FEDERAL COURT OF AUSTRALIA

Orion Pet Products Pty Ltd v Royal Society for the Prevention of Cruelty to Animals (Vic) [2002] FCA 860

TRADE PRACTICES – representations made by or on behalf of RSPCA regarding applicant’s manufactured products, electronic dog collars - whether representations false – whether conduct was misleading or deceptive or likely to mislead or deceive –whether RSPCA a “trading corporation” – whether representations made “in trade or commerce”

INJURIOUS FALSEHOOD – elements of tort – whether requisite mental state established

DEFAMATION – whether statements made concerning applicant’s products conveyed imputations pleaded – whether statements defamatory – whether applicant identified - defences of justification, fair comment and qualified privilege

WORDS AND PHRASES – “trading corporation” - “in trade or commerce”

Trade Practices Act 1974 (Cth) ss 52, 53(a)

Mummery v Irvings Pty Ltd (1956) 96 CLR 99 at 110 referred to

Dare v Pulham (1982) 148 CLR 658 at 664 referred to

Bruce v Odhams Press Ltd [1936] 1 KB 697 at 713 referred to

Multigroup Distribution Services Pty Ltd v TNT Australia Pty Ltd (1996) ATPR 41-522 at 42,679 referred to

Mitanis v Pioneer Concrete (Vic) Pty Ltd (1997) ATPR 41-591 at 44,152 referred to

Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Ltd (1998) ATPR 41-633 at 40,978 referred to

Queensland v Pioneer Concrete (Qld) Pty Ltd (1999) ATPR 41-691 at 42,827 referred to

Beach Petroleum NL v Johnson (1991) 105 ALR 456 referred to

James v Australia and New Zealand Banking Group Ltd (1986) 64 ALR 347 at 372 referred to

Global Sportsman v Mirror Newspapers (1984) 2 FCR 82 at 88 referred to

Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (1993) 38 FCR 1 at 25-26, 45-48 referred to

Stanton v Australia and New Zealand Banking Group Ltd (1987) ATPR 40-755 referred to

Turner v Jenolan Investments Pty Ltd, Jenolan Investments Pty Ltd v Turner, Turner v Acfold Investments Pty Ltd (1985) ATPR 40-571 at 46,635 referred to

Sabre Corporation Pty Ltd v Laboratories Pharm-a-Care Pty Ltd (1995) ATPR 41-396 referred to

Riley McKay v Bannerman (1977) 31 FLR 129 at 134 referred to

Given v CV Holland (Holdings) Pty Ltd (1977) 29 FLR 212 at 217 referred to

The Queen v Trade Practices Tribunal: Ex parte St George County Council (1974) 130 CLR 533 at 543, 546, 553, 561-2 and 572 referred to

The Queen v Federal Court of Australia; Ex parte W.A. National Football League (1979) 143 CLR 190 at 208, 234 and 239 referred to

Hughes v WA Cricket Association Inc (1986) 19 FCR 10 at 29 referred to

Forbes v Australian Yachting Federation Inc (1996) 131 FLR 241 at 291 referred to

Fasold v Roberts (1997) 70 FCR 489 at 525-526 referred to

The Commonwealth v Tasmania (The Tasmanian Dam Case) (1983) 158 CLR 1 at 240 referred to

E v Australian Red Cross Society (1991) 27 FCR 310 at 343 considered

United Firefighters’ Union of Australia v Metropolitan Fire and Emergency Services Board (1998) 83 FCR 346 considered

Quickenden v O’Connor (2001) 109 FCR 243 at 260, 261 referred to

Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 at 602-604 applied

Nixon v Slater & Gordon (2000) 175 ALR 15 at 23, 23 and 34 referred to

Unilan Holdings v Kerin (1992) 35 FCR 272 referred to

Tobacco Institute of Australia v Woodward (1993) 32 NSWLR 559 referred to

Plimer v Roberts (1997) 80 FCR 303 referred to

Robin Pty Ltd v Canberra International Airport Pty Ltd [1999] FCA 1019 referred to

Glorie v WA Chip & Pulp Co Pty Ltd (1981) 55 FLR 310 referred to

Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 referred to

Ratcliffe v Evans [1982] 2 QB 524 referred to

John v MGN Ltd [1997] QB 506 at 507 referred to

Barnes v Sharpe (1910) 11 CLR 462 referred to

Australian Broadcast Corporation v Comalco Ltd (1986) 68 ALR 259 referred to

Parmiter v Coupland (1840) 6 M&W 105 at 108 referred to

Slatyer v The Daily Telegraph Newspaper Co Ltd (1908) 6 CLR 1 at 7 referred to

Gardiner v Fairfax (1942) 42 SR(NSW) 171 at 172 referred to

Farquhar v Bottom [1980] 2 NSWLR 380 at 386 referred to

Knupffer v London Express [1944] AC 116 at 120 referred to

Morgan v Odhams Press [1971] 1 WLR 1239 referred to

Mirror Newspapers v World Hosts Pty Ltd (1979) 141 CLR 632 at 639 referred to

Mann v Medicine Group (1992) 38 FCR 400 referred to

Speight v Gosnay (1891) 60 LJQB 231 referred to

Polly Peck (Holdings) Plc v Trelford [1986] QB 1000 considered

Chakravarti v Advertiser Newspapers Ltd (1998) 193 CLR 519 referred to

Robinson v Laws [2001] QCA 122 referred to

David Syme & Co Ltd v Hore-Lacey [2000] 1 VR 667 referred to

Anderson v Nationwide News Pty Ltd (2001) 3 VR 619 referred to

Radio 2UE Sydney Pty Ltd v Parker (1992) 29 NSWLR 448 referred to

Clarke v Norton [1910] VLR 494 at 499 referred to

London Artists v Littler [1969] 2 QB 375 at 391 referred to

Adam v Ward [1917] AC 309 at 334 referred to

Smith’s Newspaper Ltd v Becker (1932) 47 CLR 279 at 304 referred to

Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 referred to

Lewis v Daily Telegraph Ltd; sub nom Rubber Improvements Ltd v Daily Telegraph Ltd (AC) [1964] AC 234 at 262 referred to

Nixon v Slater & Gordon (2000) 175 ALR 15 at 23, 23 and 34 referred to

John Fairfax & Sons Ltd v Kelly (1987) 8 NSWLR 131 referred to

Popovic v Herald & Weekly Times Ltd [2002] VSC 220 at pars 50-51 referred to

Humphries v TWT Ltd (1993) 120 ALR 693 referred to

Uren v John Fairfax & Sons Ltd (1966) 117 CLR 118 at 150 referred to

Dingle v Associated Newspapers Ltd [1964] AC 371 at 396 referred to

Carson v John Fairfax & Sons (1993) 178 CLR 44 at 70-71 and 104-105 referred to

Triggell v Pheeney (1951) 82 CLR 497 at 514 referred to

Fleming The Law of Torts (9^th ed, 1998) at 586, 648, 780,

Rogers, Winfield & Jolowicz on Tort (14^th ed, 1994) at 307-308

Gatley on Libel and Slander (9^th ed., 1998)at [9.2]

Halsbury’s Laws of Australia, vol 10, pars [145-835]-[145-845]

ORION PET PRODUCTS PTY LTD (ACN 010 638 721) and INNOTEK AUSTRALIA PTY LTD (ACN 010 408 983) v ROYAL SOCIETY FOR THE PREVENTION OF CRUELTY TO ANIMALS (VICTORIA) INC and HUGH WIRTH

Q1 of 2000

WEINBERG J

5 JULY 2002

MELBOURNE (VIA VIDEO LINK TO BRISBANE)

THE COURT ORDERS THAT:

in ORION PET PRODUCTS PTY LTD AND INNOTEK AUSTRALIA PTY LTD v ROYAL SOCIETY FOR THE PREVENTION OF CRUELTY TO ANIMALS (VICTORIA) INC AND HUGH WIRTH:

1.             There be judgment for the second applicant against the first respondent in the sum of $100,000, which includes a lump sum of $15,000 in lieu of interest.

2.             The first applicant’s claim against the first and second respondents, and the second applicant’s claim against the second respondent, be dismissed.

in ROYAL SOCIETY FOR THE PREVENTION OF CRUELTY TO ANIMALS (VICTORIA) INC AND HUGH WIRTH v INNOTEK AUSTRALIA PTY LTD, ANTHONY JOHN HOLLIDAY AND MARY COLLEEN HOLLIDAY:

3.             There be judgment for the second cross-claimant against the first, second and third cross-respondents in the sum of $30,000, which includes a lump sum of $5,000 in lieu of interest.

4.             The first cross-claimant’s cross-claim against the first, second and third cross-respondents be dismissed.

THE COURT FURTHER ORDERS THAT:

5.             The parties file and serve written submissions regarding the costs of the application, and the cross-claim, on or before 26 July 2002.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

introduction

1                     The applicants in this proceeding, Orion Pet Products Pty Ltd (“Orion”) and Innotek Australia Pty Ltd (“Innotek”), are both corporations registered in Queensland. Their directors and shareholders have at all material times been Mr Anthony Holliday, and his wife, Mary Holliday. The companies have, since 1995, manufactured and sold electronic dog collars for the purpose of training dogs, in Australia. The products bear the brand names “No-Bark Collar”, “Smart Dog Containment System”, “Home Free Containment System” and “Smart Dog Remote Trainer”. The business has been conducted throughout from Mudgeeraba in Queensland.

2                     The first respondent, the Royal Society for the Prevention of Cruelty to Animals (Victoria) Inc (“the RSPCA”) is an incorporated association, affiliated with the national organisation of the same name. It is regulated by the Associations Incorporation Act 1981 (Vic) and the Associations Incorporation Regulations 1998 (Vic). Its objects, broadly speaking, are to promote the welfare of animals, and to prevent cruelty to them. It operates on a non‑profit basis. However, as part of its activities, it sells various products for animals. It also conducts training courses for their care.

3                     The second respondent, Dr Hugh Wirth, is its President. He is a qualified veterinary surgeon, and conducts his own practice. Although not a full time officer or employee of the RSPCA, he devotes a great deal of time to its affairs. He regularly appears on radio and frequently comments in the news media on matters of animal welfare. It is common ground, in this case, that he was, at all material times, the RSPCA’s duly authorised officer, servant or agent, and that anything he said regarding the applicants’ products was said within the scope of his actual or apparent authority.

4                     The respondents have, since 1995, campaigned strongly against the use of electronic dog collars and have sought to have them outlawed in Victoria.

5                     These proceedings arise out of a series of statements made by the respondents concerning the applicants’ products. The applicants claim that these statements were false. They claim that in making them the respondents imputed or represented that the use of their collars was cruel, that the collars were instruments of torture, that anyone using them in Victoria would be prosecuted and that they were ineffective and inappropriate as devices for training dogs. They claim that as a result of what the respondents said about their products, they sustained significant loss and damage.

6                     The applicants rely upon four distinct causes of action. These are:

·                    a claim that the statements constituted misleading or deceptive conduct in contravention of ss 52 and 53(a) of the Trade Practices Act 1974 (Cth) (“the Act”);

·                    a claim that these statements amounted to injurious falsehood;

·                    a claim that these statements were defamatory; and

·                    a claim that these statements gave rise to a cause of action in negligence.

7                     It should be said at once that the claim for negligence was all but formally abandoned. It was never seriously pursued during the course of the trial. That was hardly surprising, given the difficulties of establishing the existence of a duty of care. In these circumstances it is unnecessary to say anything further about that claim.

8                     The respondents have cross‑claimed against Innotek, and its directors, alleging that certain statements made about them by Mr and Mrs Holliday, after an interlocutory hearing in this proceeding, constituted misleading or deceptive conduct in contravention of ss 52 and 53(c) of the Act, and were defamatory. The cross-respondents conceded that the statements were relevantly misleading or deceptive and defamatory. They also conceded that Dr Wirth, as second cross‑claimant, was entitled to damages. It is only the quantum of those damages that remains to be determined.

Background

9                     Orion commenced the manufacture and sale of electronic dog collars in 1995. Its business consisted of importing from the United States the components necessary to assemble the collars, their assembly, and their wholesale and retail sale . Wholesale sales were effected mainly through distribution agents and independent dealers. These included veterinary surgeries, pet shops, and hardware and garden stores. Retail sales were made principally by telephone and mail order. The collars were sold throughout Australia.

10                  On 1 July 1999 Innotek acquired Orion’s business. It continues to manufacture, market and sell the collars throughout Australia.

11                  Each cause of action pleaded by Orion and Innotek relies essentially upon the same type of representation. It is necessary to set out in some detail the particulars of each representation, bearing in mind that Orion relied upon those made prior to 1 July 1999, and Innotek relies upon those made thereafter. The applicants divided the representations into three categories for the sake of convenience – the cruelty representations, the illegality representations and the effectiveness representations.

THE CRUELTY REPRESENTATIONS

The October 1995 radio broadcast

12                  In about October 1995, Dr Wirth is alleged to have made a series of adverse comments regarding electronic dog collars during the course of a regular Saturday morning radio broadcast. There was considerable dispute about the exact words may have used during the course of that broadcast. However, it appears to be common ground that, on at least one occasion, and it may have been this occasion, he referred to “South American dictatorships”, drawing an analogy between their use of electronic shock treatment to alter human behaviour, and electronic dog collars.

The November 1998 representations

13                  In or about November 1998 several unnamed RSPCA officers were said to have told Mr Willie Bedford, an officer employed on the “Life Be In it” special project publishing “Holidaying With Dogs” that Orion’s products were unsafe, and that an electronic dog collar had recently caused a burn to a dog’s neck .

The December 1999 website

14                  In or about December 1999, the RSPCA posted a press release on its website which stated that electronic dog collars “involve inflicting pain”, “cause a painful stimulus”, and “cause severe discomfort if not pain”. The press release went on to say that “the potent likelihood exists that burns and more extensive injuries can result” from their use.

The Herald Sun article

15                  On 1 August 2000, the Herald Sun, a Melbourne newspaper, published a lengthy article dealing with the subject of electronic dog collars. The article was written by Mr Nick Papps, a journalist employed by the Herald Sun. It bore the heading in large print:

“Electrified collars inflict 3,000-volt shocks

Tortured pets”

It was common ground that a sub-editor, and not Mr Papps, was responsible for the heading. The article commenced:

“Electrified dog collars are being used as a torture tool to train dogs.

The collars can inflict a 3000-volt shock up to 1800 times every six seconds.

Outraged animal welfare groups say the collars are used to stop barking and to teach dogs to fight.

A Herald Sun investigation has revealed two types of collars are being sold in Victoria, a collar that shocks every time a dog barks and another which is activated when the owner presses a remote control.

It is legal to sell the collars in Victoria but they have been banned in New South Wales for several years.

The RSPCA claims dogs have died after being given the shock therapy and has called for an immediate ban on the collars.

In one incident investigated by the RSPCA the shocks from a collar were flipping a 60kg dog into the air.

Eventually this resulted in the dog suffering brain damage.

It later savaged its owner and had to be destroyed.”

Mr Papps said that the information set out above had been provided to him by Mr Kevin Apostolides, a Senior RSPCA Inspector, and that he had accurately reported the substance of what he had been told.

16                  The article continued:

“RSPCA head Dr Hugh Wirth said the electric shocks had caused epileptic fits, vomiting, seizures, burning and bleeding.

“The government should ban this object of torture,” Dr Wirth said.

“They’re cruel”.

It went on to say:

“In New South Wales, anyone using, selling or possessing such a collar faces fines of up to $5,000 and six months imprisonment.”

The article continued:

“Dr Wirth, a veterinarian, said the electric collars often shocked dogs into a fit.

“It can cause permanent behavioural damage” he said.”

17                  Mr Papps said that the following information was provided by Mr Apostolides:

“An RSPCA test on a unit showed the collars inflicted a 3000 volt shock.

Senior RSPCA inspector Kevin Apostolides said the RSPCA had seen several animals that had been hurt by the collars.

“There’s hundreds of people out there that have these and don’t really know what they’re doing,” he said.

“In many cases the collar inflicts burns, the electrodes get stuck into the skin and the dog can’t get away.”

“If the dog barks, it gets shocked and if it yells again from the pain, it gets shocked again.””

18                  Dr Wirth conceded that he had made the comments specifically attributed to him, whether in quotation marks, or not. Mr Apostolides made essentially the same concession. It follows that there is little dispute between the parties concerning what was said. There is however considerable dispute as to whether the words used bear the meaning for which Innotek contends.

19                  The article also included three colour photographs. The first was of a dog with an Innotek collar in close proximity to its head. The caption below the photograph read “dogs such as this boxer have been tortured by 3,000-volt collars”. The second was of a dog with significant injuries to its neck. The caption was “this border collie suffered extensive wounds”. The journalist responsible for the caption appears to have been untroubled by the fact that the photograph was of an Alaskan Malamute, and not a border collie. The third was a close up of an Innotek collar with its two electrodes placed next to what were said to be burn marks upon human skin. The caption was “an RSPCA inspector demonstrates how one shock burns the skin”. It was common ground that the photographs displaying the Innotek collar had been taken at the RSPCA headquarters in Burwood, and that Mr Apostolides had arranged for the boxer to be photographed next to the collar. It was also Mr Apostolides’ skin that was displayed, apparently showing burn marks.

20                  Finally, the article identified three cases where it was alleged that dogs had sustained injury through the use of the collars. These were:

CASE ONE:

A 12-month-old 60kg malamute fitted with collar for training as an attack dog.

Neighbour reports dog howling and doing backflips every time he is given a shock.

The traumatised dog turns on its owner, savagely biting owner.

Owner then has malamute destroyed.

