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Supreme Court of New South Wales |
Last Updated: 23 June 2022
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Supreme Court New South Wales
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Case Name:
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The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd; Morrow v Cordell
Jigsaw Productions Pty Ltd (No 13)
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Medium Neutral Citation:
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Hearing Date(s):
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29 and 30 November, 1, 2, 3, 7, 8, 20, 21 and 22 December 2021; further
submissions received
2 February, 18 and 21 March 2022 |
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Decision Date:
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13 April 2022
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Jurisdiction:
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Equity - Commercial List
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Before:
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Stevenson J
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Decision:
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Breach of joint venture agreement established; breach of directors’
duties established; misleading or deceptive conduct established;
publication of
defamatory material established; defence of justification established in some
cases but not in others; defences of
qualified privilege and honest opinion not
established; damages to be awarded
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Catchwords:
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CORPORATIONS – directors’ duties – joint venture company
– joint venture to produce a consumer affairs television
program for the
ABC – ultimately The Checkout – whether a term of joint venture that
each joint venturer would inform
the other of any opportunity to produce any
further series of The Checkout or any equivalent or similar consumer affairs
show –
whether a breach of such term – whether a breach of duty to
act in good faith in the best interests of joint venture company
and for a
proper purpose – whether a duty to act in the best interests of
shareholder of the joint venture company
MISLEADING OR DECEPTIVE CONDUCT – whether failure of one joint venturer to inform the other of negotiations with the ABC concerning new consumer affairs show constituted misleading or deceptive conduct DEFAMATION – whether emails sent by one joint venturer to the ABC were defamatory of the other joint venturer – whether defence of justification, common law and statutory qualified privilege or honest opinion made out |
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Legislation Cited:
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Competition and Consumer Act 2010 (Cth), Sch 2 – Australian Consumer
Law
Corporations Act 2001 (Cth) Defamation Act 2005 (NSW) Income Tax Assessment Act 1997 (Cth) |
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Cases Cited:
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Adam v Ward [1917] AC 309
Andrews v John Fairfax & Sons Ltd [1980] 2 NSWLR 225 Austin v Mirror Newspapers Ltd (1985) 3 NSWLR 354 Australian Broadcasting Corporation v Chau Chak Wing (2019) 271 FCR 632; [2019] FCAFC 125 Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2014] FCA 634 Australian Competition and Consumer Commission v LG Electronics Australia Pty Ltd [2017] FCA 1047 Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640; [2013] HCA 54 Australian Competition and Consumer Commission v viagogo AG [2019] FCA 544 Australian Competition and Consumer Commission v We Buy Houses Pty Ltd [2017] FCA 915 Ballina Shire Council v Ringland (1994) 33 NSWLR 680 Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366; [2004] HCA 5 Bauer Media Pty Ltd v Wilson (No 2) (2018) 56 VR 674; [2018] VSCA 154 Becker v Smith’s Newspaper Ltd [1929] SAStRp 66; [1929] SASR 469 Bellino v Australian Broadcasting Corporation (1996) 185 CLR 183; [1996] HCA 47 BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266 Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34 Bristow v Adams [2012] NSWCA 166 Brunninghausen v Glavanics (1999) 46 NSWLR 538; [1999] NSWCA 199 Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25 Campomar Sociedad, Limitada v Nike International Ltd (2000) 202 CLR 45; [2000] HCA 12 Carlton & United Breweries Ltd v Tooth & Co Ltd (1986) 7 IPR 581 Charlton v Baber [2003] NSWSC 745 Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337; [1982] HCA 24 Cohen v Mirror Newspapers Ltd [1971] 1 NSWLR 623 Crampton v Nugawela [1996] NSWSC 651; (1996) 41 NSWLR 176 Cripps v Vakras [2014] VSC 279 Cush v Dillon; Boland v Dillon (2011) 243 CLR 298; [2011] HCA 30 Daniels v Pynbland Pty Ltd (Nos 1 & 2) (1985) 4 BPR 9716 Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31; [1992] FCA 851 Digby v Financial News Ltd [1906] UKLawRpKQB 166; [1907] 1 KB 502 Domican v Pan Macmillan Australia Pty Limited [2019] FCA 1384 Fabcot Pty Ltd v Port Macquarie-Hastings Council [2011] NSWCA 167 Fairfax Digital Australia and New Zealand Pty Ltd v Kazal (2018) 97 NSWLR 547; [2018] NSWCA 77 Favell v Queensland Newspapers Pty Ltd [2005] HCA 52 Fox Entertainment Precinct Pty Ltd v Centennial Park and Moore Park Trust [2004] NSWSC 214 Gardiner v John Fairfax & Sons Pty Ltd [1942] NSWStRp 16; (1942) 42 SR (NSW) 171 Greek Herald Pty Ltd v Nikolopoulos (2001) 54 NSWLR 165; [2002] NSWCA 41 Green v Fairfax Media Publications Pty Ltd (No 4) [2021] WASC 474 Hanson-Young v Leyonhjelm (No 4) [2019] FCA 1981 Harbour Radio Pty Ltd v Tingle [2001] NSWCA 194 Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 1) [1988] FCA 40; (1988) 39 FCR 546 Herald & Weekly Times Ltd v Popovic (2003) 9 VR 1; [2003] VSCA 161 Heyman v Darwins Ltd [1942] AC 356 Holt v TCN Channel Nine Pty Ltd (2014) 86 NSWLR 96; [2014] NSWCA 90 Howden v Truth & Sportsman Ltd (1937) 58 CLR 416; [1937] HCA 74 John Fairfax Publications Pty Ltd v O’Shane [2005] NSWCA 164 Johnson Tiles Pty Ltd v Esso Australia Ltd (2000) 104 FCR 564; [2000] FCA 1572 Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115; [2007] HCA 61 Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623; [1989] HCA 23 Lloyd-Jones v Allen [2012] NSWCA 230 Marshall v Megna; Megna v Tory; Tory v Megna [2013] NSWCA 30 Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357; [2010] HCA 31 Mirror Newspaper Ltd v World Hosts Pty Ltd (1979) 141 CLR 632; [1979] HCA 3 Nationwide News Pty Ltd v Rush [2020] FCAFC 115 Oates v Consolidated Capital Services Pty Limited (2009) 76 NSWLR 69; [2009] NSWCA 183 OXS Pty Ltd v Sydney Harbour Foreshore Authority [2016] NSWCA 120 Palmer Bruyn and Parker Pty Ltd v Parsons (2001) 208 CLR 388; [2001] HCA 69 Pamplin v Express Newspapers Ltd (No 2) [1988] 1 All ER 282; [1988] 1 WLR 116 Percival v Wright [1902] UKLawRpCh 125; [1902] 2 Ch 421 Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17; [1985] HCA 14 Ratcliffe v Evans [1892] UKLawRpKQB 131; [1892] 2 QB 524 Reader’s Digest Services Pty Ltd v Lamb (1982) 150 CLR 500; [1982] HCA 4 Roberts v Bass (2002) 212 CLR 1; [2002] HCA 57 Rush v Nationwide News Pty Ltd (No 7) [2019] FCA 496 Shevill v Builders Licensing Board (1982) 149 CLR 620; [1982] HCA 47 Sim v Stretch [1936] 2 All ER 1237 Skinner v Redmond Family Holdings Pty Ltd [2017] NSWCA 329 Slatyer v Daily Telegraph Newspaper Co Ltd (1908) 6 CLR 1; [1908] HCA 22 Société d'Avances Commerciales (Société Anonyme Egyptienne) v Merchants' Marine Insurance Co [1924] 20 Ll L Rep 140 Southern Cross Mine Management Pty Ltd v Ensham Resources Pty Ltd [2003] QSC 402 Stead v Fairfax Media Publications Pty Ltd [2021] FCA 15 The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd (No 11) [2021] NSWSC 1477 Traderight (NSW) Pty Ltd v Bank of Queensland Ltd [2015] NSWCA 94 Tribe v Simmons (No 2) [2021] FCA 1164 Triggell v Pheeney (1951) 82 CLR 497; [1951] HCA 23 Waterhouse v Broadcasting Station 2GB Pty Ltd (1985) 1 NSWLR 58 Wilson v Bauer Media (No 6) [2017] VSC 356 Wormald v Maradaca Pty Ltd [2020] NSWCA 289 |
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Texts Cited:
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Concise Oxford Dictionary, online ed, March 2020
J D Heydon, Heydon on Contract (2019, Thomson Reuters) J D Heydon, M J Leeming, P G Turner, Meagher, Gummow & Lehane’s Equity: Doctrines and Remedies (5th ed, 2015, LexisNexis Butterworths) P W Young, C Croft and M Smith, On Equity (2009, Thomson Reuters) |
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Category:
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Principal judgment
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Parties:
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Proceedings 2019/343896:
The Checkout Pty Ltd (First Plaintiff/Third Cross-Defendant) Giant Dwarf Pty Ltd (Second Plaintiff/First Cross-Defendant) Julian Francis Xavier Morrow (Third Plaintiff/Second Cross-Defendant) Cordell Jigsaw Productions Pty Ltd (First Defendant/Cross-Claimant) Nicholas Harvey Murray (Second Defendant) Proceedings 2020/264993: Julian Francis Xavier Morrow (Plaintiff) Cordell Jigsaw Productions Pty Ltd (First Defendant) Nicholas Harvey Murray (Second Defendant) |
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Representation:
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Counsel:
S Chrysanthou SC with C O’Neill (Plaintiffs) B F Katekar SC with S Jeliba (Defendants) Solicitors: Kay & Hughes (Plaintiffs) Bird & Bird (Defendants) |
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File Number(s):
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2019/343896; 2020/264993
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TABLE OF CONTENTS
The role of the ABC in the proceedings
The genesis of the joint venture relationship
The terms of the Joint Venture Agreement
The alleged implied term of the Joint Venture Agreement
The nature of Mr Morrow’s duties as director of the Joint Venture Company
Mr Murray’s and Cordell Jigsaw’s case concerning Mr Morrow’s breaches of duty
Common ground that Mr Morrow and Mr Murray were free to develop and produce consumer affairs shows other than The Checkout or shows equivalent or similar to The Checkout?
The decision of the ABC to place The Checkout on “hiatus” and Mr Morrow’s reaction
Further discussions for a possible new “consumer show”
The Post, Digital and Visual Effects Offset determination
Mr Morrow’s discussions with the ABC continue
Mr Morrow consults Giant Dwarf’s accountants
The 13 February 2019 meeting at the ABC
Mr Morrow resumes contact with Mr Murray
The 19 February 2019 meeting at the Duck Inn
Did Mr Morrow say words to the effect that he would not make The Checkout again with Mr Murray?
Did Mr Morrow say words to the effect that he no longer wished to work in television?
Did Mr Morrow say words to the effect that it would make “more sense” for Giant Dwarf to make any new consumer affairs show the ABC proposed or that it would be better if “we” found a way to make The Checkout again?
Events following the Duck Inn Meeting
Mr Fraser’s draft response to Mr Morrow and Ms Crouch
Mr Morrow’s discussions with the ABC continue
Further communications with Mr Murray
The 8 March 2019 meeting at the ABC
Mr Fraser’s 8 March 2019 email
The “New Consumer Show” – Are You Being Served
The “New Consumer Show” may be called “[The] Checkout”
Mr Morrow’s 1 April 2019 conversation with Ms Waite and Ms Pincus
Events immediately following execution of the Share Sale Agreement
There was an opportunity to produce a further series of The Checkout
Mr Morrow and Giant Dwarf did not inform Mr Murray and Cordell Jigsaw of that opportunity and sought to divert that opportunity for their benefit
Breach of the implied term of the Joint Venture Agreement
Breach of Mr Morrow’s duty as a director of the Joint Venture Company
Mr Morrow’s and Giant Dwarf’s alleged misleading or deceptive conduct
The “Motivation Representation”
Misleading or deceptive conduct by Mr Murray and Cordell Jigsaw
Events following the execution of the Share Sale Agreement
Mr Murray hears of The Checkout series seven
The first allegedly defamatory communication – Mr Murray’s 21 May 2019 email to Mr Anderson and Mr Carrington
The second allegedly defamatory communication – Mr Murray’s 11 June 2019 conversation with Ms Pincus
The third allegedly defamatory communication – Mr Murray’s 12 June 2019 email to Ms Pincus and Ms Chapman
The events leading to the purported termination of the Share Sale Agreement
Breach of cl 5.3 of the Share Sale Agreement?
Breach of cl 9.7 of the Share Sale Agreement?
The fourth allegedly defamatory communication – Mr Murray’s 20 June 2019 email to Mr Carrington
5 July 2019 – the ABC terminates discussions concerning The Checkout
The fifth allegedly defamatory communication – Mr Murray’s 5 July 2019 email to Ms Carnabuci
The sixth allegedly defamatory communication – Mr Murray’s 12 August 2019 email to Ms Gilchrist
The alleged injurious falsehoods
Mr Murray’s 21 May 2019 email to Mr Anderson
Mr Murray’s 11 June 2019 statement to Ms Pincus
Mr Murray’s 12 June 2019 email to Ms Pincus
Statutory qualified privilege?
Common law qualified privilege?
Mr Murray’s email to Mr Carrington of 20 June 2019
Mr Murray’s email to Ms Carnabuci of 5 July 2019
Mr Murray’s email to Ms Gilchrist of 12 August 2019
Conclusions as to the six allegedly defamatory communications
Maintenance of the defence in relation to the allegations of fraud
Maintenance of a bad reputation case
The manner in which Mr Morrow was cross-examined
The incident involving Ms Agzarian
First allegedly false representation
Second allegedly false representation
Third allegedly false representation
Fourth allegedly false representation
Fifth allegedly false representation
Sixth allegedly false representation
Seventh allegedly false representation
Eighth allegedly false representation
Ninth allegedly false representation
Tenth allegedly false representation
Eleventh allegedly false representation
Twelfth allegedly false representation
Thirteenth allegedly false representation
Fourteenth allegedly false representation
Fifteenth allegedly false representation
Conclusion concerning injurious falsehood
The Joint Venture Company’s and Giant Dwarf’s claim for damages for breach of the Share Sale Agreement
Remedies claim by Cordell Jigsaw
JUDGMENT
1 Mr Julian Morrow is a television writer, performer and producer.
2 Mr Nicholas Murray is also a television producer.
3 Both Mr Morrow and Mr Murray are legally qualified, although neither is currently in practice as a lawyer.
4 In December 2010, Mr Morrow and Mr Murray agreed to work together on a consumer affairs television program.
5 That project ultimately led to the consumer affairs television series “The Checkout”.
6 It was a success.
7 But during 2019 Mr Morrow and Mr Murray fell out. Bitterly.
8 These proceedings are about the consequences of that falling out.
9 In late 2010 and early 2011 Mr Morrow and Mr Murray agreed to engage in a joint venture to produce a consumer affairs television program; ultimately The Checkout (the “Joint Venture Agreement”).
10 On or about 23 January 2012, Mr Morrow and Mr Murray caused companies of which they were both directors and shareholders, Giant Dwarf Pty Ltd and Cordell Jigsaw Pty Ltd respectively, to form a company then known as Jigsaw Dwarf Pty Ltd, and later known as The Checkout Pty Ltd (the “Joint Venture Company”).
11 Their intention was that, for the purposes of the Joint Venture Agreement, the Joint Venture Company be the special purpose vehicle to produce a proposed consumer affairs television series.
12 Each of Giant Dwarf and Cordell Jigsaw held 50% of the shares in the Joint Venture Company. Mr Morrow and Mr Murray were its sole directors. From around January 2014, Mr Morrow and Mr Murray agreed that the profits derived by the Joint Venture Company would be paid as to 60% to Giant Dwarf and as to 40% to Cordell Jigsaw.
13 During 2014 drafts of a “Shareholders Agreement” were circulated, but never executed.
14 The Joint Venture Company produced six series of The Checkout for the Australian Broadcasting Corporation (“ABC”) between 2013 and 2018. The last episode of The Checkout (episode 12 of series 6) was aired on the ABC in April 2018.
15 In July 2018, the ABC informed Mr Morrow and Mr Murray that it proposed to place The Checkout “on hiatus” and that it did not propose to commission the Joint Venture Company to produce a seventh series, at that time.
16 From July 2018, Mr Morrow sought to persuade the relevant executives of the ABC to change their minds about that decision.
17 During the same period, and against the possibility that the ABC refused to change its position about this matter, Mr Morrow also discussed with the ABC executives the possibility of his company, Giant Dwarf, producing a “new” consumer affairs program. On 8 March 2019, Mr Morrow pitched to the ABC a proposed consumer affairs show called “Are You Being Served?”.
18 Between February and April 2019 Mr Morrow negotiated with Mr Murray concerning the possible sale by Cordell Jigsaw to Giant Dwarf of its interest in the Joint Venture Company.
19 Those negotiations culminated in the execution on 8 April 2019 by Giant Dwarf and Cordell Jigsaw of a “Share Sale Agreement”. By this agreement Cordell Jigsaw sold its shares in the Joint Venture Company to Giant Dwarf for $50 and on terms that included a payment be made by the Joint Venture Company to Cordell Jigsaw of 2% of the Joint Venture Company’s “cash budget” on any further series of The Checkout produced by the Joint Venture Company, Giant Dwarf or any affiliated company.
20 During those negotiations, Mr Morrow did not mention to Mr Murray that he was, at the same time, in effect negotiating with the ABC to re-badge his proposed Are You Being Served program as the seventh series of The Checkout, subject only to a successful culmination of his negotiations with Mr Murray concerning Cordell Jigsaw’s shares in the Joint Venture Company.
21 Immediately after the Share Sale Agreement was executed, and Cordell Jigsaw had transferred its shares in the Joint Venture Company to Giant Dwarf, the Joint Venture Company, now controlled by Mr Morrow, sought to negotiate a seventh series of The Checkout with the ABC.
22 Mr Murray became aware of these negotiations and, unbeknownst to Mr Morrow, commenced email communications with ABC executives.
23 Mr Morrow alleges that these email communications, and one conversation between Mr Murray and an ABC executive, were defamatory of him and that these, and later emails, constituted injurious falsehoods against the Joint Venture Company, Giant Dwarf and Mr Morrow.
24 Immediately after it received the first of these email communications, the ABC informed Mr Morrow that a condition of commissioning any further series of The Checkout was the execution by Mr Murray and Cordell Jigsaw of a “Quit Claim Deed” under which, in effect, Mr Murray and Cordell Jigsaw released the Joint Venture Company and the ABC from any claim concerning any further series of The Checkout. The ABC did not inform Mr Morrow of Mr Murray’s email, or the later emails Mr Murray sent. Mr Morrow did not become aware of them until discovery in these proceedings.
25 Between 30 May 2019 and 13 June 2019, Mr Morrow asked Mr Murray to cause Cordell Jigsaw to execute the Quit Claim.
26 Mr Murray refused.
27 On 28 June 2019, the Joint Venture Company and Giant Dwarf purported to terminate the Share Sale Agreement on the basis of Cordell Jigsaw’s alleged repudiation of it.
Two proceedings
28 In those circumstances, Mr Morrow has caused two sets of proceedings to be instituted against Mr Murray and Cordell Jigsaw.
29 In the first proceedings (the “Commercial Proceedings”) the Joint Venture Company, Giant Dwarf and Mr Morrow, allege that:
(a) by refusing to execute the Quit Claim, Cordell Jigsaw breached the Share Sale Agreement causing loss to the Joint Venture Company and to Giant Dwarf;(b) by failing to comply with a representation that they would abide by the Share Sale Agreement, Cordell Jigsaw and Mr Murray engaged in misleading or deceptive conduct for the purposes of s 18 of the Australian Consumer Law;[1]
(c) Cordell Jigsaw and Mr Murray published injurious falsehoods that injured the Joint Venture Company, Giant Dwarf and Mr Morrow; and
(d) Cordell Jigsaw and Mr Murray breached a Mediation Agreement following an unsuccessful mediation in 2019, as a result of an unauthorised disclosure of confidential information.
30 In the Commercial Proceedings, Mr Murray and Cordell Jigsaw, by Cross Summons, allege that:
(a) Giant Dwarf acted in breach of an implied term of the Joint Venture Agreement that it would inform Cordell Jigsaw of any opportunity to produce a further series of The Checkout, or any equivalent or similar consumer affairs show;(b) Giant Dwarf engaged in misleading or deceptive conduct by failing to inform Cordell Jigsaw of its negotiations with the ABC concerning a further series of The Checkout; and
(c) in causing Giant Dwarf to act this way, Mr Morrow acted in breach of his duties as a director of the Joint Venture Company.
31 In the second proceedings (the “Defamation Proceedings”) Mr Morrow seeks damages from Mr Murray and Cordell Jigsaw by reason of the allegedly defamatory statements made by Mr Murray and Cordell Jigsaw in the emails and conversation to which I referred.
32 As I have said, Mr Morrow only became aware of these communications during discovery in the Commercial Proceedings.
33 I heard both proceedings together, with evidence in one being evidence in the other.
34 Neither Mr Morrow nor Mr Murray elected under s 21 of the Defamation Act 2005 (NSW) for the Defamation Proceedings to be tried by a jury.
35 It is common ground that, by reason of the dates of publication of the allegedly defamatory material, I must apply the provisions of the Defamation Act as they stood prior to the amendments made effective on 1 July 2021.
Decision
36 I find that:
(a) it was an implied term of the Joint Venture Agreement that each joint venturer would inform the other of any opportunity to produce a further series of The Checkout, or any equivalent or similar consumer affairs show;(b) Mr Morrow caused Giant Dwarf to act in breach of that implied term;
(c) Mr Morrow thereby acted in breach of his duties as a director of the Joint Venture Company;
(d) by not informing Mr Murray of his dealings with the ABC during March and April 2019, Mr Morrow engaged in misleading or deceptive conduct;
(e) Mr Murray and Cordell Jigsaw have thereby made out the claims at [29] and have established an entitlement to an order under s 237 of the Australian Consumer Law that the Share Sale Agreement be rescinded;
(f) Mr Morrow, Giant Dwarf and the Joint Venture Company have failed to make out the claim at [29(a)] and [29(b)] and have failed to establish any damage arising from the matters at [29(c)] and [29(d)];
(g) Mr Morrow has established that the statements made in the impugned publications were defamatory of him;
(h) Mr Murray has made out the defence of justification in relation to two of the publications.
(i) Mr Murray has not made out the defence of qualified privilege or opinion in relation to any of the publications;
(j) Mr Morrow has not established that he suffered any economic loss by reason of the defamatory publications;
(k) Mr Morrow is entitled to general and aggravated damages in relation to the defamatory publications in the sum of $35,000;
(l) Mr Morrow and Giant Dwarf have established that some of Mr Murray’s communications contained injurious falsehoods; and
(m) Mr Morrow and Giant Dwarf have not established that they suffered any economic loss by reason of those injurious falsehoods.
The hearing
37 The hearing was conducted, in person, over 10 days.
38 Ms Chrysanthou SC appeared with Mr O’Neill for Mr Morrow and his related companies. Mr Katekar SC appeared with Ms Jeliba for Mr Murray and his related company.[2]
39 I was greatly assisted by the efficient manner in which counsel, and their instructing solicitors, conducted the case in accordance with the protocols then applicable concerning the Covid-19 pandemic.
40 I was also greatly assisted by the extensive oral and written submissions received at the conclusion of the evidence, and then after judgment was reserved. Much of what appears below, especially as to uncontroversial background matters, is taken with gratitude from those submissions.
Dramatis personae
41 In the course of explaining what has happened between Mr Morrow and Mr Murray, it is necessary to refer to a large number of individuals working for Giant Dwarf, Cordell Jigsaw and the ABC.
42 To assist the reader, I attach a dramatis personae prepared by the parties which records the positions held by the relevant persons at these companies. [42] Dramatis Personae (152656, pdf)
Credit
43 Ms Chrysanthou and Mr Katekar both developed detailed submissions to the effect that the evidence given by Mr Murray and Mr Morrow, respectively, was unsatisfactory, evasive and unresponsive.
44 Despite the length, and vehemence, of those submissions, I do not see this as a case that turns on the credit of either Mr Morrow or Mr Murray.
45 Most of the communication relevant to the issues I must decide were in writing, primarily by email between Mr Morrow and Mr Murray on the one hand, and officers of the ABC on the other.
46 There is some difference in the recollections of Mr Morrow and Mr Murray concerning a conversation they had on 19 February 2019 at the Duck Inn in Chippendale (the “Duck Inn Meeting”), but I am able to resolve those differences otherwise than by reference to Mr Morrow’s and Mr Murray’s credit.
47 I am, in any event, conscious of the restraint I should exercise in forming a view about the credibility of Mr Morrow and Mr Murray based on their demeanour when giving evidence. Giving evidence is a stressful, alien experience for most people. I have in mind Atkin LJ’s familiar aphorism that “an ounce of intrinsic merit or demerit in the evidence, that is to say, the value of the comparison of the evidence with known facts, is worth pounds of demeanour”.[3]
48 I must weigh my impressions as to demeanour “carefully against the probabilities” and “examine whether the disputed evidence is consistent with the incontrovertible facts”.[4]
49 Nonetheless, as cross-examination of each of Mr Morrow and Mr Murray took place over a number of days, I had a lengthy period during which to observe the manner in which they gave their evidence.
50 As I set out below, there are some important aspects of their evidence, particularly that of Mr Morrow, that I have been unable to accept.
51 To the extent that I do not accept particular aspects of the evidence given by Mr Morrow or Mr Murray I will deal with that at the appropriate point in these reasons.
The role of the ABC in the proceedings
52 Although Mr Morrow’s and Mr Murray’s communications with the ABC are central to the dispute, neither party called any officers of the ABC as witnesses in the proceedings.
53 The ABC produced 31 packets of documents in response to the subpoenas from both parties. During argument on an interlocutory application on 14 December 2020, I was informed that the ABC had produced over 5,000 documents in response to the subpoenas. I was also informed that, leaving aside the time taken to search for the documents, the ABC has spent some 135 hours reviewing the documents sought and producing them to the Court.[5]
54 The Court Book included a large number of emails produced by the ABC to and from Mr Morrow and Mr Murray, many internal emails between officers of the ABC, as well as notes taken by ABC officers of conversations with Mr Morrow.
55 I admitted those documents only as evidence that documents in that form were within the records of the ABC. Thus, the documents themselves do not stand as evidence of the truth of what is recorded. But inferences are available from a number of them and, on occasions, other evidence points to the probability that what was recorded in the ABC documents was the true position.
56 I will set out my conclusions as to what can be drawn from particular ABC documents during my consideration of the course of events.
The genesis of the joint venture relationship
57 For a number of years prior to 2010 Mr Murray had communications with the ABC and with the Australian Consumers Association about the possibility of the ABC commissioning a consumer affairs show.
58 In late 2010, Mr Morrow approach Mr Murray about the possibility of collaborating on such a program.
59 In December 2010, Mr Morrow and Mr Murray met at a bar in Surry Hills and “shook hands on the idea of Giant Dwarf and Cordell Jigsaw working together on a consumer affairs TV show project”.[6]
60 Neither Mr Murray nor Mr Morrow gave an account in their affidavits as to what was said at this meeting. However, they each said they “agreed on” and “shook hands on” the idea of Giant Dwarf and Cordell Jigsaw working together on “a consumer affairs TV show project”.
61 The only contemporaneous record of what was agreed is in an email exchange between Mr Morrow and Mr Murray on 15 December 2010 as follows:
“[Mr Morrow]: ... just recapping the outcome of our chat ... we ... shook on the idea of [Giant Dwarf[7]]/Jigsaw venture project done on the basis of decisions by agreement, revenue 50/50, with some of the agreed decisions being that I’d host (with co-host question up for grabs), we’d jointly [Executive Produce].[Mr Murray]: ok – we’ll have play”.
62 Mr Morrow and Mr Murray had further email exchanges between 17 March 2011 and 8 April 2011.
63 On 17 March 2011, Mr Morrow wrote to Mr Murray saying that “I’ve been thinking about the show” and raised the possibility of creating “a new entity just for this program”. It was implicit in this email that “the” show and “this” program would be one produced for the ABC.
64 On 24 March 2011, Mr Murray wrote to Mr Morrow about “setting up a [Special Purpose Vehicle] with each owning 50%”.
65 Mr Morrow replied on 8 April 2011 saying that “perhaps a [joint venture] is a way to go. It’s probably best that our ‘everything by agreement’ and ‘50/50 on everything’ arrangement is reflected in the formalities, which suggests a [joint venture]”.
66 These communications suggest that what was contemplated by Mr Morrow and Mr Murray was the establishment of a special purpose vehicle to conduct a joint venture which would have the single purpose of pitching, and hopefully producing, a consumer affairs program for ABC television.
67 This was the genesis of the Joint Venture Agreement.
68 Mr Murray gave unchallenged evidence that:
“Between March 2011 and June 2011, Cordell Jigsaw and [Giant Dwarf] developed and pitched a television show to the ABC called ‘The Fair Cop’ (working title) which was renamed ‘The Checkout’ after discovering that the word Fair Cop had been trademarked by Nine Network Australia Pty Ltd”.
69 The Joint Venture Company was incorporated on 23 January 2012 to give effect to this arrangement. As I have said, Mr Morrow and Mr Murray were the sole directors of the Joint Venture Company and Giant Dwarf and Cordell Jigsaw were its equal shareholders.
70 On 26 June 2012, the Joint Venture Company signed its first ABC Production and Licence Agreement for what became known as the first series of The Checkout.
71 After series one was produced, Giant Dwarf and Cordell Jigsaw agreed to change the revenue split from 50/50 to 60/40. Mr Morrow and Mr Murray evidently saw this as better reflecting their contributions to the venture. The shareholding in the Joint Venture Company remained the same.
72 Thus, on 24 January 2014, Ms Katie Shortland, Head of Business Affairs at Cordell Jigsaw sent Mr Morrow a “1 pager” giving effect to that agreement. Mr Morrow agreed to that document in May 2015.
73 Also on 24 January 2014, Ms Shortland circulated a draft “Shareholders Agreement”.
74 Proposed cl 2.1 of that document stated:
“The objective of the Shareholders in establishing the Company is to conduct a profitable business providing the development, production and marketing of television projects and related rights.”
75 Proposed cl 3.1(1) provided that:
“The Shareholders agree that the Company will carry on the Business in the following way:
(1) the Company will be operated to procure the development, production and marketing of television projects and related rights...”.
76 “Business” was defined to mean “the Company’s business of developing and producing television projects and any other business approved under clause 9.1” (which clause required a unanimous resolution of shareholders).
77 Mr Murray agreed in cross-examination that the statement of objectives in proposed cl 2.1 was too broad and that “it probably should be limited to ... consumer affairs programs to the ABC”.
78 Clause 28.1 provided:
“This Agreement does not create or evidence a partnership, joint venture or a fiduciary relationship or the relationship of principal and agent between the parties.”
79 Mr Morrow made no response to this draft until two years later, in January 2016.
80 On 12 January 2016, Mr Morrow sent Mr Murray and Ms Shortland a “markup of the shareholder’s agreement” in which he suggested that cl 2.1 be changed to read:
“The objective of the Shareholders in establishing the Company to conduct a profitable business providing the development, production and marketing of the satirical consumer affairs television program The Checkout.”
81 Mr Morrow also proposed that cl 3.1(1) refer only to The Checkout rather than to “television projects”; he did not suggest any change to the definition of “Business”.
82 Mr Morrow’s proposed changes to cll 2.1 and 3.1 appear to have reflected the reality of the situation, namely, that the Joint Venture Company was engaged in only one project, being successive series of The Checkout.
83 Mr Morrow suggested no change to cl 28.
84 Clause 28 is a peculiar provision.
85 Mr Murray agreed in cross-examination that it was “the standard clause that we would put in these kind of agreements”. On behalf of Mr Morrow, Ms Chrysanthou relied on this clause to show that Giant Dwarf and Cordell Jigsaw (and thus Mr Morrow and Mr Murray) agreed that there was no fiduciary relationship between Giant Dwarf and Cordell Jigsaw either as shareholders in the Joint Venture Company, or at all.
86 But cl 28 also recites that the proposed Shareholder Agreement would not create “a joint venture ... between the parties”. A matter that is agreed in the proceedings is that Mr Morrow and Mr Murray did establish a joint venture between Giant Dwarf and Cordell Jigsaw. There is no suggestion in the proceedings that the circulation of the drafts of the Shareholders Agreement was intended to alter that fundamental aspect of the arrangement. That suggests to me that proposed cl 28 was included in the drafts as a “boilerplate” provision and was not intended by either Mr Morrow nor Mr Murray to reflect or record their relationship as joint venturers.
87 Ultimately, as the parties did not execute the Shareholders Agreement, the provision casts little, if any, light on the nature of their arrangement as joint venturers.
88 Mr Murray made no response to Mr Morrow’s 12 January 2016 proposed “markup” of the Shareholders Agreement and neither Giant Dwarf nor Cordell Jigsaw executed either version of the Shareholders Agreement. There was thus no finalised written agreement between the two parties as to the precise scope of the joint venture. In particular, there is no express agreement as to whether it extended beyond The Checkout.
89 As I have said, the Joint Venture Company produced six series of The Checkout for the ABC between 2013 and 2018: the last episode of which was aired in April 2018.
90 Over that period, Mr Murray and Cordell Jigsaw played an increasingly minor role in the production of the series. Mr Morrow became the primary point of contact with the ABC for the show. Mr Morrow had responsibility for all day-to-day creative, legal, editorial and production issues in relation to series four, five and six of the show. Mr Murray had little active involvement in these latter series. Indeed, Mr Murray agreed he did not speak to Mr Morrow about The Checkout at all between July 2017 and April 2018; although he then sent a note of congratulations to Mr Morrow about the sixth series of The Checkout. In effect, Giant Dwarf took over the running of the Joint Venture Company from series 4 onwards.
91 This caused some friction between Mr Morrow and Mr Murray.
92 In November 2015, Mr Morrow offered to buy out Cordell Jigsaw’s interest in the joint venture for $200,000.
93 That offer was not accepted. Thus, on 3 December 2015, Mr Murray sent a memo to Mr Morrow:
“Thanks for the kind offer, but as I said last week, we are not interested in exiting the Checkout/Jigsaw Dwarf JV.We have always been thrilled to be involved in this program and I have approached the relationship in good faith all along.
When you approached us about co-pitching this show, I expected the production will be more of a cooperative process. When it became apparent you wanted to run the show your way despite my ongoing observations about the potential efficiency gains to be made from a more traditional production method, we were happy to take a hands off approach. As we discussed the other day, while it is frustrating for me to be ignored in the way I am on this show, I am happy to continue my involvement.”
94 Nonetheless, the series were profitable. Cordell Jigsaw earned about $170,000 from series three in 2015, $175,000 from series four in 2016, and $187,000 from each of series five in 2017 and series six in 2018. Mr Morrow calculated that Cordell Jigsaw was paid a little over $1 million from series one to six. He described it as the “worst deal I’ve ever done”.
95 At around this time, Mr Murray assumed that Mr Morrow was negotiating with the ABC for the seventh season.
The terms of the Joint Venture Agreement
96 On the pleadings[8] it is common ground that in the circumstances I have described:
(1) in late 2010 Giant Dwarf and Cordell Jigsaw agreed to collaborate for the purpose of creating a consumer affairs television show for the ABC;(2) the parties thereby entered into the Joint Venture Agreement; and
(3) it was a term of the Joint Venture Agreement that all decisions were to be made by agreement.
97 Giant Dwarf and Mr Morrow contend that there were further terms of the Joint Venture Agreement that:
(1) Giant Dwarf and Cordell Jigsaw were to be credited equally as production companies;(2) Mr Morrow and Mr Murray were to be Executive Producers;
(3) Mr Morrow was to be the host of the program;
(4) the “Producer Overhead” from each series budget was to be divided equally between Giant Dwarf and Cordell Jigsaw;[9] and
(5) any revenue received in connection with the show, apart from the budget to produce a show or related project, was to be divided equally[10] between Giant Dwarf and Cordell Jigsaw.
98 I do not understand any of these matters to be disputed.
99 In their Cross-Claim List Statement Mr Murray and Cordell Jigsaw also contended that:
(a) the common intention and agreement between Cordell Jigsaw and Giant Dwarf in establishing the Joint Venture Company was that it was a vehicle to develop, produce and market a consumer affairs television series;(b) Mr Morrow was appointed as one of the two directors of the Joint Venture Company as a representative of Giant Dwarf; and
(c) Mr Murray was appointed as the other director of the Joint Venture Company as a representative of Cordell Jigsaw.
100 In their Cross-Claim Response, Mr Morrow and Giant Dwarf admitted these matters and asserted that the Joint Venture Company “was incorporated as a special purpose vehicle to produce for the ABC the consumer affairs television series that later became known as The Checkout”.
101 In these circumstances, and in the light of evidence I have set out, I find that:
(1) there was a joint venture between Giant Dwarf and Cordell Jigsaw;(2) the sole purpose of the joint venture was to pitch and, if successful, produce a consumer affairs show, ultimately The Checkout, for the ABC;
(3) it was a term of the joint venture that decisions would be made between Mr Morrow and Mr Murray by agreement and thus, in effect, that each shareholder had a power of veto in relation to any decision;[11] and
(4) each of Giant Dwarf and Cordell Jigsaw could determine whether the Joint Venture Company continued to produce The Checkout for the ABC.
102 It follows from these findings that there was a potential for deadlock between Giant Dwarf and Cordell Jigsaw, and thus, in effect, between Mr Morrow and Mr Murray, if either decided that he no longer wished to produce The Checkout within the joint venture. As I set out below, Mr Morrow’s case is that this was his position as at February 2019; that is, that he no longer wished to produce The Checkout so long as Cordell Jigsaw, and thus, in effect, Mr Murray, remained his joint venturer. There was no agreed mechanism for resolving any such deadlock. For practical purposes, the only means by which such a deadlock could be resolved would be for one of the joint venturers to buy out the other.
The alleged implied term of the Joint Venture Agreement
103 Cordell Jigsaw and Mr Murray contend that it was an implied term of the joint venture that each joint venturer would inform the other of any “opportunity” to produce a further series of The Checkout, or a similar show, and to cause the joint venture to have the benefit of that opportunity.
104 A critical question in the proceedings is whether there was any such implied term in the Joint Venture Agreement.
105 If there was, this has significant implications for Cordell Jigsaw’s and Mr Murray’s case against Giant Dwarf and Mr Morrow concerning Giant Dwarf’s alleged breach of the Joint Venture Agreement, Mr Morrow’s alleged breach of his duty as a director of the Joint Venture Company and Mr Morrow’s and Giant Dwarf’s alleged engagement in misleading or deceptive conduct.
106 Cordell Jigsaw and Mr Murray pleaded the implied term as follows:
“At least from 26 June 2012 until 8 April 2019, it was a term of the JV Agreement that Giant Dwarf and Cordell Jigsaw would:
a. cooperate and do such things as are necessary to enable the other party to have the benefit of the JV Agreement;
...
b. inform the other party of any opportunity to produce any further series of The Checkout (or any equivalent or similar consumer affairs program) for the ABC;
c. direct any such opportunity to their joint venture company incorporated for that purpose, being [the Joint Venture Company];
d. not to divert or week to capture any such opportunity for their personal benefit and to the exclusion of the other”.
107 In closing submissions, Ms Chrysanthou did not dispute the term concerning cooperation referred to in subpar (a) of the previous paragraph.
108 As to the terms alleged in subpars (b) to (d), it was common ground that such a term could only be implied into the Joint Venture Agreement if the five familiar requirements established by the authorities were made out namely that the proposed implied term was: [12]
(a) reasonable and equitable;(b) necessary to give business efficacy to the contract;
(c) so obvious that it “goes without saying”;
(d) capable of clear expression; and
(e) not contradictory of any express term of the contract.
109 As to whether the posited implied term was reasonable and equitable, Ms Chrysanthou accepted that the term “may be equitable” but submitted that the term was “not reasonable because it unreasonably neutered each of the joint venturers”.
110 That submission was not developed.
111 Giant Dwarf and Cordell Jigsaw were independent television producers that were otherwise in competition with each other. It is no part of Mr Murray’s case that he and Mr Morrow could not, concurrently with the joint venture between them, produce consumer affairs television programs other than The Checkout.
112 Each of Mr Morrow and Mr Murray acted as if they could, during the life of the joint venture, pitch and promote consumer television programs other than The Checkout. Mr Morrow stated, in terms, in cross-examination that:
“... my understanding of the arrangement with [the Joint Venture Company] and Cordell Jigsaw was that either party was able to make a new project, it always had been”.
113 As I set out below, Mr Murray was, evidently, of the same opinion.
114 An implied term of the kind advocated for by Mr Murray would not hinder or “neuter” such activity, as long as the proposed consumer affairs show was not The Checkout itself or an “equivalent” or “similar” show.
115 The posited implied term would prevent Mr Morrow and Mr Murray pitching or producing a show able to be, or intended or designed to be, a substitute for The Checkout or a show actually to be called The Checkout.
116 But it would not “unreasonably neuter” the joint venturers.
117 As to whether the posited term was reasonably necessary to give business efficacy to the Joint Venture Agreement, Ms Chrysanthou simply asserted that it was “completely unnecessary” to imply the term, evidently because the Joint Venture Agreement “operated for 6 seasons” without the need for either party to resort to it.
118 However, until the events with which these proceedings are concerned occurred, there was no cause to consider whether there was any term implied into the Joint Venture Agreement of the kind now suggested by Mr Murray.
119 The Joint Venture Company was established for the sole purpose of pitching and producing the show that became The Checkout. If either party could, without informing the other, take advantage of an opportunity to produce a further series of The Checkout or an equivalent or similar show, and thus in effect step outside the joint venture by taking advantage of that opportunity for themselves, it would render nugatory the Joint Venture Agreement. Thus, the posited implied term is, in my opinion, necessary to give business efficacy to the Joint Venture Agreement.
120 As to whether the posited term was so obvious that it went without saying, Ms Chrysanthou submitted that it was “not so obvious as to go without saying in light of the fact that the very structure of the joint venture could throw up a deadlock that could continue for the rest of ... [the] mercantile endeavour”.
121 It is true, as I have set out above, that there was no express mechanism for resolving any deadlock that might arise if either Mr Morrow or Mr Murray vetoed production by the Joint Venture Company of any further series of The Checkout. In that event, unless either joint venturer bought the other out, the Joint Venture Company would not produce any further series.
122 But I do not see how it follows from this that the posited term was not obvious. It is directed to a different situation namely, relevantly to this case, one where one party purported to exercise the right of veto against the Joint Venture Company from producing a further series of The Checkout but, allegedly, was given an opportunity to produce a further series of the same show, or an equivalent or similar show.
123 If there were no such term of the Joint Venture Agreement then if, at any stage, an opportunity arose for a further series of The Checkout, or of a show equivalent or similar to The Checkout to be produced, then either joint venturer could veto the Joint Venture Company from pursuing the opportunity and, without informing the other, step outside the joint venture and themself take the benefit of that opportunity.
124 There is an issue in this case as to whether any such opportunity in fact arose. But I think it obvious that the parties intended that if that occurred the opportunity would be directed to the Joint Venture Company and not be appropriated by the party that had exercised the right of veto.
125 The matter may be tested this way. If, at their meeting in December 2010, Mr Murray had asked Mr Morrow whether, following six successfully produced series of the proposed consumer affairs show for the ABC, either one had vetoed further production but had then been approached by the ABC to produce a further series of the same or an equivalent or similar show, it would be open to that person to exploit that opportunity himself, what would Mr Morrow’s response have been? It is obvious that a reasonable person in Mr Morrow’s position would have responded: “of course not”.
126 As to whether the posited term is capable of clear expression, Ms Chrysanthou submitted that the expressions “opportunity”, “consumer affairs program”, “equivalent” and “similar” were ambiguous and that “the Court cannot imply to a contract an uncertain term”.
127 I see no uncertainty about these expressions. It may be that nice factual questions will arise as to whether they are established in this case. But the Court is well accustomed to dealing with such matters. It is, of course, for Mr Murray and Cordell Jigsaw to establish that the implied term has been engaged.
128 Finally, as to whether the posited term is contradictory of an express term of the Joint Venture Agreement, Ms Chrysanthou submitted that the term contradicted the express term of the Joint Venture Agreement “being the production of a singular show for the ABC ... by requiring concepts for any equivalent or similar consumer affairs program to also be brought to the joint venture”.
129 I see no inconsistency between it being the object of the joint venture that the joint venturers produce a “singular” show and for it to be a term of the Joint Venture Agreement that the joint venturers direct any opportunity to produce further series of that “singular” show, or any equivalent or similar consumer affairs program, to the joint venture.
130 Ms Chrysanthou also submitted that the posited implied term would be inconsistent with the express “all things by agreement” term because “this was not agreed”. The express term to which Ms Chrysanthou referred was that all decisions concerning the joint venture be made by agreement. Again, I see no inconsistency between that term and a term ensuring that further opportunities to produce the show for which the joint venture was established, or an equivalent or similar show, be directed to the joint venture.
131 For these reasons, I am satisfied that there was an implied term of the Joint Venture Agreement of the kind contended for by Mr Murray and Cordell Jigsaw.
The nature of Mr Morrow’s duties as director of the Joint Venture Company
132 In his Cross-Claim List Response, Mr Morrow admitted that ss 181, 182 and 191 of the Corporations Act 2001 (Cth) applied to him as a director of the Joint Venture Company.
133 Mr Morrow thus accepted that he must:
(a) exercise his powers and duties in good faith in the best interests of the Joint Venture Company and for a proper purpose (s 181);(b) not improperly use his position as a director of the Joint Venture Company to gain an advantage for himself or someone else or to cause detriment to the company (s 182); and
(c) give Mr Murray, as his co-director, notice of any material personal interest he had in any matter relating to the affairs of the Joint Venture Company (s 191).
134 In the Cross-Claim List Statement, Mr Murray and Cordell Jigsaw also alleged that Mr Morrow owed the Joint Venture Company a fiduciary duty under the general law:
(a) not to have an interest that conflicted or might possibly complete with his duty as a director to the Joint Venture Company in any matter falling within the scope of his office, except with the Joint Venture Company’s fully informed consent; and(b) not to misuse his position as a director for personal advantage or for the advantage of a third party, including Giant Dwarf, except with the Joint Venture Company’s fully informed consent.
135 In the Cross-Claim List Response, Mr Morrow and Giant Dwarf denied that the duty of each director of the Joint Venture Company was as expressed in the previous paragraph and contended that each of Mr Murray and Mr Morrow were aware that the other:
(a) “was also the managing director of the television production company (Cordell Jigsaw and Giant Dwarf respectively) which conducted extensive business with the ABC, including the ABC television department responsible for The Checkout”; and(b) “had a material personal interest in matters related to the affairs of [the Joint Venture Company]”.
136 The latter contentions evidently related to a submission made by Ms Chrysanthou that each of Mr Morrow and Mr Murray were free to compete with the Joint Venture Company.
137 In this regard, Ms Chrysanthou pointed to the fact that Mr Murray and Cordell Jigsaw had pleaded that Mr Murray and Mr Morrow were appointed as directors of the Joint Venture Company “as a representative of” Cordell Jigsaw and Giant Dwarf respectively and submitted that “this is informed consent for each director to act in competition with the [Joint Venture Company]”.
138 In closing oral submissions, Ms Chrysanthou put the proposition this way:
“The directors were appointed as representatives of the shareholders. That was their role, to represent each shareholder. That is informed consent on the part of the parties and each director stands there in the interests of the shareholder, not in the overarching interest of the company”.
139 We had this exchange:
“HIS HONOUR: But not to act in conflict of the interests of the joint venture company.CHRYSANTHOU: That’s correct. Well, no. Yes, to the extent that its informed; inform nature of that conflict being that they are they’re representing the shareholders who, by their nature, by the nature of their businesses, are in competition with a joint venture company.”
