Omega Plumbing Pty Ltd v Harbour Radio Pty Ltd t/as 2GB and 2GB 873

1. [1]

   The plaintiff sues the defendants for injurious falsehood claiming damages and an injunction against further publication of certain matters. The present judgment concerns an interlocutory injunction sought by the plaintiff to prevent further publication pending the final hearing of the proceedings.

The plaintiff’s business

1. [2]

   The plaintiff operates a service company primarily providing rapid response plumbing, electrical and air conditioning services. The plaintiff has been operating for 30 years in the Greater Sydney region and employs over 80 people. The plaintiff specialises in emergency work which requires the plaintiff to operate its business seven days a week with a guaranteed response time on all calls.

2. [3]

   The plaintiff operates in a very competitive industry with almost 70 operators, most of whom provide fixed price servicing.

3. [4]

   There is a significant difference between a service offering rapid repair and resolution on the one hand, and those who offer their services in the usual trading hours and can schedule works in accordance with their job schedules. Where a plumber or electrician is able to schedule works and attend the sites to undertake those works in accordance with their required availability, the cost is reduced. Rapid responders get called and respond to the call. They maintain an inventory stockpile that can service a significant number of jobs, as well as plant and machinery that can complete those necessary works. Service providers that do not offer rapid response do not need to maintain significant inventory, or operate outside usual business hours, as they schedule the works and the required supplies at a time that is convenient to them. That often, but not always, results in a lower ultimate price. Service providers who operate on a non-urgent basis also generally offer hourly rates for their works as they are able to calculate the rate required to pay their trades plus allowances for profit and margin on the basis that the works are completed in normal business hours, and with supplies that are passed on to the client in addition to the hourly rates.

4. [5]

   The plaintiff offers its customers fixed prices. Those costs are the same notwithstanding the different times that the works are undertaken or how quickly the service is provided. The plaintiff asserts that it is not a like for like comparison for works that are undertaken in a rapid manner as requested by the customers of the plaintiff and the manner in which many other service providers operate.

5. [6]

   The plaintiff’s business obtains customers by word of mouth, repeat customers and by online advertising. When a client contacts the plaintiff, they are passed through to the call centre. The nature of the customer’s issue is noted by the telephone operator. The customer is then told that, if the customer wants to proceed, a service technician would be dispatched to the customer’s property to assess the issue and the scope of the problem for a fee of $79.00. There is a guarantee they will arrive at the time stipulated or the plaintiff will credit the customer at the rate of $5.00 per minute up to a total of $100.00.

6. [7]

   The service technician is often a licensed tradesperson and can undertake some basic fixes. However, the primary role of the technician is to identify any issues complained of by the customer and the scope of the job. The service technician then completes an Option Sheet which sets out a number of options for the customer, and provides pricing for each option. Subject to the price of the job, the customer then enters into a contract with the plaintiff. The service technician takes a deposit and lets the dispatch team know which trades are required for the works.

Background to the publications

1. [8]

   The first defendant is a media company that owns and operates the radio station 2GB which broadcasts principally in the Greater Sydney metropolitan area, but distributes its broadcasts to 4GB in Queensland and numerous regional locations. The second defendant is an employee and broadcaster for the first defendant, and has a radio broadcast show that airs from 9am until midday, Monday to Friday. The shows are also uploaded to various online distributors including podcast services.

2. [9]

   The first defendant also operates a website where snippets of audio, news articles and related material are posted.

3. [10]

   The plaintiff complains in relation to four broadcasts on 29, 30, 31 October and 1 November 2019 and in respect of articles published on the first defendant’s website on 30 and 31 October and 1 November 2019.

4. [11]

   The plaintiff’s complaint about the publications, identified in the form of the injunction it seeks, is that it identifies the defendants as saying that the plaintiff overcharges its customers for the services it provides, it rips off its customers, it engages in unethical and dishonest business practices, it steals from its customers, it charges its customers for services it does not provide, it targets vulnerable customers and it has been excluded from the Master Plumbers Association.

5. [12]

   The broadcasts came about in this way. On 25 October 2019 someone from the second defendant’s radio show telephoned John Hofmann at the plaintiff. The person followed up the phone call with a letter saying that the radio station had received a number of emails from listeners who had had negative experiences with the plaintiff in 2019. Some instances were provided of complaints that were made and questions asked in relation to those matters.

6. [13]

   The plaintiff responded by seeking details of the specific complaints that had been made. The defendants answered by saying that listeners were not comfortable with the second defendant sharing their job numbers or any other identifying factor. The response accepted that this degree of anonymity limited the plaintiff’s ability to answer in detail.

7. [14]

   Later that day the plaintiff sent a lengthy response to the questions asked by the defendants. The plaintiff was only able to provide general information except in relation to one complainant. In relation to that complainant, the plaintiff said that it had checked all its job records from March 2019 and believed that it could identify the complainant. The plaintiff pointed out that the complainant had taken his grievance to the Office of Fair Trading, that there had been a ruling in favour of the plaintiff and that the complainant still had not paid an invoice rendered by it.

Legal principles

1. [15]

   Before setting out the publications complained of, it is necessary to say something about the legal principles governing the tort of malicious falsehood and the granting of interlocutory injunctions where such tortious conduct is complained of.

2. [16]

   In order to succeed on a claim for injurious falsehood the plaintiff must establish that the defendants have made a false statement concerning the plaintiff’s property or business or goods and that the statement was published maliciously: Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388; [2001] HCA 69; DHR International, Inc a company incorporated in Delaware in the United States of America v Challis [2015] NSWSC 1567 at [31]. Since the plaintiff here seeks an interlocutory injunction, it must show a prima facie case on each of those elements. The defendants have quite properly said that they make no submission to the effect that there is no prima facie case disclosed on falsity or damages. However, they contest the plaintiff’s submission that there is a prima facie case disclosed on malice.

3. [17]

   In relation to the issue of what constitutes malice, my attention was directed to the Court of Appeal’s decision in Gross v Weston (2007) 69 NSWLR 279; [2007] NSWCA 1. That was a case considering the defence of qualified privilege in a defamation case. The defendants submitted, however, that what was said by Hunt AJA at [52] was relevant for determining what constituted malice in a claim for injurious falsehood. I did not understand counsel for the plaintiff to demur in that regard. Acting Justice Hunt said this:

4. [18]

   Subsequently, although without reference to Gross v Weston, Brereton J (as his Honour then was) said in AMI Australia Holdings Pty Ltd v Fairfax Media Publications Pty Ltd [2010] NSWSC 1395 at [31], [32] and [36]:

5. [19]

   This judgment was recently quoted with approval by White J (as his Honour then was) in DHR International at [32].

6. [20]

   Because the issue on the present application is whether there is a prima facie case on malice and because it is asserted, partly, that malice is demonstrated by taking account of how the issue developed in the broadcasts over the four day period, it is regrettably necessary to set out the entire transcript of the broadcasts and the articles. Highlighted portions assume relevance when considering whether there is prima facie evidence of malice.

7. [21]

   The following is the transcript of two segments of the program broadcast on 29 October 2019:

8. [22]

   The following is the transcript of a number of separate portions of the broadcast on 30 October 2019:

9. [23]

   The following is the heading and text of an article published on the first defendant’s website on 30 October 2019:

10. [24]

    The following is the transcript of the part of the broadcast on 31 October 2019 concerning the plaintiff:

11. [25]

    The following is the heading and text of an article published on the first defendant’s website on 31 October 2019:

12. [26]

    Attached to this article was a form of the plaintiff’s concerned with refunds that contained a clause to be signed by the person receiving the refund that they would not subsequently make a claim for compensation or publish adverse comments including on social media.

13. [27]

    The following is the text of the broadcast on 1 November 2019 relevant to the plaintiff:

14. [28]

    The following is the text of an article published on the first defendant’s website on 1 November 2019:

15. [29]

    On 1 November 2019 the solicitors acting for the plaintiff wrote to the defendants complaining of the broadcasts and the articles. The letter endeavoured to answer the matters which the plaintiff identified had been wrongly stated in the publications. The letter demanded that by 4pm on 1 November 2019 the first defendant immediately remove the articles and audio recordings from the website and refrain from publishing or republishing any material capable of conveying the false statements identified.

16. [30]

    It may be accepted that that letter was received by the first defendant after the second defendant’s program went to air on that day.

17. [31]

    At some time after receipt of that letter and before 5 November 2019, the audio recordings and articles were removed from the first defendant’s website. On 4 November 2019 I had given leave to the plaintiff to commence the proceedings at short notice to the defendants.

18. [32]

    On 6 November 2019 solicitors for the defendants wrote to the plaintiff’s solicitors asserting that the evidence did not disclose any prima facie case establishing malice. They asserted that the material broadcast was substantially accurate and based on information obtained from a number of sources. They indicated a willingness to take down and not republish the broadcast and articles that appeared at specified pages in the exhibit HG-1 to the affidavit of Hamish Geddes sworn 4 November 2019 and not to publish any allegations suggesting that the plaintiff is not a member of the Master Plumbers and Mechanical Services Association of Australia.

Submissions

1. [33]

   The plaintiff relies on the following matters to demonstrate malice.

2. [34]

   The defendants submitted that coming back to the matter over four or five days with the rhetoric becoming a little more extreme could not be said to amount to an intent to injure and, therefore, evince malice. The defendants submitted that an enthusiastic belief in what is being published is not sufficient to amount to malice.

3. [35]

   The defendants submitted that what was present in this case was a competition between dissatisfied customers and former employees on the one hand making complaints, and a company asserting on the other hand that it had good policies and procedures, and transparent pricing. In such circumstances an inference of malice could not be drawn in contradistinction to situations where there was knowledge of falsity, wilful blindness, or even reckless indifference.

4. [36]

   The defendants submitted that extrapolating from a number of complaints to make general comments about the plaintiff’s business did not constitute malice. The defendants submitted that if they had evidence of some complaints they were not being reckless in asserting problems with the company.

5. [37]

   The defendants submitted that even expressing disgust about the way the defendants perceived the company was operating was not evidence of a malicious state of mind. The defendants submitted that there was no evidence that they knew the complaints were false nor were they recklessly indifferent to whether they were true or false.

6. [38]

   The defendants say that a desire on the part of the defendants to stop misfeasance by a company on the one hand should not be confused with an intent to injure or malice on the other hand. The defendants suggest that it is legitimate for entities in their position to want to stop wrong practices even though it may be accepted that such action might have a negative effect on the business of the company. In that way the motive is not to ruin the business but to stop consumers dealing with a business that does not behave properly.

7. [39]

   The defendants say that an injunction should not be granted in the Court’s discretion. That is because it would prevent the defendants, but no other media organisation, from publishing almost anything negative about the plaintiff or its business when a Fair Trading investigation is ongoing. In that way, the result may be that the defendants would not be able to publish the results of that investigation if it was critical of the plaintiff.

Consideration

1. [40]

   This is an application for an interlocutory injunction. To succeed in its claim for a permanent injunction or for damages, the plaintiff would be obliged to establish malice on the part of the defendants. However, the test on an interlocutory injunction is whether there is a prima facie or arguable case that the publications were made maliciously. The plaintiff in the present case does not establish that the defendants published the material with knowledge that it was false. The question of whether malice is established on a prima facie basis depends, in the first instance, upon the plaintiff showing recklessness on the part of the defendants. As is made clear in Gross at [52]:

2. [41]

   On the other hand, in circumstances where recklessness is present with other evidence or the absence of a positive belief in the truth of what is published with other evidence, malice may be inferred (as Brereton J noted in AMI at [32]) from the “grossness and falsity of the assertions and the cavalier way in which they were expressed”, quoting Joyce v Sengupta [1993] 1 All ER 897 at 905-6.

3. [42]

   The only evidence put forward by the defendants in the present case concerns what they were told about the plaintiff’s membership of the Master Plumbers Association. That information was wrong as the defendants now accept. I cannot find, nevertheless, in the light of the conversation set out in the affidavit of Antonia Rosen with Paul Naylor of the Master Plumbers Association, that the defendants had knowledge of that falsity.

4. [43]

   However, a number of matters establish that the plaintiff demonstrates a prima facie case of malice in relation to the publications.

5. [44]

   First, the second defendant asserted that the plaintiff had been ripping off people for a number of years “to the extent that the Master Plumbers Association give them a wide berth”. There was no basis in what was said by Mr Naylor to the defendants that any link could be made between a previous failure to renew the membership of the plaintiff with the Association and ripping customers off. That connection was made with reckless indifference to its truth, and, when coupled with the false statements that the plaintiff was not member of the Master Plumbers Association, is sufficient on a prima facie basis to amount to malice.

6. [45]

   Secondly, the second defendant claimed in the broadcast of 30 October 2019 that the plaintiff went by a number of names and that this was “done to dupe people”. None of the complaints aired before or after that time concerned the identity of the company with whom the complainants dealt. There was simply no evidence that the use of different business names or companies (it was never made clear which) was a relevant issue. In that sense the assertion that the various names were used by the plaintiff to dupe people was made without any belief in the truth of the statement. The “other evidence” to satisfy what is required in sub-para (5) of [52] of Gross is the fact that the complaints did not concern that issue. In that way it was an entirely gratuitous statement made without a positive belief in its truth.

7. [46]

   Thirdly, in the broadcast of 31 October 2019 the second defendant said that his first question to the representative of the plaintiff who came on his program would be how he felt about being a bloke “who duds the elderly and charging them 10, 20 and 30 times more than a jobs worth.” Nothing in any of the material that preceded or post-dated that statement lent any support to the plaintiff charging anyone, let alone the elderly, 20 and 30 times more than a job’s worth. The allegation was reckless and there was a complete absence of material to justify its being made.

8. [47]

   On the other hand, the defendants were entitled to assert that the plaintiff was prepared to charge ten times more than another plumber on the basis of one complaint comparing a quote of something between $33,000 and $39,000 with that of another plumber for $3,000 or $4,000. Of course, it cannot be determined at the present time if that allegation was justified because it is not known whether the same work was being performed. However that was one of the complaints made by a listener. I note further, of course, that the complainant was not charged that amount by the plaintiff because the quote provided by the plaintiff was not accepted. Much of the second defendant’s commentary elided charging with quoting. In most or all of the specific examples given, the plaintiff’s quote was not accepted.

9. [48]

   Fourthly, there was the allegation made on a number of occasions that the plaintiff targets elderly people and affluent migrant communities. There was nothing in any of the material published that provided a basis for that repeated claim. It is true that there appear to have been two elderly people who claimed to have had difficulties with the plaintiff and the way it went about its business including its charging. That is an entirely different matter from a targeting of such people and others, and preying upon them, which goes way beyond two complaints from elderly people about the way they were dealt with. It is far from clear where the targeting of “affluent immigration communities” and “immigrant families in wealthy areas who don’t have English as their first language” originated.

10. [49]

    Fifthly, in the broadcast on 31 October 2019 the second defendant said that he had told his listeners the day before about an elderly lady who had been fighting to get a refund for a deposit she paid twice to the plaintiff. An examination of what was said the day before does not bear out any information suggesting that the woman had twice paid a deposit. Coupled with that was the statement in the article published on the website on 30 October 2019 where the second defendant told the plaintiff to give disgruntled customers all their money back “because you did bloody nothing”. Nothing in the material earlier broadcast suggested that the plaintiff had taken money and done nothing. That allegation should also be seen with the assertion on 30 October 2019 that “they were thieves”. There was no evidence to support any of those statements. It can be inferred that they were made without any positive belief in their truth.

11. [50]

    Finally, there is the matter of the repetition together with the increasing rhetoric over the period. I accept the defendants’ submission that returning to the subject over a number of days is not in itself any evidence of malice. The way the second defendant’s program operates almost necessarily means that a subject will be returned to because of listener and other response to what is first raised. I accept also the defendants’ submission that the mere fact that there was an enquiry being conducted by Fair Trading was no basis for suggesting that the defendants should not continue to air matters relevant to the complaints.

12. [51]

    It is interesting, however, to compare the balanced tone adopted by the second defendant in the broadcast of 29 October where he fairly quoted from the written response provided by the plaintiff to questions asked by the defendants. It was in the days following that the allegations escalated by the use of highly colourful language such as “thieves”, “extortion”, “dupe people”, “preys on the elderly”, “having you in the studio makes my skin crawl” (even before the second defendant had heard what the plaintiff’s representative would say), “making millions by targeting the elderly and immigrants”. In that regard, I refer again to the statement of Brereton J in AMI at [32]:

13. [52]

    I am satisfied from the combination of the foregoing that, on a prima facie basis, malice is able to be inferred from the publications already made.

14. [53]

    The balance of convenience must be considered. I accept that free speech is a consideration in that regard, but less so where injurious falsehood is alleged than where the claim is made in defamation. The defendants are only minimally disadvantaged by being prevented from publishing negative comments and allegations concerning the plaintiff. There is no shortage of other information and issues about which the defendants can broadcast. Where there is no dispute concerning the prima facie case on falsity, and where I have found a prima facie case in relation to malice, the balance of convenience strongly favours the plaintiff.

15. [54]

    Although the defendants suggest disadvantage if the enquiry by Fair Trading results in findings against the plaintiff, the injunction the plaintiff seeks is confined to specific matters. There is no reason that the injunction cannot be so framed to take account of any negative findings which might be made by Fair Trading. Further, it is always open to the defendants to seek to vary the restrictions imposed by the terms of the injunction.

16. [55]

    In those circumstances, the parties should confer on the terms of the interlocutory injunction to provide whatever exceptions are considered appropriate in the light of the ongoing enquiry by Fair Trading. The plaintiff is entitled to an injunction in the terms sought subject to the exceptions I have mentioned.

17. [56]

    In those circumstances, the order I make is that the parties are to bring in short minutes to reflect these reasons and to define the terms of the interlocutory injunction which will be granted until the final hearing of the proceedings.