CASE TWO:

NINE-year-old german shepherd put into boarding kennel by owner.

Dog starts to howl, kennel operator puts electric collar on to shock dog every time it howls.

Dog suffers seizures, vomiting and fits.

Owner returns from holiday to discover dog has been shocked and had to be treated by a vet.

Owner left to pay vet bills.

CASE THREE:

TWELVE-month-old border collie fitted with collar by owner after local council told her it was the best way to stop barking.

Owner notices scorch marks around dog’s neck, takes dog to RSPCA.

Dog had been trying to remove collar, resulting in scorch marks all around neck from moving electrodes.

Owner pleads guilty to causing unnecessary pain and suffering and placed on good behaviour bond.”

21                  It was common ground that Case One described what was referred to as the “Armitage Case”, while Case Three referred to what was known as the “van Ree Case”. I shall return to the significance of these two cases shortly.

The illegality representationS

The 30 October 1999 radio broadcast

22                  On 30 October 1999, Dr Wirth, during the course of his regular Saturday morning radio broadcast, again made a series of adverse comments regarding electronic dog collars. The words which he used on that occasion were recorded, and were not in dispute. They included the following:

“Now, this followed a case two months prior where we took a lady before a magistrate on the issue of these electronic collars. These collars you attach to the dog and when you don’t like what the dogs doing, you press a little button in your hand and that causes the collar to emit an electric shock to the dog. This time the lady kept pressing the button so often that the dog was burnt by the electrical shock around the neck.”

Dr Wirth went on to say:

“Don’t press the magic button or poke little bits of pointed steel into their necks. And we will continue to prosecute people who use those draconian methods.”

He continued:

“But the trouble is, you see, the law is so structured that you can manufacture these … electrical devices or manufacture these cruel pinch collars, you’re not in trouble because you do that, according to law: it’s only when you actually use one.”

He concluded:

“… and we have to witness them being used, and when we witness them being used, we will prosecute.”

The van Ree prosecution

23                  The case to which Dr Wirth referred in his 30 October 1999 radio broadcast was the prosecution by the RSPCA of Julie Anne Young (nee van Ree) following her use of an electronic dog collar. Mrs Young was convicted, and fined, for an offence of cruelty.

The statements by Inspector Hickey

24                  In March 2000, Inspector Darren Hickey of the RSPCA told Leanne Gaye Barrow that the Innotek containment unit that she had been using was illegal. He said that it must have been bought on the “black market” and told her that she could be fined $6,000, or face six months’ imprisonment for having used it.

THE EFFECTIVENESS REPRESENTATIONS

The 30 October 1999 radio broadcast

25                  During the course of his 30 October 1999 radio broadcast, Dr Wirth described electronic dog collars as being no more than “quick fixes”. He implied that the training theory behind the collars was “lets press an electronic button and stop it”, and “press the magic button”. He also implied that the collars sought to make dogs learn “by inflicting pain and suffering” on them.

The December 1999 website

26                  In the December 1999 press release appearing on the RSPCA website, it was claimed that “electronically activated devices” were “completely inappropriate for the proper and lasting training of dogs”. In addition, Dr Wirth was reported as saying that the use of these devices was “not training”.

representations not the subject of ANY pleadED CAUSE OF ACTION

27                  This application was initially instituted in the Queensland Registry of the Court on 6 January 2000. It was subsequently transferred to the Victorian Registry. After the proceeding was commenced, the respondents were alleged to have made further disparaging remarks concerning the applicants’ products. These comments were not the subject of any claim in this proceeding. However, they were said to be relevant to the issue of malice, and also to the quantum of damages, if any, to which the applicants were entitled.

28                  In summary, there were four occasions upon which the respondents were said to have repeated the offending comments. They were:

·                    On 1 August 2000, Dr Wirth was interviewed on the Channel 9 current affairs program “A Current Affair”. During the course of that interview, he repeated a number of the statements contained in the Herald Sun article.

·                    On 6 August 2000, an article appeared in the Queensland newspaper, “The Sunday Mail”. In that article, Dr Wirth again repeated a number of the statements contained in the article.

·                    On 12 September 2000, an article appeared in the Victorian newspaper, “The Age”. In that article, Dr Wirth said that he would continue his campaign against electronic dog collars notwithstanding the fact that, by that stage, the applicants had sought interlocutory injunctions against the respondents in this Court and had alleged that what was being said about their products would destroy their business.

·                    On 3 October 2000, Dr Wirth was interviewed on the Channel 7 current affairs program, “Today Tonight”. During the course of that interview, he again repeated a number of the statements contained in the Herald Sun article.

orion’s claims

7 October 1995 radio broadcast

29                  Orion claimed that the various statements made by Dr Wirth during the course of his radio broadcast on 7 October 1995 contravened ss 52 and 53(a) of the Act. It alleged in the alternative that these statements amounted to injurious falsehood, and were defamatory.

30                  The respondents, in answer to these claims, denied that Dr Wirth had used the words attributed to him. They admitted that he had, on other occasions, said that the use of electronic dog collars was cruel and harmful to animals. However, they claimed that these were mere expressions of opinion, genuinely held, and based on reasonable grounds.

31                  Orion relied upon three witnesses in support of its claim that, during the course of the radio broadcast, Dr Wirth spoke, with reference to electronic dog collars, about “Nazis” or “the Gestapo”.

32                  Mr Holliday said that on the day in question, which was a Saturday, he was attending the Pet Industry Joint Advisory Council (“PIJAC”) trade exhibition in Melbourne to launch the range of electronic training aids for dogs produced by Innotek Inc in the United States. He said that on that morning Dr Wirth had devoted almost his entire radio program to attacking his company’s products, referring to “us” as “Gestapo” and “Nazi torturers”. He conceded that Dr Wirth’s had not mentioned Orion by name. However, his comments had been directed at all electronic pet products, and there was no doubt that Orion had been a target.

33                  Mr Holliday’s account of what Dr Wirth had said was supported, in broad terms, by his wife.

34                  His account was also supported by Mr Steve Gill, formerly President of Innotek Inc. He recalled having been asked by Mr Holliday during the course of the PIJAC meeting in Melbourne to come to his hotel room to listen to Dr Wirth’s radio program. He remembered Dr Wirth saying that “a person who would use these torture devices should be severely punished”. He also remembered him saying that electronic dog collars “… were the equivalent of the Nazi/Communist Movement and were barbaric”, and that they were “absolutely ineffective and totally unsafe”.

35                  On behalf of the respondents, Dr Wirth denied ever having referred to the manufacturers of electronic dog collars as “Nazis” or “Gestapo”. He conceded, however, that he may have said that South American totalitarian regimes had employed electronic shock treatment on prisoners without succeeding in altering human behaviour.

36                  Under cross-examination, Dr Wirth was less certain about the precise language that he used during the course of that particular broadcast. He acknowledged that it was possible that he had described electronic dog collars in terms which involved an analogy with the Nazis or the Gestapo. However, he said that he could not recall having done so. He said that he suspected that may gave used an analogy with totalitarian regimes and it was possible that listeners may have inferred that he was talking about the Nazis or the Gestapo. He agreed that it would be offensive to a manufacturer of such collars to be linked in any way with these groups.

37                  There is no transcript or other written record of what Dr Wirth actually said during the course of that particular radio broadcast. A great deal of time has elapsed since he made his comments on that program. There are significant differences between the accounts given by Mr and Mrs Holliday, and that given by Mr Gill. It is plain that there is much scope for error.

38                  Having given this matter careful consideration, I am not satisfied, on the balance of probabilities, that Dr Wirth used the language attributed to him by Orion during the course of the broadcast. No doubt he expressed views that were strongly critical of electronic dog collars, and probably made some sort of pejorative comments about those who manufactured and sold them. That is not sufficient, without more, to give rise to liability on the part of the RSPCA or Dr Wirth. It follows that Orion’s claims arising out of the October 1995 radio broadcast must fail.

The November 1998 representations

39                  Orion’s complaint regarding this matter arose out of an attempt on the part of Mrs Holliday to have included within the “Life Be In it” publication “Holidaying with Dogs” an advertisement for its “Anti-Barking collar”, and its “Home Free Pet Containment System”. Mr Bedford wrote to Mrs Holliday on 10 November 1998 informing her that “Life Be In it” did not wish to become embroiled in the debate about the safety of Orion’s products. He said that he had sought advice from the RSPCA. He claimed that four officers from that organisation had told him that the collars were unsafe. The Chief Inspector had said that such a collar had recently caused a burn to a dog’s neck and the owner, who had been assured that the collar was safe, was devastated and likely to face changes. Mr Bedford also said that it was important to take into account that the foreword of “Holidaying With Dogs” was written by Dr Wirth. In those circumstances, Mr Bedford had determined to stand by his earlier decision not to accept Mrs Holliday’s advertisement.

40                  On any view, it is difficult to see how Orion can make good a claim for damages arising out of this incident. There is nothing to suggest that Dr Wirth had anything to do with Mr Bedford’s decision to reject the proposed advertisement. It is unclear precisely what the unnamed RSPCA officers said. There is no evidence whatever of any loss of damage resulting from the comments by those officers to Mr Bedford. The inability to place an advertisement in the particular publication may have aggrieved Mrs Holliday, but absent any evidence as to pecuniary loss arising out of that incident, the claim is untenable in any event.

41                  It follows that Orion has failed to establish that it has a viable cause of action arising out of either of the two matters that are the subject of complaint. Its application will be dismissed.

INNOTEK’S TRADE PRACTICES claimS

42                  Innotek alleged that, by making the various representations, the RSPCA and Dr Wirth engaged in misleading or deceptive conduct in contravention of ss 52 and 53(a) of the Act.

43                  It alleged that the cruelty representations were false because, correctly used, the collars were neither harmful nor cruel, did not cause burns, and did not lead to brain damage or the death of dogs. Moreover, the collars were not capable of flipping a 60kg dog into the air, did not cause epileptic fits, vomiting, seizures, or bleeding.

44                  It alleged that the illegality representations was false because, correctly used, the collars were not illegal in Victoria and those who used them were not liable to prosecution and conviction.

45                  Finally, it alleged that the effectiveness representations were false because the collars were effective as training devices for dogs and were based upon sound and recognised behaviour modification principles.

46                  Innotek claimed that the RSPCA had, by making the representations, engaged in conduct, in trade or commerce, that was misleading or deceptive, or likely to mislead or deceive. Alternatively, it claimed that the RSPCA had, in connection with the supply of goods or services in trade or commerce, falsely represented that goods were of a particular standard or quality, or had a particular history.

47                  Dr Wirth was said to be liable for these contraventions of the Act because, by his conduct, he had aided, abetted, counselled or procured them. Alternatively, he had been, directly or indirectly, knowingly concerned in, or party to them.

The cruelty representations

48                  The only contentious factual issues arising out of the representations upon which Innotek relied in support of its claims under the Act related to what was said about electronic dog collars in the Herald Sun article. In effect, it was the statements attributed to Dr Wirth and Mr Apostolides in that article that formed a major part of Innotek’s case.

49                  Unlike the position in relation to Dr Wirth’s October 1995 radio broadcast, there was no real dispute as to what either he or Mr Apostolides had said to Mr Papps. The contentious factual issues were whether their statements, as republished, were misleading or deceptive.

50                  There was, however, a preliminary pleading point raised on behalf of the respondents in relation to these statements. They referred to the fact that in par 5 of the statement of claim, the applicants alleged that, since about October 1995, the respondents had represented that the use of the applicants’ electronic dog collars “was cruel and harmful” to animals. The applicants had provided particulars of that single representation. Much of their case had been directed towards establishing that Dr Wirth and Mr Apostolides had made the statements specifically attributed to them in the article, and that those statements were false.

51                  In that regard, it was submitted on behalf of the respondents that the applicants’ case rested upon a misconception. The statements identified as particulars of the “cruelty representation”, as pleaded, were not themselves representations which were separately relied upon as giving rise to liability. Rather, they were merely constituent elements of the single broader representation pleaded. It was that representation, and that representation only, that the respondents were required to meet.

52                  The respondents, by their defence, had admitted that they had expressed the opinion that use of electronic dog collars was “cruel and harmful to animals”. They submitted that this representation conveyed nothing more than that this was in truth their state of mind. Provided that there were reasonable grounds for holding that opinion, there was nothing false, or misleading or deceptive, in communicating to Mr Papps, and through him to the readership of the Herald Sun, that that opinion was held.

53                  Innotek described this contention as “precious”. It submitted that the respondents had ignored the main object of particulars, which was to apprise the opposing party of the case which it had to meet. It contended that its case had always been, and remained, that the respondents had represented that “the use of the products is cruel and harmful to animals” in the manner particularised. It was the making of that representation, in that manner, which was alleged to be false.

54                  Innotek submitted that it had provided detailed particulars of the falsity of the cruelty representations. These particulars made it clear that its case was that, contrary to what was said in the article, correctly used the collars did not cause brain damage or kill dogs, did not inflict burns, and did not cause epileptic fits, vomiting, seizures, or bleeding. Nor were they capable of flipping a 60 kg dog into the air.

55                  Innotek submitted that the respondents had ignored the particulars given with regard to the cruelty representations when claiming that they were obliged only to meet that representation in its broadest sense. It referred to what the High Court had said in Mummery v Irvings Pty Ltd (1956) 96 CLR 99 at 110 concerning the purpose of particulars. It contended that the respondents had not been taken by surprise, or been otherwise prejudiced by anything said or done during the course of the trial in an effort to demonstrate that the cruelty representations, as particularised, were false. Each side had adduced a substantial body of evidence which went directly to the truth or falsity of the particulars of those representations. It submitted that, having regard to the way in which the trial had been conducted, it would be unfair to now require it to confine its case to the broadest form of cruelty representations, ignoring the content which the particulars gave to those representations.

56                  In my opinion, Innotek was correct in its submission that this trial was conducted throughout upon the basis that it was critical to determine whether some or all of the specific factual assertions contained within the Herald Sun article were false. It is no answer for the respondents to say now, as they do, that although they addressed that issue by adducing a substantial body of evidence in an effort to prove that those assertions were true, strictly speaking, it had been unnecessary for them to do so.

57                  The purpose of pleadings is, of course, to define the issues and thereby to inform the parties, in advance, of the case they have to meet so as to enable them to take the steps necessary to deal with it: Dare v Pulham (1982) 148 CLR 658 at 664. It is important to recognise and accept that there is a clear distinction between pleadings and particulars. A statement of claim must state the material facts. If a material fact is omitted, the statement of claim is bad. The function of particulars is quite different. They are not to be used in order to fill material gaps in what in the old phraseology would be called a “demurrable” statement of claim. Their function is to fill in the picture of the plaintiff’s cause of action with information sufficiently detailed to put the defendant on his guard as to the case he has to meet and to enable him to prepare for trial.

58                  In Bruce v Odhams Press Ltd [1936] 1 KB 697 Scott J in the Court of Appeal said at 713:

“Consequently in strictness particulars cannot cure a bad statement of claim. But in practice it is often difficult to distinguish between a “material fact” and a “particular” piece of information which it is reasonable to give the defendant in order to tell him the case he has to meet; hence in the nature of things there is often overlapping.”

59                  In this Court, the distinction between material facts and particulars has often been emphasised; see generally: Multigroup Distribution Services Pty Ltd v TNT Australia Pty Ltd (1996) ATPR 41-522 at 42,679; Mitanis v Pioneer Concrete (Vic) Pty Ltd (1997) ATPR 41-591 at 44,152; Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Ltd (1998) ATPR 41-633 at 40,978.

60                  In Queensland v Pioneer Concrete (Qld) Pty Ltd (1999) ATPR 41-691 at 42,827 Drummond J noted that recent authority acknowledged the blurring of the distinction between pleadings and particulars. His Honour referred to Beach Petroleum NL v Johnson (1991) 105 ALR 456 where von Doussa J had spoken of the tendency now towards narrative pleading arising from a growing concern that pleadings according to traditional rules do not adequately make known to the Court and to the parties the nature of the opposing cases in complex matters. von Doussa J also commented that:

“[t]echnical objections raised to pleadings on the ground of alleged want of form will be received with less enthusiasm today than in times past.”

61                  In my opinion, the cruelty representations must be viewed in the light of the particulars provided by Innotek of those representations. It would be disingenuous to permit the respondents now to assert that they were not here to meet those representations as particularised, but only in their broadest form, as pleaded. It follows that the question whether some or all of the factual assertions concerning electronic dog collars contained in the article were true must be resolved.

62                  I propose to deal with those factual assertions individually by summarising the evidence adduced in relation to each of them, and expressing my conclusion immediately thereafter.

Do Innotek’s collars produce a 3,000 volt shock?

63                  There is no doubt that the Herald Sun article contains a clear statement to the effect that electronic dog collars can inflict a 3,000 volt shock to dogs. A statement along those lines was made to Mr Papps by Mr Apostolides. Not surprisingly, that statement was duly reported. Indeed, it was given considerable prominence.

64                  Innotek claimed that this representation was plainly false. It referred to the definition of “shock” in the Macquarie Dictionary as meaning “the physiological effect produced by the passage of an electric current through the body”. It claimed that the impression conveyed by Mr Apostolides’ remarks was that electronic dog collars are capable of causing a 3,000 volt current to pass through a dog’s body, an impression that was entirely misleading.

65                  The evidence was that some brands of electronic dog collars, when “bench tested”, could produce an electric current which was capable of being measured at 3,000 volts. However, it was claimed that the current produced by bench testing bore no correlation to the current produced when such a collar was attached to a dog.