140 I do not accept that submission. While Mr Morrow and Mr Murray were no doubt appointed directors as representatives of Giant Dwarf and Cordell Jigsaw, they owed independent duties as directors to the Joint Venture Company. Although both Mr Morrow and Mr Murray knew that, outside of the joint venture, the other was engaging in television production, it cannot follow that as directors of the Joint Venture Company they could act otherwise than in that company’s interests.
Mr Murray’s and Cordell Jigsaw’s case concerning Mr Morrow’s breaches of duty
141 As developed in final submissions, Mr Murray’s and Cordell Jigsaw’s case was that, as a director of the Joint Venture Company, Mr Morrow owed the Joint Venture Company:
(a) the statutory duties to act in good faith and in the best interests of the Joint Venture Company, and for a proper purpose and “not to direct commercial opportunities from the [Joint Venture] Company” to his own company, Giant Dwarf; and(b) a duty to disclose to Mr Murray “the opportunity”, that I discuss in detail below, to produce a seventh series of The Checkout.
142 Mr Murray and Cordell Jigsaw also contended that, in the circumstances of this case, Mr Murray, as a director of the Joint Venture Company, owed a fiduciary duty to Cordell Jigsaw as a 50% shareholder in the Joint Venture Company, to:
(a) loyally promote the interests of all shareholders of the Joint Venture Company during his negotiations with the ABC for any further series of The Checkout;(b) not to cheat Cordell Jigsaw by non-disclosure of his negotiations with the ABC about the reintroduction of The Checkout;
(c) tell Mr Murray and Cordell Jigsaw that the ABC wished to commission The Checkout or a consumer affairs show the proposed format of which was similar or equivalent to The Checkout before obtaining Cordell Jigsaw’s agreement to sell its shares in the Joint Venture Company to Giant Dwarf; and
(d) not to place himself into a position of conflict between his own interests as a majority shareholder of Giant Dwarf on the one hand, and his duties to the Joint Venture Company on the other hand, without the fully informed consent of the Joint Venture Company, Mr Murray and Cordell Jigsaw.[13]
143 I will set out below how Mr Katekar developed these arguments.
144 However, I will now turn to a narration of the events that led to the Share Sale Agreement. In the course of that narration, I will consider the question of whether a “commercial opportunity” of the kind for which Mr Murray and Cordell Jigsaw contended arose during Mr Morrow’s negotiations with the ABC.
Common ground that Mr Morrow and Mr Murray were free to develop and produce consumer affairs shows other than The Checkout or shows equivalent or similar to The Checkout?
145 Before doing so, I observe that it is common ground that the Joint Venture Company was created with the single purpose of producing the consumer affairs show that ultimately became The Checkout.
146 Mr Morrow and Mr Murray did not expressly agree that, apart from The Checkout, they would be free to develop and produce consumer affairs shows other than The Checkout or shows similar to or equivalent to The Checkout.
147 However, during 2018 and 2019 both Mr Morrow and Mr Murray acted on this basis.
148 I will set out in detail below the course of Mr Morrow’s discussions with the ABC; initially concerning his protestations against the ABC’s decision not to commission a further series of The Checkout in the 2018/2019 year and his subsequent negotiations for a “new” consumer affairs show that ultimately became The Checkout.
149 During the 2018/2019 year, Mr Murray also contemplated the possibility that Cordell Jigsaw would pitch to the ABC a consumer affairs show to be tentatively described as “Fraud Squad”.
150 Ultimately, nothing came of this.
151 Mr Murray denied that this proposed show was a “consumer affairs” show, although it obviously was.
152 However, I do not find Cordell Jigsaw’s flirtation with this possibility to have significance in this case.
153 I also add, at this stage, that in the middle of 2019 Cordell Jigsaw was pitching to the ABC a show called “Reputation Rehab”. This was not a consumer affairs show and, again, despite the emphasis placed on it during counsels’ submissions, I do not find Mr Murray’s nor Cordell Jigsaw’s activities in relation to this show to have any relevance to the issues that I must decide.
154 Accordingly, I make no further reference to these matters.
The decision of the ABC to place The Checkout on “hiatus” and Mr Morrow’s reaction
155 As I have mentioned, production of series six of The Checkout finished in April 2018.
156 At that point, if the ABC was going to commission series seven, it seems likely that the series would have been produced by the Joint Venture Company in the same way as before.
157 It was not to be.
158 On 4 July 2018, Ms Josie Mason-Campbell, then Head of Non-Scripted Production at the ABC, informed Mr Morrow by telephone that the ABC was unlikely to be able to fund The Checkout in the 2018/2019 financial year.
159 On the same day, Ms Mason-Campbell and her colleague, Mr Richard Huddleston, then Supervising Executive Producer, Entertainment and Development at the ABC, told Mr Murray that the ABC was not going to produce further series of The Checkout.
160 On 4 July 2018, Mr Michael Carrington, then Acting Head of Content Distribution at the ABC wrote to Mr David Anderson, then ABC Director of Entertainment & Specialist, and shortly thereafter the Acting Managing Director of the ABC,[14] and to Ms Mason-Campbell:
“We’re keen to have The Checkout back on our screens one day. If that is a possibility, it is normal practice for networks to put shows on ‘hiatus’ while new shows are developed in the schedule.”
161 At that time, the ABC was preparing a draft statement for the media about its decision.
162 On the same day, Mr Morrow sent a text message to Mr Anderson, stating:
“Hi David – I’m just calling in the hope of stopping The Checkout being axed. Would be good to speak with you if you’re willing.”
163 There is no evidence Mr Anderson responded to this message.
164 A short time later, Mr Morrow sent a message to Mr Murray:
“Hi Nick - tried to call but just letting you know that it looks like Josie’s decided to axe The Checkout. Said she’d ring me at 5 tomorrow to confirm but the strong vibe is that it’s a done lack-of-deal. I doubt there’s much that can be done about, and could well understand if you weren’t that inclined either!, but obviously I wanted to let you know and I guess there’ll be some JV formalities to sort out in not too long. It’s had a very good run too. Hope all’s well with you and [Cordell Jigsaw].”
165 Mr Murray did not respond.
166 At around 9.30 am on 6 July 2018, Ms Mason-Campbell telephoned Mr Morrow and told him that the ABC would not fund The Checkout in the 2018/2019 financial year. Mr Morrow said that he tried to persuade Ms Mason-Campbell that there were ways to make the show “which would cost the ABC less” but that Ms Mason-Campbell “refused, repeatedly, to countenance any of these proposals.” Mr Morrow said he concluded from this that “Josie had no intention of bringing The Checkout back to ABC Television”.
167 A short time later, and before the ABC had made an announcement about putting The Checkout on hiatus, Mr Morrow published a Tweet as follows:
“The ABC has decided not to proceed with the next series of the consumer affairs show The Checkout, which was about to go into production.Since 2013 The Checkout has aimed to give Australians valuable consumer information in an entertaining way. We’ve tried to be a show that does the core business of a public broadcaster.
The line ‘Don’t get ripped off. Watch The Checkout’ summed up the show’s purpose. A public broadcaster that’s independent of commercial influence is the natural home, probably the only home, for a show like The Checkout.
We’re disappointed the ABC’s funding priorities do not include The Checkout.
The ABCs Head of Non-Scripted Production explained the decision not to fund another series of The Checkout by citing budget cuts and the relatively high cost of making the show.
It’s true The Checkout’s combination of thorough research and creative ways to present consumer information means it’s not as low costs as some other ABC programs. But the cost of making The Checkout has not increased for two years, and the next series would have costs the same or less. The Checkout was also slated for production in the current financial year, before the federal government’s freeze on ABC funding in July 2019.
The Checkout was very much a program shaped by information that ABC viewers of all ages sent in. The Checkout’s inbox was always overflowing with rip-offs, corporate double-speak and advertising fails from the sinister to the silly. The rip offs will continue, but unfortunately it seems The Checkout will not.
We’d like to thank everyone who’s tuned in to The Checkout over the years for their input and their support.” (Emphasis in original.)
168 The reference in the fifth paragraph of this Tweet to the “ABC’s Head of Non-Scripted Production” was to Ms Mason-Campbell.
169 Mr Morrow had given the ABC no notice of his intention to publish the Tweet.
170 During the afternoon of 6 July 2018, Mr Murray telephoned Mr Morrow to remonstrate Mr Morrow’s indirect reference to Ms Mason-Campbell in his Tweet. Mr Murray said:
“It’s not [Cordell Jigsaw’s] practice to make announcements like that without the network knowing, and especially not to single out an ABC executive.”
171 Mr Morrow said that, after that call, he said to a friend, Mr Sholto McPherson:
“Of all the things to be annoyed about, it’s striking that Nick is more upset about me mentioning the ABC’s Head of Non-Scripted Production in the statement. Josie Mason-Campbell is married to the CEO of Nick’s company. He seems to think we should just accept the decision to axe The Checkout and move on.”
172 Mr Morrow’s reference to the “CEO of Nick’s company” was a reference to Mr Matthew Campbell who was then the Chief Executive Officer of Cordell Jigsaw. Mr Campbell was then married to Ms Mason-Campbell.
173 Mr Morrow and Mr Murray did not speak to each other again until the Duck Inn Meeting on 19 February 2019.
174 The ABC made a public announcement about its decision later on 6 July 2018 as follows:
“The ABC has decided not to commission a seventh series of The Checkout for 2018-19 at this time.The programming slate regularly changes for any number of reasons, including the need to strike balance between new and returning programs for audiences. Putting The Checkout on hiatus does not preclude the program from returning in the future.
The ABC is proud of its long association with The Checkout and production company Giant Dwarf, with which it has worked on other programs, such as The Letdown and Growing Up Gracefully.”
175 As at 6 July 2018, Mr Murray believed, based on what he had heard from sources within the ABC, that The Checkout was not going to be made again.
176 The following day, 7 July 2018, Mr Morrow sent a further text message to Mr Anderson:
“Hi David - I’m sorry to contact you while you’re on leave - and to be honest I don’t know if you’re even in the country or mobile range at the moment - but I am resolved to [do] whatever I can to save The Checkout. So like I said [in the message of 4 July 2018], it would be good to speak with you if you’re willing.”
177 On 9 July 2018, Mr Morrow published a further Tweet:
“Thanks to everyone for your support re @ABCTV’s decision to put #thecheckout on axe-based ‘hiatus’. Hopefully the message will be heard.”
178 On 24 July 2018, Mr Morrow published a further Tweet:
“Good to see @craigreucassel is back with more #WarOnWasteAU ... The ABC’s decision to put The Checkout on axe-based hiatus means the end of dedicated consumer affairs TV shows in Aust. Seems like a waste too.”
179 In his affidavit, Mr Murray said that he read these Tweets at the time. In cross-examination, he agreed that in fact he did not see them until after these proceeding were commenced. Ms Chrysanthou criticised Mr Murray about this but, as I have said, I do not see credit as a significant factor in this case.
180 On 24 July 2018, Mr Morrow wrote to Ms Michelle Guthrie, then the Managing Director of the ABC, and Mr Justin Milne, then the Chairman of the ABC, arguing for the ABC to reconsider its decision.
181 Mr Morrow’s letter included:
“It is clear many Australians believe that ending production of The Checkout in this context is the wrong decision for the ABC to make and inconsistent with the ABC Charter. Those concerns are well founded....
The makers of The Checkout have an obvious self-interest in continuing to make the program. But we understand those interests are irrelevant. The real question is whether ending production of The Checkout is in the best interests of the ABC.
Ultimately of course, that is a question for the managing Director and the Board, which is responsible for complying with the ABC Act and the ABC Charter. That’s why I’m now seeking to raise the question directly with you, and to provide the more detailed information below.
Although I am not an employee of the ABC, as an independent producer who’s been involved in making more than 25 series of television for the ABC over 17 years, I would appreciate the opportunity to discuss these issues with you in person, and hope to hear from you.”
182 Mr Morrow attached to that letter a document headed “Reactions to the ABC’S Decision Re The Checkout”.
183 In that annexure it was stated, under Mr Morrow’s hand, that:
“The ABC’s...statement ‘Putting The Checkout on hiatus does not preclude the program from returning in the future’ is even more hollow. Even a cursory review of the immediate public response indicates that statements like this are harmful to the ABC.”
184 Mr Morrow continued:
“It is the ABC Board’s duty to ensure that the Corporation does not fail to comply with its Charter obligations. No single program is essential for the ABC to comply with its Charter. But a single programming decision can result in a breach of the ABC Charter.I believe that the ABC’s choice to stop making The Checkout is such a decision.
I am certain that if the ABC implements this decision, The Checkout will never return to production. There will be no return from this ‘hiatus’.
This is regrettable. But it presents an opportunity for the ABC’s most senior leadership to take action which will:
● be well received in the community; and
● serve as indisputable evidence that the ABC’s leadership is committed to upholding and defending the ABC Charter, and to preserving the benefits of public broadcasting for Australians.
The decision not to produce The Checkout in 2018-19 should not be endorsed. It should be reversed.I respectfully ask that you look further into the issues this letter raises, and would appreciate the opportunity to discuss them with you.” (Emphasis added.)
185 On 31 July 2018, Mr Morrow met with Ms Guthrie from the ABC.
186 In what evidently was a briefing note prepared for Ms Guthrie for the purpose of the meeting, it was stated, under the heading “Recommendation”:
“The ABC maintain its position to not commission a seventh series of The Checkout in 2018-19. The option remains for the program to return beyond 2018-19, contingent on the availability of funding and the future programming slate.”
187 Mr Morrow said that Ms Guthrie did not say anything to this effect at the meeting.
188 The following day, 1 August 2018, Mr Morrow sent an email to Ms Guthrie and Mr Anderson which concluded:
“It’s important for the ABC to understand that if The Checkout is not produced in 2018/19, it will never return to production at the ABC.The Checkout has been produced by a very talented team of freelance writer/presenters (whose skills and market value have significantly increased under the tutelage of Giant Dwarf). Inevitably they will go on to to take other jobs with different schedules, as will Giant Dwarf. This is a necessity for our livelihood, and it shows why the concept of a ‘hiatus’ is entirely unrealistic. I made this point to [Ms Mason-Campbell] when she told me about the ABC’s decision (and it’s been a theme of my chats with [Mr Anderson] about The Checkout for several years).
So thanks again for your time yesterday. I’d like to think that there are more constructive discussions to be had, and will look forward to hearing if that’s the case.”
189 On 14 August 2018, Mr Anderson participated in a radio interview with Mr Richard Glover during which they had the following exchange about The Checkout:
“Mr Anderson: When it comes to The Checkout, there are a couple of good things about The Checkout that are absolutely fantastic. Consumer advocacy and consumer affairs is something that is heartland ABC that we do quite well and we do it on other programs as well. And The Checkout has done well for us. There are always tough decisions when you look at the schedule about what can play out when and our response was that for the next 12 months it was looking difficult to fit The Checkout in, given the mix of returning series and other new series that are happening.Mr Glover: Does that mean no forever? It sounds like it doesn’t.
Mr Anderson: It’s not a no forever, no.
Mr Glover: Alright. The Checkout might return.”
190 This was the first public statement that the ABC had made about The Checkout since its announcement on 6 July 2018.
191 Throughout August 2018, Mr Morrow continued to contact Mr Anderson seeking to convince the ABC to reverse its decision concerning The Checkout.
192 Eventually, Mr Morrow was able to arrange a meeting with Mr Anderson on 17 August 2018. Mr Morrow said that during the meeting Mr Anderson said words to the effect of:
“I’m sorry about The Checkout. Things are very uncertain here at the moment. I don’t know what’s going to happen to be honest. But I’d like to have a consumer show in the second half of next year.”
193 In an email Mr Morrow later sent Mr Anderson on 8 October 2018, he said that, at the 17 August 2018 meeting:
“... we talked about moving quickly to have discussions between you and me about another TV project which could potentially start receiving funding late in the 2018/19 financial year”. (Emphasis added.)
194 This appears to be the first occasion on which Mr Morrow communicated with the ABC about a “another TV project” as opposed to reinstatement of series seven of The Checkout.
195 On 24 August 2018, Mr Morrow followed the matter up with Mr Anderson in a text message:
“Just wondering if you might have 5 mins this arvo evening when I can call you to touch base re ... parameters for future consumer affairs project”. (Emphasis added.)
196 In the meantime, Mr Morrow’s continuing disenchantment with the ABC’s decision to “hiatus” The Checkout was reflected in words attributed to him in the 30 August 2018 edition of the magazine Justinian.
197 Under the heading “Why did Aunty can The Checkout?” Mr Morrow is quoted as saying:
“They’d say ‘budget cuts’. I’d say, ‘because of misguided and inept ABC management, which is increasingly populated by executives with a track record of commitment to public broadcasting values which amount to little more than the title on their most recent business card and empty platitudes deployed as a smokescreen for poor judgment.”
198 This material was included in the Court Book without objection, from which I infer that Mr Morrow agreed it to be accurate. It shows, as did Mr Morrow’s July 2018 Tweets, that Mr Morrow was not shy about publicly criticising the ABC; despite it being his long standing and major client.
Further discussions for a possible new “consumer show”
199 On 4, 7 and 17 September 2018, with characteristic persistence, Mr Morrow followed up with Mr Anderson his enquiry of 24 August 2018 to “touch base” about “another consumer project”.
200 Ultimately, on 19 September 2018 Mr Anderson telephoned Mr Morrow and they had this conversation:
“[Mr Anderson]: I would still like to have a consumer show on the ABC in the second half of next year. And I wanted to let you know that Josie [Mason-Campbell] will not be involved in this because of the conflict of interest issues.[15][Mr Morrow]: That seems like the only appropriate decision to me, so I’m glad that’s what the ABC’s decided. Thanks for letting me know. Do you have budget parameters for this consumer show?
[Mr Anderson]: Not yet.
[Mr Morrow]: And when you say ‘a consumer show’ do you actually mean The Checkout?
[Mr Anderson]: No, I mean a consumer show.
[Mr Morrow]: Well, as you know, I think the ABC should want The Checkout. But given the ABC’s budget concerns, the only way another series of The Checkout would be possible at this point is if Giant Dwarf and [Cordell Jigsaw] can come to some sort of new agreement.
[Mr Anderson]: That’s really a matter for you and Nick. My perspective is, I want a consumer show on the ABC in the second half of 2019. I think you’re the best producer in the country to do that.
[Mr Morrow]: Thank you David. That’s nice to hear. And without wanting to sound too arrogant, I agree. I think we should proceed on the basis that we’re talking about a new consumer show. If Nick and I can work something out which means it’s possible to make The Checkout again, that’s a bonus.” (Emphasis added.)
201 Although Mr Morrow suggested that he and Mr Anderson proceed on the basis that they were talking about a “new consumer show”, his language in this conversation bespeaks a continued desire, one way or another, to be involved in the production of a further series of The Checkout.
202 Indeed, as I set out below, eight months later, on 4 June 2019, and almost two months after Giant Dwarf and Cordell Jigsaw had executed the Share Sale Agreement, Mr Morrow wrote to Mr Anderson:
“As you know, we have been talking since October last year about the prospect of bringing The Checkout back to ABC TV.”
203 In cross-examination Mr Morrow said of this:
“I had told Mr Anderson that the prospect of bringing The Checkout back to the ABC would only occur if there was an agreement, a new agreement reached between [Cordell Jigsaw] and Giant Dwarf”.
204 Although Mr Morrow did say this to Mr Anderson on this occasion, the manner in which Mr Morrow expressed himself in the June 2019 email suggests to me that, as far back as October 2018, he had in mind the possibility of producing a further series of The Checkout; without any involvement of Mr Murray.
205 Several days later, on 25 September 2018, Mr Anderson, who had by then been appointed Acting Managing Director of the ABC, was interviewed by Mr Michael Rowland on ABC News Breakfast. They had this exchange:
“Mr Rowland: Quite a few viewers wanting The Checkout to be back on our screens. Any hope there?Mr Anderson: Look, I think consumer affairs and advocacy is something the ABC has done well in the past. Whether it’s The Checkout or another program in the future, I think it’s something we’ll pursue”.
206 This was the third public statement following the ABC’s decision to “hiatus” The Checkout. Notably, on this occasion, it was made by the newly appointed Acting Managing Director. It showed that the ABC’s public position was that it would likely produce a further consumer affairs show; and that it may well be a further series of The Checkout.
207 As only the Joint Venture Company was entitled to produce The Checkout, this must have made clear to Mr Morrow that an opportunity may well exist for the Joint Venture Company to produce such a further series.
208 On 8 October 2018, Mr Morrow again wrote to Mr Anderson. His email opened with the reference to their 17 August 2018 meeting that I have set out above,[16] and continued:
“... I’m starting to think that the more likely conclusion is that there’s no genuine prospect of Giant Dwarf making either the sort of project we discussed for the ABC ... or any indeed new project in 2018/19. Unfortunately, that second element stems from the fact that Nikita [Agzarian][17] and I have had a series of deeply concerning communications with Head of Non-Scripted,[18] which in my view raise serious questions about ABC administration at the moment.I would very much like to be mistaken, but the information available to me at the moment seems to be pointing in the other direction.
We’ve been able to work through many issues over the years, and the results have been a collection of TV shows that both Giant Dwarf and the ABC can and should be proud of. I’m hoping that can continue, and that I’ll hear from you soon to that end.”
The Post, Digital and Visual Effects Offset determination
209 On 19 December 2018, the Australian Taxation Office issued a certificate confirming the Joint Venture Company’s entitlement to a Post, Digital and Visual Effects Offset under ss 376-45 Div 376 of the Income Tax Assessment Act 1997 (Cth) of $963,018 for series five of The Checkout and $995,448 for series six. The Joint Venture Company was entitled to a rebate of 30% of this amount, some $585,000 payable on 25 January 2019.
210 The parties referred to this as the “PDV Offset”. It assumes significance in relation to Mr Morrow’s discussions with Mr Murray and Cordell Jigsaw’s Chief Financial Officer, Mr Simon Fraser, in February 2019 concerning the sale of Cordell Jigsaw’s shares in the Joint Venture Company. I return to this below.
Mr Morrow’s discussions with the ABC continue
211 Also on 19 December 2018, Mr Morrow spoke to Mr Anderson. Following that conversation, he sent an email to Mr Carrington:
“Hi Michael – I was speaking with David this morning and he suggested I call you to discuss a possible project in 2019. I think I left a message on your assistant’s voicemail a short time ago, but since I’m not certain it got through to the right place I thought I’d drop you a line also.”
212 On 20 December 2018, Mr Morrow spoke to Mr Carrington. Mr Morrow’s note was that he said to Mr Carrington:
“[Mr Anderson] suggested I get in touch re possible consumer show in 2019.”
213 Mr Morrow’s note was that Mr Carrington replied that he was “waiting on a brief from Ent”.[19]
214 In his documents of 19 and 20 December 2018, Mr Morrow referred to a “possible project” and a “possible consumer show”.
215 But I think it likely that Mr Morrow spoke to Mr Carrington about alternative possibilities: a new consumer affairs show; or a recommissioning of The Checkout.
216 Thus, on the same day Mr Carrington sent an email to Ms Mason-Campbell and others at the ABC:
“I’ve just come off a call from Julian Morrow. Given we put The Checkout in hiatus earlier this year Julian and I agreed that we should pick up on the discussion to recommission or potentially develop a new consumer show asap.At the same time, I understand Richard [Huddleston] you are developing a brief for a new consumer format. It would seem we should weigh up The Checkout with that. Perhaps we can gather when everyone is back from holiday. Vic[toria] [Cook] let’s try to do that with the people on this email, w/c 14 January.” (Emphasis added.)
217 Mr Carrington’s reference in this email to “recommission” was obviously a reference to the possibility of recommissioning The Checkout.
218 In cross-examination Mr Morrow said that, during that conversation, Mr Carrington “didn’t mention The Checkout, and neither did I, I don’t think”.
219 I think it unlikely that Mr Morrow’s recollection about this is correct. On 19 September 2018 Mr Morrow had told Mr Anderson that “I think the ABC should want The Checkout”. What Mr Carrington recorded in his email to Ms Mason-Campbell is consistent with that.
220 Further, although this document was admitted only as evidence of what was contained in the ABC’s records, and not itself as evidence of the truth of its contents, Mr Morrow made reference to it in his affidavit dealing with his conversation with Mr Carrington. He did not then suggest that it did not accurately reflect the terms of their conversation.
221 The email was evidently sent by Mr Carrington immediately after his telephone conversation with Mr Morrow. There was no reason why Mr Carrington would not give his colleagues an accurate summary of the conversation.
222 In the circumstances, the inference I draw is that this email accurately records what was agreed.
223 Accordingly, I find that on 20 December 2018 Mr Morrow and Mr Carrington agreed that discussions would resume about the possibility of recommissioning The Checkout or, alternatively, developing a new consumer show.
224 Mr Morrow followed Mr Carrington up with an email on 24 January 2019:
“Just touching base to see if there’s a timeframe for picking up the conversation we began in December?”
225 The following day, 25 January 2019 the Joint Venture Company received the PDV Offset of $585,692.09.
226 Mr Morrow arranged to meet representatives from the ABC in early February 2019.
227 On 1 February 2019 he wrote to Mr Carrington:
“I thought it might be good to touch base by email ahead of that to clarify what we’d like to achieve when we meet up. The discussions I’ve had with David [Anderson] so far have been about a new half hour consumer affairs show for ABC1 for broadcast in 2019, but with some funding potentially available before the new financial year. Obviously we know from making The Checkout what that can involve, but what’s possible for a new project will very much depend on the ABC’s budget and delivery parameters. While I certainly have ideas on new approaches to the subject matter, they’re not in the form of a specific program pitch at this stage because we really need a sense of the key parameters in order to shape something appropriate.” (Emphasis added.)
228 This email shows that although on 20 December 2018 Mr Morrow and Mr Carrington had discussed a “new consumer show” as an alternative to a “recommission” of The Checkout, Mr Morrow was expressing himself here in terms of a “new half hour consumer affairs show”.
Mr Morrow consults Giant Dwarf’s accountants
229 On 6 February 2019 Mr Morrow wrote to Ms Jacqui Crouch, the accountant acting for the Joint Venture Company and for Giant Dwarf.
230 Mr Morrow’s email was headed “Shareholder arrangements & PDV Offset rebate distributions”. In his email, Mr Morrow suggested that the PDV Offset should be distributed between Giant Dwarf and Cordell Jigsaw on a 60/40 basis – $352,523.88 to Giant Dwarf and $235,015.92 to Cordell Jigsaw.
231 Mr Morrow also said he had reviewed the draft Shareholder Agreements exchanged with Mr Murray in 2014 and 2016 and that:
“... it’s fair to say that – although unexecuted – they reflect the substance of the commercial terms between [Cordell Jigsaw] and [Giant Dwarf]”.
The 13 February 2019 meeting at the ABC
232 On 13 February 2019, Mr Morrow, together with Ms Rebecca Annetts, an employee of Giant Dwarf and the producer of series six of The Checkout, met with Mr Huddleston and Mr Carrington from the ABC.
233 Mr Morrow’s note of the meeting is a little cryptic and includes these entries:
“15 minute show like Media Watch4 x 7 minutes shorts on iview - culminated into a weekly half hour ... week on a Friday
Monthly event?
One story a week?
MC - separating money and brand license”.
234 Later on 13 February 2019 Mr Huddleston sent Mr Carrington an email which stated:
“Here you go Michael, notes from today’s meeting with Giant Dwarf.”
235 Mr Carrington also sent a copy of these notes to Mr Anderson stating that he had had a follow up meeting with Mr Murray “regarding a consumer affairs show” and attached “the notes for your reference”.
236 There was debate before me as to whether the document that Mr Carrington attached was a briefing note prepared before the meeting with Mr Morrow and Ms Annetts or was a record of what was said at the meeting.
237 The note states under the heading “The Brief”:
“To consider creative ways of finding an opportunity for a new ABC, consumer affairs series that would be produced by Giant Dwarf.”
238 Under the heading “The Potential Models” the note referred to an hour long show launched once a month, a once a week “digital offer” and a “5-7 minute daily show”. These references appear to be consistent with Mr Morrow’s note of the meeting.
239 The note continued:
“Would be a mix of well known The Checkout personnel (both on and off screen) and new talent (both off and on screen). The new on-screen talent could also be already established names ...”.
240 Like all of the documents produced by the ABC on subpoena, this document was admitted as evidence only of the fact that it was included in the ABC’s records. Mr Morrow said that he did not believe that he had said anything to that effect at the meeting. However, the language in the passage I have just set out suggests that this was a matter discussed at the meeting.
241 Under the heading “The Questions”, the note stated:
“Can Giant Dwarf get out of their The Checkout partnership with [Cordell Jigsaw] as this is a $250K line in the budget?Can Giant Dwarf deliver a budget that would be cheaper than The Checkout ...”.
242 This part of the note reads as if it is out setting questions that the ABC was internally posing for its consideration. Mr Morrow said that these matters were not discussed at the meeting.
243 Under the heading “Time Line Restrictions”, the note recorded:
“Giant Dwarf stated that they would be no longer interested in the opportunity if there was no commissioning/path to market in 2019.”
244 Mr Morrow said that he did not say this although it is hard to see why Mr Huddleston would record this in the note had it not been said.
245 On the topic of this meeting, Ms Annetts said in her affidavit:
“Although I do not recall the specifics of the 13 February 2019 Meeting, I generally recall that:a) there was a preliminary discussion to gauge whether Giant Dwarf and the ABC could work together on a potential new consumer affairs program;
b) we discussed the potential budget for a potential new consumer affairs program, although the ABC were very vague on what budget they had available and did not present any budget figures on this occasion;
c) we discussed that Giant Dwarf should introduce its new team members to the ABC (although this may have been discussed in a subsequent meeting with the ABC);
d) Carrington and Huddleston indicated that the ABC wanted new cast members involved in the potential new consumer affairs program; and
e) to the extent a new consumer affairs program was discussed that television program was not The Checkout.”
246 In cross-examination, Ms Annetts said that her recollection did not extend beyond what she had said in her affidavit. In particular, she said that she did not recall there being any reference at this meeting to The Checkout.
247 The following day, 14 February 2019, Mr Peter Munro, a Communications Lead and Entertainment Specialist at the ABC, sent an email to Ms Emma McDonald from the ABC in which he stated:
“...Here’s where we are at:● Michael Carrington and Richard Huddleston ... met with Julian Morrow yesterday about the prospect of doing a consumer affairs show in the future. Please see Richard’s attached notes of the meeting. The genesis of this meeting was a meeting between [Mr Anderson] and Julian last year, after the public outcry over The Checkout. I believe [Mr Anderson] told Julian something along the lines that we were still interested in the consumer affairs space but not in 2018-19 and not with a budget as big as The Checkout. That has been our consistent message all along – it was Julian who claimed incorrectly that we had cancelled The Checkout.
● Weirdly, we have somehow found ourselves having to come up with ideas of what that future consumer affairs show might look like, rather than ask Julian to pitch ideas to us. I don’t understand why the roles have been reversed here. At yesterday’s meeting, we discussed three possible shows (see attached document). Julian said that he still wants to do The Checkout but showed some interest in Option 3 (an iview show Mon-Thu, plus a “best of” show on ABC TV on Fri nights). However, he also said that if there was no prospect of getting a show on air this calendar year, he was not interested at all (which is likely a bluff on his part).
● There was brief discussion of the cost of producing Option 3. A related issue is that Giant Dwarf (Julian’s production company) shares the rights to The Checkout with production company [Cordell Jigsaw] – which usually gets a cut of $250,000 of any such production. Julian said he would try to get [Cordell Jigsaw] to waive this fee, to bring down the overall cost of Option 3.” (Emphasis added.)
248 Neither Mr Munro nor Ms McDonald was present at the 13 February 2019 meeting between Mr Morrow, Mr Carrington and Mr Huddleston. Evidently, Mr Munro’s statement about Mr Morrow stating that he “still wants to do The Checkout” was based on something that either Mr Carrington or Mr Huddleston said.
249 Mr Munro’s email to Ms McDonald is in evidence only as evidence of the fact of the communication and not as evidence of the truth of its contents.
250 However, in cross-examination Mr Morrow gave this evidence about this communication:
“Q. Then there’s a sentence which says, ‘Julian said that he still wants to do The Checkout.’ That’s what that sentence says in that email. Did you say that to Mr Carrington and Mr Huddleston in that meeting?A. I don’t believe so. I may at the end of the meeting - I mean, it was pretty well known that I [thought] the ABC should be broadcasting The Checkout. I’d made that point to the ABC several times, and publicly. ...
Q. Is the answer to my question that you may have said that at the meeting?
A. I may have.
Q. In saying that to his Honour, you say that because, firstly, your answer to me was that it was pretty well known that you had said to the ABC that you had wanted The Checkout to return. Is that right?
A. Yes.
Q. You had said that to the ABC several times; is that right?
A. I think you took me to the correspondence yesterday.
Q. Do you say to his Honour that even at that time, around 13 February 2019, that is something that you recall you were still saying to the ABC?
A. Yes. I believe my position on that has been quite consistent.” (Emphasis added.)
251 In these circumstances, I draw the inference that, consistently with the statements he had earlier made to the ABC, Mr Morrow did say to Mr Carrington and Mr Huddleston at the meeting of 13 February 2019 that he “still wanted to do The Checkout”.
252 I draw this inference, notwithstanding the limited basis upon which I admitted Mr Munro’s email to Ms McDonald and notwithstanding the fact that Mr Munro was not present at the meeting because:
(a) Mr Morrow accepted that he may have said the words attributed to him;(b) Mr Morrow agreed that he had several times told the ABC that it “should be broadcasting The Checkout”;
(c) the words attributed to him by Mr Munro are consistent with those statements; and
(d) there is no obvious reason why Mr Munro would, a day after the meeting, have misremembered or misquoted what had been told to him by Mr Carrington or Mr Huddleston about the meeting.
253 Mr Morrow said that, after the 13 February 2019 meeting, he was confused as to the ABC’s intentions. It does seem clear from the evidence that neither Mr Carrington nor Mr Huddleston had formed a view about what course the ABC would adopt concerning a future consumer affairs show.
254 However, for the reasons I have set out, I find that while discussing a possible new consumer affairs show with Mr Carrington and Mr Huddleston, Mr Morrow again raised the possibility of recommissioning The Checkout; consistently with his discussions with Mr Carrington on 20 December 2018.
Mr Morrow resumes contact with Mr Murray
255 Within minutes of his meeting with Mr Carrington and Mr Huddleston, Mr Morrow sent Mr Murray a message. This was Mr Morrow’s first communication with Mr Murray since the telephone call on 6 July 2018 in which Mr Murray chastised Mr Morrow for referring to Ms Mason-Campbell (albeit not by name) in his 6 July 2018 Tweet.
256 Mr Morrow had not told Mr Murray about any of the communications he had had with representatives of the ABC between 6 July 2018 and 13 February 2019.
257 Mr Morrow’s message read:
“Hi Nick – happy omg it’s Feb 2019 already ... as you’re probably aware the PDV Offset rebates have come thru to [the Joint Venture Company]. I was thinking it’d be good to have a beer (or just a meeting) to talk about that if you’re open to it? Hope you’re well. Cheers, Jules”.
258 Mr Morrow’s message was directed only to the issue of the PDV Offset. He made no mention of the discussion he had had with Mr Carrington and Mr Huddleston only minutes before sending his message, nor of any of his previous communications with the ABC.
259 Mr Morrow and Mr Murray agreed to meet at the Duck Inn, in Chippendale, on 19 February 2019.
The 19 February 2019 meeting at the Duck Inn
260 The Duck Inn Meeting between Mr Morrow and Mr Murray assumes importance in this case. Mr Morrow and Mr Murray have differing recollections of what was said.
261 Neither Mr Morrow nor Mr Murray made a note of the conversation, although, as I set out below, Mr Morrow wrote about it to Mr Fraser the following day.
262 Mr Morrow agreed that the meeting was “friendly” and that he did not wish to arouse Mr Murray’s “hostility”.
263 Mr Morrow’s account of the conversation is as follows:
“[Mr Morrow]: We’re in the nice position of having a tax rebate to distribute. It’s something I’d like to do quickly if we can because Giant Dwarf incurred significant losses making Series 1 of The Letdown and it was delivered late to Netflix. This means that the (quarterly) payments from Netflix all come in later than anticipated by the loan from Fulcrum.[20] I’d like to use our share of the rebate to pay off some of that loan, to reduce the excess interest we’re incurring.[Mr Murray]: Well, there are several ways [Cordell Jigsaw] and Giant Dwarf could access their share of the rebate money. If you need the money really quickly, I think we could just do a simple loan from [the Joint Venture Company] to Giant Dwarf. Simon [Fraser] is very good with this sort of stuff. I’ll get him to speak to you about that.
[Mr Morrow]: OK. It would probably be a good idea for me to speak to Simon with our accountants[21] so that the financial experts are talking to each other. I’ll try and follow along and pretend I understand as best I can! But I wanted to meet up in person because, now that the ABC has ‘hiatus-ed’ The Checkout I think it would be a good time to see if we can draw a line under the joint venture. I really don’t want to go into the history, but I think it’s fair to say things haven’t turned out the way either of us would have liked. I’ve always acknowledged that one reason things didn’t work out is that we (the core Chaser/Giant Dwarf team) got very used to making TV in a particular way, and we basically just kept doing that in making The Checkout.
[Mr Murray]: We’ve always just wanted to see good projects get made. And The Checkout’s been a great show over the years. You can be very proud.
[Mr Morrow]: Thanks. I am. It’s something we can all be proud of. And even though the joint venture didn’t turn out how any of us hoped, I think we’ve all tried to make it as polite and civil an unhappy marriage as we could. The thing is, while The Checkout was rolling over from year to year, Giant Dwarf was willing to keep rolling over the existing arrangements (ie the 60/40 deal we settled on after Series 1). But after the “hiatus-ing”, those arrangements are a terminal disincentive to Giant Dwarf ever doing The Checkout again. We just won’t do it. Things are uncertain at the ABC at the moment. If it turns out the ABC does want to have a consumer show – which I believe they should – it would make more sense for Giant Dwarf to just make a new consumer affairs project with the ABC. If necessary, that’s what we’ll do.” (Emphasis added.)
264 Mr Morrow recounted that he also said:
“[Mr Morrow]: But I also believe it would be real shame if The Checkout never came back. It’s got a great reputation as a program. It’s used in schools a lot and kids really like it, as well as adults. Of all the shows I’ve made, there are only two that have really cut through in the public mind: The Chaser’s War on Everything and The Checkout. Shows like that are rare. I don’t want to have a fight with you about the commercial terms. I really don’t. I’d just like to see if we can reach some sort of agreement that means we can go our separate ways in a way that we’re both happy with. The way things stand, Giant Dwarf just wouldn’t make The Checkout again. I think it would be better for everyone if we could find some way that The Checkout could be made again.[Mr Murray]: Well you should speak to Simon. I’ll have a talk to him too and we’ll see...”. (Emphasis added.)
265 Mr Murray’s account of the conversation was as follows:
“[Mr Morrow]: The good news is there is some money in the bank account that each of us have a claim to. Giant Dwarf would like to use our share to urgently pay down a debt that we have. I want to find a way to access that money in a tax effective way that isn’t just paying out the money as a fee or dividend.[Mr Murray]: Is the debt the Netflix debt for The Letdown?
[Mr Morrow]: Yes, it is.
[Mr Murray]: Ok I see. There are different ways of doing something like that. You should talk to Simon [Fraser] about it. We are happy for any distribution to us to be taxable fees or a dividend, but if you want your share some other way, Simon [Fraser] could suggest some ways to deal with that.
[Mr Morrow]: And we should also talk about the split. We’ve been doing all the work on getting the PDV [Offset] so we propose kicker for Giant Dwarf by splitting it 70/30.
[Mr Murray]: I don’t think so Julian. For a start, it was our finance department who worked out that the show could qualify for the PDV. Without that, there wouldn’t be any money to distribute. We wouldn’t charge for that. In fact, the shareholding dictates that the tax offset would normally be split 50/50. But I would suggest that we would be better for the cash to be split 60/40 in the same way as the margin on the show is split. That would be fair.
[Mr Morrow]: What about a kicker for my time and Giant Dwarf staff?
[Mr Murray]: No – we wouldn’t charge staff time. But you should get your external fees and costs with the balance to be split 60/40 your way. There are various ways this could be done - such as loans or dividends - it would be good to speak to Simon [Fraser] about it.
[Mr Morrow]: Actually, given what’s happened with The Checkout, it’s probably a good time to draw a line under [the Joint Venture Company] and also deal with the IP rights in the show in the unlikely event it returns and also so the library can be exploited because it has some value – it’s really popular in schools and the YouTube and iView audience has connected very strongly. I acknowledge that the experience working on this show has not been pleasant for you and things haven’t turned out the way either us would have liked. Dealing with the ABC is very hard too. In fact I’m finding making TV so unpleasant myself that I never want to work in TV again. I can get by doing corporate speaking gigs.
[Mr Murray]: What about The Letdown? (referring to another coproduction made by Giant Dwarf)
[Mr Morrow]: That was also a very unsatisfactory experience.” (Emphasis added.)
266 Although Mr Morrow and Mr Murray have differing recollections as to the above emphasised aspects of their meeting, both agree that:
(a) Mr Morrow said that he needed access to Giant Dwarf’s share of the PDV Offset to help repay a loan Giant Dwarf had taken out in relation to a show broadcast on Netflix;(b) Mr Morrow raised with Mr Murray the question of how the PDV Offset should be split; and
(c) Mr Murray invited Mr Morrow to speak to Mr Fraser about the best means by which to distribute the PDV Offset to Giant Dwarf and Cordell Jigsaw.
267 Mr Morrow and Mr Murray further agree that Mr Morrow suggested that it was time to “draw a line under” the joint venture and that Mr Morrow spoke of the “unlikely event” of The Checkout returning.[22]
268 It is also common ground that Mr Morrow did not mention to Mr Murray his communications since July 2018 with the ABC, including his meeting with Mr Carrington and Mr Huddleston on 13 February 2019.
269 In that regard, Mr Morrow gave this evidence in response to questions from me:
“Q. In your paragraph at page 41 ... you say that you said to Mr Murray, “If it turns out the ABC doesn’t want to have a consumer show, which I believe they should”--A. Yes.
Q. -- did you think you should have told, or did you mention to Mr Murray that you had a meeting within the last week of this--
A. I did not.
Q. -- occasion where there had been a discussion about the ABC--
A. I did not, your Honour.
Q. Why not?
A. Because that was a meeting about a new consumer affairs project by [Giant] Dwarf,[23] and my understanding of the arrangement with [Giant] Dwarf and Cordell Jigsaw was that either party was able to make a new project, it always had been.”
270 I did not find Mr Morrow’s response to my questions to be convincing. If, as Mr Morrow said, he thought that Giant Dwarf was entitled to make a consumer affairs project without reference to the Joint Venture Company or Cordell Jigsaw, consistently with his understanding of the terms of the Joint Venture Agreement, there was no reason for him not to mention to Mr Murray those communications. A more likely reason for Mr Morrow not to have said anything to Mr Murray about this was his understanding that the ABC remained open to the possibility of recommissioning The Checkout; a matter that I find Mr Morrow did not wish to raise with Mr Murray in the context of “drawing a line” under the joint venture.
Did Mr Morrow say words to the effect that he would not make The Checkout again with Mr Murray?
271 There is a dispute between Mr Morrow and Mr Murray as to whether Mr Morrow said anything to the effect that there was a “terminal disincentive” to Giant Dwarf being involved in any further series of The Checkout or anything to the effect that “the way things stand, Giant Dwarf just wouldn’t make The Checkout again”.
272 Mr Morrow relied upon these statements as evidence of him exercising the right of veto that, as I have set out above, was a term of the Joint Venture Agreement.
273 Mr Murray’s evidence was that Mr Morrow “did not use the words ‘terminal disincentive’ in that conversation” and that “the financial viability of the Joint Venture was never discussed”.
274 I am not persuaded that Mr Morrow spoke as emphatically as he asserted he did about this matter.
275 At a meeting which took place three days later, on 22 February 2019, between Mr Morrow, Mr Fraser, Ms Crouch and her assistant Ms Chen, Ms Chen made a contemporaneous note that the “current agreement does not incentivise” Mr Morrow to “continue doing more” series of The Checkout. Ms Chen’s note is likely to be an accurate summary of what was said on 22 February 2019. This suggests to me that it is likely Mr Morrow also said something to this effect to Mr Murray at the 19 February 2019 meeting at the Duck Inn. I return to Ms Chen’s note below.
Did Mr Morrow say words to the effect that he no longer wished to work in television?
276 There was also a dispute as to whether, as Mr Murray deposed, Mr Morrow said anything to the effect that he was finding “making TV so unpleasant myself that I never want to work in TV again” and that he could get by “doing corporate speaking gigs”.
277 In his affidavit evidence, Mr Morrow responded to this evidence by stating:
“In reply to paragraph 149 of the Murray Affidavit, as at 19 February 2019, the ABC had not told me ‘that the ABC wanted a consumer affairs show’ or that it ‘wanted The Checkout again’. I did not say that I ‘did not want to work in television any more’.”
278 Mr Morrow accepted in cross-examination that it was incorrect for him to have deposed that the ABC had not told him they “wanted a consumer affairs show”.
279 As the evidence I have set out above shows, and as Mr Morrow must have known when he made his affidavit, the ABC had made clear on a number of occasions prior to 19 February 2019 that it did wish to produce a further consumer affairs show. Further, the discussions on 19 and 20 December 2018 and 13 February 2019 show that the ABC was open to the possibility of there being a further series of The Checkout, although no decision had yet been made about that.
280 In that regard, Mr Morrow gave this evidence, again, in response to questions from me:
“Q. The ABC had as at 19 February through its managing director told you it wanted a consumer affairs show?A. Yes.
Q. I’ll say again that that seems to be the opposite of what you said at [the passage I have set out at [277] above].
A. Indeed, your Honour.
Q. I’m wondering what explanation you have for that.
A. The explanation is that - and I’m just trying to think - recall the dates, that - Mr Anderson became the acting managing director in - in September, and he had during - while he was that acting managing director he had said, ‘I would like a new consumer affairs show.’ That - that is definitely the case. Then I had tried to explore that with Mr Anderson more, and as a result of that, I ended up in a meeting with Mr Carrington and Mr Huddleston. After that meeting, it was unclear to me what the ABC wanted, but I accept that statement the ABC had not told me - had not told me the ABC wanted a consumer affairs show. Out of context, it’s not true, yeah, that’s correct. So my explanation is the confusion arising from the 6 February meeting - 7 February. I’m confused even as to the date of it.”
281 I did not find this to be a satisfactory explanation for the evidence that Mr Morrow gave in his affidavit. The evidence was simply untrue, as Mr Morrow must have known.
282 This provides the context for Mr Morrow’s denial of having said words to the effect that “I never want to work in TV again”. It seems unlikely that this truly represented Mr Morrow’s state of mind. He had spent the last seven months trying to persuade the ABC to make a consumer affairs television show that he would produce and, six days earlier, had the meeting with Mr Carrington and Mr Huddleston to discuss that possibility.
283 In cross-examination, Ms Chrysanthou suggested to Mr Murray that he had “made up” his evidence about Mr Morrow having said he never wanted to work again in television. Mr Murray appeared to me to be very confident that his recollection was correct.
284 Some months later, on 13 June 2019, Mr Murray wrote to Mr Morrow’s and Giant Dwarf’s then solicitor, Mr Michael Easton:
“Here’s the thing that makes a settlement conference problematic:We feel highly aggrieved. At the initial meeting Julian said that making TV was so unpleasant that he never wanted to work in TV again and would be happy to just get by doing corporate speaking. At the same time, and for several months prior, he was talking to the ABC about bringing the show back again. Clearly there is no explanation of the chasm between these two scenarios other than to mislead.”
