Federal Court of Australia

Russell v S3@Raw Pty Ltd [2023] FCA 305

ORDERS

THE COURT ORDERS THAT:

1.    The interlocutory application is dismissed.

2.    The applicant is granted leave to file their amended interlocutory application dated 23 March 2023.  

3.    Pursuant to rule 10.23 of the Federal Court Rules 2011 (Cth), the interlocutory application filed on 27 February 2023, the affidavit of Gregory John Litster filed on 6 March 2023 and the affidavit of Stephen Charles Russell filed on 10 March 2023 be taken to have been served on the third respondent on 10 March 2023, by the applicant having sent emails to the third respondent on that date annexing copies of the interlocutory application and affidavit to the email address joshno@icloud.com.  

4.    Costs are reserved.

REASONS FOR JUDGMENT

MEAGHER J

introduction

1    By an amended interlocutory application, the applicant seeks an injunction requiring the third respondent to remove various Instagram posts referred to collectively as “the January Posts” (Take Down Order) and an injunction restraining the first and third respondents, their officers, servants or agents from re-publishing the January Posts and a post referred to as “the Main Post”, or publishing any other matters relating to the applicant to the same effect of the posts (Pre-Publication Order). The applicant also seeks an order pursuant to rule 10.23 of the Federal Court Rules 2011 (Cth) (Rules) that the interlocutory application filed on 27 February 2023 be deemed to have been served on the third respondent on 10 March 2023.

2    The substantive application seeks damages against the respondents for contravention of sections 18 and 37(2) of the Australian Consumer Law, being Schedule 2 of the Competition and Consumer Act 2010 (Cth) (ACL). Additionally, damages are sought from the first respondent for breach of contract and from the first and third respondents for the alleged defamatory imputations arising from the Instagram posts subject to this application.

3    The third respondent did not attend the interlocutory hearing. Given the circumstances, which are set out below, I was minded to proceed in his absence.

material before the court

4    The evidence in support of the application was comprised of the following affidavits:

    First affidavit of Gregory Litster affirmed 6 March 2023, filed 6 March 2023 (Litster 1)

    Affidavit of Stephen Russell sworn 10 March 2023, filed 10 March 2023

    Second affidavit of Gregory Litster affirmed 13 March 2023, filed 13 March 2023 (Litster 2)

    Affidavit of Service of Natasha Lauren Burke affirmed 17 March 2023, filed 17 March 2023

    Third affidavit of Gregory Litster sworn 22 March 2023, filed on 22 March 2023 (Litster 3)

5    The following documents were also before me:

    Originating Application and Statement of Claim filed on 7 November 2022

    Amended Statement of Claim filed on 6 December 2022

    Defence of the first respondent filed on 7 February 2023

    Interlocutory Application filed on 27 February 2023

    Amended Interlocutory Application filed on 23 March 2023

6    During the hearing, leave was granted to file an Amended Interlocutory Application which included an order relating to service of the third respondent. The Amended Interlocutory Application was handed up to the Court at the hearing, and subsequently filed a day later. The Amended Statement of Claim refers to four alleged defamatory imputations arising from the Main Post. The January Posts are not included in the Amended Statement of Claim, however Litster 1 and the annexed concerns notice refers to ten imputations arising from the posts collectively. Relevantly, in its defence, the first respondent denies publishing the material complained of in the Main Post.

7    Based on Litster 1, I am satisfied that:

    The first respondent is a two dollar company, and its sole director and secretary is the third respondent.

    A post described as the Main Post was published on the Instagram account “s3_studio” in November 2022.

    The Main Post includes the following statements:

•    The applicant had been “working behind our back”;

•    The applicant had decided not to exercise the option to buy the business in circumstances in which, “an approx $90k profit plus her salary is apparently not enough”;

•    The applicant had signed a lease to “frustrate our attempt to sell the business to someone else. She didn’t want to buy the business but she wanted to stop us from selling the business. Stunned!”; and

•    The applicant had provided “a bullshit reason to steal the clients without doing the hard work”.

    On 11 November 2022, the applicant sent a concerns notice pursuant to section 12A of the Defamation Act 2005 (Vic) (Defamation Act) to the first and third respondents in relation to the Main Post (First Concerns Notice).

    Although no response was received to the First Concerns Notice, the Main Post was taken down.

    On 25, 26 and 27 January 2023 a further three Instagram posts were published on the Instagram account “joshua.s3” (January Posts). The January Posts include the following statements:

•    “…Hayley Russell continues to spread misinformation about me and my former business.”;

•    “We were never allowed to take what’s not ours… because that’s stealing.”;

•    Sets out a chronology of events regarding the potential sale of the business, and then states, “what Hayley did was very different…”; and

•    “Hayley has issued proceedings against me, the S3 company and my husband…”

    On 20 February 2023 the first and third respondent were sent a concerns notice relating to the January Posts, pursuant to section 12A of the Defamation Act (Second Concerns Notice), demanding that the January Posts be immediately deleted and seeking undertakings that the January Posts will be removed, will not be republished and to otherwise not publish any matter concerning the applicant to the same effect as the imputations identified in the First and Second Concerns Notices.

