Metcash Trading Limited v Bunn (No 2) [2009] FCA 1493

FEDERAL COURT OF AUSTRALIA

DEFAMATION – interlocutory injunction to restrain publication – injurious falsehood and contravention of Trade Practices Act 1974 (Cth) s 52 – public interest in free speech – preserving the status quo – publication redacted.

Defamation Act 2005 (SA) s 9

Fair Trading Act 1977 (SA) s 56

Trade Practices Act 1974 (Cth) s 52

Metcash Trading Limited v Bunn [2009] FCA 1468cited

Australian Broadcasting Corporation v Lenah Game Meats Pty Limited (2001) 208 CLR 199cited

Castlemaine Tooheys Limited v South Australia (1986) 161 CLR 148 referred to

Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 applied

Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 referred to

METCASH TRADING LIMITED (ACN 000 031 569), IGA DISTRIBUTION PTY LTD (ACN 004 391 422) and AUSTRALIAN LIQUOR MARKETERS PTY LTD (ACN 002 885 645) v PETER CHADLEY BUNN

SAD 29 of 2006

LANDER J

10 DECEMBER 2009

ADELAIDE

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION	SAD 29 of 2006

BETWEEN:

METCASH TRADING LIMITED (ACN 000 031 569)

First Applicant

IGA DISTRIBUTION PTY LTD (ACN 004 391 422)

Second Applicant

AUSTRALIAN LIQUOR MARKETERS PTY LTD

(ACN 002 885 645)

Third Applicant

AND:

PETER CHADLEY BUNN

Respondent

JUDGE:	LANDER J
DATE OF ORDER:	10 DECEMBER 2009
WHERE MADE:	ADELAIDE

THE COURT ORDERS THAT:

1. Upon the first applicant undertaking to submit to such order (if any) as the Court may consider to be just for the payment of compensation, to be assessed by the Court to any person, whether or not a party, adversely affected by the operation of this order and to pay compensation as directed until further order, the Respondent, his servants or agents be restrained from publishing or republishing, whether by the internet or any other means of communication:

1.1 the entirety of un-numbered paragraph 5, which begins with the words “The problem” and ends with the word “saying”;

1.2 in respect of un-numbered paragraph 6, the portion of the first sentence beginning with the words “If one” to and including the word “proposal”;

1.3 in respect of numbered paragraph 1:

1.3.1 the word “will” in the first line:

1.3.2 the words “who will most likely be labelled as barons”;

1.3.3 the word “barons”; and

1.3.4 the remainder of that paragraph, from and including the words “which means”;

1.4 in respect of numbered paragraph 2, the words “will” and “would” wherever they appear;

1.5 the entirety of numbered paragraph 4;

1.6 the entirety of numbered paragraph 5;

1.7 in respect of numbered paragraph 6:

1.7.1 the words “would” and “will” wherever they appear;

1.7.2 the final 5 words of that paragraph, commencing with and including the words “along with”;

1.8 in respect of numbered paragraph 7:

1.8.1 the word “would” in the first line;

1.8.2 the word “eradicate”;

published in the document titled: “T.I.G.A. THE INDEPENDENT GROCERS ADVOCATE 12/1-2009”, or words or allegations to similar effect.

2. Liberty to the parties to apply at short notice.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
general division	SAD 29 of 2006

BETWEEN:

METCASH TRADING LIMITED (ACN 000 031 569)

First Applicant

IGA DISTRIBUTION PTY LTD (ACN 004 391 422)

Second Applicant

AUSTRALIAN LIQUOR MARKETERS PTY LTD

(ACN 002 885 645)

Third Applicant

AND:

PETER CHADLEY BUNN

Respondent

JUDGE:	LANDER J
DATE:	10 DECEMBER 2009
PLACE:	ADELAIDE

REASONS FOR JUDGMENT

1 This is an application for an interlocutory injunction in a proceeding which was commenced on 24 February 2006.

2 The first applicant is the holding company of the second and third applicants and is a public company listed on the Australian Stock Exchange.

