Palmer Bruyn & Parker Pty Ltd v Parsons [2001] HCA 69

HIGH COURT OF AUSTRALIA

GLEESON CJ,

GUMMOW, KIRBY, HAYNE AND CALLINAN JJ

PALMER BRUYN & PARKER PTY LIMITED APPELLANT

AND

KEITH PARSONS RESPONDENT

Palmer Bruyn & Parker Pty Ltd v Parsons

[2001] HCA 69

6 December 2001

S8/2001

ORDER

Appeal dismissed with costs.

On appeal from the Supreme Court of New South Wales

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)

Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

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".

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.