    On 20 February 2023 the third respondent replied to the Second Concerns Notice by email stating, “I reject your letter in its entirety for its characterization of my comments. Everything I said in my comments was an accurate description of the circumstances of Hayley’s involvement with my business and the events that followed.”

8    Based on the affidavit of service of Natasha Lauren Burke, I am satisfied that an attempt has been made to personally serve the third respondent with the Originating Application and Amended Statement of Claim.

9    Based on Litster 2 I am satisfied that the third respondent was sent, by email, the interlocutory application and supporting affidavits, and on 10 March 2023 was advised of the date and time for the hearing.

10    Based on Litster 3 I am satisfied that the third respondent was advised of the applicant’s intention to seek an order pursuant to rule 10.23 of the Rules that the interlocutory application is deemed to have been served on him and was again advised of the applicant’s intention to seek interlocutory relief.

service of the third respondent

11    Pursuant to rule 10.23 of the Rules, a document is deemed to have been served if it is not practicable to serve a document on a person in the way required by the Rules, and there is evidence provided to the Court which demonstrates that the document has been brought to the attention of the party to be served. The word “practicable” has been held to have a wide meaning and will depend on the circumstances relevant to the particular proceeding (Australian Securities and Investments Commission v China Environment Group Ltd [2013] FCA 286 at [11]–[15]). The second criteria, whether the document has been brought to the attention of the other party, is a question of fact.

12    Counsel for the applicant submitted that as the third respondent had not filed a notice of address for service and now lives in Portugal, this presents legal and practical difficulties with respect to serving him personally. Counsel for the applicant queried what more it could rationally be required to do to put the third respondent on notice.

13    The third respondent has filed an affidavit, sworn on 20 March 2023, which effectively disputes service of the originating documents. Counsel for the applicant submitted that the Court can take notice of the filing of that affidavit, notwithstanding it has not been read into evidence. It was submitted that the affidavit contains the third respondent’s email address in its footer, thus indicating the third respondent continues to use the email address to which the correspondence referred to in paragraphs [7], [9] and [10] has been sent.

14    Further, the applicant’s counsel submitted that the third respondent is the sole director and secretary of the first respondent who was represented before the court. Therefore, counsel submitted, the third respondent must be engaged in the conduct of the litigation absent any evidence that a power of attorney has been granted in that regard, or that the conduct of the litigation has otherwise been delegated to another person.

15    I accept the applicant’s submission that it has not been practicable to serve the interlocutory application on the third respondent in the manner required by the Rules. In light of the evidence set out at paragraph [9] – [10] above I accept that the interlocutory application has been brought to the attention of the third respondent. I therefore make an order pursuant to rule 10.23 of the Rules that the Interlocutory Application lodged for filing on 27 February 2023, and accepted for filing on 2 March 2023, and the supporting affidavits be taken to have been served on the third respondent on 10 March 2023.

interlocutory injunction

Submissions

16    Counsel for the applicant indicated that the Take Down Order was not pressed in relation to the first respondent as the Main Post has been removed from Instagram, however it was submitted that a Pre-Publication Order should be made to prevent the first respondent from publishing any further defamatory matter relating to the applicant. Both the Take Down Order and the Pre-Publication Order, with respect to the January Posts, were pressed against the third respondent. It should be noted that counsel for the applicant also offered the usual undertaking as to damages if the interlocutory application were to succeed.

17    The applicant’s counsel submitted that the chronology of events contained in the January Posts is long and inaccurate, and contains defamatory imputations. The applicant’s counsel further submitted that evidence of the defamatory and damaging imputations contained in the January Posts can be gleaned by reference to the comments made in response to them, including ones which describe the applicant as a “bully”, “a worm of a girl”, an “ar*****e” and having a “disgusting attitude”.

18    Counsel for the applicant submitted that the damage caused by the defamatory statements are “numerous and difficult to quantify” and that the ongoing impact on the applicant has been significant, relying on evidence set out in Litster 1 paragraphs [27] and [28]. Those effects include anxiety, illness, stress and nervousness, loss of appetite and sleep, and an adverse impact on Ms Russell’s work, social life and well-being. The effects also include damage to Ms Russell’s reputation due to the way in which she and the third respondent’s working lives overlapped particularly in the arts and entertainment industry, and the concomitant overlap in their social media audiences.