66                  Innotek relied primarily upon the evidence of Mr Peter Collins, an electrical engineer who was called on behalf of the respondents. Mr Collins had organised the conduct of tests on an Innotek “No-Bark collar”. In his report, he explained electrical theory in the following terms:

“Three electrical variables must be explained. They are voltage, current and resistance. Voltage is the electrical pressure that causes an electrical current to flow. This is measured in volts. Current is the flow of electricity and this is measured in amperes (amps). Resistance is the characteristic of a circuit that impedes or resists the flow of current. Resistance is measured in ohms.

The three variables are connected by the equation – Voltage (V, volts) = Current (I, amps) x Resistance (R, ohms), that is simply:

V = I x R ……………… equation 1

This equation states that the current flowing in a circuit is dependent on the voltage applied to the circuit and the resistance of the circuit.

The dog collar generates a voltage between the two electrodes. In free air, the voltage developed across the two electrodes was measured to be 2705 volts. Under these conditions negligible current would flow. Essentially the resistance between the electrodes is infinitely high and thus, according to the above equation, no current flows. If something conductive connects the two electrodes with a reduced resistance (dog’s neck) then a current will flow. This current is also determined by the above equation. The lower the resistance of the dog’s neck, the higher the current that will flow.

The dog collar has a resistance built into the module. This resistance is in series with one of the electrodes. This resistance is designed to limit the current which will flow should the electrodes be bridged (shorted) externally. This resistance is termed the internal resistance (or impedance) of the voltage source (dog collar). The internal resistance and the external resistance added together determine the magnitude of the discharge current. The addition of these resistances combine to give the total circuit resistance and thus determine the current flowing (refer equation 1). The higher the internal resistance the lower the current that will flow. Measurements made during testing indicated that the value of the internal resistance altered with both the output level setting and the magnitude of the current flowing.

If a wire (effectively zero resistance) shorts the electrodes then the current flowing in the circuit is set by the value of the internal resistance. The shorting wire does not contribute to the overall circuit resistance.

The resistance through the dog’s neck is important. The addition of the dog’s resistance (neck) and the collar’s internal resistance determine the current that flows. SPI Powernet measured the output of the collar for resistance values between 100 and 4000 ohms, over all seven settings …. For a given setting the resistance value changed the value of the voltage generated between the electrodes and the current which flows.”

67                  He went on to deal with “electric shocks”, and said:

“An electric shock is caused by an electric current from an external source passing through the body. The shock is the discomfort or pain the body experiences when this current flows. Generally the higher the current level the greater the “shock”. Some areas of the body are sensitive to current and the level of discomfort (pain) can be great even though the current level may be low.

The greater the separation between the entry and exit points for the current the greater the value of the body resistance. For a given voltage level the greater the body resistance the lower the current that will flow (refer to the equation 1 above).”

68                  Mr Collins concluded his report by observing:

“Based on the experimental data, summarised above, I am satisfied that the pulses of current flowing through the neck of a dog most probably would be in excess of 20 milli-amps. If the surface of the skin were punctured or lacerated then I would expect that the total impedance could even be less than 100 ohms. Should this be the case than [sic] the current pulses could be far greater than 20 milli-amp. Again I have no test data on animals to support this opinion. As a reference the perception for current in humans is around 0.5 milli-amps.

With the current pulses lasting for 600 milli-seconds and with a value in excess of 20 milli-amps the animal would most probably suffer high level of distress … It is recorded that a dog’s heart is disturbed when it is exposed to currents as low as 0.06 to 0.1 milli-amp. This is the lower threshold for heart disturbance. …

Consideration should be given to the possible duration for receiving the electrical shock. With the collar around the neck and the electrodes contacting the skin the dog would be unable to withdraw from the source of the shock. When a human experiences a shock the first reaction is to withdraw and remove the source of the shock. The collar would not enable the dog to reduce the level of the shock. …”

69                  Under cross-examination Mr Collins agreed that the impedance to the animal was expected to be in the order of 100 ohms. Based upon that figure, he believed that the current flowing through a dog’s neck when a collar was activated was in the order of 20 milli-amps. The cross-examination continued:

“Would that therefore mean that the voltage actually delivered is two volts? –

The voltage times the – sorry, I beg your pardon. The voltage is equal to the current times the resistance, and multiply those two together and you will get, yes, about two volts.

So in any event, based on your examination of this device, the current flow was 20 milliamps? – Yes.

The impedance was in the order of 100 ohms? – Correct.

Therefore our voltage is two volts? – Correct.

You would agree then that a statement of 3000 volts in terms of pain or sensation is really quite a meaningless statement? – No, the 3000 volts is a statement of the electrical characteristics of the device and the device produces between its terminals 3000 volts.

But the actual current flow is two volts? – No – sorry, current is not measured in volts.

Right, okay, 20 milliamps? – The flow of current is 20 milliamps, yes.

Is that the current which actually goes into the skin? – That’s the current that passes through the animal.”

70                  Mr Collins agreed that it was inappropriate to speak of a number of volts passing through a body. Voltage is merely the capacity to make current flow. He maintained that the statement in the article concerning 3,000 volts was, broadly speaking, correct, but he conceded that it said nothing about how much current a dog would experience as it passed through its skin. In other words, the shock would arise out of a 3,000 volt potential between the probes on the collar, but was not itself a shock of 3,000 volts. It was, in fact, a shock in the order of 20 milli-amps, equivalent to about 2 volts.

71                  The expression “misleading or deceptive” is not defined in s 52 of the Act. The most appropriate meaning for the word “deceive” is to cause to believe what is false, to mislead as a matter of fact, or to lead into error. The words “or is likely to mislead or deceive” mean may be expected to mislead or deceive.

72                  In determining whether the statement that electrified collars inflict 3,000 volt shocks was misleading or deceptive, it is necessary to identify the relevant section of the public which is said to have been likely to be misled. For present purposes, that means readers of the Herald Sun newspaper. Without being unduly disparaging, these readers are hardly likely to be capable of appreciating the subtle nuances with which electrical engineers distinguish voltage and current.

73                  The idea that an electronic dog collar is capable of administering a 3,000 volt shock to a dog’s neck connotes something quite different from the true position which is that it generates a current of 20 milli‑amps, or a voltage of about 2 volts, which passes through the dog’s neck.

74                  Accordingly, I am satisfied that Mr Apostolides’ statement to Mr Papps to the effect that the collars were capable of inflicting 3,000 volt shocks to dogs, was, in every sense, misleading or deceptive. It was, at least, likely to mislead or deceive.

Do the collars cause burning?

75                  Mr Apostolides was reported in the Herald Sun article as having said that “in many cases” electronic dog collars inflict burns. Innotek relied upon the evidence of several witnesses to prove that this statement was false.

76                  The first was Mr Collins. He said that there are two ways in which electricity can cause burns to human or animal flesh. The first is by generating heat and the second is by creating a spark.

77                  In relation to heat, flesh can be burned where the energy created by electricity, measured in joules, is sufficient to raise the temperature to a level at which burning occurs. The capacity of an electrical device to generate such energy is measured in watts. The wattage of an electrical device is calculated by multiplying the voltage by the amperage. One watt produces one joule per second. He said that given the low voltage involved in the use of an electronic dog collar upon a dog’s neck (2 volts) and the low amperage at which the collars operate, the wattage output would be small. The effect of his evidence was that it was virtually impossible for such a device, powered by a 6 volt battery, to generate enough heat to burn flesh. In giving that evidence, he proceeded upon the assumption that in order to cause burning, a collar would have to generate enough heat to raise the temperature to 60 degrees celsius, at a rate faster than the rate at which heat dissipates. There was evidence to that effect from two veterinarians called on behalf of Innotek.

78                  The second process by which electricity can cause burning, according to Mr Collins, is where the electrical current shorts through air, creating a spark, or an arc. In order to produce this effect there must be a break in the electrical circuit so that electricity passes through air. However, a very precise break is required. Mr Collins suggested that such a break could occur if one of the electrodes on the collar was in contact with the skin of the dog’s neck, but the other was not. He accepted that given the low voltages and amperages involved, and the high resistance of air as a conductor of electricity, the break would have to be very slight – perhaps 0.5 to 1.0 millimetres. It would require a very steady hand if one were attempting, deliberately, to hold an electrode away from the skin of a dog’s neck at precisely a distance that could give rise to arcing. Innotek described the idea that this effect could be brought about by accident as “pure fantasy”. However, even if it were theoretically possible, it could not even remotely justify Mr Apostolides’ comment. That was because the process described by Mr Collins could only create a burn which was so small as to be invisible to the naked eye.

79                  In re-examination Mr Collins suggested that an arc might occur where the electrode was sufficiently proximate to the hair on a dog’s neck rather than to the skin on its neck. However, even assuming that possibility, he confirmed that any burn caused in that manner would merely affect the dog’s hair rather than its skin.

80                  The next group of witnesses called by Innotek in relation to this issue gave what might be described as “anecdotal” evidence. These were witnesses who had considerable experience in using electronic dog collars. Each of them denied any knowledge of such collars ever having caused burns.

81                  Among these witnesses were Mr Scott Brune, the Vice President (Engineering) of Innotek Inc in the United States. He said that his company had sold up to one million of the collars in the last ten years and that there had never been any complaint that a dog had been burnt by their use.

82                  Mr Holliday gave evidence to the same effect, save that he acknowledged that the RSPCA had claimed that there had been two instances of burning in this country, neither of which he accepted.

83                  Three veterinarians, Dr Christopher Andrews, Dr Richard Murray and Dr Gregory Mahon, each from different parts of Australia, gave evidence of their experience in using the collars. None of them had ever come across an instance where a dog had suffered burns. Mr Ross Allen, an experienced dog trainer who had used the collars extensively, gave evidence to the same effect.

84                  Innotek also called veterinary evidence to substantiate its claim that its collars did not inflict burns. It acknowledged that Dr Iain Mitchell, who had actually inspected the dog in the van Ree case, had diagnosed it as having lesions which, in his words, were “consistent with” electrical burns. It also acknowledged that Mr Apostolides’ claims were supported by Dr Barbara Maddern-Wellington, though her evidence was based upon a diagnosis which she made from looking at photographs of the Alaskan Malamute dog involved in the Armitage case.

85                  Innotek accepted that both Dr Mitchell and Dr Maddern-Wellington were truthful witnesses and that they honestly believed that what they had seen were lesions caused by burning. However, it submitted that, on the issue of burning, the evidence of Mr Collins was conclusive. It also submitted that the evidence of its own veterinarians, all of whom had worked extensively with electronic dog collars, should be preferred to that of Dr Mitchell and Dr Maddern‑Wellington, who had not. Each of Innotek’s veterinarians maintained that a proper diagnosis regarding burning could not be made without histopathology. Each considered that the observations made by Dr Mitchell were consistent with lesions caused by pressure leading to necrosis, and consequent blackening of the underlying skin, and not burning.

86                  Both Dr Mitchell and Dr Maddern-Wellington accepted that histopathology was, at least, desirable in order to make a positive diagnosis of burning. Neither disputed Dr Mahon’s evidence that, in order to cause burning, a temperature in excess of 60 degrees celsius had to be achieved, and heat had to be applied faster than it dissipated. Dr Maddern‑Wellington proffered the opinion that burning could be produced by electricity without heat, in the same way that burns may result from acid or radiation. However, that opinion found no support in the evidence of any of the other veterinary experts, or in the testimony of Mr Collins.

87                  Dr Mahon’s evidence was, in my view, of particular importance. He pointed out that if a dog were to be burned by the use of a collar, one would expect to see evidence of such a burn along the length of the electric charge, from one electrode to the other. That was not the case in relation to either of the two dogs said to have suffered burns in this country.

88                  I should add for the sake of completeness that Innotek also relied upon the evidence of Mr Dieter Klein, a clinical engineer and technical employee at Westphalia Wilhelm University in Munster, Germany. Mr Klein had written a paper entitled “Electronic Stimulus Devices”. He reported having tested an electronic dog collar on a piece of dead pig skin with a view to determining whether it was capable of inflicting burns. He had concluded that such collars were not capable of inflicting such burns.

89                  Under cross-examination Mr Klein accepted what was in any event obvious, namely that there is a difference between the skin of a dead pig and that of a live dog or human being. He acknowledged that it was possible that the live skin of a dog’s neck could react quite differently to electrical stimuli than a piece of the skin of a dead pig. He maintained, however, that his research had allowed for that difference by exposing the pig skin to much longer electrical stimulus than would normally be the case.

90                  In the end, I did not consider Mr Klein’s evidence to be of any significant value.

91                  In my view, the evidence adduced demonstrates that, save in the most exceptional circumstances, when used correctly, electronic dog collars of the type which Innotek manufactures are incapable of inflicting burns upon dogs. It follows that, Mr Apostolides’ statement that “in many cases” the collars inflict burns, was false, and therefore misleading or deceptive.

Do the collars cause other injuries?

92                  In the Herald Sun article, Mr Apostolides claimed that dogs had died after being given the shock therapy. He also claimed that shocks from a collar had caused a 60 kg dog to flip into the air, eventually resulting in the dog suffering brain damage. He claimed that it had later savaged its owner and had to be destroyed. He maintained that the RSPCA had seen several animals that had been hurt by the collars.

93                  In the same article, Dr Wirth said that electric shocks had caused epileptic fits, vomiting, seizures, burning and bleeding. He described electronic dog collars as objects of torture, and asserted that they were cruel.

94                  Innotek contended that there was no evidence that any dog had ever died as a direct result of the use of an electronic dog collar. The only conceivable basis for that assertion was the Armitage case. It was said that the use of a collar upon the Malamute had so traumatised the dog, and changed its temperament, that it had turned upon its owner, and had to be destroyed. That was a very different allegation to the one made by Mr Apostolides.

95                  Innotek also contended that there was no evidence that the use of an electronic dog collar could cause any dog (let alone one weighing 60 kg) to do “backflips” every time the dog was given a shock. Common sense, and ordinary human experience, would suggest that this claim was entirely fanciful.

96                  The same submission was made with regard to Mr Apostolides’ suggestion that the Malamute had suffered “brain damage”. The only basis for that suggestion was said to be the supposed change of temperament on the part of the dog. It was submitted that the expression “brain damage” would ordinarily be understood to convey some form of organic injury, and not a mere change of disposition.

97                  Innotek contended that there was no basis to support Dr Wirth’s suggestion that the collars had caused epileptic fits, vomiting, seizures or bleeding. As far as burning was concerned, the preponderance of the evidence was that this had not occurred.

98                  The respondents contended that there was substantial evidence that electronic dog collars were harmful. There was evidence from Mr Collins that they caused pain. There was also evidence that they caused injuries to dogs, including necrotic lesions and burns. Dr Andrews said that they could exacerbate behavioural problems in aggressive or anxious dogs. When used on dogs suffering “separation anxiety”, they could increase the level of fear and anxiety.

99                  I am satisfied, on the totality of the evidence, that Mr Apostolides’ statement that “dogs have died after been given the shock therapy” was at least misleading. The Armitage case did not provide any real justification for that assertion. Similarly, there was nothing to justify his claim that the Malamute, a 60 kg dog, had been “flipped” into the air when shocked by the collar. It was also misleading to claim that the use of the collar had led to the dog suffering “brain damage”.

100               I am satisfied, again on the totality of the evidence, that Dr Wirth’s statement that electronic dog collars had “caused epileptic fits, vomiting, seizures, burning and bleeding” was misleading. There was no proper foundation for that statement to be made. It could only have been justified by reference to either the van Ree or Armitage cases.

101               In the van Ree case, Mrs Young had used an Innotek No-Bark collar. She did so at the suggestion of an officer of the Maroonda Shire Council which had written to her directing her to prevent her dog from barking.

102               Mrs Young gave evidence in the proceeding before me. She said that the collar had proved to be effective when she first used it. That was for a period of two or three weeks. However, when her dog had begun barking again, after she removed the collar, and she reattached it, she conceded that she had fixed it too tightly. She also conceded that she had left it on for too long. As a consequence, her border collie had suffered injury.

103               The respondents relied upon the fact that when Mrs Young was interviewed by an RSPCA inspector, she had admitted to him that her dog had sustained burns. It was clear, however, that it was the inspector who first suggested that the injury was a burn. Mrs Young merely accepted what she was told.

104               Mrs Young pleaded guilty in the Magistrates Court to having caused unnecessary pain and suffering to an animal. She was placed on a good behaviour bond. The evidence was that her plea was the product of a negotiated settlement whereby two other charges were withdrawn. It is true that in her case, Dr Mitchell examined the border collie and diagnosed the injury to its neck as a burn. It was largely on the strength of that diagnosis that the case proceeded upon the basis that the collar had indeed caused burns to her dog’s neck.

105               Mrs Young’s evidence was of some significance in relation to the complaint made about Dr Wirth’s radio broadcast of 30 October 1999. It will be recalled that during that broadcast he referred to what had purportedly occurred in her case. He said that she had “kept pressing the button so often that the dog was burnt by the electrical shock around the neck”.

106               Dr Wirth’s description of the van Ree case was significantly at variance with what had in fact occurred. In truth, what that case demonstrated was that when the collar was initially used, it had been effective in preventing her dog from barking. The injuries subsequently sustained were the product of the collar having been applied too tightly, and kept on for too long.

107               It is significant to note that Mrs Young said in evidence that she had tried the collar on her own throat before using it on her dog. She described it as having produced a kind of “jolt”. However, she maintained that she had not felt any pain.

108               In relation to the Armitage case, it should be noted that the RSPCA laid two charges of cruelty against Mr Armitage. However, it elected ultimately not to proceed with the prosecution. The charges were dismissed with costs.

