CJZ Pty Ltd v Giant Dwarf Pty Ltd; CJZ Pty Ltd v Morrow

1. [1]

   WARD P: I have had the advantage of reading in draft the comprehensive reasons of Adamson JA, with which I agree. I also agree with the orders that her Honour proposes.

2. [2]

   MITCHELMORE JA: I agree with the reasons of and orders proposed by Adamson JA.

3. [3]

   ADAMSON JA: Before the Court there are two applications for leave to appeal and a cross-appeal. They arise from a dispute relating to the production and broadcast of The Checkout, a television program, between, on the one hand, CJZ Pty Ltd (CJZ), formerly known as Cordell Jigsaw Productions, the first applicant, and its director, Nicholas Murray, the second applicant, and, on the other, The Checkout Pty Ltd (the Joint Venture Company), the first cross appellant, Giant Dwarf Pty Ltd (Giant Dwarf), the second cross appellant, and Julian Morrow, the third cross appellant. Each party challenges orders made by Stevenson J (the primary judge) on 23 June 2022 in two proceedings, the Commercial proceedings and the Defamation proceedings (defined below) which were heard together in the Equity Division of the Supreme Court.

4. [4]

   On 1 November 2019, the Joint Venture Company, Giant Dwarf and Mr Morrow commenced proceedings in the Commercial List in the Equity Division against CJZ and Mr Murray (the Commercial proceedings). They claimed declarations, injunctions and damages, alleging that:

   1. (1)

      CJZ had breached an agreement made on 8 April 2019 (the Share Sale Agreement), including by repudiatory conduct, thereby entitling them to terminate the agreement;

   2. (2)

      CJZ and Mr Murray had engaged in misleading and deceptive conduct prior to the execution of the Share Sale Agreement; and

   3. (3)

      CJZ and Mr Murray had committed the tort of injurious falsehood by making injurious statements about Mr Morrow to the Australian Broadcasting Corporation (ABC).

5. [5]

   CJZ cross-claimed against the Joint Venture Company, Giant Dwarf and Mr Morrow seeking an order that the Share Sale Agreement be rescinded on the basis of misleading or deceptive conduct, as well as damages and equitable compensation.

6. [6]

   On 11 September 2020, Mr Morrow commenced proceedings in the Common Law Division against CJZ and Mr Murray, seeking damages for defamation (the Defamation proceedings). The amended statement of claim filed on 12 February 2021 alleged the publication of six matters complained of (MCOs), which were alleged to be defamatory. CJZ and Mr Murray relied on defences of justification, qualified privilege (statutory and common law) and honest opinion. In his reply, Mr Morrow alleged express malice (including improper motive and knowledge of falsity) to defeat the defence of qualified privilege.

7. [7]

   On 4 February 2021, the primary judge ordered that the Commercial proceedings and the Defamation proceedings be heard together. On 29 November 2021, the primary judge ordered that evidence in one proceedings be evidence in the other proceedings. The hearing commenced on 30 November 2021 and continued on 1, 2, 3, 7, 8, 20, 21 and 22 December 2021. Judgment was reserved.

8. [8]

   Ms Chrysanthou SC appeared with Mr O’Neill at first instance and on appeal for Mr Morrow, Giant Dwarf and the Joint Venture Company (together, the cross-appellants). Mr Katekar SC appeared at first instance with Ms Jeliba and on appeal with Mr Lewis (on the application for leave to appeal against the orders in the Defamation proceedings) and Ms Gaussen (on all other matters).

9. [9]

   On 13 April 2022, the primary judge published his reasons for decision and directed the parties to confer on the orders necessary to give effect to the reasons: The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd; Morrow v Cordell Jigsaw Productions Pty Ltd (No 13) [2022] NSWSC 444.

10. [10]

    On 16 June 2022, the primary judge heard argument on costs. CJZ and Mr Murray sought costs in the Commercial proceedings on an indemnity basis on the basis that the claims made by the Joint Venture Company, Giant Dwarf and Mr Morrow were “hopeless”. They also sought costs of their cross-claim on the basis of Calderbank offers made on 18 October 2019 and 1 November 2019.

11. [11]

    In the Defamation proceedings, Mr Murray submitted that there ought be no order as to costs.

12. [12]

    On 23 June 2022, the primary judge made orders in each of the two proceedings, including as to costs: The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd; Morrow v Cordell Jigsaw Productions Pty Ltd (No 14) [2022] NSWSC 835 (the Costs Judgment).

13. [13]

    In the Commercial proceedings, Giant Dwarf made the following claims, each of which was rejected:

    1. (1)

       damages for breach of an implied term which required CJZ to sign the Quit Claim (to be explained below);

    2. (2)

       termination of the Share Sale Agreement based on CJZ’s alleged repudiatory conduct in refusing to sign the Quit Claim;

    3. (3)

       misleading and deceptive conduct premised on CJZ’s refusal to sign the Quit Claim;

    4. (4)

       damages for injurious falsehood (the primary judge found no loss); and

    5. (5)

       damages for breach of the mediation agreement (the primary judge found that Giant Dwarf suffered no harm).

14. [14]

    Further, on Mr Murray and CJZ’s cross-claim, the primary judge found that:

    1. (1)

       Giant Dwarf had breached the joint venture agreement and engaged in misleading or deceptive conduct;

    2. (2)

       Mr Morrow had breached his duty as a director of the Joint Venture Company and to CJZ (as shareholder of the Joint Venture Company) and engaged in misleading or deceptive conduct; and

    3. (3)

       the Share Sale Agreement ought be rescinded.

15. [15]

    In the Commercial proceedings, the primary judge dismissed the amended summons and, on the cross-claim, ordered that the Share Sale Agreement be rescinded and that Giant Dwarf transfer to CJZ with effect from 8 April 2019 the shares in the Joint Venture Company that CJZ transferred to Giant Dwarf pursuant to the Share Sale Agreement and cause Mr Murray to be reinstated as a director of the Joint Venture Company. The primary judge also made orders requiring Giant Dwarf to pay to CJZ 40% of the Postal, Digital and Visual Offset tax rebate (the PDV rebate) for the first four series of The Checkout, together with interest.

16. [16]

    In the Defamation proceedings, the primary judge found that, of the six MCOs made respectively on 21 May 2019 (MCO 1), 11 June 2019 (MCO 2), 12 June 2019 (MCO 3), 20 June 2019 (MCO 4), 5 July 2019 (MCO 5) and 12 August 2019 (MCO 6), each was defamatory; the defences of qualified privilege (common law or statutory) or honest opinion were not made out in respect of any of them; and the defence of justification was made out in respect of MCO 1 and 2, but not in respect of the other MCOs. His Honour entered judgment for Mr Morrow and ordered CJZ and Mr Murray to pay general damages of $30,000 and aggravated damages of $5,000, together with interest. His Honour also ordered CJZ and Mr Murray to pay Mr Morrow’s costs of the proceedings.

17. [17]

    The matters before this Court comprise:

    1. (1)

       the cross-appeal brought by the cross-appellants against the substantive orders made by the primary judge in the Commercial proceedings on the claim and the cross-claim. (There is no cross-appeal against the orders made in the Defamation proceedings.);

    2. (2)

       CJZ’s and Mr Murray’s application for leave to appeal against the orders made in the Defamation proceedings;

    3. (3)

       CJZ’s and Mr Murray’s application for leave to appeal against the costs orders made against them by the primary judge in the Commercial proceedings; and

    4. (4)

       the cross-appellants’ notice of motion filed on 11 May 2023 for leave to adduce further evidence comprising emails from Mr Murray sent between 9 March 2023 and 24 March 2023.

18. [18]

    The applications in (2) and (3) above are relatively self-contained. However, the cross-appeal (1) is significantly broader. Grounds 1-6 and 7A of the cross-appeal concern the claim for damages for injurious falsehood and will be addressed separately in connection with that claim. In ground 7 the cross-appellants challenge 42 findings of fact made by the primary judge (some of which are addressed in the course of the summary of his Honour’s findings while others are addressed in a table at the conclusion of these reasons). None of these challenges has been made out, for the reasons given below. The remaining grounds of the cross-appeal, 8 and 9, challenge the orders made on Mr Murray and CJZ’s cross-claim and will be addressed first following the narrative of facts relating to the entry into the Share Sale Agreement on 8 April 2019.

19. [19]

    Neither party sought, in the event that error was established, that this Court order a retrial or that any matter be remitted to the primary judge for determination. While the primary judge made some credit findings, the parties accepted that the primary judge’s advantage in this respect ought not inhibit this Court from making all necessary findings pursuant to s 75A of the Supreme Court Act 1970 (NSW). In these circumstances, this Court is obliged to determine for itself whether there is an error in any of the factual findings challenged and, if so, what facts ought to have been found. Similarly, if the error alleged is failure to address an argument, a claim or a defence, it is this Court’s task to address such argument, claim or defence for itself.

The facts

1. [20]

   Before turning to the various matters for this Court’s determination, it is useful to summarise the facts as found by the primary judge. Because of the overlap between the facts and issues in the Commercial proceedings and the Defamation proceedings, the summary will contain facts which are germane to either or both. The references in square brackets are to paragraphs of the primary judge’s reasons.

2. [21]

   In order to avoid repetition, it is convenient, in some instances, to address a number of the challenges made by Mr Morrow to the factual findings as part of the chronology of facts.

3. [22]

   There is a clear division between the period up to and including the Share Sale Agreement and what occurred thereafter. The claim by Mr Murray and CJZ for rescission of that agreement arises from those facts from the earlier period. The events subsequent to the entry into the Share Sale Agreement form the basis of the claims against Mr Murray in the Defamation proceedings and for damages for injurious falsehood in the Commercial Proceedings; and the claim that Giant Dwarf and the Joint Venture Company were entitled to terminate the Share Sale Agreement on the basis of Mr Murray’s alleged repudiation of it.

4. [23]

   In these circumstances, it is convenient to address the cross-appeal in so far as it challenges the order for rescission of the Share Sale Agreement before turning to the other challenges to the primary judge’s orders, which turn on what occurred afterwards.

The facts up to and including the Share Sale Agreement

1. [24]

   In about December 2010, Mr Morrow and Mr Murray met at Surry Hills to discuss the idea of their respective companies (Giant Dwarf and CJZ) working together on a consumer affairs television program ([47]). They envisaged that the revenue would be split 50/50, that Mr Morrow would host the program and that they would each be involved in executive production ([59]-[61]). It was common ground that the only broadcaster contemplated by the parties was the ABC.

2. [25]

   In 2011, Mr Morrow and Mr Murray communicated about how this could best be achieved ([63]-[68]). Ultimately, on 23 January 2012, the Joint Venture Company was incorporated. Its directors were Mr Morrow and Mr Murray and Giant Dwarf and CJZ were its shareholders ([69]). It was common ground that all decisions relating to the joint venture were to be made by agreement ([96]). Thus, each shareholder had a power of veto ([101]).

3. [26]

   In June 2012, the Joint Venture Company agreed with the ABC to make a series program, which became the first series of The Checkout ([70]). After the first series, Mr Morrow and Mr Murray agreed that the revenue would be split between them 60/40 (rather than 50/50 split as had originally been agreed) ([71]). Although Mr Morrow and Mr Murray discussed a shareholders’ agreement, no such agreement was ever executed ([73]-[87]).

4. [27]

   It was common ground that the Joint Venture Company owned certain intellectual property rights to The Checkout.

5. [28]

   The Joint Venture Company produced six series of The Checkout for the ABC. It was common ground that after the third series, Mr Morrow took control of all creative, legal, editorial and production issues which caused Mr Murray to withdraw from active involvement. Although Mr Murray had other projects with the ABC, Mr Morrow was the prime contact with the ABC for the Joint Venture Company with respect to The Checkout ([90)].

6. [29]

   Production of series six of The Checkout was completed in April 2018 ([155]). Under the terms of the joint venture agreement referred to above, of the sum paid by the ABC to the Joint Venture Company, CJZ was paid a little over $1 million for the first six series of The Checkout ([94]). It was not disputed that Mr Morrow was disgruntled by the size of the payments which the joint venture agreement obliged the Joint Venture Company to make to CJZ. His attempt to buy out Mr Murray in 2015 was unsuccessful.

7. [30]

   Because of the arrangement referred to above (and, in particular, the power of veto), the Joint Venture Company could only continue to produce The Checkout if both Mr Morrow (on behalf of Giant Dwarf) and Mr Murray (on behalf of CJZ) agreed to do so ([101]-[102]).

8. [31]

   It was common ground that CJZ and Giant Dwarf were, other than in relation to the joint venture and the Joint Venture Company, competitors. As such, each would independently pitch ideas for programs to the ABC, without recourse to the other ([145]-[154]).

9. [32]

   On 4 July 2018, Josie Mason-Campbell, then Head of Non-Scripted Production at the ABC, told Mr Morrow that the ABC was unlikely to be able to fund The Checkout in the 2018/2019 financial year ([158]). She separately informed Mr Murray of this on the same day ([159]). Mr Morrow communicated with David Anderson, the then Director of Entertainment & Specialist at the ABC with a view to saving The Checkout ([162]).

10. [33]

    On 6 July 2018, the ABC announced that it was putting The Checkout “on hiatus”. In a tweet posted on that day, Mr Morrow was critical of the ABC. Mr Murray contacted him to chastise him about publicly criticising the ABC. This was the last occasion on which Mr Morrow and Mr Murray contacted each other until 13 February 2019 ([255]-[259]).

11. [34]

    Mr Morrow continued to lobby the ABC with a view to persuading it to change its mind about putting The Checkout on hiatus ([166]-[201]).

12. [35]

    On 25 September 2018, Mr Anderson (then the Acting Managing Director of the ABC) said in an ABC radio interview that the ABC would either reinstate The Checkout or produce another consumer affairs and advocacy program in the future ([205]). As the Joint Venture Company was the only entity which had the intellectual property rights to The Checkout, any further series of The Checkout would have to be produced by the Joint Venture Company (or an assignee or licensee of those rights) ([206]).

13. [36]

    On 19 December 2018, the Australian Taxation Office issued a certificate confirming that the Joint Venture Company was entitled to a Postal, Digital and Visual Offset, which entitled it to a PDV rebate of 30%. This amounted to approximately $585,000, which was payable (and was paid) on 25 January 2019 ([209], [225]).

14. [37]

    In an email to Jacqui Crouch (the accountant for the Joint Venture Company and Giant Dwarf), Mr Morrow suggested that this sum be divided between the shareholders of the Joint Venture Company (Giant Dwarf and CJZ) 60/40 ([229]-[231]).

15. [38]

    There were further communications between Mr Morrow and the ABC about a consumer affairs program in late 2018 and early 2019. Because the ABC’s budget had been cut, there was a question about how much the ABC could afford to pay for such a program.

16. [39]

    In his findings about what had occurred in particular discussions with the ABC, the primary judge referred to internal records of the ABC which had been produced on subpoena and which purported to record (sometimes by persons not present for such meetings) what had transpired in discussions between Mr Morrow and the ABC. No witness from the ABC was called by either party. The primary judge rejected an application that these records be admitted as business records and admitted them pursuant to s 136 of the Evidence Act 1995 (NSW) for non-hearsay purposes.

17. [40]

    However, the primary judge had regard to such records in making findings about what was said in the exchanges between Mr Morrow and the ABC on the basis of Mr Morrow’s answers to questions in cross-examination regarding such records.

18. [41]

    The primary judge found that Mr Morrow was communicating with the ABC about a “possible consumer show” on 19 and 20 December 2018 ([214]). His Honour did not accept Mr Morrow’s (tentative) recollection that The Checkout was not mentioned in his conversation with Michael Carrington (then Acting Head of Content Distribution at the ABC) on 20 December 2018 ([218]-[219]), given that Mr Morrow had told Mr Anderson on 19 September 2018 that “the ABC should want The Checkout” ([219]). The primary judge noted that the inference that The Checkout was mentioned in Mr Morrow’s conversation with Mr Carrington on 20 December 2018 was consistent with the email sent by Mr Carrington to Ms Mason-Campbell on that day, which referred to the call from Mr Morrow and referred to him and Mr Morrow having agreed to “pick up on the discussion to recommission [The Checkout] or potentially develop a new consumer show asap” (set out at [216]). The primary judge found that the reference in the email to “recommission” was “obviously a reference to recommissioning The Checkout.”