3 The applicants operate a grocery and liquor wholesale business throughout Australia supplying grocery stock and liquor products to supermarket operators and liquor retailers which conduct 1,300 separate outlets. The first applicant also is the shareholder in a number of companies which conduct supermarket and liquor outlet businesses. It is not clear on the evidence as to how many supermarkets are owned by those companies of which the first applicant is a shareholder. It is not less than 62 but I am unable to be more precise than that. The applicants have about 20% of the grocery and liquor wholesale market. Their operators have about 20% of the retail market. Coles and Woolworths between them have 80% of the retail market.

4 The respondent was the sole director, secretary and shareholder of two companies, Chadmar Enterprises Pty Ltd (in liquidation) and Kayso Pty Ltd (in liquidation), which between 1997 and 2004 carried on the business of supermarket operators. The applicants were the suppliers of goods on credit to those supermarkets. The second applicant initiated the winding up of those two companies.

5 In the proceeding in which this application has been brought, the applicants claim that the respondent has threatened to disclose confidential information which came into the respondent’s hands in circumstances of confidentiality. Secondly, the applicants claim that the respondent has induced suppliers and customers of the applicants to breach their contractual arrangements with the applicants by breaching confidentiality agreements to which those suppliers and customers are parties. Thirdly, it is asserted the respondent has infringed trademarks registered in the names of the first and third applicants. Fourthly, the applicants complain that various publications made by the respondent are defamatory of the applicants. Fifthly, it is claimed that the same publications constitute an injurious falsehood which has given rise to actual damage. Sixthly and lastly, the applicants complain that the respondent has contravened s 52 of the Trade Practices Act 1974 (Cth) (TPA) and s 56 of the Fair Trading Act 1977 (SA). The applicants seek damages and injunctions restraining the respondent from publishing any further statements of the kind to which objection is taken in the statement of claim filed in the proceeding.

6 The respondent is an undischarged bankrupt and is unrepresented in this proceeding. The proceeding has a history of hard fought interlocutory applications. The applicants have pursued the respondent vigorously and relentlessly. The respondent on the other hand has fiercely defended himself. At the same time he has claimed the right to continue to publish communications highly critical of the applicants. In particular, the respondent has published on his website at least monthly a document entitled “T.I.G.A. THE INDEPENDENT GROCERS ADVOCATE” (T.I.G.A.).

7 On 9 March 2006 at the instigation of the applicants I made a number of orders in the nature of injunctions restraining the respondent from publishing particular documents and an order that the respondent be restrained from publishing any allegation to the effect that:

3.5 c. The Applicants actively and deliberately operate in a manner calculated to prejudice, damage or destroy the business of independent retailers with whom they deal;

8 On 29 November 2009 the first applicant submitted an offer to Mitre 10 Limited (Mitre 10) offering to purchase 50.1% of that company and an associated company, and seeking an option to purchase the remaining 49.9% some time in 2012 or 2013. I have not been advised of the details of the offer which are said to be confidential except that “the offer expressed within it stands in the region of tens of millions of dollars”.

9 The offer contains a proposal that Mitre 10 and its associated company “will be combined into a new company (Mergeco) by way of scheme of arrangement”. It is proposed that the first applicant will acquire 50.1% interest in Mergeco with an option to acquire the remaining shareholding in either 2012 or 2013 by way of a separate and independent scheme of arrangement. The offer was announced in an ASX release on 27 November 2009 and the CEO of the first applicant, Mr Reitzer, is quoted as saying:

Recent developments in the hardware sector have materially changed the landscape and outlook for independent operators.

Based on our experience and success in the competitive food and liquor sector, a Metcash backed Mitre 10 wholesaler will enable Mitre 10’s retail customers to compete more effectively in an increasingly competitive marketplace.

10 The proposal assumes that not only will the first applicant assume majority control of Mitre 10 and its associated company through Mergeco, but it will also become the wholesaler to Mergeco. Mitre 10 has 408 separate retailers who presently are both franchisees of and shareholders in Mitre 10 and its associated company. Those shareholders are presently considering the first applicant’s proposal. There is a competing proposal before those shareholders from an entity, Anchorage Capital Partners, which is also seeking a controlling interest in Mitre 10 and its associated company. The applicants’ solicitor has deposed in an affidavit relied on in support of this application that Mitre 10 may be considering further offers which compete directly with the first applicant’s proposal.