109               Mr Apostolides claimed that the Armitage case was not pursued because of the reluctance of several material witnesses to give evidence. That explanation was challenged by Innotek. It called as a witness Mr David Hume, Mr Armitage’s solicitor. He suggested that the main reason that the prosecution had been dropped was that it was found, when the collar was tested, that it was not working. Mr Collins, who tested the collar, agreed that this was so.

110               Another reason proffered for the withdrawal of the charges was the inability of the RSPCA to match the location of the lesions on the Malamute’s neck with the electrodes on the collar. Moreover, insofar as the case depended upon the proposition that burns had been inflicted upon the dog, that conclusion was supported only by Dr Maddern-Wellington. She had based that conclusion solely on photographs and had never inspected the dog.

111               Innotek submitted that, despite the fact that the Armitage prosecution had been misconceived, the respondents had sought to justify a number of claims made in the Herald Sun article by reference to that case. Indeed, it was Mr Armitage’s dog that featured as “Case One” in the article. It was also that dog that was said to have suffered burns, to have been flipped in the air, to have vomited, and to have suffered brain damage (being its change in temperament ). That dog was said to have later bitten its owner, and to have had to be put down. There was no evidence that any of these things had actually occurred. Alternatively, if they had, there was no evidence that they were brought about by the use of an electronic dog collar.

112               In my opinion, the statements made by Mr Apostolides, and to a much lesser extent by Dr Wirth, regarding the effects of the collars upon dogs, as republished in the Herald Sun article, were misleading or deceptive. There was no basis for using the van Ree case to suggest that the collars caused scorch marks around her border collie’s neck. Mrs Young’s admission that she had inflicted such burns was of no probative value, having regard to the circumstances in which it was made. The evidence of Mr Collins was in my view conclusive on this point. I have already indicated that Innotek’s collars do not, at least when properly fitted, and used in accordance with instructions, inflict burns upon dogs’ necks.

113               The Armitage case was, as I have said, a failed prosecution. No facts had ever been properly established regarding the circumstances in which the Malamute came to be injured. It was therefore misleading to treat the allegations supposedly made in that case as though they were proven facts.

Is the use of the collars “cruel”?

114               Innotek readily acknowledged that the term “cruelty” is an elusive concept. It accepted that it was open to Dr Wirth, and others, to hold, and express, the opinion that electronic dog collars are “cruel”. Other experts could honestly and reasonably hold different opinions.

115               Innotek contended, however, that, notwithstanding the subjective nature of the concept, “cruelty” could be assessed to some degree objectively. This could be done by measuring the amount of pain inflicted.

116               The respondents accepted that the mere fact that a method of training involved the infliction of a measure of pain did not render it cruel. The RSPCA itself recognised that “check chain” or “choker” collars, products which it sold, could inflict pain. It also accepted that dogs were often trained by being hit with various implements, including rolled-up newspapers. It condoned the use of electric fences to keep dogs and domestic animals from straying. It also condoned the branding of horses and cattle with red-hot irons. Plainly this involved the infliction of pain. None of these techniques had been the subject of a “campaign” of the type which it had waged against electronic dog collars. Presumably they were not regarded as “cruel”.

117               Innotek accepted that it would be cruel to cause pain to an animal without good reason. At the same time, it submitted, there were circumstances where it would be appropriate to inflict a measure of pain in order to preserve the life of an animal or to protect its welfare. It all depended upon what was reasonable in the circumstances.

118               A number of witnesses who gave evidence in this proceeding said that they had tested the collars on themselves. Those who had done so generally avoided the use of the word “pain” to describe the sensation which they felt. However, even those who said that they did feel “pain” were said to have done so in a context which made it clear that they were really speaking of discomfort, and not acute pain.

119               Innotek did not deny that the collars produced an unpleasant sensation, and one which could reasonably be characterised as “pain”. Indeed, it contended that the collars would be worthless if they did not do so. The question was whether the level of “pain” produced could be justified, having regard to the benefits which the collars offered.

120               Innotek submitted that the evidence established that, in some cases, the only practical means to save a dog’s life was the use of an electronic dog collar. Some dogs were at risk of being put down unless they stopped barking. Others were at risk of being killed by traffic unless they were prevented from straying. It was obvious that electronic dog collars could be used in a cruel manner. However, in any such case, it would be the misuse of the collar which would be cruel, and not the collar itself.

121               Innotek further submitted that the respondents’ description of their collars as “cruel” was emotive rather than rational. It accepted that many decent people would regard the idea of putting an electric collar around a dog’s neck as repugnant. It submitted however that a response of this type reflected a misguided tendency to anthropomorphise dogs. When all was said and done, dogs lacked the capacity to comprehend the nature of what was happening to them to anything like the extent of human beings.

122               Innotek accepted that, both as a veterinarian, and as President of the RSPCA, Dr Wirth was entitled to hold and express the opinion that electronic dog collars were cruel. However, it submitted that in the present case, he had gone far beyond that position. He had singled out the collars, claiming that there their use resulted in particular and severe physical consequences to dogs. In truth, their correct use did not. Moreover, his statements implied that the collars were more “cruel” than other devices used to train dogs. In truth, they were not.

123              The respondents submitted that Dr Wirth’s comments regarding cruelty were mere expressions of opinion. They submitted that statements of that kind ordinarily conveyed nothing more than that the maker honestly held those opinions: James v Australia and New Zealand Banking Group Ltd (1986) 64 ALR 347 at 372. See also Global Sportsman v Mirror Newspapers (1984) 2 FCR 82 at 88 and Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (1993) 38 FCR 1 at 25-26 and at 45-48.

124               The respondents recognised that an expression of opinion may constitute misleading or deceptive conduct: Stanton v ANZ Banking Group Ltd (1987) ATPR 40-755. They submitted, however, that it will not do so provided that the maker genuinely holds the opinion in question and that there is some proper foundation for it: Stanton (supra) at 41,193; Turner v Jenolan Investments Pty Ltd, Jenolan Investments Pty Ltd v Turner, Turner v Acfold Investments Pty Ltd (1985) ATPR 40-571 at 46,635 and Sabre Corporation Pty Ltd v Laboratories Pharm-a-Care Pty Ltd (1995) ATPR 41-396.

125               In my view, Dr Wirth’s statements to the effect that the use of electronic dog collars was cruel, did not constitute misleading or deceptive conduct. This was his opinion, genuinely held, and not devoid of any proper foundation. The evidence establishes that the collars are capable of inflicting a measure of pain upon dogs. That occurs in circumstances where the dogs may not be able, in a practical sense, to do anything to bring that pain instantly to an end. Whether or not, on balance, the use of such collars is justified is very much a matter of personal judgment. It is not a matter upon which the respondents can be fixed with liability for any contravention of the Act.

The illegality representations

126               Innotek contended that since about October 1999 the respondents had continually stated that their products were illegal, and implied that anyone caught using them would be prosecuted. Comments to this effect were certainly made by Dr Wirth in his radio broadcast of 30 October 1999.

127               Innotek also purported to rely upon the van Ree prosecution in support of its claims insofar as they were based upon these representations. I have already dealt with that prosecution in some detail and it is unnecessary to say anything further about it at this stage.

128               Another example of the loss and damage sustained by the illegality representations was said to be the incident involving Inspector Hickey and Mrs Barrow. That incident occurred after Innotek commenced this proceeding, and is, at best, evidence of malice.

129               Nonetheless, its facts are of some significance. Mrs Barrow’s dog, Rupert, a truly precocious animal, was said to have outsmarted Innotek’s Containment System by repeatedly approaching the boundary fence, just close enough to activate the collar without receiving a shock. This had caused the battery which activated the collar to run down. Rupert then escaped from his intended confinement. Innotek noted that Mr Hickey plainly had evidence that Mrs Barrow had used an electronic collar but chose, in the exercise of his discretion, not to charge her with any offence. That was said to demonstrate that Dr Wirth’s statements to the effect that anyone using such a collar would be prosecuted were false.

130               The respondents submitted that it was clear that in his 30 October 1999 radio broadcast Dr Wirth said nothing more than that it was his understanding of the law in Victoria that the use of such a collar could lead to the laying of charges. He had expressly acknowledged that it was not illegal, per se, to posses such a device. Mr Apostolides gave evidence that whenever the RSPCA was in a position to prove that an electronic collar had been used in relation to a dog, it would prosecute.

131               As far as the van Ree case was concerned, the respondents submitted that it was impossible to see how the fact that Mrs Young had been prosecuted could possibly amount to the making of the illegality representation.

132               Finally, as far as the Hickey/Barrow matter was concerned, Mr Hickey denied having told Mrs Barrow that it was illegal per se to use an electronic dog collar. He maintained that he had merely told her that, under certain circumstances, the use of such a collar could amount to an offence.

133               In my opinion, Innotek has failed to establish that the illegality representations, as pleaded, were in fact made. The transcript of Dr Wirth’s 30 October 1999 radio broadcast is somewhat disjointed. However, it seems to me that what he was saying, when read in context, was that it was likely that anyone using an electronic dog collar would be prosecuted. That was his opinion, genuinely held. It was an opinion for which there was some rational basis. Accordingly, Innotek’s claim in relation to the illegality representations must fail.

The effectiveness representations

134               Innotek contended that, from about October 1999, the respondents had continually represented that their electronic dog collars were ineffective as training devices. The representations were said to have been conveyed, in particular, by parts of the 30 October 1999 broadcast, and by the December 1999 website press release.

135               Innotek submitted that during the course of the broadcast Dr Wirth had implied that its products were no more than “quick fixes”, and that the training theory behind them was to make an animal learn “by inflicting pain and suffering”.

136               In the website press release the RSPCA stated categorically that “electronically activated devices” were “completely inappropriate for the proper and lasting training of dogs”.

137               By their defence, the respondents admitted that they had expressed the opinion that the products were ineffective. They contended that this opinion was genuinely held and rationally based.

138               The evidence concerning the effectiveness of the products was largely that of two animal behaviourists, Dr Robert Holmes for Innotek, and Dr Kersti Seksel for the respondents. It is fair to say that both these witnesses expressed some reservations regarding the devices. Dr Holmes thought that they were ineffective for aggressive dogs. He also indicated that in his view there were alternative training methods that were preferable. He specifically noted that the instructions provided with the collars might not be sufficiently clear regarding their use. Dr Seksel was, in general, more critical of the devices. She regarded them as being poor substitutes for proper training.

139               Many of Innotek’s witnesses agreed that the collars were only effective for so long as they were worn. They could not otherwise change the behaviour of dogs. That was certainly true of the dog in the van Ree case, and also of Mrs Barrow’s dog.

140               In my opinion, Innotek has not established that the respondents did not honestly believe, on rational grounds, that the collars were not effective training methods for dogs. The answer to that question is very much a matter of opinion. Innotek cannot be entitled to compensation for the expression of a genuinely held opinion which is supported by some experts, though not others.

The elements of ss 52 and 53(a) of the Act

141               Innotek, having established that the respondents made a number of representations regarding its products that were relevantly misleading or deceptive, must go further and establish each of the other elements required in order to make good its claims under the Act.

142               Section 52 requires proof that the RSPCA is a “corporation” within the meaning of s 4. It also requires proof that in making the representations the RSPCA acted “in trade or commerce”. If these elements are established, Innotek must then prove that it suffered loss or damage by conduct in contravention of the section, and finally establish the quantum of any such loss or damage. The respondents denied each of these allegations.

143               Section 53 supports s 52 by enumerating specific types of conduct which, if engaged in by a corporation in trade or commerce, in connection with the promotion or supply of goods or services, will give rise to a breach of the Act. The elements of s 53 are essentially the same as those of s 52, at least insofar as one is dealing with the terms “corporation” and “in trade or commerce”. Section 53(a) requires that an actionable representation be “false” rather than “misleading or deceptive”. It is not entirely clear what difference this makes. However, the authorities suggest that a representation can be false, even if it is not false to the knowledge of the person making the representation: Riley McKay v Bannerman (1977) 31 FLR 129 at 134; Given v CV Holland (Holdings) Pty Ltd (1977) 29 FLR 212 at 217. It follows that there is no relevant distinction, at least for present purposes, between this particular element of each section. However, s 53(a) includes a requirement that the false representation in relation to goods be that they are of a “particular standard, quality …”. All that is meant by the term “particular” is that the standard or quality must be an indicated or certain standard.

Is the RSPCA a “corporation” for the purposes of ss 52 and 53(a)?

144               Section 52 of the Act relevantly provides:

“(1) A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.”

145               Section 53 of the Act relevantly provides:

“A corporation shall not, in trade or commerce, in connexion with the supply or possible supply of goods or services or in connexion with the promotion by any means of the supply or use of goods or services:

(a)               falsely represent that goods are of a particular standard, quality, value, grade, composition, style or model or have had a particular history or particular previous use;

…”

146               The term “corporation” is defined in s 4 as meaning, a body corporate that:

“(a) is a foreign corporation;

(b) is a trading corporation formed within the limits of Australia or is a financial corporation so formed;

(c) is incorporated in a Territory; or

(d) is the holding company of a body corporate of a kind referred to in paragraph (a), (b) or (c).”

147               The respondents submitted that the RSPCA was not a “corporation” within the meaning of any of these paragraphs. Plainly it did not fall within pars (a), (c) or (d). Nor was it a “financial corporation” within par (b). The only issue was whether it was a “trading corporation formed within the limits of Australia”. There was no question that it was formed within Australia. Equally, there was no question that it engaged in some trading activities. However, the mere fact that a corporation engages in trade is not enough to constitute it a “trading corporation”: The Queen v Trade Practices Tribunal: Ex parte St George County Council (1974) 130 CLR 533 at 543, 546, 553, 561-2 and 572.

148               The respondents contended that a corporation will be a trading corporation only if trading represents a substantial aspect of its corporate activities. Trading which is merely a peripheral aspect of those activities will not be sufficient to render it a trading corporation: the Queen v Federal Court of Australia; Ex parte W.A. National Football League (1979) 143 CLR 190 at 208, 234 and 239. Whether a corporation’s trading activities are substantial, and not merely peripheral, is a question of fact and degree.

149               The respondents noted that the evidence as to the RSPCA’s current activities was to be found in the affidavit of its Executive Officer, Mr Richard Hunter. They acknowledged that it was apparent, from that affidavit, that a number of the activities engaged in by the RSPCA were trading activities.

150               Mr Hunter produced a copy of the RSPCA’s annual report for the financial year to 30 June 2000. That report included a statement of income and expenditure showing total income earned by and total expenditure with respect to each of its various departments which were treated, for accounting purposes, as separate cost centres. He also produced a more detailed report containing a break-down of items of income and expenditure for each of the departments.

151               Mr Hunter said that the RSPCA’s sources of income included donations, general subscriptions, interest and dividends earned on investments and shareholdings, income earned by its Op Shop at Burwood, rent received, royalties received, profit on the sale of fixed assets, income derived from capital investments, income from the Tailwaggers Club (that is, fees received from members of the public who have their animals registered with the RSPCA in the event that they are lost and found) and some sundry items. Of these income items, only royalties received, proceeds from the Op Shop and the Tailwaggers income were generated through the sale of goods or services to members of the public.

152               Mr Hunter explained that the royalties received by the RSPCA came largely from the sale of RSPCA (Aust) accredited eggs known as “RSPCA Barn Laid Eggs”. These eggs were produced by egg producers accredited by the RSPCA as complying with its standards. The RSPCA employed a part time officer who inspected egg producers to ensure compliance. In the financial year ended 30 June 2000 the RSPCA received $92,829.13 in royalties.

153               Mr Hunter also explained that the RSPCA employed ten inspectors to carry out its functions under the Prevention of Cruelty to Animals Act 1986 (Vic). The inspectors were funded by donations and by government grants. This unit operated at a deficit of approximately $1.45 million in the financial year ending 30 June 2000. That deficit was made good by revenue raised from fund raising and marketing activities.

154               Mr Hunter said that the RSPCA also maintained short term boarding kennels at its Animal Welfare Centre at Burwood. All income earned by the kennels came from fees charged to members of the public. The Centre also housed a shelter which offered ambulance and rescue services and received and housed sick, injured and stray animals. In addition the RSPCA had contracts with the Cities of Monash and Whitehorse pursuant to which it acted as their pound. It also earned income from separate contracts with the Shires of Hume and Whittlesea to operate pounds on their behalf. Another source of income was from animal sales (being the sale of animals rescued) and dog training (being fees received from a dog trainer who conducted a training school at the shelter car park at Burwood). The Centre sold a number of animal products of the type commonly sold at veterinary clinics. Income earned by the Shelter accounted for only 37.3 per cent of its running costs. The deficit was made up by funds and bequests.

155               The next item which Mr Hunter addressed was the veterinary clinic run by the RSPCA at the Centre. It employed a number of veterinarians who provided in-house services to the other departments, including the Shelter and the kennels. It also offered commercial veterinary services to the public. It earned income from grooming, the sale of animal related products, dog training services offered to members of the public and veterinary fees.

156               Finally, Mr Hunter noted that the RSPCA engaged in a number of fund raising and promotional activities, including an annual open day at Burwood and a stall at the Royal Melbourne Show. It earned income from the sales of certain branded chocolates and corporate Christmas cards and had entered into a royalty agreement with KMART stores whereby they sold RSPCA branded animal related products. It also raised funds through telephone marketing of products to members of the public. Included among the goods offered for sale to members of the public in this way was a dog training manual.

157               Mr Hunter said that the accounts demonstrated that the RSPCA was funded to a large extent by legacies. Without those legacies, which totalled $2,965,053 in the financial year ending 30 June 2000, the RSPCA would have had an operating deficit.

