Palmer Bruyn & Parker Pty Ltd v Parsons

• Jurisdiction: Australia Federal only
• Court: High Court
• Judge: Gleeson CJ,Gummow J,Kirby J,Hayne J,Callinan J
• Judgment Date: 06 December 2001
• Neutral Citation: [2001] HCA 69,2001-1206 HCA A
• Docket Number: S8/2001
• Date: 06 December 2001

[2001] HCA 69

HIGH COURT OF AUSTRALIA

Gleeson CJ, Gummow, Kirby, Hayne and Callinan JJ

S8/2001

Palmer Bruyn & Parker Pty Limited

Appellant

and

Keith Parsons

Respondent

Representation:

B R McClintock SC with C A Evatt for the appellant (instructed by Hunt & Hunt)

T K Tobin QC with T Molomby and M A Kumar for the respondent (instructed by McDonald Johnson Solicitors)

Palmer Bruyn & Parker Pty Ltd v Parsons

Injurious falsehood — Elements of the tort — Forged letter containing false statements — Initial publication to defined group intended to ridicule subject of letter — Report in newspaper of ‘bogus letter’ – Contract terminated as a result of newspaper report — Whether loss suffered caused by initial publication — Whether loss suffered was a natural and probable consequence of initial publication — Identification of relevant falsehood — Relevance of reasonable foreseeability as criterion for limiting liability — Causation of plaintiff's damage — Whether actual damage to plaintiff proved or assumed by expert report.

Words and phrases — ‘Natural and probable consequence’, ‘grapevine effect’.

ORDER

Appeal dismissed with costs.

1 Gleeson CJ. The appellant claimed damages from the respondent for the tort of injurious falsehood. In order to succeed, it was necessary to establish that the respondent maliciously published a false statement about the appellant, its property or business, and that actual damage resulted from such publication. The present case does not raise for decision the question as to how far the action for injurious falsehood extends beyond concepts of business or property 1. The appellant carries on, as a corporation, the professional practice of a surveyor. The statement in question was made about its professional conduct. The element of malice was found in the appellant's favour by the trial judge. The central issue in the appeal, and the point on which the appellant failed, at trial, and in the Court of Appeal of New South Wales, is whether there was a causal relationship between the making of the false statement and the damage of which the appellant complained.

2 The detailed facts are set out in the reasons for judgment of Gummow J and Callinan J. In brief, the appellant made an application to the Newcastle City Council on behalf of a client, McDonald's Australia Ltd (‘McDonald's’), for the rezoning of certain land for purposes of development. The respondent, a member of the Council, opposed the proposal. He concocted a letter, purporting to come from the appellant, which contained absurd inducements and threats. This was described by the trial judge as an act that was ‘calculated to ridicule the [appellant] and injure it in its effort to persuade the Council in favour of approving the development application’, and as ‘a crude attempt to influence members of the [Australian Labor Party] caucus [within the Council] in responding unfavourably to the application’. A facsimile copy of the letter was sent by the respondent to another member of the Council, Councillor Manning, who, for a short time, took it at face value. The damage of which the appellant complained was that McDonald's terminated its retainer. That was not directly the result of the circulation of the hoax letter, which was shown to only a few people in addition to Councillor Manning. It was the direct result of a newspaper article which reported the fact of the hoax. McDonald's decided that it was no longer in that company's interests to retain the appellant to pursue its application before the Council. The trial judge found, and the Court of Appeal agreed, that the loss of McDonald's business was caused by the publication of the newspaper article about the hoax, for which the respondent was not legally responsible.

3 The case for both parties was conducted upon a surprisingly literal approach to the question of falsity. The appellant's contention was that the respondent communicated to the people to whom he showed the bogus letter the false information that the appellant had offered the inducements, and made the threats, appearing in the letter. The letter, both in its contents and its physical appearance, looks like such an obvious concoction that it is difficult to accept that it could be regarded by a reasonable reader as genuine, and as containing

statements actually made by the appellant. Nevertheless, Councillor Manning apparently understood it in that way.