285 I find this email to be a reasonably contemporaneous confirmation of the correctness of Mr Murray’s recollection about what Mr Morrow said about this.
286 Ms Chrysanthou pointed out that the email was sent almost four months after the 19 February 2019 meeting at the Duck Inn. However, I do not see this as a reason to doubt that it accurately reflects Mr Murray’s recollection of what Mr Morrow said on 19 February 2019.
287 Mr Morrow’s denial of having said words to this effect should, in my opinion, be seen in the context of his immediately preceding, and false, evidence that the ABC had not told him, as at 19 February 2019, that it wished to present a consumer affairs show. I find that Mr Morrow did say the words attributed to him by Mr Murray. They cannot have reflected his true state of mind. They must have been said to deflect Mr Murray’s attention from the prospect of Mr Morrow’s further involvement in any potential recommissioning of The Checkout.
Did Mr Morrow say words to the effect that it would make “more sense” for Giant Dwarf to make any new consumer affairs show the ABC proposed or that it would be better if “we” found a way to make The Checkout again?
288 In his affidavit dealing with the conversation at the Duck Inn Meeting, Mr Murray did not dispute that Mr Morrow said words to the effect that if it turned out that the ABC did wish to broadcast a consumer affairs show “it would make more sense” for Giant Dwarf to produce that show.
289 Nor did Mr Murray dispute that Mr Morrow had said that it “would be better for everyone if we could find some way that The Checkout could be made again”.
290 In those circumstances, I accept that Mr Morrow did say something to this effect.
291 It appears that the “way” in which Mr Morrow was suggesting that “we” (that is he and Mr Murray) could “find” for The Checkout to be made again was for Cordell Jigsaw to sell its shares in the Joint Venture Company to Giant Dwarf.
292 That idea was eventually reflected in the terms of the Share Sale Agreement making provision for the Joint Venture Company to pay Cordell Jigsaw a 2% fee on the Joint Venture Company’s cash budget “on subsequent series of The Checkout produced by” the Joint Venture Company, Giant Dwarf “or any affiliated company or subsidiary”.
293 I return to these matters below.
Events following the Duck Inn Meeting
294 The following day, 20 February 2019, Mr Morrow sent an email to Mr Simon Fraser, the Chief Financial Officer of Cordell Jigsaw, with a copy to Mr Murray:
“I had a good chat with Nick yesterday about [the Joint Venture Company] and how to distribute the PDV Offset rebates 60/40 as per the underlining agreement.I gather you’ve got some thoughts on how to approach this, so Nick suggested we arrange to talk through those ... when would be a good time for us to do that?
As I mentioned to Nick, [Giant Dwarf is] keen to pay off some loans still outstanding from another project, so the sooner we can implement this the better.
I also suggested to Nick that given the hiatus-ing of The Checkout by the ABC, this might be a good moment to draw a line under the joint venture one way or another ... which I only mention now in case it’s relevant to your thoughts re options for the PDV Offset rebate ...”.
295 The terms of the email were apt to direct Mr Fraser’s attention to the question of how the PDV Offset should be dealt with. The email was headed “PDV Rebate Distribution”. The first three paragraphs refer to Mr Morrow’s discussion with Mr Murray about distribution of the PDV Offset, how that should be achieved, and why Giant Dwarf wished the matter to be dealt with in the near future.
296 In the email, Mr Morrow does refer to his suggestion to Mr Murray the previous day that they draw “a line under the Joint Venture”, but only in the context of “options for the PDV Offset Rebate”.
297 I think it likely that Mr Morrow composed the email with the object of suggesting to Mr Fraser, and through him Mr Murray, that his motivation in “drawing a line under the Joint Venture” was concerned only with the PDV Offset. This email was the first in a series in which Mr Morrow in this way “managed the message”[24] he was conveying to Mr Murray.
298 On the same day, Mr Morrow sent Mr Murray a message:
“Hi Nick – really good to see you the other day. Jacqui [Crouch] and Simon [Fraser] spoke this morning and it seems like they’re on the same page in terms of paying out the PDV Offset income, which is good. They also broached the broader question of the future of [the Joint Venture Company] and I believe Simon [Fraser’s] going to talk to you about that. Just wondering if it might be helpful for me to send you something outlining a possible approach? Happy to approach this however you think’s best.”
299 The following day, 21 February 2019, Mr Fraser telephoned Ms Crouch. They discussed possible ways of distributing the PDV Offset. The possibilities discussed included:
(a) the payment by the Joint Venture Company to Giant Dwarf and Cordell Jigsaw of a non-franked dividend;(b) a loan from the Joint Venture Company to Giant Dwarf and Cordell Jigsaw; and
(c) the payment of a fee from the Joint Venture Company to Giant Dwarf and Cordell Jigsaw.
300 Mr Fraser said:
“We also discussed these options under a scenario where the ownership of the Joint Venture Company ... changed to Giant Dwarf and how that might affect the different options for each of Giant Dwarf and Cordell Jigsaw.”
301 On 21 February 2019, Mr Fraser sent an email to Mr Murray concerning his telephone conversation with Ms Crouch:
“I have been talking with [the Joint Venture Company’s] accountants (Jackie Crouch fromGenerate)
There are a couple of ways to distribute the PDV that [the Joint Venture Company] earned on The checkout ($587,539) to CJP and GD
Non Franked Dividend
Loan
Fee
We are agreed that the better way is Fee, 40 / 60 in the normal course.
However, what happens to the JV Company ..., and this is impacted
by what our position on future series of The Checkout would be.
If we have no position in future series, then we are probably ok to sell our share
in [the Joint Venture Company] and contract to maintain our 40% entitlement to royalties. Potentially there is a format fee paid to us on ongoing series that we are not involved in the production of, say 2% (40% of a standard 5% Format fee.) This would be easier then novating the IP, and both parties keeping shares in a JV business. And do we want the name of the company to change as part of any possible sale by us?
Giant Dwarf would probably prefer to receive a loan from [the Joint Venture Company] for their part of the PDV, as they will be using the funds to pay down debt but works best when they are a 100% shareholder of the JV.
For us – it will be income whichever way it comes in and there is no real advantage of having a loan, The loan makes sense to Giant Dwarf if they own the JV fully and it gives them some flexibility (accounting / tax wise).
So, I am due to meet with [Mr Morrow] and his accountants – tomorrow afternoon at 2pm, so it would be good to understand our position on future possible series of the Checkout.
Can I discuss this with you Nick”. (Emphasis added.)
302 The passage I have emphasised suggests that Mr Fraser contemplated the possibility that Cordell Jigsaw might sell its share in the Joint Venture Company to Giant Dwarf, and that thereafter there might be an “ongoing series” of The Checkout; to be produced by Giant Dwarf or some other entity associated with Mr Morrow. This possibility had been foreshadowed by Mr Morrow at the Duck Inn Meeting when he said it would make “more sense” for Giant Dwarf to produce any new consumer affairs show for the ABC and that it would be better if “we” found “some way” for The Checkout to be made again.
22 February 2019 meeting
303 On 22 February 2019, Mr Fraser met with Mr Morrow and with Ms Crouch and Ms Chen.
304 Mr Fraser said that, immediately before the meeting, he spoke briefly with Mr Murray, Mr Matthew Campbell (who, it will be recalled, was the Chief Executive Officer of Cordell Jigsaw and then married to Ms Mason-Campbell, the Head of Non-Scripted Production at the ABC) and Ms Shortland from Cordell Jigsaw. Mr Fraser said the following conversation took place:
“[Mr Fraser]: I’m off to see [Mr Morrow] and his accountant. There are a number of ways of distributing the PDV. One of the ways we discussed potentially was Cordell Jigsaw exiting the company. What do we think about that?[Mr Campbell]: The Checkout’s not coming back.
[Mr Murray]: Yeah, I think that’s probably right but let’s see what they have to say.”
305 As I have mentioned, Ms Chen made a contemporaneous note of what was discussed at the meeting.
306 Ms Chen’s note shows that the bulk of the discussions at the meeting concerned the manner in which the PDV Offset should be distributed.
307 The only reference in Ms Chen’s note to any future possible series of The Checkout is that to which I have referred. That part of the note reads, in full:
“Subsequent series, any format fee or some sort of fee? Need agreement with Nick.● Current agreement does not incentivise Jules to continue doing more TCO
● Format fee can be gross or net”.
308 Mr Morrow gave evidence that the following conversation occurred with Mr Fraser:
“[Mr Morrow]: We want to discuss this because while The Checkout was in regular, ongoing production Giant Dwarf was willing to go along with the existing arrangements. But now that the ABC has put the show on ‘hiatus’, Giant Dwarf is no longer willing to make The Checkout on those terms. Those terms [that is a 60/40 split of profit] are a terminal disincentive to trying to bring The Checkout back.But I think it would be far better for everyone if [Cordell Jigsaw] and Giant Dwarf can reach an agreement we’re all happy with. It’s best if we can move on in a way that makes it possible for The Checkout to be made again. I’ve said to Nick before, I have no problem with the front of house stuff: [Cordell Jigsaw] could stay on the credits as a co-producer. I don’t even mind if Nick keeps his Executive Producer credit.
[Mr Fraser]: Well in terms of our exposure, it’s probably more sensible if we’re not listed on a program we’re not really involved in. And obviously if there are more series of The Checkout, that’s good for everyone.
[Mr Morrow]: Yes. The value of the old series of The Checkout, that [Cordell Jigsaw] will continue to have a bigger stake in, will be much greater if The Checkout is still on air. It’s good for the brand overall.” (Emphasis added.)
309 Thus, on Mr Morrow’s account of it, he repeated at this meeting the statement that he said he made to Mr Murray at the Duck Inn Meeting; namely, that the “existing arrangements” between Giant Dwarf and Cordell Jigsaw were a “terminal disincentive” to there being any further series of The Checkout.
310 In his account of this meeting, Mr Fraser did not, in terms, dispute that Mr Morrow had said this. Mr Fraser said that he could not recall the precise words used at the meeting and considered that, to the best of his recollection, Ms Chen’s notes were “an accurate summary of the matters discussed”.
311 Mr Fraser said that he recalled Mr Morrow saying words to the effect that Mr Morrow did not believe the joint venture was “viable”; which Mr Fraser took to mean that Mr Morrow “did not wish to continue the joint venture with Mr Murray given his relationship with Mr Murray”.
312 That evidence confirms in my mind the conclusion that Ms Chen’s note, that the “current agreement does not incentivise [Mr Morrow] to continue doing more [episodes of The Checkout]”, is the most reliable record of what was said.
313 Mr Fraser did not dispute that Mr Morrow said that it would be “best if we can move on in a way that makes it possible for The Checkout to be made again” and that “if there are more series of The Checkout, that’s good for everyone”.
314 Consistently with not having denied those matters, Mr Fraser said in his affidavit that he recalled saying at the meeting words to the effect that in the event that a further series of The Checkout was produced, Cordell Jigsaw “would be entitled to a format fee”.
315 In that regard, in his affidavit Mr Fraser said:
“There is a wide range of how much a format fee would be on projects. The range can be anywhere between 2% and 10%. It was prudent to cover off a rate commercially, but given the expectation of it actually taking place was low in the opinion of [Cordell Jigsaw], we did not spend long discussing what an appropriate rate should be.I recall discussing at the meeting that a format fee would typically be in the order of 5-8% and 40% of that format fee would be between 2-3%. However, I also said that there were a number of options and that I needed to discuss with Nick Murray. I recall finishing the meeting indicating that needing to discuss with Nick Murray.”
316 Mr Fraser said that he mentioned the format fee during the meeting “simply as a prudent step to take commercially”.
317 It was common ground that, at this meeting, Mr Morrow did not mention his ongoing discussions with the ABC.
318 These matters provide further confirmation that Mr Fraser, and I would infer, ultimately, Mr Murray, contemplated the possibility of Giant Dwarf producing a further series of The Checkout after any sale by Cordell Jigsaw of its shares in the Joint Venture Company to Giant Dwarf.
319 On the same day, 22 February 2019, Mr Fraser sent an email to Mr Murray:
“I have now met with [Mr Morrow] and his accountant Jacqui Crouch. We have agreed that both parties are OK to do the followingPay 40% of the NET [PDV Offset] to [Cordell Jigsaw]
Lend 60% of the Net [PDV Offset] to [Giant Dwarf]
And we would need to cover off that on the repayment of the loan by [Giant Dwarf] to [the Joint Venture Company] – that [Cordell Jigsaw] had no interest in the repaid funds.
There is another Option – transfer ownership of the business. From [Cordell Jigsaw] to [Giant Dwarf]
This would require an agreement on the following that we were broadly in agreement on
...
[Cordell Jigsaw] entitlement to a format fee on subsequent series (rate and method to be agreed – but I recommend somewhere between 2-3% on the greater of series budget / or license fee which ever is the greater). It may appear in the budget as something else other than Format fee, so that it is not subject to being included in the budget.
I advised we are happy to talk further on the sale of shares and if that got too complicated or took too long we were ok on the fee/loan process. Next step is Nick and Jules to talk again re format fee. I will put together a draft note back to Jules on some of the points above and look to get that sent out next week.”
320 On 24 February 2019, Ms Crouch’s assistant, Ms Kitty Chen, sent Mr Morrow an email summarising her understanding of what had occurred at the meeting on 22 February 2019:
“I have outlined below a summary of the proposal we discussed last week. Please have a read of the below and let me know if everything sounds ok to you. If so, please feel free to send it through to Nick and I will be in touch again once we have reconciled the accounts to date and finalised the payment figures....
Transfer of shares
● [Cordell Jigsaw] will transfer their 50% shareholding in [the Joint Venture Company] to [Giant Dwarf] at the cost of the shares ($50). As [the Joint Venture Company] is a service entity, there is no value to the shares once [Cordell Jigsaw’s] share of retained earnings have been paid out.
...
Share of income on [The Checkout] IP
● [Giant Dwarf] agrees to pay [Cordell Jigsaw] 40% share of any future net royalties received on the exploitation of the existing [The Checkout] IP (excluding Screen Rights which has been dealt with separately above).
● [The Joint Venture Company] agrees to pay 4%[25] (40% of 10% format fee) of the production budget for any new [The Checkout] series’ developed in the future.”
321 The following day, 25 February 2019, Mr Morrow sent Mr Murray a copy of Ms Chen’s email and added:
“Hi Nick - had a good chat with Simon [Fraser] on Friday ... Kitty [Chen] from Generate sent me this summary of the big picture discussion, which I’m forwarding to tee off a discussion between us about that stuff. I think a good next step might be for you and me to together again later this week (I think you’re in Melb[ourne] early in the week...) to talk through it ... what do you reckon?”
An “agreement in principle”?
322 It is Mr Morrow’s and Giant Dwarf’s case that an “agreement in principle” was reached at the meeting of 22 February 2019 to the effect that Cordell Jigsaw would sell to Giant Dwarf its shares in the Joint Venture Company for $1 each, $50 in total, together with a “format fee” of 2% of the production budget of any new series of The Checkout. Mr Morrow said, however, that he “understood that the agreement in principle reached was subject to approval by Mr Murray”.
323 The evidence does not support the conclusion to which Mr Morrow says he came.
324 Ms Crouch said in her affidavit that:
“Fraser and I discussed the possibility that [the Joint Venture Company] be re-arranged so that [Cordell Jigsaw] could transfer its shares to [Giant Dwarf] and [Nick] Murray could resign as Director of [the Joint Venture Company].”
325 In that regard, Ms Crouch gave this evidence in cross-examination:
“Q. So what you’re referring to there is a possibility being discussed at that meeting that that is what occurred; correct?A. Yes.
Q. There was no agreement at that meeting that that is what should occur; do you agree with that?
A. Yes.”
326 This evidence is consistent with the documents I have set out which were generated after the meeting.
327 Mr Fraser’s email to Mr Murray spoke of a “transfer ownership of the business” being “another option” in relation to the distribution of the PDV Offset and that he had told Mr Morrow and Ms Crouch that “we’re happy to talk further on the sale of shares”; but that if that proved “too complicated” another means (“the fee/loan process”) could be adopted to answer the PDV Offset question.
328 Ms Chen’s email spoke of Giant Dwarf agreeing to pay Cordell Jigsaw a share of future royalties. But that statement was made in the context of summarising “the proposal we discussed last week”.
329 Mr Morrow’s email to Mr Murray of 25 February 2019 spoke of the 22 February 2019 meeting as being a “big picture discussion” which he was forwarding to Mr Murray “to tee off a discussion between us about that stuff.”
330 The same day, Mr Morrow wrote to Ms Crouch and Ms Chen saying that he had forwarded to Mr Murray Ms Chen’s email and stating that “fingers crossed we can sort this relatively quickly and without too much hassle”.
331 These communications make clear to me that it was Mr Morrow’s state of mind, and the fact, that no agreement, whether in principle or otherwise, had been reached between the two parties at this time.
Mr Fraser’s draft response to Mr Morrow and Ms Crouch
332 On 25 February 2019, Mr Fraser prepared a draft email to be sent to Mr Morrow and Ms Crouch which included:
“It was good to catch up last week to go through the options on [the Joint Venture Company].This was our default position, in the event the transfer of ownership
Pay 40% of the Net PDV [Offset] to [Cordell Jigsaw]
Lend 60% of the Net PDV [Offset] to [Giant] Dwarf
And we would need to cover off that on the repayment of the loan by [Giant Dwarf] to [the Joint Venture Company], so that [Cordell Jigsaw] had no interest in the repaid funds.
Ultimate outcome - transfer ownership of [the Joint Venture Company] from [Cordell Jigsaw] to [Giant Dwarf]
...
DRAFT Agreement to cover off
[Cordell Jigsaw] ongoing entitlement to 40% of NET S1 – S6 exploitation income
[Cordell Jigsaw] ongoing entitlement to 40% of NET S1 – S6 Any tax rebates / other income generated from prior series
[Cordell Jigsaw] entitlement to a format fee on subsequent series (rate and method to be agreed - but I recommend somewhere between 2-3% on the greater of series budget / or license fee which ever is the greater). It may appear in the budget as something else other than Format fee, so that it is not ‘subject to’ being included in the budget.” (Emphasis in original.)
333 Mr Fraser did not send the final version of that draft to Mr Morrow and Ms Crouch until 8 March 2019. It was not until then that it could be said that any “agreement in principle” was in place.
334 By then discussions had moved on between Mr Morrow and the ABC.
Mr Morrow’s discussions with the ABC continue
335 On 28 February 2019 Mr Morrow wrote the Mr Anderson:
“Hi David - just wondering if there was any update from your discussion with Michael Carrington? He emailed to say ‘budgets for next financial year are still not known’ which had an eerie ring of familiarity to it ... exactly what was said before last year’s hiatus-ing. I hope you can understand my concern / frustration ... and 5 months later there still hasn’t been any meaningful progress on that.Overall the pattern looks and feels a lot more like being strung along in private and misrepresented in public than actually moving towards a new project that will fill the gap of quality public broadcast content left by dumping The Checkout.
Is anything actually going to happen?”
336 On 1 March 2019 Mr Carrington wrote to Mr Morrow:
“Just a quick follow up on our recent meeting.[26]I’ve now had a chance to review the details of the E&S[27] budget. It would be great if we could meet again to further our discussions around developing a consumer show for the ABC.
I’d like to invite David Anderson to join us. I’ve checked his diary and I’d like to propose 10 am Friday, 8th March. Does that suit you?”
337 Mr Morrow replied the same day:
“Does the fact that you’ve had a chance to review the E&S budget mean that the ABC is now in the position to indicate what level of funding it intends to allocate to consumer affairs programming in the next financial year?”
338 Mr Carrington replied:
“In theory, yes - I'm nutting out the final figures. Let’s discuss Friday [8 March] on what could work.”
339 On 4 March 2019, Mr Carrington wrote to Mr Morrow:
“We have settled on a potential budget of $2.7m for a 10 x 28’ series.As I mentioned in our last meeting, we agree that in a world of fragmented audiences we can still unite and galvanise communities and satisfy their curiosity with strong factual content. With this in mind, we are keen to develop a next generation series around consumerism in a tone and format that delivers a distinctive offering. Content that offers audiences information they should know, that helps them think differently, and provokes conversations.
At the same time, we are keen [that] the ABC has an opportunity to develop new talent – including diversity and inclusion, is a big part of our strategy going forward, both in front of and behind the camera.” (Emphasis added.)
Further communications with Mr Murray
340 On 5 March 2019, Mr Morrow sent Mr Murray a message:
“Hi Nick – just following up re meeting again ... don’t suppose you could do this arvo or tomorrow?”
341 Mr Murray gave evidence that on either 5 or 6 March 2019 he telephoned Mr Morrow and that they had this conversation:
“[Mr Morrow]: Sorry to keep chasing you, but we need to pay this loan off, so we really need to progress the deal.[Mr Murray]: If it’s urgent, as I’ve said before, you could just borrow the money. But I’ve been away a lot and we haven’t had time to talk about it in the office.
[Mr Morrow]: We should just do the whole deal now.
[Mr Murray]: Alright, I’ll talk to Simon [Fraser] and get back to you.”
342 Again, Mr Morrow’s language was apt to suggest to Mr Murray that his motivation to “progress the deal” was the PDV Offset, receipt of which Mr Morrow had said was necessary so that Giant Dwarf could pay off the loan to which Mr Morrow referred. I think it likely that this was Mr Morrow’s intention. He was continuing to “manage the message” in this way.
343 On 6 March 2019, Mr Murray sent an email to Mr Fraser:
“I’ve got Jules chasing me and I’ve had a quick chat with him. He’s trying to get ownership of the company so he can transfer the [Giant Dwarf] money without having to document a loan etc. I understand this and if we can arrive at a simple deal, we may as well agree now and get rid of the company.Here is what I thought ... let me know if this accords with your thoughts.
1. [Cordell Jigsaw] takes a fee via invoice equal to 40% of the PDV [Offset[ to date.
2. Agreement that if any further PDV [Offset] is available from production activity to 28 Feb 2019, then [Cordell Jigsaw] gets 40% of it.
3. Access to accounts to verify 1 & 2.
4. Change the name of the [Joint Venture Company] to remove the word ‘Jigsaw’.
5. Giant Dwarf then buys [Cordell Jigsaw] shares in [the Joint Venture Company] for $1.
6. Both [Giant Dwarf] and [Cordell Jigsaw] have the right to produce a consumer affairs show in the future without reference to the other (but not using the name or format of The Checkout).
7. [Cordell Jigsaw] cannot use the name The Checkout but [Giant Dwarf] can.
8. If [Giant Dwarf] or a subsidiary gets another commission for The Checkout using either the name or format, then it pays [Cordell Jigsaw] a consulting/formal fee equal to 2% of the cash budget (or another number [Simon Fraser] suggests).
Can this work quickly? That would get him off my back.”
344 Mr Murray’s references in pars 7-8 to Cordell Jigsaw “taking a fee” and Giant Dwarf being able to “use the name The Checkout” suggests that he had contemplated the possibility of Mr Morrow and Giant Dwarf producing a further series of the show in the event the sale of shares was to proceed.
345 As I set out below, late on Friday 8 March 2019, Mr Fraser sent Mr Morrow and Ms Crouch the final version of the draft email he prepared on 25 February 2019, following his 22 February 2019 meeting with Mr Morrow, Ms Crouch and Ms Chen.
346 In the meantime, on each of 6, 7 and 8 March 2019, Mr Morrow sent Mr Murray emails pressing for a response. Mr Morrow’s emails were expressed politely but reflected Mr Morrow’s practice of persistent communication when seeking resolution to his satisfaction of the issue at hand.
The 8 March 2019 meeting at the ABC
347 At 9 am on 8 March 2019, Mr Morrow and Ms Annetts met with Mr Anderson and Mr Carrington at the ABC.
348 Mr Katekar described this as a “critical meeting, in light of the events that followed”.
349 Ms Chrysanthou did not dispute the following summary, taken from Mr Katekar’s submissions, of Mr Morrow’s evidence about this meeting:
(a) Mr Anderson said that the ABC was willing to make available $3.2 million for a “new consumer television program for the second half of 2019”;[28](b) Mr Anderson agreed to the creative control provisions that had applied to Mr Morrow in the past (including on the previous sixth series of the show);[29]
(c) Mr Anderson said that this was a commitment for two seasons; and
(d) Mr Morrow said to Mr Anderson that “if Nick and I can work something out which means it’s possible to make The Checkout again, then I think it makes sense to do that” and that “the ABC should want The Checkout”.
350 Mr Morrow’s affidavit evidence was that “at the end of the 8 March 2019 ABC Meeting, I raised the topic of The Checkout”.
351 Mr Morrow recounted that he said words to the effect of:
“Just before we all go, I should just update you. As David [Anderson] said, we’re talking about a new consumer program. As David knows, Giant Dwarf will not make another series of The Checkout under arrangements that were in place with [Cordell Jigsaw] until The Checkout was placed on what the ABC called ‘hiatus’. But I’ve also said to David, if Nick and I can work something out which means it’s possible to make The Checkout again, then I think it makes sense to do that. The update on that is unexpectedly positive. [Cordell Jigsaw] and [Giant Dwarf] have reached agreement on the terms for [Cordell Jigsaw] to exit The Checkout’s production company and we’re in the process of formalising that. We should still proceed on the basis we’re talking about a new consumer show, but hopefully it won’t be too long until things between [Giant Dwarf] and [Cordell Jigsaw] are sorted out. I’d say it will be done within a few days, but whenever I say that it always takes a few weeks, so I’ll just say it should be done ‘soon’.” (Emphasis added.)
352 Mr Morrow was not correct to say to the ABC that Giant Dwarf and Cordell Jigsaw had “reached agreement on the terms for [Cordell Jigsaw] to exit The Checkout’s production company”.
353 No “agreement in principle” was reached until later on 8 March 2019 when Mr Fraser sent Mr Morrow and Ms Crouch the final version of the email he had drafted on 25 February 2019.
354 As I set out below, on 13 June 2019, Mr Morrow wrote to Mr Murray stating:
“I did not believe that The Checkout potentially being recommissioned by the ABC was a genuine prospect until well after [Cordell Jigsaw] and [Giant Dwarf] had agreed on the terms for [Cordell Jigsaw’s] exit from [the Joint Venture Company]”.
355 Mr Morrow’s evidence, extracted and emphasised at [351] above, shows that by 8 March 2019, he did believe that there was a “genuine prospect” of the ABC recommissioning The Checkout.
356 Mr Morrow said nothing to Mr Murray about these matters.
357 Mr Morrow agreed that he “didn’t just forget to tell Mr Murray that [he was] talking to the ABC”. Mr Morrow said that he did not think he needed to tell Mr Murray about those discussions for two reasons. The first was because Mr Morrow said he “understood that the deal from the outset of the joint venture was that either party could make another project if it didn’t involve the [intellectual property] of [the Joint Venture Company]”. Second, Mr Morrow thought he had an agreement in principle with Mr Murray arising out of his discussions with him on 19 February 2019 and discussions with Mr Fraser on 22 February 2019.
358 I have found that there was no “agreement in principle” at this stage. And, as I set out below, whether or not Mr Morrow understood there to be “an agreement in principle” at this stage that Cordell Jigsaw would sell out to Giant Dwarf, Mr Morrow must have understood that unless and until that “agreement in principle” was consummated by a transfer of shares in the Joint Venture Company, the Joint Venture continued to subsist.
359 Later on 8 March 2019, and following his meeting with Mr Morrow and Ms Annetts, Mr Carrington wrote a note to Ms Natalie Edgar, another employee of the ABC. The email was headed “Hiatus Ending...”. The email read:
“The hiatus on a ‘consumer show’ will be coming to an end soon. We are working with Giant Dwarf on a new series (to be named) of 20 x 28’ episodes across two years. For clarity that would split into two seasons: S1 (10 x 28’) October 2019, and S2 (10 x 28’) August 2020 – delivery TBC.”
Mr Fraser’s 8 March 2019 email
360 Still later on 8 March 2019, at around 5.30 pm, Mr Fraser sent an email to Mr Morrow and Ms Crouch with a copy to Mr Murray and Ms Chen. This was the final version of the email Mr Fraser had drafted on 25 February 2019. It was the first formal communication from Cordell Jigsaw in response to Mr Morrow’s 19 February 2019 suggestion about “drawing a line” under the joint venture and to the matters discussed by Mr Fraser, Mr Morrow and Ms Crouch at the 22 February 2019 meeting.
361 Mr Fraser’s email read:
“[I]t was good to catch up to go through the options on [the Joint Venture Company]. Nick and Jules have also spoken this week so it would appear we should almost be there on the framework overall.I just need to confirm what the costs are that have run through [the Joint Venture Company] this year and then we should be fine to progress.
...
DRAFT Agreement to cover off
[Cordell Jigsaw] ongoing entitlement to 40% of NET S1 – S6 Exploitation income
[Cordell Jigsaw] ongoing entitlement to 40% of NET S1 – S6
Any tax rebates / other income generated from prior series
[Cordell Jigsaw] entitlement to a format fee on subsequent series of the Checkout produced by [Giant Dwarf] or affiliated company / subsidiary (2% on the series budget / or license fee which ever is the greater) It may appear in the budget as something else other then Format fee, so that it is not ‘subject to’ being included in the budget.
[Cordell Jigsaw] allowed to use clips and references to S1-S6 of Checkout on corporate website
[Cordell Jigsaw/Giant Dwarf] both have right to produce consumer affairs show without reference to the other, but not using the name or format of The Checkout
[Cordell Jigsaw] is not able to use the name The Checkout for a production, this right is exclusive to [Giant Dwarf]
[Cordell Jigsaw] has right of review of [Giant Dwarf] accounts in subsequent years with normal provisions
[Cordell Jigsaw] sells share on [the Joint Venture Company] to [Giant Dwarf] for $1.”
362 I think Mr Katekar was correct to characterise this email as Mr Fraser putting “forward a framework by which ownership of the [Joint Venture Company] could be transferred to Giant Dwarf although the terms still needed to be drafted and the payment figures still needed to be finalised”.
363 Mr Fraser agreed that by this point there was an agreement in principle “subject to working out the financial stuff”. Mr Fraser said:
“This is - this, hopefully, I guess, encapsulates what the deal is, subject to the finance stuff that we were still negotiating or we - we probably actually hadn’t started negotiating at that point.”
364 Consistently with this, several days later, on 14 March 2019, Mr Murray wrote to Mr Morrow:
“I’ve been going back and forth with Simon [Fraser] about the costs which seem very high, particularly after my discussion with you about an allowance for the PDV application.We also have questions about the fines and some other costs.
Other than that the other issues are pretty much sorted”.
365 Of course, Mr Murray entered this “agreement in principle” in ignorance of the discussions that Mr Morrow was simultaneously having with the ABC.
The “New Consumer Show” – Are You Being Served
366 Still later on 8 March 2019, at around 9.30 pm, Mr Morrow sent Mr Carrington and Mr Anderson a draft “Outline” and draft “Term sheet” for a “New Consumer Show – 2019/20”.
367 Mr Morrow said:
“I’ve compiled this draft Term Sheet using the Term Sheet for The Checkout Series 6 as a base”.
368 The “Outline” was of a show to be called Are You Being Served. The show was described as “a BRAND NEW program” and “the FUTURE of consumer affairs TV...”.
369 The “working title” of the show, Are You Being Served was described as being “subject to rights check” and was described to be:
“A 10 x 28 minute satirical consumer affairs show for the twenty-first century ... and beyond”.
370 The “Outline” continued:
“The focus of Are You Being Served? will be individual consumer/viewer complaints. The Are You Being Served? team will investigate consumer complaints that are selected on the basis of merit in terms of both:
● the unfairness to the individual’s treatment by a business; and
● how applicable the individual consumer’s experience is to the audience and broader issues in Australian consumer affairs.
Are You Being Served? will package these investigates into a weekly half hour TV show comprising 4 investigations presented in a creative, entertaining and thematically appropriate form. These stories will be mixed with short, sharp, satirical interstitial segments which are thematically connected to the ‘tent pole’ investigations of the episode.”
371 I asked Mr Morrow to explain what he saw as being the distinction between the proposed Are You Being Served and the most recent series of The Checkout. We had this exchange:
“HIS HONOURQ. Can you just explain to me what way was the substance of the Are You Being Served? proposal different from let's say the most recent series of The Checkout?
A. The substance of it was that The Checkout always had a sort of inventive premise as a way of explaining stories. For example, we did a story about password protection that was called - it was based on a sort of parody of Mary Poppins. So it has a sort of skimming for each story that was about subject matters. This proposal was to meet the heart of each - of four stories per episode about an individual consumer, and so it was about taking that person's situation—
Q. Four particular cases of a consumer being--
A. Yes.
Q. --unfairly dealt with?
A. Yes.
Q. Was that different from the way The Checkout was structured?
A. Well, yes, because it was about an individual, whereas, the - The Checkout would usually take a subject and often profile a number of individuals, and sometimes no individuals at all.
Q. An example you've given is of password protection--
A. Yes.
Q. --and the dangers of it?
A. Yes. And - and from recollection, I don't think there is reference to individual consumers in that segment.
Q. As you've explained it to me in that 30 seconds, that does sound quite different. Is that fair?
A. Yes, I believe so.”
372 Nonetheless, Mr Morrow plainly believed that a further series of The Checkout was substitutable for any series of Are You Being Served.
373 Thus, he gave this evidence:
“Q. So the proposal you were putting forward was Are You Being Served?A. Yes. [A] new consumer show.
Q. But that if you were able to reach an agreement with Cordell Jigsaw, then that proposal would change to being series 7 and 8 of The Checkout; is that right?
A. That's right.
Q. Is this the proposal that you discussed with Mr Anderson and Mr Carrington on 8 March?
A. No. On 8 March we discussed a new consumer affairs program.
Q. Yes. But you also said to them that if you were able to reach agreement with Mr Murray - with Cordell Jigsaw about the joint venture, then it would make sense to then do The Checkout; is that right?
A. I did, yes.
Q. Then did you say to them that this is my proposal for Are You Being Served?, a new consumer show, but if I'm able to reach agreement with Mr Murray, then it would become The Checkout?
A. I'd already said that to them.”
Events after 8 March 2019
374 On 11 March 2019 Mr Morrow wrote to Mr Carrington:
“Just wanted to check that the material I sent in on Friday is enough for you to advance things within the ABC?”.
375 Mr Carrington replied on 11 March 2019:
“Thank you Julian. If we need any further information, we’ll come back to you asap. In the meantime, I’ll now involve Business Affairs, Operations, Finance, and Production to review the detail and plan this for the green-light and Commissioning process.”
376 On 12 March 2019 Mr Carrington wrote to Ms Mason-Campbell:
“We are ending the hiatus on a consumer type show.On the back of a meeting I had with Julian Morrow and Richard Huddleston a few weeks ago, I’d asked Julian to present a proposal for Giant Dwarf to produce a new program. He came into see [Mr Anderson] and me last Friday. We’ve since received his proposal for a new series which we like.”
The “New Consumer Show” may be called “[The] Checkout”
377 On 14 March 2019, with customary persistence, Mr Morrow sent a message to Mr Anderson:
“Just called in the hope of touching base briefly cos I think you said you were away for a while from tomorrow. Basically, just wondering how to advance things after the last meeting ... I sent that stuff in. I’d like to keep up the momentum and am not sure who the best drivers of that might be in your absence”.
378 On 15 March 2019, Ms Georgina Waite, the Head of Business Affairs at the ABC sent an email to Ms Julia Pincus, the Senior Business Affairs Lead:
“Attached is Julian’s proposal for a new consumer show which may be called ‘Checkout’. He has based his first draft on [The] Checkout Series 6 ...Could you please:
• Compare the attached to [The] Checkout series 6 to see if it’s a true comparison.
• Given Julian tends to butcher the formatting, I suggest we start again from our [The] Checkout S6 and mark up our proposal. Wherever we diverge from his proposal we should include a comment.
...This is urgent as Julian is now calling Michael [Carrington] and [Mr Anderson] for a response and I don’t want to concede points because we are rushed. Ideally we would send Michael [Carrington] and [Mr Anderson] a note about headline issues this morning.” (Emphasis added.)
379 There is no direct evidence as to why Ms Waite thought the “new consumer show” “may be called ‘Checkout’”. The inference I draw is that Ms Waite was informed by either Mr Anderson or Mr Carrington of what Mr Morrow had said on 8 March 2019, particularly in the passage set out at [351] above that I have emphasised.
380 Ms Waite’s comment that Mr Morrow had “based his first draft on [The] Checkout Series 6” was no doubt based on Mr Morrow’s statement to that effect in his 8 March 2019 email to Mr Carrington and Mr Anderson.
381 Ms Waite’s request that Ms Pincus compare Mr Morrow’s Are You Being Served material with The Checkout Series 6 “to see if it’s a true comparison” evidently reflected Ms Waite’s apprehension that there may be some similarity between the two programs.
382 A short time later on 15 March 2019, Ms Pincus sent an email to Mr Carrington at the ABC:
“Georgina [Waite] and I have been working on this matter. I understand that Julian may be calling you today.We have looked at the format proposal for ‘Are you being Served’ and in our view it is sufficiently similar to [T]he Checkout to constitute a ‘spin off’ from the format, whether we use the title ‘Checkout’ or not. The format was originally brought to us by [Cordell Jigsaw] who later brought on Giant Dwarf.
As the format for [T]he Checkout S 6 was owned 100% by the [the Joint Venture Company] as a first step, we need to ensure [Cordell Jigsaw] don’t have a claim against Julian / Giant Dwarf in relation to this new consumer show. This could be achieved by Julian either providing us with the relevant documents to show that he now owns the 100% of the rights in the format or a ‘quit claim’ from [Cordell Jigsaw]. Ideally we would need information about any commercial arrangement reached between Giant Dwarf and [Cordell Jigsaw] in relation to any transfer of the format as this may impact the budget.
Once you have had this conversation, I am happy to draft the follow up email depending on what we find out in relation to the format.
In addition, we are currently analysing Julian’s proposed deal as against the last [The] Checkout (S6) and hope to send you a recommendation about the deal terms later today with a view to starting work on a draft Term Sheet as soon as possible.” (Emphasis added.)
383 This communication is the first reference in the evidence to the possibility that, were the ABC to proceed to broadcast Mr Morrow’s proposed consumer affairs show, that it would be necessary that Mr Morrow procure from Cordell Jigsaw a Quit Claim.
384 Later evidence makes clear that, in using this expression, the ABC representatives were referring to a document whereby Cordell Jigsaw released the Joint Venture Company and the ABC from any claim that Cordell Jigsaw might have in respect of The Checkout.
385 I did not receive Ms Pincus’s above statement that she and Ms Waite had formed a view that Mr Morrow’s proposed Are You Being Served show was sufficiently similar to The Checkout to constitute a ‘spinoff’ as itself evidence that in fact that there was such similarity. Like all ABC documents, Ms Pincus’s email was received as evidence that such a document was within the records of the ABC. However, I am able to infer from the document that this was the ABC’s apprehension about the matter.
386 A short time late on 15 March 2019, Mr Carrington wrote to Ms Pincus:
“I’ve just spoken to Julian. The format discussions are ongoing between Giant Dwarf and [Cordell Jigsaw], but they seem to be headed in a positive direction.The proposal is for Giant Dwarf to own [the Joint Venture Company] to produce the series. Giant Dwarf are likely to pay a licence fee to allow the use of the title, ‘Checkout’.”
387 Again, I did not receive Mr Carrington’s note as evidence of the truth of its contents. However, in cross-examination Mr Morrow agreed that he had had a conversation with Mr Carrington on 15 March 2019. He denied that he said during that conversation anything to the effect of the second paragraph I have set out in the preceding paragraph.
388 But Mr Morrow said that the conversation on this occasion was “in substance”, the same as what he had said to Mr Carrington and Mr Anderson on 8 March 2019; that is, if it were possible to make The Checkout again “it makes sense to do that”, that he had reached agreement with Mr Murray about the terms on which Cordell Jigsaw would “exit” the Joint Venture Company and that “we’re in the process of formalising that”.[30] This suggests that Mr Carrington’s note accurately reflects what Mr Morrow said to him.
389 On 17 March 2019, Mr Murray wrote to Mr David Knox, who is associated with a publication known as “TV Tonight”, saying:
“I thought [The Checkout] had been put on hold but then Julian put out a press release saying it was cancelled. He also had a massive argument with David Anderson in the ABC foyer. From that point onwards, The Checkout was dead.”
390 On 19 March 2019, Mr Carrington wrote in a note:
“A quick line to confirm a two year deal has been agreed with the producer for the consumer show:Year 1 - $2.7m for 10 x 28’
Year 2 - $2.7m for 10 x 28’.”
391 On 20 March 2019, Mr Morrow wrote to Mr Carrington:
“Thanks for your note Michael. Can we still expect draft docs from Business Affairs this week?...
Also just wanted to check if the project will still move straight to commissioning, so that by next stage of development we just mean how things will progress as opposed to ‘going into development’.” (Emphasis in original.)
392 On 20 March 2019, Mr Morrow sent a further email to Mr Fraser.
393 Mr Morrow’s email included:
“... I’m happy to discuss anything else you might want to. I wonder though if it would be possible to do this alongside the process of preparing and agreeing the documentation too? As you know, [Giant Dwarf] is keen to sort this asap so that we can access [Giant Dwarf’s] share of the money to pay out a loan. Since there seem to be no major issues apart and the documentation you alluded too seems fairly straightforward, I’d like to think we can progress the documentation even while there’s a bit of back and forth about the final numbers. Could we proceed that way?As I say though, happy to discuss any time.” (Emphasis added.)
394 Again, the wording chosen by Mr Morrow was apt to lead Mr Fraser to believe that Giant Dwarf’s keenness “to sort this asap” was so that Giant Dwarf could have access to its share of the PDV Offset. Again, I think it likely that Mr Morrow chose his words deliberately and with the intention that they convey this impression: managing the message.
395 On 22 March 2019, Mr Morrow wrote to Mr Carrington:
“I haven’t heard anything from business affairs yet so was hoping to touch base about where things are at from the ABC perspective. Hope to hear from you soon.”
396 On 27 March 2019, Mr Morrow sent an email to Mr Murray and Mr Fraser:
“I’m just following up on this with what’s hopefully the politest of nudges :-) (Also left a voicemail for you just now Simon [Fraser]).Would it perhaps be worth circulating a draft and then meeting up to try and knock off any outstanding issues? Given where we’ve got to go so far on the big picture, I reckon that should be possible and fairly straightforward.”
The events of 28 March 2019
397 In the morning of the 28 March 2019, Mr Morrow wrote to Mr Carrington and Mr Anderson:
“I’m just touching base again. It’s almost three weeks since our last meeting and the Term Sheet I sent later that day. I do appreciate that Michael [Carrington] has touched base with me a couple of times since then, but I still haven’t received anything of substance from the ABC.Overall this feels more like the experience of last year, when various senior ABC execs repeatedly made verbal statements about proceeding with another series of The Checkout in the second half of 2018 only to abruptly pull the pin, rather than something different. This is very discouraging ...
Can we please meet early next week to go through the draft Term Sheet?”
398 A short time later, Mr Carrington wrote to Mr Morrow:
“Thanks so much for your email. There is still a bit to be done. I have spoken with all the right people internally to keep the momentum going. We have our own processes that we need to follow.We do need to follow the correct procedures, which all independent producers are subjected. There is nothing abnormal about the timeline we are on...
As I said on the phone last week, we are aiming to get the next [Content Executive meeting], which is next week. Indeed I was only talking to Business Affairs early this morning about finalising ... the next steps”.
399 Mr Carrington then sent an email to Mr Morrow:
“Julia Pincus will call you about those details”.
400 Ms Pincus arranged to place a telephone call to Mr Morrow at 2.30pm that day.
401 Ms Pincus made a contemporaneous handwritten note about what she and Mr Morrow discussed at this meeting. Ms Pincus caused that note to be recorded in a typewritten file note which she sent by email to Ms Waite that evening.
402 I received Ms Pincus’s handwritten note, and her email as evidence only of the fact that those documents were included in the records of the ABC.
403 However, Mr Morrow has given a detailed account of this conversation in his affidavit and stated that he had “also reviewed various documents produced by the ABC in these proceedings which appear to relate to this phone call”. Included in those notes were Ms Pincus’s manuscript and typed notes of the meeting.
404 There is not a great difference between Mr Morrow’s asserted recollection and Ms Pincus’s contemporaneous notes. Further, Mr Morrow did not, in his affidavit, suggest that there was any error in Ms Pincus’s notes. As Ms Pincus’s documents were created during, and then immediately after the conversation, I think it likely that they are the most accurate record as to what was said. As Mr Morrow did not dispute the accuracy of those notes, and notwithstanding the limited basis upon which I admitted them, I infer that they are an accurate record of what was said.
405 Ms Pincus’s note read:
“Re [The Checkout] / [Cordell Jigsaw] issue:[Ms Pincus] raised issue and asked what comfort we can get that [Cordell Jigsaw] aware and happy for this production to go ahead.
[Mr Morrow] said that this contract has nothing to do with [Cordell Jigsaw] at all. [Ms Pincus] asked him to explain saying that it will be the first thing asked at [Content Executive]. When pushed, [Mr Morrow] said that he has had discussions with [Cordell Jigsaw] but no formalisation of those discussions and this will not be possible before next week. This commission is a new show which does [not] have to anything to do with the rights holders to [The Checkout]. In any event, he was confident that this show would end up being branded ‘The Checkout’ although at this stage it needs to be commissioned as ‘Are you being served?’.
[Mr Morrow] said that he has ‘confidence but can’t say high level of confidence’ that the show will become [The Checkout]. ...
[Ms Pincus] explained that we will need to have some comfort that the ABC isn’t going to commence the process of commissioning a new show with the possibility [of] an injunction hanging over its head.
[Mr Morrow] said that [Mr Anderson] will not require you to put those provisions in the contact. [Ms Pincus] explained that it wasn’t about whether anything is included in the contract or not, it is just about our normal process with any new show of taking steps to check that no one else’s copyright is being breached. We either have to get that comfort from the copyright owner of [The Checkout] or if, as he asserts, it is a new show, then we will have to make an assessment of the risk of the copyright owner taking action. [Mr Morrow] said that there wasn’t enough detail in the pitch document to do that analysis and that in any event there is no ownership over consumer affairs shows and if we were to say that this new show is a copy of [The Checkout] then [The Checkout] is a copy of the Investigators.
[Mr Morrow] said that in all likelihood the issue will go away but he didn’t explain how. [Ms Pincus] said that ABC would need to know what deals are being done in the background as it may have implications for the budget.
[Mr Morrow] said it was possible that [Cordell Jigsaw] and [Giant Dwarf] will reach agreement which means [Giant Dwarf] will produce a series of [The Checkout] but that is not the scenario we are contracting [sic] now. The Acting MD[31] has had these discussions with [Mr Morrow] and he is aware of the situation – what is on the record and off the record.
[Mr Morrow] said that the problem here is ABC’s slow pace dealing with this project.
[Ms Pincus] said really needs to understand what is going on re the rights to make the show.
[Mr Morrow] said ‘off the record’ that Nick said that he would send a draft document setting out the commercial arrangement but he hasn’t done so yet. [Mr Morrow] said that they [Cordell Jigsaw] and [Giant Dwarf] have covered all the key points – namely that the outcome would be that [Giant Dwarf] would acquire [Cordell Jigsaw’s] share of the [joint venture] in return for revenue in the future. He has not received any indication that anything has changed about this deal but he also hasn’t received the promised doc from Nick. [Ms Pincus] said that we need to have that document agreed and can he chase them for it. [Mr Morrow] said the [Cordell Jigsaw] is not aware that [Mr Morrow] is pitching this show to ABC and that strongly suspects (off the record) that if [Cordell Jigsaw] made aware, chances of it ever becoming [The Checkout] would drastically reduce.” (Underlined emphasis in original; italics emphasis added.)