11 Sometime shortly before 4 December 2009 the respondent published to 80 shareholders/franchisees of Mitre 10 and other people including Momentum Corporate, which is advising the first applicant in relation to its proposal to Mitre 10 a document entitled “T.I.G.A. THE INDEPENDENT GROCERS ADVOCATE EDITION: 12/1-2009E” (T.I.G.A. 12/1-2009). The document claims to be the 81^st edition of T.I.G.A. The document is in the following form:

Mitre 10 retailers ponder a life with Metcash

It is timely to remember that Andrew Reitzer’s/Metcash’s attempt to buy the Symbion Pharmaceuticals wholesale business failed when Symbion’s largest customer, Terry White Chemists, (after carrying out due diligence), refused to work with Metcash, with Mr. Terry White reportedly telling Reitzer that “we [Terry White Chemist group] wouldn’t be dealing with him [Reitzer/Metcash], full stop”!

Today, Metcash have the Mitre 10 retailers in their sights !!

Mitre 10 retailers’ discussion of, and hunt for information about Metcash, and its [Metcash’s] relationship with IGA retailers, went from a “passing interest” over the last few months to what is now a full on search for exact detail, and, the Mitre 10 retailers are not short of people to tell them what life is like with Metcash as your major wholesaler !!

Independent retailers, and other parties, all over Australia are giving Mitre 10 retailers the facts and the “heads up” on the Andrew Reitzer run Metcash, and from what we have heard, and been told, they are not exactly the sort of comments that Andrew Reitzer may want !!

...

If ... Mitre 10 retailers, as an example, may see the following things occur, should Metcash takeover Mitre 10 :

1. Metcash ... invest in, by taking shareholdings in, the bigger Mitre 10 retailers (Reitzer has reportedly, already started this intention), ... by Metcash. These Mitre 10 ... will then be given the ‘opportunity’ to buy other Mitre 10 sites ...;

2. Metcash ... ‘encourage’ the suppliers to Mitre 10 to stop dealing directly with Mire 10 retailers and to move all stock through the Metcash controlled Mitre 10 warehouse, along with the requirement to negotiate all promotions/deals/etc through Metcash, resulting in Mitre 10 retailers loosing contact with their suppliers, which ... result in Mitre 10 retailers ... be even more reliant on Metcash;

3. the number of ‘membership/service’ fees and charges to belong to, and be supplied by, a Metcash owned Mitre 10 may increase;

4. ...;

5. ...;

6. the supply arrangements that Metcash ... require Mitre 10 retailers to enter into, so as to obtain supply, and use of the Mitre 10 banner name, ... be of a contractual handcuff in nature, which ... be on a rolling term, and require personal guarantees and securities (normally including the business, and premises), along with shorter payment terms;

7. Metcash ... either ... any opposition suppliers, either through buy-out, or via exclusivity arrangements, so that a Metcash owned Mitre 10 supplied retailer has no other viable supply arrangements in which to move to; and of course, then there is the matter of ...

8. Metcash’s profit growth, which, as in the case of groceries, may far outstrip the independent retailers profit growth that Metcash supplies.

Andrew Reitzer has already told Metcash stakeholders, in respect to the proposed Mitre 10 purchase by Metcash, that “We [Metcash] are the absolute natural owners of that [Mitre10] business” !! – Reitzer seems very sure of himself [!] – in other words Andrew Reitzer sees Mitre 10 as Metcash’s by right, and then, as Reitzer has stated, Metcash will be able to call themselves the “Champion of the Independent Hardware Retailer” !!

FINAL THOUGHT: Always be cautious of the self proclaimed savior

12 The publication has been redacted in accordance with the reasons which follow. However, it will be necessary to refer to some of the redacted statements to have an understanding of these reasons.

13 That document came to the attention of the first applicant’s group general counsel, Mr Watson, who was contacted by the Chairman of Mitre 10 who advised him that T.I.G.A. 12/1-2009 “had been received by many (if not all) members of Mitre 10”. The first applicant was also contacted by the Managing Director of Momentum Corporate who advised that T.I.G.A. 12/1-2009 had been received in its office. The applicants’ solicitor says that his client also believes that T.I.G.A. 12/1-2009 has been distributed to banks, media organisations and other corporate advisers. The document itself claims that it will be published on the respondent’s website. That arises out of the claim in the document that “All previous editions of T.I.G.A. are available at www.met-info.net”. The respondent has not disputed that that is his intention unless he be restrained.