19    Given the Take Down Order with respect to the January Posts was not pressed as against the first respondent, counsel’s submissions were confined to re-publication of the Main Post. He referred the Court to the decision of Capilano Honey Ltd v Dowling (No 2) [2018] NSWCA 217 at [105] in which Basten JA, with whom Beazley P and McColl J agreed, said, in the context of Take Down Orders:

Of course, there will be further publications each time a member of the public obtain access to the relevant website, but, at least arguably, where it is likely that relevant damage has already been done, there will be greater reluctance to provide interlocutory relief in essentially the same form as final relief, absent some indication that only limited damage has been done and much more is likely to follow.

20    The first respondent’s counsel submitted that to the extent damage has occurred, it has already been done. The nature of the Main Post and its likely audience are such that, given it has already been taken down, it is unlikely to do further damage. It was submitted that there was no evidence of any intention to re-publish any of the matters in the Main Post, nor an intention to re-publish those matters if not restrained by the Court. On that basis, it was submitted that the injunction should not be granted against the first respondent in relation to the Main Post. In relation to the January Posts, counsel for the first respondent submitted that orders, if any are to be made, should be directed to the third respondent.

21    This proposition was rejected by counsel for the applicant. It was submitted that the first respondent is a small company controlled by the third respondent and, given the propensity of its controller to publish, there is a risk that the first respondent, by way of the third respondent, could publish further.

22    Counsel for the applicant drew my attention to the Defence filed by the first respondent, which denied publishing the material contained in the Main Post. Counsel submitted that it would have been easy for the first respondent to put some material before the Court to “provide a factual foundation for that suggestion”.

23    The applicant’s counsel submitted that on its face, the account which posted the Main Post was that of the first respondent as the Instagram handle, being “s3_studio”, is the name of the first respondent. The Main Post also contains the phrase “Reopening Cancelled”, which the applicant’s counsel submitted is a “business-oriented notification”. The applicant’s counsel referred to Litster 1, particularly to documents that were provided by the second respondent to the applicant in relation to an option to purchase the business of the first respondent, and submitted that those documents include a business profile for the first respondent which identifies that it has an Instagram account.

24    All of those matters, in the applicant’s counsel’s submission, support the inference that the Instagram account is controlled, owned and operated by the first respondent. Whether a natural person pressed “send” does not, in the applicant’s submission, change the fact that the first respondent’s company was the publisher of the post on its Instagram account. Counsel for the applicant submitted that, in the absence of any evidence to the contrary, a prima facie case is established that the first respondent is the publisher of the Main Post.

25    The applicant’s counsel submitted that there is a risk that the first and third respondent may make further defamatory publications, which is emphasised by the fact that the January Posts were published after the First Concerns Notice was sent, and after the proceedings had commenced. Furthermore, based on Litster 1 the January Posts may remain available on the third respondent’s Instagram account. Counsel for the applicant submitted that his client’s concerns in this regard are exacerbated by the fact that she has no direct way of knowing if any further publications are made by the third respondent as she is blocked from his Instagram account.

26    With respect to the balance of convenience, counsel for the applicant submitted that there is little to be said against the granting of the injunctions for the following reasons:

    The first respondent no longer operates the business.

    It is a two dollar company and its sole director and secretary, the third respondent, has moved overseas and therefore the prospect of actual recovery, should damages be awarded may be difficult to recover.

    The damage to the applicant is significant and extensive, however due to the nature of social media, it is difficult to apprehend its full extent. In this regard counsel for the applicant referred to the “grapevine effect” referred to by Gleason J in Webster v Brewer (No 3) [2020] FCA 1343 at [44] as follows:

Allowance should be made for the “grapevine effect” (which recognises that the dissemination of defamatory material is rarely confined to those to whom the matter is immediately published); the tendency of the poison in the defamatory publications to percolate through underground passages and contaminate hidden springs or to be driven underground only later to emerge from their lurking place

27    These factors all, according to counsel for the applicant, mean that damages will not be an adequate remedy – they will be difficult to assess and probably difficult to recover.

Principles

28    The principles governing the Federal Court’s power to grant interlocutory relief were set out by Wheelahan J in Webster v Brewer [2020] FCA 622 (Webster v Brewer) at [13] as follows:

The Court has statutory power under s 23 of the Federal Court Australia Act 1976 (Cth) to grant an interim injunction, including an interim injunction to enjoin the commission of a tort: Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1 at [30] (Brennan CJ, McHugh, Gummow, Kirby and Hayne JJ). That jurisdiction extends to enjoining the publication of a defamatory matter. However, as a question of discretion, the power to enjoin publication is ordinarily exercised only with great caution, and only in very clear cases: Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 at [16] –[18] (Gleeson CJ and Crennan J), citing Stocker v McElhinney [No 2] [1961] NSWR 1043 at 1048 (Walsh J). That is because of the regard which the law has for the value of freedom of speech. Accordingly, in practice, if there is any real ground for supposing that a respondent may succeed at trial, an injunction would ordinarily be refused. The organising principles for considering whether to grant an injunction are well known. “[I]n all applications for an interlocutory injunction, a court will ask whether the plaintiff has shown that there is a serious question to be tried as to the plaintiff’s entitlement to relief, has shown that the plaintiff is likely to suffer injury for which damages will not be an adequate remedy, and has shown that the balance of convenience favours the granting of an injunction”: Australian Broadcasting Corporation v O’Neill at [19] (Gleeson CJ and Crennan J). See also, Gummow and Hayne JJ at [65]–[72] and [85]. The organising principles are to be applied having regard to the nature and circumstances of the case, under which issues of justice and convenience are addressed.