406 Mr Katekar asked Mr Morrow whether he said words to the effect of those attributed to him by Ms Pincus. For the most part, Mr Morrow agreed that Ms Pincus’s note was accurate but denied that he made some of the comments that Ms Pincus has recorded.
407 In response to my question, Mr Morrow denied that in this telephone call he said anything to the effect recorded in the last sentence of Ms Pincus’s note, namely, that he suspected if Cordell Jigsaw became aware that he was pitching his show to the ABC, the chances of that show becoming The Checkout “would drastically reduce”.
408 But in his affidavit he deposed that, at the relevant part of the conversation, he said to Ms Pincus:
“What I’m saying is that I’m giving the ABC the only comfort I can as things currently stand. This is a sensitive matter between Cordell Jigsaw and Giant Dwarf. I’d like this show to be The Checkout. But I think the chances of it becoming The Checkout would drastically reduce if the ABC insists on dealing with format issues now when I believe these issues will be addressed soon. And I don’t think that would be the best outcome for ABC either.” (Emphasis added.)
409 I can see no difference, in substance, between what Mr Morrow has deposed he said at this part of the conversation and what Ms Pincus recorded Mr Morrow as saying. And yet, in response to my question, Mr Morrow was prepared to deny the accuracy of Ms Pincus’s note.
410 This suggests to me that, when he thought it suited him, Mr Morrow was prepared to give evidence that he could not have been sure to be correct.
411 In effect, what Mr Morrow said to Ms Pincus was that:
(a) although his proposal was to make a “new” consumer affairs show that had “nothing to do” with Cordell Jigsaw, he was confident that the show would become The Checkout and that in all likelihood the issue preventing the show becoming The Checkout would go away; and(b) Cordell Jigsaw, and thus Mr Murray, did not know that he was “pitching this show to the ABC” and that if Mr Murray did become aware of that fact, the chances of the “new” show becoming The Checkout would “drastically reduce”.
412 Mr Morrow’s confidence that the new show, then being pitched as Are You Being Served, would “become The Checkout” evidently reflected his confidence that he would successfully negotiate the purchase by Giant Dwarf of Cordell Jigsaw’s shares in the Joint Venture Company.
413 Mr Morrow confirmed that he did not wish Mr Murray to know of his negotiations with the ABC for fear that Mr Murray would not sell out of the Joint Venture in the following passage of evidence, initially in response to questions from me:
“Q. Did you think as at the date of this meeting, that if you did tell Mr Murray of your negotiations with the ABC that that would cause him to hesitate proceeding with the transaction to sell out of the joint venture company?A. I thought he would probably say, ‘Well, I won't sell, and, therefore, I would make the new - I would make the new consumer show.’
...
Q. It was your state of mind as at 28 March 2019 that if Mr Murray became aware of your discussions with the ABC, the chances of your proposed show becoming The Checkout would drastically reduce?
A. Yes.
KATEKAR
Q. That's because, Mr Morrow, Mr Murray would not have authorised Cordell Jigsaw to have sold its shares in [the Joint Venture Company] to Giant Dwarf?
A. Well, I thought the chances would - would reduce drastically.
Q. Just on that.
A. Yes.
Q. The reduction in chances that you're talking about is the reduction in the chance that Mr Murray would have authorised Cordell Jigsaw to sell its 50% shares in [the Joint Venture Company] to Giant Dwarf?
A. Yes.”
414 Later on 28 March 2019, Mr Morrow, persistent as ever, sent Mr Murray a message:
“Hi Nick – just Jules ... sorry to bug you but was just calling to bug you ;-)”.
415 A short time later, Mr Morrow and Mr Murray had the following SMS exchange:
“[Mr Murray]: Ha. Sorry was getting off the plane from [Melbourne]. I’ll be in the office tomorrow, so will see where Simon [Fraser] has got to. He had some questions about the costs. N[Mr Morrow]: Thanks Nick. Have sent Simon [Fraser] some more info. Happy to discuss tho[ugh]: am in an event tomorrow but can tee up a time in the breaks if that works for Simon. cheers, J”.
29 March 2019
416 The following day, 29 March 2019, Mr Carrington wrote to Mr Morrow:
“Yes it seems we still have some work to do to clarify what is being commissioned here following your conversation with Julia [Pincus] yesterday. You have submitted a treatment for a new program ‘Are you Being Served’ (working title) together with proposed deal terms, and while we are keen to progress it doesn’t seem to be as simple as importing what has gone before.On the Format: I had understood from our discussions that you were securing permission from [Cordell Jigsaw] to secure the use of ‘The Checkout’ or making a program that was a different consumer show. I gave our [Business Affairs] team your treatment and it seems to them sufficiently similar to the ‘Checkout’ format that we would require either a licence from [Cordell Jigsaw] or a quit claim in a form approved by ABC Legal in order to confirm the chain of title. We have obligations under existing Agreements that we need to satisfy. Julia [Pincus] tells me that you discussed various obstacles around you providing either of these documents, however unfortunately clearing the chain of title is a precondition to moving forward so please advise how you intend to proceed”. (Emphasis added.)
417 Mr Carrington’s email shows that he saw a strong similarity between Mr Morrow’s proposed “new” show and The Checkout. The proposal was, in his view, “importing what has gone before”.
418 A short time later, Mr Morrow wrote to Ms Louise Porter, ABC’s Production Executive TV Entertainment and Events attaching a proposed budget for Are You Being Served. As emerges below, immediately after the Share Sale Agreement was executed on 8 April 2019, Mr Morrow produced a budget for a show entitled “The Checkout” which was virtually identical to the budget sent to Ms Porter.
419 Later on 29 March 2019, Mr Morrow replied to Mr Carrington’s email sent earlier in the day:
“Many of the points you raised were addressed in the meeting on 8 March between David [Anderson], you, me and [Ms Annetts]. For example, it was expressly confirmed that the creative/editorial position would be as per The Checkout (which is in turn as per Giant Dwarf/The Chaser’s terms with the ABC going all the way back to 2007). The existing provisions don’t at all equate to ‘no editorial input’ for the ABC, but they are indeed different from the ABC’s normal practices. As I say though, this was unambiguously addressed in our meeting....
Equally, on the format question, we discussed how that is likely to [be] resolved, but it seemed in that meeting [that] there was a mutual intention ... to move forward on the basis on a new format while that was being clarified.” (Emphasis added.)
420 Mr Morrow explained what he meant by moving forward “on the basis of a new format”:
“Q. By that, you meant to communicate to Mr Carrington, ‘We're going to move forward on the basis of a new format, but if you are able to get sole ownership of [the Joint Venture Company], then [the Joint Venture Company] will be producing The Checkout.’A. Yes.”
Mr Morrow’s 1 April 2019 conversation with Ms Waite and Ms Pincus
421 On 1 April 2019, Mr Morrow had a further conversation with Ms Waite and Ms Pincus.
422 Again, Ms Pincus took contemporaneous notes of the conversation. In an affidavit, Mr Morrow gave an account of the conversation and, once again, said that he had “reviewed” Ms Pincus’s notes and did not suggest that Ms Pincus’s notes did not accurately reflect the terms of the conversation.
423 Ms Pincus’s notes included recording Mr Morrow saying:
“Anticipate shortly [Giant Dwarf] will own [the Joint Venture Company] fully → won’t be an issue.Don’t want ABC to be reaching out to [Cordell Jigsaw] ...
Only thing: derail is ABC notification”.
424 Ms Pincus’s notes record Ms Waite as saying that “we will not reach out to [Cordell Jigsaw]”.
425 The first of these notes corresponds with Mr Morrow’s evidence that he said to Ms Pincus:
“We are having a complex series of discussions with Cordell Jigsaw. I anticipate that shortly Giant Dwarf will own [the Joint Venture Company]. If that happens, as I said to Julia [Pincus], there will not be a format issue. But there are issues for Cordell Jigsaw and Giant [Dwarf] to sort out between themselves without ABC involvement.”
426 As to the second matter recorded in Ms Pincus’s notes, Mr Morrow’s evidence was that he said:
“What I’m saying is I think the far more likely outcome at this point is that Giant Dwarf will be in a position to make The Checkout. And that the only thing that would derail that is the ABC inserting itself into the negotiations.”
427 Mr Morrow gave this evidence, in answer to questions from me:
“Q. But your state of mind was, was it, that you didn’t want the ABC to say to Mr Murray, ‘Do you know about these negotiations that Mr Morrow is having with us?’A. Yes. I haven’t been involved in a negotiation with the ABC where they have sought to consult third parties.
Q. That’s not quite what I asked you. Was your state of mind that you did not want the ABC to tell Mr Murray of your negotiations with them?
A. For a new consumer show, yes. That’s correct.”
428 Mr Morrow’s evidence confirms the accuracy of Ms Pincus’s note, and makes clear that Mr Morrow’s state of mind at this point was that there was a “genuine prospect”, to use the words of his email to Mr Murray of 13 June 2019 (to which I have referred) and an “opportunity” (for the purposes of the implied term of the Joint Venture Agreement that I have found) to produce a further series of The Checkout.
429 That “genuine prospect” had arisen after Giant Dwarf and Cordell Jigsaw had, on 8 March 2019, agreed in principle on the terms of Cordell Jigsaw’s sale to Giant Dwarf of its shares in the Joint Venture Company.
430 Mr Morrow did not see the “opportunity” as one that should be made available to the Joint Venture Company. That was because he was not prepared to be involved in production of a further series of The Checkout by the Joint Venture Company as long as Cordell Jigsaw held 50% of shares in that company. Mr Morrow’s position was that he was only prepared to be involved in the production of a further series of The Checkout if Giant Dwarf was the owner of all shares in the Joint Venture Company or, possibly, if Giant Dwarf itself produced the show.
431 Mr Morrow insisted that the ABC not “reach out to Cordell Jigsaw” (the words in Ms Pincus’s note) or “insert itself into the negotiations” (Mr Morrow’s affidavit). That is, Mr Morrow insisted that the ABC not inform Mr Murray of the fact that, first, Mr Morrow was negotiating with the ABC for the production of a further consumer affairs show, and second, his intention was that once Cordell Jigsaw had sold to Giant Dwarf its shares in the Joint Venture Company that consumer affairs show become the seventh and eighth series of The Checkout.
432 Also on 1 April 2019, Mr Morrow wrote to Mr Carrington:
“Reading back over your email on Friday, I just wanted to make clear how the formalities re The Checkout work. Neither [Cordell Jigsaw] nor] [Giant Dwarf] holds any IP rights in The Checkout: those rights are held by [the Joint Venture Company] with [Cordell Jigsaw] and [Giant Dwarf] owning 50 shares each in [the Joint Venture Company]. Whatever documentation the ABC requires, the ABC would need to obtain it from [the Joint Venture Company], not [Cordell Jigsaw].I don’t anticipate there being a difficulty with [the Joint Venture Company] providing that in due course. It’s just that while [Cordell Jigsaw] and [Giant Dwarf] have reached an agreement in principle, the contracts to implement that agreement in principle are still to be executed.
I think there’s good reason to expect that any format issues will evaporate shortly. Of course it’s a matter for the ABC how it approaches this, but given that it may well be that detailed consideration and consternation about any potential format issue is premature.” (Emphasis added.)
433 On 2 April 2019, following their conversation on 1 April 2019, Ms Pincus sent an email to Mr Morrow:
“Thank you for your time on the phone yesterday with Georgina [Waite] and me to discuss the format issue.You indicated that you are working through the format issue and the likely scenario is change of ownership of [the Joint Venture Company] from [Cordell Jigsaw]/[Giant Dwarf] to [Giant Dwarf]. I thought it would be useful to set out a brief summary of what we would require in that scenario as it may be relevant to your negotiations. Our preliminary thoughts are that we would need:
• A quit claim from [Cordell Jigsaw] (and any relevant related company) releasing the [Joint Venture Company] and [Giant Dwarf] from all possible claims (including infringements of IP, breach of contract or breach of confidentiality). A transfer of rights will not in itself release the [Joint Venture Company] or [Giant Dwarf] of any claims and such claims could impact production of the program;
• In order to confirm chain of title in relation to ownership of the Checkout format by [the Joint Venture Company], a solicitor’s opinion in relation to the documentation which would need to trace the history of the ownership of the format. For example, if our understanding is correct that the format was originally devised jointly with [Cordell Jigsaw] (or its related company) we would need evidence of the following assignments of the format:
o from the original author of the format to [Cordell Jigsaw] (either as employee or contractor);
o from [Cordell Jigsaw] to [the Joint Venture Company]; and
o from any other party/ies who contributed to the creation of the format to [the Joint Venture Company] (including contractors of [Giant Dwarf]); and
• If it’s intended to use the title or other program elements of The Checkout, the chain of title review will need to extend to these elements.
In the meantime, we will keep the deal terms and the financial discussions moving along.”
434 Mr Morrow replied the same day:
“Thanks Julia – I’ll look forward to receiving the ABC’s response on the overall deal terms. Hopefully I’ll be able to clarify things the state of play on the format issue by then too.”
435 The “format issues” to which Mr Morrow referred in his communications with Mr Carrington and Ms Pincus were obviously the question of whether the “new” consumer affairs shows would be called Are You Being Served, or The Checkout; with Mr Morrow’s ambition being the latter.
436 In cross-examination, Mr Morrow said he was confused about what Ms Pincus meant in her email. I do not accept that evidence. His response shows he laboured under no such confusion.
437 In the meantime, Mr Morrow continued communicating with Mr Murray, without mentioning his communications with the ABC.
438 On 1 April 2019, Mr Morrow had sent an email to Mr Murray attaching a draft share sale agreement and stating:
“I know you’ve got a lot on at the moment, but I’m really hoping that we can get this sorted in the next couple of days because - as I’ve mentioned previously - I really need ... access [Giant Dwarf’s] share of the retained earnings from the PDV rebates to pay off an outstanding loan ... so time is very literally money.Needless to say, happy to discuss any of the docs and to revise if necessary, but I hope think you’ll find it covers everything we need and is consistent with Simon’s summary of the discussions to date.
Perhaps we could duck in to the Duck Inn one afternoon this week to have a beer and sign it all off?
As I say, would really appreciate if we could finalise this as soon as poss[ible] ...”.
439 Once again, Mr Morrow’s words were apt to suggest to Mr Murray that his only motivation in seeking to “finalise this as soon as possible” was Giant Dwarf’s need to access the PDV Offset. In cross-examination Mr Morrow denied this, and said he was motivated by a “sincere desire not to be in business with Mr Murray and Cordell Jigsaw any longer”. Mr Morrow may well have been so motivated, but he was careful to give Mr Murray the impression that his only concern was access to the PDV Offset.
440 I also find that, in fact, the reason Mr Morrow wanted to “finalise this as soon as possible” was so that he could inform the ABC that the “format issues” had been resolved and that he was, whether through the Joint Venture Company or Giant Dwarf, free to produce a “new” consumer affairs show to be the seventh series of The Checkout. As I set out below, this is what happened, as soon as the Share Sale Agreement was finalised.
441 Persistent as ever, the next day, 2 April 2019, Mr Morrow sent messages to Mr Murray:
“[Mr Morrow]: Hi Nick - just tried to call, hoping to see if you’ve got the docs I sent through yesterday. It would be great if we could sort things in the next day or so as I’d really like to get both pay off that loan, and to stop having to hassle you![Mr Murray]: In a screening in Melb[ourne]. Will be able to go through in detail tomorrow. Cheers N
[Mr Morrow]: Thanks Nick. I’m around during the day, if you’d like to discuss anything, and if there are changes I can make them and send through a revision. All the best for the screening ... hope your phone’s on silent ;-)”.
442 Later on 2 April 2019, Ms Pincus sent Mr Morrow a “table setting out the deal terms of The Checkout S6, your proposed terms for a new consumer show and the ABC’s position re each of those terms.”
443 The table attached to Mr Pincus’s email contained four columns headed “Terms”, “Checkout S6”, “New Consumer Show (Proposed Terms – 2019)” and “ABC Response”. It also set out, in relation to each of those subjects, entries for items such as “Producer”, “Program”, “Budget”, “Creative Approvals” and the like.
444 Ms Pincus populated the table with the relevant details from the sixth series of The Checkout, Mr Morrow’s proposals for the “New Consumer Show” and the ABC’s response to those proposals. A copy of the table is attached to these reasons. The details recorded for the sixth series of The Checkout, and the “New Consumer Show” were almost exactly the same. [444] ABC comparative table (318397, pdf)
445 The table is a vivid illustration of how closely aligned the ABC and Mr Morrow now saw Mr Morrow’s proposed Are You Being Served show and The Checkout.
446 On 3 April 2019, Mr Carrington wrote to Mr Morrow dealing with disagreements which had arisen in relation to certain of the “deal terms” for the “New Consumer Show” (which differences are not presently relevant) and concluding:
“[W]e’re aiming to be on air in October.”
447 On the same day, Mr Morrow sent Mr Murray a further message:
“Hi Nick – any chance to a quick chat today or tomorrow to hopefully get things sorted? Cheers, Jules.”
448 On 4 April 2019 Mr Morrow sent Mr Murray a further message:
“Hi Nick – am hoping to hear back from you soon. Could we talk this afternoon pls?”.
449 Mr Morrow was obviously anxious to finalise the arrangements with Mr Murray. He agreed that he understood he then had no legally binding arrangement with Mr Murray. By now he had been offered a two-series deal at $3.2 million per season. He was intending that, if he could secure sole ownership of the Joint Venture Company, that show would be The Checkout.
450 As Mr Katekar submitted, even if the return of The Checkout was, as at the time of the Duck Inn Meeting “unlikely”, by now the position had changed completely. Subject only to Mr Murray agreeing to sell Cordell Jigsaw’s shares in the Joint Venture Company to Mr Morrow or Giant Dwarf, the return of The Checkout was a certainty.
451 Later on 4 April 2019, Mr Murray replied to Mr Morrow:
“I’ve reviewed the draft paperwork and it appears in good shape.I will speak to Simon [Fraser] when I get back to Sydney in the morning and confirm he is happy with what he has been provided with.
I assume there will have been some movement regarding the fees you have charged to the company in the current financial year. We did discuss your specific question about a kicker for [Giant Dwarf] in our Duck Inn meeting. You will recall I had said no to that, given that we don’t do that on our other shows. Nor do we charge Exec time in respect of the submission of PDV or Offset applications and did not expect you to do so.
If that issue can be resolved and everything else is in order then we’ll be in a position to execute the paperwork tomorrow.”
452 On 5 April 2019, Mr Morrow replied with an email to Mr Murray which included:
“If we can sign the docs today though, that would be great as it would mean I could press go on getting the damn loan paid off and stopping the clock on some chunky interest payments.”
The Share Sale Agreement
453 On 8 April 2019, Mr Murray executed the draft Share Sale Agreement and wrote to Mr Fraser and Cordell Jigsaw’s inhouse lawyer, Ms Mandy Chapman:
“Here is the version I’ve signed - we’ll have to transfer [the Joint Venture Company] money and close those accounts tomorrow.Jules was still chasing me just then to sign, so we should make sure he can access the $$ tomorrow.
Mandy [Chapman], I’ll need to send something to ABC tomorrow too so they know about the change.”
454 On 8 April 2019, Giant Dwarf, Cordell Jigsaw and the Joint Venture Company executed the Share Sale Agreement.
455 The Share Sale Agreement provided that:
(a) the Joint Venture Company would pay Cordell Jigsaw 40% of the Joint Venture Company’s net income from the exploitation of series one to six of The Checkout and from “any tax rebates” from the exploitation of those series (that is, any PDV Offsets from those series other than that received in January 2019 in respect of series five and series six);[32](b) the Joint Venture Company would pay Cordell Jigsaw “a fee of 2 percent of [the Joint Venture Company’s] cash budget ... on subsequent series of The Checkout produced by [the Joint Venture Company, Giant Dwarf] or any affiliated company or subsidiary”;[33]
(c) the parties acknowledged that each of Giant Dwarf and Cordell Jigsaw had a “separate right to produce another consumer affairs show provided that show does not use the name or format of The Checkout or any Intellectual Property or Works owned by [the Joint Venture Company];[34]
(d) Cordell Jigsaw and Giant Dwarf each acknowledged that “all Intellectual Property Rights in relation to The Checkout, including Format owned exclusively by [the Joint Venture Company];[35]
(e) each of Giant Dwarf and Cordell Jigsaw agreed to “do all things [the Joint Venture Company] considers reasonably necessary to protect the assignment in this clause”;[36]
(f) each party to the agreement released the other from “all and any liability”, including in contract, equity and under the Competition and Consumer Act in connection with, among other things:
(i) any decision or action made or taken by or on behalf of the Joint Venture Company in relation to the business conducted by the Joint Venture Company by the “Released Party” or any of its directors; and(ii) “the transfer of the Released Party’s Ordinary Shares under this agreement”;[37] and
(g) each party agreed to “do anything (including executing any document) that any other party may reasonably require to give full effect to this agreement”.[38]
456 I will return to the terms of the Share Sale Agreement later in these reasons.
457 I note at this point, however that:
(a) Mr Morrow and Giant Dwarf rely upon the releases referred to in cll 7.1 and 7.2 of the Share Sale Agreement in answer to Mr Murray’s and Cordell Jigsaw’s claims in the Cross-Claim Statement; and(b) there is a dispute between the parties as to whether Mr Murray and Cordell Jigsaw failed to comply with obligations of further assurance under cl 9.7 of the Share Sale Agreement when they refused to execute the “Quit Claim” proffered by the ABC during June 2019.
458 At the same time that he executed the Share Sale Agreement, Mr Murray resigned as the Director of the Joint Venture Company.
Events immediately following execution of the Share Sale Agreement
459 On 10 April 2019, two days after the Share Sale Agreement was executed, Mr Morrow wrote to Ms Pincus, Ms Porter, Mr Anderson, Mr Carrington and Ms Waite at the ABC:
“Ahead of the phone call with Lou [Porter] and Julia [Pincus] at 4pm today, I wanted to bring you all up to date on the developments at our end re another series and, in particular, The Checkout.Nick Murray and I have now executed the agreements to implement [Cordell Jigsaw’s] withdrawal from the joint venture company which produced TCO1- TCO6 (ie Series 1 to 6 of The Checkout).
...
All [intellectual property] rights in The Checkout continue to be fully owned by [The Joint Venture Company] (now a 100% owned subsidiary of Giant Dwarf Pty Ltd), and this is confirmed in the exit arrangements with [Cordell Jigsaw].
...
In other words, the outcome I’ve been foreshadowing in our discussions has now happened and therefore we should now proceed on the basis that the “Consumer Show – 2019” will be TCO7 ie Series 7 of The Checkout, produced by the same entity that has made all previous series.
Given that, you won’t be surprised to hear that the producer’s position is that in all material respects this needs to be on the same terms and conditions as for previous series. Those terms have been substantially the same for six series already and have worked well. This is also in line with discussions between David [Anderson] and me to date.” (Emphasis added.)
460 Mr Morrow attached to his email a revised copy of the “deal terms” table that Ms Pincus had sent him on 2 April 2019.
461 Mr Morrow substituted for the previous heading “New Consumer Show (Proposed Terms – 2019)” the heading “TC07 – The Checkout S7” and changed the “producer” of the company from Giant Dwarf to the Joint Venture Company.
462 Otherwise, the documents were in almost exactly the same terms.
463 Thus, as Mr Morrow had foreshadowed in his discussions with the ABC since 8 March 2019, now that Mr Murray had caused Cordell Jigsaw to sell to Giant Dwarf its shares in the Joint Venture Company, Mr Morrow was proposing that the “new” consumers affairs show that he had been pitching to the ABC since 8 March 2019 be re-badged from Are You being Served to The Checkout: fait accompli.
464 Mr Morrow’s motivation in entering the Share Sale Agreement was revealed several months later when his then solicitor, Mr Michael Easton, said in an email to Mr Murray:
“The fundamental purpose of the [Share Sale Agreement] was to put in place arrangements which would make it possible for there to be another series of The Checkout.”
465 This was certainly Mr Morrow’s “fundamental purpose”, a purpose his numerous communications concerning the PDV Offset were, I have found, designed to conceal from Mr Murray. Although Mr Morrow said to Mr Murray at the Duck Inn Meeting that it would be “better” if “we” could find some way to make The Checkout again, and although for the reasons I have set out, including the terms of the Share Sale Agreement itself, Mr Murray must have contemplated the possibility that the Joint Venture Company might eventually produce a further series of The Checkout, there is no suggestion in the evidence that Mr Murray saw the “fundamental purpose” of the Share Sale Agreement to be as Mr Morrow stated. Mr Murray had no knowledge of Mr Morrow’s communications with the ABC, nor of the advanced state of his negotiations with them. Indeed, Mr Morrow, in effect, instructed the ABC not to inform Mr Murray of those matters.
466 Ms Pincus forwarded this email to Mr Carrington who, on 11 April 2019, replied:
“Thank you Julia. We certainly want to commission The Checkout.”
467 Much happened thereafter.
468 The events leading to the defamation and injurious falsehood claims in these proceedings occurred after this date; as did the events leading to Cordell Jigsaw’s alleged repudiation of, and Giant Dwarf’s and the Joint Venture Company’s purported termination of, the Share Sale Agreement.
469 However, I will pause the course of events here to consider, and make findings about the parties’ position as at 8 April 2019.
There was an opportunity to produce a further series of The Checkout
470 The events that I have set out make clear that from 8 March 2019 there was a “genuine prospect” (to use the words in Mr Morrow’s 13 June 2019 email to Mr Murray) and an “opportunity” within the meaning of the implied term of the Joint Venture Agreement that I have found for there to be a further series of The Checkout.
471 For some months after the ABC announced the “hiatus” of The Checkout in July 2018, Mr Morrow sought to persuade the ABC to change its decision both by public announcements (the Tweets in July 2018) and direct negotiation with Ms Guthrie on 31 July 2018 and later with Mr Anderson on and following 17 August 2018.
472 During this time the ABC made public announcements to the effect that it was open to broadcasting a further or new consumer affairs shows in the future; for example Mr Anderson’s interview with Mr Richard Glover on 14 August 2018 and with Mr Michael Rowland on 25 September 2018.
473 Mr Anderson said words to this effect to Mr Morrow in their 17 August 2018 meeting, their 19 September 2018 telephone conversation and their 19 December 2018 telephone conversation.
474 Mr Morrow accepted that he obtained all this information in his capacity as a director of the Joint Venture Company.
475 As early as August 2018, Mr Morrow’s discussions with the ABC moved beyond producing a further series of The Checkout to producing a different TV project.
476 However, I find that throughout this period, Mr Morrow still had in mind the possible production of a further series of The Checkout, without the involvement of Mr Murray or Cordell Jigsaw.
477 In late December 2018, Mr Morrow’s communications with Mr Anderson, and also Mr Carrington were about a new consumer affairs show or, as an alternative, the “recommissioning” of The Checkout.
478 This led to Mr Morrow’s meetings with ABC’s representatives on 13 February 2019 in which a new consumer affairs show was discussed and at which Mr Morrow expressed a desire to “still do The Checkout”.
479 As I have set out, it was immediately after this meeting that Mr Morrow resumed contact with Mr Murray for the first time since the previous July to commence negotiations about “drawing a line” under the joint venture. This led to his meeting with Mr Murray at the Duck Inn and his meeting with Mr Simon Fraser, Ms Crouch and Ms Chen on 22 February 2019.
480 At his meeting with the ABC on 8 March 2019, Mr Morrow raised the possibility of a further series of The Checkout “if Nick and I can work something out”. It is thus clear, by this time, that Mr Morrow was actually looking for an opportunity of recommissioning The Checkout albeit only, as he was seeking to negotiate, if he could persuade Mr Murray to sell Giant Dwarf the shares of Cordell Jigsaw in the Joint Venture Company.
481 It was in that context that, later on 8 March 2019, Mr Murray pitched Are You Being Served to the ABC. Mr Morrow saw that show as being substitutable for The Checkout, notwithstanding any differences in format that may have existed between the two shows.
482 By 28 March 2019, the position became even clearer. By then Mr Morrow had told Ms Pincus that he was “confident” the show Are You Being Served would become The Checkout, such confidence evidently reflecting Mr Morrow’s assuredness that he would successfully consummate negotiations with Mr Murray in relation to Cordell Jigsaw’s shares in the Joint Venture Company.
483 Certainly, by 1 April 2019 Mr Morrow must have seen that there was an “opportunity” and a “genuine prospect” of the ABC agreeing that the new consumer affairs show could be called The Checkout; and that this was an opportunity that was available not only to him, or to Giant Dwarf, but also to the Joint Venture Company.
484 Mr Morrow did not wish the Joint Venture Company to pursue that “opportunity” so long as Mr Murray was the director of the Joint Venture Company and Cordell Jigsaw was its 50% shareholder. He asked the ABC to not inform Mr Murray of the opportunity.
485 Mr Morrow’s position was that he had exercised Giant Dwarf’s right of “veto” as a member of the joint venture to disable the Joint Venture Company from pursuing the opportunity.
486 Mr Morrow, however, had done this without revealing to his fellow director, Mr Murray, his plans to cause the opportunity to become available and, once it was available, to appropriate it for the benefit of Giant Dwarf.
Mr Morrow and Giant Dwarf did not inform Mr Murray and Cordell Jigsaw of that opportunity and sought to divert that opportunity for their benefit
487 There is no dispute that Mr Morrow did not inform Mr Murray of his negotiations with the ABC. And he asked the ABC not to do so.
488 On 10 April 2019, immediately after execution by Giant Dwarf and Cordell Jigsaw of the Share Sale Agreement on 8 August 2019, Mr Morrow informed the ABC that Cordell Jigsaw had withdrawn from the Joint Venture Company and that “we should now proceed” to produce series seven of The Checkout.
489 By now, Giant Dwarf was the sole shareholder of the Joint Venture Company. It sought to appropriate the opportunity to produce series seven of The Checkout and to reap the benefits of that opportunity.
Breach of the implied term of the Joint Venture Agreement
490 It follows from these matters that Giant Dwarf was in breach of the implied term of the Joint Venture Agreement to disclose such an opportunity to its joint venturer, Cordell Jigsaw, and thus, in effect, to the Joint Venture Company.
Breach of Mr Morrow’s duty as a director of the Joint Venture Company
To the Joint Venture Company
491 Mr Morrow’s duties, as a director of the Joint Venture Company, to exercise his powers and discharge his duties in good faith and in the best interests of the Joint Venture Company, and to exercise those powers for a proper purpose, necessarily imposed on him a duty to cause the Joint Venture Company to abide by the terms of the Joint Venture Agreement; and not to cause the Joint Venture Company to act in breach of a term of the Joint Venture Agreement.
492 That duty necessarily involved a duty to cause the joint venturer with which he was associated, Giant Dwarf, to inform the other joint venturer, Cordell Jigsaw (that is, for all practical purposes, Mr Murray), of any opportunity to produce any further series of The Checkout (or any equivalent or similar consumer affairs show).
493 As director of the Joint Venture Company, Mr Morrow had a duty not to use his position to gain an advantage for himself or for a company with which he was associated or to cause detriment to the Joint Venture Company.
494 He also had a duty to give his fellow director, Mr Murray, notice of any material personal interest in any matter that related to the affairs of the Joint Venture Company.
495 It was in the Joint Venture Company’s interest, and indeed its duty, to act consistently with the Joint Venture Agreement.
496 It was not in the Joint Venture Company’s interest to act inconsistently with the Joint Venture Agreement.
497 This, in my opinion, placed Mr Morrow in a position of conflict between his interests in having Giant Dwarf become sole shareholder of the Joint Venture Company and thus to produce a seventh series of The Checkout solely for its own benefit, and his duty to disclose to the Joint Venture Company, and to his fellow director, that such an opportunity was available.
498 Mr Morrow was not entitled himself to decide that the Joint Venture Company would take advantage of that opportunity unbeknownst to his co-director; and only after the other joint venturer, Cordell Jigsaw, had transferred its interest in the Joint Venture Company to Giant Dwarf.
499 Mr Katekar put the matter this way:
“On 17 August 2018, Mr Anderson presented Mr Morrow with an opportunity for a consumer show to air on the ABC in the second half of 2019. It seems plain – and Mr Morrow accepted - that he obtained that information in his capacity as a director of the Company. This placed Mr Morrow into a position of conflict: he could direct the opportunity to the [Joint Venture] Company, or he could direct it to Giant Dwarf instead, in which case it would be outside the joint venture and not subject to the 60/40 profit split with [Cordell Jigsaw] which had so irked him....
The only way in which Mr Morrow could have avoided breaching his fiduciary and statutory duties to the [Joint Venture] Company was to make full disclosure to the [Joint Venture] Company via its other director, Mr Murray. It is not in contest that he did not do that.” (Citations omitted.)
500 My conclusion is that the “opportunity” presented to Mr Morrow in relation to The Checkout arose in March 2019, rather than August 2018 as Mr Katekar submitted. Otherwise, I think Mr Katekar’s submission is correct.
501 In March 2019, an opportunity arose for there to be a seventh series of The Checkout. Mr Morrow became aware of that opportunity by reason of discussions that he had had, in the eight months leading to March 2019, with officers of the ABC. He had those discussions in his capacity as a director of the Joint Venture Company. Through those discussions, an opportunity arose that Mr Morrow should have, as a director of the Joint Venture Company, disclosed to the Joint Venture Company and thus, to his fellow director, Mr Murray.
502 My conclusion is that Mr Murray and Cordell Jigsaw have established the case that they propounded in the Amended Cross-Claim List Statement that Mr Morrow’s conduct, as I have set out above, was in breach of his duty as a director to the Joint Venture Company because:
(a) it was not acting in good faith in the best interests of the Joint Venture Company for Mr Morrow to seek “to divert the new series away from the [Joint Venture Company], towards Giant Dwarf, or not produce the series at all, unless Giant Dwarf could obtain control of the [Joint Venture Company] by buying Cordell Jigsaw’s shares in it”;(b) it was “not loyal to” the Joint Venture Company and “was not for proper purposes, and was a misuse of his position for the benefit of himself or Giant Dwarf” for Mr Morrow to behave in this fashion “in that Mr Morrow told the ABC that whether [the Joint Venture Company] would produce the next series of The Checkout was conditional on Giant Dwarf buying out Cordell Jigsaw from the [Joint Venture Company], which in turn depended on Cordell Jigsaw not finding out about his discussions with the ABC to reintroduce the show”;
(c) it was in Mr Morrow’s interests “for Giant Dwarf to pursue further series of The Checkout (or a similar program) with the ABC without Cordell Jigsaw’s involvement as a shareholder of” the Joint Venture Company;
(d) “in the context of negotiations between Giant Dwarf and Cordell Jigsaw in relation to the Share Sale Agreement, and the price to be paid for Cordell Jigsaw’s shares in [the Joint Venture Company], it was in [Mr] Morrow’s interests to keep the ABC’s intention of commissioning a further series of The Checkout secret from Cordell Jigsaw”; and
(e) Mr Morrow “kept the ABC’s intentions secret from [Mr] Murray and Cordell Jigsaw in order for Giant Dwarf to obtain Cordell Jigsaw’s shares in the [Joint Venture Company] for the lowest price possible”.[39]
To Cordell Jigsaw
503 Mr Murray and Cordell Jigsaw also alleged that Mr Morrow, as a director of the Joint Venture Company, owed a “fiduciary duty, or alternatively an equitable duty” to Cordell Jigsaw to, relevantly:
“... tell [Mr] Murray and Cordell Jigsaw that the ABC wished to commission The Checkout or a consumer affairs program the proposed format of which was similar or equivalent to The Checkout before obtaining Cordell Jigsaw’s agreement to sell its shares in [the Joint Venture Company] to Giant Dwarf.”
504 In light of my conclusions in relation to the nature of Mr Morrow’s duty as a director of the Joint Venture Company to the Joint Venture Company, and the conclusions to which I come below concerning Mr Morrow’s and Giant Dwarf’s misleading or deceptive conduct, it is not necessary that I reach any conclusion in relation to this aspect of Mr Murray’s and Cordell Jigsaw’s claim.
505 I will, nonetheless, deal with the submission, albeit briefly.
506 There is no recognised category of fiduciary relationship between a director and an individual shareholder.[40]
507 Occasionally, a fiduciary relationship may be found to exist between a director and a shareholder in particular circumstances. For example, such a relationship has been found to exist where the sole effective director and majority shareholder of a company took advantage of his special knowledge of a proposed sale of the company business to acquire the shares of the only other shareholder at a gross undervalue without disclosing the negotiations.[41]
508 Mr Murray and Cordell Jigsaw contended that such a duty existed in this case and asserted that Mr Morrow and Giant Dwarf “each occupied a special position of advantage in relation to Cordell Jigsaw”. This was said to be because Mr Morrow and Giant Dwarf conducted the day to day management of the Joint Venture Company and because Mr Morrow had carriage of negotiations with the ABC on behalf of the Joint Venture Company from July 2018 onwards.
509 Mr Katekar submitted that the Joint Venture Company was a “closely-held company akin to a partnership”, that Mr Morrow had control of the Joint Venture Company’s relationship with the ABC, and that in that capacity Mr Morrow was given information of which he knew Cordell Jigsaw was ignorant, and which might reasonably and objectively have controlled or influenced Cordell Jigsaw’s judgment in deciding to sell its interest in the Joint Venture Company.
510 Mr Katekar submitted that Mr Morrow had, in effect, taken over conduct of the Joint Venture Company to the exclusion of Mr Murray and “surreptitiously pursued an opportunity with the ABC, creating the basis for the transaction through his conscientious efforts”; and yet that “Mr Morrow then deliberately kept all of that secret from his co-director Mr Murray and, through him, Giant Dwarf’s joint venture partner, knowing that if Mr Murray found out, the share sale would never have occurred”; at least not for the consideration set forth in the Share Sale Agreement.
511 In my opinion, there is substance in these submissions.
512 No doubt, it would have been possible for Mr Murray to make his own enquiries of the ABC. However, on Mr Morrow’s account of his conversation with Mr Murray at the Duck Inn Meeting, and for the reasons I outline more fully below concerning whether Mr Morrow and Giant Dwarf engaged in misleading or deceptive conduct, what Mr Morrow asserts he told Mr Murray on 19 February 2019 was apt to lead Mr Murray to the conclusion that Mr Morrow was not yet in discussions with the ABC and that he would not be taking any steps to seek to revive production of The Checkout until the posited share sale transaction had been consummated.
513 In that circumstance, were it necessary for me to decide whether Mr Morrow owed Cordell Jigsaw a duty of the kind of which Mr Murray contends, I would have found such a duty existed, and was breached.
Mr Morrow’s and Giant Dwarf’s alleged misleading or deceptive conduct
514 The primary ground upon which Mr Murray and Cordell Jigsaw advanced their case against Mr Morrow and Giant Dwarf was on the basis of Mr Morrow’s and Giant Dwarf’s conduct which was alleged to be misleading or deceptive within the meaning of s 18 of the Australian Consumer Law.
515 In their Amended Cross-Claim List Statement, Mr Murray and Cordell Jigsaw at times allege that it was Giant Dwarf that engaged in misleading or deceptive conduct and at times that it was both Mr Morrow and Giant Dwarf that did so. Alternatively, it is alleged that each of Mr Morrow and Giant Dwarf were accessorily liable for the misleading or deceptive conduct of the other.
516 However, in oral and written submissions reference was made only to Mr Morrow’s alleged misleading or deceptive conduct. I understood that the substance of Mr Murray’s and Cordell Jigsaw’s complaint was that Giant Dwarf, by reason of Mr Morrow’s actions, engaged in such conduct.
517 As neither party suggested anything turns on the distinction between Giant Dwarf and Mr Morrow, I will, for the sake of simplicity, adopt the parties’ practice of referring only to Mr Morrow in this regard.
518 There was no dispute about the general principles. They were summarised by Mr Katekar as follows:
“Conduct will be misleading or deceptive if it induces or is capable of inducing error.[42] This is a question of fact to be determined in the context of the impugned conduct and the relevant surrounding facts and circumstances.[43] The first step is to determine whether the facts establish the impugned conduct[44] and the second step is to ascertain whether that conduct is to be characterised as misleading.[45] In the present context, this involves a consideration of a notional cause and effect relationship between the conduct and the state of mind of the relevant persons – which is an objective question.[46]A ‘half-truth’ – a statement that is literally true but likely to mislead unless suitably qualified – may be misleading in the relevant sense.[47] That is because a half-truth may be worse than a blatant lie because it may lull those to whom it is directed into a false sense that they are receiving the whole truth and nothing but the truth – and hence is under the understanding, and reasonable and legitimate expectation, that the person giving the information is presenting all the information necessary for the recipient to act accordingly.[48]
The “Motivation Representation”
519 Mr Murray and Cordell Jigsaw alleged that by reason of matters discussed between Mr Murray and Mr Morrow during the Duck Inn Meeting, as well as the communications by email and telephone between the parties on 20 February 2019, 27 February 2019, 5 or 6 March 2019, 20 March 2019, 1 April 2019, 2 April 2019 and 5 April 2019, Giant Dwarf represented to Cordell Jigsaw that:
(a) Giant Dwarf’s desire to buy Cordell Jigsaw’s shares was motivated by Mr Morrow’s stated need to access funds from the PDV Offset in order to pay off a loan on another project; and(b) Giant Dwarf, through Mr Morrow, did not wish to continue producing television programs.
520 In their Amended Cross-Claim List Statement, Mr Murray and Cordell Jigsaw called these representations, together, the “Motivation Representation”.
521 As to the representation at (a), which Ms Chrysanthou characterised as the “PDV Representation”, I have found that the email and SMS communications that Mr Morrow had with Mr Murray and upon which Mr Murray relies were apt to, and intended by Mr Morrow to, suggest to Mr Murray that Mr Morrow’s sole motivation in seeking to cause Giant Dwarf to acquire Cordell Jigsaw’s shares in the Joint Venture Company was to access the PDV Offset so that Giant Dwarf could repay a loan it had taken out in relation to a Netflix project.
522 Mr Morrow did not say in any of those communications that his only reason for seeking to have Giant Dwarf acquire Cordell Jigsaw’s shares was to access the PDV Offset. But the emails were apt to, and I have found calculated to, create that impression and to convey that access to the PDV Offset was Mr Morrow’s only immediate motivation.
523 However, by 8 March 2019, by which date Mr Morrow sent 4 of the 10 communications upon which Mr Murray relies, it is clear, for the reasons I have set out, that Mr Murray’s motivation, not mentioned in any of the emails, was to produce a further series of The Checkout without any involvement by Mr Murray or Cordell Jigsaw.
524 I have found that at the Duck Inn Meeting Mr Morrow said to Mr Murray that “I think it would be better for everyone if we could find some way that The Checkout could be made again”.
525 It is evidently Mr Morrow’s case that the way the “we” found a way to make The Checkout again was by entering into the Share Sale Agreement.
526 It is also true that the terms of the Share Sale Agreement reflected the possibility that the Joint Venture Company might make a further series of The Checkout following transfer by Cordell Jigsaw to Giant Dwarf of its shares in the Joint Venture Company (hence the 2% agreed fee on any further series of The Checkout).
527 However, as Mr Murray said in a later email, this was a “blue sky” statement. That is, it reflected as a matter of generality what Mr Murray must have contemplated Mr Morrow and Giant Dwarf might do in the future. But the form of the Share Sale Agreement, and Mr Morrow’s emails and various communications in March and April 2019 did not reveal, or even suggest, that he had immediate plans, at least from 8 March 2019, to produce a series called The Checkout as soon the share transfer from Cordell Jigsaw to Giant Dwarf was completed.
528 In those circumstances I find that Mr Morrow did make the “PDV Representation” to Cordell Jigsaw.
529 As to the representation in (b) at [519] above (which Ms Chrysanthou characterised as the “Never Again Representation”) I have found that Mr Morrow did say the words attributed to him by Mr Murray.
530 I have also found that Mr Morrow made this statement in an effort to deflect Mr Murray’s attention from the prospect of Mr Morrow’s further involvement in any potential recommissioning of The Checkout.
531 However, I find it hard to see what reliance Mr Murray could have placed on it. It must have become apparent to Mr Murray from the immediately succeeding events that Mr Morrow did propose to continue producing television programs. For example, after the 22 February 2019 meeting, Mr Fraser reported to Mr Murray that Cordell Jigsaw might have an “entitlement to a format fee on subsequent series” of The Checkout. In Mr Fraser’s email to Mr Morrow of 8 March 2019, which was copied to Mr Murray, there was a further reference to Cordell Jigsaw having an “entitlement to a format fee on subsequent series of The Checkout produced by [Giant Dwarf] or affiliated company/subsidiary”. Mr Murray must have understood from these matters that, despite what Mr Morrow said on 19 February 2019, he proposed to remain involved in the business of producing television programs.
Misrepresentation by silence
532 Mr Murray’s and Cordell Jigsaw’s case is that by not disclosing to Mr Murray the nature and extent of his communications with the ABC, Mr Morrow engaged in misleading or deceptive conduct because:
(a) Cordell Jigsaw had a reasonable expectation that the nature and content of those discussions would be disclosed to it and that there would also be disclosed “any information of which Giant Dwarf was aware to the effect that the ABC wished to commission a further series of The Checkout or any consumer affairs program the proposed format of which was similar or equivalent to The Checkout”;(b) those matters were relevant to any decision by Cordell Jigsaw as to whether it would enter into the Share Sale Agreement, and if so on what terms; and
(c) Mr Morrow and Giant Dwarf deliberately withheld that information from Cordell Jigsaw because they understood:
(i) from Mr Murray’s rejection of Mr Morrow’s November 2015 offer to buy Cordell Jigsaw’s interest in the Joint Venture Company that, as long as the Joint Venture Company continued to produce The Checkout for the ABC, Cordell Jigsaw wished to continue to participate in the profits of its shareholding in the Joint Venture Company; and(ii) that (as was the fact) Cordell Jigsaw would not have entered into the Share Sale Agreement had it known of those matters.
533 In Fabcot Pty Ltd v Port Macquarie – Hastings Council[49] Sackville AJA said[50] in a passage which has been endorsed by the Court of Appeal:[51]
“The question in a case of alleged misleading or deceptive conduct as a result of non-disclosure is whether in the light of all relevant circumstances, there has been conduct which is misleading or deceptive ... While the circumstances in which silence can be characterised as misleading or deceptive cannot be exhaustively defined, unless they give rise to a reasonable expectation that if some relevant fact exists it will be disclosed, mere silence will not support the inference that the fact does exist ...”.
534 More recently, Bell P[52] summarised[53] the “key propositions to emerge from the High Court’s important decision” in Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd as follows:
“• the language of reasonable expectation [found in cases such as Demagogue][54] is not statutory ...;• in commercial dealings between individuals or individual entities, characterisation of conduct will be undertaken by reference to its circumstances and context ...;
• close analysis of all of the circumstances of a transaction embraces a consideration of the sophistication of the parties and their experience in their fields ...;
• the knowledge of the person to whom the conduct is directed may be relevant ...;
• the existence of common assumptions and practices established between the parties or prevailing in the particular profession, trade or industry in which they carry on business may also be relevant ...;
• the analysis is objective ...;
• the analysis is to be ‘unmediated by’ high moral expectations exceeding the requirements of the general law ...;
• the statutory prohibition on misleading or deceptive conduct does not require a party to commercial negotiations to volunteer information which will be of assistance to the decision-making of the other party ...; and
• the failure to make reasonable inquiries, whilst not automatically defeating a statutory claim for damages for misleading or deceptive conduct, is a circumstance that is relevant to a consideration as to whether a failure to make disclosure is correctly characterised as misleading ...”.