14 On Saturday, 5 December 2009 the first applicant filed a notice of motion in the District Registry seeking the following orders:

1. That until further order the Respondent, his servants or agents be restrained from publishing or republishing, whether by the internet or any other means of communication, the document titled : “T.I.G.A. THE INDEPENDENT GROCERS ADVOCATE 12/1 2009” or any substantially similar document.

2. That until further order the Respondent, his servants or agents be restrained from publishing, whether by the internet or any other means of communication, any allegation by any person that, should members of the Mitre 10 group accept a proposal by Metcash Limited to acquire a majority interest in the Mitre 10 group, those members will be subject to practices of the first applicant which will prejudice or damage the businesses of those Mitre 10 members.

3. Providing for the costs of this Notice of Motion.

4. For such further or other orders as this Court deems fit.

15 I heard the application on Saturday afternoon. The first applicant was represented by counsel and the respondent who is resident in Canberra appeared by telephone. After a lengthy hearing, I made the following orders:

1. Upon the First Applicant undertaking to submit to such order (if any) as the Court may consider to be just for the payment of compensation, to be assessed by the Court to any person, whether or not a party, adversely affected by the operation of this order and to pay compensation as directed:

1.1 until Wednesday 9 December 2009 at 2:15 pm (Adelaide time), the Respondent, his servants or agents be restrained from publishing or republishing, whether by the internet or any other means of communication, the document titled: “T.I.G.A. THE INDEPENDENT GROCERS ADVOCATE 12/1 2009” (“the T.I.G.A document”) or any substantially similar document;

1.2 until Wednesday 9 December 2009 at 2:15 pm (Adelaide time), the Respondent, his servants or agents be restrained from publishing, whether by the internet or any other means of communication, any allegation by any person that, should members of the Mitre 10 group accept a proposal by Metcash Limited to acquire a majority interest in the Mitre 10 group, those members will be subject to practices of the first applicant of the kind referred to in paragraphs numbered 1 – 8 of the T.I.G.A document.

2. There be liberty to the parties to apply at short notice.

3. The question of costs be reserved.

4. Further consideration of this application be adjourned until Wednesday 9 December 2009 at 2:15pm (Adelaide time).

16 The hearing resumed before me on 9 December 2009. In the meantime, the first applicant’s solicitors filed two further affidavits of the solicitors in support of the application for an interlocutory injunction. The respondent filed a lengthy affidavit in opposition to the application.

17 Between the hearings another application was made by the first applicant in relation to a further publication made by the respondent. On Saturday, 5 December 2009 the respondent published a further T.I.G.A., being edition 12/2:2009 – the 82^nd edition. In that publication the respondent recounted the application which had been made to me on that day which he claimed was “an attempt to silence the matters discussed by T.I.G.A. 12/1-2009”. The respondent set out the orders which had been made and concluded:

Of course there are no orders as to the copies of the T.I.G.A. publication (12/1-2009) already in circulation. We believe that when a person reads that publication, in conjunction with the above orders, a person will clearly see what it is that drives Metcash’s fears, and to which Metcash did not just put the evidence of their denial in the public forum so that stakeholders in Mitre 10 retailers could make up their own minds!!

18 On Monday, 7 December 2009 the first applicant applied for further orders restraining the publication of T.I.G.A. 12/2:2009 but, for reasons which I gave at that time, I refused that application: Metcash Trading Limited v Bunn [2009] FCA 1468.

19 I am advised that Mitre 10 held meetings on Monday, 7 December 2009 and that further meetings are to be held today which may lead to the parties negotiating and seeking to agree upon an Implementation Agreement. If an agreement can be reached, the parties will need to apply to the Court and seek shareholder approvals for the schemes of arrangement which are proposed.

20 The first applicant seeks a continuation of the interim orders made on Saturday, 5 December 2009 until at least the schemes of arrangement have been effected, which will be some time in the first quarter of 2010.

21 The first applicant complained that the publication of T.I.G.A. 12/1-2009 ought to be restrained for three reasons. First, its publication contravened paragraph 3.5c. of the orders made by me on 9 March 2006. Secondly, the contents of the publication contravened s 52 of the TPA because a number of statements were false and therefore the publication constituted engaging in the prescribed conduct in that section. Thirdly, because the statements were false and because they had been made maliciously, in that they were made to cause the applicants damage, the publication constituted the tort of injurious falsehood. The first applicant could not bring a proceeding in defamation because of the provisions of the Defamation Act 2005 (SA): s 9(1).