4 Although it was not recognised as such by Councillor Manning, the letter was intended to be an exercise in parody. Whether it was clever or clumsy, witty or heavy-handed, humorous or tasteless, is beside the point. Parody may convey false representations, but the falsity, if it exists, does not lie in the fact of the parody. A comedian, impersonating a public figure, may attribute to that public figure outrageous statements and may thereby falsely attribute to that person beliefs or attitudes which the person does not hold. But the falsity does not lie in the fact of the impersonation.

5 The respondent did not give evidence, but a record of a police interview was tendered at the trial. The respondent told the police that he meant the letter to be recognised immediately as bogus by Councillor Manning and other Councillors who might see it, although it is clear that he intended the letter to have an adverse effect upon the rezoning application. He meant to ridicule the appellant, and to be seen to be mocking it. He never intended that anyone would seriously believe that the appellant had actually sent the letter. The trial judge held that it was obvious that the words in the text of the letter ‘were not to be taken at face value’.

6 Even allowing for Councillor Manning's initial reaction to the letter, there is a degree of artificiality in seeking to relate falsity to damage where, in a case of parody, the falsity is alleged to consist in the representation that the object of the parody actually made the attributed statements: a representation that was unintended, and that would only be conveyed to someone who failed to notice obvious signs that, although, as the trial judge said, the bogus letter was intended to carry a sting, it was never meant to be taken literally. Additionally, the appellant has a problem arising out of the nature of the damage it suffered, and the circumstances in which the damage occurred.

7 The damage claimed by the appellant was financial loss resulting from the decision by McDonald's, following the newspaper article, to terminate the engagement of the appellant to prosecute the application before the Council.

8 There is no evidence that McDonald's was shown the bogus letter by the respondent, or that it took it seriously in the sense that it believed the appellant had in truth offered the inducements, and made the threats, contained in the letter. The newspaper article, to which McDonald's reacted, reported that police were investigating a ‘bogus’ and ‘forged’ letter purporting to have been written on the appellant's letterhead, in connection with a rezoning application. Even if the respondent had represented that the appellant had written the letter in question, and made the threats, and offered the inducements, contained in it, the newspaper article, far from repeating or republishing those representations, contradicted them. The gist of the article was that there was trouble about the concoction of the letter, and that the police were investigating the matter. Why this caused McDonald's to terminate its association with the appellant is not entirely clear. Perhaps it simply took the view that it did not need this kind of trouble in connection with its application, that the appellant appeared to have enemies within the Council, and that its commercial interests were best served by either finding a new surveyor or dealing with the matters without further expert assistance. That would not be an unreasonable commercial response; but it would not be a response to a representation that the appellant had offered bribes, or made threats. It would be a response to evidence that relations between the appellant and the Council were bad.

9 The trial judge found that the false statement, as identified above, was originally published by the respondent to Councillor Manning, and that its further re-publication to members of the Council's ALP caucus was the natural and probable result of the original publication. But he was not prepared to find that the article in the newspaper was the natural and probable result of the publication of the false statement and, in addition, he pointed out that the difference between the substance of what was published in the newspaper and the substance of the false statements complained of by the appellant meant that there was no causal connection between the making of false statements by the respondent and the damage suffered by the appellant. The Court of Appeal upheld those findings 2.

10 In the Court of Appeal, Heydon JA, whose reasons were agreed in by Stein JA and Foster AJA, summarised the appellant's argument as being that ‘the loss of the McDonald's contract was either the natural and probable result of the impugned letter, or the result which the defendant in publishing the impugned letter intended’. The same argument was put in this Court, it being made clear that the appellant also contended that, if the respondent intended to cause the appellant some harm, and the appellant in fact suffered some harm, it was beside the point that the harm suffered was different from the harm intended.

11 The reason for the qualification was, no doubt, that there was no evidence, or finding, that the respondent intended that the appellant would lose McDonald's as a client. Insofar as the respondent was found to have any intention to cause harm, it was an intention to impede the progress of...