535 In my opinion, Mr Morrow’s silence in the period from 19 February 2019 to 8 April 2019 concerning the progress and status of his negotiations with the ABC, combined with his “half truth” communications with Mr Murray in the meantime, constituted misleading or deceptive conduct.
536 I am able to reach this conclusion assuming[55] that:
(a) on 19 February 2019, at the Duck Inn, Mr Morrow told Mr Murray that:(i) the 60/40 profit arrangement stipulated in the Joint Venture Agreement was a “terminal disincentive” to Giant Dwarf ever doing The Checkout again;[56](ii) if the ABC did wish to have a consumer show, “it would make more sense for Giant Dwarf” to make that show;
(iii) that “the way things stand”, that is, as long as Cordell Jigsaw was a shareholder in the Joint Venture Company, “Giant Dwarf just wouldn’t make The Checkout again”; and
(iv) it “would be better for everyone” if “we” (that is, Mr Morrow and Mr Murray), could find “some way” (that is, by Giant Dwarf purchasing Cordell Jigsaw’s shares in the Joint Venture Company) that The Checkout could be made again; and
(b) on 22 February 2019:
(i) Mr Morrow repeated, but this time to Mr Simon Fraser, that it was best if “we” can all “move on” any way that makes it possible for The Checkout to be made again;(ii) Mr Fraser said something to the effect that it would be “sensible if we’re not listed on a program we’re not really involved in”, obviously acknowledging the prospect of Giant Dwarf producing The Checkout alone; and
(c) it was agreed in negotiations following 19 February 2019 for the Share Sale Agreement that Cordell Jigsaw would receive a 2% fee, thus bespeaking, Mr Murray’s and Cordell Jigsaw’s contemplation of the possibility of Giant Dwarf producing a further series of The Checkout at some point.
537 Nonetheless, the facts remain that:
(a) the Joint Venture remained on foot until the execution of the Share Sale Agreement on 8 April 2019 and the transfer by Cordell Jigsaw to Giant Dwarf of their shares in the Joint Venture Company; and(b) throughout that period, it remained an implied term of the Joint Venture Agreement that Giant Dwarf was obliged to inform Cordell Jigsaw of the “opportunity” that I have found arose from 8 March 2019 to produce a further series of The Checkout or of any equivalent or similar consumer affairs program.
538 It must follow from this that Mr Murray and Cordell Jigsaw had a reasonable expectation that Giant Dwarf would comply with this term and disclose the opportunity that I have found had been presented.
539 It may be that, throughout this period, Mr Murray’s state of mind was that The Checkout was “not coming back” and that it was “dead”; as evidenced by Mr Campbell’s statement immediately before Mr Simon Fraser’s meeting with Mr Morrow, Ms Crouch and Ms Chen on 22 February 2019 and Mr Murray’s statement to Mr David Knox on 17 March 2019. But that confirms, rather than contradicts, that there was a reasonable expectation on the part of Mr Murray and Cordell Jigsaw that Mr Morrow reveal that the opportunity had arisen and that there was a significant prospect of The Checkout “coming back”.
540 I see nothing in any of the evidence to suggest that Mr Murray should have, himself, made enquiries of Mr Morrow or the ABC between 19 February 2019 and 8 April 2019. Indeed, the statement that Mr Morrow says he made to the effect that it would be better for everyone if “we” found a way to make The Checkout again (that is, by the Share Sale Agreement) was apt to suggest to Mr Murray that Mr Morrow would take no steps to cause The Checkout to be “made again” until that “way” had been achieved; that is, that Giant Dwarf had acquired Cordell Jigsaw’s shares in the Joint Venture Company.
541 In closing submissions, Ms Chrysanthou put:
“Mr Morrow told Mr Murray that he wanted to make The Checkout again and thought it could return so he told Mr Murray he didn’t want to make the program with him, but that he would make it again if they could reach an agreement”.
542 It seems to me that this submission emphasises the point. On Mr Morrow’s evidence he told Mr Murray that he may well seek to produce a further series of The Checkout if he and Mr Murray could reach an agreement; that is, an agreement that Mr Murray cause Cordell Jigsaw to sell its shares in the Joint Venture Company to Giant Dwarf. Mr Morrow seems to have thought that once an agreement “in principle” had been reached, he was free to pursue the possibility of producing a new series of The Checkout. A reasonable person in his position would have understood that until any such agreement “in principle” had been perfected, in this case by the transfer of shares, the Joint Venture was still on foot and Giant Dwarf remained bound by its terms.
543 My conclusion is that, coupled with the misleading nature of the communications constituting what Ms Chrysanthou characterised as the “PDV Representations”, Mr Morrow’s silence in these circumstances amounted to misleading or deceptive conduct on his part.
Causation
544 Mr Murray’s evidence was that, had Mr Morrow disclosed the nature of his discussions with the ABC and the opportunity that had thereby arisen, he would not have caused Cordell Jigsaw to sell to Giant Dwarf its shares on the terms of the Share Sale Agreement.
545 I accept that evidence.
546 I also accept the submission made on behalf of Mr Murray and Cordell Jigsaw that the appropriate relief that should be awarded to Mr Murray and Cordell Jigsaw in these circumstances is an order under s 237 of the Australian Consumer Law rescinding the Share Sale Agreement.
547 I will consider below, the implications of rescission of the Share Sale Agreement as to:
(a) Mr Morrow’s and Giant Dwarf’s contention that in June 2019 Cordell Jigsaw repudiated its obligations under the Share Sale Agreement, justifying Giant Dwarf’s termination of it on 28 June 2019; and(b) Mr Morrow’s contention that, had Mr Murray not agreed that Cordell Jigsaw sell to Giant Dwarf its shares in the Joint Venture Company, Giant Dwarf could have proceeded to produce a number of series of Are You Being Served and enjoyed the profit from that production.
548 One such implication arises immediately, and that is that the “Bar to Action” in cl 7.2 of the Share Sale Agreement is no answer to Mr Murray’s and Cordell Jigsaw’s claims.
549 Another relates to Mr Morrow’s and Giant Dwarf’s case that Mr Murray and Cordell Jigsaw engaged in misleading or deceptive conduct.
Misleading or deceptive conduct by Mr Murray and Cordell Jigsaw
550 Giant Dwarf alleges that Mr Murray and Cordell Jigsaw themselves engaged in misleading or deceptive conduct.
551 In closing submissions, Ms Chrysanthou summarised Giant Dwarf’s claim as follows:
“Giant Dwarf brings a claim against [Cordell Jigsaw] and Mr Murray on the basis that they made representations that upon execution of the [Share Sale Agreement], Giant Dwarf and [the Joint Venture Company] would hold and enjoy the exclusive right to produce, exploit and otherwise deal with the rights and property in The Checkout, that [Cordell Jigsaw] and [Mr] Murray would not object to the exercise of those rights in producing further series of The Checkout, that they acknowledged Giant Dwarf was free to make other consumer affairs shows, and that they would comply with the [Share Sale Agreement].”
552 Ms Chrysanthou did not develop this submission.
553 In my opinion, there is no substance to it.
554 It cannot survive my conclusion that, because of Mr Morrow’s misleading or deceptive conduct, the Share Sale Agreement should be rescinded.
Events following the execution of the Share Sale Agreement
555 I return now to the course of events.
556 On 7 May 2019, Ms Pincus wrote to Mr Nick Heydon, then Entertainment Manager at the ABC, and Ms Porter under the heading “TCO S7”, stating that Mr Carrington had “given [the] green light to go ahead” two further series of The Checkout.
557 On 13 May 2019, Mr Morrow sent Ms Porter a budget for series seven of The Checkout. This budget was in the same format as the budget Mr Morrow sent Ms Porter on 29 March 2019 for Are You Being Served. It was populated with almost the same figures. The opening slides of each budget were virtually identical.
558 Thus, that for Are You Being Served was:
559 That for The Checkout series seven was:
Mr Murray hears of The Checkout series seven
560 Mr Murray had no knowledge of a proposed seventh series of The Checkout until 13 May 2019 when he had a text message exchange with Mr Craig Reucassel, another television producer, and then a director of and shareholder in Giant Dwarf.
561 Mr Murray had sent Mr Reucassel a text message congratulating Mr Reucassel on a television show that had evidently just been aired. Mr Reucassel thanked Mr Murray for his note and replied:
“BTW I presume you’re across this Checkout return I’ve heard rumours about. Not that I’ve been told about it.”
562 Mr Murray replied:
“Haven’t heard. Julian asked us to bail out of [T]he Checkout [joint venture]. But I’d be surprised if it came back after what happened between Julian and David Anderson (and Josie [Mason-Campbell] for that matter). So while they should be doing consumer affairs, I can’t see them doing it with Julian.”
563 Mr Reucassel replied, ominously:
“That’s not what I hear. I’d be looking at your JV terms.”
564 Mr Reucassel’s message appears to have been what prompted Mr Murray to write an email to the ABC that constitutes the first communication alleged by Mr Morrow to be defamatory of him.
565 Mr Morrow did not become aware of any of these allegedly defamatory communications until after the commercial proceedings were commenced.
The first allegedly defamatory communication – Mr Murray’s 21 May 2019 email to Mr Anderson and Mr Carrington
566 On 21 May 2019, Mr Murray sent an email to Mr Anderson with a copy to Mr Carrington.
567 I have marked up this and the later emails to show:
(a) the words by which defamatory imputations are alleged to be conveyed, being the words underlined in red; and(b) the words alleged to constitute an injurious falsehood, being the text in red;
568 The 21 May 2019 email was in the following terms
“Last week I was contacted by Craig Reucassel saying that he had heard a rumour that The Checkout was bring recommissioned. He asked what I had heard. Some of our production staff have now heard the same - we assumed the rumour was possibly contingent on additional funding flowing from a Labor government being elected.However, given the way that Julian Morrow behaved when the show was put into hiatus, we also assumed there would be no chance of the show returning. Also Julian did not mention his negotiations with you to me at all.
...
Many of the key Checkout team have indicated their reluctance to work on the series without a circuit breaker protecting them from Julian. (For instance, even Craig has in the recent past asked me to take over from Julian). I will no longer be that circuit breaker as Julian has asked that [Cordell Jigsaw] leave the [Joint Venture Company]. We now believe that in doing so, he may have breached his duties as a director of the company by not informing us of the negotiations to bring the show back. Accordingly, if the show proceedings, it is likely to be the subject of litigation which will probably result in internal ABC documents and correspondence between Julian and the ABC being subject to subpoena. We obviously would like to avoid that.
I should say that I am not suggesting any wrongdoing on the part of the ABC - you were not to know the contents of the discussions between Julian and us about the JV.
We had always believed that cheaper, fresher shows featuring some of the same key on air talent would be a more preferable course for the ABC than to bring back [T]he Checkout. As a result we have put a lot of effort and resources into that area.
Could you as a matter of urgency let me know the situation with the production?”.
569 Mr Anderson replied the following day, 22 May 2019:
“I appreciate you writing to me and bringing these matters to my attention.[Cordell Jigsaw] is an important partner of the ABC. We greatly value our relationship with you.
You will appreciate that discussions the ABC has with producers about their projects, whether that be with Julian Morrow or yourself or anyone else, are confidential.
However, I assure you that the ABC takes the matters raised in your email extremely seriously.”
570 Mr Murray’s email obviously caused some concern within the ABC.
571 Thus, despite Mr Anderson’s somewhat conciliatory response to Mr Murray’s 21 May 2019 email, later on the same day Mr Carrington wrote to Mr Morrow:
“On my side, and in preparation for the ABC’s commissioning meeting, I’ve been in touch with General Counsel to ensure we’ve covered all the legal and factual issues with regards to The Checkout. I’ll need to demonstrate to the Commissioning executive that we are clear to proceed. On GC’s advice please see the attached letter.”
572 The “attached letter”, addressed to Mr Morrow as “MD & Co-Founder” of Giant Dwarf, was formally written on ABC letterhead, and included:
“As you will appreciate going forward with the next series of The Checkout is a significant and strategic decision for the ABC, both financially and from an audience reach perspective....
I understand that you have provided us with a redacted copy of the Share Sale Agreement between Giant Dwarf and Cordell Jigsaw Productions (CJP). ABC Legal have reviewed this and whilst on its face it confirms the intellectual property chain of title in favour of Giant Dwarf, on this occasion our risk tolerance for the project is extremely low and we will require more comfort from you.
To assure the ABC that all relevant matters are in order, could you please arrange for a quit claim from [Cordell Jigsaw] and any relevant related company confirming that they have no claim against the ABC, yourself, Giant Dwarf, [the Joint Venture Company], and any relevant related company in relation to further series of The Checkout.”
573 Mr Carrington made no reference in this letter to the email from Mr Murray.[57] However, it is obvious that it was prompted by Mr Murray’s email.
574 Thus, obviously motivated by Mr Murray’s 21 May 2019 email, the ABC revived its requirement that Mr Morrow procure a Quit Claim from Cordell Jigsaw.
575 The ABC had last raised the question of a Quit Claim on 2 April 2019. Evidently, the ABC had decided not thereafter to insist on such a requirement once satisfied that Mr Murray would cause Cordell Jigsaw to transfer its shares in the Joint Venture Company to Giant Dwarf.
576 In the following days, there were discussions between Mr Morrow and the ABC as to the form of the Quit Claim.
577 On 29 May 2019, Mr Carrington sent an email to Ms Pincus:
“Obviously my intention is to pull [The Checkout] project ... if we do not receive the signed Quit Claim.”
578 On 30 May 2019, Ms Kate Gilchrist, the Acting Head of Legal Operations at the ABC, forwarded the final version of the Quit Claim to Mr Morrow with a note:
“I would encourage you now to arrange for this document to be executed as soon as possible. The ABC would like to commence the commissioning process for The Checkout at the next Content Executive meeting on 4 June but the ABC must have the executed Quite Claim by the morning of 4 June in order to do this. So if you have any further issues, please let me know as soon as possible.” (Emphasis in original.)
579 Later on 30 May 2019, Mr Morrow sent Mr Murray an email headed “ABC superfluous paperwork re The Checkout” which stated:
“I’ve been speaking with the ABC about potentially un-hiatusing The Checkout (as I’m sure you’re already aware, the TV industry being what it is).As you and I both know, the share sale in April did not affect IP rights holding for The Checkout: it’s always been with the company formerly known as [the Joint Venture Company], and both [Giant Dwarf] and [Cordell Jigsaw] confirmed its exclusive ownership in the share sale agreement.
Despite this, the ABC has - in its inimitable way - asked us to confirm those arrangements for their benefit by way of a Deed of Quitclaim (or by way of frustrating overkill, depending on how you look at it ;-)
So, with apologies in advance for the additional hassle the ABC’s requiring, please find attached a Deed of Quitclaim which the ABC has said will do the trick for them.
Just so you’re aware, I’ve done several rounds with the ABC already to wind back the usual one-sided over-lawyering that comes with any ABC first draft. There’s still way more boilerplates than I’d go for, but the substance is all in clause 2.
[The Joint Venture Company’s] view is that this comes with clause 5.3 of the Share Sale Agreement (re doing what’s reasonably necessary to confirm the IP rights in The Checkout). I’m hoping you agree (and/or just don’t want to waste your valuable time with it!) and so will be ok to have the Deed executed by [Cordell Jigsaw] ... but of course I’m more than happy to discuss the Deed with you beforehand if you’d like. Any time.
Again sorry to bother you with this, but if you wouldn’t mind please having a look at the attached and letting me know if you’re ok to sign the Deed in this form, I’d really appreciate it. If it’s possible to get this sorted quickly and simply that would also be great for all concerned I’m sure!”. (Emphasis in original.)
580 As I have set out above, cl 5.3 of the Share Sale Agreement, to which Mr Morrow referred, obliged both Giant Dwarf and Cordell Jigsaw to do all things that the Joint Venture Company “considers reasonably necessary to perfect the assignment in this clause, including executing all documents”.
581 The form of Quit Claim attached to Mr Morrow’s email was in the terms that the ABC had required. The only parties to the proposed document were Cordell Jigsaw and the Joint Venture Company (which by now had changed its name to The Checkout Pty Ltd). Its operative clause was:
“2.3 [Cordell Jigsaw] releases and discharges:(a) [the Joint Venture Company], other than as set out in clause 4.3 of the Share Sale Agreement; and
(b) the ABC,
and their related entities, and current and former officers, employees and agents as applicable, from any and all existing and future Claims wherever, whenever and however arising, known or unknown, which arise out of or are incidental to the production of any series of The Checkout produced subsequent to the date of this Deed.”
582 Clause 4.3 of the Share Sale Agreement, the subject of the carve-out in cl 2.3(a), was the provision in the Share Sale Agreement that the Joint Venture Company pay Cordell Jigsaw the 2% fee.
583 A matter in dispute in these proceedings is whether Cordell Jigsaw was obliged by either or both of cll 5.3 or 9.7 of the Share Sale Agreement to execute a Quit Claim in this form. I return to this below.
584 The following day, Mr Morrow sent a message to Mr Murray:
“Hi Nick - sorry to bother. Just Jules following up on my email to you yesterday re Checkout and the ABC wanting a Quitclaim Deed ... any thoughts? Cheers, Jules”.
585 As I have set out, Ms Gilchrist stated in her 30 May 2019 email to Mr Morrow that the ABC required an executed Quit Claim by the morning of 4 June 2019, so that the ABC could commence the “commissioning process” for The Checkout at the Content Executive meeting to be held on that day.
586 On the morning of 4 June 2019, Mr Morrow had not heard from Mr Murray about the Quit Claim. Accordingly, he emailed Mr Anderson:
“As you know, we have been talking since October last year about the prospect of bringing The Checkout back to ABC TV.As I write to you this morning, The [Joint Venture Company] (the same entity which has produced the previous six series of The Checkout and is now a wholly owned subsidiary of Giant Dwarf Pty Ltd) stands ready, willing and able to produce a seventh series.
In order to deliver [Season] 7 to meet the ABC’s preferred broadcast date, pre-production needs to commence on 17 June 2019.
I have provided to the ABC documentary proof that all intellectual property rights in The Checkout are held by The Checkout Pty Ltd. (I set out relevant terms of the Share Sale Agreement between [Cordell Jigsaw] and Giant Dwarf were set out in my email to you and Michael [Carrington] on 22 May 2019, but it is also attached).
There is, with respect, no convincing basis for a realistic concern about the chain of title in the series at this point. Even if there was, the TC07 contract includes a warranty from The Checkout Pty Ltd that it holds ‘full right and title’ to make the series, and an indemnity in the ABC’s favour re any breach of that indemnity.
...
The situation we are in however is that it seems unlikely I will be able to provide the fully executed Deed of Quitclaim by the morning.
...
I will continue to make all reasonable efforts to provide the executed Deed of Quitclaim to the ABC as soon as possible.”
587 Mr Morrow attached to that email a “Chain of Title Opinion” that he received from his then solicitor, Mr Michael Easton, in which Mr Easton expressed an opinion about Cordell Jigsaw’s “ongoing entitlements”.
588 As I have mentioned earlier, a notable aspect of Mr Morrow’s email to Mr Anderson is his statement that they had been discussing since October 2018 “the prospect of bringing The Checkout back to ABC TV”.
589 Mr Carrington responded later on 4 June 2019, firmly:
“We do need to have the quit claim prior to commencing commissioning. The ABC wants to be comfortable with Nick Murray’s position too, given we have relationships with both of you.”
590 Mr Morrow replied a short time later:
“If you want to be comfortable with Nick’s position, can I suggest that you or David [Anderson] calls him to discuss it?I haven’t heard back from Nick re the Quitclaim yet, so I’m not sure what his attitude to it will be. He might well think - and I would agree - that the Quitclaim is unnecessary and not something he wants to devote any time to.
The ABC’s approach to this issue means that in effect, you are giving [Cordell Jigsaw] a veto over whether and when the program can proceed, even though there is objective proof, available to all parties and supported by a Chain of Title Opinion, that [Cordell Jigsaw] has no rights in The Checkout. That is, to say the least, a troubling position for the ABC to take given the real conflict of interest concerns re [Cordell Jigsaw] and The Checkout at the ABC.
...
Even though the Quitclaim requirement seems calculated to frustrate the commissioning process, I will continue to try and obtain the Quitclaim and to do whatever I can to ensure that The Checkout returns to the ABC.
Ultimately though, if and when this happens is entirely a matter for the ABC. I hope common sense will prevail.” (Emphasis in original.)
591 A short time later, Mr Morrow sent a further message to Mr Murray:
“Hi Nick - could we please tee up a time to discuss the ABC’s Quitclaim deed? Hope to hear from you soon. Cheers, Jules”.
592 The following day, 5 June 2019, Mr Morrow sent an email to Mr Murray:
“Hi Nick - as I’m sure you’re aware I’ve been trying to contact you by phone/text quite a few times - without success - over the last few days re the ABC’s ‘Deed of Quitclaim’.Not sure if you’re out of the office at the moment, or otherwise occupied, so apologies for the hassling, but I do need to [have] the Deed executed by [Cordell Jigsaw] asap.
While I very much appreciate this will be an unwelcome distraction and - again - am sorry about that, clause 5.3 of the Share Sale Agreement between [Giant Dwarf] and [Cordell Jigsaw] does apply to this scenario ... ie what I’m asking is something that [Cordell Jigsaw] has already agreed to do.
Can you please arrange for the Deed to be executed by [Cordell Jigsaw] and send it back?”.
593 As short time later, Mr Murray sent an email to Mr Fraser:
“I am disinclined to agree to this quitclaim at the moment. I suspect that Julian had had negotiations with the ABC prior to the execution of the share sale agreement meaning that Julian has breached his director’s duties to us as a shareholder in [the Joint Venture Company].I would like to have a chat tomorrow to get your thoughts on how to deal with this.
I have been tied up ... but should respond to Julian. I think it should include my suspicions about his behaviour.”
594 Mr Murray was, of course, correct in suspecting that Mr Morrow had had negotiations with the ABC prior to execution of the Share Sale Agreement. I have set out above my findings as to whether that meant that Mr Morrow was in breach of his duties as a director of the Joint Venture Company to “us as a shareholder”.
595 On 7 June 2019, Mr Carrington wrote to Mr Morrow saying that, as Mr Morrow had suggested, he had spoken to Mr Murray but that “Nick has not been able to give the ABC the comfort it requires”. Mr Carrington continued:
“However, the ABC cannot proceed to commissioning, and will not be able to enter into an agreement for any further series of The Checkout, until we receive the executed quit claim. We must have this by 12 June if we are to proceed on the proposed production timeline.”
596 Later on 7 June 2019, Mr Murray wrote to Mr Morrow:
“I have briefly reviewed the proposed Quit Claim, and have heard from your lawyer Michael Easton (cced here on his request) earlier today.As discussed with Michael, we are disinclined to sign the Quit Claim as a result of timing concerns we have. Our concerns relate to the date we entered into the Share Sale Agreement, and your discussions with the ABC regarding a further series of The Checkout.
I will have more of a chance to look into this over the next week or two.
As an aside, we disagree with the heading of this email and believe that in the circumstances, the Quit Claim is not superfluous.”
597 On 9 June 2019, Mr Easton wrote to Mr Murray. I have referred to this email earlier.
598 Mr Easton stated:
“The main issue is that we don’t have a couple of weeks to resolve this issue. The ABC has set a deadline of this Wednesday, 12 June, for receiving the executed Deed of Quitclaim in order to allow production of the seventh series of The Checkout to proceed. Although you have referred in a general way to timing concerns, it is clear that the Share Sale Agreement (SSA) contemplates a further series of The Checkout with the ABC.My instructions are that Julian feels he was upfront with you, and with the ABC, that a further series of The Checkout was not viable if the joint venture arrangement as it stood before the [Share Sale Agreement] remained in place. This is what prompted the negotiations which resulted in the [Share Sale Agreement].
Under the [Share Sale Agreement], producing another series of The Checkout means that [Cordell Jigsaw] will be entitled to payment of a fee of 2% of the cash budget. I am instructed this will be approximately $60,000. If the series doesn’t proceed, then not only will this fee not be payable to [Cordell Jigsaw], but there will be many cast and crew who’ll have to look for other work.
The fundamental purpose of the [Share Sale Agreement] was to put in place arrangements which would make it possible for there to be another series of The Checkout. Although they have not indicated that they have any particular concerns regarding the chain of title or the effectiveness of the [Share Sale Agreement], the ABC is requiring that [Giant Dwarf] and [Cordell Jigsaw] ... execute the quit claim in order for another series of The Checkout to proceed.
The quit claim is drafted to be clear that is does not affect [Cordell Jigsaw’s] entitlements in this regard. If you do have concerns on this point, I am sure that they can be addressed.”
599 The following day, 10 June 2019, Mr Murray sent an email to Ms Mandy Chapman, Cordell Jigsaw’s inhouse lawyer, Mr Fraser and to Ms Katie Shortland:
“I can’t see that this will be resolved by Tuesday afternoon.Specifically, Julian did not say that the series could not proceed with the original [joint venture] structure. This was never contemplated or mentioned. The whole purpose of the dissolution of the [joint venture] was stated to be for Julian to access the retained earnings/PDV allowance. In fact, Julian wanted a greater share of the PDV [Offset].
In addition, we had been told by the ABC that there was no chance of the show returning in the short term. Sure, the agreement contemplated another series, but that was a blue sky exercise not a short term issue.
I note that there is no denial that Julian had had discussions with the ABC concerning the show prior to the execution of the share purchase agreement. Indeed, the opposite appears to be the case judging by the remark, ‘This is what prompted the negotiations which resulted in the [Share Sale Agreement]’.
Given Julian did not disclose these discussions, he has clearly breached his duties as a director to all the shareholders including us.
Perhaps we could negotiate to rescind the [Share Sale Agreement], or hold out completely.”
600 On 11 June 2019, Mr Carrington sent to Mr Morrow:
“Thanks also for the unredacted copy of the Share Sale Agreement which ABC Legal is reviewing. The ABC has previously said that, on its face, the Share Sale Agreement appears to confirm the intellectual property chain of title in favour of Giant Dwarf. That is not the issue we are seeking to address with the quit claim. We want to ensure that [Cordell Jigsaw] cannot make any claim in relation to further series of The Checkout, for example, in respect of the validity of the Share Sale Agreement.”
601 Later on 11 June 2019, Mr Murray replied to Mr Easton’s 9 June email. His response included:
“As Julian has now briefed you to act in this matter, we feel we have no choice but to seek our own independent legal advice regarding the Quit Claim and the circumstances surrounding the transaction itself. That will not occur within the short timeframe you have dictated.In the meantime, while we obtain advice, I take this opportunity to note that there are various comments and assertions made in your email that are of serious concern to us.
For example, your instructions that negotiations resulting in the [Share Sale Agreement] were prompted by the notion that the series was ‘not viable’ under the [joint venture] are incorrect. On no less than 7 occasions leading up to execution of the [Share Sale Agreement], Julian clearly stated the reason he wanted to enter into a Share Sale Agreement - namely that he needed to access in a tax effective manner, cash held by the [joint venture] to pay off a loan in connection with a separate Netflix production. This strategy involved ensuring that the [Joint Venture Company] became a subsidiary of Giant Dwarf. Both Simon Fraser (our CFO) and I were led to believe that the [Share Sale Agreement] was required urgently on this basis.
The viability or otherwise of The Checkout was never raised. The Checkout was always a profitable production and generated sizeable profits including from the PDV Offset/rebate, evidenced by the healthy retained earnings distributed prior to the [Share Sale Agreement].
...
Given my discussions with Julian and our recent enquiries, including with the ABC, it may be that Julian has not been transparent with us prior to the date we entered into the [Share Sale Agreement]. His duties as a director of the [Joint Venture Company] extends to all shareholders.
So to be absolutely clear, we not only have concerns about the drafting of the Quit Claim, we also believe that Julian may have breached his duties as a director of the [Joint Venture Company] by failing to inform one of the shareholders of changes in the status of the primary asset of the [Joint Venture Company]. This information would have resulted in a very different outcome in the negotiations of the [Share Sale Agreement].”
The second allegedly defamatory communication – Mr Murray’s 11 June 2019 conversation with Ms Pincus
602 On 11 June 2019, Mr Murray had a conversation with Ms Pincus at the ABC in which he described Mr Morrow as “the new millennials’ Steve Vizard”. Mr Morrow contends this statement was defamatory of him.
603 Ms Pincus recorded the substance of her conversation with Mr Murray in an email to Ms Waite on 11 June 2019.
604 A copy of Ms Pincus’s email to Ms Waite, marked up in the same manner as Mr Murray’s 21 May 2019 email:
“I called Nick Murray this afternoon following his call to you earlier today and summarise the brief conversation as follows:● I explained that you had been away for 5 weeks and were now at home ill but you were keen for me to call him back on your behalf;
● Nick explained that he had been provided with a quit claim marked ‘draft 8’ and wanted to understand who it had come from;
● I explained that, given the history of [The Checkout], we have requested a quit claim to ensure all relevant parties aware of and happy for a possible production of a subsequent series of [The Checkout] to proceed. As it was at our request, [Mr Morrow] had asked us to provide our standard quit claim doc. We agreed but made clear that we would not get involved in the negotiation of the document;
● [Mr Murray] says he is not wanting to ‘deny’ the show being made but thinks has been misled ... 7 meetings held leading to the signing of the share transfer agreement;
● [Mr Murray] says that [Mr Morrow] said that he needed share transfer as he needed to get access to cash in the bank account – made no reference to possible further production of [The Checkout];
● I asked if he had given [Mr Morrow] indication of why not signing quit claim and he said he had but that [Mr Morrow] ‘is the new millennials’ [S]teve [V]izard ([S]teve [Vizard] had penalty imposed by [Federal Court] for breach of director’s duty).
● [Mr Murray] said that he was just this moment about to reply to a letter from [Mr Morrow’s] lawyer to set out again why he was not prepared to sign the quit claim.
● [Mr Murray] thanked me for returning his call. He did not give the impression that he was in any way angry with the way ABC had handled the matter (perhaps not surprisingly).”
The third allegedly defamatory communication – Mr Murray’s 12 June 2019 email to Ms Pincus and Ms Chapman
605 A little over an hour later, Mr Murray sent an email to Ms Pincus, copied to Ms Chapman, this being the third communication from Mr Murray to the ABC that Mr Morrow contends was defamatory of him.
606 A copy of the email, marked up in the manner I have described, follows:
“Thanks for your time yesterday afternoon.As noted, we are in a very unfortunate situation with Julian Morrow and Giant Dwarf which relates to Julian conduct between late 2018 and 8 April 2019, when we transferred out interest in The Checkout to Giant Dwarf at Julian’s urgent request.
Julian represented that he urgently needed to access PDV funds held by our Joint Venture [C]ompany to repay a loan connected to another production in a tax effective way. We had been told by both the ABC and Julian that there was no chance of the show returning for a seventh series. In reliance on those representations, we agreed to transfer our shares in the [Joint Venture Company] to Giant Dwarf without payment.
It appears that Julian was not transparent regarding discussions he had been having with the ABC surrounding a further series of The Checkout and another consumer affairs program (which would itself have been problematic for the [joint venture]). It also appears that he may have intentionally omitted critical details he was obliged to disclose as a director of Jigsaw Dwarf, to us as a 50% shareholder.
As I mentioned, Julian has now instructed the solicitor Michael Easton to represent him. Accordingly, due to the pressure Julian and his lawyer are putting us under to sign the Quit Claim, we will also need to instruct external counsel. I hope that we can find a resolution to the issues we have with Julian without further involving the ABC.
However, we will not be in a position to execute the Quit Claim in the near future and need to put the ABC on notice that there is a dispute concerning the ownership of the underlying IP for [T]he Checkout and the ownership of The Checkout Pty Ltd (formerly Jigsaw Dwarf) as a result of Julian’s conduct.”
607 Several hours later, on the same day, Mr Morrow sent an email to Mr Murray which included:
“I’m really sorry that there appears to be a new dispute between us now.It’s clear we have really quite different views about the events that led up to the Share Sale Agreement we both signed in April. From my perspective, our meeting at the pub in February was a good, amiable start to the process of putting the troubled history of our joint venture on The Checkout - something we both acknowledge didn’t work out as either of us hoped - behind us by putting in place new arrangements that would give The Checkout a chance of getting back on the tele.
...
I hope we still agree that it would be a real shame if a disagreement between us means that the real and imminent possibility of The Checkout returning to the ABC evaporates ... especially for all the excellent people we know who’ve worked so hard, and earned their livelihoods, for the show.”
608 On 13 June 2019, Mr Easton wrote to Ms Gilchrist of the ABC requesting “copies of the relevant correspondence from [Cordell Jigsaw], so that my client may review and respond to these claims”.
609 On 14 June 2019, Ms Gilchrist replied to Mr Easton, stating that the ABC would not provide a copy of the correspondence requested.
610 Ms Gilchrist’s email read:
“The ABC acknowledges that the Share Sale Agreement appears to demonstrate on its face that [the Joint Venture Company] is the sole owner of all copyright and other intellectual property subsisting in the program. Please note the ABC first requested a quit claim from your client on 2 April 2019 prior to the execution of this Share Sale Agreement.We confirm that [Cordell Jigsaw] has written to the ABC to put the ABC on notice that there is a dispute concerning the ownership of the underlying intellectual property for The Checkout and the ownership of [the Joint Venture Company].”
611 Ms Gilchrist was here obviously referring to Mr Murray’s 12 June 2019 email to Ms Pincus.
612 Ms Gilchrist continued:
“The ABC does not wish to become the mediator in any dispute between your client and [Cordell Jigsaw]. The ABC declines your request to provide copies of correspondence you are seeking. We will, however, ask [Cordell Jigsaw] to provide you with copies of their relevant correspondence.The ABC does require confidence that it can proceed to commission The Checkout without there being any risk that a claim may be made.”
613 In the meantime, on 13 June 2019, Mr Murray wrote the email to Mr Easton to which I have earlier referred:
“We feel highly aggrieved. At the initial meeting Julian said that making TV was so unpleasant that he never wanted to work in TV again and would be happy to just get by doing corporate speaking. At the same time, and for several months prior, he was talking to the ABC about bringing the show back again. clearly there is no explanation of the chasm between these two scenarios other than to mislead....
If Julian was not a director of [the Joint Venture Company] at the time, it would be a different matter as regards the director’s duties issue. However, it was incumbent on him as a director to inform the other shareholder ie [Cordell Jigsaw], that the show was potentially being recommissioned by the ABC. That information would have changed the value of the shares from zero to some substantial value and changed our view on the disposal of them. It was key information that Julian was obliged to disclose, yet over the course of several months, specifically elected not to.”
614 On 13 June 2019, Mr Morrow wrote Mr Murray the email referring to a “genuine prospect” of The Checkout being recommissioned to which I also earlier referred.
615 The relevant part of the email read, in full:
“... I did not believe that The Checkout potentially being recommissioned by the ABC was a genuine prospect until well after [Cordell Jigsaw] and [Giant Dwarf] had agreed on the terms for [Cordell Jigsaw’s] exit from [the Joint Venture Company]. There’s obviously nothing to be gained from debating that sort of thing by email, but I really do believe it could be constructive for some sort of meeting that would allow us to understand each other’s perspectives better (even though, sadly, it needs to be done urgently).
616 It may well be that Mr Morrow did not know whether there was a “genuine prospect” that The Checkout would be recommissioned at the time of the Duck Inn Meeting with Mr Murray, or at the time of his meeting with Mr Fraser, Ms Crouch and Ms Chen on 22 February 2019, being the dates by which, on Mr Morrow’s case, Cordell Jigsaw and Giant Dwarf “had agreed on the ‘terms’ of Cordell Jigsaw’s ‘exit’ from the Joint Venture Company”.
617 I have, however, found that there was no “agreement in principle” about that matter until 8 March 2019.
618 Assuming, in Mr Morrow’s favour, that there was no “genuine prospect” of The Checkout being recommissioned on those dates, it is nonetheless plain, for the reasons I have set out, that from 8 March 2019, and certainly by early April at the latest, there was not only a “genuine prospect” that The Checkout would be recommissioned. It was, subject to Mr Murray causing Cordell Jigsaw to execute the Share Sale Agreement, a certainty.
619 On 14 June 2019 Mr Murray sent an email to Ms Pincus.
620 That email, marked up to show the passages allegedly constituting an injurious falsehood, follows:
“Thanks for this - and yes, of course it makes sense that the ABC would require a corresponding Quit Claim from us if the position were reversed.You are right about the contents of the ABC press release and [Cordell Jigsaw] was completely on board with the reasons for the hiatus. Craig Reucassel and I were very disappointed about Julian’s public response to this news. His actions at that time resulted in various ABC representatives telling us (i.e. [Cordell Jigsaw]) that the show was now cancelled instead of on hiatus, and would not be returning under any circumstances. At that time, Julian also had a massive and very public argument in the foyer of the ABC with David Anderson who threw Julian out of the building. The clear impression from witnesses was Julian would never be welcome back.
Re Michael Easton’s request for documents, you may not be aware that Michael has now ceased acting for Julian as of last night. He has been replaced by Ben Kay from Kay & Hughes. This morning Ben has sent us a very aggressive, formal legal letter giving notice of proposed legal action to be commenced on Monday 17th June with a return date of Wednesday 19th June. Accordingly, it may be preferable to wait until that occurs at which time, the correspondence between all the parties and the ABC will be subpoenaed by both sides. This is what we were trying to avoid.
Julian is continuing to apply unreasonable pressure to us when he has been told on multiple occasions that we are not able to obtain our independent advice until after the weekend when Hamish Fraser from Bird and Bird returns to Australia. Julian appears to be doing [the] same to the ABC. It is very unfortunate that Julian’s actions have affected the ABC at all, and we regret that.
As an aside, Julian and his legal team are fully aware of our grievances and should be in no doubt about our resolve concerning his actions. I hope he is no longer misrepresenting our position.”
621 As Mr Murray stated in this email, on or about 14 June 2019, Mr Morrow retained Mr Ben Kay, from Kay & Hughes, to act for him and Giant Dwarf, in place of Mr Easton.
622 On or about 16 June 2019, Mr Hamish Fraser from Bird & Bird commenced to act for Mr Murray and Cordell Jigsaw.
The events leading to the purported termination of the Share Sale Agreement
623 An exchange of correspondence between Mr Kay and Mr Fraser then ensued that led to the Joint Venture Company’s and Giant Dwarf’s purported termination of the Share Sale Agreement on the basis of Cordell Jigsaw’s alleged repudiation of it.
624 As I have found that the Share Sale Agreement should be rescinded under s 237 of the Australian Consumer Law by reason of Mr Morrow’s misleading or deceptive conduct, whether or not Cordell Jigsaw did repudiate the Share Sale Agreement, and whether or not Giant Dwarf was entitled to terminate it is of less moment.
625 However, in deference to the detailed submissions I received on the question, and lest I be wrong in concluding that the Share Sale Agreement should be rescinded, I interrupt these reasons here to deal with that correspondence and set out my findings on this question.
626 As these clauses are mentioned in the correspondence exchanged between Mr Kay and Mr Fraser I will set out, again, the text of cll 5.3 and 9.7 of the Share Sale Agreement.
627 Clause 5.3 provided:
“[Giant Dwarf] and [Cordell Jigsaw] agree to do all things [the Joint Venture Company considers reasonably necessary to perfect the assignment in this clause,[58] including executing all documents and assisting as necessary in any application for trade mark registration in respect of The Checkout or in any protection or enforcement of the rights in The Checkout”. (Emphasis in original.)
628 Clause 9.7 provided:
“Each party must do anything (including executing any document) that any other party may reasonably require to give full effect to this agreement”.
629 On 14 June 2019, Mr Kay wrote to Murray stating that:
(a) the ABC had by now extended the deadline for provision of the Quit Claim to 24 June 2019;(b) the Joint Venture Company had now reached an “agreement in principle with the ABC for the production of a further series of The Checkout”;
(c) Mr Morrow had sought “to persuade the ABC ... that because of the [Share Sale Agreement] there was no reasonable need for the [Quit Claim]”;
(d) the Quit Claim “does nothing more than affirm the express legal effect of the [Share Sale Agreement];
(e) a refusal by Cordell Jigsaw to execute the Quit Claim would constitute a breach of cll 5.3 and 9.7 of the Share Sale Agreement;
(f) if the Share Sale Agreement “were set aside ab initio, the ownership of The Checkout IP would revert to the entity which owned The Checkout IP prior to execution of the [Share Sale Agreement]”;
(g) Mr Morrow was available for a settlement conference at any mutually convenient time prior to 17 June 2019; and
(h) if a commercial resolution could not be achieved by noon on 17 June 2019, Mr Morrow and Giant Dwarf proposed to commence legal proceedings.
630 On 16 June 2019, Mr Fraser notified Mr Kay of his retainer and on 19 June 2019 sent Mr Kay an email saying that:
“... I called the ABC on Monday [17 June 2019] to see whether they would accept a version of the Quit Claim [Deed] that dealt with the IP only. I was surprised to find you had already spoken to the ABC on Friday [14 June 2019] on the same question. I understand we have both been advised that the broader form is the only form of Quit Claim the ABC will entertain”.
631 On 19 June 2019, Mr Kay sent Mr Fraser a document headed “Breach Notice” in which he imposed a “Final Deadline” of 5pm on Friday 21 June 2019 by which date Cordell Jigsaw should execute the Quit Claim.
632 Mr Kay also stated that Mr Morrow “required” Mr Murray to confirm by the following day that:
“(a) All intellectual property rights in The Checkout are held exclusively by The Checkout Pty Ltd as stated in the Quit Claim Deed;(b) Your client has no claims against the ABC or its related entities in relation to The Checkout as contemplated in the Quit Claim Deed;
(c) Your client stands by the validity of the [Share Sale Agreement] and will uphold its terms; and
(d) Your client will not pursue any injunctive relief attempting to prevent the production, broadcast, or other exploitation of The Checkout.” (Emphasis in original.)
633 On 19 June 2019, Mr Fraser replied to Mr Kay’s letters of 14 and 19 June 2019:
(a) disputing that the Quit Claim does “nothing more than affirm the express legal effect” of the Share Sale Agreement;(b) asserting that the Quit Claim “extends beyond merely affirming the effect” of the Share Sale Agreement; and
(c) stating that it “is out client’s view that the [Share Sale Agreement] does not compel it to sign the Quit Claim in its current form (or at all).”
634 Mr Fraser then set out his instructions as to Cordell Jigsaw’s “contention that it was misled in the lead up to the execution” of the Share Sale Agreement and that had Cordell Jigsaw’s “officers been aware of the true status of The Checkout, it would simply not have proceeded with the sale of its shares” in the Joint Venture Company.
635 In that context, Mr Fraser continued “our client will not agree to execute a Quit Claim that forfeits its rights to challenge” the Share Sale Agreement.
636 In my opinion, Mr Fraser’s statement that Mr Murray and Cordell Jigsaw were of the view that the Share Sale Agreement did not compel it to sign a Quit Claim in its current form “or at all” should be read in this context. Mr Fraser was making clear that his instructions were that Mr Murray and Cordell Jigsaw would not execute a Quit Claim that was so broadly drawn that it would prevent Mr Murray and Cordell Jigsaw pursuing such rights as may be available to them arising from the misleading conduct of which they complained, and which I have found has been made out.
637 Finally, Mr Fraser said that Mr Murray and Cordell Jigsaw confirmed the matters in (a) and (b) set out at [632] above but were not prepared to confirm matters (c) and (d).
638 On 21 June 2019, Mr Fraser sent an email to Mr Kay contending that:
(a) the Share Sale Agreement “does not mandate that [Cordell Jigsaw] sign the Quit Claim as presently framed or at all; and(b) the Share Sale Agreement “does not deal with the production of a new version of The Checkout” but was “an agreement for the transfer of shares between two parties” with the relevance of the production of The Checkout merely being “via a budget linked payment in the event further series of The Checkout are produced”.
639 On 25 June 2019, Mr Fraser wrote to Mr Kay noting that the ABC had agreed to extend the deadline for execution of the Quit Claim to 28 June 2019. This was the last extension that the ABC granted in relation to execution of the Quit Claim.
640 On 25 June 2019 Mr Kay replied to Mr Fraser:
(a) stating that the Share Sale Agreement did contemplate production of a further series of The Checkout;(b) stating that Mr Murray’s and Cordell Jigsaw’s failure to “comply with our clients’ request pursuant to Clause 5.3 of the Agreement” (that is to execute the Quit Claim) was a breach of the Share Sale Agreement which would deprive the Joint Venture Company “of substantially the whole benefit it was intended to obtained from” the Share Sale Agreement, namely the “exclusive right to exercise the powers and benefits subsisting in The Checkout”;
(c) asserting that there had been an “renunciation” of the Share Sale Agreement; and
(d) giving a “Final Notice” for Mr Murray and Cordell Jigsaw to execute the Quit Claim and to provide a series of 11 “undertakings” set out in an annexure to the letter.
641 On 26 June 2019, Mr Fraser wrote to Mr Kay stating that:
(a) “our client does not agree to sign the Undertakings ... given the undertakings are broader in scope than the Quit Claim”;(b) the discussions that had taken place between Mr Murray, Mr Morrow and Mr Simon Fraser prior to April 2019 “resulting in the creation of the [Share Sale Agreement], did not contemplate that the show The Checkout ... was to be imminently re-enlivened or that there were, at that time, attempts being made to re-enliven it”;
(c) Mr Murray’s position was that “had he known that Mr Morrow was in discussions with the ABC regarding re-enlivening the show, he simply would not have entered the [Share Sale Agreement] at all”;
(d) Mr Morrow as a director of the Joint Venture Company was in breach of his duties to Cordell Jigsaw; and
(e) “the Quit Claim Deed and your client’s Undertaking both require our client to forgo a claim to challenge” the Share Sale Agreement.
642 On 27 June 2019, Mr Kay sent an email to Mr Fraser disputing the matters in Mr Fraser’s email and repeating the demand for the undertakings to be given, this time by 9am on 28 June 2019.
643 On 28 June 2019 Mr Kay wrote to Mr Fraser:
“Our clients elect to terminate the [Share Sale] Agreement as the result of your client’s words and conduct, as extensively set out in prior correspondence, which amount to repudiatory breach and renunciation of the [Share Sale] Agreement.For the avoidance of doubt, and without limitation, those reasons include:
(I) Your client’s repeated and unremedied repudiatory breaches of the [Share Sale] Agreement, including clauses 5.3 and 9.7;
(II) Your client’s clear renunciation of the [Share Sale] Agreement, including without limitation its repeated and express refusal to affirm the validity of the [Share Sale] Agreement or stand by its obligations under the [Share Sale] Agreement; and
(III) Your client’s course of conduct which has had the effect of depriving our clients of the benefit of the [Share Sale] Agreement.”
Repudiation?
