Oneflare Pty Ltd v Chernih [2017] NSWCA 195

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Oneflare Pty Ltd v Chernih [2017] NSWCA 195 Hearing dates: 19 June 2017 Decision date: 07 August 2017 Before: Meagher JA at [1]; Gleeson JA at [95]; Leeming JA at [96] Decision: Appeal dismissed with costs. Catchwords: CONTRACTS – construction – informal and partly oral contract to provide search engine optimisation services – where service provider instructed to undertake "aggressive" strategy including link building – where "unnatural", "artificial" or "spammy" links to target website created in violation of Google Webmaster Guidelines – where algorithmic and human demotion in search results applied by Google – whether "aggressive" strategy entailed impugned link building

CONTRACT – remedies – damages – assessment – where marginal profit calculated assuming initial sales revenue from before revenue loss period and growth rate from period after consequences of breach ceased – whether appropriate to apply discount for endogeneity problem, apparent difference in growth trend lines and counterfactual possibility of adverse competition and harmful conduct by plaintiff

EVIDENCE – witness evidence – cross-examination – rule in Browne v Dunn – reliability and truthfulness – where adverse credibility findings made against directors of plaintiff – where substantial points of difference between significant affidavit evidence of plaintiff's directors and defendant – where truthfulness of plaintiff's directors put in issue by opening statements and cross-examination – whether denial of procedural fairness Cases Cited: Armory v Delamirie (1722) 1 Stra 505; 93 ER 664 Browne v Dunn (1893) 6 R 67 Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd [2016] HCA 26; (2016) 90 ALJR 770 Kuhl v Zurich Financial Services Australia Limited (2011) 243 CLR 361; [2011] HCA 11 Malec v JC Hutton Pty Ltd (1990) 169 CLR 638 McCartney v Orica Investments Pty Ltd [2011] NSWCA 337 Seymour v Australian Broadcasting Commission (1977) 19 NSWLR 219 Category: Principal judgment Parties: Oneflare Pty Ltd (Appellant) Nicholas Chernih (First Respondent) Linkbuild SEO Pty Ltd (Second Respondent) Representation: Counsel: NJ Kidd SC (Appellant) MK Condon SC, DW Robertson (First Respondent)