22 The structure of T.I.G.A. 12/1-2009 relies upon a claim by the respondent that because of past practices of the first applicant it may be assumed that if the first applicant were to obtain control of Mitre 10 and become the wholesaler to the Mitre 10 franchisees, the matters identified in the paragraphs numbered 1-8 may come about. That appears clear from the fifth and sixth paragraphs of the publication. The publication refers to “a well documented ‘modus operandi’, which has been experienced by, literally, thousands of small business people in the grocery and liquor industries over the years”. In the sixth paragraph the publication refers to “Andrew Reitzer’s – Metcash’s historic actions/conduct in respect to grocery and liquor independent retailers”. The publication claims that because of that modus operandi and those historic actions/conduct, the matters identified in paragraphs numbered 1-8 “may ... occur, should Metcash take over Mitre 10”.

23 In the first numbered paragraph the respondent asserts that Metcash will invest in the retailers to which the paragraph refers. In the second numbered paragraph it is asserted that Metcash would encourage the suppliers to Mitre 10 to stop dealing directly with Mitre 10 retailers. In paragraphs 3 and 4 it is asserted like the introduction to the numbered paragraphs that the matters referred to may occur. In paragraph 5 the respondent asserts that the conduct “will commence”. In paragraphs 6 and 7 he asserts that the conduct “would” occur. There is a tension between the introduction to the numbered paragraphs and the expressions in paragraphs 1, 2, 5, 6 and 7. In paragraph 8 the respondent asserts that the result to which he refers “may” occur, which is again consistent with the introduction to the numbered paragraphs.

24 When the matter came before me on Saturday, 5 December 2009 there was no evidence adduced by the respondent who had only been served less than an hour before the hearing. I made the interim orders to allow the respondent to adduce any evidence upon which he would rely in opposition to the application for interlocutory injunction. I also allowed the first applicant to file any further evidence upon which it would intend to rely before the hearing of the application for the interlocutory injunction. As I have said, the first applicant filed two further affidavits; one of which exhibited an affidavit of the general counsel of the first applicant upon whose information the applicants’ solicitors had relied for the affidavit which was filed on Saturday in support of the application. The other affidavit put into evidence that which I had been told by counsel for the first applicant at the hearing on Saturday. In particular, the applicants’ solicitor said:

3.1 Metcash has no modus operandi of the nature or effect specified in Exhibit PAC-1 whether written or otherwise;

3.2 Metcash does not own directly or indirectly nearly all of the major trading IGA stores;

3.3 Metcash has not increased fees or charges under any guise or so as to convey a misleading impression;

3.4 Metcash has not engaged in any fear-mongering amongst its retailers or any spreading of rumours to increase fear amongst its retailers.

I will refer to that evidence as paragraph 3.

25 Those assertions which I am prepared to accept for the purpose of this interlocutory application have to be understood with other evidence adduced by the first applicant from its solicitor which was:

29. I am instructed by Mr Watson and verily believe that:

29.1 December TIGA is false and misleading in various respects, in particular:

29.1.1 as for numbered paragraph 1, the first applicant has no present intention of acquiring the Mitre 10 stores in the manner referred to therein;

29.1.2 as for numbered paragraphs 3 and 4, the first applicant has no present intention to increase membership/service fees, if the Metcash Proposal is accepted, and indeed it is presently anticipated that those fees will be reduced;

29.1.3 as to numbered paragraphs 2, 6 and 7, the first applicant has not yet formed intentions regarding purchase or supply arrangements which might apply if the Metcash Proposal is accepted;

29.1.4 more generally, the Metcash Proposal is still at a relative stage of infancy, and decisions have not yet been made by the first applicant regarding the matters referred to therein.