Principles
644 The term “repudiation” is used in two senses.[59]
645 The first is where there has been a “renunciation”[60] by one party of the contract as a whole or of a fundamental obligation under the contract.[61] The question in such a case is whether a party to the contract has evinced an unwillingness[62] to render substantial performance under the contract and either to be no longer bound by the contract at all, or, more relevantly here, to fulfil it “only in a manner substantially inconsistent” with its obligations and “not in any other way”.[63]
646 The test is whether the conduct of one party is such as to convey “to a reasonable person, in the situation of the other party, repudiation or disavowal either of the contract as a whole or of a fundamental obligation under it”.[64]
647 In this context it has been held that there is a difference between evincing an intention to carry out the contract “only if and when” it suits the party to do so and evincing an intention to carry out the contract “as and when” it suits the party to do so. In the former case, “the party intends not to carry out the contract at all in the event that it does not suit him”. In the second case, “the party intends to carry out the contract, but only to carry it out as and when it suits him”. Repudiation may be found in either case, but more easily in the former.[65]
648 Repudiation is a “serious matter, not to be lightly found or inferred”[66] and must constitute a breach “so serious that it goes to the root of the contract, and thus deprives the other party of substantially the whole benefit of the contract”.[67]
649 The second sense in which the term “repudiation” is used is where there has been a breach of contract which justifies termination by the other party.[68] Repudiation in this sense describes the effect of the breach of a condition or of an intermediate term.[69]
650 There may be cases where a party’s conduct amounts to repudiation in both of these senses.[70]
651 Mr Morrow and Giant Dwarf contend for repudiation in the first sense by reason of Mr Fraser’s statement in his 19 June 2019 email that Cordell Jigsaw “will not agree to clause 25(c)” contained in Mr Kay’s email of the same date; which, as I have stated, called for Cordell Jigsaw to confirm its “express and full acceptance” that it “stands by the validity” of the Share Sale Agreement and “will uphold its terms”.[71]
652 Thus, Ms Chrysanthou submitted:
“Critically, [Cordell Jigsaw] failed to stand by the [Share Sale Agreement]. It did not confirm agreement to render substantial performance of the contract. It did not confirm or indicate that [Cordell Jigsaw] intended to be bound. It did not accept even a single undertaking sought”.
653 Mr Fraser made clear in his 19 June 2019 letter that the reason Cordell Jigsaw would not give that confirmation was its belief that it “was misled in the lead up to execution” of the Share Sale Agreement and was not prepared to “forfeit its rights to challenge” the Share Sale Agreement on that basis.
654 I have held that, just as Mr Fraser contended in this letter, Mr Morrow had misled Mr Murray “in the lead up to execution” of the Share Sale Agreement.
655 Accordingly, Mr Murray’s refusal to “stand by” the Share Sale Agreement could not have been a repudiation of it.
656 Alternatively, Mr Morrow and Giant Dwarf contend for repudiation in the second sense, by reason of Cordell Jigsaw’s refusal to execute the Quit Claim.[72]
657 Resolution of that issue requires consideration of whether cl 5.3 or cl 9.7 of the Share Sale Agreement required Cordell Jigsaw to execute the Quit Claim.
Breach of cl 5.3 of the Share Sale Agreement?
658 In my opinion cl 5.3 does not have any application here.
659 I think Mr Katekar was correct to submit that the Quit Claim did not ask Cordell Jigsaw to perfect any assignment of any intellectual property and that the clause has no operative effect in the context of the Quit Claim.
Breach of cl 9.7 of the Share Sale Agreement?
660 Clause 9.7 is a “further assurance” clause requiring, relevantly, Cordell Jigsaw to do anything, including executing a document that Giant Dwarf reasonably required “to give full effect to this agreement”.
661 As Mr Katekar submitted, such clauses are “a very common type of clause, its purpose being to make sure that the purchaser obtains what it bargained for, no less and no more”.[73]
662 A clause such as this “cannot operate upon some subject matter wider than that delineated by the deed itself” and “does not contemplate that its operation will pay attention to matters outside the document’s purview”.[74]
663 It is true the Share Sale Agreement contemplated the possibility that the Joint Venture Company may pay Cordell Jigsaw “a fee of 2%” of the cash budget “on subsequent series of The Checkout produced” by the Joint Venture Company, Giant Dwarf or any affiliated company or subsidiary. Thus, it contemplated the possibility that the Joint Venture Company or Giant Dwarf might produce a further series of The Checkout.[75]
664 But the Quit Claim not only required Cordell Jigsaw to release the Joint Venture Company from any claim it might have in relation to any such further series. It also obliged Cordell Jigsaw to release the ABC and its “current and former officers, employees and agents” from all “existing and future” claims “wherever, whenever or however arising, known or unknown” from any such further series.
665 This went far beyond anything that the Share Sale Agreement contemplated and far beyond anything Mr Morrow or Giant Dwarf could reasonably require Cordell Jigsaw to do to “give the full effect of this agreement”.
666 In any event, what is reasonably required will depend upon the circumstances leading to the request. By the time Mr Murray and Cordell Jigsaw finally refused to execute the Quit Claim they had, I have found, a reasonable basis to suspect that Mr Morrow had been in negotiations with the ABC throughout the time he was negotiating with Mr Murray concerning the terms of the Share Sale Agreement.
667 I have found that Mr Fraser was correct to say, in his email of 26 June 2019 to Mr Kay, that the discussions between Mr Murray and Mr Morrow and between Mr Simon Fraser and Mr Morrow prior to execution of the Share Sale Agreement on 8 April 2019 “did not contemplate” that The Checkout “was to be imminently re-enlivened or that there were, at that time, attempts being made to re-enliven it”.
668 In those circumstances, I cannot see how Mr Morrow or Giant Dwarf or the Joint Venture Company could reasonably require Mr Murray or Cordell Jigsaw to execute a document that “forfeited its rights” to challenge the Share Sale Agreement on this basis. As I have set out above, I have upheld that challenge.
669 In any event, as I have set out above, it appears to be Mr Morrow’s own position that the Quit Claim was not reasonably necessary to give effect to the Share Sale Agreement as, according to Mr Kay, Mr Morrow had sought to so persuade the ABC.[76]
Conclusion
670 Cordell Jigsaw did not repudiate its obligations under the Share Sale Agreement.
671 The Joint Venture Company and Giant Dwarf were not entitled to terminate the Share Sale Agreement and in purporting to do so, themselves repudiated the Share Sale Agreement.
672 In view of my decision to rescind the Share Sale Agreement under s 237 of the Australian Consumer Law it is not necessary for me to determine whether or not Cordell Jigsaw accepted that repudiation.
Settlement discussions
673 In the meantime, on 17 June 2019, Mr Morrow and Mr Murray participated in a settlement conference. At that conference Mr Murray asked Mr Morrow how many series of The Checkout the ABC was proposing to commission.
674 Mr Morrow agrees that he answered by saying “one”.
675 In fact, as Mr Morrow knew, the ABC was contemplating the possibility of there being two further series.
676 Mr Murray, it appears correctly, took that to be a dishonest answer and the settlement “fell over” as a result.
The fourth allegedly defamatory communication – Mr Murray’s 20 June 2019 email to Mr Carrington
677 I return now to the course of events.
678 On 20 June 2019, Mr Murray sent a further email to Mr Carrington headed “Checkout shenanigans update” which, Mr Morrow contends, contains further defamatory statements about him.
679 A copy of that email, marked up in the manner I have described above, follows:
“I thought I should give you an update on our discussions with Julian regarding sorting out [T]he Checkout debacle.Here at [Cordell Jigsaw] we have dedicated the entire last week trying to grapple with the problem we find ourself in. Julian has also changed lawyers and we faced a barrage of legal letters, threats and deadlines from the new legal team. On Monday three of us (Simon Fraser our CFO, Mandy Chapman in house lawyer and me) spent all day at our external lawyer’s office including the afternoon in a delightful settlement conference with Julian and his lawyer.
From that meeting and with additional information gleaned since, we have been able to put a settlement proposal to Julian yesterday. While I don’t know the prospects of that offer, in our view we’ve put a reasonable resolution on the table which is capable of being accepted by Julian.
We didn’t expect to find ourselves in this position, and it arises purely because Julian had revived the show while engaged in negotiations with us about us transferring our 50% share in the [Joint Venture Company] to Julian’s company for nothing. We would never have given him the shares had we known about the resurrection of the show (about which Julian was obliged to inform us, but didn’t).
We are aware of the ABC’s looming Monday deadline to sign the quit claim document and our efforts this week have been to try to achieve that by resolving all of the issues. We are hoping that can be done without Julian commencing legal proceedings - despite his repeated threats to do so.
If the show can’t proceed due to the dispute, then we are truly sorry. It isn’t our intention to be difficult, but we have a genuine grievance arising from Julian’s conduct. Our current position is supported by a key business partner of Julian’s too. So we stand by our position.
Hopefully you will have clarity one way or the other shortly. Many thanks for your patience.”
680 Mr Carrington replied the following day:
“Thank you for the update and your effort to negotiate a settlement to the dispute between you and Julian.We value our relationship with [Cordell Jigsaw] and look forward to hearing that the matter has been resolved.”
681 On 27 June 2019, Mr Murray wrote to Ms Gilchrist and Mr Carrington requesting that the ABC supply “us with The Checkout correspondence as we owned 50% of the company until 8th April, I was a director until 9th April and [Executive Producer] of [T]he Checkout at all relevant times” and that “this is getting more urgent and if this is to be resolved at all, we need access to the documents everyone else has”.
682 Ms Gilchrist replied the same day declining to provide that correspondence.
683 On 28 June 2019, Mr Murray wrote to Ms Gilchrist and Mr Carrington, with a copy to Mr Anderson and Ms Pincus.
684 That email, marked up to the passages allegedly constituting an injurious falsehood, follows:
“We have just received a notice from Julian Morrow’s lawyers terminating the Share Sale Agreement for The Checkout [Joint Venture] [C]ompany The Checkout Pty Ltd (formerly Jigsaw Dwarf Pty Ltd).They also say they will not provide the correspondence between Julian and the ABC contrary to the ABC’s request for them to do so.
We remain enthusiastic and willing to participate in the production of The Checkout or another consumer affairs show contemplated by the discussions between Julian and the ABC since October last year. However if a production proceeds involving Julian but without us, we will be forced to commence action to protect our rights against Julian and any company associated with him.
We are confused about why they have taken this approach while negotiations were still proceeding. None-the-less, we remain convinced that Julian behaved improperly and are determined to defend our position.
I am available to talk this through if you would like.”
685 Later on 28 June 2019, Mr Morrow wrote to Mr Anderson:
“Following our last conversation, there have been extensive communications with [Cordell Jigsaw] re The Checkout.After we spoke I was hopeful we might be able to sort things out with [Cordell Jigsaw] on the basis of a ‘value exchange’ (as you put it).
I’ve done what you asked and tried to reach a resolution. But as things stand now, I think the chances of a resolution re The Checkout by the ABC’s current deadline are very low.
Over many projects and many years, Giant Dwarf and the ABC have worked together successfully and, I hope you’d agree, to mutual benefit. And along the way, we’ve always found a way to resolve all manner of complicated and difficult issues, in a sensible. Often that’s been achieved through direct discussion between you and me.
As I’ve made clear in previous correspondence, I very much value not only the relationship between Giant Dwarf and the ABC but also the working relationship I’ve had with you. I also very much believe, as I know you do, that consumer affairs television is and should continue to be part of the ABC’s core business as a public broadcaster.
And that’s why I feel I must now ask for an urgent meeting in person with you to discuss the current situation.
I know you’re very busy. I’ll make myself available at any time and place that work[s] for you. But an urgent meeting is, I believe, imperative at this point.”
5 July 2019 – the ABC terminates discussions concerning The Checkout
686 On 5 July 2019, the ABC, under the hand of its General Counsel, Ms Connie Carnabuci, wrote a formal letter to Mr Morrow and Mr Murray as directors of Giant Dwarf and The Checkout and Cordell Jigsaw terminating discussions for a further series of The Checkout.
687 Ms Carnabuci wrote:
“We are writing to respond collectively to your correspondence in this matter. At this time, the ABC does not intend to respond to each of the assertions you have both variously made. The ABC does not wish to have any involvement in the dispute between you. The ABC does not presently have a view on any of the claims each of you has made. The ABC does not propose to investigate the claims nor act as mediator. We would like you to resolve the matter between yourselves.Unfortunately, the ABC is not able to commission The Checkout for this year due to your inability to resolve your dispute by our deadline.
We therefore want to be clear about how the ABC will proceed in the future.
The ABC is willing to receive pitches from each of you in relation to The Checkout and any other audio-visual consumer affairs production at any time. Please direct these communications to Michael Carrington, Acting Director of Entertainment & Specialist. However, if the ABC wishes to pursue that pitch, the ABC will now insist on the following prior to negotiating any development or production deal with you to satisfy itself the ABC can proceed without risk.
● Undertakings in a form approved by the ABC that there would be no claims made by either of you individually or by your companies and associated companies including claims which would affect production, exploitation and the reputation of that production and any future series of that production.
● If the ABC were then to proceed to enter into a development or production agreement, it will seek appropriate warranties and indemnities from you, and may require a financial guarantee from an approved guarantor.
● In relation to The Checkout, if the Share Sale Agreement has in fact been terminated, we would require you both individually, and now again as shareholders and directors of The Checkout Pty Limited, to execute the relevant written development or production agreement (as applicable) to ensure you are in agreement and can work together in the best interests of the production.
Please advise if you would like us to forward a copy of this letter to your respective lawyers.We again acknowledge the value of our relationship with you and your associated companies, what you have achieved in the television industry and the quality and success of your creative endeavours. We very much look forward to hearing that you have been able to come to an amicable resolution of the matter.”
The fifth allegedly defamatory communication – Mr Murray’s 5 July 2019 email to Ms Carnabuci
688 That letter prompted Mr Murray to write to Ms Carnabuci.
689 Mr Morrow contends this letter contained further defamatory statements about him, as well as statements constituting an injurious falsehood.
690 A copy of that email, marked up in the manner I have described, follows:
“Thanks for your letter today. It is indeed unfortunate that Giant Dwarf and Cordell Jigsaw Productions have been unable to resolve The Checkout despite.I broadly agree with your proposed method of assurance going forward.
[Cordell Jigsaw] remained optimistic about being able to meet the ABC’s revised July 1 deadline until the derailment of the negotiations last Friday morning via Giant Dwarf’s notice of termination of the Share Sale Agreement. No attempt has been made by Julian to settle this dispute since then.
I want to clarify two points.
1. The third bullet point in your letter assumes that Julian’s purported termination of the Share Sale Agreement would result in the reinstatement of the [joint venture]. Our shareholders assumed that too, but apparently not. It is very confusing, but without us commencing legal proceedings, Giant Dwarf may be able to keep our shares in the [joint venture] and has none of the obligations contained in the [Share Sale Agreement]. So the [joint venture] has not been automatically revived, [Cordell Jigsaw] has not at this stage been reinstated as shareholder, nor do we have a director on the company board. Unfortunately therefore, production cannot proceed on the basis you outline in that point.
2. We have spent a huge sum on legal fees since this dispute began. Julian asked the ABC to set 4 different deadlines for us to work to, which we did in good faith without knowing the deadlines were being extended. However, our allegations against Julian and Giant Dwarf of fraudulent misrepresentation, breach of directors duties, and misleading and deceptive conduct (ironically under the Australian Consumer Law) would easily have been proven or disposed of, had we had access to the relevant communications between the ABC and Julian.
We note however that our assumptions about timing of the negotiations have not been denied. It is that timing discrepancy which caused this dispute. We are extremely unhappy about the result and have made reasonable offers to settle including the effective reinstatement of the [joint venture]. These offers have been rejected by Julian. We also believe Julian continued to lie to us about the nature of the proposed [The] Checkout commission during the settlement negotiations. Again, we have not had the requisite access to documents to confirm these suspicions.
But I would like to thank you and the team at the ABC for the calm manner in which this has been handled at your end. We would also be disappointed if The Checkout did not return – although that is becoming increasingly likely.”
691 On 23 July 2019, Ms Carnabuci wrote to Mr Murray:
“The ABC is willing to consider a pitch for a new consumer affairs TV show from you and does not require any undertakings set out in our letter of 5 July in order to do that....
Obviously, it would be to the advantage of all concerned if you and Giant Dwarf Productions were able to resolve this matter.”
692 On the same day, Ms Carnabuci wrote a corresponding letter to Mr Morrow.
693 Mr Murray replied on 29 July 2019 in an email which Mr Morrow contends contains injurious falsehoods. That email, marked up in the manner I have described, follows:
“I refer to your letter of 23rd July 2019. I have just tried to call you so I can get some understanding of the context for the most recent letter.As I stated in my reply email to your letter of 5th April 2019, we were broadly in agreement with the mechanisms outline in your letter. That approach is fair, given the parties have been unable to reach any resolution despite [Cordell Jigsaw’s] best attempts.
However, your letter last week seeks to significantly reduce the protections for [Cordell Jigsaw]. We don’t understand why there has been a dilution of the approach you set out on 5th July. We are very uncomfortable about this change.
You should be under no misapprehension about our resolve in this matter.
If the ABC commissions a Consumer Affairs program involving Julian Morrow, we will have no choice but to commence legal proceedings in relation to the matters we have previously outlined. Unfortunately there will be no way to insulate the ABC from the associated discovery and subpoena process.
If you have a moment, I would appreciate the opportunity to discuss this on the phone or in person.”
694 Ms Gilchrist replied to Mr Murray on 8 August 2019:
“What claims can you actually substantiate in relation to a consumer affairs show involving Julian Morrow that are not related to The Checkout?We ask you to notify [Mr Morrow] of your continuing claims and take appropriate action to test those claims now to resolve the dispute. Otherwise, the ABC sees no impediment to going ahead with such a show in the future.
As a matter of courtesy, we are advising [Mr] Morrow of your intention to commence legal proceedings if the ABC commissions a consumer affairs program involving him.
The ABC would of course comply with any validly issued subpoena.”
The sixth allegedly defamatory communication – Mr Murray’s 12 August 2019 email to Ms Gilchrist
695 Four days later, on 12 August 2019, Mr Murray replied to Ms Gilchrist’s email. This is the final email in which Mr Morrow contends that Mr Murray made defamatory statements about him.
696 A copy of that email, marked up in the manner I have described follows:
“I refer to your email of 8th August and thanks for your time on Friday.I just want to emphasise two points:
1. Why would the ABC be considering commissioning a replacement program from Julian who has wrecked an ABC brand and been involved in a fraud designed to take shares and IP in that brand from a loyal ABC partner - [Cordell Jigsaw]? We are about to start Gruen which is usually the ABC’s top rated series. Julian’s output isn’t in that ball park.
There is no way commissioning a show designed to avoid The Checkout will not result in serious blowback for the ABC. ... There is no way that any ‘replacement consumer affairs program’ discussed at that time is owned by Julian.
2. Julian is also asserting he is able to pitch an alternative consumer affairs program to the ABC by virtue of the provision in the [S]hare [S]ale [A]greement which gave each of us the right to pitch new consumer affairs programs.
4.6 Other consumer affairs shows. All parties acknowledge that [Giant Dwarf] and [Cordell Jigsaw] each has the separate right to produce another consumer affairs show provided that show does not use the name or format of The Checkout or any Intellectual Property or Works owned by [the Joint Venture Company].
Of course the problem he now has, is that he unilaterally terminated that agreement on 28th June. He has no right to pitch a replacement consumer affairs show to the ABC without our involvement.Following our conversation, I will today instruct our solicitors to commence proceedings against Julian, Giant Dwarf Pty Ltd and The Checkout Pty Ltd. Thanks for confirmation that the ABC will comply with a subpoena issued under those proceedings.
I confirm our resolve in this matter. Our shareholders, directors and executive are unanimous in their positions that Julian can no longer be allowed to benefit from his appalling behaviour. We can’t stand by while he profits from his unlawful actions.” (Bold and italics emphasis in original.)
The mediation
697 On 18 October 2019, Mr Morrow and Mr Murray attended a mediation.
698 Mr Simon Fraser was also in attendance. Following the mediation, Mr Simon Fraser wrote to Ms Gilchrist from the ABC attaching copies of a number of versions of the Quit Claim required by the ABC and stating:
“We are keen to see The Checkout go forward and are working on a version of the Quit Claim in a form that we can both sign.I understand that Nick spoke to you about this yesterday. We would like your views on whether the attached would be acceptable to the ABC for the production to move forward.”
699 In cross-examination, Mr Simon Fraser readily agreed that this information was given to him during the mediation and that, by providing the information to Ms Gilchrist, he acted in breach of the confidentiality provisions in the mediation agreement.
700 In closing submissions, Ms Chrysanthou submitted that this “unauthorised disclosure obviously and necessarily interfered with the plaintiffs’ relationship and ongoing negotiations with the ABC”.
701 However, there is no evidence that the disclosure had any effect on Mr Morrow’s, Giant Dwarf’s, or the Joint Venture Company’s relationship with the ABC, as the following account of Mr Morrow’s negotiations with the ABC concerning the proposed “Help Desk” program reveals.
“The Help Desk” negotiations
702 Back on 4 July 2019, Mr Morrow had written to Mr Anderson and Mr Carrington attaching “Giant Dwarf’s letter proposing a new consumer affairs TV project, The Help Desk”.
703 Mr Morrow wrote:
“As requested, please find attached our proposal for an ABC TV version of a new consumer affairs TV format created and developed by Giant Dwarf.As you know, Giant Dwarf has a proven track record of creating consumer affairs television programming on the ABC which is both popular and well respected.
Giant Dwarf is the creative force behind, and now exclusive owner of, The Checkout.
Giant Dwarf is willing to continue producing The Checkout for ABC TV, but if the ABC’s preference is to pursue its commitment to public interest broadcasting about consumer affairs via a new format, Giant Dwarf is also ready, willing and able to deliver a new factual entertainment program that ticks just as many, if not more, boxes as The Checkout with a new program.
That new program is The Help Desk.
The Help Desk will continue Giant Dwarf’s track record of delivering high quality television content that appeals to the ABC audience in the broadest sense”. (Emphasis in original.)
704 On 19 August 2019 Mr Carrington wrote to Mr Morrow:
“Based on the ABC’s current assessment of your pitch for The Help Desk, the ABC does not require a quit claim from Cordell Jigsaw Productions (CJP) etc. in order for the ABC to engage in development of The Help Desk. However, the ABC may require such a quit claim or other undertakings, assurances and other information in the future. The ABC will determine what it requires as it sees fit.”
705 A dispute arose between Mr Morrow and the ABC concerning the production terms on which the ABC might commission The Help Desk.
706 Mr Morrow understood that, at his meeting of 8 March 2019 with Mr Anderson concerning what Mr Carrington then described as “a new series (to be named)” and which later that day Mr Morrow pitched as Are You Being Served, Mr Anderson had agreed to give Mr Morrow sole creative control over the new program.
707 Now that Mr Morrow was pitching The Help Desk to the ABC, the ABC insisted on its “standard editorial approvals”; which involved creative input from the ABC and did not give Mr Morrow sole creative control.
708 Thus, on 24 August 2019, Mr Carrington wrote to Mr Morrow:
“The meeting with [Mr Anderson] on 8 March 2019 was a very preliminary, high level discussion about the possibility of commissioning a new consumer show. It was unreasonable to expect that there would be no further discussion of the deal terms and the ABC’s position on creative approvals was clarified in our subsequent correspondence.[Ms Pincus] wrote to you on 2 April 2019 setting out our proposed terms for commissioning ‘Are You Being Served’ with standard approvals as broadcaster and advising that Nick Hayden had been appointed as Executive Producer and would expect the usual approvals (including over scripts, talent, rough and fine cut etc).
The deal terms for that show were never resolved so it is not correct to state that the ABC was willing to agree [to] your long-standing terms re creative approvals in the context of a new consumer program.
We subsequently moved to discussing deal terms for Series 7 of your long-standing program The Checkout and in fact we continued to seek appropriate amendments to creative approvals even for that returning series.
In any event, you have now delivered an entirely new proposal under different circumstances and, in view of that, I confirm that we are seeking standard editorial approvals for ‘The Help Desk’.”
709 Evidently, this was not acceptable to Mr Morrow.
710 On 28 October 2019, Mr Morrow wrote to Mr Anderson and Mr Carrington noting that the ABC’s proposed terms for pursuing The Help Desk including “ABC’s standard terms re ‘creative approvals’” and stating that those terms were “inferior” to what Mr Morrow asserted Mr Anderson had agreed to on 8 March 2019.
711 Mr Morrow concluded:
“There is therefore no commercial reason for Giant Dwarf to pursue The Help Desk on the terms currently offered by the ABC....
Giant Dwarf is willing to produce The Help Desk for the ABC on terms which are not less favourable to the producer than the 8 March Position. If the ABC is willing to commission The Help Desk on that basis, we would appreciate written confirmation, before 5pm Wednesday 30 October 2019.
If the ABC does not agree, the failure to replace The Checkout leaves Giant Dwarf and The Checkout Pty Ltd no option but to commence proceedings against [Cordell Jigsaw] to recover their losses caused by (among other things) [Cordell Jigsaw’s] failure to execute the Quit Claim.”
712 On 1 November 2019 Ms Gilchrist wrote to Mr Morrow:
“To confirm whether the ABC is willing to commission The Help Desk on terms which, apart from the ‘two series deal’ element, are not less favourable to the producer than the 8 March position. The ABC is not willing to commission The Help Desk on that basis.”
713 Later on 1 November 2019 Ms Porter at the ABC sent an email to Ms Pincus concerning a telephone call she had just had with Mr Morrow:
“As discussed, I did also ask why so quiet, that we’ve been waiting on a Dev budget for Help Desk. He said the ABC’s precondition for development requires his agreement to the ABC’s standard deal terms. He only wants to proceed with the deal terms that he’s previously negotiated and worked to for the previous 13 years. If he can’t get these terms then the deal is off.”
714 Although I only received that document as evidence of the contents of the ABC’s records, it in fact reflects that Mr Morrow wrote to Mr Anderson and Mr Carrington on 28 October 2019.
715 Mr Morrow commenced the Commercial Proceedings on that day.
716 On 18 November 2019, Mr Morrow, under letterhead of the Joint Venture Company, wrote to Mr Anderson raising “concerns” about a “potential breach of Editorial Standard 1.3” arising from “the ABC’s decision to ban personnel from The Checkout working on a ‘new consumer affairs program’.”
717 On 21 November 2019, Mr Morrow wrote to Mr Carrington again complaining about the ABC’s decision concerning “creative approvals” and concluding:
“In that context, I’m sure you can understand my reluctance to depart from those provisions, especially when the ABC has not provid[ed] any reason for this massive change as - as we both know - the ABC was willing to agree to the existing creative approval provisions for Series 7 and 8 of The Checkout. I don’t think it’s fair or reasonable for the ABC to require that as a pre-condition for entering into a Development Agreement and a development budget of $25k.I’m open to a negotiated position on ABC approvals if it’s aligned with a meaningful ABC commitment to having The Help Desk for broadcast in 2020, and I’d be happy to meet up for that purpose as a matter of urgency.”
718 On 22 November 2019, Mr Carrington wrote to Mr Morrow:
“We confirm that we are asking you to accept our standard creative approval terms without further negotiation on this point; andWe cannot confirm that the ‘ABC’s budget parameters for The Help Desk will be at least the same as for The Checkout Series 7’ as this is something which will be discussed as part of the development process and agreed in the event that we proceed to commission the production, as is standard process.
We look forward to hearing from you as to whether you are prepared to accept ABC’s standard creative approvals and proceed to development on that basis. It has been over 3 months since we first asked you this question and any further delay will jeopardise this project. As a result, we need to receive your response on this point as a matter of urgency (no later than COB Monday) following which we can provide a response to your substantive email on the development.”
719 Mr Morrow replied on the same day:
“ ... it’s such a shame that the ABC seems intent on damaging the successful working relationship it has had with Giant Dwarf for many years, especially when that involves back-tracking on the express assurances given by the Managing Director (which I acknowledge have since been retracted).Thanks for at least confirming that the ABC will not negotiate on its standard form contract. Obviously it’s disappointing that, for the first time in all the negotiations with the ABC I’ve been involved in since 2001, the ABC is not willing to countenance any change whatsoever to its standard terms. This stance has all the hallmarks of unfairness.
For the record, The Help Desk does not warrant being grouped with the other programs you’ve referred to, which are self-evidently exceptions to the general terms of trade between Giant Dwarf and the ABC. They were instances of new formats with first time program makers, which is not the case with The Help Desk on either score. The natural analogy would be with the first series of The Checkout. As a matter of fact, the situation is far closer to before the first series of The Checkout, or Hamster Wheel, or Hamster Decides or Media Circus ... but I realise saying that invites a bone fide discussion, which the ABC is rejecting.
Since you have demanded an urgent response, I confirm that Giant Dwarf will consider a Development Agreement for The Help Desk which incorporates the ABC’s standard terms for creative approvals. Since addressing creative approvals for a series in a Development Agreement is completely unprecedented, obviously that is subject to reviewing the actual terms of the proposed agreement, including of course the context of the other terms of the agreement and in particular the ABC’s response to the other points we have raised.
I look forward to receiving the ABC’s draft agreement as soon as possible.”
720 Later that day, 2019 Mr Carrington wrote to Ms Pincus and Ms Waite:
“Far from trying to damage the relationship as [Mr Morrow] asserts below, I am actually trying to build the relations so we can move this development forward. His aggressive behaviour all along the way has been exhausting, the likes of which I have never known in my 30 year TV career. However, I do see merit in The Help Desk, so we should proceed. Over to you to progress the development deal.”
721 As I have said earlier, I have received the internal communications within the ABC as evidence only of the fact that they are within the ABC’s records and not, themselves, evidence of the truth of their contents. I include them here merely to show how things progressed, as the ABC recorded matters.
722 That evening, Mr Carrington wrote to Mr Morrow:
“...Let me reassure you, there is no intention to damage the ABC’s relationship with Giant Dwarf. I have been your champion throughout and I want this partnership to work.Thanks for getting back to me so quickly. [Ms Pincus] will liaise with you asap to move the development agreement forward.”
723 Mr Morrow replied within minutes:
“Hi Michael – nothing in that first paragraph seems even remotely true”.
724 That was a remarkably robust response for Mr Morrow to make to Mr Carrington’s assurance that the ABC did not intend to damage its relationship with Giant Dwarf and to Mr Carrington’s personal assurance that the had been Mr Morrow’s “champion throughout”. In effect, Mr Morrow was accusing Mr Carrington of making a statement he knew to be untrue.
725 On 24 November 2019, Mr Morrow published on The Checkout’s Twitter account:
“So much for ‘hiatus’ ... Now @ABCTV is also banning personnel from #thecheckout from a new consumer show ... quite the F.U. for the talented, hard-working folks who worked on the Tube. Working on the only consumer show on TV for 6 series disqualifies you from consumer show ???”
726 The Tweet also included the following image:
727 This was a quotation from an email sent to Mr Morrow from the ABC’s head of “Acquisitions and Productions - Legal" on 24 October 2019.
728 That prompted the ABC, under the hand of Ms Carnabuci on 26 November 2019, to write to Mr Morrow, under the heading “Breach of Confidence”:
“The ABC has been negotiating with you since July 2019 in relation to the possible development and production of a new consumer affairs program which you pitched to us entitled The Help Desk.We have had several editorial meetings with you, but we have not yet finalised the terms of any development agreement for The Help Desk.
On Friday 22 November the ABC agreed to provide you with a draft development agreement for your consideration, following your confirmation that you would consider an agreement which incorporates ABC’s standard editorial approvals.
All these discussions and the related correspondence are communications made between you and the ABC on a strict commercial in confidence basis.
On Sunday 24 November, The Checkout Twitter account (which we understand is managed by you), published an extract of the confidential correspondence between you and Richard Huddleston, Manager Development & Partnerships, Factual & Entertainment, in relation to the development of The Help Desk.
...
Your publication of this information on The Checkout Twitter account is a breach of your obligation to the ABC to keep information exchanged in the course of our negotiations confidential.
We trust that you will make no further unauthorised disclosure of confidential information communicated in the context of the ABC’s negotiations with you.” (Emphasis in original.)
729 On 5 December 2019, Mr Carrington wrote to Mr Morrow:
“Far from wanting to damage the ABC’s relationship with Giant Dwarf as you assert, my editorial team and I have been seeking to work with Giant Dwarf on The Help Desk since July. The ABC has consistently and clearly communicated the need for our standard creative approvals from our earliest discussions about The Help Desk.The ABC has also been clear from the outset of our discussions that any new consumer affairs show would need to be substantially different from The Checkout, for editorial and legal reasons.
Despite this, you have made misleading public statements about the ABC via The Checkout social media accounts for not seeking to use The Checkout talent on The Help Desk.
Your decision to publish our confidential editorial communications with you demonstrates a lack of good faith in your dealings with our editorial team.
It is clear from your public statements, correspondence and our protracted discussions over several months that we are not aligned in the creative direction for The Help Desk, which is a necessary first step when considering development of a new program.
Therefore, the ABC has decided to cease discussions with you and Giant Dwarf for The Help Desk.” (Emphasis added.)
730 Mr Carrington’s words were measured, but clear. The ABC was clearly most unhappy that Mr Morrow had, again, taken his dissatisfaction with the ABC’s decisions into the public arena and, on this occasion, had chosen to publish material the ABC regarded as confidential.
731 That same day, the ABC issued the following public statement from its Media Centre:
“The ABC had preliminary discussions with producer Giant Dwarf to develop a consumer affairs program that offers something new to our audiences, showcasing fresh ideas and diverse Australian talent. We have ended those discussions after Giant Dwarf’s public statements and correspondence and dealings with the ABC made it clear that we are not creatively aligned, which is a necessary first step when considering development of a new program.We were also clear from the outset of those discussions that we are unable to commission a seventh series of The Checkout due to editorial and legal reasons, including current court proceedings between third parties.
The ABC continues to look at ways to build on the consumer affairs content of our News, Factual and Specialist teams across radio, television and online.
Meanwhile, we are working with Giant Dwarf on other unrelated projects.” (Emphasis added.)
732 I will return to these matters when considering Mr Morrow’s claim for economic loss in the context of his defamation claim against Mr Murray and his and Giant Dwarf’s corresponding claim in relation to injurious falsehood.
The alleged injurious falsehoods
733 In the meantime, between 13 September 2019 and 26 November 2019, Mr Murray sent emails to various persons at the ABC that Mr Morrow and Giant Dwarf allege contained further injurious falsehoods. The alleged injurious falsehoods in these emails are in addition to those in the passages in red text in the emails to which I have already referred.
734 Those emails were, with the alleged injurious falsehoods in red text, as follows:
(a) Mr Murray’s email to Mr Carrington of 13 September 2019:
“I’m very happy to speak to you about this next week.
FYI, we are paid $1450 per week for Gruen XL. When we agreed to start Gruen XL, we had no idea how hard it would be to do. I suspect that is why no one else is doing a similar thing.
It is a significant exercise for me personally as I cut the show because the rest of the team are working on the following week’s show by Wednesday. It is very difficult and results in me having a 14 hour day in the edit suite running two edits and two audio suites concurrently.
I am also frustrated with the way the ABC reports the Gruen and Gruen XL ratings which I have been unable to address despite raising it more than two years ago. They run the reports as two separate shows meaning that other programs where the same episode is run as an encore on ABC Comedy and iView appear to have higher ratings than Gruen because the Gruen XL ratings are not added to Gruen’s.
So Gruen XL is a source of some frustration.
That is the background to my comment that my enthusiasm for Gruen XL will reduce to zero in the circumstances you describe below. I have offered to repay the $1450 per week personally so neither the ABC, nor [Cordell Jigsaw] is out of pocket.
On the other hand, I have been very disappointed by the refusal of ABC legal to provide the documents we’ve been seeking. We are stuck in the middle here and are receiving no assistance in our attempts to resolve it. The ABC is in possession of the material which would enable us to prove or disprove our suspicions. We’ve already spent a huge sum on legal fees and have received another threat of legal action this week. It is debilitating.
That is why I don’t want to continue Gruen XL if there is a new show developed with Lord Voldemort.
As an aside, I wrote to David Anderson some weeks ago about this issue requesting a meeting and never heard back. That doesn’t shout valued partner to me.”
(b) Mr Murray’s email to Ms Julianna Walsh of 14 October 2019:
“Thanks for your time just now.
It would be good to know what is happening both with our application, and Julian’s separate application for more recent correspondence between me and the ABC.
I am open to considering releasing the documents Julian is seeking when you are in a position to request that approval and we have had a chance to review his request.
In respect of our application, our submission is that any correspondence between Julian and the ABC up until 8th April (inclusive) is already owned by us as 50% shareholder of Jigsaw Dwarf Pty Ltd. Accordingly as a director of the company at all relevant times, I grant permission for the documents to be supplied to Cordell Jigsaw Productions Pty Ltd without further consultation with the writer of the correspondence (Julian Morrow) as he was writing on behalf of the company we owned and was the co-director of the company with me at the time.”
(c) Mr Murray’s email to Ms Gilchrist and Mr Carrington of 15 October 2019:
“Further to our earlier correspondence, I wanted to update you on recent developments.
We have mediation scheduled with Julian Morrow and his legal representatives in [T]he Checkout/consumer affairs show dispute. Barring any unforeseen hiccup, the mediation will take place this coming Friday, 18th October.
The matter is more likely to settle if, before the mediation, we are given access to the documents requested in our FOI application of 13th September 2019. The 30 day period for the ABC to process our request expired yesterday. Juliana Walsh is managing this at the ABC’s end, and we appreciate Juliana’s time and assistance.
It is our aim to mediate a resolution to our dispute on Friday without the need for litigation. This is our preferred outcome.”
(d) Mr Murray’s email to Mr Anderson of 21 October 2019:
“I have been trying to get some information today and you may be the only person available to give me the answer.
[Cordell Jigsaw] has been continuing to attempt to resolve our differences with Julian Morrow including via a 9 hour mediation last Friday. So far we have been remarkably unsuccessful in reaching a negotiated position.
We have now been told that ‘the ABC would prefer to commission [T]he Checkout’ rather than the alternative consumer affairs program Julian has been pitching. If you can confirm that this is the case, we will see if there is a way we can deliver that outcome.
We also have been told that there is a deadline of tomorrow for that to be confirmed. No one I have spoken to at the ABC today was aware of such a deadline. Can you let me know if this is correct?
I would appreciate your views as I need to sort it out tomorrow before I get caught in Gruen world for the next few days.”
(e) Mr Simon Fraser’s email to Ms Gilchrist of 22 October 2019:
“I work with Nick at [Cordell Jigsaw] and we are attempting to resolve the current state of play between the parties (Julian and Nick) in a way that can allow the next series of The Checkout to be announced and to move forward into production.
We are keen to see The Checkout go forward and are working on a version of the Quit Claim in a form that we can both sign.
I understand that Nick spoke to you about this yesterday. We would like your views on whether the attached would be acceptable to the ABC for the production to move forward.
Nick would like me to send this to you as he is currently a the Gruen record at the ABC with our suggested changes for your urgent review please. I am also attaching the first version the ABC generated for ease of review that was sent thus by Julian’s lawyer.
We would like to propose a form of the Quit Claim that is acceptable to the ABC, to Julian today and would appreciate your input as a priority please. We have been given a 4pm deadline by Julian’s lawyers.”
(f) Mr Murray’s email to Mr Anderson of 29 October 2019:
“Discussions with Michael [Carrington] and ABC Legal last week have revealed that what we were told by Julian’s side about the show preference, and the Tuesday deadline, was simply not true.
It’s all very weird because the fact Julian has been dishonest in mediation and settlement conferences is the main reason this dispute between us hasn’t been resolved. For instance, if he had been truthful about [T]he Checkout 2 x series order in the June meeting, we would have settled in time for the ABC’s deadline. We have established that he lied in that meeting, and subsequently in writing regarding series 7 & 8 after the meeting.
We remain mystified about what is going on.”
(g) Mr Murray’s email to Mr Knox at TV Tonight of 26 November 2019:
“Thanks for your call yesterday.
Background:
[Cordell Jigsaw] was in a joint venture arrangement with Giant Dwarf under which we developed and produced 6 series of The Checkout between 2012 and last year.
Earlier this year we transferred our 50% share of the [Joint Venture Company] to Giant Dwarf after an approach from Julian. Subsequently we discovered that Julian was in discussions with the ABC for the return of the show without telling us. We are not sure when these discussions commenced, but the ABC has told us there are 60 documents between the ABC and Julian between the show being put on hiatus and the share transfer.
The ABC then required us to sign a document called a Quit Claim for the show to proceed. The Quit Claim included a provision that we forgo any ability to pursue Giant Dwarf about the circumstances surrounding the share transfer. For obvious reasons, we did not sign that document and have been pursing copies of the above correspondence in order to investigate whether there was any impropriety on Julian’s part. We have always said that we would sign the Quit Claim if those documents reveal no wrongdoing. Neither Julian, nor the ABC will provide those documents to us.
Julian has now commenced proceedings in the Supreme Court of NSW against [Cordell Jigsaw] for not signing the Quit Claim, which we will be defending.
Quote:
We are bewildered by the recent activity about The Checkout on social media. The ABC has made it clear that it will not commission The Checkout while there is a dispute between [Cordell Jigsaw] and Giant Dwarf about the show.
[Cordell Jigsaw] has tried very hard to resolve the dispute but have been unable to do so. Julian has now chosen to commence legal proceedings and we will be defending that action. As our barrister told the court, our defence/cross claim includes allegations that Julian was involved in misleading and deceptive conduct in breach of the Australian Consumer Law. We also believe Julian’s companies do not have the financial resources to meet any costs orders awarded against them if we successfully defend the action. We are preparing an application for discovery of documents and security for costs which will be heard in court next week.
We are very proud of The Checkout and are saddened if this dispute has delayed the return of the show to TV.” (Bold emphasis in original.)
735 I will return to these allegedly injuriously false emails below.
736 I now turn to consider Mr Morrow’s contentions concerning the six allegedly defamatory communications made by Mr Murray to the ABC.
Defamation
737 Mr Murray does not dispute that he published the five emails in question nor that he had the conversation with Ms Pincus recorded in her email of 11 June 2019.
738 Nor does Mr Murray dispute that if those publications had the meanings for which Mr Morrow contends, they were defamatory of Mr Morrow in that they would tend to lower Mr Morrow’s reputation in the minds of right thinking ordinary members of the community.[77]
739 In the case of four of the six allegedly defamatory publications, there is a dispute as to the meaning of what was said.
740 In relation to each publication, Mr Murray relied on the defences of:
(a) justification;(b) statutory qualified privilege;
(c) common law qualified privilege; and
(d) honest opinion.
741 I will deal with each of the allegedly defamatory publications in sequence and, in the course of dealing with those publications, set out the relevant principles.
Mr Murray’s 21 May 2019 email to Mr Anderson
742 I have set out the text of this email at [568] above.
743 Mr Murray sent this email after receiving the text messages from Mr Reucassel to which I have referred.
744 In this email, Mr Murray said, in the allegedly defamatory passages, that:
(a) Mr Morrow “did not mention his negotiations with [the ABC] to me at all”; and(b) “we now believe that [in asking Cordell Jigsaw to leave the Joint Venture Company] he may have breached his duties as a director of [the Joint Venture Company] by not informing us of the negotiations to bring the show back”.
745 Mr Murray also said that he was “not suggesting any wrongdoing on the part of the ABC” as “you were not to know the contents of the discussions between [Mr Morrow] and us about the [joint venture]”: thus making clear that he was “suggesting” that Mr Morrow had engaged in “wrongdoing”.
746 Mr Morrow also stated, in the part of the email which is not alleged to be defamatory, that “Craig”, that is Mr Reucassel, “has in the recent past asked me to take over from Julian”. Mr Murray accepted that he was “gilding the lily” about this in that Mr Reucassel had made that request in April or May 2017 and thus, at least arguably, not in the “recent past”. I will return to this below.
The meaning conveyed
747 There was a dispute as to the meaning of the allegedly defamatory passages from this email.
748 The question is, what meaning would be conveyed from the publication about the reputation of Mr Morrow from the perspective of the “ordinary reasonable reader”.[78] The “ordinary reasonable reader” is a person of fair average intelligence, not avid for scandal but, equally, prone to a degree of loose thinking and capable of reading between the lines.[79]
749 The analysis is not of the precise wording of the publication, but the meaning that an ordinary, reasonable reader would attribute to the publication analysed in the context of its overall tone or tenor.[80] That meaning can include any implication or inference which the ordinary reasonable reader would derive from the publication, guided by general knowledge and unfettered by strict legal rules of construction.[81]
750 Ms Chrysanthou submitted that the meaning of this email was that Mr Morrow had “acted unlawfully in negotiating the [Share Sale Agreement] with [Cordell Jigsaw]”.
751 On the other hand, Mr Katekar submitted that the meaning conveyed was that “Mr Morrow did not mention his negotiations with the ABC about The Checkout when he asked [Cordell Jigsaw] to leave the Joint Venture Company, which may have been in breach of Mr Morrow’s director’s duties”.
752 In my opinion, the meaning contended for by Ms Chrysanthou is what the ordinary, reasonable reader would understand.
753 Ms Chrysanthou submitted that “unlawful conduct (as understood by a lay person) is deliberately unlawful conduct” or “knowingly illegal” conduct. I do not agree. In my opinion, the ordinary reasonable reader of this email would understand Mr Murray to be saying that Mr Morrow had behaved unlawfully in the sense of behaving in a manner “not conforming to or permitted by the law”.[82] I see nothing in Mr Murray’s words that would convey to an ordinary reasonable reader that Mr Murray was alleging that Mr Morrow’s conduct was knowingly unlawful.
754 It is true that the allegedly defamatory statements were made in the context of Mr Murray saying, earlier in the email, that he had “heard a rumour that The Checkout was being recommissioned”, suggesting Mr Murray was not saying that he actually knew what had occurred.
755 However, as I have said, Mr Murray’s statement that he was not suggesting “any wrongdoing on the part of the ABC” carried the implication that he was suggesting that Mr Morrow had engaged in wrongdoing, namely having acted in breach of his duties as a director of the Joint Venture Company.
Justification?
756 Under s 25 of the Defamation Act (“the Act”), it is a defence to the publication of defamatory matter if the defendant proves that the defamatory imputations carried by the matter are “substantially true”.[83]
757 Section 4 of the Act defines “substantially true” as meaning “true in substance or not materially different from the truth”.
758 It is necessary to establish that “every material part” of each imputation is “substantially true”.[84] However, an error in detail does not mean the defence will necessarily fail.[85]
759 In my opinion, what Mr Murray said in this email was substantially true.
760 Mr Morrow “did not mention his negotiations” with the ABC to Mr Murray.
761 I have found that Mr Morrow did act in breach of his duties as a director of the Joint Venture Company by causing Giant Dwarf to act in breach of the implied term of the Joint Venture Agreement that he would inform Cordell Jigsaw of any opportunity to produce a further series of The Checkout or any equivalent or similar consumer affairs show.
762 Thus, it was substantially true for Mr Murray to say that Mr Morrow may have breached his duties to the Joint Venture Company by “not informing us of the negotiations to bring the show back”; and for Mr Murray to say, by implication, that Mr Morrow had engaged in “wrongdoing”.
763 For that reason, my conclusion is that Mr Murray has made out a defence of justification under s 25 of the Act.
764 That being so, it is not necessary to consider what other defences Mr Murray may have had in relation to this publication.
Mr Murray’s 11 June 2019 statement to Ms Pincus
765 I have set out the text of this Ms Pincus’s email recording of what Mr Murray said to her at [604] above.
766 Mr Murray had this conversation with Ms Pincus after receiving Mr Morrow’s request that he execute the Quit Claim.
767 In the email of 11 June 2019, Ms Pincus recorded that Mr Murray had told her that he thought he had been “misled” in the meetings “leading to the signing of” The Checkout Share Sale Agreement, that in those negotiations Mr Morrow had made reference only to his need to gain access to the PDV Offset and had “made no reference to the possible further production of” The Checkout and that Mr Morrow was “the new millennials’ Steve Vizard”.
Meaning conveyed
768 Ms Chrysanthou submitted the ordinary reasonable person in the position of Ms Pincus would have understood Mr Murray’s statements to mean that Mr Morrow had acted unlawfully in negotiating the Share Sale Agreement with Cordell Jigsaw and had misled Cordell Jigsaw into signing the Share Sale Agreement.