29    Gleeson CJ and Crennan J in Australian Broadcasting Corporation v O'Neill 227 CLR 57; [2006] HCA 46 (O’Neill) at [30] emphasise the need to “to take proper account of the public interest in free communication of opinion and information which is basic to the caution with which courts have approached the topic of prior restraint of allegedly defamatory matter”.

30    Dixon J in School for Excellence Pty Ltd v Trendy Rhino Pty Ltd [2018] VSC 514 (Trendy Rhino) at [34], summarised the organising principle with respect to the balance of convenience referred to in O’Neill:

The balance of convenience must favour the granting of an injunction. The balance of convenience requires the consideration of the relevant matters favouring or militating against the granting of an injunction and will necessarily involve a consideration of the strength of the plaintiff’s claim assuming that a serious issue has been identified.

31    Dixon J also cautioned at [37], with reference to Stocker v McElhinney (No 2) [1961] NSWR 1043, 1048, cited with approval in O’Neill, 66–68 [16]–[18] (Gleeson CJ and Crennan J); Duthie v Nixon (2015) 47 VR 355, 361–362 [20]; QBH Commercial Pty Ltd v Nine Network Australia Pty Ltd [2016] VSC 441, that:

It is accepted that in defamation cases the power to grant an interlocutory injunction ‘is exercised with great caution and only in very clear cases’, and will be refused if the publication is merely arguably defamatory, in recognition of the importance of free speech.

32    At [52]-[53] Dixon J, accepting the “traditional view” of the significance of free speech, set out a number of exceptional circumstances such that injunctive relief may nonetheless be appropriate. They include:

(a)    where a defendants’ persistence in making repeated defamatory publications has ‘the flavour of a vendetta’ against the plaintiffs;

(b)    where it is likely a defendant will in future publish similar allegations ‘despite having been afforded an opportunity to defend those allegations and despite those allegations having been found by a court of competent jurisdiction to be unwarranted’. Perhaps because of ‘an irrational view of the truth of the allegations he makes’;

(c)    where a defendant has revealed ‘a disinclination to conform to anticipated findings of the court which may verge on disrespect for legal process’; and/or

(d)    where the vehemence of the language used by a defendant indicates that they will continue to defame the plaintiff unless restrained from so doing.

In my view, publication that causes circumstances of harassment of a plaintiff by third parties as appears to have occurred here also constitutes exceptional circumstances that may warrant injunctive relief.

33    In Webster v Brewer, Wheelahan J granted interlocutory relief in relation to what his Honour referred to as “vile” publications. Interlocutory relief was also granted in Tribe v Simons [2021] FCA 930 where “very serious” allegations were made, and there was evidence of repeated publication after the commencement of the proceeding.

Consideration

34    The applicant has demonstrated that there is a serious question to be tried. The Instagram posts are of such quality as to be “likely to lead an ordinary person to think less” of the applicant (Radio 2UE Sydney Pty Ltd v Chesterton (2009) 238 CLR 460; [2009] HCA 6 at [5]).

35    The balance of convenience weighs in favour of the applicant based on the following:

    The first respondent has pleaded no defence other than to deny publication;

    The third respondent did not appear at the interlocutory hearing, despite being put on notice of the application. It is therefore impossible to know what defence he might advance, although based on the email dated 20 February 2023 referred to in paragraph [7] above, a defence of justification might be inferred;

    Damages will be difficult to quantify and unlikely to be an adequate remedy;

    The first respondent is a two dollar company;

    The third respondent resides off shore; and

    The applicant seeks to run a business associated with the proceeding.

36    Based on the above this matter is finely balanced. The Main Post has been taken down and there is no suggestion of further publication by the first respondent. Furthermore, the alleged defamation by the third respondent is “merely arguably defamatory” (Trendy Rhino at [37]). The importance of free speech must be recognised. The alleged defamation complained of is not of the kind referred to in paragraph [32] above. Whilst that it is not an exhaustive list, I am not satisfied that the alleged defamation warrants the granting of an interlocutory injunction. My conclusion may have differed had the publications complained of been repeated such as to for example assume the “flavour of a vendetta”.

37    Accordingly the interlocutory application is dismissed.

Associate:

Dated:    5 April 2023