26 I conclude, relying on paragraph 29.1, that the first applicant does not deny it “may” engage in the conduct to which paragraphs numbered 1-7 relate, except those paragraphs addressed by paragraph 3, but that it has not yet made up its corporate mind in regard to those other paragraphs. I also conclude that the first applicant does not deny the result predicated in paragraph 8 may come about. It has adduced no evidence in relation to that prediction. It follows, it seems to me, that insofar as the respondent asserts that the applicants may engage in the conduct in paragraphs numbered 1-8 there is, with the exception of those paragraphs addressed in paragraph 3, no real issue. However, the evidence of the first applicant would not support a finding that the first applicant “will” or “would” engage in the conduct in paragraphs 1, 2, 5, 6 and 7.

27 The respondent filed a lengthy affidavit in which he exhibited a number of documents which he said supported the assertions in T.I.G.A. 12/1-2009, including each of the assertions in paragraphs numbered 1-8. He said those documents identify previous conduct from which it may be inferred that the first applicant may engage in the conduct in paragraphs numbered 1-8. Indeed, in respect to some of the documents, he said that previous conduct would support the representation that they would engage in that conduct.

28 At the hearing yesterday, I invited both parties to advise me if they wished to adduce any further evidence either in support of or in opposition to the application. Both parties said that no further evidence would be led and I should make my decision on the material before me.

29 The purpose of an interlocutory injunction is to preserve the status quo until trial when the rights of the parties can be determined: Australian Broadcasting Corporation v Lenah Game Meats Pty Limited (2001) 208 CLR 199.

30 In Castlemaine Tooheys Limited v South Australia (1986) 161 CLR 148 at 153, Mason ACJ identified the principles which govern the grant or refusal of an interlocutory injunction in both private and public law litigation. He said:

In order to secure such an injunction the plaintiff must show (1) that there is a serious question to be tried or that the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief; (2) that he will suffer irreparable injury for which damages will not be an adequate compensation unless an injunction is granted; and (3) that the balance of convenience favours the granting of an injunction.

31 Those principles were addressed by the High Court in Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 where Gummow and Hayne JJ said at [65]:

The relevant principles in Australia are those explained in Beecham Group Ltd v Bristol Laboratories Pty Ltd. This Court (Kitto, Taylor, Menzies and Owen JJ) said that on such applications the court addresses itself to two main inquiries and continued:

The first is whether the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the tiral of the action the plaintiff will be held entitled to relief ... The second inquiry is ... whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted.

By using the phrase “prima facie case”, their Honours did not mean that the plaintiff must show that it is more probable than not that at trial the plaintiff will succeed; it is sufficient that the plaintiff show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial. That this was the sense in which the Court was referring to the notion of a prima facie case is apparent from an observation to that effect made by Kitto J in the course of argument. With reference to the first inquiry, the Court continued, in a statement of central importance for this appeal:

How strong the probability needs to be depends, no doubt, upon the nature of the rights [the plaintiff] asserts and the practical consequences likely to flow from the order he seeks.

(Footnotes omitted.)

32 That case was concerned with a publication by the national broadcaster and a claim for defamation as a result of the material broadcast. Gleeson CJ and Crennan J agreed with the principles stated by Gummow and Hayne JJ and, in particular, that the proper principle for the grant of an interlocutory injunction was as stated in Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618. They said at [19]:

In the context of a defamation case, the application of those organising principles will require particular attention to the considerations which courts have identified as dictating caution. Foremost among those considerations is the public interest in free speech.

33 This is not a case in defamation but it is a case in injurious falsehood and for a contravention of s 52 of the TPA. The first applicant seeks to have this Court restrain the respondent making statements about the way in which the first applicant has carried on its business and might carry on its business if the first applicant were to succeed in having Mitre 10 accept its proposal. It seeks an order restraining the respondent’s right to freedom of speech.

34 The status quo is sometimes difficult to establish and depends upon the viewpoint one might take. Mr Livesey QC, who appeared on the second hearing, said that the status quo was effectively identified as his client’s right to make a proposal to the Mitre 10 shareholders/franchisees uncontaminated by any misrepresentations made by the respondent to those shareholders/franchisees. The respondent on the other hand would say that the status quo was his right to communicate with people (shareholders/franchisees) who might be affected in the future by the way in which the applicants conduct their business.

35 The first applicant contended that there was a serious question to be tried and even if I thought that the serious question to be tried was weak I should, because of the balance of convenience which it contended was undoubtedly in favour of the first applicant, make the orders sought.