769 On the other hand, Mr Katekar submitted that the ordinary reasonable person in Ms Pincus’s position would have understood Mr Murray to be saying that Mr Morrow “may have” misled Mr Murray and Cordell Jigsaw and breached his director’s duties in that he told Mr Murray that the Share Sale Agreement was needed so he could access cash in a bank account, but did not tell them about a possible further production of The Checkout before the Share Sale Agreement was signed.
770 In my opinion, a reasonable person in Ms Pincus’s position would have understood Mr Murray to be saying that Mr Morrow had in fact misled him and Cordell Jigsaw by not revealing, in the course of negotiations in relation to the Share Sale Agreement, his concurrent negotiations with the ABC; and that Mr Morrow had in fact acted in breach of his duties as a director of the Joint Venture Company by not disclosing the opportunity to produce a further series of The Checkout or an equivalent or similar consumer affairs show.
Justification?
771 That is, in effect, what I have found to have occurred. I have found Mr Morrow to have engaged in misleading or deceptive conduct by remaining silent about the opportunity presented during March and April 2019. I have found that Mr Murray was in fact misled in the course of the negotiations leading to the Share Sale Agreement. I have also found that, in his written communications with Mr Murray between the Duck Inn Meeting and the execution of the Share Sale Agreement, Mr Morrow continually stated that he needed Cordell Jigsaw to transfer its shares in the Joint Venture Company to Giant Dwarf so that Giant Dwarf could access the PDV Offset and “made no reference to possible further production of” The Checkout.[86]
772 It is true that at the Duck Inn Meeting and in his meeting with Mr Simon Fraser on 22 February 2019 Mr Morrow made oblique references to future possible productions of The Checkout and that the provisions in the Share Sale Agreement for a 2% fee of the Joint Venture Company’s budget on any subsequent series of The Checkout produced by the Joint Venture Company, Giant Dwarf or any affiliated company or subsidiary reflected that oblique reference. But Mr Morrow did not reveal the imminence of the likely production of further series of The Checkout.
773 I have also found that Mr Morrow acted in breach of his duties as a director of the Joint Venture Company.
774 In other words, my conclusion is that what Mr Murray said in his email was substantially true and that a defence of justification under s 25 of the Act is made out.
775 It is, again, therefore unnecessary to consider the other defences relied upon by Mr Murray.
Mr Murray’s 12 June 2019 email to Ms Pincus
776 I have set out this email at [606] above.
777 Mr Murray sent this email to Ms Pincus, with a copy to Ms Chapman, the day following his conversation with Ms Pincus on 11 June 2019.
778 In this email, in the allegedly defamatory passages, Mr Murray said to Ms Pincus and Ms Chapman that:
(a) Mr Morrow had represented that he urgently needed access to the PDV Offset funds;(b) Mr Murray had been told by the ABC and Mr Morrow that there was “no chance” of The Checkout returning for a seventh series;
(c) in reliance on both those representations Mr Murray and Cordell Jigsaw agreed to transfer Cordell Jigsaw’s shares to the Joint Venture Company to Giant Dwarf “without payment”;
(d) it “appears” that Mr Morrow had not been “transparent” regarding the discussions he was having with the ABC concerning a further series of The Checkout and that he “intentionally omitted critical details” that, as a director of the Joint Venture Company, he was obliged to disclose to Cordell Jigsaw; and
(e) there was a dispute concerning “the ownership of the underlying IP for The Checkout” and the ownership of the Joint Venture Company, as a result of Mr Morrows conduct.
Meaning conveyed
779 It is common ground that the meanings conveyed by these passages were that Mr Morrow had acted unlawfully in negotiating the Share Sale Agreement with Cordell Jigsaw and that Mr Morrow had deceived Cordell Jigsaw into selling its shares in the Joint Venture Company to Giant Dwarf without payment.
Justification?
780 I have found that Mr Morrow engaged in misleading or deceptive conduct and in breach of his duties as a director of the Joint Venture Company and have, in that sense, found that Mr Morrow acted unlawfully and deceived Cordell Jigsaw into selling its shares in the Joint Venture Company to Giant Dwarf.
781 It was not true, however, for Mr Murray to say that the transfer had been “without payment” as there was consideration for the transfer, in addition to the nominal figure of $50,[87] being the promise by the Joint Venture Company to pay Cordell Jigsaw the 2% fee to which I have referred.
782 More significantly, it was not true for Mr Murray to say that there was a “dispute concerning the ownership of the underlying IP for The Checkout”.
783 As I have set out above, a short time after 12 June 2019, on 19 June 2019 Mr Fraser, no doubt on instructions from Mr Murray, confirmed to Mr Kay that Mr Murray agreed that “all intellectual property rights in The Checkout were held exclusively by the [Joint Venture Company] as stated in the Quit Claim Deed”.
784 Mr Murray must have known this when he wrote the email on 12 June 2019.
785 Accordingly, I am not satisfied that what he said in this email was substantially true in all respects.
786 It follows that the defence of justification is not made out in relation to this email. “Partial justification”, that is a plea which fails to justify every material part of every pleaded imputation is not a defence.[88]
787 The question of what damage Mr Morrow has suffered by reason of those aspects of this email that were not substantially true is another matter, to which I will return.
Statutory qualified privilege?
788 As s 30(1) of the Act provides:
“30 Defence of qualified privilege for provision of certain information(1) There is a defence of qualified privilege for the publication of defamatory matter to a person (the recipient) if the defendant proves that –
(a) the recipient has an interest or apparent interest in having information on some subject, and
(b) the matter is published to the recipient in the course of giving to the recipient information on that subject, and
(c) the conduct of the defendant in publishing that matter is reasonable in the circumstances.”
789 A vital element in this defence is that the recipient has an “interest or apparent interest” in having information on the subject.
790 In this context, “interest” is used in its broadest popular sense.[89] Nonetheless, I cannot see what interest, or apparent interest, the ABC had in hearing from Mr Murray about the matters he set out in this email.
791 It may be that the ABC had an interest or apparent interest in knowing, as a general matter, that there was a dispute between Mr Morrow and Mr Murray concerning any entitlement to produce a further series of The Checkout. That might have been relevant to the ABC’s decision about commissioning a further series. But the ABC had no interest or apparent interest in hearing the detail of Mr Murray’s contentions about that matter.
792 It certainly had no interest, or apparent interest, in being told, contrary to the fact, that Cordell Jigsaw had agreed to transfer its shares in the Joint Venture Company to Giant Dwarf “without payment”; and that there was a dispute concerning the ownership of the underlying intellectual property of The Checkout.
793 Mr Murray’s conduct in including incorrect information about these matters was not reasonable.
794 The defence of statutory qualified privilege is not made out.
Common law qualified privilege?
795 The defence of common law qualified privilege is made out where the communication is made, relevantly, where a person has an interest in making the statement on an occasion and the recipient has a corresponding interest in receiving it. That is, there must be a reciprocity of, in this case, the interest of the publisher and the interest of the recipient.[90]
796 Mr Murray may have had an interest in making the complaint set out in this email to the ABC. But, for the same reasons I have set out in relation to the defence of statutory qualified privilege, I cannot see what interest the ABC had in receiving the information in this email, particularly as not all of it was correct.
Honest opinion?
797 In relation to this publication, Mr Murray also relied upon the defence of honest opinion.
798 Section 31(1) of the Act provides:
“31 Defences of honest opinion(1) It is a defence to the publication of defamatory matter if the defendant proves that-
(a) the matter was an expression of opinion of the defendant rather than a statement of fact, and
(b) the opinion related to a matter of public interest, and
(c) the opinion is based on proper material.”
799 In this context, an opinion is “something which is or can reasonably be inferred to be a deduction, inference, conclusion, criticism, judgment, remark, observation etc”.[91] The test is whether the ordinary reasonable person would understand the defamatory meaning as an expression of opinion, rather than a statement of fact in the context of the matter complained of.[92]
800 In my opinion, an ordinary, reasonable reader of this email would not read the first or third parts of this email as Mr Murray expressing an opinion. He alleges that Mr Morrow made certain representations and that there was in fact a dispute concerning ownership of the intellectual property.
801 It is true that Mr Murray prefaces the second of his statements with the words “it appears that”. But an ordinary reasonable person reading this email would take Mr Murray as stating that Mr Morrow had in fact not been transparent regarding discussions and had in fact intentionally omitted critical details.
802 In any event, I cannot see how what Mr Murray said in this email could possibly relate to a matter of public interest.
803 The test is whether the conduct engaged in “inherently, expressly or inferentially invites public criticism or discussion”.[93]
804 This was a private dispute between Mr Murray and Mr Morrow. Mr Murray was sharing details of that private dispute with the ABC. Assuming, contrary to my opinion, that the ABC had an interest in knowing about the details of that dispute, as set out in this email, those details did not relate to any matter of public interest.
805 The defence of honest opinion is not made out.
Mr Murray’s email to Mr Carrington of 20 June 2019
806 I have set out this email at [679] above.
807 Mr Murray sent this email to Mr Carrington immediately following the exchange of correspondence between Mr Kay and Mr Fraser on 19 June 2019 to which I have referred.
808 In the allegedly defamatory passages in this email, Mr Murray said to Mr Carrington that:
(a) “[w]e didn’t expect to find ourselves in this position” [that is, to engage lawyers and engage in a settlement conference] which arose “purely because [Mr Morrow] had revived [The Checkout] while engaged in negotiations with us about transferring our 50% share in the [Joint Venture] Company to Julian’s company for nothing”;(b) Cordell Jigsaw would never have “given” Mr Morrow the shares had “we known about the resurrection of the show (about which Julian was obliged to inform us but didn’t)”;
(c) we have a “genuine grievance” arising from Mr Morrow’s conduct; and
(d) “our current position is supported by a key business partner of Julian’s too”.
Meaning conveyed
809 Ms Chrysanthou submitted that the meaning conveyed by these words was that Mr Morrow had acted unlawfully in negotiating the Share Sale Agreement with Cordell Jigsaw, had deceived Cordell Jigsaw into selling its shares in the Joint Venture Company to Giant Dwarf without payment and that he had engaged in fraud against Cordell Jigsaw.
810 On the other hand, Mr Katekar submitted that the meaning conveyed by this email is that Mr Murray and Cordell Jigsaw had grievances with Mr Morrow’s failure to inform them of the resurrection of The Checkout when negotiating with them about the transfer of 50% of the shareholding in the Joint Venture Company to Giant Dwarf.
811 In my opinion, the ordinary reader of this email would conclude that Mr Murray was going further than saying he had “grievances” about Mr Morrow’s failure to inform him of the “resurrection of the show”.
812 Mr Murray asserted that Mr Morrow was “obliged to inform us” about the “resurrection” of The Checkout but had failed to comply with that obligation.
813 An ordinary and reasonable reader of this email would conclude that Mr Murray was asserting that Mr Morrow had deceived him into transferring the shares.
814 To that extent, I accept Ms Chrysanthou’s submission.
815 However, I do not think an ordinary and reasonable reader would conclude that Mr Murray was alleging, in this email, that Mr Morrow had engaged in fraud.
816 Mr Murray’s statement that the shares were transferred “for nothing” and that “we would never have given him the shares” also suggests that the shares were transferred without payment.
817 As I have set out, that was not true.
818 As to Mr Murray’s statement that his position was “supported by a key business partner” of Mr Morrow’s, Mr Murray agreed that his reference was to Mr Reucassel.
819 In that regard, Mr Murray gave this evidence in cross-examination:
“Q. You then say, ‘Our current position is supported by a key business partner of Julian’s too.’ Is that right?A. Yes. Yes.
Q. You’re referring to Mr Reucassel there, are you?
A. That’s correct.
Q. I want to suggest to you that Mr Reucassel did not support your position?
A. He - that's not correct.
Q. And that you had provided Mr Reucassel - or you provided him with some correspondence in the matter - and he effectively told you he wanted to stay out of the dispute?
A. He did say that, yes.
Q. He did not say to you, I support your position?
A. He said - when I told him that we - it didn’t look like we were going to be signing the quit claim, he said these words: ‘Go for it.’”
820 Although Mr Reucassel was then a director and shareholder in Giant Dwarf, Mr Morrow did not call him to contradict this evidence. I see no reason to doubt it. Assuming that Mr Reucassel did say the words attributed to him by Mr Murray, it shows that Mr Reucassel expressed some support for Mr Murray’s “current position” of not executing a Quit Claim.
Justification?
821 I have found that Mr Morrow “was obliged to inform” Mr Murray “about the resurrection of the show” as Mr Murray said in this email.
822 I have also found that Mr Morrow engaged in misleading or deceptive conduct and acted in breach of his duty as the director of the Joint Venture Company; and thus, as Mr Murray said, Mr Murray had a “genuine grievance arising out of Julian’s conduct”.
823 To that extent, what Mr Murray said in this email was substantially true.
824 However, it was not true to say that Cordell Jigsaw had transferred its shares in the Joint Venture Company to Giant Dwarf “for nothing” or that the shares had been “given” to Giant Dwarf.
825 To that extent, what Mr Murray said in this email was not true.
826 It follows that the defence of justification is not made out in relation to this email.
827 Again, the question of what damage Mr Morrow has suffered by reason of those aspects of this email that were not substantially true is another matter, to which I will return.
Other defences
828 The heading of this email was “Checkout shenanigans update”. Its opening words were that “I thought I should give you an update on our discussions with Julian regarding sorting out The Checkout debacle”.
829 The ABC had no interest in receiving any such “update”.
830 Mr Murray was not expressing any opinion and nothing he said in this email related to a matter of public interest.
831 Thus, the defences of statutory qualified privilege, common law qualified privilege, and honest opinion are not made out.
Mr Murray’s email to Ms Carnabuci of 5 July 2019
832 I have set out this email at [690] above.
833 This email was Mr Murray’s reply to Ms Carnabuci’s email addressed to both Mr Murray and Mr Morrow, sent earlier that day, advising that “the ABC is not able to commission The Checkout for this year due to your inability to resolve your dispute by our deadline”.
834 In that letter, Ms Carnabuci had emphasised:
“The ABC does not wish to have any involvement in the dispute between you. The ABC does not presently have a view on any of the claims each of you has made. The ABC does not propose to investigate the claims nor act as mediator. We would like you to resolve the matter between yourselves.”
835 Nonetheless, Mr Murray replied and, in the passages alleged to be defamatory, stated that:
(a) Mr Morrow, and thus Giant Dwarf, had “purported” to terminate the Share Sale Agreement;(b) nonetheless, Cordell Jigsaw had not “been reinstated as shareholder” and had no board representation;
(c) “our allegations against [Mr Morrow] and Giant Dwarf of fraudulent misrepresentation, breach of director’s duties, and misleading and deceptive conduct ... would easily have been proven or disposed of, had we had access to relevant communications”;
(d) “our assumptions about [the] timing of the negotiations have not been denied” and that it was “that timing discrepancy which caused the dispute”; and
(e) Mr Morrow had “continued to lie to us about the nature of the proposed The Checkout commission during the settlement negotiations”.
Meaning conveyed
836 Mr Chrysanthou submitted that these passages conveyed the meaning that Mr Morrow had acted unlawfully in negotiating the Share Sale Agreement with Cordell Jigsaw and had engaged in fraud against Cordell Jigsaw.
837 Mr Katekar submitted that the meaning conveyed in this document was that the timing of Mr Morrow’s negotiations with the ABC about The Checkout had caused Mr Murray and Cordell Jigsaw to suspect and allege that Mr Morrow and Giant Dwarf had engaged in fraudulent misrepresentation, breach of director’s duties and misleading and deceptive conduct.
838 In my opinion, the ordinary and reasonable reader of this email would conclude that Mr Murray was not merely reciting a suspicion that Mr Morrow had engaged in fraud. He was accusing Mr Morrow of fraud. Although Mr Murray referred to “our allegations” of fraudulent misrepresentation, breach of director’s duties and misleading and deceptive conduct, he went on to say that such “allegations” would “easily have been proven or disposed of” had Mr Murray had access to the relevant communications and that, critically, “our assumptions about the timing of the negotiations have not been denied”.
839 The ordinary and reasonable reader of this email would conclude Mr Murray was saying that, as his “allegation” of fraud (among other things) could have been proven or disposed of, but had not been denied, it was, in effect, made out.
Justification?
840 To the extent Mr Murray alleges that Mr Morrow engaged in misleading or deceptive conduct and acted in breach of his director’s duties, I have found this imputation to be substantially true.
841 However, Mr Murray has not, in these proceedings, alleged that Mr Morrow made any fraudulent misrepresentation; and I have made no such finding.
842 The words used by Mr Murray are “fraudulent misrepresentation”. Those words were used in conjunction with, and in addition to the following words: “breach of director’s duties, and misleading and deceptive conduct”. The ordinary reasonable reader of the words “fraudulent misrepresentation” would take them to mean something more than breach of duty or misleading or deceptive conduct and to bespeak knowingly dishonest conduct.
843 My findings about Mr Morrow may bespeak a serious misunderstanding on his part about his legal position. And it may be, as Mr Katekar submitted, that Mr Morrow’s management of the message he was sending Mr Murray prior to the execution of the Share Sale Agreement, was “sharp”. But my findings are a far cry from fraud.
844 In closing submissions, Mr Katekar boldly submitted that “the ‘fraud’ imputation is substantially true”.
845 Mr Katekar submitted:
“The meaning of ‘Fraud’ in the ordinary sense of the word includes misleading conduct, or deceit, trickery, sharp practice, or breach of confidence by which it is sought to gain some unfair or dishonest advantage, a particular instance of deceit or any deceit, or an individual who makes deceitful pretences.”
And later:
“The present task is to assess the sting of the fraud imputations as the ordinary reasonable reader would understand them, not as practising lawyers would who have a unique understanding of the gravity of the notion of fraud. Of course, the Court will have to be satisfied to the Briginshaw standard.[94] The defendants maintain that the Court can be persuaded of the truth or substantial truth of [the imputations of fraud] because the evidence before the Court proves Mr Morrow’s conduct in connection with the Share Sale Agreement (in the whole of its context, including the historical arrangements between the parties) was at the least, sharp. His conduct violated the rules of fair dealing.” (Emphasis in original.)
846 But in this email, Mr Murray is speaking of “fraudulent misrepresentation” in contrast to “breach of director’s duties” and in contrast to “misleading and deceptive conduct”.
847 In that context, the ordinary reasonable reader of this email would understand “fraudulent misrepresentation” to mean a knowingly false statement, that is, knowingly dishonest conduct; not the “fraud-lite” the subject of Mr Katekar’s submissions.
848 In written submissions, the parties drew my attention to the decision of Le Miere J in Green v Fairfax Media Publications Pty Ltd,[95] handed down on 23 December 2021, the day after I reserved judgment.
849 In the very different circumstances of that case, which included the plaintiff’s claim that she had been defamed by an accusation, the imputation of which was said to be that she “defrauds the public and investors”, his Honour observed that “fraud is deceptive conduct”.[96] So it is. But the converse, that deceptive conduct is necessarily fraudulent, does not follow; and nothing his Honour said supports any such conclusion. The decision does not advance Mr Murray’s case.
850 The matter was compounded by the following passage from Mr Katekar’s oral address in relation to this email:
“... The mere word use of the word ‘fraud’, does not of itself amount to an imputation that fraud had occurred. What is said here, in that whole sentence, if your Honour reads it together, and with reference to the next paragraph, ‘We’re trying to resolve this, but our allegations’ - and what we say, can I say this candidly, your Honour, if your Honour would wish, we do say that he fraudulently made a misrepresentation to us. So, in a sense, that’s true, anyway.HIS HONOUR: So, you say you do maintain that?
KATEKAR: It’s not part of my pleaded case, but it would be available for your Honour that that is substantially true because it was a deliberate--
HIS HONOUR: You just made a submission of fraud, have you?
KATEKAR: Well, no, no. I withdraw that, your Honour.
HIS HONOUR: Do you withdraw it?
KATEKAR: Yes. I see where your Honour is coming from.” (Emphasis added.)
851 Mr Katekar confirmed, later, that the allegation was withdrawn. I return to this when considering the question of aggravated damages.
852 Ms Chrysanthou was, in my opinion, correct to submit:
“That submission should never have been made. It was a submission made for the first time, in closing, by Senior Counsel (presumably on instruction), under the absolute privilege of the courtroom. It lacked care. It was not reasonably justified by the material available. It was unnecessary. It could only have been made to embarrass Mr Morrow. It was only withdrawn in response to a reaction from the Court to the submission. It warrants an award of aggravated damages.”
853 It follows that Mr Murray has not made out a defence of justification.
Other defences
854 There can be no question here of any defence of qualified privilege as Ms Carnabuci had made it perfectly clear in her email, to which Mr Murray was replying, that the ABC did not “wish to have any involvement in the dispute between you”. The ABC had no interest in receiving an email in the terms of Mr Murray’s email of 5 July 2019.
855 As far as concerns the defence of honest opinion, Mr Murray was not expressing any opinions in this email. In any event, nothing he said relates to a matter of public interest.
Mr Murray’s email to Ms Gilchrist of 12 August 2019
856 I have set out this email at [696] above.
857 This email was Mr Murray’s reply to Ms Gilchrist’s email of 8 August 2019 in which Ms Gilchrist stated, “what claims can you actually substantiate in relation to a consumer affairs show involving Julian Morrow that are not related to The Checkout”, and asked Mr Murray to “notify Julian of your continuing claims and take appropriate action to test those claims now to resolve the dispute”.
858 In my opinion, Ms Gilchrist was not inviting Mr Murray to explain to her what claims he could substantiate. Ms Gilchrist was inviting Mr Murray to communicate with Mr Morrow to “resolve the dispute”.
859 In the allegedly defamatory parts of this email, Mr Murray:
(a) asked “why would the ABC be considering commissioning a replacement program from Julian who has wrecked an ABC brand and been involved in a fraud designed to take shares and IP in that brand from a loyal ABC partner - [Cordell Jigsaw]”;(b) said that Mr Morrow was asserting his ability to pitch an “alternative consumer affairs show” by reason of cl 4.6 of the Share Sale Agreement but that “the problem he now has” is that he has terminated that agreement;
(c) Mr Morrow should “no longer be allowed to benefit from his appalling behaviour”; and
(d) “we can’t stand by while he profits from his unlawful actions”.
Meaning conveyed
860 It is common ground that the meaning conveyed by this email was that Mr Morrow had engaged in fraud against Cordell Jigsaw and had acted unlawfully in negotiating the Share Sale Agreement.
Justification?
861 There can be no justification for Mr Murray’s allegation in this email that Mr Morrow had been “involved in a fraud”.
862 As I have said, no such allegation is made by Mr Murray in these proceedings and I have made no such finding.
863 The opening words of Mr Murray’s email showed that he was attempting to persuade the ABC not to work with Mr Morrow again.
864 In relation to that passage, Mr Murray gave this evidence:
“Q. So you accept that’s a rhetorical question?A. It’s a good question though, because I still don’t understand what was going on.
Q. But you accept that it’s a rhetorical question, and in fact what you are saying is, Julian has done these things. You’re not actually asking a question that requires an answer?
A. I wouldn’t - I wouldn’t have minded someone answering that question; that’s a question that I’ve had - I still - I still do not understand what occurred that made the ABC think that it was okay to not tell us what Julian was proposing.
Q. In that dearth of understanding, you choose to accuse my client of fraud; and fraud designed to take shares and IP. Do you see that?
A. Yeah, what’s dearth?
Q. It’s like a lacuna, it’s an absence of information. You said you didn’t understand what was going on, and you didn’t know; but despite not knowing you accuse my client of fraud. You see that?
A. I do see that, yeah.
Other defences
865 For the same reasons that I have set out in relation to Mr Murray’s email to Ms Carnabuci of 5 July 2019, no other defences are available to Mr Murray.
866 There can be no question of qualified privilege. The ABC had no interest in receiving an email from Mr Murray in these terms. As I have said, the email from Ms Gilchrist to which Mr Murray was replying, in terms, suggested that he deal with Mr Morrow about any allegation that he thought he could substantiate.
867 There can also be no question of an honest opinion defence. Nothing in this email relates to a matter of public interest.
Conclusions as to the six allegedly defamatory communications
868 For those reasons, my conclusions in relation to the six allegedly defamatory publications are:
(a) each of the publications conveyed meanings which were defamatory of Mr Morrow;(b) Mr Murray has not made out a defence of qualified privilege, whether statutory or at common law, or honest opinion in relation to any of the publications;
(c) Mr Murray has made out a defence of justification in relation to his email of 21 May 2019 to Mr Anderson and his conversation with Ms Pincus on 11 June 2019;
(d) Mr Murray has not made out a defence of justification for his emails of 12 June 2019 to Ms Pincus because he incorrectly asserted that Cordell Jigsaw transferred its shares in the Joint Venture Company to Giant Dwarf “without payment” and that there was a dispute about the “underlying IP for The Checkout”;
(e) Mr Murray has not made out a defence of justification for his email of 20 June 2019 to Mr Carrington because he incorrectly asserted that Cordell Jigsaw transferred its shares in the Joint Venture Company to Giant Dwarf “for nothing”; and
(f) Mr Murray has not made out a defence of justification in relation to his emails of 5 July 2019 to Ms Carnabuci and 12 August 2019 to Ms Gilchrist.
Damages
869 By reason of s 35 of the Act, the maximum amount of damages for non-economic loss that may be awarded in this case is $432,500.[97]
870 The cap does not require the Court to engage in a scaling exercise. Rather it is a “cut off” amount.[98]
871 If a plaintiff establishes matters of aggravation, damages for economic loss can be awarded in excess of the cap of $432,500.
872 If a plaintiff proves that the publication of a defamatory matter was actuated by malice, a defence of qualified privilege under s 30(1) of the Act and the common law is defeated.[99] However, as I have found that Mr Murray has not established the defence of qualified privilege in relation to any of the impugned publications, this question does not arise.
873 The making of a defamatory publication actuated by malice is also relevant to the question of whether aggravated damages should be awarded. Accordingly, I will consider the question of malice before turning to the question of aggravated damages.
874 As I have found that Mr Murray has established a defence of justification in relation to the first two publications, his email of 21 May 2019 to Mr Anderson and his conversation with Ms Pincus on 11 June 2019, the question of malice does not arise in relation to anything said in those publications. Nonetheless, I will deal with Ms Chrysanthou’s submissions about those publications.
Malice
875 Malice is an improper motive that actuates the publication: that is, a motive which is foreign to the occasion which gives rise to the occasion of privilege. To establish malice, it is necessary to demonstrate more than mere ill-will, spite or prejudice. A lack of a positive belief in the truth of the defamatory matter does not necessarily bespeak malice. But a positive belief in the falsity of defamatory material is generally conclusive proof of malice.[100]
876 If established, malice is relevant to the question of whether aggravated damages should be awarded.
877 Mr Katekar submitted that Mr Murray’s motivation in making the impugned statements was to “address the dispute at hand”.
878 Mr Katekar pointed to evidence from Mr Murray that his explanation for making the publications in question was to:
(a) obtain documents and information from the ABC about Mr Morrow’s negotiations with them about the revival of The Checkout;(b) to convey his and Cordell Jigsaw’s position in relation to the dispute, including as to why Cordell Jigsaw was not prepared to execute the Quit Claim; and
(c) to protect Mr Murray’s, and Cordell Jigsaw’s, legitimate interests.
879 However, I am satisfied that Mr Murray’s motivations went beyond these anodyne matters.
880 In Mr Murray’s email to Mr Anderson of 21 May 2019, he concluded by saying:
“We had always believed that cheaper, fresher shows featuring some of the same key on air talent would be a more preferable course for the ABC than to bring back The Checkout. As a result, we have put a lot of effort and resources into that area.”
881 That shows, in my opinion, that part of Mr Murray’s motivation in writing to Mr Anderson was to sway Mr Anderson, and thus the ABC (Mr Anderson was then the Acting Managing Director) not to proceed with any further series of The Checkout. This was going further than seeking documents, conveying Cordell Jigsaw’s position or seeking to protect Cordell Jigsaw’s legitimate interests.
882 However, I have found that Mr Murray has established the defence of justification in relation to this email, and Mr Morrow did not allege that what was conveyed by imputation in this email included that the ABC should not proceed with any further series of The Checkout with him. That appears to limit the relevance of this material to the question of aggravated damages.
883 On 11 June 2019, Mr Murray described Mr Morrow to Ms Pincus as “the new millennials’ Steve Vizard”.
884 In that regard, Mr Murray gave this evidence:
“Q. When you referred to my client as ‘the new millennium’s Steve Vizard’, you were doing so gratuitously in order to harm his reputation with Ms Pincus?A. I was saying that he’s someone you don’t want to be in business with.
Q. You said that in order to harm his reputation?
A. No. I think it’s probably an aside, actually; I don’t think there’s any - there was no--
Q. When you say--
A. --deliberate attempt to harm his reputation.
Q. When you say ‘an aside’, you’re agreeing with me that it was gratuitous?
A. It’s probably - yeah, maybe it’s gratuitous, sure.
Q. When you referred to Steve Vizard, you wanted Ms Pincus to understand that you were comparing Mr Morrow to a person who had breached his director’s duties?
A. I can see in her note that that’s what she thought I - well, it’s not actually - I didn’t have that in mind.
Q. What did you have in mind when you referred to Steve Vizard?
A. That he, you know, was fun, interesting, very clever writer, funny guy, and someone you didn’t want to be in business with; that’s what I said to her.
Q. You didn’t say those words to her. What you said is that Mr Morrow was ‘the new millennium’s Steve Vizard’.
A. I think I said some other words as well; that’s not the - I said ‘the new millennium’s Steve Vizard’; I did say that.
Q. You did not say that Mr Morrow was like Mr Vizard because he was fun?
A. I said - or did I say, you know, I can’t remember exactly what I - 'he’s good fun to have dinner with’ or something like that; it’s set out in one of my affidavits. ‘He’s good fun to have dinner with but he’s not someone you want to be in business with’,”
885 Although Mr Murray denied he was deliberately seeking to harm Mr Morrow’s reputation in this passage, and despite Mr Murray’s references to Mr Morrow being an amusing dinner companion, Mr Murray agreed that he had told Ms Pincus that Mr Morrow was not someone “you want to be in business with”. This was at a time when, as Mr Murray knew, Mr Morrow was negotiating with the ABC about a further series of The Checkout. In that evidence, Mr Murray, in effect, agreed that his motivation was to deter the ABC from doing business with Mr Morrow.
886 However, once again, as I have found that Mr Murray has established the defence of justification in relation to this communication, and as Mr Morrow has not alleged that the defamatory material conveyed a meaning that Mr Morrow was not a person the ABC should be in business with, I again find that the relevance of this material is limited to the question of aggravated damages, which I will address shortly.
887 In relation to Mr Murray’s 12 June 2019 email sent to Ms Pincus the day following his conversation with her, Mr Murray agreed in cross-examination that his object was to “stonewall” Mr Morrow’s negotiations with the ABC. Mr Murray also included in that email a statement, that he must have known to be untrue, that there was a “dispute concerning the ownership of the underlying IP for The Checkout”.
888 The inclusion in a defamatory publication of a statement that the publisher knows to be untrue is a matter capable of bespeaking malice and thus being a matter relevant to aggravated damages. I have found that Mr Murray has not established the defence of justification in relation to this email as, as well as wrongly asserting that the transfer of the shares in the Joint Venture Company was “without payment” Mr Murray made this statement about the ownership of the “underlying IP” to which I have referred.
889 As to the emails Mr Murray sent to Ms Carnabuci on 5 July 2019 and to Ms Gilchrist on 12 August 2019, I think Ms Chrysanthou was correct to submit that Mr Morrow’s obvious motivation, as revealed by the words he used, was to shame Mr Morrow in the eyes of the ABC.
890 Both emails contained an allegation that Mr Morrow had behaved fraudulently, and the 12 August 2019 email opened with the words:
“Why would the ABC be considering commissioning a replacement program from Julian who has wrecked an ABC brand and been involved in a fraud designed to take shares and IP in that brand from a loyal ABC partner - [Cordell Jigsaw].”
891 In that passage, Mr Murray was openly seeking to dissuade the ABC from dealing with Mr Morrow.
892 In this respect, Mr Murray’s motivations went far beyond those for which Mr Katekar contended and were foreign to the occasion and calculated and intended to harm Mr Morrow and Giant Dwarf.
The “grapevine effect”
893 Mr Murray agreed that he had spoken to “many, many” people about the allegations the subject of his communications to the ABC.
894 Thus, he gave this evidence in cross-examination:
“Q. From that date 13 May 2019, you have spoken to many many people in the television industry, haven’t you, in which you’ve made allegations about Mr Morrow?A. Yes.
Q. You’ve alleged to various persons that Mr Morrow misled you or engaged in some sort of misconduct towards you in the commercial dealings between you?
A. Yes.
Q. How many people do you think you’ve spoken to in the last two years and made those sorts of allegations?
A. I - that would be difficult for me to answer. I’m not sure.
Q. Because there are just so so many?
A. No, it’s not - it's not so so many. I just don’t know what the number is that I would have said, you know--
Q. Dozens?
A. I don’t know.”
895 Ms Chrysanthou did not explore with Mr Murray the extent, if any, to which he repeated to others the allegation of fraud made in his emails of 5 July 2019 and 12 August 2019.
896 Mr Murray agreed that he had, in effect, engaged in a campaign. Thus he gave this evidence in response to Ms Chrysanthou’s suggestion that his aim, in writing to the ABC, was to promote his proposed program Reputation Rehab:
“Q. That is what this email indicates, that that was your state of mind. Do you agree with that or not?A. No, I disagree with that, and it - why would I have kept writing emails to the ABC about The Checkout if that's - if that's what I was thinking? If I'd achieved the aim that you say I was - I was aiming for rather than just looking after my own - our own, you know, legitimate interests, why would - why would I have kept writing to the ABC about The Checkout?
Q. What do you mean? What email? What are you referring to when you say, ‘Why would I have kept writing to the ABC?’ Which emails --
A. Well, because you just --
Q. -- are you referring to?
A. Well, there are a whole lot more emails in - in - in the schedules that you're just about to take me to that - that are about The Checkout, and - and if you say that my only - my aim - you say that my - my whole aim is to stop The Checkout being made so we could get Rehab - Rehab up, if that's what I was trying to do, why didn't I just stop my campaign at that point?” (Emphasis added.)
Prior good reputation
897 The following persons gave evidence of Mr Morrow’s prior good reputation:
(a) Mr Alan Kirkland, the Chief Executive Officer of Choice, the Australian Consumers’ Association;(b) Mr Phillip Adams AO, a well-known journalist who described himself as “the ABC’s oldest broadcaster”;
(c) Professor Ron McCallum AO, Professor Emeritus at the University of Sydney Law School;
(d) Mr Michael Easton, a solicitor who acted for Mr Morrow briefly during June 2019;
(e) Ms Amanda Rose, a researcher on series five and six of The Checkout and who, at the time of her affidavit, worked at the United Workers Union in the membership team;
(f) Mr Alan Sunderland, a journalist and editorial consultant;
(g) Mr James Edwards, a television editor who was employed by Giant Dwarf and worked on series five and six of The Checkout;
(h) Mr Rick Kalowski, the Head of Comedy at the ABC at the relevant time;
(i) Mr Gerard Brody, the Chief Executive Officer of the Consumer Action Legal Centre;
(j) Ms Geraldine Moody, who for a short time in 2018 worked as Chief People and Community Officer at the ABC and who was also a neighbour of Mr Morrow;
(k) Ms Geraldine Doogue AO, a well-known journalist and broadcaster;
(l) Mr Sam Asher, a series designer and art director on Series two to six of The Checkout;
(m) Mr Kim Dalton OAM, the Chief Executive Officer of the Australian Film Commission from 1999 to 2006 and the Director of Television at the ABC from 2006 to 2013;
(n) Mr Michael Rodrigues, who is currently the 24 Hour Economy Commissioner for New South Wales;
(o) Ms Nikita Agzarian, a previous employee of Giant Dwarf;
(p) the Honourable Kristina Keneally, the Senator for New South Wales and, at the time she made her affidavit, the Deputy Leader of the Opposition and Shadow Minister for Home Affairs and for Immigration and Citizenship, and formerly a Premier of New South Wales;
(q) Ms Lisa Main, the Director of Grants at the Judith Neilson Institute for Journalism and Ideas and the Co-Founder of ABC Fact Check;
(r) Ms Delia Rickard, the Deputy Chair of the Australian Competition and Consumer Commission (albeit making her affidavit in a personal, not professional, capacity);
(s) the Honourable Anthony Burke, MP, the Member for Watson in the Parliament of Australia and, at the time he made his affidavit, the Shadow Minister for Industrial Relations and Arts and the Manager of Opposition Business in the House of Representatives;
(t) Mr Anthony Jones, a well-known broadcaster who has worked at the ABC since the mid-1980s and is the host of a number of well-known television programs;
(u) Mr Peter McEvoy, a television broadcast producer;
(v) Mr Kieran Smark SC;
(w) Dr Norman Swan, a well-known physician, journalist and broadcaster who has worked with the ABC since 1982;
(x) Dr Lisa Pryor, Mr Morrow’s spouse; and
(y) Mr Charles Licardello, another well-known television producer.
898 Mr Katekar did not cross-examine any of these witnesses. Their evidence is unchallenged, and I accept that evidence.
899 Mr Murray pleaded that, nonetheless, Mr Morrow had a bad reputation within the ABC being that of:
“i. A person who damaged his ongoing relationship with the ABC and undermined his partnership with the ABC in respect of future programs.ii. A person who is difficult to work with.
iii. A person who is a bully.
iv. A person who has a poor record in relation to his treatment of cast and crew of programs under his control.
v. A person who may be trying to conduct his business relations with the ABC in a manner that was deliberately detrimental to Cordell Jigsaw.
vi. A person who was the director of a company, which had become increasingly difficult to work with in respect of ABC editorial creativity, budgeting and rights management.
vii. A person who was the director of a company, which had a notoriously restrictive approach to the ABC creative approvals and input.
viii. A person who was the director of a company, which increasingly chose conflict over collaboration with the ABC, which made the partnership with the ABC increasingly unsustainable.
ix. A person who had a confrontation with then Head of TV/Director of Entertainment and Specialist and now Managing Director of the ABC David Anderson, in the public foyer of the ABC offices at Ultimo, on 31 July 2018.”
900 I shall deal, immediately, with the last of these allegations, being that Mr Morrow had had a confrontation with Mr Anderson in the public foyer in the ABC offices at Ultimo on 31 July 2018.
901 The maintenance by Mr Murray of this allegation was a low point in the proceedings.
902 Mr Murray’s contention that there had been such an incident arose from a text message exchange between Ms Mason-Campbell and Mr Anderson on 31 July 2018 as follows:
“[Ms Mason-Campbell:] Hey, I’m only just registering now about the foyer fight... 1stly, I need to hear all the details and 2ndly I can’t thank you enough for supporting me through this... Julian really is a bully and you called him on it!! I think this is the start of a new playing field at the ABC, thank you j[Mr Anderson:] [You’re] most welcome, it’s my job to defend you against arseholes. Have a good night. D”.
903 Mr Morrow denied that there had been any such altercation. He said that Mr Anderson:
“Has never commented to me in any way about the conversation we had on 31 July. And if it was anything like the way its been described by the defendants, I would have expected him either to have raised, or perhaps not even to deal with me”.
904 On 1 April 2021, in the course of the dispute concerning the subpoenas served on the ABC to which I have referred in earlier judgments, the solicitor for the ABC, Ms Katherine Haddock said:
“As you know, the ABC does not consider that there was a dispute or interaction of any significance between Mr Morrow and Mr Anderson in the foyer of the ABC on or around 31 July 2018.”
905 In closing submissions Mr Katekar sought to make something of the fact that Ms Haddock had said that the ABC did not consider there to have been a dispute or interaction “of any significance” on the day in question.
906 But Ms Haddock’s letter makes clear, in my opinion, that from the ABC’s perspective, nothing happened on 31 July 2018 that would warrant any conclusion being made as to Mr Morrow’s reputation within the ABC. Mr Anderson was not called to give an account of what is said to have occurred.
907 Otherwise, the matters relied upon by Mr Murray to establish that Mr Morrow had a bad reputation within the ABC comprised, first, a number of emails which, as I have emphasised above, I admitted only as evidence of the fact of their existence in the ABC’s records, and not as evidence of the truth of their contents.
908 Second, Mr Murray also relied on his own understanding, the basis of which Mr Murray did not explain, “that Morrow has a bad reputation within the ABC”, and evidence of a former employee of Giant Dwarf. Third, Mr Murray relied on the evidence of Ms Kirsten Drysdale, who has worked with Mr Morrow and who gave evidence of a particular altercation she had with Mr Morrow in February 2018 and who asserted that Mr Morrow had “a reputation in the industry as someone who is combative, aggressive, intimidating, manipulative, controlling and very difficult to work with”.
909 I do not find these general assertions a sufficient basis to draw any conclusion as to Mr Morrow’s reputation within the ABC.
Damage to reputation
910 It is common ground that damage to reputation by a defamatory publication is presumed.[101]
911 The following of Mr Morrow’s reputation witnesses gave evidence of having become aware of the allegations made by Mr Murray: Mr Jones, Mr McEvoy, Ms Main, Ms Agzarian, Mr Brody, Dr Swan and Ms Annetts.
912 It is true, as Mr Katekar submitted, that there was no evidence of actual damage to Mr Morrow’s reputation among those who received the defamatory communications, being Mr Anderson, Mr Carrington, Ms Pincus, Ms Chapman, Ms Carnabuci and Ms Gilchrist.
913 It is also true that the communications were made to representatives of the ABC who had already been dealing with Mr Morrow, and who may well have formed their own view about Mr Morrow’s reputation before receipt of the publications. It must have been obvious to those ABC representatives, from the words Mr Murray used, that Mr Murray felt deeply aggrieved about what he understood Mr Morrow had done and, particularly, about Mr Morrow’s negotiations with the ABC leading up to the execution of the Share Sale Agreement. The ABC knew Mr Morrow did not want Mr Murray to know about those discussions, as Mr Morrow’s statement to Ms Pincus on 28 March 2019 made clear. Accordingly, it is likely that the targeted recipients of Mr Murray’s communications took his statements with a grain of salt. But as neither side called any of the ABC recipients as witnesses, I am not able to reach any final conclusions about these matters nor, more generally, about what the recipients made of Mr Murray’s communications.
914 A further factor is that Mr Morrow did not know of Mr Murray’s communications until after discovery was given in the Commercial Proceedings.
915 Obviously, any rumours as to what Mr Murray had said about Mr Morrow had not reached Mr Morrow’s ears until then. It is not clear from Mr Morrow’s damage to reputation witnesses whether they heard anything about what Mr Murray had said to the ABC before Mr Morrow learned of those matters.
916 Those factors tend to suggest, although by no means decisively, that knowledge within the television industry of what Mr Murray said to the ABC about Mr Morrow has to a large extent been generated by these proceedings, as well as by the publications themselves.
917 Mr Morrow has not made another television program for the ABC since the matters complained of were published, although he still appears on ABC radio. However, as I discuss below in relation to Mr Morrow’s claim for damages for economic loss, Mr Morrow’s behaviour concerning The Help Desk negotiations must be considered in this context.
918 Finally, to the extent that Mr Morrow’s reputation has been damaged by Mr Murray’s statements that Mr Morrow engaged in misleading or deceptive conduct and acted in breach of his duty as a director of the Joint Venture Company, I have found those statements to have been justified.
Hurt to feelings
919 Mr Morrow gave evidence of his hurt to his feelings arising from the matters complained of. I accept Ms Chrysanthou’s submission that although Mr Morrow was stoic in the witness box, he was plainly upset giving his oral evidence when asked about his reaction to the matters complained of. I do not accept Mr Katekar’s submission that Mr Morrow appeared “wooden” when giving evidence about his reaction to Mr Murray’s publications.
920 In cross-examination, Mr Katekar put to Mr Morrow that he did not feel “any sense of upset” arising from the communications.
921 Thus, this exchange occurred:
“Q. The evidence that you gave to his Honour about how upset you were about those communications and generally, was not genuine evidence, was it, Mr Morrow?A. It was genuine evidence.
Q. You didn't actually feel any sense of upset arising from any of those communications, did you?
A. I did feel genuine upset when I read those communications, and continue to.
Q. You didn't then, and do not now, care what any of Mr Anderson, Mr Carrington, Ms Pincus, Ms Waite, Ms Carnabuci or Ms Gilchrist, think of you, do you?
A. I do.”
922 Mr Morrow was clearly offended by being asked those questions.
923 His wife, Dr Pryor, gave unchallenged evidence in her affidavit that Mr Morrow was still upset.
924 Further, extensive evidence was given by a number of Mr Morrow’s reputation witnesses as to how it appeared to them that Mr Morrow had been hurt by what Mr Murray had said of him. This included Ms Rickard, Dr Swan, Ms Moody, Mr Brody, Mr Edwards, Mr Smark, Ms Main, Ms Agzarian, Mr McEvoy, Ms Annetts and Mr Asher.
925 Mr Katekar did not seek to cross-examine any of those witnesses.
926 However, Mr Morrow’s evidence as to his hurt feelings must be seen in the context of my findings that he did engage in misleading or deceptive conduct, and did act in breach of his duties as a director of the Joint Venture Company. Thus, to the extent that his feelings have been hurt by Mr Murray’s statements to that effect, I have found those statements to be justified.
Aggravated damages
927 An award of aggravated damages may be made where a respondent’s conduct towards a plaintiff is found to have been improper, unjustifiable or lacking in bona fides.[102]
928 The following factors are capable of relevance to an award of aggravated damages:
(a) sensational, accusatory and spiteful publications;(b) the respondent’s failure to seek comment prior to publication;
(c) the respondent’s failure to give notice to the applicant prior to publication that he or she intended to make the publication;
(d) the respondent’s knowledge of the public status of the applicant;
(e) the respondent’s intention irrevocably to damage the applicant’s reputation and professional career;
(f) the respondent’s campaign to damage the applicant’s reputation; and
(g) the failure of the respondent to apologise for the publication.[103]
929 As I have said, if the Court is satisfied that an award of aggravated damages should be made, the statutory cap is not applicable.[104]
930 Circumstances of aggravation can be found in a respondent’s conduct from the date of publication up to the date of judgment. The manner in which a respondent conducts the defamation litigation can provide a basis for an award of aggravated damages.[105]
931 Once again, when considering the extent to which the damages recoverable by Mr Morrow should include aggravated damages, it must be borne in mind that I have found that Mr Murray has substantiated the allegations he made to the effect that Mr Morrow engaged in misleading or deceptive conduct and acted in breach of his duties as a director of the Joint Venture Company.
932 This goes to the extent that damages have been mitigated, rather than aggravated. Mitigation of damages will arise where there has been partial success in the defence of justification (often misleadingly called “partial justification”).[106]
933 To the extent that I have found that Mr Murray was actuated by malice in relation to, particularly, the emails to Ms Carnabuci of 5 July 2019 and to Ms Gilchrist of 12 August 2019, those matters are relevant to the extent to which aggravated damages should be awarded.
934 Ms Chrysanthou relied on the following further matters of aggravation.
Failure to apologise
935 Section 38(1)(a) of the Act provides that evidence of an apology is admissible on behalf of the defendant, in mitigation of damages for the publication of defamatory material, the defendant has made an apology to the plaintiff.
936 Conversely, a failure to make an apology is capable of relevance to the question of aggravated damages.[107]
937 In closing submissions Mr Katekar said:
“In circumstances where there is a real and ongoing dispute between the parties and [Mr Murray and Cordell Jigsaw] bring their own cross-claim, it is unsurprising that [Mr Murray and Cordell Jigsaw] have not made an apology in respect of the allegedly defamatory communications”.
938 I do not agree, particularly in relation to the statements made by Mr Murray in his emails to Ms Carnabuci of 5 July 2019 and to Ms Gilchrist of 12 August 2019 to the effect that Mr Morrow had behaved fraudulently.
Maintenance of the defence in relation to the allegations of fraud
939 I find that an aggravating factor is Mr Murray’s maintenance of his defence in relation to the allegations of fraud made in those two emails.
940 Mr Murray did not allege fraud against Mr Morrow in these proceedings and has not been able to justify the allegations of fraud made in these two emails.
941 As I have already said, the matter was compounded by Mr Katekar’s closing submission “we do say that he fraudulently made a representation to us”.[108] The submission was immediately withdrawn but only because of my response to it.
Mr Murray’s “campaign”
942 As I have said, Mr Murray agreed that he had, in effect, engaged in a campaign against Mr Morrow. That is a matter relevant to an award of aggravated damages.
Maintenance of a bad reputation case
943 I have set out the slender basis on which Mr Murray contended that Mr Morrow had a bad reputation within the ABC.
944 I find this also to be a matter relevant to aggravation.
The manner in which Mr Morrow was cross-examined
945 I have set out above, Mr Katekar’s cross-examination of Mr Morrow was to the effect that he did not, in truth, feel upset about Mr Murray’s communications with the ABC.
946 This matter was put to Mr Morrow despite the unchallenged evidence of many witnesses including Dr Pryor, Mr Morrow’s wife, testifying to Mr Morrow’s upset.
Communications with the media
947 Mr Murray admitted that he had spoken to a journalist from the Sydney Morning Herald and told them that Mr Morrow had served 26 affidavits in the proceedings, including some of the names of these witnesses.
948 It was, obviously, unwise and inappropriate for Mr Murray to have spoken to the media about the evidence that Mr Morrow had adduced in these proceedings. That is a matter capable of relevance to aggravation of damages although, it should be said that the resultant publicity was, if anything, more favourable to Mr Morrow.
The incident involving Ms Agzarian
949 Along with the evidence regarding Mr Anderson’s alleged fight with Mr Morrow in the foyer of the ABC on 31 July 2018, this was another low point in the proceedings.
950 Ms Agzarian is one of Mr Morrow’s reputation witnesses. Ultimately, as I have said, Ms Agzarian was not required for cross-examination. Ms Chrysanthou cross-examined Mr Murray about a statement Mr Murray made to Ms Agzarian, shortly before the hearing, in the corridors of the ABC to the effect “see you in court next week”.
951 Ms Chrysanthou submitted:
“It was completely unnecessary for Mr Murray to speak to Ms Agzarian about the proceedings at all, and is understandable (regardless of his intent) that she took it badly”.
952 However, Ms Agzarian was not called to give an account of how she “took” Mr Murray’s statement and, on Mr Murray’s account of it, he had not spoken to Ms Agzarian in an intimidating manner.
953 The matter should not have been raised in these proceedings at all.
Economic loss
954 If a party is defamed in relation to their business or professional reputation, they are also entitled to recover damages for general loss of business or custom flowing from the publication of the defamatory material.[109]
955 A party is also entitled to plead and prove pecuniary loss resulting from the publication of defamatory material.[110]
956 Mr Morrow’s claim for economic loss is based on his evidence that he has not been engaged to make a television program for broadcast by the ABC since 17 April 2018, when the last episode of series six of The Checkout was aired. Mr Morrow has said that this was the longest period in his career that he has not been engaged by the ABC to make a television program.
957 I am not satisfied that Mr Morrow has established that Mr Murray’s publications to the ABC are the cause of the situation in which Mr Morrow now finds himself.
958 Ms Carnabuci’s email of 5 August 2019 made clear that the reason that the ABC decided not to commission a further series of The Checkout was due to Mr Morrow’s and Mr Murray’s “inability to resolve your dispute by our deadline”. Mr Morrow caused that dispute by engaging in misleading or deceptive conduct and acting in breach of his duty as a director of the Joint Venture Company which has led, in the circumstances I have set out above, to my conclusion that Mr Murray is now entitled to an order under s 237 of the Australian Consumer Law rescinding the Share Sale Agreement.
959 Any economic loss that Mr Morrow or Giant Dwarf have suffered is caused by those circumstances, and not by Mr Murray’s publications.
960 Further, and leaving aside the rescission of the Share Sale Agreement, I have concluded that cll 5.3 and 9.7 of the Share Sale Agreement did not require Cordell Jigsaw to execute a Quit Claim in the form required by the ABC. Accordingly, Cordell Jigsaw’s refusal to execute the Quit Claim did not cause Mr Morrow or Giant Dwarf loss in respect of which they can look to Cordell Jigsaw for compensation.
961 The evidence that I have set out above shows that, despite Ms Carnabuci’s email of 5 July 2019, the ABC was prepared to entertain the possibility of Mr Morrow producing a new show, The Help Desk.
962 At one point in his cross-examination, Mr Morrow said:
“It’s my case that the statements of Mr Murray resulted in the ABC’s proposal for The Help Desk being one that I didn’t think it was in the best interests in Giant Dwarf to pursue.”
963 Mr Morrow has not made out any such case. There is no evidence to suggest that anything Mr Murray said led Mr Morrow to reach any such conclusion or a change in the ABC’s position.
964 The material that I set out above shows that the ABC was interested in having Mr Morrow produce The Help Desk and that the reason that that project did not proceed was Mr Morrow’s own conduct, particularly his Tweet of 24 November 2019; and perhaps also his 22 November 2019 accusation to Mr Carrington that “nothing in that first paragraph seems remotely true”.[111]
965 That led to the ABC, under the hand of Mr Carrington, writing to Mr Morrow on 5 December 2019 terminating “discussions with you and Giant Dwarf for The Help Desk” because of “your decision to publish our confidential editorial communications”. Mr Carrington said this publication showed a “lack of good faith in your dealings with our editorial team” and that Mr Morrow and the ABC “are not aligned in the creative direction for The Help Desk”.[112] This was measured, but steely, language. It bespoke the ABC’s serious unhappiness with Mr Morrow’s decision, yet again,[113] to take into the public sphere his dissatisfaction with the ABC’s conduct; exacerbated in this case by Mr Morrow’s public revelation of his confidential communications with the ABC.
966 The matter was made even clearer by the ABC’s published statement, later on 5 December 2019, that it had ended discussions with Giant Dwarf:
“... after Giant Dwarf’s public statements and correspondence and dealings with the ABC made it clear that we are not creatively aligned, which is a necessary first step when considering development of a new program.”[114]
967 Mr Morrow has not adduced evidence of any circumstances following these events which might cast light on why it is that the ABC has not invited him to produce any further television programs.
968 Such evidence as is before me points firmly to the conclusion that it is a matter that Mr Morrow has brought upon himself and is not a matter that has anything to do with Mr Murray’s defamatory publications.
Quantum
969 I now turn to the difficult question of the quantum of the damages to be awarded to Mr Morrow.
970 For the reasons I have explained, there can be no damages for economic loss.
971 As to general damages, I must engage in what is necessarily an impressionist exercise which is not capable of precise intellectual analysis.
972 The sting of the libel in this case is Mr Murray’s accusations, in his emails to Ms Carnabuci of 5 July 2019 and to Ms Gilchrist of 12 August 2019, that Mr Morrow had behaved fraudulently. This is obviously a serious allegation. It was, however, made to a targeted audience being the two individuals at the ABC to whom the emails were sent, and those within the ABC with whom Mr Murray must have thought would hear of the allegations.
973 Despite the gravity of the allegations, they do not seem to have affected the ABC’s inclination to deal with Mr Morrow. Things fell apart between the ABC and Mr Morrow at the end of 2019 for different reasons; being reasons for which Mr Morrow can blame no one but himself.
974 Mr Murray repeated the allegations to “many, many” people although, as I have set out, the evidence does not reveal the extent to which Mr Murray passed on allegations that I found to be justified (misleading or deceptive conduct and breach of director’s duty) as opposed to allegations which I have found not to be justified (fraud).
975 And all this must be seen in the context where I have found that Mr Murray was justified in making the obviously defamatory assertions that Mr Morrow had engaged in misleading or deceptive conduct and acted in breach of his duty to the Joint Venture Company.
976 Further, there are circumstances of aggravation that I have set out.
977 During argument, my attention was drawn to other cases in which “comparable awards” were said to have been given. I attach a schedule which sets out a summary of those other cases. [977] Comparable awards (198102, pdf)
978 Those cases, obviously, deal with factual circumstances very different from those before me. They, however, do suggest that the award for damages in this case must be very much less than in most of those cases.
979 The conclusion I have come to is that, in all the circumstances I have described, the appropriate award of damages for the defamatory statements made by Mr Murray for which there is no justification is $30,000, to which I add $5,000 on account of aggravation.
Interest on damages
980 It was common ground that Mr Morrow should be awarded interest on those damages.
981 There was, however, a dispute in the written submissions as to the rate of interest. I will hear further submissions about that matter following publication of these reasons.
Injunction
982 Ms Chrysanthou submitted that I should also issue an injunction restraining Mr Murray and Cordell Jigsaw from further publishing any of the imputations found to have been conveyed.
983 At the moment, I am unable to see that there is any real risk that Mr Murray will repeat the imputations that I have found to be defamatory of Mr Morrow and not to be justified. Accordingly, I am not able to see why any injunctive relief should be granted.
984 However, I will invite further submissions about that matter following delivery of judgment.
Injurious falsehood
985 It is common ground that the elements of the tort of injurious falsehood are that:
(a) a false statement has been made about the plaintiff’s goods or business;(b) that statement was published by the defendant to a third party;
(c) there was malice on the part of the defendant; and
(d) the plaintiff has suffered actual loss as a result.[115]
986 On behalf of Mr Morrow and Giant Dwarf, this aspect of the case was developed by reference to a schedule entitled “Table of Falsehoods”. That schedule listed 15 allegedly false representations, all of which are said to be contained in email communications sent by Mr Murray to various officers of the ABC, including in the emails in which the allegedly defamatory statements were made.
987 The parties have cooperated to produce an expanded version of that schedule to include Mr Murray’s and Cordell Jigsaw’s response to Mr Morrow’s and Giant Dwarf’s contentions.
988 I will deal with each of the alleged “falsehoods” but record at this stage that the short answer to Mr Morrow’s and Giant Dwarf’s case concerning injurious falsehood is that, just as Mr Morrow has failed to show that he has suffered any economic loss as a result of Mr Murray’s allegedly defamatory communications to the ABC, for the same reasons, he has failed to establish any loss by him or Giant Dwarf as a result of the allegedly false statements subject of his injurious falsehood claim.
989 Further, in relation to some of the falsehoods alleged, Mr Morrow and Giant and Dwarf have not established that they were actuated by malice.
990 I will deal with each of the alleged falsehoods in turn.
First allegedly false representation
991 The first alleged false representation arises from the statement made by Mr Murray in his 21 May 2019 email to Mr Anderson that:
“Many of the key Checkout team have indicated their reluctance to work on the series without a circuit breaker protecting them from [Mr Morrow]. (For instance, even Craig [Reucassel] has in the recent past asked me to take over from [Mr Morrow]). I will no longer be that circuit breaker as [Mr Morrow] has asked that [Cordell Jigsaw] leave the [Joint Venture Company].”
992 Mr Morrow alleges that the following false representation arises from this passage:
“That many key members of The Checkout team would be unwilling to work on the series if a new season of [The Checkout] was commissioned by the ABC without the involvement of [Cordell Jigsaw]”.
993 That is not how I read the relevant passage of Mr Murray’s email to Mr Anderson. Rather, I read Mr Murray as saying that many key members of The Checkout team would be reluctant to work on a new season of The Checkout were Mr Morrow to be involved; and were Mr Murray to not also be involved as a “circuit breaker”, whatever that may mean.
994 Mr Murray has not adduced evidence from any “key member of The Checkout team” to prove that they were reluctant “to work on the series without a circuit breaker protecting them from” Mr Morrow.
995 On behalf of Mr Morrow, reference was made to the evidence of Ms Drysdale, called in Mr Murray’s case, that she was “excited about the prospect of returning to work on The Checkout”. However, Ms Drysdale qualified that evidence by saying that she would only be so excited “if the way to do that was through Crikey because it meant I would not have to work directly with Julian”.
996 As for Mr Murray’s reference to Mr Reucassel having asked him in the “recent past” to “take over from Julian” I have already referred to Mr Murray’s evidence that he agreed that he was “gilding the lily” about this.
997 Mr Murray was referring to a conversation that he said he had with Mr Reucassel during the production of series five of The Checkout in April or May 2017. Mr Murray said that Mr Reucassel told him:
“I’m very worried about the team on the show. Julian is out of control and many are threatening to leave. It’s becoming harder and harder to actually deliver the show due to his treatment of the crew including some of the presenters, and his unreasonable demands on the post production process. It’s so bad that I think you need to take over from him running the show.”
998 In cross-examination, Mr Murray adhered to his evidence that Mr Reucassel had said something to this effect. Mr Morrow did not call Mr Reucassel to contradict that evidence, notwithstanding the fact that, as I have said, Mr Reucassel is a director and shareholder of Giant Dwarf.
999 I find that what Mr Reucassel is reported to have said to Mr Murray provides a basis for what Mr Murray said in his email of 21 May 2019 to Mr Anderson.
1000 On behalf of Mr Morrow, reference was made to indirect evidence that other named persons, evidently associated with The Checkout in an earlier series, would have been prepared to participate in a seventh series.
1001 To this limited extent, Mr Morrow has demonstrated falsity in relation to what Mr Murray said to Mr Anderson in this email.
1002 However, I see no basis to conclude that Mr Murray was actuated by malice in making this statement. Indeed, Mr Murray’s evidence as to what Mr Reucassel said to him provides some basis for it.
Second allegedly false representation
1003 This allegedly false representation arises from the same passage in Mr Murray’s 21 May 2019 email to Mr Anderson that is the subject of the first allegedly false representation.
1004 The alleged representation is:
“That Craig Reucassel, described by Mr Murray as a key business partner of [Mr Morrow and Giant Dwarf] had recently before 21 May 2019 asked [Cordell Jigsaw] and Mr Murray to take over management and production of The Checkout.”
1005 As I have said, Mr Murray accepted that he was “gilding the lily” when he said the statements by Mr Reucassel upon which Mr Murray relied were made “in the recent past”. They were in fact made in April or May 2017; not the “recent past”.
1006 However, I see no reason to doubt that Mr Reucassel did make this statement to Mr Murray.
1007 Thus, although it was untrue to the extent if referred to “the recent past”, I do not find it was made maliciously.
Third allegedly false representation
1008 This representation is:
“That Giant Dwarf and Mr Morrow misled and deceived [Cordell Jigsaw] and Mr Murray in the negotiation of the [Share Sale Agreement].”
1009 It is said to arise from a number of Mr Murray’s allegedly defamatory emails to the ABC.
1010 I have found that, in substance, this is what happened. Thus, the representation was not false.
Fourth allegedly false representation
1011 This representation, said to arise from a number of the allegedly defamatory emails, is:
“That Giant Dwarf and Mr Morrow acted unlawfully in the negotiation of the [Share Sale Agreement] with [Cordell Jigsaw].”
1012 Again, in effect, I have found that Mr Morrow and Giant Dwarf did act unlawfully and that Mr Morrow acted in breach of his duties as director of the Joint Venture Company and engaged in misleading or deceptive conduct. Thus, this representation was not false.
Fifth allegedly false representation
1013 This representation, said to arise from a number of the allegedly defamatory emails, is:
“That Mr Morrow breached his duties as a director of [the Joint Venture Company] in negotiation of the [Share Sale Agreement] with [Cordell Jigsaw].”
1014 Again, this is in substance what I have found. The representation was not false.
Sixth allegedly false representation
1015 This representation is:
“That [the Joint Venture Company] did not have good and valid title in the rights and intellectual property in The Checkout.”
1016 This alleged representation is based on the statement in Mr Murray’s 12 June 2019 email to Ms Pincus and Ms Chapman that:
“We ... need to put the ABC on notice that there is a dispute concerning the ownership of the underlying IP for The Checkout ... ”.
1017 I have found that it was not correct of Mr Murray to allege that there was a “dispute” concerning the ownership of the intellectual property underlying The Checkout. Mr Murray’s solicitor, Mr Fraser confirmed, several days after this email, that this matter was not disputed.
1018 Mr Murray must have known that this statement was not correct. It was in my opinion made with malice.
Seventh allegedly false representation
1019 This representation is:
“That [the Joint Venture Company] and Giant Dwarf were not entitled to deal with the rights and title in The Checkout as contemplated under the Share Sale Agreement.”
1020 This allegedly false representation is also based on the passage from Mr Murray’s email to Ms Pincus of 12 June 2019.
1021 Mr Murray must have known the statement was not true. I find it was made maliciously.
Eighth allegedly false representation
1022 This representation is:
“That Giant Dwarf and Mr Morrow deceived [Cordell Jigsaw] into selling its shares in [the Joint Venture Company] [to] Giant Dwarf without payment.”
1023 This representation arises from Mr Murray’s statements to that effect in his emails of 12 June 2019 to Ms Pincus and 20 June 2019 to Mr Carrington.
1024 As I set out earlier, it was not true that Cordell Jigsaw sold its shares in the Joint Venture Company to Giant Dwarf “without payment” and to this extent this representation is not correct.
1025 However, I have found that, in effect, Mr Morrow and Giant Dwarf did deceive Cordell Jigsaw into selling its shares in the Joint Venture Company. This is the substance of the misrepresentation. I cannot conclude that the addition of the incorrect statement that the transfer was “without payment” bespeaks malice on Mr Murray’s part.
Ninth allegedly false representation
1026 This representation is:
“That Giant Dwarf and Mr Morrow misled and deceived [Cordell Jigsaw] into believing that there was no chance of The Checkout returning for a seventh series.”
1027 This alleged representation is based on the statement made by Mr Murray in his 12 June 2019 email to Ms Pincus that:
“We had been told by both the ABC and Julian that there was no chance of the show returning for a seventh series.”
1028 Mr Murray did not say in this email that Giant Dwarf had made any representation about the likelihood of The Checkout returning.
1029 In cross-examination, Mr Murray said that “the impression that we had” from what Mr Morrow had said was that there was “no chance” of The Checkout returning but that Mr Morrow had not said “in those words” that there was no such chance.
1030 Thus, what Mr Murray said was, literally, not true.
1031 However, I see no reason to conclude that he made this statement maliciously.
Tenth allegedly false representation
1032 This representation is:
“That [Cordell Jigsaw] and Mr Murray disputed the ownership of the intellectual property in The Checkout.”
1033 This is based on the statements made by Mr Murray in his 12 June 2019 to Ms Pincus to which I have referred. I reach the same conclusion here as I have in relation to the sixth and seventh allegedly false representations.
Eleventh allegedly false representation
1034 This representation is:
“That Giant Dwarf and Mr Morrow were not entitled to produce other consumer affairs television programs without the involvement or permission of [Cordell Jigsaw]”.
1035 On behalf of Mr Morrow and Giant Dwarf, four of Mr Murray’s emails were identified as containing this representation.
1036 In the sixth paragraph of Mr Murray’s 12 August 2019 email to Ms Gilchrist, Mr Murray said:
“Julian is also asserting he is able to pitch an alternative consumer affairs program to the ABC by virtue of the provision in the Share Sale Agreement which gave each of us the right to pitch new consumer affairs programs”.
1037 Mr Murray then set out the text of cl 4.6 of the Share Sale Agreement.
1038 Mr Murray continued:
“Of course the problem he now has, is that he unilaterally terminated that agreement on 28th June. He has no right to pitch a replacement consumer affairs show to the ABC without our involvement”.
1039 Thus, Mr Murray’s statement was qualified by reference to Mr Morrow’s purported termination of the Share Sale Agreement. His point was, evidently, that as Mr Morrow had purported to terminate the Share Sale Agreement, he was no longer entitled to rely on cl 4.6 of that document. But it would not follow from that that Mr Morrow had “no right to pitch a replacement consumer affairs show”.
1040 The statement was thus false to this extent. But I cannot conclude it was made maliciously. More likely, it bespoke a misunderstanding on Mr Murray’s part of the consequences to Giant Dwarf of its purported termination of the Share Sale Agreement.
Twelfth allegedly false representation
1041 This alleged representation is:
“That if the ABC commissioned The Checkout or any other consumer affairs programs involving Mr Morrow or Giant Dwarf without the involvement or consent of [Cordell Jigsaw], [Cordell Jigsaw] would cause the ABC to suffer commercial damage.”
1042 Mr Morrow and Giant Dwarf identified three of Mr Murray’s emails as containing this representation.
1043 Mr Morrow and Giant Dwarf appear to be relying upon the statement in Mr Murray’s 12 August 2019 email to Ms Gilchrist:
“There is no way of commissioning a show designed to avoid The Checkout [that] will not result in serious blowback for the ABC.”
1044 However, when read in the context of the whole email, it is clear that Mr Murray is referring to the possibility of subpoenas being served on the ABC were he to commence proceedings against Mr Morrow, Giant Dwarf and the Joint Venture Company, and of the ABC thereby incurring expense.
1045 Mr Murray’s statement was thus not only true, but it was prescient. As I have recorded in earlier judgments, the ABC was served with a large number of subpoenas and has spent a very large amount of money responding to them.
Thirteenth allegedly false representation
1046 This representation is that:
“That Giant Dwarf and Mr Morrow’s conduct caused The Checkout to be cancelled by the ABC, rather than ‘put on hiatus’.”
1047 Again, Mr Morrow and Giant Dwarf refer to a number of Mr Murray’s emails as allegedly containing this representation.
1048 The alleged representations appears to derive from a passage in Mr Murray’s email to Ms Pincus of 14 June 2019 where he stated:
“[Mr Morrow’s] actions at that time [July 2018] resulted in various ABC representatives telling us ... that the show was now cancelled, instead of on hiatus, and would not be returning under any circumstances”
1049 Mr Murray was here recording what he said Cordell Jigsaw had been told in or since July 2018 by ABC representatives.
1050 My attention has not been directed to any evidence to show that this was not correct.
1051 Looking at the matter more widely, by Ms Carnabuci’s email of 4 July 2019, the ABC did in effect “cancel” The Checkout, rather than continue it being “on hiatus”. In substance, I have found that Mr Morrow’s conduct did cause this to happen.
Fourteenth allegedly false representation
1052 This representation is:
“That as at 20 June 2019, a key business partner of Mr Morrow supported the position of [Cordell Jigsaw] and Mr Murray in the dispute between the parties.”
1053 This alleged representation relates to the statement made by Mr Murray in his 20 June 2019 email to Mr Carrington that:
“Our current position is supported by a key business partner of Julian’s too”.
1054 This was a reference to Mr Reucassel’s statement to Mr Murray that he should “go for it” so far as concerns the Quit Claim.
1055 As I have said above, I am satisfied that, to this extent, Mr Reucassel did “support” Cordell Jigsaw’s position.
Fifteenth allegedly false representation
1056 This representation is:
“That Giant Dwarf and Mr Morrow had engaged in fraud against [Cordell Jigsaw].”
1057 This representation arises from Mr Murray’s 5 July 2019 email to Ms Carnabuci and his 12 August 2019 email to Ms Gilchrist.
1058 For the reasons I have discussed earlier, this representation was false.
Conclusion concerning injurious falsehood
1059 To the limited extent that I have set out in the preceding paragraphs, I find that Mr Morrow’s and Giant Dwarf’s case concerning injurious falsehood has been made out.
1060 However, as I said at the outset of my discussion on that subject, I am not satisfied that Mr Morrow or Giant Dwarf have suffered any loss as a result of those injurious falsehoods.
The Joint Venture Company’s and Giant Dwarf’s claim for damages for breach of the Share Sale Agreement
1061 The Joint Venture Company and Giant Dwarf claim damages from Cordell Jigsaw for alleged breaches by Cordell Jigsaw of the Share Sale Agreement.
1062 The breach alleged is Cordell Jigsaw’s failure to execute the Quit Claim.
1063 The Joint Venture Company and Giant Dwarf allege that as a result of this failure, the ABC declined to commission series seven of The Checkout and that the Joint Venture Company and Giant Dwarf have suffered a loss which is said to be a function of:
(a) lost production funding for series seven and eight of The Checkout;(b) loss of “co-producer cash” across series seven and eight of The Checkout;
(c) loss of producer overheads for series seven and eight of The Checkout;
(d) loss of income for series seven and eight of The Checkout; and
(e) loss of an opportunity to profit from series seven and eight of The Checkout and any further series of The Checkout.
1064 The amount claimed by the Joint Venture Company is $1,218,660. The amount claimed by Giant Dwarf is $1,812,640.
1065 The manner in which those figures were calculated was set out in detail in closing written submissions.
1066 It is not necessary for me to deal with the manner in which those damages claims are calculated because there are two fundamental reasons why neither the Joint Venture Company nor Giant Dwarf is entitled to recover such damages.
1067 The first is that I have found, by reason of Giant Dwarf’s misleading or deceptive conduct, that Cordell Jigsaw is entitled to an order rescinding the Share Sale Agreement. Accordingly, no question of any breach by Cordell Jigsaw of the Share Sale Agreement can arise for consideration.
1068 Second, and in any event, I have found that by declining to execute the Quit Claim, Cordell Jigsaw did not act in breach of any provision of the Share Sale Agreement.
1069 I have found that had Mr Morrow caused Giant Dwarf to fail to comply with the implied term of the Joint Venture Agreement. I have also found that, by his silence, Mr Morrow caused Giant Dwarf to engage in misleading or deceptive conduct. And that, but for those matters, Mr Murray would not have caused Cordell Jigsaw to execute the Share Sale Agreement.
1070 It may well be that, if Mr Morrow had not sought to negotiate a sale by Cordell Jigsaw to Giant Dwarf of its shares in the Joint Venture Company, had not caused Giant Dwarf to act in breach of the implied term of the Joint Venture Agreement, had not acted in breach of his duties as a director to the Joint Venture Company and not engaged in the misleading or deceptive conduct, Mr Morrow could have caused Giant Dwarf to proceed to produce a show called Are You Being Served; provided, of course, that it was not in a format that was similar or equivalent to The Checkout. And it may well be that Giant Dwarf may have profited from that venture.
1071 But these are not the “facts as they actually existed”. It is “often of no avail” for a company director who has disposed of company property by acting in breach of fiduciary duty to show that “the property could have been taken from the company, by some means other than that actually employed, without any breach of fiduciary duty”. [116]
1072 So too here. It is not to the point that Mr Morrow may have been able to produce a show called Are You Being Served without engaging in the conduct I have found. That is not what happened. The reason Giant Dwarf has suffered any such loss is its own conduct in not complying with the implied term of the Joint Venture Agreement and its director engaging in the misleading or deceptive conduct that I have found. Any such loss has not been caused by any breach by Cordell Jigsaw of the Share Sale Agreement.
Remedies claim by Cordell Jigsaw
1073 I have found that Cordell Jigsaw is entitled to an order under s 237 of the Australian Consumer Law rescinding the Share Sale Agreement.
1074 Cordell Jigsaw also seeks damages on the basis that had Giant Dwarf disclosed to Cordell Jigsaw the opportunity that I have found to have arisen in March 2019 to produce a further series of The Checkout, or an equivalent or similar consumer affairs program, and thus not acted in breach of the implied term of the Joint Venture Agreement and in an manner that was misleading or deceptive:
(a) Mr Morrow would have told Mr Murray about his efforts to reintroduce The Checkout at the ABC;(b) the Share Sale Agreement would not have been entered into;
(c) the ABC would not have required Cordell Jigsaw to enter any Quit Claim;
(d) the ABC and the Joint Venture Company would have entered into an agreement to produce series seven and eight of The Checkout; and
(e) Cordell Jigsaw would have made profits from those series.[117]
1075 I am not persuaded that matters would have proceeded this way had Mr Morrow, and thus Giant Dwarf, disclosed to Mr Murray and Cordell Jigsaw the opportunity that I have found arose in March 2019 concerning a further series of The Checkout.
1076 I see no reason to doubt Mr Morrow’s evidence that he no longer wished to work with Mr Murray in relation to The Checkout and that, had matters so transpired, Mr Morrow would have exercised what he described as being his right of “veto” over the Joint Venture Company engaging in any further production of The Checkout.
1077 Had Mr Morrow told Mr Murray about the ABC’s interest in producing a further series of The Checkout, Mr Murray may well have declined to cause Cordell Jigsaw to sell its shares in the Joint Venture Company to Giant Dwarf. In that event, Mr Morrow, and thus Giant Dwarf, would have refused to engage any further television production activities with Mr Murray and Cordell Jigsaw concerning The Checkout.
1078 For those reasons, I am not satisfied that Cordell Jigsaw has suffered the damage for which it contends.
1079 As I propose to make an order rescinding the Share Sale Agreement there will be consequences so far as concerns the PDV Offsets already received by the Joint Venture Company and those receivable in the future.
1080 I invite submissions as to the orders that should be made in regard to these matters.
Conclusion
1081 I will now invite submissions from the parties as to whether there are any further matters to be determined in relation to these proceedings and as to the orders that should be made to give effect to my reasons.
1082 I will also seek submissions as to costs. It may be that the appropriate order is that there be no order as to costs, with the intent that each party pays his or its own costs of the proceedings.
**********
Amendments
13 April 2022 - Hearing dates on Coversheet inserted
14 April 2022 - [897(v)] footnote deleted
23 June 2022 - [72] name corrected to "Mr Morrow"
[1] Competition and Consumer Act
2010 (Cth), Sch 2 – Australian Consumer
Law.
[2] For convenience, and
without intending any disrespect to Mr O’Neill and Ms Jeliba, I will
henceforth refer only to Ms Chrysanthou
and Mr
Katekar.
[3] Société
d'Avances Commerciales (Société Anonyme Egyptienne) v Merchants'
Marine Insurance Co (1924) 20
Ll L Rep 140 at
152.
[4] Goodrich Aerospace Pty Ltd
v Arsic (2006) 66 NSWLR 186; [2006] NSWCA 187 at [27] (Ipp JA; Mason P and
Tobias JA agreeing).
[5] See my
judgment of 16 November 2021, The Checkout Pty Ltd v Cordell Jigsaw Productions
Pty Ltd (No 11) [2021] NSWSC
1477.
[6] The words used in Mr
Murray's first affidavit.
[7] Then
known as “Polar”.
[8]
That is, the Amended Commercial Cross-Claim List Statement and Amended
Commercial List Response to Cross-Claim; not technically “pleadings”
as proceedings in the Commercial List are not commenced by Statement of Claim;
but convenient to be referred to as
such.
[9] The pleading refers to
the Joint Venture Company, but it is clear this is a mistake and that the
reference should be to Cordell
Jigsaw.
[10] Later
60/40.
[11] In closing
submissions it was suggested, for the first time, on behalf of Mr Murray and
Cordell Jigsaw that the right of veto related
only to “creative”
decisions; that proposition was not earlier suggested, pleaded or put to Mr
Morrow; I see no basis
for it in the evidence and do not accept
it.
[12] BP Refinery
(Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266 at 282-283;
Codelfa Construction Pty Ltd v State Rail
Authority of NSW (1982) 149 CLR 337;
[1982] HCA 24 at 347 (Mason J; with Stephen J at 344, Wilson J at 392 and
Brennan J at 404 agreeing).
[13]
Amended Cross-Claim List Statement
C42.
[14] Mr Anderson is
currently the Managing Director of the
ABC.
[15] Evidently a reference
to the fact that Ms Mason-Campbell was married to Cordell Jigsaw’s CEO, Mr
Matthew Campbell.
[16] At
[193].
[17] An Executive Producer
at Giant Dwarf.
[18] Ms
Mason-Campbell.
[19] The
Entertainment and Specialist section of the ABC, of which Mr Carrington was then
director.
[20] A production
cashflow lender.
[21] Ms Crouch
and her employee Ms Kitty
Chen.
[22] In cross-examination,
Mr Morrow denied that he had said this. Nonetheless, Ms Chrysanthou put to Mr
Murray during cross-examination
that this had been said, and in closing
submissions, posited that Mr Murray’s recollection of this constituted an
“admission”
by him that Mr Morrow had not said the show was never
coming back.
[23] Mr Morrow
referred to “Jigsaw Dwarf”, that is the Joint Venture Company; but
it appears clear that he intended to refer
to Giant
Dwarf.
[24] To adopt a phrase use
by Mr Katekar in reply
submissions.
[25] It is common
ground that this is a typographical error and that the figure should be
2%.
[26] That is, the 13 February
2019 meeting.
[27] Entertainment
and Specialist.
[28] I would add,
to be produced by Mr Morrow.
[29]
These provisions, in effect, gave Mr Morrow sole creative
control.
[30] See [351]
above.
[31] That is, Mr
Anderson.
[32] Clause
4.2.
[33] Clause
4.3.
[34] Clause
4.6.
[35] Clause
5.1.
[36] Clause
5.3.
[37] Clauses 7.1 and
7.2.
[38] Clause
9.7.
[39] Amended Cross-Claim
List Statement C43.
[40] See P W
Young, C Croft and M Smith, On Equity (2009, Thomson Reuters) at [7.239], citing
Charlton v Baber [2003] NSWSC 745 (Barrett J); Percival v Wright [1902] UKLawRpCh 125; [1902] 2 Ch 421
(Swinfen Eady J); and Southern Cross Mine Management Pty Ltd v Ensham Resources
Pty Ltd [2003] QSC 402 (Chesterman
J).
[41] J D Heydon, M J Leeming,
P G Turner, Meagher, Gummow & Lehane’s Equity: Doctrines and Remedies
(5th ed, 2015, LexisNexis
Butterworths) at [5-030], citing Brunninghausen v
Glavanics (1999) 46 NSWLR 538; [1999] NSWCA 199 (Priestley, Handley and Stein
JJA).
[42] Johnson Tiles Pty Ltd
v Esso Australia Ltd (2000) 104 FCR 564; [2000] FCA 1572 at [63] (French J,
Beaumont and Finkelstein JJ agreeing), approved in Miller & Associates
Insurance Broking Pty Ltd v BMW Australia Finance
Ltd (2010) 241 CLR 357; [2010]
HCA 31 at [15] (French CJ and Kiefel J); Australian Competition and Consumer
Commission v TPG Internet Pty Ltd (2013) 250 CLR 640; [2013] HCA 54 at [39]
(French CJ, Crennan, Bell and Keane
JJ).
[43] Skinner v Redmond
Family Holdings [2017] NSWCA 329 at [85] (Gleeson JA, with whom Macfarlan JA and
Barrett AJA agreed).
[44]
Campomar Sociedad, Limitada v Nike International Ltd (2000) 202 CLR 45; [2000]
HCA 12 (Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan
JJ).
[45] Campbell v Backoffice
Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25 at [25] (French
CJ).
[46]
Ibid.
[47] Henjo Investments Pty
Ltd v Collins Marrickville Pty Ltd (No 1) [1988] FCA 40; (1988) 39 FCR 546 (Lockhart, Burchett
and Foster JJ); Australian Competition and Consumer Commission v Coles
Supermarkets Australia Pty Ltd [2014] FCA 634 at [46] (Allsop CJ); Australian
Competition and Consumer Commission v We Buy Houses Pty Ltd [2017] FCA 915
(Gleeson J); Australian Competition and Consumer Commission v viagogo AG [2019]
FCA 544 (Burley J).
[48]
Australian Competition and Consumer Commission v LG Electronics Australia Pty
Ltd [2017] FCA 1047 at [53] (Middleton
J).
[49] [2011] NSWCA
167.
[50] At [209(iii)]
(citations omitted).
[51] See,
Traderight (NSW) Pty Ltd v Bank of Queensland Ltd [2015] NSWCA 94 at [192]
(Barrett JA, Bathurst CJ and Beazley P agreeing); OXS Pty Ltd v Sydney Harbour
Foreshore Authority [2016] NSWCA 120 at [178] (Gleeson JA, Macfarlan and Leeming
JJA agreeing); and Skinner v Redmond Family Holdings Pty Ltd at [89] (Gleeson
JA, Macfarlan JA
and Barrett AJA
agreeing).
[52] As the Chief
Justice then was.
[53] Wormald v
Maradaca Pty Ltd [2020] NSWCA 289 at [111] (Bell P, Bathurst CJ and Payne JA
agreeing).
[54] Demagogue Pty Ltd
v Ramensky (1992) 39 FCR 31; [1992] FCA 851 (Black CJ, Gummow and Cooper
JJ).
[55] Notwithstanding my
finding as to some of these
matters.
[56] A matter that Mr
Murray denies; I have made findings about this
above.
[57] Indeed, as I have
said, Mr Morrow did not become aware of any of Mr Murray’s emails to the
ABC until disclosure of documents
in the Commercial
Proceedings.
[58] Of all
“Intellectual Property Rights”: defined to mean “all
intellectual property rights or analogous rights at
any time protected by
statute or common law, throughout the world including but not limited to ...
patents, copyright, circuit layout
rights, registered designs and
trademarks”.
[59]
Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115;
[2007] HCA 61 at [44] (Gleeson CJ, Gummow, Heydon and Crennan
JJ).
[60] Heyman v Darwins Ltd
[1942] AC 356 at 397.
[61]
Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd [1989] HCA 23; (1989) 166 CLR 623 at
659; [1989] HCA 23 at [18] (Deane and Dawson
JJ).
[62] Or inability per
Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd at [44] (Gleeson CJ,
Gummow, Heydon and Crennan JJ):
not relevant
here.
[63] Laurinda Pty Ltd v
Capalaba Park Shopping Centre Pty Ltd at [22] (Mason
CJ).
[64] Ibid at 659; [18]
(Deane and Dawson JJ).
[65] Ibid
at 634; [22] (Mason CJ).
[66]
Ibid at 657; [16] (Deane and Dawson JJ) and Shevill v Builders Licensing Board
(1982) 149 CLR 620; [1982] HCA 47 at 633 (Wilson
J).
[67] Progressive Mailing
House Pty Ltd v Tabali Pty Ltd [1985] HCA 14; (1985) 157 CLR 17 at 31; [1985] HCA 14 (Mason
J).
[68] Koompahtoo Local
Aboriginal Land Council v Sanpine Pty Ltd at
[44].
[69] J D Heydon, Heydon on
Contract (2019, Thomson Reuters) at
[24.240].
[70] Koompahtoo Local
Aboriginal Land Council v Sanpine Pty Ltd at
[44].
[71] Commercial List
Statement at C36 and C36.
[72]
Commercial List Statement at
C31.
[73] Carlton & United
Breweries Ltd v Tooth & Co Ltd (1986) 7 IPR 581 at 594 (Young J) (this
matter was reversed on appeal, however, his Honour’s statement regarding
covenants for further assurance
was not disputed); see also Daniels v Pynbland
Pty Ltd (Nos 1 & 2) (1985) 4 BPR 9716 at 9719 (Young
J).
[74] Fox Entertainment
Precinct Pty Ltd v Centennial Park and Moore Park Trust [2004] NSWSC 214 at
[195]- [196] (Barrett J).
[75]
Clause 4.3(a).
[76] See Mr
Kay’s letter of 14 June
2019.
[77] For example, Slatyer v
Daily Telegraph Newspaper Co Ltd (1908) 6 CLR 1; [1908] HCA 22 at 7 (Griffith
CJ); Sim v Stretch [1936] 2 All ER 1237 at 1239-1240 (Lord Atkin, Lord Russell
and Lord MacMillan agreeing); Gardiner v John Fairfax & Sons Pty Ltd [1942] NSWStRp 16; (1942)
42 SR (NSW) 171 at 172 (Jordan CJ); Mirror Newspaper Ltd v World Hosts Pty Ltd
(1979) 141 CLR 632 at 638; [1979] HCA 3 (Mason and Jacobs
JJ).
[78] Reader’s Digest
Services Pty Ltd v Lamb [1982] HCA 4; (1982) 150 CLR 500 at 506; [1982] HCA 4 (Brennan J,
Gibbs CJ, Stephen and Wilson JJ agreeing); Rush v Nationwide News Pty Ltd (No 7)
[2019] FCA 496 at [75] (Wigney
J).
[79] Rush v Nationwide News
Pty Ltd (No 7) at [75]-[78].
[80]
See, relevantly, recent discussion by Lee J in Stead v Fairfax Media
Publications Pty Ltd [2021] FCA 15; Rush v Nationwide News Pty Ltd (No 7) at
[75]; Australian Broadcasting Corporation v Chau Chak Wing [2019] FCAFC 125; (2019) 271 FCR 632 at
684-685; [2019] FCAFC 125 (Besanko, Bromwich and Wheelahan JJ); Greek Herald Pty
Ltd v Nikolopoulos (2001) 54 NSWLR 165 at 172-173; [2002] NSWCA 41 (Mason P,
Wood CJ at CL agreeing).
[81]
Favell v Queensland Newspapers Pty Ltd [2005] HCA 52 at [14]- [18] (Gleeson CJ,
McHugh, Gummow and Heydon JJ
agreeing).
[82] The ordinary,
dictionary meaning: for example, Concise Oxford Dictionary, online ed, March
2020.
[83] This is the same as
the test at common law: see, Domican v Pan Macmillan Australia Pty Limited
[2019] FCA 1384 at [35] (Wigney
J).
[84] Howden v Truth &
Sportsman Ltd [1937] HCA 74; (1937) 58 CLR 416 at 420-421; [1937] HCA 74 (Dixon
J).
[85] Hanson-Young v
Leyonhjelm (No 4) [2019] FCA 1981 at [105] (White
J).
[86] The words Ms Pincus
attributed to Mr Murray in her
email.
[87] Mr Murray said that,
in fact, the $50 was not paid. The fact remains that it was liable to be paid
and thus comprises
consideration.
[88] Digby v
Financial News Ltd [1906] UKLawRpKQB 166; [1907] 1 KB 502 at 507 (Collins MR, Cozens-Hardy and Farwell
LJJ agreeing); Becker v Smith’s Newspaper Ltd [1929] SAStRp 66; [1929] SASR 469 at 471-472
(Angas Parsons, Napier and Richards JJ); Cohen v Mirror Newspapers Ltd [1971] 1
NSWLR 623 at 627 (Jacobs and Manning JJA); Herald & Weekly Times Ltd v
Popovic [2003] VSCA 161; (2003) 9 VR 1 at 57 and 63; [2003] VSCA 161 (Gillard AJA, Winneke ACJ
and Warren AJA agreeing).
[89]
Austin v Mirror Newspapers Ltd (1985) 3 NSWLR 354 at 359 (Lord Griffiths); Cush
v Dillon; Boland v Dillan (2011) 243 CLR 298; [2011] HCA 30 at [22] (French CJ,
Crennan and Kiefel JJ).
[90] Adam
v Ward [1917] AC 309 at 334 (Lord Atkinson); Bashford v Information Australia
(Newsletters) Pty Ltd (2004) 218 CLR 366; [2004] HCA 5 at [9]- [10] and [53]
(Gleeson CJ, Hayne and Heydon JJ) and [136]-[137] (Gummow
J).
[91] John Fairfax
Publications Pty Ltd v O’Shane [2005] NSWCA 164 at [25]- [30] (Giles
JA).
[92] Stead v Fairfax Media
Publications Pty Ltd at [128] (Lee J); Lloyd-Jones v Allen [2012] NSWCA 230 at
[43] (Nicholas J); Marshall v Megna; Megna v Tory; Tory v Megna [2013] NSWCA 30
at [361] (Beazley JA).
[93]
Bellino v Australian Broadcasting Corporation [1996] HCA 47; (1996) 185 CLR 183 at 221; [1996]
HCA 47 (Dawson, McHugh and Gummow
JJ).
[94] Briginshaw v Briginshaw
(1938) 60 CLR 336; [1938] HCA
34.
[95] [2021] WASC
474.
[96] At
[255].
[97] Being the amount
declared by the Attorney General pursuant to s 35(3) of the Act on 20 May
2021.
[98] Cripps v Vakras [2014]
VSC 279 at [599]- [609] (Kyrou J) (this matter was reversed on appeal, however,
the issue of the statutory construction of s 35 did not arise); Bauer Media Pty
Ltd v Wilson (No 2) (2018) 56 VR 674; [2018] VSCA 154 (Tate, Beach and Ashley
JJA); Rush v Nationwide News Pty Ltd (No 7) at [671]; Nationwide News Pty Ltd v
Rush [2020] FCAFC 115 at [442]- [466] (White, Gleeson and Wheelahan
JJ).
[99] Section 30(4) of the
Act.
[100] Roberts v Bass
(2002) 212 CLR 1; [2002] HCA 57 at [76]- [77] (Gaudron, McHugh and Gummow
JJ).
[101] For example, Bristow
v Adams [2012] NSWCA 166 at [29]- [30] (Basten JA, Tobias AJA
agreeing).
[102] Triggell v
Pheeney (1951) 82 CLR 497; [1951] HCA 23 (Dixon, McTiernan, Williams, Webb and
Kitto JJ); Waterhouse v Broadcasting Station 2GB Pty Ltd (1985) 1 NSWLR 58 at
74-5 (Hunt J); Hanson-Young v Leyonhjelm (No 4) at
[245]-[248].
[103] Tribe v
Simmons (No 2) [2021] FCA 1164 at [41]- [44] (Perram
J).
[104] Bauer Media Pty Ltd v
Wilson (No 2) at [249]; Rush v Nationwide News Pty Ltd (No 7) at [671]-[672];
Nationwide News Pty Ltd v Rush
at [442], [468] (White, Gleeson and Wheelahan
JJ); it will be recalled that as the proceedings involved publications made
prior to
1 July 2021, I must apply the law effective on that
date.
[105] For example,
Harbour Radio Pty Ltd v Tingle [2001] NSWCA 194 at [8], [16]-[34], [39]-[41]
(Beazley JA).
[106] Fairfax
Digital Australia and New Zealand Pty Ltd v Kazal (2018) 97 NSWLR 547; [2018]
NSWCA 77 at [38] (Meagher JA); Wilson v Bauer Media (No 6) [2017] VSC 356 at
[37]- [56] (John Dixon J); Holt v TCN Channel Nine Pty Ltd (2014) 86 NSWLR 96;
[2014] NSWCA 90 (Macfarlan J, Gleeson JJA and Sackville AJA agreeing); Pamplin v
Express Newspapers Ltd (No 2) [1988] 1 All ER 282; [1988] 1 WLR 116 at 120
(Oliver, Purchas and Neill
LJJ).
[107] See, for example,
Tribe v Simmons referred to at [928(g)]
above.
[108] See [850]
above.
[109] Andrews v John
Fairfax & Sons Ltd [1980] 2 NSWLR 225 at [79] (Glass JA); see also
Nationwide News Pty Ltd v Rush at [382]-[383] (White, Gleeson and Wheelahan
JJ).
[110] See, for example,
Crampton v Nugawela [1996] NSWSC 651; (1996) 41 NSWLR 176 at 189-90 (Mahoney
ACJ).
[111] See [722]-[726]
above.
[112] See [729]
above.
[113] See his Tweets in
July 2018 after the announcement of the ABC’s decision to
“hiatus” The
Checkout.
[114] See [731]
above.
[115] Ratcliffe v Evans
[1892] UKLawRpKQB 131; [1892] 2 QB 524 (Bowen LJ); Ballina Shire Council v Ringland (1994) 33 NSWLR 680
at 692 (Gleeson CJ); Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR
388 at 393 (Gleeson CJ), 404 (Gummow J), 447 (Callinan J); [2001] HCA
69.
[116] Oates v Consolidated
Capital Services Pty Limited (2009) 76 NSWLR 69; [2009] NSWCA 1983 at [227]
(Campbell JA; Spigelman CJ and Allsop P agreeing) (this passage not reported in
the authorised report).
[117]
Amended Cross-Claim List Statement at C50.
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