158               The respondents submitted that while it was clear that the RSPCA earned substantial revenue from trading activities, those activities could only be regarded as peripheral when compared with its overall activities. They submitted that the RSPCA was substantially engaged in non-trading or non-income producing activities. These included the protection, treatment and maintenance of animals, the provision of shelter, and the education of the community regarding their humane treatment. They also included political campaigning and lobbying in support of animal welfare issues, and employing the inspectors who investigated and prosecuted complaints of breaches of the Prevention of Cruelty to Animals Act. These activities were in accordance with the purposes for which the RSPCA was established. The trading activities which it conducted were merely ancillary. To point, as Innotek did, to the revenue which the RSPCA earned by various trading activities was not, in this case, decisive: Hughes v WA Cricket Association Inc (1986) 19 FCR 10 at 29; Forbes v Australian Yachting Federation Inc (1996) 131 FLR 241 at 291; and Fasold v Roberts (1997) 70 FCR 489 at 525-6.

159               Innotek submitted that it was clear that the RSPCA earned substantial revenue from its trading activities. What the accounts showed was that these activities generated an annual revenue in excess of $5.5 million which was more than half the total revenue of $9,940,377 for the financial year ending 30 June 2000. It conceded that many of the activities undertaken by the RSPCA were substantially non-trading, or non-income producing, in nature. The respondents had suggested that a great many of the trading activities including, for example, the egg accreditation scheme, were carried out primarily for educative and welfare purposes, and not to raise income. That suggestion was denied by Innotek, which pointed out that the RSPCA could, if it chose, pursue these objectives without taking advantage of the opportunity to turn them into a money-making operation. The RSPCA did not have to seek to receive royalties for the use of its name and logo. While a campaign against eggs produced by the “battery hen” method might not be a trading activity, the fact that the RSPCA charged a fee for participation in the scheme plainly turned it into one.

160               As regards the RSPCA’s other trading activities, the evidence indicated that virtually all of them were conducted in direct competition with ordinary commercial enterprises. Telemarketing accounted for over $2.3 million of revenue. Veterinary fees accounted for over $1.4 million. Significantly even the sale of goods was not confined to products directly relevant to animals for the promotion of their welfare. It included pen sets, t-shirts, diaries, calendars, baseball caps, mugs, wrapping paper, Christmas cards, watches and other general merchandise.

161               Innotek accepted that the ultimate aim of these trading activities was not to create a profit, but to fund the pursuit of the RSPCA’s animal welfare objectives. However, in determining whether a corporation was a “trading corporation” it was that corporation’s “activities rather than the purpose of its incorporation [which] designate its relevant character”: R v Federal Court of Australia; Ex parte W.A. National Football League (supra) at 208. The test was essentially quantitative. At 239 of that case, Murphy J said:

“As long as the trading is not insubstantial, the fact that trading is incidental to other activities does not prevent [the corporation] from being a trading corporation”.

162               In considering whether a corporation’s trading activities are “significant” or “peripheral” it is irrelevant that those activities do not constitute “the predominant part” of its overall activities: The Commonwealth v Tasmania (The Tasmanian Dam Case) (1983) 158 CLR 1 at 240.

163               It submitted that, on any view, trading revenue in excess of $5.5 million was substantial, in the context of the overall revenue of the RSPCA.

164               Innotek relied upon E v Australian Red Cross Society (1991) 27 FCR 310. There the relevant corporate entity’s motives and objectives were entirely altruistic, conducted with a view to achieving benefit to the public, and not with a view to making a profit. However, as Wilcox J said at 343:

“It is true that the trading activities were not motivated by the hope of private gain but purely to earn the revenue which the Division needed for its charitable activities. But, as Mason, Murphy and Deane JJ made clear in State Superannuation Board …, motive does not matter.”

165               In that case the evidence indicated that the Red Cross earned considerable sums of money from the sale of goods – over $2 million – including almost $1.2 million from opportunity shops,street stalls and other fund raising activities, $65,000 from training provided at first aid courses and over $300,000 from a gift shop. Wilcox J said at 343:

“The scale of the Division’s trading activities amply meets any of the tests annunciated in [R v Federal Court of Australia; Ex parte W.A. National Football League].”

166               The approach taken by Wilcox J to the determination of whether or not a company should be regard as a trading corporation has been followed in United Firefighters’ Union of Australia v Metropolitan Fire and Emergency Services Board (1998) 83 FCR 346 where Marshall J held that the trading activities of the Board generated substantial income and rendered it a trading corporation within s 51(xx) of The Constitution. It was also adopted in Quickenden v O’Connor (2001) 109 FCR 243 where a Full Court of this Court similarly held that the University of Western Australia was a trading corporation.

167               Black CJ and French J said at 260:

“Relevantly for the present case, the University of Western Australia will be a trading corporation for the purpose of pl (xx) and therefore a constitutional corporation to which the Workplace Relations Act applies if it engages in substantial or significant trading activities notwithstanding that trading is not its primary purpose.”

168               Their Honours continued at 261:

“The concept of “trading” is a broad one. It is doubtful, however, that it extends to the provision of services under a statutory obligation to fix a fee determined by law and the liability for which, on the part of the student, appears to be statutory. For present purposes, however, this aspect of the claimed trading activities can be disregarded. For it is plain that the other activities cited are trading activities and are a substantial, in the sense of non-trivial, element albeit not the predominant element of what the University does. The University was not established for the purpose of trading and at another time, closer to the time of its creation, it may not have been possible to describe it as a trading corporation. But at the time relevant to this case and at present, it does fall within that class.”

169               The respondents submitted that the approach taken by Wilcox J in Australian Red Cross Society was not applicable in relation to the RSPCA. In Australian Red Cross Society, there was evidence that that Society had raised revenue from a multitude of sources. The sheer scale of its trading activities was so great as to be determinative of the question whether it was a trading corporation. By way of contrast, in the present case, a great many of the RSPCA’s trading activities, such as the egg accreditation scheme, were carried out primarily for educative and welfare purposes, and not in order to produce income.

170               Innotek responded by noting that even if a number of the RSPCA’s trading activities were carried out for educative and welfare purposes, and not in order to produce income, the scale of some of its other trading activities (including telemarketing and veterinary fees) was so great as to make it impossible to conclude that it was other than a trading corporation.

171               It seems to me that, in accordance with the authorities to which I have referred, and on the evidence, the RSPCA must be regarded as a trading corporation within the meaning of s 4 of the Act. I accept that trading on a modest scale does not imbue a company with the character of a trading corporation. However, in the RSPCA’s case, its trading activities seem to me to be anything but modest.

Were the representations made “in trade or commerce”?

172               The expression “trade or commerce” is defined in s 4 of the Act to mean trade or commerce within Australia or between Australia and places outside Australia. The words “trade” and “commerce” are not themselves defined.

173               The respondents submitted that even if it could be concluded that the RSPCA was a trading corporation, it did not follow that the conduct of which Innotek complained in this proceeding was relevantly conduct “in trade or commerce”.

174               Innotek’s case, as pleaded, was that the representations that were said to be misleading or deceptive, or false, were all made in the course of the RSPCA’s business. That business was said to comprise the management and promotion of animal welfare, the sale of products for animals, and the conduct of training courses for their benefit.

175               The respondents contended that in order to amount to conduct “in trade or commerce” the conduct impugned must itself demonstrate, or at least suggest, some commercial or trading purpose. They submitted that the question was not whether the conduct engaged in was in connection with trade or commerce, or in relation to trade or commerce, but rather whether it was conduct in trade or commerce.

176               In the present case, the representations complained of were published in several different ways. Some were made orally, by Dr Wirth on radio station 3LO. Others were made by him and by Mr Apostolides to Mr Papps, the journalist employed by the Herald Sun. Still others were made by the RSPCA on its website.

177               The respondents submitted that insofar as any representations were made by Dr Wirth, this occurred as part of the RSPCA’s campaign to have electronic training devices banned in Victoria. They were part of its program of educating the public about animal welfare. Indeed, Dr Wirth agreed that he had formulated his remarks as part of a political campaign, using the media as best he could to achieve the RSPCA’s objectives. Any representations made by the RSPCA on its website were made solely to inform members of the public about its work.

178               As far as Mr Apostolides was concerned, he spoke purely as an RSPCA inspector. He had no role whatever in any of its trading activities. His authority to speak upon the subject of electronic dog collars stemmed from his responsibilities under the Prevention of Cruelty to Animals Act. Accordingly, so it was submitted, any statements that he made regarding the collars could not be characterised as conduct which, by its nature, bore a trading or commercial character.

179               The respondents recognised that Dr Wirth had conceded in cross‑examination that his high media profile, and his outspoken campaigning, were essential aspects of the RSPCA’s business activities. He also conceded that the RSPCA depended heavily upon its reputation as being able to fulfil its role successfully with respect to animal welfare issues. However, it did not follow that it was any part of Dr Wirth’s purpose in participating in an interview or broadcast to sell more eggs, or to influence members of the public to buy more goods from the RSPCA. While publicity given to Dr Wirth’s views might, as a secondary consequence, have those effects, that did not render his conduct relevantly conduct “in trade or commerce”.

180               For its part, Innotek conceded that insofar as its case depended upon communications between RSPCA inspectors and members of the public, including for example communications between Mr Hickey and Mrs Barrow, those communications did not occur “in trade or commerce”. However, it was submitted that where the RSPCA had communicated to the public at large, either directly (through Dr Wirth’s radio broadcasts and the material appearing on its website), or indirectly (through the provision of information to journalists such as Mr Papps) these communications were in fact quite central to its trading activities.

181               Innotek referred to the evidence which showed that a significant aspect of the RSPCA’s business activities included the commercial exploitation of its name and corporate logo. These included both the acronym “RSPCA” and the expression “All creatures great and small” (which, I was helpfully reminded, comes from the celebrated hymn written by the Irish poet Cecil Frances Alexander). These merchandising activities involved the commercial exploitation of intellectual property, including the promotion of the marketability of the name and logo. They were, by their very nature, trading or commercial activities. The public statements of the RSPCA made by Dr Wirth and others were said to have the effect of “promoting the sale of goods or services”. They were calculated and intended to enhance the marketability of its name and logo and of merchandise sold under that name and logo.

182               Innotek submitted that the RSPCA’s conduct in impugning its products also formed a central part of its business activities. This was particularly so, having regard to the fact that the RSPCA itself sold training devices for dogs to the public. In that regard, it competed directly with Innotek. One effect of disparaging electronic dog collars was to promote the sale of “check chain” or “choker” collars which the RSPCA marketed.

183               Innotek submitted that even if Dr Wirth’s purpose in criticising its products was primarily educative, and intended to support animal welfare, an inevitable consequences of what he said was to enhance the RSPCA’s profile, and the marketability of its intellectual property . It submitted that it was not necessary, in order for conduct to be “in trade or commerce” that it be motivated solely, or even primarily, by trading or commercial considerations. The critical question was whether Dr Wirth’s statements had an impact upon the RSPCA’s business operations. The evidence made it clear that they did. It followed that his public statements were central to its business activities, and therefore made “in trade or commerce”.

184               It was common ground between the parties that the legal test to be applied in determining whether the representations which were made constituted conduct “in trade or commerce” was that enunciated in Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594. In that case a construction worker alleged that while he was employed by a construction company a foreman of that company instructed him to remove the grates from the entry points of certain air-conditioning shafts and informed him that each grate was secured by certain bolts. That statement, it was alleged, was untrue. While the worker was removing one of the grates it gave way and caused him to fall to the bottom of the shaft and suffer serious injuries. He claimed damages against his employer on the basis that its foreman’s untrue statement was conduct which was misleading or deceptive or liable to mislead or deceive contrary to s 52 of the Act. It was held that the facts pleaded did not give rise to a cause of action under s 52 because the foreman’s statement was not conduct “in” trade or commerce.

185               A majority of the Court (Mason CJ, Deane, Dawson and Gaudron JJ) held that s 52 was concerned with the conduct of a corporation towards persons, be they consumers or not, with whom it had or might have dealings in the course of those activities which, by their nature, bore a trading or commercial character and thus were “in” trade or commerce. Their Honours said at 602:

“The phrase “in trade or commerce in s. 52 has a restrictive operation. It qualifies the prohibition against engaging in conduct of the specified kind. …”

186               Their Honours continued at 603-604:

“…it is plain that s. 52 was not intended to extend to all conduct, regardless of its nature, in which a corporation might engage in the course of, or for the purposes of, its overall trading or commercial business. … What the section is concerned with is the conduct of a corporation towards persons, be they consumers or not, with whom it (or those whose interests it represents or is seeking to promote) has or may have dealings in the course of those activities or transactions which, of their nature, bear a trading or commercial character.”

187               Their Honours went on to illustrate the point by example. They said that while the driving of a truck for the delivery of goods to a consumer, and the construction of a building for another pursuant to a building contract were, no doubt, trade or commerce insofar as the relationship between supplier and actual or potential customer, or between building and building owner was concerned, the mere driving of a truck or construction of a building was not, without more, conduct “in trade or commerce”.

188               The respondents submitted that the principles developed in Concrete Constructions had been frequently applied in this Court. They referred in particular to Unilan Holdings v Kerin (1992) 35 FCR 272 where Hill J held that the giving of a speech by a Minister to an international wool conference was not an aspect or element of activities or transactions which, of their nature, bore a trading or commercial character. The fact that the speech concerned matters of trade or commerce meant that it could be said to be conduct in relation to trade or commerce. It was not, however, conduct in trade or commerce. See however Nixon v Slater & Gordon (2000) 175 ALR 15 at 22-23 where it was held that promotional activities in relation to, or for the purposes of, the supply of goods or services to actual or potential consumers were activities bearing a “trading or commercial character”.

189               It seems clear that statements made in public presentations, such as films or advertisements, may constitute conduct in trade or commerce if designed to advance or protect the commercial interests of the exhibitor or publisher: Fasold v Roberts (supra) at 490.

190               In Tobacco Institute of Australia v Woodward (1993) 32 NSWLR 559, a case brought under the Fair Trading Act 1987 (NSW), it was held that a person who made public statements on behalf of a lobby group opposed to tobacco was not engaged “in trade or commerce”. Similarly, in Plimer v Roberts (1997) 150 ALR 235 it was held that statements made in the course of public lectures and taped interviews by an academic who was not paid for them were not in trade or commerce. In Robin Pty Ltd v Canberra International Airport Pty Ltd [1999] FCA 1019 Gyles J expressed reservations about the correctness of an earlier decision by Morling J in Glorie v WA Chip & Pulp Co Pty Ltd (1981) 55 FLR 310, where his Honour had concluded that a film produced to explain to the public the way in which a particular forest area was managed was not merely a political exercise but had been exhibited in trade or commerce.

191               In my opinion, the representations made by Dr Wirth and Mr Apostolides on behalf of the RSPCA which were misleading or deceptive, or false (they being primarily the statements contained in the Herald Sun article) were not made “in trade or commerce”. Nor were the statements which Dr Wirth made during the course of his various radio broadcasts.

192               The RSPCA is, as I have found, a trading corporation. However, many of its functions have a non-trading or commercial character. Dr Wirth’s radio broadcasts combine educational and political objectives. They may provide a benefit to the RSPCA from greater public exposure of its intellectual property, including its name and logo. However, any such benefit is purely incidental.

193               The statements made by Dr Wirth and Mr Apostolides to Mr Papps were similarly part of an educational and political agenda. They were only tenuously, if at all, connected with the RSPCA’s trading activities.

194               It follows that although Innotek has succeeded in demonstrating that a number of the statements made by Mr Apostolides, in particular, were misleading or deceptive, or false, and that they were made by or on behalf of a trading corporation, it has failed to demonstrate that these statements were made “in trade or commerce”. It follows that each of Innotek’s claims against the respondents under the Act must fail. It is unnecessary therefore to deal with the causation issue raised under s 82, or the potential difficulties raised by Wardley Australia Ltd v Western Australia (1992) 175 CLR 514.

the injurious falsehood claim

195               Innotek’s claim against the respondents for injurious falsehood alleged that the representations already relied upon for its claims under the Act were similarly false for the purposes of this tort. It was also claimed that these representations were made in the knowledge that they were untrue (or at least with reckless disregard as to their truth) and with the intention of discouraging purchasers from acquiring its products, and thereby destroying its business. The claim for injurious falsehood was, of course, brought in the accrued jurisdiction of the Court.

196               The tort of injurious falsehood had its origins towards the end of the sixteenth century in cases involving a challenge to the plaintiff’s title to land, thereby prejudicing his efforts to dispose of it. From this association the tort acquired the name “slander of title”. Gradually, its scope expanded to cover disparaging remarks not only as to title, but also as to the quality of land or goods. Thus knowingly making a false assertion that the plaintiff’s products were inferior, a lie calculated to injure that person in his trade, could give rise to liability.

197               Fleming, in The Law of Torts (9^th ed, 1998), comments that today the tort is broad enough to encompass any damaging falsehood which interferes with prospective advantage, even of a non-commercial nature. The modern term for the tort is that coined by Salmond, “injurious falsehood”.

198               In some respects, this tort bears a marked resemblance to defamation. Both involve a false and harmful imputation concerning the plaintiff which is made to a third party. They differ, however, in that the law of defamation protects interests in personal reputation while injurious falsehood protects interests in the disposability of a person’s property, products or business. Defamation is generally actionable without proof of damage. Falsehood is presumed and liability is strict. In an action for injurious falsehood, the plaintiff must prove that he sustained actual economic loss, that the offending statement was false, and that it was made with intent to cause injury without lawful justification. The requisite state of mind is often described as malice.

