AMFM Constructions Pty Ltd v Boreal Holdings Pty Ltd [2001] NSWSC 1091

New South Wales Supreme Court

CITATION : AMFM Constructions Pty Ltd v Boreal Holdings Pty Ltd [2001] NSWSC 1091 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 5294/01 HEARING DATE(S) : 15/11/01 JUDGMENT DATE : 15 November 2001

PARTIES : AMFM Constructions Pty Ltd (P) Boreal Holdings Pty Ltd (D) JUDGMENT OF : Young CJ in Eq

COUNSEL : D Ash (P) M Miceli (S) (D) SOLICITORS : DTA Lawyers (P) Robert Napoli & Co (D) CATCHWORDS : CONSUMER CREDIT [55]- Credit reports- Corporation complaining of allegedly false report- Injunction available. Advance (NSW) Insurance Agencies Pty Ltd v Matthews (1989) 166 CLR 606 CASES CITED : Chappell v TCN Channel 9 Pty Ltd (1988) 14 NSWLR 153 Macintosh v Dun [1908] AC 90 Waller v Loch (1881) 7 QBD 619 DECISION : Orders made.

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION 5294 of 2001 YOUNG CJ in EQ

Thursday 15 November 2001

AMFM CONSTRUCTIONS PTY LTD v BOREAL HOLDINGS PTY LTD

Judgment

1 His Honour: This is an unusual application made in a case involving less than $3,000, but one which raises very awkward matters of principle. The plaintiff is a construction company and, according to the evidence, its director Mr Funke, has been in the construction business for some twenty four years. The defendant is also in the construction industry and the defendant alleges that the plaintiff owes it some $2,385.00 for three jobs done for the plaintiff. The defendant insists that the money is owing; the plaintiff denies it. 2 However, instead of suing for the money or sending around a debt collector, the defendant contacted a company called Credit Advantage Limited, which appears to put out information to persons seeking advice as to the credit worthiness of companies with which they intend to deal. 3 The only evidence to date has been put on by the plaintiff. The evidence shows that Credit Advantage Limited was contacted by Austral Brick Co Pty Ltd and the inference can only be that it was so contacted because the plaintiff asked Austral Brick for a credit account. Austral Brick searched the information kept by Credit Advantage Limited and found an entry: "Overdue Account(s): These are accounts owed by this company which have been reported by subscribers of Credit Advantage. On 19/2/2001 ALL TYPE JOINERY NSW advised that a 30 Day account reference 736 was overdue. They reported the amount overdue as $2,385, due to a payment default." 4 The plaintiff says that this entry, which does not represent the true facts, is causing it to suffer in its business dealings generally. In modern trading circumstances of course, the ability to obtain credit is to the core of everyone's business. 5 The plaintiff protested to the defendant but the defendant still considers the amount due and doubtless, with such a small amount, considers that suing for it or sending out the debt collector is not as efficient as other methods of debt collection. Apart from advising in July 2001 there was a dispute about the matter, it has done very little. 6 The company Credit Advantage Limited has done even less. It has adopted an ostrich attitude to this problem, saying that it is merely a matter between the two disputants and has declined to make any alteration in its files. 7 The problem for the plaintiff is if it were an individual then it would seem, under the Commonwealth Privacy Act 1988, that the conduct of Credit Advantage Limited would make it liable to a penalty for not checking the accuracy of information which it puts on its data base before displaying it. The only inference that can be drawn from the evidence today is that it merely listed what the defendant told it without anything further. That would appear to be quite contrary to the spirit of the legislation which tolerates activities of people such as Credit Advantage Limited, and that conduct is made worse by, as I say, it declining to do anything about the matter when it is drawn to its attention. 8 This sort of business, that is credit reference, has always been a thorn in the side of the law. The cases show that this sort of activity is necessary in a society where credit is important, and that within certain limits, agencies should be permitted to disseminate information to genuinely interested parties without fear of action for defamation: see Waller v Loch (1881) 7 QBD 619 at 622. However, whether protection extends to profit making agencies such as Credit Advantage Limited, in view of the Privy Council decision in Macintosh v Dun [1908] AC 90, is something I do not need to resolve at the present time. 9 It may or may not be that either the defendant or Credit Advantage Limited has defamed the plaintiff and I again do not need to determine that. However, the law of defamation does need to be considered because it is a basic right of any Australian to say what he, she or it thinks fit, subject to paying damages for defamation if what is said is defamatory. 10 As a general rule, the Court does not issue injunctions to restrain people making statements. However, the Court does enter into these sorts of matters on appropriate occasions as is made clear in the seminal case of Chappell v TCN Channel 9 Pty Ltd (1988) 14 NSWLR 153. 11 Where there is an action pending in a court and a party to the litigation makes a statement about the matter, that is the subject matter of the Court proceedings, then the Court is entitled to safeguard its own process by making an injunction. It may be remembered in Advance (NSW) Insurance Agencies Pty Limited v Matthews (1989) 166 CLR 606 where I made an injunction at first instance, that injunction was not disturbed by the High Court of Australia even though the other orders were discharged. 12 What the plaintiff is met with at the moment, is that Credit Advantage Limited do not want to know it, but will continue to publish the offensive statement. The defendant also wants to put pressure on the plaintiff to pay this debt and is not inclined to do anything unless ordered to, and indeed has put no evidence on even though it was only served relevantly recently and is only taking technical points as to the evidence in the form of order. It seems to me by analogy with what is in the Federal Legislation in this sort of case, the Court should intervene. 13 I think, strictly speaking, the credit agency should have been a party. The plaintiff says it cannot go to the expense of suing everyone in this type of action and it should be sufficient to have an order requiring the defendant to take action. On the other hand, the defendant says that it is in no position to compel Credit Advantage Limited to do what it says. 14 I think the way forward is to make the order which I have handed down in draft, ie, that the defendant is to tell Credit Advantage Limited by three o'clock this afternoon that it is to remove this material from its data base and is also to tell Credit Advantage Limited that if it does not, then the defendant has been ordered to attend this court at 9.50am tomorrow morning and apply for an order that the Sheriff of New South Wales enter the premises of the credit reference bureau, switch off all computers on which the information noted above is stored and take possession of any disks on which that information is stored. However as that may affect the business of Credit Advantage Limited, they should be informed if they wish to be heard on that order that they should be in court tomorrow morning. 15 I make the orders and I reserve the costs and stand the matter over to tomorrow morning. 16 I make orders in accordance with the short minutes, and that involves, in due course, listing the matter before the Registrar on 31 January 2002 at 9.30 am. The great probability will be that when the evidence in this case is ready, if it is not settled, it will be remitted to the District Court.