19. [42]

    Ms Chrysanthou criticised the primary judge for having regard to the email from Mr Carrington to Ms Mason-Campbell on 20 December 2018 in which he, in effect, said that he and Mr Morrow had discussed recommissioning The Checkout. She contended that the primary judge had used the evidence for an (impermissible) hearsay purpose, contrary to his Honour’s ruling. I reject this submission: the fact that Mr Carrington raised the topic of recommissioning The Checkout with Ms Mason-Campbell on 20 December 2018 (a non-hearsay purpose) made it more likely that it had been the subject of discussion between Mr Carrington and Mr Morrow in their conversation earlier that day. Further, the primary judge did not make a finding that it had been raised because of what was said in the email. Rather, his Honour inferred from the objective probabilities (including Mr Morrow’s view expressed in September 2018) that it was in fact raised and considered that the terms of the communication in the email of 20 December 2018 were consistent with that inference. This process of reasoning did not breach his Honour’s ruling as to the limited use to which such communications could be put.

20. [43]

    It is also noteworthy that the primary judge was careful, as the findings set out below indicate, to make clear that the finding of the misleading or deceptive conduct was based on the “genuine prospect”, which arose from 8 March 2019, of The Checkout being recommissioned and Mr Morrow’s failure to disclose that matter to Mr Murray ([470]). Thus, the findings about what happened in December 2018, while relevant to the background, were not ultimately dispositive.

21. [44]

    Also of significance, the primary judge relied on Mr Morrow’s acceptance (in the passage of cross-examination extracted at [250]) that “it was pretty well known that [he thought] the ABC should be broadcasting The Checkout [and that he had] made this point to the ABC several times”, including on 13 February 2019 (when Mr Morrow had met with Mr Carrington and Richard Huddleston (then Supervising Executive Producer, Entertainment and Development at the ABC)) as his position “has been quite consistent”. The primary judge drew the inference that Mr Morrow had told them that he “still wanted to do The Checkout” ([251]). After this meeting, Mr Morrow was confused about the ABC’s intentions and considered that it had not yet decided what course would be taken ([253]).

22. [45]

    Ms Chrysanthou was critical of the primary judge’s findings concerning the ABC, including those at [233], [244], [247] and [404], for the separate reason that the primary judge did not have regard to the significance of s 16 of the Parliamentary Privileges Act 1987 (Cth) (the PP Act). This matter will be addressed towards the conclusion of these reasons.

23. [46]

    Within minutes of the conclusion of this meeting on 13 February 2019, Mr Morrow sent Mr Murray a message to suggest talking about the PDV rebate ([255]). He made no mention of the discussions he had had with the ABC between 6 July 2018 and that day about reinstating The Checkout ([256]).

24. [47]

    As a result of this message, Mr Murray and Mr Morrow agreed to meet at the Duck Inn in Chippendale (the Duck Inn meeting).

25. [48]

    It was either common ground or not disputed that, at this meeting:

    1. (1)

       Mr Morrow told Mr Murray that he needed access to Giant Dwarf’s share of the PDV rebate to help repay Giant Dwarf’s loan regarding a Netflix show ([266]);

    2. (2)

       Mr Morrow raised the question of how the PDV rebate should be split ([266]);

    3. (3)

       Mr Murray suggested that Mr Morrow should speak to Simon Fraser, CJZ’s Chief Financial Officer (who will be referred to throughout by his full name to avoid confusion with Hamish Fraser, who became CJZ’s solicitor) about the best means to distribute the PDV rebate to Giant Dwarf and CJZ ([266]);

    4. (4)

       Mr Morrow suggested that it was time to “draw a line under” the joint venture, given the unlikely event of The Checkout ever returning ([267]);

    5. (5)

       Mr Morrow told Mr Murray that if it transpired that the ABC did want to broadcast a consumer affairs show, “it would make more sense” for Giant Dwarf to produce that show ([288]);

    6. (6)

       Mr Morrow told Mr Murray that “it would be better for everyone if we could find some way that The Checkout could be made again” ([289]); and

    7. (7)

       Mr Morrow made no mention of his discussions with the ABC about The Checkout or a further consumer affairs show, including the discussion which had occurred on 13 February 2019 referred to above ([268]).

26. [49]

    The primary judge also found that it was likely that Mr Morrow had told Mr Murray on 19 February 2019 that he was not prepared to do another series of The Checkout under the current arrangements of the joint venture agreement between them (because Mr Murray was receiving 40% of the net revenue without having to perform work on the series) ([275]).

27. [50]

    The basis for the primary judge’s finding, which Mr Morrow accepted to be correct, was that, on 22 February 2019, Mr Morrow, Simon Fraser, Ms Crouch and her assistant, Ms Chen, met to discuss the best means to distribute the PDV rebate, and that, at that meeting, Ms Chen noted that the “current agreement does not incentivise” Mr Morrow “to continue doing more” series of The Checkout ([275]).

28. [51]

    The primary judge inferred that the “way” Mr Morrow was suggesting for The Checkout to be made again was for CJZ to sell its shares in the Joint Venture Company to Giant Dwarf ([291]). His Honour considered that this finding was corroborated by the eventual terms of the Share Sale Agreement (referred to below) ([292]).

29. [52]

    The primary judge did not accept the reason Mr Morrow gave for not disclosing the discussions in (7) above to Mr Murray. Instead, his Honour found that it was more probable that Mr Morrow did not raise them because it would have been inconsistent with “drawing a line” under the joint venture to indicate that he was currently discussing the prospect of reinstating The Checkout with the ABC ([270]). It is significant that, while Mr Morrow’s motive for not raising his communications with the ABC was relevant to the primary judge’s assessment of his credit, it was not necessary to prove his intent in order to establish that his conduct was misleading or deceptive since the test is objective (although it can more easily be inferred that it was misleading or deceptive, if it was intended to mislead or deceive: Yorke v Lucas (1985) 158 CLR 661 at 666 (Mason ACJ, Wilson, Deane and Dawson JJ); [1985] HCA 65; Campomar Sociedad, Ltd v Nike International Ltd (2000) 202 CLR 45; [2000] HCA 12 at 63 (Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ)).

30. [53]

    Mr Murray said, in paragraph 149 of his affidavit of 4 June 2020, that at the Duck Inn meeting Mr Morrow had told him that he was finding “making TV so unpleasant … that [he] never want[ed] to work in TV again” and that he could “get by doing corporate speaking gigs”. Mr Murray’s evidence was that he regarded this comment as incompatible with Mr Morrow having discussions with the ABC about The Checkout or another consumer affairs show.

31. [54]

    In response Mr Morrow deposed (in paragraph 216 of his affidavit of 14 December 2020):

32. [55]

    At first instance, Mr Morrow admitted that the statement in bold was not true. The primary judge found that the discussions between the ABC and Mr Morrow on 19 and 20 December 2018 and 13 February 2019 showed that the ABC was “open to the possibility of there being a further series of The Checkout, although no decision had yet been made about that” ([279]). The primary judge found that Mr Morrow’s evidence as to this matter was untrue to his knowledge ([281]).

33. [56]

    The primary judge accepted Mr Murray’s evidence that Mr Morrow had said, at the Duck Inn meeting, that he never wanted to work in TV again. His Honour did so on the basis of Mr Murray’s evidence (including his demeanour in the witness box), finding that he was “very confident that his recollection was correct” ([283]). His Honour also took into account the contents of an email sent by Mr Murray to Michael Easton (Mr Morrow and Giant Dwarf’s then solicitor) on 13 June 2019, in which Mr Murray said, in part:

34. [57]

    The primary judge found this email to be “a reasonably contemporaneous confirmation of the correctness of Mr Murray’s recollection about what Mr Morrow said about this” ([285]). The primary judge also took into account Mr Morrow’s false evidence in the paragraph of his affidavit extracted above and found that, for Mr Morrow to say that he never wanted to work in television again, “cannot have reflected his true state of mind” ([287]).

35. [58]

    Ms Chrysanthou contended that the primary judge’s finding that Mr Morrow had said at that meeting that he would not work in television again was erroneous. She argued that the email sent on 13 June 2019 could not be regarded as “reasonably contemporaneous” and that it was, in effect, glaringly improbable that Mr Morrow would have said any such thing.

36. [59]

    I consider that it was open to the primary judge to make the finding at [287] that Mr Morrow had said that he never wanted to work in TV again. The assessment of credibility at first instance involves a number of factors, which include consistency of the statement with other statements and with the surrounding circumstances, motive and any corroboration which may be available: see generally Onassis v Vergottis [1968] 2 Lloyds Rep 403 at 431 (Pearce LJ); Watson v Foxman (1995) 49 NSWLR 315 at 318-319 (McLelland CJ in Eq). His Honour’s careful reasons on this question indicated that he took into account the motive of Mr Morrow (which the primary judge found was to make Mr Murray believe that the purpose of the joint venture had come to an end so that he, Mr Morrow, could gain control of the Joint Venture Company); the fact that Mr Morrow had been prepared to make one knowingly false statement (that the ABC had not told him that it wanted a consumer affairs program or that it wanted to broadcast The Checkout again) and Mr Murray’s apparently firm recollection of what Mr Morrow had said, which was confirmed by his email in June 2019. I have no reason to doubt the correctness of the primary judge’s finding, which also reflected his Honour’s advantage in seeing and hearing the witnesses: Abalos v Australian Postal Commission (1990) 171 CLR 167 at 179 (McHugh J); [1990] HCA 47; Devries v Australian National Railways Commission (1993) 177 CLR 472 at 478-479 (Brennan, Gaudron and McHugh JJ); at 479-481 (Deane and Dawson JJ); [1993] HCA 78; Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 at [41] (Gleeson CJ, Gummow and Kirby JJ); at [93] (McHugh J).

37. [60]

    On 20 February 2019, Mr Morrow emailed Simon Fraser (copied to Mr Murray) suggesting a meeting to discuss how to distribute the PDV rebate. He also referred to his proposal to “draw a line under the joint venture”, “given the hiatus-ing of The Checkout by the ABC” ([294]). His Honour found ([297]):

38. [61]

    On 21 February 2019, Mr Morrow sent a follow-up message to Mr Murray ([298]) and their respective accountants (Simon Fraser and Ms Crouch) setting out how best to distribute the dividend, on two scenarios: first, the status quo (with Giant Dwarf and CJZ each continuing to own a share in the Joint Venture Company), and, second, if Giant Dwarf was the sole shareholder of the Joint Venture Company ([299]-[300]). Following his discussions with Ms Crouch, Simon Fraser sent an email to Mr Murray setting out the various options for distribution (non-franked dividend, loan or fee) ([301]) and said, in part, as follows:

39. [62]

    The primary judge inferred from the highlighted passage that the parties, at that time, contemplated that there was still a “possibility” that, if CJZ sold its shares in the Joint Venture Company to Giant Dwarf, there might be a further series of The Checkout ([302]).

40. [63]

    On 22 February 2019, Simon Fraser spoke briefly with Mr Murray, Matthew Campbell (the CEO of CJZ) and Katie Shortland (Head of Business Affairs, CJZ). Mr Campbell and Ms Mason-Campbell were married, a matter on which Ms Chrysanthou placed some significance. In this conversation, Simon Fraser told them that he was about to meet with Mr Morrow and Ms Crouch about distributing the PDV rebate and, potentially, CJZ exiting the Joint Venture Company. Mr Campbell commented that The Checkout was not coming back, to which Mr Murray said, “Yeah, I think that’s probably right but let’s see what they have to say” ([304]).

41. [64]

    After this discussion, Simon Fraser met with Mr Morrow, Ms Crouch and Ms Chen (who took notes). The only part of Ms Chen’s notes which was not related to the PDV rebate was as follows (extracted at [307]):

42. [65]

    The primary judge found that Ms Chen’s note was reliable ([312]). His Honour also found that Mr Morrow had said (it not having been disputed by Simon Fraser) that Giant Dwarf would not be prepared to make The Checkout again under the present arrangement, that it would be better if The Checkout could be made again and that the value of past episodes of The Checkout would be greater if it were made again ([308]-[313]). Simon Fraser then raised the issue of a format fee for any future episodes of The Checkout, a possibility which he then considered to be low ([314]-[316]).

43. [66]

    The primary judge noted that it was common ground that Mr Morrow made no mention of his ongoing discussions with the ABC at the meeting ([317]).

44. [67]

    Following the meeting on 22 February 2019, Simon Fraser reported to Mr Murray by email ([319]) and Ms Chen reported to Mr Morrow about what had transpired.

45. [68]

    The primary judge rejected Mr Morrow’s evidence that an “agreement in principle”, subject to Mr Murray’s approval, had been reached at the meeting. His Honour referred to contemporaneous emails in support of this finding ([322]-[331]). His Honour found, at [331]:

46. [69]

    On 28 February 2019, Mr Morrow wrote to Mr Anderson to complain about the lack of progress in arranging a consumer affairs program ([335]). He said in part:

47. [70]

    This email elicited a response from Mr Carrington on 1 March 2019. There were further email exchanges between them between 1 and 4 March 2019 concerning the budget available to the ABC for such a program ([337]-[339]).

48. [71]

    On 5 March 2019, Mr Morrow wrote to Mr Murray proposing a meeting. When Mr Murray phoned Mr Morrow that day or the next, Mr Morrow emphasised the urgency of resolving the issues between them so that Giant Dwarf could pay off the loan it had taken out for a Netflix show with the PDV rebate ([341]). The primary judge found that this was another example of Mr Morrow “manag[ing] the message” as to the reason why the “deal” ought be progressed ([342]). Mr Murray emailed Simon Fraser suggesting a proposed deal and seeking his advice ([343]). Reference was made to what would occur if future episodes of The Checkout were made, which led his Honour to infer that Mr Murray contemplated the possibility that Giant Dwarf would produce The Checkout again in the event that the share sale proceeded ([344]).

49. [72]

    On 8 March 2019, Mr Morrow and Rebecca Annetts, then an employee of Giant Dwarf who worked as a producer of The Checkout between 2017 and 2019, met with Mr Anderson and Mr Carrington at the ABC to discuss a consumer affairs program for the second half of 2019 ([347]-[351]). At the meeting Mr Anderson said that the ABC could make $3.2m available for such a program for two seasons and the previous creative control provisions would apply. Mr Morrow told the ABC ([349]) “if Nick and I can work something out which means it's possible to make The Checkout again, then I think it makes sense to do that” and “the ABC should want The Checkout”.

50. [73]

    Mr Morrow also told the ABC that Giant Dwarf and CJZ had reached agreement on, and were in the process of formalising, the terms for CJZ to exit “The Checkout’s Production company” [the Joint Venture Company] ([351]). The primary judge found that this statement was not correct as no such agreement in principle was reached until later that day (8 March 2019) when Simon Fraser sent an email to Mr Morrow and Ms Crouch ([352]-[353]).

51. [74]

    His Honour also found Mr Morrow’s statement (made in an email to Mr Murray dated 13 June 2019) that he did not believe that there was a genuine prospect of The Checkout being recommissioned until “well after” CJZ and Giant Dwarf had agreed on the terms of CJZ’s exit from the Joint Venture Company ([353]-[355]) to be knowingly untrue.

52. [75]

    Later on 8 March 2019, as referred to above, Simon Fraser sent an email to Mr Morrow and Ms Crouch setting out the terms which CJZ proposed for the sale of CJZ’s share in the Joint Venture Company to Giant Dwarf ([361]). Simon Fraser agreed that, at this point, there was an agreement in principle ([363]), which Mr Murray confirmed on 14 March 2019 in an email to Mr Morrow ([364]).

53. [76]

    Later that day, Mr Morrow sent to the ABC a draft outline and term sheet for a consumer affairs program, which was to be called Are you being served? ([366]). The primary judge asked Mr Morrow to explain the differences between The Checkout and Are you being served?. Mr Morrow accepted the primary judge’s observation that they sounded “quite different” and said that he believed that to be the case ([371]).

54. [77]

    The primary judge said, at [372]:

55. [78]

    This finding was challenged by Ms Chrysanthou on the basis that it had neither been pleaded nor put to Mr Morrow. I do not consider this challenge to have been made out. It was plain, as the primary judge found, that Mr Morrow was proposing another consumer affairs program, Are you being served?, to the ABC pending Giant Dwarf’s acquisition of CJZ’s shares in the Joint Venture Company, following which he intended to propose further series of The Checkout ([351]). In that sense, they were substitutable since the ABC wanted one consumer affairs program and either met that description. These matters were not in dispute. There was no reason for this finding to be either pleaded or put to Mr Morrow.

56. [79]

    The ABC considered Mr Morrow’s proposal ([373]-[386]). In an email dated 15 March 2019, Georgina Waite (Head of Business Affairs at the ABC) asked Julia Pincus (the Senior Business Affairs Lead at the ABC) to compare the documents provided by Mr Morrow regarding Are you being served? with the corresponding documents for the sixth series of The Checkout to see if it was a “true comparison” ([378]). Ms Pincus responded later that day by email which said in part (as set out at [382]):

57. [80]

    The primary judge was cognisant of the limited basis on which the ABC documents had been admitted ([385]). His Honour was entitled to infer that the ABC was sufficiently apprehensive about the similarity between Are you being served? and The Checkout to be concerned about a potential claim by CJZ against Mr Morrow or Giant Dwarf about Are you being served? and that the ABC had an interest in ensuring that such a claim would not be made. These inferences do not involve the hearsay use. The evidence was plainly relevant, including because it provided context to the ABC’s subsequent request for a Quit Claim.

58. [81]

    Later on 15 March 2019, Mr Carrington wrote to Ms Pincus as follows ([386]):

59. [82]

    The email established that the ABC was aware of the discussions between Giant Dwarf and CJZ and understood (from previous communications) what Mr Morrow’s objective was: that Giant Dwarf would own the Joint Venture Company so that The Checkout could be made again.

60. [83]

    In the meantime, Mr Morrow continued to communicate with Simon Fraser with a view to finalising the share sale as soon as possible. He continued to refer to the PDV rebate as the reason for the urgency ([392]-[394]).

61. [84]

    The primary judge found at [412]:

62. [85]

    His Honour also found, at [413], that Mr Morrow did not want Mr Murray to know of his negotiations with the ABC because he was concerned that, if Mr Murray did know, he would not sell CJZ’s share in the Joint Venture Company to Giant Dwarf. To this end, Mr Morrow asked the ABC not to reveal to Mr Murray either that the ABC was in negotiations with Giant Dwarf about a new consumer affairs show or that, once CJZ had sold its share in the Joint Venture Company to Giant Dwarf, it was proposed that The Checkout be produced for broadcast ([431]).

63. [86]

    Within the ABC, there were concerns about a potential conflict of interest (concerning Ms Mason-Campbell because of her husband’s position in CJZ) but also the potential need for a Quit Claim. These concerns were the subject of an email between Simon Melkman (an Editorial Policy Advisor at the ABC) and Mr Carrington and Ms Waite, in which he said in part:

64. [87]

    This email was not referred to by the primary judge but it was relied on by Mr Katekar in this Court and in the Court below in support of his submission, which I accept, that the ABC was alive to the potential need for a Quit Claim from CJZ over a month before Mr Murray sent his email of 21 May 2019, following which the ABC required a Quit Claim as a precondition of its further commissioning The Checkout (see below).

65. [88]

    The ABC’s concerns about the change in ownership led Ms Pincus to write to Mr Morrow on 2 April 2019 saying in part ([433]):

66. [89]

    In the meantime, on 1 April 2019, Mr Morrow sent a draft of the Share Sale Agreement to Mr Murray, referring again to the PDV rebate ([438]-[439]). On 2, 3 and 4 April 2019, Mr Morrow communicated with Mr Murray with a view to getting him to sign the Share Sale Agreement ([441], [447], [448]). The primary judge found ([449]-[450]):

67. [90]

    The Share Sale Agreement was executed by all parties on 8 April 2019. It relevantly provided ([455]) that:

    1. (1)

       the Joint Venture Company would pay CJZ 40% of its net income from the exploitation of series 1-6 of The Checkout and any tax rebates relating to those series (cl 4.2);

    2. (2)

       CJZ would be paid 2% of the Joint Venture Company’s cash budget for any subsequent series which it, or any affiliated company or subsidiary, produced (cl 4.3);

    3. (3)

       either of Giant Dwarf or CJZ were entitled to produce any other consumer affairs program as long as that program did not use the name of, the format of, or the intellectual property associated with, The Checkout (cl 4.6);

    4. (4)

       the parties acknowledge that the Joint Venture Company owned all intellectual property rights associated with The Checkout (cl 5.1);

    5. (5)

       the parties agreed to do all things necessary to protect the assignment in cl 5;

    6. (6)

       the parties gave mutual releases including relating to the transfer of shares (cll 7.1, 7.2); and

    7. (7)

       the parties agreed to do anything necessary to give effect to the agreement (cl 9.7).

68. [91]

    Because of the importance of cl 5 to the allegation of malice to defeat the claim of qualified privilege in relation to MCOs 3-6, it is necessary to set it out in full:

69. [92]

    At first instance, Mr Morrow and Giant Dwarf relied on the releases in the Share Sale Agreement in answer to Mr Murray and CJZ’s cross-claim in the Commercial proceedings and alleged that Mr Murray and CJZ had failed to comply with cl 9.7 by refusing to sign the Quit Claim (see below). The primary judge’s rejection of these submissions was the subject of grounds of their cross-appeal (referred to below).

70. [93]

    On 10 April 2019, Mr Morrow wrote to various persons at the ABC to inform them of the execution of the Share Sale Agreement and its effect ([459]). He said, in part:

71. [94]

    The primary judge concluded that this admission was true and that this was what Mr Morrow had set out to do and what he had achieved ([464]). His Honour found that Mr Morrow’s motivation to persuade Mr Murray to sell CJZ’s shares in Giant Dwarf was to put in place arrangements whereby Giant Dwarf would be prepared to make The Checkout again ([464]) and that Mr Morrow had deliberately concealed this purpose from Mr Murray by not disclosing it and by instructing the ABC not to divulge the negotiations to Mr Murray ([465]).

72. [95]

    The primary judge found, in accordance with Mr Morrow’s admission, that Mr Morrow had obtained all of the information relating to the prospect of making a further series of The Checkout in his capacity as a director of the Joint Venture Company ([474]).

73. [96]

    His Honour made the following further findings, of which those in [481] and [483] are challenged by the cross-appellants:

74. [97]

    Ms Chrysanthou challenged the finding in [483] that the opportunity to make The Checkout was available not only to Mr Morrow or to Giant Dwarf but also to the Joint Venture Company. She submitted that the opportunity was not, in fact, open to the Joint Venture Company because Mr Morrow’s stated and firm position was that he would not make The Checkout again on the conditions of the joint venture agreement (which required the Joint Venture Company to pay 40% of the profits to CJZ) and, accordingly, while CJZ owned a share in the Joint Venture Company there was no prospect that the Joint Venture Company would be able to take up the opportunity to produce a further series of The Checkout. Thus, as the primary judge found at [485], Mr Morrow would exercise his veto to prevent the Joint Venture Company from taking up any such opportunity.

75. [98]

    The primary judge’s findings at [484]-[485] demonstrate his Honour’s awareness of these very matters. It does not follow from the fact that the Joint Venture Company would not actually be able to take up the opportunity of producing a further series of The Checkout (because of Mr Morrow’s position and veto power), that it was not an opportunity which was in fact available to the Joint Venture Company. The only reason it would not occur was because of Mr Morrow’s discontent about having to pay 40% of the profits to CJZ. His veto did not give him a licence to manipulate the situation so that CJZ would no longer be a shareholder of the Joint Venture Company and would, because of the Share Sale Agreement, no longer be entitled to its 40%.

76. [99]

    The finding at [486], which is also challenged, follows from the primary judge’s findings as to Mr Morrow’s motive and credit and reflects his Honour’s advantage in seeing and hearing the witnesses as well as the primary judge’s close attention to the sequence of events and the objective probabilities.

77. [100]

    The Joint Venture Company could have produced The Checkout if Mr Morrow and Mr Murray had been able to resolve their differences in time for the ABC’s commissioning timetable. Indeed, absent an assignment of such intellectual property rights as the Joint Venture Company held in The Checkout, no one other than the Joint Venture Company could have produced The Checkout. There were several ways in which this could have occurred: the best case for Mr Morrow was that Mr Murray would simply relinquish CJZ’s rights to the 40% and be content with a % format fee referable to the cash budget. The best case for Mr Murray was that The Checkout would be made and he would receive 40% of the net profit. However, Mr Morrow’s best case was only achievable (as the primary judge found) if Mr Murray was unaware of the genuine prospect that the ABC would recommission The Checkout and Mr Murray’s best case was not achievable because of Mr Morrow’s determination to use his veto. There must have been a possibility that they could come to an arrangement which was acceptable to them both to take up the opportunity which presented itself. The primary judge’s finding was that, had Mr Murray known of the genuine prospect, he would not have signed the Share Sale Agreement on its then current terms ([544]-[545]).

78. [101]

    For these reasons, the cross-appellants have not made out their challenges to the primary judge’s findings at [483], [484] or [486] (facts 20, 21 and 22 in the schedule).

79. [102]

    Mr Murray and CJZ alleged and the primary judge found ([103]-[131]) that, at least from 26 June 2012 until 8 April 2019, there was an implied term of the joint venture agreement that Giant Dwarf and CJZ would:

80. [103]

    The implied term was relied on by Mr Murray and CJZ in two ways: first, it was alleged that its breach constituted a breach of the joint venture agreement which entitled them to damages; and, second, it was alleged that the terms of the implied term required Mr Morrow and Giant Dwarf to disclose to Mr Murray and CJZ the existence of the opportunity (thereby creating a duty to disclose) which meant that the failure to disclose the opportunity amounted to misleading and deceptive conduct by silence.

81. [104]

    Ms Chrysanthou did not dispute that a. was an implied term of the joint venture agreement but she contended that b., c. and d. above were inconsistent with first, the circumstance that Giant Dwarf and CJZ were competitors; and, second, the parties’ right of veto in respect of any project undertaken by the Joint Venture Company.

82. [105]

    The primary judge found, at [490], that Giant Dwarf was in breach of the implied term which required it to disclose to CJZ (and thus to the Joint Venture Company) the opportunity to produce a further series of The Checkout. The cross-appellants challenge to the implied term will be addressed later in these reasons.

83. [106]

    Mr Murray and CJZ alleged that Mr Morrow owed the Joint Venture Company a fiduciary duty to act in its interests and not, without fully informed consent, to put himself in a position of conflict or misuse his position for advantage (paragraph 20 of the amended Commercial List cross-claim statement). They also alleged that Mr Morrow and Giant Dwarf each occupied a position of special advantage in relation to the Joint Venture Company on the bases that they had day-to-day management of its financial affairs, employed the staff who produced The Checkout, undertook negotiations on behalf of the Joint Venture Company with the ABC and knew that Mr Murray and CJZ trusted them and relied on them because of that special relationship (paragraph 21 of the amended Commercial List cross-claim statement).

84. [107]

    Ms Chrysanthou submitted in this Court that the primary judge was not entitled to make findings on whether Mr Morrow and Giant Dwarf owed (and breached) a fiduciary duty to the Joint Venture Company and that his Honour’s findings (at [491]-[502]) on those issues ought be “excised from the judgment”. I reject this submission. CJZ had alleged such a breach of fiduciary duty (which was denied by Ms Chrysanthou’s clients). Further, the amended response to cross-claim filed on behalf of Mr Morrow and Giant Dwarf, included in the issues likely to arise whether Mr Morrow or Giant Dwarf owed a fiduciary duty to the Joint Venture Company and whether such duty, if owed, was breached. The primary judge was not only entitled, but also required to determine the issues which the parties had identified in the pleadings and otherwise. The existence of the fiduciary duty was relevant to the question whether CJZ and Mr Murray had a reasonable expectation that Mr Morrow would disclose certain matters to them.

85. [108]

    The primary judge found that Mr Morrow breached his duty as a director of the Joint Venture Company not to use his position to gain an opportunity for himself or for Giant Dwarf which would be to the detriment of the Joint Venture Company and that this opportunity required him to disclose the existence of the opportunity to Mr Murray (and through him, CJZ) and obtain informed consent before Mr Morrow or Giant Dwarf could take advantage of the opportunity ([491]-[502]).

86. [109]

    Mr Murray and CJZ also alleged that Mr Morrow owed a fiduciary duty to CJZ, as a shareholder of the Joint Venture Company, which was breached by Mr Morrow’s conduct in diverting the opportunity to make The Checkout away from the Joint Venture Company while CJZ was its shareholder (paragraphs 42 and 43 of the amended cross-claim statement).

87. [110]

    Mr Katekar had relevantly submitted that the Joint Venture Company was akin to a partnership and that Mr Morrow had control over the Joint Venture Company’s relationship with the ABC. Mr Katekar submitted that, in these circumstances, Mr Morrow was obliged to divulge information of which he knew CJZ to be ignorant, which would have influenced CJZ’s decision whether to sell its interest in the Joint Venture Company ([508]-[510]).

88. [111]

    His Honour said that it was not necessary for him to determine this question as he had already found that Mr Morrow had breached the duty which he owed to the Joint Venture Company. However, the primary judge said that, had it been necessary for him to decide the question, he would have found that there was such a duty and that it was breached ([513]). Although his Honour did not expressly accept Mr Katekar’s submissions on why such a duty existed and had been breached, his Honour said at [511] that there “is substance in these submissions”.

89. [112]

    The events referred to above form the basis of Mr Murray’s claim for an order for rescission of the Share Sale Agreement on the basis that he had entered into it on the basis of Mr Morrow’s misleading or deceptive conduct. (The primary judge made an order for rescission on that basis.)

90. [113]

    As the primary judge considered that Mr Morrow acted on his own behalf and as agent for Giant Dwarf, his Honour referred to Mr Morrow’s conduct without specific reference to Giant Dwarf as there was no relevant distinction ([516-517]).

91. [114]

    The conduct which was alleged to be misleading or deceptive conduct comprised the “motivation representation”, which consisted of representations that:

    1. (1)

       Giant Dwarf wanted to buy CJZ’s shares in the Joint Venture Company in order to access the PDV rebate to repay a loan (the PDV representation); and

    2. (2)

       Giant Dwarf, through Mr Morrow, no longer wished to produce television programs ([519]-[520]).

92. [115]

    As to (1), the primary judge found that Mr Morrow’s communications with Mr Murray were apt, and intended, to convey that his sole motivation for wanting CJZ to sell its share in the Joint Venture Company to Giant Dwarf was to access the PDV rebate to repay a loan ([521]) and that Mr Morrow had, in fact, made the PDV representation ([528]). The finding in [528] is challenged in ground 7 (fact 29).

93. [116]

    As to (2), the primary judge found that Mr Morrow had made the statement and had intended to deflect Mr Murray’s attention from the prospect of Mr Morrow’s future involvement in The Checkout, but that Mr Murray had not relied on it ([530]-[531]).

94. [117]

    The cross-appellants challenged the finding that the PDV representation was made. Ms Chrysanthou submitted that the primary judge failed to have regard to or give necessary weight to that fact that the mention of the PDV rebate was made in the context of the discussions between Mr Murray and Mr Morrow, including at the Duck Inn on 19 February 2019, about “drawing a line” under the joint venture, in part because Mr Morrow was not prepared to produce The Checkout under the then current arrangements (which required him to pay 40% of the net profit to Mr Murray).

95. [118]

    The primary judge accepted that Mr Morrow had referred to the benefit of producing The Checkout again ([524]) and that this was at least a possibility at the time Mr Morrow was pressing for the Share Sale Agreement to be executed so that he could use the PDV rebate to repay a loan. The primary judge’s explanation for finding that the PDV representation was made appears substantially from [527] which appears immediately prior to the finding at [528] that it was made and said:

96. [119]

    In my view, the primary judge was correct to find that Mr Morrow implicitly represented that his sole motivation in wanting the Share Sale Agreement executed was to obtain access to the PDV rebate. Although Mr Morrow had told Mr Murray that he would like to produce The Checkout again, this was not presented as an imperative, much less an urgent one, for the share to be transferred, whereas the need for cash to repay the loan for the Netflix show from the PDV rebate was repeatedly given as a reason to effect the share transfer. The cross-appellants have not made out their challenge to this finding. The PDV representation and the motivation representation were both made and were misleading or deceptive.

97. [120]

    The primary judge summarised Mr Murray and CJZ’s case that:

    1. (1)

       by not disclosing the nature and extent of Mr Morrow’s communications with the ABC in the period leading up to the execution of the Share Sale Agreement, Mr Morrow engaged in misleading or deceptive conduct because CJZ had a reasonable expectation that Mr Morrow would disclose any information of which he was aware regarding the ABC’s desire or intention to commission a further series of The Checkout or any similar or equivalent program;

    2. (2)

       such information was relevant to Mr Murray’s decision whether to sell CJZ’s share in the Joint Venture Company; and

    3. (3)

       Mr Morrow had deliberately withheld such information from CJZ because he knew that if Mr Murray knew of the communications, Mr Murray would be loath to sell CJZ’s share in the Joint Venture Company and would not have done so ([532]).

98. [121]

    The primary judge accepted these submissions and found, at [535], that Mr Morrow’s silence (failure to disclose) in the period from 19 February 2019 to 8 April 2019 relating to the progress and status of his negotiations with the ABC and his “half-truths” (in the motivation representation) constituted misleading or deceptive conduct. In my view, the primary judge’s findings were not only open but also correct, for the reasons given by his Honour.

99. [122]

    The primary judge found at [537] that the joint venture remained on foot until the execution of the Share Sale Agreement on 8 April 2019 and that it was an implied term of the joint venture agreement that “Giant Dwarf was obliged to inform [CJZ] of the ‘opportunity’ that … arose from 8 March 2019 to produce a further series of The Checkout or of any equivalent or similar consumer affairs program”. This was a reference back to the implied term which was pleaded (as set out in [106]) and accepted at [131] (the implied term finding) as follows:

100. [123]

     The primary judge found further:

101. [124]

     The cross-appellants challenged the finding at [537] and contended that, instead of that finding, the primary judge ought to have found as follows:

102. [125]

     The cross-appellants also challenged the finding at [538] that Mr Murray and CJZ had a reasonable expectation that Giant Dwarf would comply with the implied term and disclose the opportunity which had been presented (the reasonable expectation finding). Ms Chrysanthou contended that the primary judge ought to have found, instead, that:

103. [126]

     Ms Chrysanthou contended that the implied term finding was fundamental to the reasonable expectation finding, which in turn formed the basis for the finding of misleading or deceptive conduct. She submitted that the implied term finding ought be set aside and that, if it were, the reasonable expectation finding and the finding of misleading or deceptive conduct could not stand.

104. [127]

     Ms Chrysanthou submitted that the primary judge had failed to apply the five criteria for the implication of a term articulated in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 283 (approved in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337; [1982] HCA 24):

105. [128]

     Ms Chrysanthou submitted that the implied term found by the primary judge:

     1. (1)

        was neither reasonable nor equitable because Giant Dwarf and CJZ were competitors who retained the right to produce rival shows;

     2. (2)

        was unnecessary since the Joint Venture Company was the only entity which was entitled to produce The Checkout because it owned the intellectual property rights to the program and whether it did so or not depended on whether CJZ (Mr Murray) and Giant Dwarf (Mr Morrow) could agree to do so;

     3. (3)

        it was not capable of clear expression, as evidenced by the different ways in the which the implied term was formulated throughout the primary judge’s reasons; and

     4. (4)

        it was contrary to the express terms of the joint venture agreement and, in particular, the right of each party to veto further production of The Checkout and the term that its sole purpose was to produce The Checkout and no other program.

106. [129]

     In response, Mr Katekar contended that:

     1. (1)

        the primary judge was correct to find that the implied term was necessary to protect the parties’ rights in the joint venture and that it was not to the point that the joint venture could have acted to enforce breach of its intellectual property rights (if both parties had agreed to co-operate for that purpose, which was not a given, in light of the shareholders’ power of veto);

     2. (2)

        the shareholders’ power of veto was not inconsistent with an obligation by, say, Giant Dwarf, of an obligation to inform CJZ of an opportunity to produce a new series of The Checkout; and

     3. (3)

        there was no error in extending the implied term to “an equivalent or similar show”.

107. [130]

     However, Mr Katekar also contended that although the existence of an implied term was a sufficient condition to give rise to a reasonable expectation of disclosure (so as to render failure to disclose misleading or deceptive), it was not a necessary condition because there were several bases on which a reasonable expectation of disclosure could arise and that these were also accepted by the primary judge.

108. [131]

     It is not necessary to decide whether the primary judge erred in making the implied term finding. The finding is not determinative as this was not a claim in contract for breach of an implied term. Rather, it was a claim for rescission as a consequence of misleading or deceptive conduct which was said to arise from non-disclosure in circumstances where there was a reasonable expectation of disclosure such as to render non-disclosure misleading or deceptive (for the reasons I have given above and also for those which appear below).

109. [132]

     The primary judge found, in my view correctly, that the reasonable expectation of disclosure arose not only from the putative implied term, but also from:

     1. (1)

        the PDV representation;

     2. (2)

        the nature and purpose of the joint venture agreement (to produce The Checkout) and the shareholding and identity of the directors of the Joint Venture Company (who owed fiduciary duties to act in its interests);

     3. (3)

        the information to which Mr Morrow was privy as a director of the Joint Venture Company as a consequence of his communications with the ABC about recommissioning The Checkout in the near future;

     4. (4)

        the steps which Mr Morrow took to ensure that Mr Murray, also a director, did not learn of his discussions with the ABC which bespoke an intention to mislead and deceive Mr Murray (who knew that The Checkout had been “axed” in July 2018) into believing that there was no genuine prospect of The Checkout returning in the near future; and

     5. (5)

        the circumstance that misleading or deceptive conduct can more readily be inferred when there is an intention to mislead or deceive (see the authorities referred to above).

110. [133]

     Whereas the putative implied term principally arose from (2) above, the reasonable expectation of disclosure, the failure to disclose and the finding of misleading or deceptive conduct arose from each of (1)-(5). Thus, while the implied term required disclosure (which necessarily gave rise to a correlative expectation of disclosure), it was by no means the only source of the requirement or the correlative expectation, given the matters referred to above. I consider that the primary judge’s findings as to the reasonable expectation of disclosure were amply warranted by the evidence. No error has been shown.

111. [134]

     For the reasons given above, none of the various challenges made to the finding that Mr Morrow and Giant Dwarf engaged in misleading or deceptive conduct to induce, and which had the effect of inducing, Mr Murray and CJZ to enter into the Share Sale Agreement on the terms provided by that agreement has been made out.

112. [135]

     The primary judge found, on the basis of Mr Murray’s evidence, which he accepted, that if Mr Morrow had disclosed to Mr Murray the nature of his discussions with the ABC and the opportunity which had arisen, he would not have caused CJZ to sell its share in the Joint Venture Company on the terms of the Share Sale Agreement ([544]-[545]). Ms Chrysanthou did not challenge this finding.

113. [136]

     The primary judge’s reasons for ordering rescission were ([546]):

114. [137]

     The grounds of cross-appeal relating to the relief granted on the cross-claim are as follows:

115. [138]

     Apart from 8(c), ground 8 has been addressed above. Ground 8(c) is addressed below. For the reasons given the ground has not been made out because none of the sub-paragraphs has been made out.

116. [139]

     In support of ground 9, Ms Chrysanthou contended that [546] (extracted above) did not amount to reasons for rescission and that the primary judge had failed to address any of the arguments she had put as to why rescission was not an appropriate remedy even if misleading or deceptive conduct had been established. She submitted that, had the Share Sale Agreement not been executed, there would have been no further series of The Checkout, Mr Morrow would have made Are you being served? and Mr Murray would have been in no better position. She submitted that this Court ought set aside the order for rescission even if it did not disturb the findings that Mr Morrow’s misleading or deceptive conduct had caused Mr Murray to sign the Share Sale Agreement.

117. [140]

     Many of the reasons put forward by Ms Chrysanthou in her submissions as to why recission ought not have been granted pertain to challenges to findings of fact which have not been made out. However, she separately contended that rescission was an inappropriate remedy because it required parties who were obviously incompatible to remain as part of a joint venture whereas the effect and purpose of the Share Sale Agreement was to sever their relationship and enable each to continue as competitors without regard, or recourse, to the other. She submitted that this Court ought not intervene to set aside the order for rescission because otherwise, it would be forcing parties who wanted to separate back into a company where the only avenue for exit (given the unlikelihood of resolution by agreement) would be for the Joint Venture Company to be wound up on the just and equitable ground pursuant to s 461(1)(k) of the Corporations Act 2001 (Cth).

118. [141]

     It is telling that Mr Morrow and Giant Dwarf did not propose, either at first instance or on appeal, an alternative remedy to rescission. While Mr Murray and CJZ sought damages, their claim was rejected by the primary judge because, as referred to above, his Honour accepted that Mr Morrow would have refused to produce The Checkout again on the terms of the joint venture agreement. In these circumstances, Ms Chrysanthou’s criticism of the primary judge that his Honour failed to consider the full range of options would appear to be unwarranted. It would appear that they contend that there ought be no adverse consequence to them from their wrongful conduct. In other words, Mr Murray and CJZ are to be left without a remedy, if Ms Chrysanthou’s argument is accepted. This is an unattractive submission, not least because the injured parties (Mr Murray and CJZ) sought rescission and therefore can be taken to have preferred it to being bound by the Share Sale Agreement.

119. [142]

     The effect of the order for rescission of the Share Sale Agreement is to deprive Mr Morrow and Giant Dwarf of the fruits of their misleading or deceptive conduct and to put the parties in the position they would have been in had the conduct not occurred. This consequence is consistent with the related principle that, generally speaking, the appropriate measure of damages for misleading or deceptive conduct is the sum sufficient to put the injured party in the same position, as far as money can do it, as if the wrongful conduct had not occurred: Marks v GIO Australia Holdings Limited (1998) 196 CLR 494; [1998] HCA 69 (Marks v GIO) at [41] (McHugh, Hayne and Callinan JJ). Although relief under s 237 of the Australian Consumer Law is not to be confined to common law remedies (Marks v GIO at [40]), restoration of the parties to the status quo ante can often be an effective way of undoing the wrong.

120. [143]

     I appreciate that it may be that the dismissal of the cross-appeal and, in particular, ground 9 may lead to further litigation (a winding-up application). However, it does not follow from the circumstance that orders will not finally resolve all of the issues between parties, that no orders ought be made, particularly where no other order has been sought. In circumstances where the primary judge had power to make an order for rescission of the Share Sale Agreement pursuant to s 237 of the Australian Consumer Law and neither the injured parties nor the wrongdoer has proposed any other viable substantive relief (apart from damages or equitable compensation, which was refused), I am not persuaded that the order for rescission was other than appropriate.

121. [144]

     For the reasons given above, ground 9 has not been made out.

122. [145]

     For the reasons given above, I am not persuaded that any of the grounds of cross-appeal have been made out.

The facts relating to the period after execution of the Share Sale Agreement on 8 April 2019

1. [146]

   On 7 May 2019, Ms Pincus confirmed that Mr Carrington had approved two further series of The Checkout ([556]). On 13 May 2019, Mr Morrow sent his budget for The Checkout to the ABC. It was in the same format and contained almost the same figures as had appeared in the budget he had sent the ABC for Are You Being Served? ([557]-[558]).

2. [147]

   Also on 13 May 2019, Craig Reucassel, who had been a writer and presenter of the first six series of The Checkout, and was a director and shareholder of Giant Dwarf, sent a text to Mr Murray intimating that The Checkout was rumoured to be returning ([561]). Mr Murray’s response was sceptical. Mr Reucassel responded:

3. [148]

   Rather than list each of the MCOs and the alleged injurious falsehoods (IF), I propose to set them out largely in their place in the chronology (and identify them by headings).

4. [149]

   On 21 May 2019, Mr Murray wrote to Mr Anderson with a copy to Mr Carrington in the following terms ([568]):

5. [150]

   The primary judge found that the alleged imputations in this email were not defamatory (there is no challenge to this finding).

6. [151]

   Mr Anderson responded on 22 May 2019, assuring Mr Murray “that the ABC takes the matters raised in your email extremely seriously.” Later that day, Mr Carrington sent an email to Mr Morrow which attached a letter, which included the following:

7. [152]

   The primary judge’s finding that Mr Murray’s email of 21 May 2019 had brought about this letter was not challenged. Nor was his Honour’s finding that Mr Murray’s email had caused the ABC to “revive its requirement that Mr Morrow produce a Quit Claim from [CJZ]” ([574]), in circumstances where the ABC had previously been content to accept that the transfer of shares in the Joint Venture Company from CJZ to Giant Dwarf was sufficient to protect the ABC’s interests ([575]).

8. [153]

   On 29 May 2019, Mr Carrington sent an email to Ms Pincus informing her of his intention to “pull [The Checkout] project” if no signed Quit Claim was received ([577]). On 30 May 2019, Kate Gilchrist, the Acting Head of Legal Operations at the ABC, sent a final version of the Quit Claim to Mr Morrow, requiring it to be signed by the morning of 4 June 2019 before the Content Executive meeting on that day ([578]). Later on 30 May 2019, Mr Morrow sent the draft Quit Claim to Mr Murray for his signature, relying on cl 5.3 of the Share Sale Agreement (which required the parties to do all things necessary to transfer the intellectual property rights in The Checkout to the Joint Venture Company).

9. [154]

   The operative clause of the Quit Claim was:

10. [155]

    As Mr Morrow had not received a response from Mr Murray by 4 June 2019, he sent Mr Anderson an email which said:

11. [156]

    Later on 4 June 2019, Mr Carrington emailed Mr Morrow to confirm that the ABC required the Quit Claim before commissioning the program ([589]). Communications ensued between Mr Morrow and Mr Murray in the course of which Mr Murray expressed his disinclination to sign the Quit Claim. In an email to CJZ’s in-house lawyer, Mandy Chapman, Simon Fraser and Ms Shortland (all in-house to CJZ), Mr Murray set out his position ([599]). He concluded the email by saying:

12. [157]

    On 11 June 2019, Mr Carrington wrote to Mr Morrow, acknowledging receipt of the Share Sale Agreement ([600]). He said:

13. [158]

    On 11 June 2019, Mr Murray spoke to Ms Pincus, who recorded the substance of the conversation in an email to Ms Waite sent on the same day. The email said:

14. [159]

    After the conversation with Mr Pincus (documented above), Mr Murray sent an email to Ms Pincus and Ms Chapman, as follows:

15. [160]

    Later that day, Mr Morrow wrote to Mr Murray saying that it would be a shame if their disagreement stopped The Checkout ([607]).

16. [161]

    Mr Easton (Giant Dwarf’s then solicitor) sought copies of Mr Murray’s correspondence from the ABC, which refused to provide it but said that it would ask Mr Murray to provide it to Giant Dwarf. Ms Gilchrist also said in her email of 14 June 2019 ([610]), implicitly referring to Mr Murray’s email of 12 June 2019 to Ms Pincus:

17. [162]

    On 14 June 2019 Mr Murray sent an email to Ms Pincus, on which Mr Morrow (on behalf of Giant Dwarf) relied to support its injurious falsehood claim ([619]-[620]). The email said:

18. [163]

    The primary judge addressed Mr Morrow’s contention that he was entitled to terminate the Share Sale Agreement as part of his duty to make all relevant findings (in order to avoid unnecessary remitter following an appeal) although, on the basis of his Honour’s decision that the agreement ought be rescinded ab initio, the question of termination was moot. Ms Chrysanthou contended that the order for rescission ought be set aside and a finding made that Mr Morrow was entitled to terminate the Share Sale Agreement.

19. [164]

    The refusal by Mr Murray to sign the Quit Claim became the subject of correspondence between the parties’ lawyers. Mr Morrow retained Ben Kay from Kay & Hughes and Mr Murray retained Hamish Fraser from Bird & Bird.

20. [165]

    Mr Morrow’s lawyers contended that Mr Murray (and CJZ) were in breach of the following clauses of the Share Sale Agreement because Mr Murray had refused to sign the Quit Claim:

21. [166]

    Both parties’ lawyers communicated with each other and the ABC about the form of the Quit Claim.

22. [167]

    There were settlement discussions between the parties on 17 June 2019, in the course of which Mr Murray asked Mr Morrow how many series of The Checkout the ABC was proposing to commission. When Mr Morrow said “one” (which he admitted in evidence was false since the ABC was proposing to commission two), Mr Murray disbelieved him, which brought to an end the settlement discussions ([673]-[676]).

23. [168]

    Ms Chrysanthou challenged these findings (ground 7, fact 33 in [676]) and contended that the primary judge ought to have found that:

24. [169]

    Ms Chrysanthou relied on evidence as to what the term “commission” means within the ABC and the specific evidence of discussions regarding when series 8 of The Checkout would be commissioned. I am not persuaded that this evidence renders the primary judge’s finding erroneous. On 19 March 2019, in an email to Mr Morrow, Mr Carrington confirmed a “two year deal”, with 10 episodes of “the consumer show” for each year ([390]). In a subsequent email to the ABC dated 28 October 2019, Mr Morrow confirmed that what was reflected in the 19 March 2019 email represented what had been agreed at a meeting on 8 March 2019: namely, that the ABC had “on the basis of a two series deal over two years … decided to move forward to commission … a new consumer affairs program”. Mr Morrow also accepted this in cross-examination. The “new consumer affairs program” became The Checkout once Mr Morrow confirmed that he controlled the Joint Venture Company. However, when Mr Morrow was cross-examined about his statement to Mr Murray that the ABC had only commissioned one series, he maintained that what he said was true. The primary judge was entitled to prefer what Mr Morrow had said in writing on 28 October 2019 to his oral evidence. The challenge to the finding in [676] has not been shown to be in error.

25. [170]

    Ultimately, the discussions culminated in Mr Kay sending Hamish Fraser an alleged “breach notice” on 19 June 2019 which imposed a final deadline of 5pm on 21 June 2019 for the execution of the Quit Claim. Mr Kay also said that Mr Morrow required Mr Murray to confirm that:

26. [171]

    On 19 June 2019 Hamish Fraser responded that Mr Murray was prepared to confirm (a) and (b) but not (c) or (d) and that it was Mr Murray’s view that the Share Sale Agreement did not compel him to sign the Quit Claim “in its current form (or at all)” ([633]). Hamish Fraser then set out Mr Murray’s key contentions that he was misled into signing the Share Sale Agreement and that, if he had been aware of “the true status of The Checkout”, he would not have sold CJZ’s shares in the Joint Venture Company ([634]). Hamish Fraser also said ([635]):

27. [172]

    Hamish Fraser’s open letter of 19 June 2019 is also significant to CJZ and Mr Murray’s application for leave to appeal against the costs order and is addressed in greater detail in that context.

28. [173]

    The primary judge found at [636]:

29. [174]

    Further communications ensued, including with the ABC, which extended the deadline for the Quit Claim to 28 June 2019 ([639]).

30. [175]

    On 25 June 2019, Mr Kay wrote to Hamish Fraser. He alleged that Mr Murray’s and CJZ’s failure to comply with Mr Morrow’s request pursuant to cl 5.3 of the Share Sale Agreement to execute the Quit Claim was a breach which would deprive the Joint Venture Company “of substantially the whole benefit it was intended to obtain from” the Share Sale Agreement, namely the “exclusive right to exercise the powers and benefits subsisting in The Checkout”. Mr Kay asserted that this amounted to a “renunciation” (repudiation) of the Share Sale Agreement and gave a “final notice” requiring Mr Murray to execute the Quit Claim ([640]).

31. [176]

    On 26 June 2019, Hamish Fraser responded, putting Mr Murray’s position that: Mr Murray would not sign the undertakings because they were broader than the Quit Claim; the discussions between Mr Murray, Mr Morrow and Simon Fraser before April 2019 were not on the basis that the revival of The Checkout was imminent or that Mr Morrow was trying to revive it; if Mr Murray had known about the discussions which Mr Morrow was having with the ABC he would not have signed the Share Sale Agreement; Mr Morrow was in breach of the duties he owed to CJZ as a consequence of his being a director of the Joint Venture Company; and the Quit Claim and proposed undertaking both required Mr Murray to give up his claim to challenge the Share Sale Agreement ([641]).

32. [177]

    On 28 June 2019, Mr Kay wrote to Hamish Fraser purporting to terminate the Share Sale Agreement on the basis of Mr Murray’s repudiation.

33. [178]

    The primary judge found that cl 5.3 was not relevant since the Quit Claim did not ask CJZ to perfect any assignment of intellectual property ([658]-[659]). The primary judge further found:

34. [179]

    The primary judge found that because Mr Murray had been misled by Mr Morrow into signing the Share Sale Agreement, his refusal to “stand by” the Share Sale Agreement could not have been a repudiation of it ([654]-[655]). Ms Chrysanthou contended that this did not follow. This contention will be addressed below.

35. [180]

    On this basis, the primary judge concluded that CJZ did not repudiate the Share Sale Agreement; and that, in purporting to terminate the Agreement, the Joint Venture Company and Giant Dwarf themselves repudiated it ([670]).

36. [181]

    The cross-appellants contended that the primary judge was in error in finding that CJZ did not repudiate the Share Sale Agreement. For the reasons his Honour gave, this finding was not necessary for the decision as his Honour had found that CJZ was entitled to an order for rescission of the Share Sale Agreement. Because I consider that the order for rescission should stand, I can be relatively brief in addressing this challenge.

37. [182]

    The cross-appellants argued that Mr Murray (and CJZ) had repudiated the Share Sale Agreement in the following two ways, which will be addressed in turn:

    1. (1)

       Mr Murray’s refusal to confirm that he was prepared to “stand by” the Share Sale Agreement; and

    2. (2)

       Mr Murray’s refusal to sign the Quit Claim.

38. [183]

    If a person has been induced to sign an agreement as a result of misleading or deceptive conduct, it cannot amount to repudiation of that agreement for the party to insist on his or her rights under the Australian Consumer Law or to refuse to contract out of them (which appears to have been the intended effect of the undertaking sought by Mr Morrow’s solicitors from Mr Murray that he “stand by” the Share Sale Agreement). This situation is to be distinguished from the situations considered in Universal Cargo Carriers Corp. v Citati [1957] 2 QB 401 at 437-438 (Devlin J), where the example was given of someone who announces that he or she will not perform a contract before the time for performance has arrived, or the cases envisaged by the majority in DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 where one party who insists on an untenable construction of the agreement may be held to have repudiated it.

39. [184]

    It was a question of construction whether the Share Sale Agreement required Mr Murray to sign the Quit Claim in the form sought by the ABC. The primary judge found that it imposed no such obligation. No challenge was made to that finding.

40. [185]

    For these reasons, the cross-appellants have not made out their challenge to the primary judge’s finding that CJZ did not repudiate the Share Sale Agreement.

41. [186]

    On 20 June 2019 Mr Murray sent an email to Mr Carrington as follows:

42. [187]

    MCO 4 arises in connection with the application for leave to appeal against the orders in the Defamation proceedings (which are considered separately below). Ms Chrysanthou separately challenged the primary judge’s finding at [820] (ground 7, fact 35) that:

43. [188]

    The primary judge’s finding was based on Mr Murray’s evidence (extracted at [819]) that:

44. [189]

    The primary judge explained his conclusion in [820]:

45. [190]

    Although the primary judge used the word “assuming”, it is plain that his Honour accepted Mr Murray’s uncontradicted evidence of what Mr Reucassel had said to him and also (by implication) drew the Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 inference that, if called, Mr Reucassel’s evidence would not have assisted Mr Morrow. No error in this finding has been shown.

46. [191]

    Nor do I consider this finding to be impugned by Mr Reucassel’s response to Mr Kay’s email (both dated 12 May 2020) in which Mr Kay asked him to confirm whether, as at 20 June 2019, he “had expressed to CJZ that [he] supported their position in the dispute regarding CJZ’s exit from [the Joint Venture Company].” Mr Reucassel responded:

47. [192]

    It was open to the primary judge to accept Mr Murray’s evidence of his conversation with Mr Reucassel (set out above). Mr Reucassel’s email shows an understandable reluctance to go onto the record in support of either side but does not gainsay his expression of limited support to Mr Murray in the conversation to which Mr Murray referred. For these reasons, the challenge to [998] (ground 7, fact 38) also fails (the balance of this challenge is addressed in the table at the conclusion of these reasons).

48. [193]

    On 27 June 2019, Mr Murray asked the ABC for copies of correspondence with the Joint Venture Company, on the basis that he had, until 8 April 2019, been one of its directors. The ABC refused ([681]-[682]).

49. [194]

    On 28 June 2019, Mr Murray wrote to Ms Gilchrist and Mr Carrington, with a copy to Mr Anderson and Ms Pincus, as follows:

50. [195]

    On 28 June 2019, Mr Morrow wrote to Mr Anderson requesting an urgent meeting to discuss the situation ([685]).

51. [196]

    By email dated 5 July 2019, Connie Carnabuci, the ABC’s General Counsel, wrote to Mr Murray and Mr Morrow to inform them that the ABC was not able to commission The Checkout “due to [their] inability to resolve [their] dispute by [the ABC’s] deadline” ([686]).

52. [197]

    On 5 July 2019, Mr Murray responded to Ms Carnabuci as follows:

53. [198]

    On 23 July 2019, Ms Carnabuci wrote separately to Mr Morrow and Mr Murray, indicating that the ABC would be willing to consider a pitch for a new consumer affairs TV show from either of them and that this would not require the undertakings set out in the letter of 5 July 2019.

54. [199]

    On 29 July 2019, Mr Murray wrote to Ms Gilchrist as follows:

55. [200]

    On 8 August 2019, Ms Gilchrist responded to Mr Murray ([694]) in the following terms:

56. [201]

    On 12 August 2019, Mr Murray wrote to Ms Gilchrist in the following terms:

57. [202]

    There was a mediation between Mr Murray and Mr Morrow on 18 October 2019. Following the mediation, Simon Fraser (who had been present at the mediation) wrote to the ABC, attaching various versions of a Quit Claim and asking which would be acceptable to the ABC. In cross-examination, Simon Fraser accepted that he had obtained the documents in the course of the mediation and that he was in breach of the confidentiality provisions of the mediation agreement.

58. [203]

    The primary judge rejected Ms Chrysanthou’s submission that this “unauthorised disclosure obviously and necessarily interfered with the plaintiff’s relationship and ongoing negotiations with the ABC”, on the basis that there was no evidence to establish that it had ([697]-[701]).

59. [204]

    Mr Morrow claimed that he and Giant Dwarf had suffered damage as a result of Mr Murray’s defamation and injurious falsehood and that this damage included the loss of the opportunity to produce a new consumer affairs show, The Help Desk.

60. [205]

    On 4 July 2019, Mr Morrow wrote to Mr Anderson and Mr Carrington proposing The Help Desk. In the course of negotiations, a disagreement arose between Mr Morrow and the ABC which resulted in Mr Morrow writing to the ABC on 28 October 2019 asserting that the ABC’s terms for The Help Desk were not as good as those which the ABC had offered for Are You Being Served? Mr Morrow refused to accept the ABC’s standard terms and conditions as a starting point for negotiations and accused the ABC of damaging the successful working relationship it had had with Giant Dwarf. On 22 November 2019, Mr Carrington wrote to Mr Morrow ([722]):

61. [206]

    As the primary judge noted at [723], Mr Morrow replied within minutes:

62. [207]

    Mr Morrow aired his grievance with the ABC by publishing a tweet ([725]):

63. [208]

    The tweet included an image with the ABC’s logo, which read:

64. [209]

    The ABC responded to the tweet by informing Mr Morrow that it considered the tweet to be an unauthorised disclosure of confidential information ([728]).

65. [210]

    Ultimately, on 5 December 2019, Mr Carrington wrote to Mr Morrow as follows ([729]):

66. [211]

    At [731], the primary judge found:

67. [212]

    Mr Morrow particularised a total of 21 injurious falsehoods, of which 12 were alleged to have been made on or after 13 September 2019 (these are set out at [734] of the reasons of the primary judge).

68. [213]

    For the reasons which appear later in these reasons, it is not necessary to set them all out since I am not persuaded that the primary judge was in error in finding that none of them was an operative cause of the loss claimed by the cross-appellants.

69. [214]

    The primary judge rejected this claim on the following bases:

    1. (1)

       CJZ was entitled to an order for rescission of the Share Sale Agreement (which meant that it could not be terminated by Giant Dwarf) ([1067]);

    2. (2)

       CJZ was not in breach of the Share Sale Agreement by refusing to execute the Quit Claim ([1068]); and

    3. (3)

       Giant Dwarf had itself failed to comply with the Share Sale Agreement ([1069]).

70. [215]

    The primary judge also found, at [1072]:

71. [216]

    CJZ claimed that, but for the misleading or deceptive conduct by Mr Morrow, the joint venture agreement would have remained on foot and Giant Dwarf would have produced further series of The Checkout. The primary judge was not satisfied of this counterfactual. His Honour considered that, in that event, Mr Morrow would have exercised his right of veto and that Mr Murray would have refused to sell CJZ’s share in the Joint Venture Company ([1076]-[1077]), thereby preventing any further production of The Checkout. For this reason, the primary judge was not satisfied that CJZ had suffered any damage as a result of the misleading or deceptive conduct ([1078]).

72. [217]

    The application for leave to appeal on behalf of Mr Murray is confined. There is no cross-appeal in the Defamation proceedings. It was accepted that each of the MCOs was published and that, if each bore the imputation for which Mr Morrow contended, each was defamatory. The real issue turned on the defences raised by Mr Murray. Accordingly it is not necessary to address all of the primary judge’s findings or reasons. It is sufficient to summarise them in the following table (by reference to each MCO) before turning to the matters in respect of which leave to appeal is sought.

73. [218]

    As the primary judge’s findings on the defence of justification were relied on in relation to qualified privilege, it is convenient to set them out before turning to the defence of qualified privilege.

74. [219]

    In rejecting the defence of justification for MCO 3, the primary judge said:

75. [220]

    These findings were relied on by Ms Chrysanthou in response to Mr Katekar’s submission that malice did not defeat the defence of qualified privilege (which he contended ought be found by this Court if leave to appeal were granted in respect of the orders in the Defamation proceedings).

76. [221]

    The primary judge addressed the defence of justification with respect to MCO 5 as follows:

77. [222]

    Ms Chrysanthou relied on these findings in support of her submission that, if MCO 5 was otherwise communicated on an occasion of qualified privilege, the privilege was defeated by malice, as Mr Murray’s purpose in sending it was an improper one, foreign to the occasion of qualified privilege (which will be addressed below).

78. [223]

    The primary judge stated the following test to determine whether the defence of qualified privilege at common law had been made out at [795] as follows:

79. [224]

    The primary judge applied the test set out above to MCO 3 and said at [796]:

80. [225]

    The reference to statutory qualified privilege was a reference to [791] where the primary judge said:

81. [226]

    The primary judge addressed the question of malice as follows:

82. [227]

    The primary judge, at [875]-[892], addressed the question of malice with respect to MCOs 1 and 2. The primary judge, under the heading, “Malice”, expressed what can be taken to be his Honour’s understanding of the relevant principle:

83. [228]

    The primary judge addressed Mr Katekar’s submissions as to Mr Murray’s purpose in sending MCO 1 and relevantly found, at [881]:

84. [229]

    As the primary judge found that the defence of justification was made out in connection with MCO 1 and MCO 2, no question of damages in relation to these two MCOs arose, although Mr Murray’s state of mind was potentially relevant to aggravated damages for the other MCOs in respect of which no defence was made out: [882]-[886].

85. [230]

    The primary judge said, in relation to the subsequent MCOs:

86. [231]

    The primary judge addressed the spread of the defamatory matter at [893]-[896] and the unchallenged evidence of Mr Morrow’s prior good reputation at [897]-[898]. The primary judge noted that damage to reputation was presumed. His Honour accepted Mr Katekar’s submission that there was no evidence of actual damage to Mr Morrow’s reputation from anyone who received the emails ([912]).

87. [232]

    The primary judge summarised the evidence relating to “hurt to feelings” at [919]-[926] before turning to aggravated damages. His Honour accepted, as circumstances of aggravation, Mr Murray’s failure to apologise ([935]-[938]); his maintenance of the allegations of fraud ([939]); that Mr Murray had engaged in a “campaign” against Mr Morrow ([942]); and that Mr Murray had pressed a “bad reputation” defence ([944]).

88. [233]

    In the context of aggravated damages, the primary judge said:

89. [234]

    Ms Chrysanthou challenged the primary judge’s finding in [940]. I am not persuaded that this challenge ought succeed. It is plain that the primary judge drew a distinction between, on the one hand, an allegation of fraud (such as an allegation of fraudulent misrepresentation) as the basis for a cause of action and, on the other hand, the defence of justification in response to an MCO which carries an imputation of fraud. When [940] is read fairly, the primary judge was simply observing, as was the case, that no allegation of fraud had been made by Mr Murray or CJZ as the basis for a claim for relief in the proceedings.

90. [235]

    When assessing damages for economic loss, the primary judge made the following findings, which Ms Chrysanthou alleged were erroneous:

91. [236]

    In effect, the primary judge found that any economic loss that Mr Morrow or Giant Dwarf have suffered has been brought on them by Mr Morrow himself and not by Mr Murray’s defamatory publications ([956]-[968]).

92. [237]

    Ms Chrysanthou challenged the findings at [963] and [968] (ground 7, fact 37) which appear in the following passage from the primary judge’s reasons:

93. [238]

    Ms Chrysanthou submitted that the primary judge ought to have found:

94. [239]

    I consider that the challenge to [963] and [968] should be rejected for the reasons given by the primary judge. The ABC was entitled to propose its standard terms for The Help Desk and did so for its own reasons which were not shown to be related to anything Mr Murray had said or done. Mr Morrow’s response to the ABC in these circumstances was, as his Honour correctly found, the reason why The Help Desk was not commissioned.

95. [240]

    As to damages, the primary judge found:

96. [241]

    On this basis, the primary judge concluded that the appropriate award of damages for the defamatory statements made by Mr Murray for which there is no justification (MCOs 3-6) was $30,000 for general damages plus $5,000 for aggravated damages, plus interest and costs ([979]). His Honour made orders to this effect on 23 June 2022. In the principal judgment, his Honour expressed a view that injunctive relief ought not be granted ([983]).

97. [242]

    Mr Murray and CJZ require leave to challenge the orders made against them in the Defamation proceedings as the appeal involves a matter in issue which is less than $100,000: s 101(2)(r) of the Supreme Court Act.

98. [243]

    Mr Katekar argued that leave ought be granted because there was an error of principle in determining whether the defence of qualified privilege had been made out and that this Court ought intervene to correct it.

99. [244]

    Ms Chrysanthou submitted that leave ought not be granted because there was no error of principle. She submitted further that the findings which the primary judge made with respect to malice for the purposes of awarding aggravated damages were also applicable to the question whether malice defeated the defence of qualified privilege, thereby rendering any finding on appeal that the communications were protected by qualified privilege irrelevant to the result. She submitted that, in these circumstances, the result would be no different, even if this Court were to find that the defence of qualified privilege had otherwise been made out.

100. [245]

     Ms Chrysanthou’s submission that the primary judge’s findings on malice (which were expressed to be for the purposes of determining whether aggravated damages ought be awarded) would defeat the defence in any event was premised on the submission that the primary judge had relevantly found malice for the purposes of defeating the defence of qualified privilege. The primary judge said in [872] that the question of whether malice defeated the defence of qualified privilege did not arise (because the defence of qualified privilege had not been made out for any of MCOs 3-6). As set out above, the primary judge did make findings at [887]-[892] concerning MCOs 3-6 and identified in respect of each of them that Mr Murray’s purpose was, in part at least, an improper one. However, the primary judge neither found, nor purported to find, that malice had been established (it being unnecessary to do so in light of the primary judge’s findings regarding qualified privilege). Nor did his Honour apply the correct test which required Mr Morrow and Giant Dwarf to prove that Mr Murray’s dominant motive was an improper one.

101. [246]

     In these circumstances, I am not persuaded that his Honour actually made findings of malice for the purposes of qualified privilege. If I have misunderstood his Honour’s findings at [887]-[892], then I consider that this Court ought review them since his Honour did not pose the correct test. Accordingly, no assumption can be made that, if this Court overturned his Honour’s rejection of the defence of qualified privilege, the result would be the same.

102. [247]

     As the question whether leave ought be granted is affected by whether there has been an error of principle, I propose to turn to the grounds of appeal.

103. [248]

     There is considerable overlap in the grounds of appeal. The questions of principle substantially turn on the defence of qualified privilege. In ground 1, Mr Murray and CJZ allege that, in failing to find that MCO 3 was published on an occasion of qualified privilege, the primary judge:

     1. (1)

        conflated the notion of “interest” for the purposes of the defence of qualified privilege pursuant to the Defamation Act 2005 (NSW) with the notion that applied in the context of the common law defence of qualified privilege; and

     2. (2)

        applied an overly narrow test (whether the ABC had an interest in knowing the details of the dispute between Mr Murray and Mr Morrow) to determine whether the ABC, as the recipient of MCO 3, had an interest in knowing of the dispute between Mr Morrow and Mr Murray as a general matter.

104. [249]

     The grounds which challenge the findings for each of MCO 4, 5 and 6 repeat (2) above. There are further grounds which will be considered if leave is granted. The principal questions are those set out in the applicants’ summary of argument as follows:

     1. (1)

        what is the correct test to determine whether there is a reciprocal interest between the publisher of a communication and the recipient(s) for the purpose of common law qualified privilege?

     2. (2)

        did his Honour fail to apply that test to the four publications found not to be privileged?

     3. (3)

        to the extent that his Honour determined that two of the four publications were actuated by malice for the purpose of consideration of aggravated damages, do those findings apply to defeat the defence of qualified privilege should those publications be found to be privileged on appeal (this submission has been addressed in part above)?

     4. (4)

        did his Honour err in finding that the second applicant was actuated by (relevant) malice in respect of those two publications?

105. [250]

     The test the primary judge applied is set out above. In effect, the primary judge found that although the ABC had an interest in the parties’ entitlement to produce the television series for it, it had no specific interest in the details of the dispute and therefore there was no reciprocity of interest for the purposes of qualified privilege with respect to MCOs 3-6. For the reasons which follow, this was not the correct question. Instead of asking whether the recipient was interested in receiving the particular statements which comprised the publication, his Honour should have determined whether the defendant had proved that:

     1. (1)

        the communication was published on a privileged occasion; and

     2. (2)

        the communication was relevant to the occasion.

106. [251]

     The common law defence of qualified privilege is defeated by a particular kind of malice, sometimes referred to as “express malice”: Horrocks v Lowe [1975] AC 135 at 149, approved in Roberts v Bass (2002) 212 CLR 1; [2002] HCA 57 at [75] (Gaudron, McHugh and Gummow JJ). To prove express malice, the plaintiff must prove that the dominant purpose of the communication was unrelated to the privileged occasion: that is, that the dominant purpose was an improper purpose, being a purpose which was foreign to the privileged occasion.

107. [252]

     The first step, the identification of a privileged occasion, requires consideration of the communality, or reciprocity, of interest between the publisher (in this case, Mr Murray) and the recipient (the ABC) in the subject matter of the communication (rather than the precise terms of the communication): Wraydeh v Fairfax Media Publication Pty Limited; Wraydeh v Nationwide News Pty Ltd (2021) 105 NSWLR 254; [2021] NSWCA 153 at [44] (Simpson AJA, Bell P and Gleeson JA agreeing).

108. [253]

     An occasion will be privileged if a person has an interest or duty of a legal, social or moral nature to make a statement on an occasion and the recipient has a corresponding interest or duty to receive it: Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366; [2004] HCA 5 (Bashford) at [9]-[10] (Gleeson CJ, Hayne and Heydon JJ). The concept of reciprocal duty and interest is a broad and general one and is founded on public utility: Telegraph Newspaper Co Ltd v Bedford (1934) 50 CLR 632 at 657 (Evatt J); [1934] HCA 15. The circumstances of the case, the situation of the parties, the relations of all concerned and the events leading up to and surrounding the publication are all relevant to the identification of the occasion and the determination whether it is privileged: Bashford at [10].

109. [254]

     In Papaconstuntinos v Holmes a Court (2012) 249 CLR 534; [2012] HCA 53, the plurality (French CJ, Crennan, Kiefel and Bell JJ) said of present relevance at [38]:

110. [255]

     The second question, which is one of characterisation is: was the communication related to the privileged occasion.

111. [256]

     Where a communication attracts qualified privilege, there is a presumption of honesty on the part of a publisher which casts on the plaintiff the onus of rebutting the presumption: Roberts v Bass at [96]-[97].

112. [257]

     In KSMC Holdings Pty Ltd t/as Hubba Bubba Childcare on Haig v Bowden (2020) 101 NSWLR 729; [2020] NSWCA 28 (KSMC) at [59]-[61], this Court (Payne JA, Basten and White JJA agreeing) summarised the principles on proof of malice to defeat qualified privilege:

113. [258]

     It is also of significance that the plurality (Gaudron, McHugh and Gummow JJ) said in Roberts v Bass at [103]-[104]:

114. [259]

     I note that at first instance, the parties agreed on the applicable principles and the relevant authorities and that there was a distinction between malice for the purposes of qualified privilege and malice for the purposes of aggravated damages. On appeal, there was a departure from this position by Ms Chrysanthou who maintained, “malice is malice is malice”, which I understood to be a submission that a finding of malice for the purposes of aggravated damages was tantamount to a finding of malice to defeat the defence of qualified privilege. In so far as I have understood the submission, I reject it. Malice for the purposes of defeating qualified privilege is a different concept from malice for the purposes of aggravated damages.

115. [260]

     Each MCO was a communication to the ABC concerning production of The Checkout. The ABC had an interest in knowing of the dispute between Mr Murray and Mr Morrow for several reasons.

116. [261]

     First, it was considering commissioning further series and had an interest (which it shared with Mr Murray) in knowing about a dispute between the putative controlling minds of the Joint Venture Company (solely Mr Morrow if the Share Sale Agreement was not rescinded or Mr Morrow and Mr Murray if the Share Sale Agreement was rescinded) which had the potential to upset the production of The Checkout, or cause it to be abandoned by the Joint Venture Company. It also had a related interest in knowing why Mr Murray was refusing to sign the Quit Claim which the ABC had prepared with a view to protecting its own interests. Further, even if the Share Sale Agreement was not rescinded, it provided for Mr Murray to receive a format fee, which meant that he had a continuing personal and financial interest in the broadcasting of The Checkout.

117. [262]

     Secondly, the ABC (and Mr Murray) had an interest in protecting the integrity and credibility of The Checkout, which was itself a consumer affairs program. Consumer affairs is concerned with such topics as the availability of remedies for misleading or deceptive conduct. As a public broadcaster, the ABC was in a pre-eminent position to expose matters of concern relating to consumer affairs (in a way that commercial broadcasters may be less able to do because of their financial dependence on advertising income). In these circumstances, Mr Murray’s allegation that Mr Morrow’s misleading or deceptive conduct had caused him to execute the Share Sale Agreement and his claim that the agreement ought accordingly be rescinded had the capacity to impugn the credibility of the program and the ABC, as its broadcaster.

118. [263]

     Thirdly, whether Mr Morrow’s conduct had in fact been misleading or deceptive depended in large measure on his communications with the ABC. Thus, there was a substantial risk (which ensued in the proceedings) that the interstices of the ABC’s decision-making processes about programming arising from its communications with Mr Morrow would be made public (when the ABC would otherwise have kept them confidential) and that the ABC would be subject to the cost, expense and inconvenience of answering subpoenas (for documents and, potentially, for its staff to give evidence).

119. [264]

     It is necessary to address each MCO in turn to apply the correct tests for qualified privilege and express malice.

120. [265]

     MCO 3 arose from Mr Murray’s conversation with Ms Pincus on the previous day (11 June 2019) in which he had asked Ms Pincus for information about the provenance of the Quit Claim which Mr Morrow had requested that he sign. In MCO 3, Mr Murray explained to the ABC, by reference to his dispute with Mr Morrow, why he would not be in a position to sign the Quit Claim “in the near future”.

121. [266]

     In these circumstances and in light of my reasons (set out above) and the ABC’s interest in knowing why Mr Murray refused to sign the Quit Claim, I consider that the primary judge’s misstatement of the test for qualified privilege misled his Honour into mischaracterising the privileged occasion and falling into error in finding that MCO 3 was neither made on a privileged occasion nor arose from that occasion, when his Honour ought to have found to the contrary.

122. [267]

     It is thus necessary to address the question whether Mr Morrow has proved that Mr Murray’s dominant purpose was improper (that is, foreign, or unrelated, to the privileged occasion). Ms Chrysanthou submitted that Mr Murray’s object in publishing MCO 3 was to harm Mr Morrow and his companies and to secure a commercial advantage for CJZ and to “stonewall” the process of recommissioning a further series of The Checkout.

123. [268]

     Ms Chrysanthou referred to two matters which she alleged were false statements and on which she relied in support of the submission that malice had been established:

     1. (1)

        the alleged dispute about the intellectual property rights; and

     2. (2)

        the reference to a transfer of CJZ’s shares in the Joint Venture Company “without payment”.

124. [269]

     Ms Chrysanthou submitted that these two statements revealed that Mr Murray’s true motive was to harm Mr Morrow’s reputation, which was a purpose foreign to the privileged occasion. In support of this submission, Ms Chrysanthou relied on the primary judge’s findings at [781]-[784] (extracted above).

125. [270]

     I shall address the question of a dispute relating to the intellectual property rights first. Mr Murray’s evidence was that he believed that he still had an interest in the intellectual property for The Checkout (as he had not executed an all-rights assignment of any intellectual property which he retained in the show). The primary judge found, at [782]-[784] and [887] (extracted above) that Mr Murray must have known that it was untrue that there was a dispute about the intellectual property rights. I do not consider this finding to follow. Indeed, cl 5.2 of the Share Sale Agreement (extracted above at [91]) contemplated that it was the Share Sale Agreement which effected a final assignment of intellectual property rights from, relevantly, CJZ to the Joint Venture Company. In addition, cl 5.3 required CJZ to execute documents to perfect any such assignment. Mr Murray’s evidence that he had not actually executed documents to perfect any such assignment effected by the Share Sale Agreement was not challenged. Thus, if the Share Sale Agreement was rescinded (on the basis of Mr Morrow’s misleading or deceptive conduct), there would be a dispute about the intellectual property rights because (as would appear from the premise of cl 5) some would be owned by CJZ, some by Giant Dwarf and some by the Joint Venture Company.

126. [271]

     Further, even if Mr Murray’s belief that there was a dispute about the intellectual property rights was incorrect (and this was the reason why the defence of justification failed in relation to MCO 3), it did not follow that Mr Murray knew that it was incorrect: see Roberts v Bass at [103]-[104] (extracted above). The warning at [104] of Roberts v Bass, taken from Godfrey v Henderson (1944) 44 SR (NSW) 447 at 454 (Jordan CJ) is apposite. A finding of express malice is not the obverse of the defence of justification. The defendant must prove the imputation to be true in fact to make out the defence of justification. However, in order to prove express malice, a plaintiff must prove improper purpose, which may be proved by establishing (to the Briginshaw standard) both that the imputation was false and that the defendant actually knew it to be false. If this requirement is not rigorously guarded, there is a risk that the defence of qualified privilege will have no independent operation to the defence of justification, when its purpose and parameters are quite distinct.

127. [272]

     It is also important to address the primary judge’s finding, at [783], that on 19 June 2019, a short time after 12 June 2019 (the date of MCO 3), Hamish Fraser, on behalf of Mr Murray, confirmed to Mr Kay that he agreed that all intellectual property rights in The Checkout were held by the Joint Venture Company. This finding ignores the fact that the letter of 19 June 2019 was intended to resolve the dispute about the form of the Quit Claim. In a letter sent earlier on 19 June 2019, Mr Kay had required that Mr Murray confirm, first, that all intellectual property rights in The Checkout were held by the Joint Venture Company; second, that Mr Murray had no claim against the ABC; third, that Mr Murray “stands by the validity” of the Share Sale Agreement; and, fourth, that he would not seek injunctive relief to prevent the broadcast of The Checkout. Hamish Fraser confirmed that Mr Murray “is willing to confirm” the first two matters, but not the third or the fourth. Mr Murray’s expression of willingness to confirm that the Joint Venture Company held the intellectual property rights to The Checkout was put in the context of a wider proposal to settle the proceedings and did not, in my view, amount to an admission that, absent resolution of the dispute as a whole, Mr Murray was prepared to agree to those two matters or that he accepted that the Joint Venture Company did hold all the intellectual property rights to The Checkout.

128. [273]

     Further, there was an issue about its ownership because there was an issue about the ownership of the Joint Venture Company since a search of the Australian Securities and Investment Commission register would reveal that Giant Dwarf was the sole shareholder, which would prove to be inaccurate if the Share Sale Agreement were set aside. Mr Murray understood that Mr Morrow could not proceed with his negotiations with the ABC without a Quit Claim because of the ABC’s concerns.

129. [274]

     The second matter which was said to be false was Mr Murray’s statement that CJZ had transferred its share in the Joint Venture Company “without payment” when in fact the Share Sale Agreement provided for payment of $50 plus the promise by the Joint Venture Company to pay CJZ a fee of 2% of the cash budget for future series of The Checkout. At the time Mr Murray signed the Share Sale Agreement, he had (as a consequence of what he had been told by Mr Morrow and what he had heard from the ABC) no real expectation that there would ever be any future series of The Checkout. Thus, in this context, the 2% fee was speculative. Mr Murray’s evidence, which was not disputed, was that the $50 had not in fact been paid. Thus, no monies had actually been paid to Mr Murray for CJZ’s share in the Joint Venture Company. I am not satisfied that the strictly true, but perhaps slightly exaggerated, statement that the transfer was “without payment” is sufficient to establish that Mr Murray’s dominant motive in communicating MCO 3 was a purpose foreign to the occasion of qualified privilege. Further, Mr Murray’s belief that he had received no payment was in fact true.

130. [275]

     Each of these matters was relevant to the (proper) purpose of the communication. Even Mr Murray’s “stonewalling” was related to the proper purpose because it preserved the status quo, pending resolution of the dispute between Mr Murray and Mr Morrow as to the validity of the Share Sale Agreement. In these circumstances, I am not persuaded that Mr Morrow has discharged his onus of proving that Mr Murray’s dominant purpose for the publication of MCO 3 was an improper one.

131. [276]

     It follows from my reasons set out above that grounds 1(a) and (b) (alleged error of principle relating to qualified privilege) and ground 2 (erroneous finding of malice, if such a finding was made) are made out. In ground 3, the primary judge’s rejection of the justification defence with respect to MCO 3 is challenged. I do not consider that this raises an issue of principle and, accordingly, I am not persuaded that leave to appeal ought extend to this ground. In any event, it is irrelevant as Mr Murray and CJZ have established the common law defence of qualified privilege with respect to MCO 3.

132. [277]

     The primary judge found that because Mr Murray sent an “update” to the ABC on the discussions he had had with Mr Morrow on the matter in which his Honour had found, in relation to MCO 3, the ABC had no interest in the communication and that, accordingly, it was not protected by qualified privilege ([828]-[829]).

133. [278]

     In MCO 4 Mr Murray communicated information to the ABC about the dispute between him and Mr Morrow concerning the Share Sale Agreement. For the reasons given above in relation to MCO 3, this attracted qualified privilege as it was relevant to the occasion of qualified privilege.

134. [279]

     The allegation of malice (in this context, improper motive) was not the subject of a specific finding by the primary judge. Ms Chrysanthou submitted that his Honour’s findings (in respect of other matters) “span[ned] the entire period during which the matters complained of were published” and were “consistent” with a finding of malice. Ms Chrysanthou accepted that the primary judge’s malice findings pre-dated MCOs 4-6 but relied on the word “campaign” which his Honour used to describe what Mr Murray had done ([896] and [942]). I do not consider that these findings can properly be read as amounting to a finding of malice to defeat qualified privilege in respect of MCO 4.

135. [280]

     As I consider that Mr Murray has established the defence of qualified privilege in respect of MCO 4, it is necessary to address Ms Chrysanthou’s argument that Mr Morrow established malice (or rebutted the presumption of honesty of purpose). Ms Chrysanthou relied on the primary judge’s finding (for the purposes of the justification defence to MCO 3) at [781]-[784] (set out above) and said that Mr Murray’s statements that the transfer of shares had been without payment and that there was a dispute about the intellectual property rights were untrue to his knowledge. For the reasons given above in respect of MCO 3, I am not satisfied that Mr Morrow discharged his onus of proving that Mr Murray’s dominant motive was an improper one.

136. [281]

     In MCO 5, Mr Murray continued to update the ABC about the dispute. The additional statement which had not previously been made referred to “[Mr Murray and CJZ’s] allegations against [Mr Morrow] and Giant Dwarf of fraudulent misrepresentation”.

137. [282]

     The primary judge rejected the defence of qualified privilege on the following basis (which I have found, for the reasons given above, to be erroneous) at [854]:

138. [283]

     The primary judge’s findings on the defence of justification for MCO 5 at [840]-[847] have been extracted above. In substance, his Honour found that “the ordinary reasonable reader” would understand “fraudulent misrepresentation” to mean a knowingly false statement. As referred to above, Ms Chrysanthou relied on this finding in support of her submission that, as MCO contained a false statement by Mr Murray, the defence of qualified privilege, if established, would be defeated by malice.

139. [284]

     Mr Murray was cross-examined extensively on MCO 5. He said that he used the word “allegations” to qualify “fraudulent misrepresentations” to make it clear that they were just allegations at that time. He agreed that he did not press such allegations in the Defamation proceedings. Mr Murray explained that he was making allegations but referring in the same sentence to documents which he did not then have (correspondence between Mr Murray and the ABC) which would be capable of proving or disproving the allegations (see the text of MCO 5 set out above). He accepted that he was alleging fraudulent misrepresentations but said that the ABC itself would know whether there were actually fraudulent misrepresentations because the ABC would know whether Mr Morrow was negotiating with them about the return of The Checkout before 8 April 2019 (the date he signed the Share Sale Agreement). Mr Murray confirmed in cross-examination that his purpose in writing to the ABC was to obtain from them the relevant documents (communications between the ABC and Mr Morrow about the return of The Checkout before 8 April 2019). He denied that his purpose was to “shame” Mr Morrow. Indeed, when Ms Chrysanthou put to him that MCO 5 was a “gratuitous attack on [Mr Morrow] in order to harm him”, Mr Murray responded that if that was the case he would have sent it to a “wide distribution list” rather than to “one person at the ABC”.

140. [285]

     It is not to the point that Mr Murray did not press the allegations of fraudulent misrepresentations in the Commercial proceedings. The statutory prohibition on misleading or deceptive conduct in trade and commerce was a significant advance in the law in that it did not require proof of intent, in contrast to fraudulent misrepresentations. It would appear that Mr Murray appreciated that an allegation of fraudulent misrepresentation implies that the representor believed the representation to be false at the time it was made. Indeed, this was his belief. He had learned that Mr Morrow had been negotiating with the ABC for a future series of The Checkout prior to 8 April 2019 in circumstances where Mr Morrow had, at the same time, been representing to him that there was no real prospect of that occurring. Mr Murray’s evidence was that he believed the allegation (of fraudulent misrepresentation) to be true but that he could not actually know as he did not have the documents (which were in the ABC’s possession) which were necessary to prove or disprove it.

141. [286]

     In these circumstances, it cannot be inferred that Mr Murray knew the allegation to be untrue for the purposes of express malice. Indeed, there were grounds for him to believe it to be true since Mr Morrow had in fact been speaking to the ABC about bringing The Checkout back at the very time when he had been telling Mr Murray to the contrary. Just as there is a significant difference between suspicion and belief (George v Rockett (1990) 170 CLR 104 at 115-116; [1990] HCA 26), there is a significant difference between belief and knowledge.

142. [287]

     The primary judge’s finding about what an “ordinary reasonable reader” (which was made in the course of determining whether the defence of justification was made out) would understand by the statement is not to the point. What is relevant for a determination of malice in this context is Mr Murray’s state of mind. What he was trying to do in sending MCO 5 was to obtain documents from the ABC to determine one way or the other what the true facts were with a view to resolving the issue relating to the validity of the Share Sale Agreement with Mr Morrow. This was central to the occasion of qualified privilege. He was, at that time, making several allegations against Mr Morrow, all of which, but for the fraudulent misrepresentation, were pressed in the Commercial proceedings and made out.

143. [288]

     In these circumstances, Mr Morrow failed to discharge the onus of proving an improper motive for MCO 5. Accordingly, Mr Murray was entitled to the benefit of qualified privilege and is not liable in defamation for MCO 5.

144. [289]

     The email dated 12 August 2019 was similar in import to MCO 5. It repeated the allegation of fraud but did not use the word allegation. Mr Murray continued to update the ABC about the dispute between himself and Mr Morrow and informed the ABC that he would commence proceedings against Mr Morrow (which he, of course, eventually did). He also informed the ABC that Mr Morrow had terminated the Share Sale Agreement. The matters addressed in this email related to the occasion of qualified privilege. While the language of the paragraph which commenced with the rhetorical question beginning, “Why would the ABC…” was both angry and intemperate, it was relevant (indeed, central) to the occasion of qualified privilege and not in any way foreign to it. For these reasons, Mr Morrow has failed to discharge the onus of establishing malice for the purposes of defeating the defence of qualified privilege in respect of MCO 6.

145. [290]

     I am satisfied that Mr Murray has made out the defence of qualified privilege in respect of each of MCOs 3, 4, 5, and 6 and that Mr Morrow has not discharged his onus of proving malice (in the relevant sense of improper, or foreign, purpose) in respect of any of these publications. For these reasons, there should be judgment for Mr Murray and CJZ in the Defamation proceedings. The orders I propose are set out at the conclusion of these reasons.

146. [291]

     At [988], the primary judge found that:

147. [292]

     The primary judge addressed IFs 1-15 at [991]-[1058] before concluding at [1059]-[1060] (and referring back to [988]) that although to the “limited extent” set out, the case concerning injurious falsehoods had been proved, neither Mr Morrow nor Giant Dwarf had suffered any loss as a result of the injurious falsehoods.

148. [293]

     The grounds of cross-appeal relating to this claim are as follows:

149. [294]

     The key challenge in the cross-appeal relating to the injurious falsehood claim is ground 5, which challenges the primary judge’s finding that the cross-appellants had not established that any of the IFs had caused any loss suffered by them. In order to address the cross-appeal, I propose to address this challenge first.If it is not made out, there is no utility in addressing the other grounds since the claim for damages for injurious falsehood must fail as the cross-appellants were required to prove that they had suffered actual loss as a result of the IFs (see the list of elements of the tort of injurious falsehood at [985] of the primary judge’s reasons, which were said to be common ground).

150. [295]

     Ms Chrysanthou submitted that the primary judge had erred by addressing only the economic loss suffered by Mr Morrow and Giant Dwarf and making no finding as to the economic loss suffered by the Joint Venture Company.

151. [296]

     The primary judge referred only to Mr Morrow and Giant Dwarf when finding that neither had established loss as a consequence of the IFs. However, it is, in my view, inconceivable that a different conclusion in respect of the Joint Venture Company could be reached as the Joint Venture Company was, after 8 April 2019, under Mr Morrow’s control (since Mr Murray was no longer a director from 9 April 2019 and CJZ was no longer a shareholder). Therefore the findings relating to the reason why The Checkout (or any other show associated with Mr Morrow) was not broadcast were relevant to the question of whether economic loss had been established to be the result (in terms of the natural and probable consequence) of the injurious falsehood.

152. [297]

     Ms Chrysanthou also submitted, in reliance on Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388; [2001] HCA 69 (Palmer Bruyn), that it was not necessary for the cross-appellants to established that their loss was actually caused by the alleged IFs but that it was sufficient if they established that:

     1. (1)

        loss was in fact sustained (because the ABC did not commission The Checkout or The Help Desk); and

     2. (2)

        the loss was intended by Mr Murray; or

     3. (3)

        the loss was the natural and probable consequence of making each IF.

153. [298]

     I am not persuaded that Palmer Bruyn provides any support for the proposition that it is enough for a plaintiff to prove that the loss in fact sustained was intended by the maker of the injurious falsehoods in circumstances where the plaintiff cannot show that the loss was the natural and probable consequence of the injurious falsehoods and, indeed, a substantial cause.

154. [299]

     In Palmer Bruyn, McDonald’s had retained Palmer Bruyn to provide surveying services for the preparation of a development application for a new restaurant at Wallsend near Newcastle. Before the Council meeting to decide the issue, one Councillor created a hoax letter on Palmer Bruyn’s letterhead falsely suggesting (among other things) that the recipient Councillor would receive “4 Big Macs and 2 choc sundaes per week” if he supported it.

155. [300]

     The local newspaper reported the details of the hoax letter in an article which was not critical of Palmer Bruyn. The article caused McDonald’s to reconsider its retainer of Palmer Bruyn and terminated the contract. Palmer Bruyn sued the author of the hoax letter for injurious falsehood. The issue in that case was not whether Palmer Bruyn’s loss of the McDonald’s contract was caused by the falsehoods in the hoax letter, but whether its author should be held liable for that loss when he had no intention of causing it. This required consideration of the sufficiency of the connection between the publication of the false statement and the damage caused by it, which was a question of “remoteness”.

156. [301]

     In Palmer Bruyn at [57], Gummow J (with whom Gleeson CJ agreed) approved the statement in Ratcliffe v Evans [1892] 2 QB 524 at 527-528 that:

157. [302]

     Gummow J continued at [73]:

158. [303]

     His Honour said at [75]:

159. [304]

     Gummow J stressed the significance of the concept of “natural and probable result” in [81] where his Honour said:

160. [305]

     In Palmer Bruyn, the harm was neither intended by the author of the hoax letter, nor was the harm the “natural and probable result” of its publication. Gummow J also addressed the applicable principles of causation in such a case and, at [96], confirmed the principle that “the publication of an injurious falsehood is a legal cause of pecuniary loss if ‘it is a substantial factor in bringing about the loss’ …”.

161. [306]

     Thus, although the hoax letter “caused” the loss of Palmer Bruyn’s contract with McDonald’s in the “but for” sense (since but for the letter, the newspaper article would not have been written and McDonald’s would not have been concerned about the adverse publicity and would not have terminated its contract with Palmer Bruyn), this was insufficient to establish liability for the tort of injurious falsehood.

162. [307]

     In the present case, the cross-appellants were required to prove, in accordance with Palmer Bruyn, that the alleged IFs were a substantial factor in causing them economic loss. The question of remoteness (which was a live issue in Palmer Bruyn) did not arise in the present case because the primary judge found that the reason the ABC did not recommission The Checkout was because the parties could not resolve their dispute over the Share Sale Agreement ([716], [731], [958] and [1060]). This dispute also included Mr Murray’s refusal to sign the Quit Claim (which was found to be justified). Thus, the primary judge was satisfied that the operative cause of this aspect of the loss claimed by the cross-appellants was not the IFs.

163. [308]

     As to the second aspect of the loss claimed, the primary judge found that the reason the ABC refused to commission The Help Desk was because of Mr Morrow’s own conduct, which was unrelated to anything Mr Murray had said or written ([729] and [731]). Thus, Mr Morrow was the operative cause of the cross-appellants’ loss.

164. [309]

     The primary judge’s reasoning and conclusion are in accordance with the principles in Palmer Bruyn, which have been cited and applied by this Court: see, for example, TCN Channel Nine Pty Ltd v Anning (2002) 54 NSWLR 333; [2002] NSWCA 82 at [100] (Spigelman CJ, Mason P and Grove J agreeing). Accordingly, ground 5 of the cross-appeal has not been made out.

165. [310]

     In these circumstances, it is not necessary to address the other grounds (1, 2, 3, 4, 6 and 7A) of the cross-appeal against the dismissal of the claim for injurious falsehood since the rejection of ground 5 is dispositive of this aspect of the cross-appeal: Boensch v Pascoe (2019) 268 CLR 593; [2019] HCA 49 at [7]-[8] (Kiefel CJ, Gageler and Keane JJ), [101] (Bell, Nettle, Gordon and Edelman JJ) and applied by this Court in Massoud v Nationwide News Pty Ltd; Massoud v Fox Sports Australia Pty Ltd (2022) 109 NSWLR 468; [2022] NSWCA 150 (Leeming JA, Mitchelmore JA and Simpson AJA agreeing).

166. [311]

     Section 16 of the PP Act relevantly provides:

167. [312]

     As referred to above at [45], Ms Chrysanthou contended that the primary judge was in error in failing to address the consequences of the PP Act when considering the effect of documents which had been tendered from those produced on subpoena by the ABC. She submitted that “a large and significant subset of ABC documents” had been excluded or redacted by reason of s 16(3) of the PP Act and that this necessarily affected the primary judge’s fact-finding function. Ms Chrysanthou contended that:

     1. (1)

        exclusions and redactions were made to otherwise relevant evidence by reason of the PP Act;

     2. (2)

        the primary judge had access to documents by reason of s 16(5) of the PP Act; and

     3. (3)

        the primary judge was obliged, and failed, to have regard to the PP Act when drawing inferences from the ABC documents.

168. [313]

     However, Ms Chrysanthou has not identified any error in fact-finding by the primary judge or alternative finding which ought to have been made as a consequence of the effect of the PP Act. It is understandable that no such identification could be made because to embark on that process would inevitably breach the relevant privilege.

169. [314]

     The record shows that after the cross-appellants had raised the issue of the PP Act with Mr Murray and CJZ, the parties agreed on what ought be excluded and redacted. Thus, the primary judge did not need to make rulings on the effect of the PP Act on particular documents. Nor was the primary judge privy to such material since it was not admitted into evidence (and was removed from the court books). It may be that the operation of the PP Act worked to the forensic disadvantage of the parties. But it is impossible to tell whether it did so and whether the forensic disadvantage of one party was greater than that of the other. None of these matters is relevant in the circumstances of the present case where the parties conducted their cases on the basis that certain material ought not be tendered because it was inadmissible.

170. [315]

     The primary judge was bound to decide the case according to the evidence. His Honour was not entitled, much less obliged, to take into account the absence of “evidence” in circumstances where the putative evidence was inadmissible. Nor was the primary judge entitled to speculate about what the documents which were not tendered (because of the PP Act) would have revealed. No error in the primary judge’s approach has been demonstrated.

171. [316]

     On 16 June 2022, there was a further hearing day for submissions on the appropriate orders, including costs. On 23 June 2022, the primary judge delivered the Costs Judgment: The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd; Morrow v Cordell Jigsaw Productions Pty Ltd (No 14) [2022] NSWSC 835. It is necessary only to address those aspects of his Honour’s orders which are the subject of the application for leave to appeal by Mr Murray and CJZ.

172. [317]

     Before the primary judge, Mr Murray and CJZ relevantly submitted that they were entitled to indemnity costs of the Commercial proceedings on the basis of either of their three Calderbank offers dated 19 June 2019, 18 October 2019 and 1 November 2019.

173. [318]

     The offers, together with other relevant correspondence, are set out below.

174. [319]

     As referred to above, on 19 June 2019, Hamish Fraser wrote an open letter to Mr Morrow’s solicitor which set out his client’s position in significant detail and said:

     1. (1)

        clauses 5.3 and 9.7 of the Share Sale Agreement were “further assurance clauses” and, thus, would not be interpreted to extend the ambit of the agreement and did not oblige Mr Murray to sign the Quit Claim, in part because the Quit Claim contained mutual releases;

     2. (2)

        further, if Mr Murray signed the Quit Claim, this would impede his ability to challenge the Share Sale Agreement on the basis that it had been procured by Mr Morrow’s misleading or deceptive conduct;

     3. (3)

        Hamish Fraser contacted the ABC to see if the Quit Claim could be confined but the ABC required the Quit Claim to be signed in its then current form (which required mutual releases);

     4. (4)

        had Mr Murray been aware of the true status of further series of The Checkout, he would not have signed the Share Sale Agreement;

     5. (5)

        neither Mr Murray nor CJZ was in breach of the Share Sale Agreement by refusing to sign the Quit Claim;

     6. (6)

        further series of The Checkout could be produced if the parties could resolve the issues between them; thus, Mr Murray is not responsible for the show not proceeding; and

     7. (7)

        Mr Murray was prepared to confirm (a) (the Joint Venture Company owned all intellectual property rights in The Checkout) and (b) (Mr Murray had no claims against the ABC), but not (c) (that he “stood by” the Share Sale Agreement) or (d) (that he would not pursue injunctive relief relating to The Checkout).

175. [320]

     As the primary judge found at [74] of the Costs judgment, Mr Murray’s Calderbank offer of 19 June 2019 (which was rejected the following day) was to the following effect:

176. [321]

     It is also of significance, for reasons that appear below, that Mr Kay, on behalf of Mr Morrow and Giant Dwarf made a Calderbank offer on 20 June 2019 to Hamish Fraser, which included an offer to settle the matter on the following basis:

177. [322]

     The offer was expressed to be open until 21 June 2019 “after which time this offer will permanently lapse.”

178. [323]

     In their offer dated 18 October 2019 (which was put after the mediation which had taken place on the same day), Mr Murray and CJZ offered to settle “the matter” on the basis that the parties treat the Share Sale Agreement as reinstated subject to the provision in the Share Sale Agreement that the Joint Venture Company pay CJZ a 2% fee being replaced with a provision that it pay CJZ $59,000 for each of series seven and eight of The Checkout and that CJZ sign the Quit Claim required by the ABC. This offer was withdrawn on 21 October 2019, apparently because of concerns that Mr Morrow was intending to produce a consumer affairs show other than The Checkout, as Mr Murray had learned that the ABC had a preference for a different show.

179. [324]

     On 1 November 2019, Ms Chapman, on behalf of Mr Murray and CJZ, made another Calderbank offer. She explained that the 18 October 2019 Calderbank offer was premised on the understanding that the ABC had a preference for The Checkout but that it now appeared that this was not the case. The terms of the offer (to settle the whole dispute) was as follows:

180. [325]

     Mr Morrow’s solicitors rejected this offer on 4 November 2019 saying that it “fails to remedy the damage our clients have suffered.”

181. [326]

     His Honour said, of present relevance, of the offer of 1 November 2019:

182. [327]

     There are considerable obstacles in the way of an application for leave to appeal against a costs order. Ordinarily it is only appropriate to grant leave where there is an issue of principle, a question of general public importance, or an injustice which is reasonably clear, in the sense of going beyond what is merely arguable. It is not sufficient merely to show that the trial judge was arguably wrong: Wentworth v Rogers (No 3) (1986) 6 NSWLR 642. Where (as here) the decision under appeal is a decision made in the exercise of the Court’s costs discretion (under s 98 of the Civil Procedure Act 2005 (NSW)), it is necessary to point to a House v The King (1936) 55 CLR 499; [1936] HCA 40 error. This requires the Court to be satisfied that the judge acted upon a wrong principle, took into account extraneous or irrelevant matters, mistook the facts, failed to take into account a material consideration, or where upon the facts the outcome is unreasonable or plainly unjust. Only if the decision is attended with sufficient doubt to warrant its reconsideration on appeal will leave be granted.

183. [328]

     Mr Katekar argued that, by the time the offer was made on 1 November 2019, Giant Dwarf’s claim against CJZ had been finally articulated (that CJZ had breached the Share Sale Agreement by refusing to sign the Quit Claim) and CJZ’s response had also been articulated in its letter of 19 June 2019 (that it was not obliged to sign the Quit Claim and that it had been misled into executing the Share Sale Agreement). Mr Katekar submitted, in effect, that the error highlighted in the passage extracted above from his Honour’s reasons caused the primary judge’s discretion as to costs to miscarry in the House v The King sense and that, accordingly, this Court should re-exercise the costs discretion on a basis which reflected the true position. Mr Katekar also relied on the primary judge’s finding at [76] of the Costs judgment:

184. [329]

     I accept Mr Katekar’s submission that the primary judge’s discretion miscarried. Hamish Fraser’s letter of 19 June 2019 articulated comprehensively CJZ’s and Mr Murray’s claim against Mr Morrow and Giant Dwarf and refuted, also comprehensively, Mr Morrow and Giant Dwarf’s claim against them. In this sense, the primary judge relevantly “mistook the facts”. It was not to the point that, as at 1 November 2019, CJZ’s cross-claim had not been brought since CJZ’s offers included a release from all claims which it could have brought against Giant Dwarf, Mr Morrow or the Joint Venture Company. Both the 18 October and 1 November 2019 Calderbank offers invited Giant Dwarf to accept terms that reflected the fact that its claim that CJZ had breached the Share Sale Agreement for refusing to execute the Quit Claim would fail and offered mutual releases (which were contained in the Quit Claim, which CJZ was offering to sign). Thus, it was irrelevant that, for example, the implied term (which formed part of the case on reasonable expectation of disclosure) had not yet been formulated, since a general release was offered.

185. [330]

     I consider that leave to appeal against the costs order ought be granted because of the particular circumstances of the present case, more fully referred to below, but which include the offeror’s detailed expatiation of the legal position well in advance of the hearing, which was vindicated in the primary judge’s reasons and the significant compromise reflected in the offer.

186. [331]

     In these circumstances, it is necessary to exercise the discretion afresh. In my view, the relevant offer is that of 1 November 2019 because the offer of 18 October 2019 was withdrawn before its expiry date.

187. [332]

     The policy behind the awarding of costs on an indemnity basis as a consequence of a Calderbank offer is to encourage the parties to assess the strengths and weaknesses of their respective cases (including at an early stage). The principle was articulated in SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323 at [37], where Giles JA said:

188. [333]

     Ms Chrysanthou submitted that it was not unreasonable for Mr Morrow and Giant Dwarf to reject the 18 October 2019 and 1 November 2019 Calderbank offers because they could not be expected to give up potentially valuable claims (such as the claim for damages against CJZ for breach of the Share Sale Agreement). She contended, orally:

189. [334]

     Further, Ms Chrysanthou submitted that there was a very significant distinction between Mr Morrow’s offer of 20 June 2019 and Mr Murray’s offer of 1 November 2019 despite their apparent similarities. Mr Morrow’s offer of 20 June 2019 limited the format fee (expressed as a percentage of the co-producer cash budget) to “subsequent series of The Checkout”, whereas Mr Murray’s offer of 1 November 2019 extended the format fee to “subsequent series of The Checkout and/or on series 1 and 2 of any alternative consumer affairs program produced by [the Joint Venture Company], [Giant Dwarf] or any affiliated company, subsidiary, or any third party producer or production partner of [the Joint Venture Company], [Giant Dwarf] or Julian Morrow”. Ms Chrysanthou, in somewhat hyperbolic oral submissions, described Mr Murray’s offer as “absurd” and said that it had the effect that Mr Morrow “can never make a consumer affairs show again.”

190. [335]

     It is true, as Ms Chrysanthou submitted, that for Mr Morrow and Giant Dwarf to accept the offer of 1 November 2019 would have required them to relinquish their damages claim for alleged breach of the Share Sale Agreement, which they must have assessed as having some value to warrant its being brought. On the other hand, acceptance of the offer would have freed Mr Morrow and Giant Dwarf from the joint venture agreement and given them control of the Joint Venture Company, to the exclusion of Mr Murray. It was an offer which delivered almost everything Mr Morrow wanted in terms of a future business model and was made at a time when Mr Morrow may have been able to salvage his relationship with the ABC (which he had harmed by his conduct relating to The Help Desk). The offer represented a very substantial compromise on the part of Mr Murray and CJZ, particularly having regard to their legal position, which was relatively strong and was, as I have said, vindicated by the primary judge.

191. [336]

     I reject Ms Chrysanthou’s argument that the 1 November 2019 Calderbank offer was “absurd” or uncommercial. It made allowance for the real prospect that, instead of recommissioning The Checkout for another two series, the ABC would decide to commission another consumer affairs show, such as The Help Desk. What the 1 November 2019 offer did was to give Mr Murray a return on the first two series of any such substitute program. There was no indication that the ABC had any appetite for The Checkout as well as another consumer affairs program. It had, as early as 9 March 2019, approved the proposal of a further two series of a consumer affairs show. When the 1 November 2019 offer is viewed by reference to the surrounding circumstances (which include the terms of Mr Morrow’s 20 June 2019 offer, which was substantially similar but limited to The Checkout), I consider it to have been unreasonable of Mr Morrow not to accept the 1 November 2019 offer.

192. [337]

     It would, in my view, be unreasonable and plainly unjust to deprive Mr Murray and CJZ of their costs on an indemnity basis, particularly in circumstances when their offer of 1 November 2019 had been preceded, in the open letter of 19 June 2019. In that letter, Hamish Fraser’s detailed explanation (by reference to the facts and legal authority) as to why Mr Morrow and Giant Dwarf’s claims against them would fail was vindicated by the primary judge’s findings (which have not been disturbed on appeal) as follows:

     1. (1)

        the Quit Claim went beyond the scope of the Share Sale Agreement;

     2. (2)

        the Share Sale Agreement did not require Mr Murray to sign the Quit Claim;

     3. (3)

        Mr Murray and CJZ were induced by Mr Morrow and Giant Dwarf’s misleading or deceptive conduct into entering into the Share Sale Agreement;

     4. (4)

        but for Mr Morrow and Giant Dwarf’s misleading or deceptive conduct, Mr Murray and CJZ would not have entered into the Share Sale Agreement; and

     5. (5)

        neither Mr Murray nor CJZ was in breach of the Share Sale Agreement or had repudiated that agreement by either refusing to sign the Quit Claim or by refusing to “stand by” the Share Sale Agreement.

193. [338]

     As I have said, had Giant Dwarf accepted CJZ’s offer, it would have been in a better position and CJZ would not have incurred substantial costs in defending itself against the claim in the Commercial proceedings and successfully prosecuting its cross claim for rescission of the Share Sale Agreement. Further, Giant Dwarf ought to have accepted that its claim was doomed to fail for the reasons given by Hamish Fraser (and subsequently the primary judge) and accepted CJZ’s offer.

194. [339]

     For these reasons, I consider that the application for leave to appeal in the Commercial proceedings ought be granted and that the appeal ought be allowed. Instead of the costs order that was made, the order should be that the respondents pay the applicants’ costs of the Commercial proceedings on an indemnity basis.

Application for leave to adduce further evidence

1. [340]

   By notice of motion filed on 11 May 2023, the cross-appellants sought leave to adduce further evidence which comprised emails from Mr Murray sent between 9 March 2023 and 24 March 2023. The purpose of the notice of motion was to support the cross-appellants’ claim that the undertaking given by Mr Murray on his own behalf and on behalf of CJZ and noted by the Court in the Defamation proceedings (that he would not publish any statement to the effect that the plaintiff [Mr Morrow] engaged in fraud against the first defendant (CJZ)) was insufficient and that this Court ought grant injunctive relief instead.

2. [341]

   As Mr Murray and CJZ have been successful in their appeal against the orders made in the Defamation proceedings, there is no basis on which the Court could order injunctive relief instead of the undertaking. In these circumstances, I propose that the notice of motion be dismissed. Further, it is necessary to release Mr Murray from the undertaking which the primary judge noted in (3) of the orders made in the Defamation proceedings on 23 June 2022, as, the appeal having been allowed, there is no longer any basis for requiring the undertaking.

Proposed orders

1. [342]

   For the reasons given above, I propose the following orders:

   1. (1)

      Dismiss the cross-appeal.

   2. (2)

      Grant leave to the applicants to appeal in respect of costs.

   3. (3)

      Set aside orders (7) and (8) made by Stevenson J on 23 June 2022 in proceedings 2019/343896 and in lieu thereof make the following order:

   4. (4)

      Subject to (5), order the respondents to pay the applicants’/appellants’ costs of the appeal.

   5. (5)

      If any application is to be made for a different order for the costs of the appeal, direct that the party send by email a notice of motion, together with any evidence and submissions in support, to the Associate to the Presiding Judge within 14 days hereof.

   6. (1)

      Grant leave to appeal on grounds 1, 2, 4, 6, 7, 8, 9 and 10 but otherwise refuse leave to appeal.

   7. (2)

      Allow the appeal.

   8. (3)

      Set aside orders (1), (2), (3) and (4) made by Stevenson J on 23 June 2022 in proceedings 2020/264993 and in lieu thereof make the following orders:

   9. (4)

      Subject to (5), order the respondents to pay the applicants’/appellants’ costs of the appeal.

   10. (5)

       If any application is to be made for a different order for the costs of the appeal, direct that the party send by email a notice of motion, together with any evidence and submissions in support, to the Associate to the Presiding Judge within 14 days hereof.

   11. (6)

       Release the second defendant from the undertaking given by him on his own behalf and on behalf of the first defendant, the making of which was noted by the primary judge in (3) of the orders and notations made on 23 June 2022.