199               Injurious falsehood, then, according to Fleming, consists in the publication of false statements, whether oral or in writing, concerning the plaintiff or his property, calculated to induce others not to deal with him. The falsehood must relate to the plaintiff’s goods, and must be published with “malice”. Originally, the averment of malice was said to have been only a superfluous pleading form, meaning nothing more than that the words were published with intent to disparage the plaintiff’s title. Later however, it came to be treated as a separate element, and, as Fleming comments at 780:

“…today the dominant view seems to be that malice, in the sense of some indirect, dishonest or improper motive, or at any rate an intent to injure without just cause or excuse, must be proved by the plaintiff. It is sufficient evidence of malice that the defendant knew the disparaging statement to be false… Conversely, an honest belief in an unfounded claim is not actionable; nor is mere carelessness (in contrast to recklessness or conscious indifference to truth), …”

200               In Rogers, Winfield & Jolowicz on Tort (14^th ed, 1994), the learned authors comment that malice is never easy to define in the law of tort. They say, at 307-308:

“The requirement is fulfilled if the defendant knows that the statement is false or if he is reckless, ie. makes the statement not caring whether it is true or false… However, even if the defendant does believe that untrue statement there may still be malice if he is actuated by some indirect, dishonest or improper motive …”

201               The leading case regarding this tort is Ratcliffe v Evans [1982] 2 QB 524. Though an action for injurious falsehood may be available in conjunction with an action for defamation, a publication need not be defamatory to ground an action for injurious falsehood.

202               Halsbury’s Laws of Australia, vol 10, pars [145-835]-[145-845] asserts that malice may not be inferred from the fact of publication but will be inferred where a false publication was made with an intent to injure without just cause, and knowledge of the falsity or reckless indifference as to its truth or falsity. No action will lie where the false publication was made with mere lack of care or with an honest belief in its truth.

203               Innotek’s claim against the respondents for injurious falsehood overcomes the first hurdle, namely proof of a false publication. I have already found that a number of the factual allegations made by Mr Apostolides regarding its products were false. Its electronic dog collars do not inflict a 3,000 volt shock upon dogs. Nor do they inflict burns, or cause 60 kg dogs to flip into the air, or to suffer brain damage. These statements were made by the RSPCA through Mr Apostolides. They were published in the Herald Sun article as he knew they would be, and as he intended.

204               It is plain that a number of these statements were directed against Innotek’s own products, and not against electronic dog training devices generally. Two of the photographs contained in the article were of Innotek collars, as Mr Apostolides, who arranged for them to be taken, well knew.

205               Although Innotek is not the sole manufacturer and supplier of electronic dog collars in this country, it is a major player in that market. It is obvious that an article in a tabloid newspaper such as the Herald Sun, containing a heading emblazoned with the emotive words “Tortured Pets”, and featuring Innotek’s distinctive collar in close proximity to injured dogs, was calculated to cause significant harm to its business. It was likely that such an article would dissuade prospective purchasers from acquiring its products. There was evidence that this is precisely what occurred in Victoria after the article appeared.

206               However, in order to succeed in its claim for injurious falsehood, Innotek must prove that the statements made by Dr Wirth and Mr Apostolides were made with malice, that is with knowledge that they were false, or with reckless disregard as to their truth or falsity.

207               It is first necessary to consider in some detail the evidence of Mr Apostolides. He was the prosecutor in the van Ree case and also had an involvement with the Armitage matter.

208               He was asked to recount the circumstances surrounding his interview with Mr Papps. He said that that particular journalist contacted the RSPCA on a fairly regular basis in relation to its investigations. He had been directed to Mr Apostolides for comment regarding the van Ree and Armitage matters, and also in relation to electronic collars generally.

209               Mr Apostolides said that he spoke to Mr Papps briefly over the telephone and then arranged for him to come out and interview him in person. The interview took place at RSPCA headquarters, and lasted in excess of two hours. He said that it was he who had told Mr Papps that dogs had “died after being given the shock therapy”. He said that the basis for that comment was a call that he had received about 10 days prior to the interview from a woman who sounded distressed. She told him that her German Shepherd had been boarded at a kennel, and had had an electronic collar attached to it by the owners. This had been done because the dog had been fretting and barking continuously. She had had no knowledge of it. When she collected the dog, she observed that it was fitting, and took it to the vet. It subsequently died. The conversation with the woman formed the basis of “Case Two” in the article.

210               Mr Apostolides also conceded that it was he who had told Mr Papps that the Malamute dog, the subject of the Armitage matter, had been put down. He said that his interstate counterparts had told him of their experiences with electronic dog collars, and that in some cases, their use had resulted in dogs being put down or dying.

211               Mr Apostolides was then asked about the 60 kg dog which was said to have been flipped into the air. He agreed that he had related this incident to Mr Papps, though he could not recall actually using the word “flipped”. He said that he told Mr Papps that the complainant in the Armitage matter was in fact the owner of the Malamute, and that that dog had been observed to be doing “backflips”. He also said that there were a number of witnesses who had observed this happening, but had refused to provide statements to that effect.

212               Mr Apostolides agreed that he had shown Mr Papps photographs of the dog, including an area of its neck that he claimed had been deliberately shaved so that better contact could be achieved for the collar. He said that he understood that the electrodes on the collar had caused significant injury to the dog’s neck. He told Mr Papps that the dog had inexplicably attacked its owner after it was returned to him, and had had to be destroyed. He also told Mr Papps that the owner’s belief was that the dog had been affected by the collar, and that it had suffered some sort of “brain damage”. In substance, he claimed that the references to the Malamute in the article attributed comments to him which were in fact made by its owner. He said that he had no belief as to whether these comments were correct.

213               As regards the reference in the article to the collars’ inflicting 3,000 volt shocks, Mr Apostolides said that as a result of its investigation in the Armitage matter, the RSPCA had engaged Mr Collins to test the collar found on that dog. He said that he had discussed Mr Collins’ findings with Mr Papps, and had provided him with a copy of the expert’s report. He denied having told Mr Papps that the test showed that the collars inflicted a 3,000 volt shock. He claimed that what he said was that the expert had found that the collar “put out 3,000 volts”. He agreed that he had said that “in many cases” the collars inflicted burns, and that the electrodes became stuck into the skin. He said that the basis for these statements was the veterinary reports on the dogs in the van Ree and Armitage matters, and also reports of interstate prosecutions.

214               Mr Apostolides was asked about a photograph which appeared in the article showing an electronic dog collar adjacent to his forearm. He said that Mr Papps had brought the collar with him to the interview and that it was, in fact, an Innotek collar. The caption to that photograph asserted that it showed an RSPCA inspector demonstrating how one shock burns the skin. The photograph showed the two electrodes on the collar separated by a plastic probe (which does not emit current) next to what appear to be three red marks on human skin. Mr Apostolides said that he had used the collar on his arm on a number of occasions shortly before the interview, and it had left a number of marks. There was no explanation as to why the activation of two electrodes should result in three distinct marks.

215               Under cross-examination, Mr Apostolides conceded that, in his affidavit of 11 September 2000, he had not mentioned of a number of the matters about which he later gave evidence-in-chief. He could not produce any record to substantiate his claim regarding the German Shepherd. He said that he rarely spoke with Dr Wirth, and would not have been the source of his comments that the collars had caused “epileptic fits, vomiting, seizures, burning and bleeding”. He agreed that, at the time of the interview, he had been aware that, on 20 July 2000, the Armitage case had been dismissed. He agreed that although he had told Mr Papps that anyone using, selling or possessing a collar in New South Wales faced a fine of up to $5,000, and six months’ imprisonment, he had been aware that there had been a case involving a man named Driver in which a District Court Judge had dismissed a charge arising out of the possession of such a collar.

216               When questioned about the statement in the article that the collars inflicted 3,000 volt shocks, Mr Apostolides insisted that he had said no such thing. He maintained that all he had told Mr Papps was that they “put out” 3,000 volts. He also agreed that he had provided Mr Papps with a copy of Mr Collins’ report.

217               Mr Apostolides conceded that he read the article when it was published. He agreed that he took no steps to have Mr Papps correct any of the errors contained within it. He said that he was not an electrician, and did not understand much of what was contained in Mr Collins’ report.

218               Mr Apostolides was the main source of the statements in the article which I have found to be false. Innotek must establish that, when he made those statements, he either knew that they were untrue, or made them without regard to their truth.

219               Having given careful consideration to this matter, I am not persuaded that Mr Apostolides made these statements with either state of mind. I should say at once that I have found his evidence concerning his remark to Mr Papps about the collars having a capacity to “put out” 3,000 volts unconvincing. I prefer the evidence of Mr Papps who said that Mr Apostolides told him precisely what he recorded in the article, namely that the collars could inflict a “3,000 volt shock”. The latter formulation is precisely what I would expect a layman, confronted with a report prepared by an electrical engineer which he found difficult to understand, to use. In my view, Mr Apostolides introduced the notion of “putting out” 3,000 volts in order to mitigate the damaging effect of what he had said. Notwithstanding this fact, I cannot conclude that he was aware, when he spoke to Mr Papps, that what he was saying was false.

220               Nor do I think that Mr Apostolides ever adverted to the possibility that what he was saying about the 3,000 volt shock inflicted by the collars might be untrue. He struck me as having no idea of the difference between current and voltage. It might be said that he acted carelessly in telling Mr Papps that an Innotek collar had been tested and could inflict a 3,000 volt shock. Carelessness is not, however, tantamount to recklessness, and is certainly insufficient to give rise to liability for injurious falsehood.

221               Mr Apostolides’ statement to Mr Papps to the effect that dogs had died after using the collars was plainly misleading, if not false. So too was his observation that the RSPCA had seen several animals that had been hurt by the collars. Nonetheless, there was at least some basis upon which that observation could be said to rest. His statement that there had been “many cases” in which the collars had inflicted burns was less defensible. He knew of only two such cases (van Ree and Armitage) and there were significant difficulties associated with each of them. There was no proper basis for his statement that a 60 kg dog had been flipped into the air, although it was said that some unnamed witnesses who had declined to provide statements claimed to have seen this occur.

222               At the same time, however, it is my view that Mr Apostolides genuinely believed that all of the factual allegations which he made about the collars were true. He believed that dogs had been burned as a result of their use. He also believed that they inflicted a 3,000 volt shock. These were damaging statements to make about Innotek’s products. However, though false, they were not made maliciously.

223               Mr Apostolides also genuinely believed, notwithstanding the inherent improbability of the assertion, that the Malamute had done “backflips” when shocked by the collar. That statement was equally damaging to Innotek’s collars. Although false, and made carelessly, it was not made maliciously.

224               There is nothing in the evidence of Dr Wirth which suggested that he did not honestly hold the views which he expressed to Mr Papps, and on radio, regarding electronic dog collars. Much of what he had to say was opinion rather than fact. I reject the contention that he exhibited malice.

225               It follows that Innotek’s claim against the respondents for injurious falsehood must fail.

the defamation claim

General principles

226               By its claim for defamation, Innotek seeks substantial damages, principally in order vindicate its reputation. An award of damages is, of course, the primary remedy for defamation: John v MGN Ltd [1997] QB 506 at 507. The purpose of general damages is to compensate the plaintiff for the effects of the defamatory statement. However, compensation for defamation is said to be “a more complex idea than it is in the case of injury to person or property by negligence”: Gatley on Libel and Slander (9^th ed., 1998)at par 9.2.

227               It has been suggested that general damages serve three functions; to act as a consolation to the plaintiff for the distress suffered from the publication of the statement; to repair the harm to the plaintiff’s reputation; and to vindicate that reputation. While actual financial loss (such as loss of business), which is not too remote, is clearly recoverable, it is a comparatively rare case in which evidence of such loss is given, simply because it is not available. However, Innotek’s case is one of those rare cases.

228               Fleming op cit observes, at 586, that notwithstanding earlier doubts, a corporation may have a:

“… character for stability, soundness and fair dealing, as essential to its commercial success as it is vulnerable to attack, quite like the business reputation of a natural person.”

229               A corporation may, accordingly, complain of any defamation calculated to damage its business interests or goodwill. This includes false imputations of improper, or dishonest conduct of its affairs: Barnes v Sharpe (1910) 11 CLR 462. A corporation may also complain of a libel which affects not only property, but its institutional reputation, though it cannot recover damages for hurt feelings: Australian Broadcasting Corporation v Comalco Ltd (1986) 68 ALR 259.

230               Innotek’s claim in defamation arises as an alternative to its claims under ss 52 and 53(a). It is, of course, brought in the accrued jurisdiction of the Court. It was agreed between the parties that as the allegedly defamatory statements about which it complains were published in Victoria, the law which governs this aspect of the proceeding is the law applicable in Victoria. In essence, that is the common law.

231               A defamatory statement is one which tends to lower a person in the estimation of his or her fellows. Frequently, it takes the form of an imputation calculated to bring the plaintiff into “hatred, ridicule or contempt”: Parmiter v Coupland (1840) 6 M&W 105 at 108. Defamation is not limited to aspersions upon the private character of an individual. It also embraces disparagement of reputation in trade, business or office. Thus it would be defamatory to accuse a doctor of incompetence, a company of insolvent trading, or even to attribute authorship of an inferior book to a prestigious writer. It is clearly established at common law that in determining the meaning of words, the intention and knowledge of the publisher are immaterial. What imputation is conveyed by any particular words is to be determined on an objective test, that is, by the meaning which the “ordinary reasonable person” would accord those words. Another way of putting it is that whether a statement is defamatory depends upon the reaction aroused in a citizen of “fair average intelligence”: Slatyer v The Daily Telegraph Newspaper Co Ltd (1908) 6 CLR 1 at 7 or “ordinary decent folk in the community, taken in general”: Gardiner v Fairfax (1942) 42 SR(NSW) 171 at 172.

232               It is sufficient, for the purposes of this test, that the statement was calculated to stir up adverse feelings among a substantial group within the community, though not in all quarters. On the other hand, it is not sufficient that the words would be regarded as prejudicial by a small minority whose standards are so deviant that it would not be proper for the courts to recognise them.

233               Not all falsehoods calculated to injure are defamatory. Defamation is confined to those statements which strike at character or reputation. A disparaging remark concerning the quality of merchandise may import a reflection on the plaintiff’s conduct of his business. To say that all his goods are shoddy would almost certainly do so. To say that one particular article was defective would almost certainly not.

234               Whether or not a particular statement is defamatory may depend upon the meaning which is to be attached to that statement. Where words are ambiguous, they must be understood in their ordinary and natural sense. It matters not that the author did not intend them to have a defamatory meaning if they would be given that meaning by the ordinary sensible person to whom they are addressed.

235               In Farquhar v Bottom [1980] 2 NSWLR 380 at 386 Hunt J observed:

“This ordinary reasonable reader does not, we are told, live in an ivory tower. He can, and does, read between the lines, in the light of his general knowledge and experience of worldly affairs … the ordinary reasonable reader is a layman, not a lawyer, and that his capacity for implication is much greater than that of a lawyer: …

… The ordinary reasonable reader of such an article he is understandably prone to engage in a certain amount of loose thinking. …

… the reader of a book would read it with more care than he would a newspaper. In both the “newspaper” and in other cases, there is also a very wide degree of latitude given to the capacity of the matter complained of to convey particular imputations where the words are imprecise, ambiguous, loose, fanciful or unusual ….”

236               It goes without saying that any publication must be read as a whole. An apparently innocent statement may conceal a defamatory innuendo. Where innuendo is relied upon, it must be specifically identified in the pleading.

Identity of Innotek as the person defamed

237               To succeed in a claim for defamation, a plaintiff must prove not only that the defendant published the words and that they are defamatory, but also identify himself as the person defamed. A defamatory statement is not actionable unless it is published “of the plaintiff”, or “of and concerning the plaintiff”: Knupffer v London Express [1944] AC 116 at 120.

238               It is usually clear enough that the words are published of the plaintiff because he is named in the statement. However, the plaintiff need not be specifically mentioned or identified so long as the tenor of the publication reasonably implicates him. The test is the same as that for defamatory meaning. It is not whether the defendant intended to aim at the plaintiff, but whether a sensible reader would reasonably identify the plaintiff as the person defamed: Morgan v Odhams Press [1971] 1 WLR 1239.

239               Innotek submitted that the statements made by the respondents were “made of and concerning” it. As Innotek was not named in any of the relevant publications, it must prove that the matters in relation to which it complains were published to persons who would understand that they were directed at it: Mirror Newspapers v World Hosts Pty Ltd (1979) 141 CLR 632 at 639; Morgan v Odhams Press Ltd (supra). Innotek is one of very few companies manufacturing and selling electronic dog collars in this country. As such, it is reasonable to infer that anyone hearing anything said by Dr Wirth upon the subject of these products, or reading the remarks in the Herald Sun article emanating from Mr Apostolides, would have understood them as being applicable to Innotek.

240               This conclusion is supported by the principle that, if a class of persons, small in number, is defamed, and the publication is capable of referring to all members of the class, each may have a cause of action: Mann v Medicine Group (1992) 38 FCR 400.

241               The fact that it was Innotek’s collars that were specifically depicted by the photographs in the article makes it clear that the statements about electronic dog collars in the article were made “of and concerning” Innotek.

Were the statements defamatory?

242               Innotek claimed that each statement, in its natural and ordinary meaning, was defamatory. It asserted that the statements meant, and were intended to mean, that its products; were unsafe and inflicted pain or caused severe discomfort to dogs, had killed dogs, had caused a dog to suffer brain damage, were capable of inflicting a 3,000 volt shock, were “cruel”, “tortured dogs”, were illegal, and were ineffective for the training of dogs.

243               Innotek further claimed that by reason of the publication of each of these statements, it had been held up to public ridicule and contempt. It claimed that its reputation had been severely injured and that it had suffered significant loss and damage.