36 If I were to make the orders sought the respondent would not at any time prior to the approval of the schemes of arrangement be able to communicate with those persons who will vote on the proposal in the schemes of arrangement. In those circumstances, those people will not have the advantage, if it be an advantage, of knowing of the respondent’s experiences with the applicants.

37 The first applicant contends that it has established to the appropriate level of satisfaction that there is a serious question to be tried in relation to the matters referred to in paragraph 3. It also contends that there is a serious question to be tried for the whole of the remainder of the publication. I accept that if the representations and statements referred to in paragraph 3 were established to be false, the first applicant might establish the contravention of s 52 and, if damage were proved, the injurious falsehood. On the evidence as it stands, I am satisfied that there is a serious question to be tried in that regard.

38 Whilst I am prepared to accept that the first applicant has established that there is a serious question to be tried in relation to the matters in paragraph 3, I am not by and large prepared to accept that the first applicant has made out a serious question to be tried in relation to the paragraphs numbered 1-8, except insofar as paragraph 3 relates and except insofar as the publication uses imperative expression in paragraphs 1, 2, 5, 6 and 7. The first applicant’s solicitor’s own evidence does not deny that the first applicant might not do exactly that which the respondent asserts, except insofar as paragraph 3 relates. The evidence only goes so far as to asserting that the first applicant has not applied its mind to those matters at this point of time. In those circumstances, I am not prepared to find that the first applicant has made out a serious question to be tried in relation to all of the numbered paragraphs in the publication. Even if I thought that the first applicant had established a weak case that there was a serious question to be tried, I would not make the orders sought on the whole of the publication and the further orders sought because, in respect to the matters not addressed in paragraph 3, I am not satisfied that the balance of convenience favours the making of those orders. The effect of those orders if they were made would be to deny the respondent for all relevant times the right to communicate with persons who might be interested in his publications. There would be no point in his communicating with them on these issues after the schemes of arrangement were implemented. If the respondent continues to have the right to communicate with those shareholders/franchisees, the first applicant can seek to challenge his views by communicating with the shareholders/franchisees in like manner. A finding therefore that the first applicant had a weak case that there was a serious question to be tried would not lead in my opinion to the making of the orders sought.

39 Notwithstanding that an order would impinge upon the respondent’s right to freedom of speech, I think the balance of convenience favours the first applicant in relation to the matters in paragraph 3. I indicated yesterday that I would make an order restraining further publications of assertions of the kind addressed in paragraph 3. I indicated that I would make an order restraining publication of the first sentence in paragraph 5 which addressed a claim of modus operandi. I also indicated consistent with that conclusion that I would make an order restraining the publication of that part of the first sentence of paragraph 6 which would indicate historical actions/conduct. In respect of paragraph 1 I indicated that the imperative “will” ought to be deleted. Moreover, there was no evidence before me of Metcash identifying any of its retailers as “barons”, which is the subject of an assertion in paragraph numbered 1. I said I would make an order restraining publication of an assertion of that kind. I indicated that the imperative words “will” and “would” ought to be deleted from paragraph numbered 2.

40 In conformity with my conclusion that the first applicant has made out a serious question to be tried in relation to the issues in paragraph 3, the claims in paragraph numbered 4 should also not be republished until further order. Similarly, because of the first applicant’s evidence in paragraph 3.4, paragraph numbered 5 should not be republished at this time. I was of the opinion that the evidence did not support the claim in paragraph numbered 6 that the contractual handcuff will give rise to shorter payment terms. Lastly, I was also of the opinion that the respondent should be restrained from using the imperative language in paragraphs numbered 6 and 7, and should be obliged to express that conduct as a possibility, as he had in respect of the earlier numbered paragraphs. I was also of the opinion that the word “eradicate” should be deleted from paragraph numbered 7.

41 Yesterday I advised the parties that the first applicant ought to bring in minutes of order to reflect those conclusions. I made it clear to both parties that those minutes of order were intended to express my reasons and were not an attempt to settle the issues between the parties. Indeed, I advised the parties that both of them could take whatever steps they wished to overturn these orders.

42 T.I.G.A. 12/1-2009, which is set out in [11] of these reasons, has been redacted in conformity with these reasons and with the orders which I have proposed.

43 Provided the first applicant gives the usual undertaking as to damages, I will now make the following orders: