Leigh v Bruder Expedition Pty Ltd

This judgment arose out of a jury finding that the appellant had committed the tort of injurious falsehood. The appellant had published statements online about the respondent’s caravans, and its conduct in response to consumer complaints. The imputations conveyed by the statements were untrue. A jury found that she had made the statements with malice, in that she intended to cause financial harm to the respondent. The Court of Appeal unanimously allowed the appeal, finding that the jury had not been properly directed as to the Briginshaw standard of proof, and that errors had been made in the award of damages for loss of profits.

Sofronoff P and Davis and Wilson JJ

10 November 2020

Background

In 2018 Mr Coles purchased a caravan from the respondent and began to have difficulties with it. [1]. He published a website which relayed his disappointments. [1]. On 5 May 2019 the appellant, Ms Leigh, allowed the publication of material from Mr Coles’ website, and included a hyperlink to it. [2]. Ms Leigh also subsequently published statements of her own in relation to the respondent and its caravans. [3]. Those statements included imputations that the caravans were defective, of poor quality, unsafe and overpriced, and that the respondent had refused to assist customers (amongst other things). [9].

The respondent sued the appellant in the District Court, alleging that she had made the publications maliciously with the intention to cause it financial harm. [4]. Her evidence was that she only intended to “let other customers know”, and did not intend to cause the respondent financial harm. [6]. After trial, the jury found that the imputations conveyed by the statements were false, and that the appellant had made the statements with the intention of causing financial harm to the respondent. [9]. Orders for an award of damages for loss of profits, and injunctive relief, were made by the primary judge. [10]. The appellant appealed against those orders. [11].

In the result, the Court of Appeal unanimously allowed the appeal. Reasons were given by Sofronoff P, with whom Davis and Wilson JJ agreed. [51]–[53]. The appeal was allowed for two key reasons: firstly, because of a misdirection to the jury about the standard of proof; and second, because of errors in the making of the award for loss of profits.

The misdirection to the jury about the standard of proof

At trial, the appellant’s counsel had submitted that a direction should be given to the jury about the Briginshaw standard of proof, in relation to the issue of malice. [13]. As paraphrased by Sofronoff P, Dixon J observed in Briginshaw v Briginshaw (1938) 60 CLR 336 that “the seriousness of the allegation made, the inherent unlikelihood of an occurrence, or the gravity of the consequences flowing from a particular finding, are considerations which must affect … whether the issue has been proved”. [16].

Inconsistently with this standard, the trial judge instead directed the jury that “if one side of the scales is weighed down ever so much more slightly than the other side, that is sufficient” (for proof of the allegation of malice). [17]. According to Sofronoff P, “it was an error to instruct the jury that this was how they should perform their function”. [23]. As Dixon J had said in Briginshaw, the civil standard does not involve a mere mechanical comparison of probabilities. [23]. In this case, the allegations against the appellant – including that she had acted with malice – “were serious because they impugned her integrity”. [22]. Accordingly, the jury “should have been reminded that they should act with care and caution before finding the allegation established”. [24].

The problems with the award for loss of profits

The appellant also appealed on the ground that the trial judge had erred in allowing an amendment to the respondent’s statement of claim. [27]. The amendment included assertions that the respondent had certain “reasonable expectations about future sales”, which founded its calculations for an award of damages for loss of profits. [30]. The amendment was allowed, and evidence was led by the respondent at trial in relation to it. [31].

Sofronoff P said that the “plea about expected sales was bad and the amendment should not have been allowed”. [35]. His Honour said that a plaintiff claiming damages for loss of profits “must prove the probable amount of profit that would have been made but for the commission of the tort”, but that the fact that somebody “held an expectation about future profits is not evidence that can be used to prove loss of profits”. [34]. The respondent had called a director to give evidence about the expectation, but he was not put forward as an expert “qualified to analyse facts and … to offer a sound hypothesis”, and “[n]or was he able to prove facts from which probable future sales could be inferred”. [35].

The award for loss of profits also could not be sustained for other reasons, including because there was “no evidence to support the claimed loss” in relation to a supposed need to hire an additional employee; and there were errors in certain figures presented to the jury, which were relied upon as a basis for the award. [36], [39].

Orders

Given the misdirection concerning the standard of proof on the issue of malice, and the errors underlying the assessment of damages for loss of profits, the orders of the trial judge had to be set aside. [45]. However, there remained the question of whether a new trial should be ordered. [45].

Sofronoff P observed that under r 770(2) of the Uniform Civil Procedure Rules 1999, the Court has a discretion about whether to order a new trial. However, whether or not a new trial should be ordered “depends upon the demands of justice”. [47]. In that regard, what was done or not done at trial, “is an important consideration”. [47]. His Honour said that the misdirection concerning Briginshaw was “an error into which the learned judge was led by the respondent’s counsel”, and that the setting aside of the orders concerning loss of profits were “a consequence of the respondent’s failure to plead and prove a rational case on damages”. [48]. That being the case, the discretion to order a retrial should not be exercised “to permit the respondent to have a second go”, when the need for a second trial “had been brought about by the way in which it conducted the trial”. [50].

Accordingly, the appeal was allowed and the respondent’s claim dismissed. [51].

W Isdale