244               When dealing with Innotek’s claims under ss 52 and 53(a) I found that a number of the factual statements made by Mr Apostolides to Mr Papps regarding electronic dog collars were misleading or deceptive. That finding was of no avail to Innotek because it failed to establish that the statements were representations made “in trade or commerce”. It was similarly of no avail to Innotek in relation to its claim for injurious falsehood because I concluded that Mr Apostolides had not acted with malice.

245               Innotek’s claim in defamation effectively requires each statement made to be re-considered. That is because in defamation, the falsity of defamatory statements is presumed until dispelled by the defendant. In other words, a plaintiff is not required to prove that defamatory statements made about him were untrue. Instead, truth, generally known as justification, is a defence, the onus of proving which rests upon a defendant.

246               I have already indicated that the remarks attributed to Dr Wirth in the October 1995 radio broadcast were not proved to have been made. That disposes of this aspect of Orion’s claim in defamation.

247               The other statements allegedly made by the respondents fall into two broad categories.

248               The first involves comments concerning the general nature of Innotek’s products. Thus Dr Wirth has readily acknowledged that he repeatedly described the use of electronic dog collars as “cruel” and “ineffective”. As I have previously indicated, in my view these are expressions of opinion, and are not to be regarded as purporting to be factual statements.

249               The second involves more specific statements which may fairly be described as factual in nature. These are essentially the allegations contained in the Herald Sun article, most of which emanated from Mr Apostolides. They include the statements that the collars inflict 3,000 volt shocks, have inflicted burns to the necks of dogs, have killed dogs, have caused brain damage, and have resulted in a 60 kg dog being flipped into the air.

250               The respondents sought to meet Innotek’s claim that both categories of statements conveyed the imputations pleaded by Innotek by submitting that:

·               the statement made by RSPCA officers to Mr Bedford in November 1998 to the effect that electric shock collars were unsafe was imprecise, and ought not have been pleaded in that way,

·               the statement appearing on the RSPCA website in December 1999 that the collars inflicted pain, caused severe discomfort, and had the potential to cause burns and extensive injuries, was not shown to have been made by Dr Wirth. Moreover, the natural and ordinary meaning of the press release on the website was merely that the RSPCA opposed the use of any devices capable of delivering electric shocks to dogs because such devices could be used to abuse animals, and cause burns and more extensive injuries to them. Furthermore, the RSPCA believed that the sale and use of such devices should be banned in Victoria. In conveying these meanings, the press release was true in substance and in fact.

·               the statements appearing in the Herald Sun article, which were republications of what Dr Wirth told Mr Papps, were not proved to have been reproduced in Dr Wirth’s precise words. Accordingly, neither Dr Wirth nor the RSPCA could be liable for their republication. Furthermore, Mr Apostolides was not a party to the proceeding. The respondents could only be responsible for any republication of his comments if they either knew, or intended, that his actual words would be reproduced, or if that was a natural and probable consequence of something that they did: Speight v Gosnay (1891) 60 LJQB 231. There was nothing in the statement of claim to indicate just how the respondents could be liable for anything which Mr Apostolides said to Mr Papps. Indeed, Innotek had not established that the imputations pleaded had been published by Mr Papps precisely in the form alleged. For example, Mr Papps gave evidence, in relation to the claim that dogs had died after being given the shock therapy, that this information came from the RSPCA. He could not recall with any greater precision the source of that information. Mr Apostolides denied using the precise words regarding this matter contained in the article. He merely admitted telling Mr Papps about the Malamute, which had to be destroyed after turning on its owner. That statement conveyed a very different meaning to the imputation which was pleaded. Mr Papps also said that Mr Apostolides was the source of the information that [Innotek’s] electronic dog collars inflicted a 3,000 volt shock. Mr Apostolides acknowledged that he had provided Mr Papps with a copy of an expert report commissioned by the RSPCA. He also acknowledged that he told him that the particular collar tested had a “discharge” of 3,000 volts, not that it “inflicted” a shock of those dimensions. The respondents emphasised that, by way of contrast to its claims under the Act, Innotek did not, in its claim for defamation, rely on any imputation with respect to the flipping of dogs into the air, or with respect to epileptic fits, vomiting, seizures or bleeding.

251               Innotek replied to these submissions by noting firstly, in relation to the letter to Mr Bedford, that it demonstrated that four RSPCA officers had made negative remarks concerning “the safety of using electric shock collars on dogs”, and that the “chief inspector says that such a collar … has recently caused a burn to a dog’s neck”. It submitted that this evidence supported its imputation as pleaded regarding this letter that “[Innotek] supplied unsafe products”. The respondents’ contention that this imputation was “imprecise” and should be “struck out” was misconceived. The time for taking pleading points was before, and not after, the conclusion of the evidence. Such points should not be taken without an application formally made to have the impugned pleading struck out. In any event, there was nothing imprecise or unclear regarding the word “unsafe”.

252               Innotek then submitted that the website press release plainly conveyed the imputations pleaded, but did not go on to develop that argument.

253               Finally, Innotek submitted that the respondents’ attempts to disavow responsibility for the words published in the Herald Sun article were misconceived. Mr Papps had given clear evidence that both Dr Wirth and Mr Apostolides used the words attributed to them within quotation marks. He also said that the statements attributed otherwise than as direct quotations fairly represented the substance and effect of what they had said. That evidence had not been seriously disputed by either Dr Wirth or Mr Apostolides.

254               As regards the imputation that the products “inflicted a 3,000 volt shock on animals”, Innotek submitted that the evidence showed quite clearly that the operative voltage – that is, the potential discharge in volts of the device causing the shock – was 2 volts, and not 3,000 volts. Although it was plain to anyone with a passing familiarity with electricity that it was absurd to characterise a shock in terms of the potential discharge in volts of the device causing that shock, the average reader of the Herald Sun was unlikely to have appreciated that fact. Rather, that reader would have regarded the suggestion that the products inflicted such a powerful shock with revulsion. The same was true in relation to the allegation that the products inflicted burns – this was a most serious condemnation of Innotek’s collars, and was plainly defamatory.

255               In my opinion, Innotek has clearly established that at least two of the imputations upon which it relied were made by the RSPCA. I refer specifically to the statements in the Herald Sun article that the collars inflicted 3,000 volt shocks, and that they had burned dogs’ necks. Those imputations were plainly defamatory. On balance, I consider that Innotek has also established that Mr Apostolides told Mr Papps that Innotek had supplied products which had killed a dog (meaning had led directly to the death of the animal, not affected its behaviour so that it ultimately had to be destroyed). These statements were made by Mr Apostolides while acting in the course of his employment, and on behalf of the RSPCA. They were made with full knowledge that they were likely to be reported, and with the intention that that occur. In those circumstances, the RSPCA cannot avoid responsibility for what Mr Apostolides said.

256               There was no evidence to suggest that Dr Wirth was in any way responsible for having made any of these statements. It is my view that Innotek’s claim for defamation against him, insofar as it is based upon the pleaded imputations which I have found to be false, must fail.

The respondents’ defences

257               The RSPCA relied upon the defences of justification, fair comment and qualified privilege.

Justification

258               Its defence of justification fails in relation to Mr Apostolides’ factual statements for the reasons set out earlier in this judgment.

259               It also relied upon what is known as the “Polly Peck” defence. Under that defence, first articulated by the Court of Appeal in Polly Peck (Holdings) Plc v Trelford [1986] QB 1000 it was held, where a plaintiff complained that the natural and ordinary meaning of selected words in a publication was defamatory, and pleaded the meaning he contended they bore by way of false innuendo, the defendant was entitled to plead that, in their context, the words complained of were true, as regards any meaning which it was open to the jury to find that they bore. In other words, the scope of the defence of justification does not depend upon the meaning of the words complained of pleaded by the plaintiff, but upon the meanings which the words are reasonably capable of bearing.

260               There is some doubt as to whether the Polly Peck defence is available in common law jurisdictions in Australia. In Chakravarti v Advertiser Newspapers Ltd (1998) 193 CLR 519 Brennan CJ and McHugh J rejected the reasoning in Polly Peck, describing it as being fundamentally defective. In Robinson v Laws [2001] QCA 122 the Queensland Court of Appeal expressly held that no such defence was available in that State.

261               In Victoria, however, the Court of Appeal has held that the Polly Peck defence may be available, but only where the meaning which the defendant seeks to justify is not substantially different from, and not more injurious than, a meaning pleaded by the plaintiff: David Syme & Co Ltd v Hore-Lacey [2000] 1 VR 667. That decision was applied in Anderson v Nationwide News Pty Ltd (2001) 3 VR 619.

262               In Roberts v Bass, an appeal from a decision of the Full Court of the Supreme Court of South Australia, the High Court was asked to determine whether the Polly Peck defence is in fact available. Judgment was reserved on 10 April 2002, and has not yet been delivered.

263               In the present case, it makes no difference whether the Polly Peck defence is regarded as viable, or not. The “alternative meanings” pleaded by the respondents in relation to the factual statements made by Mr Apostolides are fundamentally different to the meanings ascribed to his statements by Innotek. They could not conceivably be regarded as being “not substantially different from” those meanings. It follows that no Polly Peck defence can be made out.

Fair Comment

264               The RSPCA next sought to rely upon the defence of fair comment. It is accepted that fair comment is permitted on matters of public interest. For the defence to be available, the words themselves must indicate with reasonable clarity that the imputation which they convey amounts to a comment, not a statement of fact: Radio 2UE Sydney Pty Ltd v Parker (1992) 29 NSWLR 448. Imputations of fact are not protected by this defence. If the imputation is one of fact, the defence must be justification or privilege. As Fleming notes at 648:

“Comment alone may claim indulgence, in its primary sense of “something which is or can reasonably be inferred to be a deduction, inference, conclusion, criticism, judgment, remark or observation”, as distinct from “direct statement concerning or description of a subject of public interest”.”[Clarke v Norton [1910] VLR 494 at 499.]

265               The defence is predicated on the proposition that the right of fair comment is one of the fundamental rights of free speech. There are matters in which the public has a legitimate interest. On such matters, it desirable that all should be able to comment freely, and even harshly, so long as they do so honestly and without malice.

266               Whether a comment on a matter is regarded as being fair depends upon whether the ordinary reader might reasonably so regard it. Whether that matter is one which is of public interest depends upon whether it affects “people at large” so that they may be legitimately interested in, or concerned at, what is going on: London Artists v Littler [1969] 2 QB 375 at 391.

267               The RSPCA submitted that several of the imputations pleaded by Innotek were in the nature of comments, rather than imputations of fact. These included the imputation that Innotek supplied products which were cruel to dogs, or which tortured dogs, and the imputation that its products were ineffective and inappropriate for the training of dogs. These imputations were principally sourced to Dr Wirth.

268               Innotek conceded that Dr Wirth genuinely held the opinion that its collars were “cruel to dogs” and that they were ineffective and inappropriate for their training. It acknowledged that, provided there was some basis upon which these opinions could rationally be held, fair comment might constitute a defence in relation to them. It submitted, however, that Dr Wirth’s reference to “torture” fell into a different category. That word was so redolent with emotion as to render untenable any claim that its use amounted to “fair” comment.

269               In my view, Dr Wirth’s comments regarding the cruelty of electronic dog collars, and his description of them as “objects of torture” do not exceed the bounds of fair comment. The same is true of his opinion that the collars are ineffective, and inappropriate as training devices for dogs. I do not accept Innotek’s submission that these comments were “clearly based on inaccurate statements of fact”. The terms which Dr Wirth used are broad, and they are certainly emotive. However, they seem to me to fall within the parameters of protected speech, on a matter of public interest, unless actuated by malice. I have already indicated that I can detect no malice in anything said by Dr Wirth.

270               Mr Apostolides’ factual statements fall into an altogether different category. They are not comments. It follows that they are not protected by this defence.

Qualified privilege

271               The last defence upon which the RSPCA relied was that of qualified privilege. That defence arises where, on grounds of public policy, a person may without incurring liability for defamation, make statements about another which are defamatory and in fact untrue.

272               In Adam v Ward [1917] AC 309, it was said, at 334, that the defence arises:

“…where the person who makes [the] communication has an interest or a duty, legal, social, or moral, to make it to the person to whom it is made, and the person to whom it is so made has a corresponding interest or duty to receive it. This reciprocity is essential. …”

273               It is not apparent from the RSPCA’s submissions as to how it is said that Mr Apostolides’ factual statements to Mr Papps were made on an occasion of qualified privilege. Nor is it apparent from those submissions how the publication of such statements to a journalist, which it is intended be conveyed to the world at large, can attract this defence. That is not to say that there have not been past examples of its having been successfully invoked in such circumstances: Smith’s Newspaper Ltd v Becker (1932) 47 CLR 279 at 304.

274               In Gatley on Libel and Slander such cases are described as “extremely rare”. It is difficult, in my view, to accept the proposition that Mr Papps, at least, was under a “duty”, in any relevant sense, to receive the communication from Mr Apostolides. Accordingly, I would reject the defence of qualified privilege insofar as it is sought to provide an answer to the defamatory consequences of Mr Apostolides’ statements

275               I should add for the sake of completeness that the RSPCA also sought to invoke the principles enunciated in Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 in answer to Innotek’s claims. That case stands for the proposition that each member of the Australian community has an interest in disseminating and receiving information, opinions and arguments concerning government and political matters that affect the people of this country. The RSPCA contended that Mr Apostolides’ remarks were made during the course of a campaign to reform the laws in Victoria regarding the use of electronic training devices, and therefore fell squarely within the protection.

276               I reject that contention. The Herald Sun article, when read as a whole, barely adverts to any such political campaign. It includes only one sentence from Dr Wirth referring to this matter – “the government should ban this object of torture”. The Lange defence does not give carte blanche to defame another merely because the statements which are said to be defamatory form part of the background to a campaign for legislative change.

277               It follows that Innotek has established that the statements of fact contained in the Herald Sun article were made “of and concerning it”. Those statements were made by Mr Apostolides, acting in the course of his employment, and on behalf of the RSPCA. Any liability arising out of those statements must be borne by the RSPCA. The statements were defamatory, and the RSPCA has not justified them. Similarly, the defences of fair comment and qualified privilege have not been made out. Innotek is therefore entitled to damages.

Damages

278               As previously indicated, in an action for defamation brought by a corporation, the only injury which is compensable is damage to reputation. The relevant principle is set out in Lewis v Daily Telegraph Ltd; sub nom Rubber Improvements Ltd v Daily Telegraph Ltd (AC) [1964] AC 234 at 262 per Lord Reid:

“A company cannot be injured in its feelings, it can only be injured in its pocket. Its reputation can be injured by a libel but that injury must sound in money. The injury need not necessarily be confined to loss of income. Its goodwill may be injured.”

279               Innotek relied upon the evidence of Mr Paul Vincent, an investigating chartered accountant, in support of its claim for damages. Much of what he had to say was directed to its application under ss 52 and 53(a) of the Act, and its claim for injurious falsehood, each of which has been rejected. However, some of his evidence is relevant to the damage allegedly sustained by Innotek by reason of the statements made by Mr Apostolides in the Herald Sun article, regarding its products.

280               Mr Vincent prepared a report in which he attempted to quantify the damage suffered by Innotek as a result of all of the adverse publicity emanating from the various statements made by Dr Wirth and Mr Apostolides from October 1995 to the time of trial. He noted that at the time of the publication of the Herald Sun article, Innotek was the Asia and Pacific distributor of electronic dog training products for the American company, Innotek Pet Products. However, his report took into consideration only those damages said to flow from adverse publicity in Victoria.

281               In summary, Mr Vincent concluded that the total damages suffered by both Orion and Innotek fell within a range of approximately $237,000 and $404,000, depending upon which of a number of possible scenarios was adopted. He arrived at these figures by relying upon survey data from BIS Shrapnel Pty Ltd, an independent research body, which indicated that normally gross sales in the Victorian pet products market were 20 per cent higher than in the Queensland market. Mr Vincent then postulated that had the adverse publicity not occurred, the Victorian market would have been expected to perform at a level 20 per cent higher than the actual growth in the Queensland market. However, as a result of that publicity, Innotek’s sales had not performed at that level in the Victorian market. He estimated the effect of the publicity upon sales to have been “somewhere between 10 and 20 per cent”.

282               The key assumption in Mr Vincent’s analysis was his assertion that the Victorian market was normally expected to be 20 per cent higher than that in Queensland. He agreed, under cross-examination, that this assumption was based entirely upon the BIS Shrapnel survey which had been provided to him by Mr Holliday. He conceded that he had not carried out any investigation of his own into that matter.

283               The respondents called their own expert, Mr Geoffrey Sincock. He did not accept any assumption based upon the BIS Shrapnel report. He referred instead to an Australian Bureau of Statistics survey which indicated that Victorian household expenditure on animal products was, on average, 31.9 per cent lower than Queensland household expenditure. He pointed out that if the BIS Shrapnel report was to form the basis for any assessment of loss, the relevant statistic in that report was the comparative spending on dog products, and not pet products generally. That statistic demonstrated a 12.15 per cent difference between Victoria and Queensland, and not a 20 per cent difference.

284               Under cross-examination, Mr Vincent acknowledged that it was reasonable for Mr Sincock to rely upon 12.15 per cent rather than 20 per cent.

285               The respondents submitted that the evidence showed that Innotek’s sales figures in Victoria were largely unaffected by any adverse publicity which may have been generated by anything said by Dr Wirth or Mr Apostolides. While sales in Victoria for the year ending 30 June 2001 had grown more slowly than in previous years, that was to be expected from a business which had been established in 1995. The respondents noted that Mr Vincent accepted that there were not many established businesses that could generate increases in revenue of between 50 and 100 per cent annually. They submitted that Innotek had made no attempt to prove that it was reasonable to assume that, absent the adverse publicity, its business would have continued to grow at previous rates. They submitted that if, however, I were satisfied that there was some basis for the belief that Innotek had sustained losses as a result of what had been said about its products, a figure significantly below any of those postulated by Mr Vincent should be accepted.

286               In my opinion, the publication of the Herald Sun article containing Mr Apostolides’ imputations of fact was likely to, and did, cause significant damage to Innotek’s business and its reputation in Victoria. It is only common sense, that when an institution as highly regarded as the RSPCA says that a company’s products “inflict 3,000 volt shocks” and “cause burns to dogs” (in some cases leading to their deaths), this will impact adversely upon the sale of those products.

287               Assessing the extent of that impact is a difficult matter. An important component of any loss is the reduction in sales, and therefore profits, which Innotek has suffered as a result of what was said in the article. Expert evidence of the type given by Mr Vincent and Mr Sincock, can be of some assistance in assessing the damage sustained. However, in the end, the process of quantifying damages for harm to a person’s reputation is necessarily imprecise.

288               Innotek invited me to award aggravated or exemplary damages. It submitted that the conduct of Dr Wirth, and Mr Apostolides had been “malicious, reckless, or contumacious.” I am unable to accept that submission.

289               In my view, Mr Apostolides was, careless in what he said about Innotek’s products. However, although it was false, it was not deliberately so. Nor was it reckless in any relevant sense. There is nothing to suggest that he adverted to the possibility that his statements were untrue, and elected to make them in any event.

290               The RSPCA invited me to conclude that Innotek’s claim for future loss could not be sustained because undertakings provided to the Court on 12 September 2000 had effectively brought an end to any adverse publicity. That may be true, but it does nothing to remedy the continuing adverse effect of what Mr Apostolides’ said in the Herald Sun article about Innotek’s products.

291               As Innotek submitted, the practical reality is that a substantial number of persons in Victoria have been led to believe by the RSPCA, a highly reputable organisation devoted to protecting animals from cruelty, that Innotek’s products can kill, or burn their dogs, and inflict massive shocks upon them.

292               It seems to me to be self evident that the publicity accorded to these statements would result in lost sales, and that these losses would be likely to continue for some time into the future.

293               I note that no retraction, or apology, has ever been proffered by the RSPCA.

294               Innotek invited me to assess damages upon the basis of the lowest figure accepted by Mr Vincent, under cross-examination. That figure was based upon the assumption that consumers in Victoria would ordinarily spend 12.15 per cent more on pet products than consumers in Queensland. If that assumption were accepted, the reasonable expectation would be that, but for the adverse publicity, and in particular the Herald Sun article, sales in Victoria could be expected to have exceeded those in Queensland by that percentage.

295               The evidence is that this did not occur. The inference sought to be drawn is that the adverse publicity brought that about. It was submitted that, making due allowance for every concession made by Mr Vincent under cross-examination, including his concessions on technical matters regarding appropriate accounting treatment, Innotek’s total past loss would amount to approximately $106,000. It was submitted that an amount of approximately $31,000 would be reasonable compensation for future loss. Interest pursuant to s 51A of the Federal Court of Australia Act 1976 (Cth) was sought on the past loss.

296               Innotek conceded that once such a figure was reached some discount might be appropriate to provide for contingencies for which full allowance could not be made in any hypothetical calculation. It invited me to arrive at a “global” assessment of damages of between $120,000 and $150,000.

297               In my opinion, Innotek’s damages should be reduced somewhat from that figure by reason of the fact that a number of the statements made about its products which contributed to the adverse publicity have been found not to be actionable. Nonetheless, Mr Apostolides’ imputations of fact seriously disparaged its products. They undoubtedly caused significant harm to its business, reputation and goodwill. For that harm, Innotek is entitled to be compensated. Any damages awarded will be paid by the RSPCA, and not by Dr Wirth, who, as I have said, is not liable.

298               Doing the best that I can, I have determined that there should be judgment for Innotek in the amount of $60,000 to compensate it for losses up to the trial, and an additional $25,000 to compensate it for future losses, making a total of $85,000. In arriving at the award of damages, I have concluded that interest should be added to the amount of $60,000 cf Nixon v Slater & Gordon(supra) at 34. In accordance with s 51A(1), the Court may either order that there be included in the sum for which judgment is given, interest at such rate as it thinks fit or, without proceeding to calculate interest, order that there be included in the sum for which judgment is given, a lump sum in lieu of any such interest. I propose to adopt the latter course. I will order that $15,000, in lieu of interest, be added to the sum of $85,000, for which judgment is given. I base that figure broadly upon the entitlement to interest in Victoria under s 60 of the Supreme Court Act 1986 (Vic), which requires the Supreme Court to award damages in the nature of interest at such rate not exceeding the rate for the time being fixed under the Penalty Interest Rate Act 1983 (Vic). I consider it appropriate to adopt the Victorian approach to the assessment of interest because both Innotek’s claim in defamation, and that of Dr Wirth, are brought at common law, in the accrued jurisdiction of the Court. I note that in John Fairfax & Sons Ltd v Kelly (1987) 8 NSWLR 131 McHugh JA, in dealing with the question of interest on damages in a defamation case, expressed the view that normally such an award of damages contains no component for loss after verdict, and acknowledged that the assessment of interest could never be other than an instinctive synthesis, far from mathematical perfection. See generally Popovic v Herald & Weekly Times Ltd [2002] VSC 220 at pars 50-51.

299               Innotek also sought injunctive relief. It submitted that it was appropriate that such relief be granted because there had been no open offer of any undertakings on the part of the respondents to desist from republishing any of the offending comments regarding its products. The absence of any such offer was said to imply that the respondents regarded themselves as being at liberty to make similar comments in the future, unless restrained.

300               In my opinion, it is not appropriate to grant injunctive relief restraining the respondents from expressing any genuinely held views regarding Innotek’s products, whether these be related to their “cruelty” or their “effectiveness”. Moreover, I do not consider it appropriate to restrain the RSPCA, through its servants or agents, from making public statements regarding the supposed physical consequences of the use of the collars, such as inflicting 3,000 volt shocks, killing dogs, inflicting burns upon their necks, causing brain damage, or flipping them in the air. A number of these comments have been found not to have been made tortiously, and are not amenable to injunctive relief. Those which have been found to give rise to a claim in defamation are the subject of orders for compensation, and are unlikely to be repeated. If they are, that will no doubt give rise to the possibility of future claims which may lead to the award of far more substantial damages than have already been ordered.

the respondents’ cross-claim

301               By their cross-claim dated 2 November 2000 the respondents have sought damages against Innotek, and against Mr and Mrs Holliday, for misleading and deceptive conduct, in contravention of s 52 of the Act, and for defamation. The publications about which they complained followed the hearing in this Court of an application for interlocutory injunctive relief brought by the applicants on 12 September 2000.

302               The publications in question comprise four letters and a brochure. However, only the second and third letters were relied upon in support of the claim for defamation.

303               The first is an undated letter distributed by the respondents entitled “Innotek wins Injunctive Hearing against RSPCA”. That letter essentially claimed that on 12 September I had ordered an injunction against the RSPCA and Dr Wirth restraining them from making representations about electronic collars and their use except in very specific circumstances. It was stated that “In ordering this injunction, the Court had access to scientific reports and studies …”. The letter claimed that the Court was concerned with recent publicity from the RSPCA which had appeared around Australia which was “false”.

304               The second is a letter dated 19 October 2000 addressed to customers of Innotek. In that letter reference was made to “the recent RSPCA “slanderous” media campaign.” In particular, the letter said:

“Due to lies and innuendos that Dr Hugh Wirth of Victoria’s RSPCA has circulated, Innotek has had to take them to court. On September 12, we won an Injunction against him and the RSPCA in the Federal Court of Melbourne. In ordering the Injunction the Court recognised that the RSPCA had conducted a smear campaign against electronic collars which was false information …”

It referred to the RSPCA’s “nonsense” regarding electronic dog collars and invited those it whom it was addressed to write to the Minister for Agriculture regarding this matter.

305               The brochure referred to various reports regarding electronic dog collars which spoke of them in laudatory terms. It went on to say that I had ordered an injunction against the RSPCA and Dr Wirth restricting them from making representations about electronic collars, and that I had based my decision on scientific reports of the type mentioned above. It claimed that I had found information of the type disseminated by the RSPCA and Dr Wirth to be incorrect.

306               The third letter was dated 24 October 2000 and was addressed to Mrs Bunty Jackson of the Humane Society for Animal Welfare. It complained of various statements which she had made to various councils in support of a campaign to have electronic collars banned. It threatened legal action against her and said:

“Innotek Australia has won a Court Order in Melbourne against the RSPCA Victoria by Justice Weinberg due to the malicious untruths that have been spread by them in the media.”

307               The fourth letter was dated 19 October 2000 and was sent by the cross-respondents to the Honourable Warren Truss, the Minister for Agriculture. It was brought to Dr Wirth’s attention when, as a member of the National Consultative Committee on Animal Welfare, he received the agenda papers for its bi-annual meeting to be held on 3 and 4 April 2001. The letter claimed that the RSPCA had “maintained a smear campaign” against Innotek, with “the information getting more and more outlandish as time progressed”. It referred to the court proceedings before me on September 12 2000 claiming that I had enjoined the RSPCA and Dr Wirth from making representations about electronic dog collars and their use, and that I had done so based upon a number of scientific reports and the affidavits of prominent veterinarians and animal behaviourists. It referred to the Herald Sun article and implied that I had found that a number of the claims contained therein were false. It described the RSPCA as having engaged in “propaganda” and repeated the claim that it was conducting a “scandalous smear campaign”.

308               The cross-respondents conceded that the second and third letters were defamatory of Dr Wirth. At the outset of the hearing, the following statement was made on their behalf:

“… we acknowledge that what was said was wrong. We have apologised for that and we expect the only evidentiary issue that will concern your Honour in relation to that aspect of the case is whether it had the capacity to or did in fact impact in any way of Dr Wirth’s reputation and we anticipate that [Sir Rupert]Hamer and other witnesses will, when they’re cross-examined say that they think no less of Dr Wirth as a result of what was said.”

309               They also acknowledged that, to the extent that the publications complained of were factually inaccurate, Innotek and Mr and Mrs Holliday had contravened s 52. They noted, however, that no argument had been addressed by the cross-claimants regarding any possible claim arising out of the contents of the fourth letter or the brochure. They submitted that the claims under the Act did not really take the matter any further.

310               The cross-respondents accepted that the letters were false insofar as they represented that injunctions had been granted against the respondents. The truth was that undertakings had been proffered by the RSPCA and Dr Wirth, and there had been no determination whatever by me of whether there were serious questions to be tried regarding the alleged falsity of what had been said regarding Innotek’s products. In particular it was false of the cross-respondents to represent that I had “accepted” the evidence contained in scientific reports and studies upon which Innotek had relied.

311               The imputations said to arise from the second and third letters were, essentially, that the RSPCA and Dr Wirth had intentionally made false statements regarding electronic dog collars in order to influence public opinion, and that I had so found. With regard to the claims under the Act it was said that the first letter and the brochure conveyed representations that I had found that Innotek’s collars could not cause burns to a dog’s skin, had a 98 per cent success rate and were humane. With regard to the second and third letters, the cross-claimants sought aggravated damages on the basis that when they were published the cross-respondents knew that the imputations conveyed therein were untrue, or were reckless as to their truth or falsity. Moreover, the cross-respondents had sought to maintain a defence of justification until trial, and had failed to apologise until a very late stage in the proceeding.

312               Mrs Holliday gave evidence that there had been at least 1,000 brochures printed. She said that they were sent to customers, prospective customers and to local authorities and veterinarians around Australia. She said that the first letter had been sent to the same groups. The second letter, which also enclosed a copy of the brochure, had been sent to 545 persons, all of whom were customers of Mr Ross Parker, an agent who sold Innotek’s products.

313               The cross-claimants submitted that once the libel had been proved, general damage was presumed: Ratcliffe v Evans (supra). They submitted that the award of damages for defamation was intended to vindicate the plaintiff publicly, and to provide consolation for the wrong done, which included both injury to feelings and damage to reputation. While vindication was not a separate head of damages, the sum awarded should reflect that consideration. A simple calculation of damages based upon compensation for injury to reputation and injury to feelings might not adequately compensate a wronged plaintiff: Humphries v TWT Ltd (1993) 120 ALR 693.

314               The cross-claimants submitted that in the present case vindication was an important element in arriving at the appropriate award of damages. The reputation evidence called on behalf of Dr Wirth had demonstrated the extremely high regard in which he was held in the community and by his peers, particularly with regard to his reputation for honesty. In assessing injury to reputation, the Court should take into account the seriousness of the imputations conveyed, and the fact that they had been published throughout Australia to local councils and to veterinarians with whom Dr Wirth (and the RSPCA) dealt on a regular basis. I was referred to Uren v John Fairfax & Sons Ltd (1966) 117 CLR 118 at 150; Dingle v Associated Newspapers Ltd [1964] AC 371 at 396; and Carson v John Fairfax & Sons (1993) 178 CLR 44 at 70-71 and 104-105.

315               Dr Wirth gave evidence of his outrage and hurt at reading the publications. He said that he was very upset and angry. He regarded the letters as having suggested that even within his own profession there were those who believed that he was a liar and cheat. He also said that the letters suggested that he had been “found to be deficient” as a veterinarian presenting scientific material on behalf of the RSPCA. There had been no apology proffered until counsel for Innotek had asked Dr Wirth whether he would “accept an apology to yourself personally through me as a spokesman for my client”. Dr Wirth had accepted that apology but remained concerned about his vilification before his associates and others. He also said that although he had accepted an apology, because it had been made openly in Court, he was disappointed that those who had received false information about him had not opportunity to hear directly what had been said. He regarded the apology as having been “extracted”, and not “offered in good faith”.

316               The cross-claimants submitted that in these circumstances the failure to apologise until late in the proceeding should of itself attract substantial compensatory damages. That failure had exacerbated Dr Wirth’s hurt feelings and deprived the RSPCA of the vindication to which it was entitled. It should lead to aggravated damages in accordance with the principles enunciated in Triggell v Pheeney (1951) 82 CLR 497 at 514.

317               The cross-respondents submitted that it was clear that Dr Wirth was entitled to general damages once defamation had been conceded. However, the same could not be said of the RSPCA as first cross-claimant. The RSPCA could not be injured in its feelings, but only in its pocket. There was no evidence that any pecuniary loss had been suffered by either of the cross-claimants. There was no suggestion that donations to the RSPCA had declined, or that its trading income had been reduced. Nor had it incurred any costs in an effort to remedy the harm caused by the publications of which it complained. Moreover, there was no evidence that the reputation of either cross-claimant had been damaged. Formidable evidence had been adduced on behalf of Dr Wirth to establish his good reputation and it followed that to the extent that some general damage was to be presumed, the amount was slight. It was also submitted that an open and public apology had been made during the course of the proceedings and there was therefore no occasion to seek to vindicate either cross-claimants’ reputation or to consider the award of aggravated damages. What Dr Wirth was entitled to was really compensation for the damage done to his feelings.

318               In that regard, it was submitted that Dr Wirth was plainly a robust person not unused to controversy. He had long displayed the courage to stand up for his beliefs and was used to maintaining a high public profile. It was submitted that during the course of his lengthy evidence he betrayed no symptoms of being a “shrinking violet”.

319               It was also submitted that the evidence of Mr and Mrs Holliday was to the effect that the various comments of which complaint was made had been made innocently, in the mistaken belief that they were factually accurate. That evidence had not been challenged in cross-examination.

320               Though the cross-respondents acknowledged the seriousness of the defamations which they had committed, they submitted that it did not follow that they should sound in significant damages. The RSPCA, as first cross-claimant, had not established that it had suffered any pecuniary loss. It followed that it could not recover damages, either for libel or under the Act. Dr Wirth was entitled to damages sufficient to vindicate his reputation and to provide compensation for his injured feelings. It was not suggested that “derisory” or “contemptuous” damages should be awarded. However it was submitted that the defamatory statements made about Dr Wirth did not warrant a large award of damages. It was submitted that an appropriate award of damages would be “a figure comprising four digits, rather than five”.

321               In my opinion, Dr Wirth is entitled to damages to vindicate publicly his reputation and to provide some consolation for his injured feelings. It is no light matter to be publicly branded a liar before one’s professional peers and associates. At the same time, however, I am satisfied that no lasting damage has been done to his reputation.

322               I accept that Dr Wirth feels aggrieved by what the cross-respondents said about him, and that their apology, though welcome, was somewhat belated. I do not consider it appropriate to award aggravated damages. The remarks made by Mr and Mrs Holliday were the product of ignorance on their part as to the nature of the proceedings which took place before me, and not the product of any intention to distort the truth. Doing the best that I can, I would award Dr Wirth $25,000 damages. Although there was no specific application for interest in relation to any amount awarded under the cross-claim, the cross-claimants sought “such further or other orders as the Court shall think fit.” I consider it appropriate that there be a lump sum, in lieu of interest, added to the amount of $25,000 awarded to Dr Wirth. I fix that amount at $5,000, making a total of $30,000.

323               Having regard to the fact that there was no evidence that the RSPCA sustained any pecuniary loss by reason of anything said about it by the cross-respondents, I do not propose to award damages for either their contravention of s 52 of the Act, or for defamation.

Associate:

Dated: 5 July 2002