Higgins and Ors v Sinclair [2011] NSWSC 163 (18 March 2011)

Last Updated: 29 March 2011

Supreme Court New South Wales

Case Title:	Higgins and Ors v Sinclair
Medium Neutral Citation:	[2011] NSWSC 163
Hearing Date(s):	31 January 2011, 1 February 2011, 2 February 2011, 3 February 2011, 4 February 2011, 7 February 2011, 8 February 2011
Decision Date:	18 March 2011
Jurisdiction:
Before:	Johnson J
Decision:	Each of the First and Second Plaintiffs to be awarded damages in the sum of $100,000.00 together with interest. The Plaintiffs are entitled to appropriate orders by way of injunctive and declaratory relief. Submissions to be made with respect to the form of injunctive relief and declaratory orders, and on the question of costs.
Catchwords:	DEFAMATION - misleading and deceptive conduct - publications on internet and by email - defamatory statements concerning individual Plaintiffs - defence of substantial truth - defence not established - assessment of damages for defamation - claim by corporate Plaintiff for relief under Fair Trading Act 1987 - whether representations misleading and deceptive - whether made in trade or commerce - whether injunctive and declaratory relief appropriate
Legislation Cited:	Fair Trading Act 1987 Defamation Act 2005 Evidence Act 1995 Competition and Consumer Act 2010 (Cth) Uniform Civil Procedure Rules 2005
Cases Cited:	Dow Jones & Co Inc v Gutnick [2002] HCA 56; 210 CLR 575 Gardener v Nationwide News Pty Limited [2007] NSWCA 10 Farquhar v Bottom [1980] 2 NSWLR 380 Amalgamated Television Services Pty Limited v Marsden (1998) 43 NSWLR 158 Haddon v Forsyth [2011] NSWSC 123 Howden v Truth & Sportsman Limited [1937] HCA 74; 58 CLR 416 Sutherland v Stopes [1925] AC 47 Greek Herald Pty Limited v Nikolopoulos [2002] NSWCA 41; 54 NSWLR 165 Amalgamated Television Services Pty Limited v Marsden [2002] NSWCA 419 Palmer v Dolman [2005] NSWCA 361 Sydney South West Area Health Service v Stamoulis [2009] NSWCA 153 JMVB Enterprises Pty Limited v Camoflag Pty Limited [2005] FCA 1474; 67 IPR 18 Taco Co of Australia Inc v Taco Bell Pty Limited [1982] FCA 136; (1982) 42 ALR 177 Hornsby Building Information Centre Pty Limited v Sydney Building Information Centre Limited [1978] HCA 11; [1978] HCA 11; 140 CLR 216 Butcher v Lachlan Elder Real Estate Pty Limited [2004] HCA 60; 218 CLR 592 Equity Access Pty Limited v Westpac Banking Corporation [1989] FCA 506; (1989) 16 IPR 431 Parkdale Custom Built Furniture Pty Limited v Puxu Pty Limited [1982] HCA 44; 149 CLR 191 Plimer v Roberts (1997) 80 FCR 303 Shahid v Australasian College of Dermatologists [2008] FCAFC 72; 168 FCR 46 Palmer Bruyn & Parker Pty Limited v Parsons [2001] HCA 69; 208 CLR 388 Huyn v Tang (District Court of New South Wales, 2003) Zarth v Williamson [2006] NSWCA 246 Trantum v McDowell [2007] NSWCA 138 SMEC Holdings Ltd v Boniface [2007] NSWSC 140 Martin v Bruce [2007] NSWDC 1497 Holmes v Fraser [2008] NSWSC 570 Fraser v Holmes [2009] NSWCA 36 PK v BV (No. 2) [2008] NSWDC 297 Webster v Coles Myer Limited; Thompson v Coles Myer Limited [2009] NSWDC 4 Ryan v Premachandran [2009] NSWSC 1186 Australian Broadcasting Commission v O'Neill [2006] HCA 46; 227 CLR 57 Hatfield v TCN Channel 9 and Ors [2010] NSWCA 69 Carson v John Fairfax & Sons Limited [1993] HCA 31; 178 CLR 44
Texts Cited:	Colin Bodkin, "Patent Law in Australia", Law Book Company, 2008
Category:	Principal judgment
Parties:	Peter Gordon Higgins (First Plaintiff) John Randall Sharp (Second Plaintiff) Power & Data Corporation Pty Limited (Third Plaintiff) John Ashton Sinclair (Defendant)
Representation
- Counsel:	Counsel: Mr KP Smark SC; Ms S Chrysanthou (Plaintiffs) Mr JA Sinclair (Defendant in person)
- Solicitors:	Solicitors: Doyle Watson Solicitors (Plaintiffs) Mr JA Sinclair (Defendant in person)
File number(s):	2009/297946
Publication Restriction:

Judgment

1. JOHNSON J : By Further Amended Statement of Claim filed 8 December 2010, the Plaintiffs claim against the Defendant in defamation and under the Fair Trading Act 1987 ( "FT Act" ).
   
2. The First Plaintiff, Peter Gordon Higgins, and the Second Plaintiff, John Randall Sharp, are both directors of the Third Plaintiff, Power & Data Corporation Pty Limited ( "PDC" ). The Plaintiffs allege that the Defendant, John Ashton Sinclair, published defamatory material on a website in August 2009. The Plaintiffs allege that the Defendant also engaged in misleading and deceptive conduct under the FT Act in the form of emails sent by him in July 2010.
   
3. The Plaintiffs contend that these publications carried a number of serious imputations and misrepresentations giving rise to claims in defamation and under the FT Act.
   
4. The Third Plaintiff, a corporation, has no cause of action for defamation: s.9 Defamation Act 2005 . PDC's claim is limited to relief under the FT Act.
   

The Hearing

5. Neither the Plaintiffs nor the Defendant elected for the proceedings to be tried by jury, so the hearing proceeded by way of Judge-alone trial: s.21 Defamation Act 2005 .
   
6. The Plaintiffs were represented at the hearing by Mr Smark SC and Ms Chrysanthou of counsel.
   
7. The Defendant was unrepresented. At the commencement of the hearing, I acceded to an application by the Defendant that a friend of his, Mr Michael Gallen (who is not legally qualified), sit with him at the bar table and assist him during the course of the hearing. Mr Gallen fulfilled this function throughout the seven-day hearing which proceeded between 31 January 2011 and 8 February 2011.
   
8. At various points in the proceedings, I sought to explain to the Defendant the nature of the hearing and its phases, including evidence and submissions, to assist the progress of the hearing. In the course of the hearing, I became aware that the Defendant did not have the transcript of the proceedings. I took the view that the Court would be assisted in the determination of the proceedings if the Defendant had a copy of the daily transcript, and that this course would also serve the interests of justice. A copy of the transcript was provided to the Defendant, and was available to him before he came to give evidence and make submissions.
   
9. In addition, I determined that whatever the strict procedure ought to have been, it was appropriate that Mr Smark SC address first by way of closing submissions so that the Defendant would understand the legal and factual issues raised by the Plaintiffs. Detailed written submissions were prepared by counsel for the Plaintiffs and provided to the Court and the Defendant on 7 February 2011 (T460-461), the day before closing submissions were made (T475ff).
   
10. The following witnesses gave oral evidence in the Plaintiffs' case at the hearing:
    

(a) John Bernard Redfern, Patent Attorney (T45-76; T328-348);

(b) Ross David Andrews, Chief Engineer at PDC (T77-200);

(c) Colin Grantham, Consultant Electrical Engineer (T201-227);

(d) Noel Carmody, Consultant Electrical Engineer (T230-255);

(e) John Randall Sharp, the Second Plaintiff (T256-279);

(f) Peter Gordon Higgins, the First Plaintiff (T279-315).

11. In addition, the Plaintiffs relied upon the affidavit of Phillip Krull and statements of Robert James Webster and Mitchell O'Neil Taylor (Exhibits DD and EE respectively) with respect to extent of publication and also the reputations of the First and Second Plaintiffs. Messrs Krull, Webster and Taylor were not required for cross-examination.
    
12. The Defendant gave evidence in his case (T349-459). He called no other witnesses.
    
13. In addition to the oral evidence, a range of documents and objects were tendered by the parties.
    

The Parties and the Issues in the Proceedings

14. The First Plaintiff, Mr Higgins, founded PDC in 2003 and remains a director and shareholder of that company. He was also one of the founders of Mortgage Choice, a large mortgage broker.
    
15. The Second Plaintiff, Mr Sharp, was previously a member of the House of Representatives and a Minister in the Howard Government between 1996 and 1998. He retired from Parliament in 1998. Mr Sharp invested in PDC in 2003 and became a director and shareholder in PDC in 2004.
    
16. The Defendant, Mr Sinclair, was one of the inventors of an electrical conductor system now marketed and sold by PDC under the name "Mainline" (hereinafter "Mainline system" or "Mainline product" ). Put simply, the Mainline system permits the replacing of conventional power points with a power track into which movable power sockets (called adaptors) could be fitted at whatever points on the track the user desires.
    
17. Reference will be made later, in the course of factual findings, to events between 2002 and 2010 which are relevant to these proceedings.
    
18. It is sufficient to observe at this point that a provisional patent application was filed in relation to the Mainline system on 18 December 2002 by Power & Communications Logistics Pty Limited ( "PCL" ), of which the Defendant was then a director. By various documents, PDC acquired rights to the invention, including rights to exploit a patent lodged in respect of it.
    
19. A standard patent application was filed on 18 December 2003 by PCL and that application was later granted.
    
20. PDC has now developed the Mainline system to the point where its full-scale commercial exploitation has been taking place since early 2008. The evidence reveals that this process has involved extensive safety testing of the Mainline system, and has resulted in it being certified as complying with applicable standards. The Mainline system is widely marketed in the United Kingdom and in Australia and has also been sold in Europe. It has been installed in Sydney at the University of Sydney, and at various school sites and in other commercial and private premises.
    
21. The present proceedings were commenced by Statement of Claim filed on 12 November 2009. As mentioned earlier, the current pleading is the Further Amended Statement of Claim filed on 8 December 2010.
    
22. The Defendant filed a Defence on 3 March 2010. That Defence was clearly not drawn by a legal practitioner and its content was capable of giving rise to a measure of confusion. However, the matter was clarified on 8 March 2010 by the parties in the form of orders made, by consent, that the only substantive defence raised by the Defendant was one of justification.
    
23. At the commencement of the hearing before me, the Defendant acknowledged that he had published the website and emails complained of. He accepted broadly that the imputations and representations pleaded by the Plaintiffs were conveyed by the publications. The Defendant stated that it was his case that everything in the matters complained of (including the imputations and representations) was true and that he stood by their content (T29-31).
    
24. In these circumstances, the issues for determination by the Court with respect to each matter complained of are as follows:
    

the extent of publication of each of the matters complained of;

whether the defence of justification under s.25 Defamation Act 2005 ought succeed;

whether the conduct of the Defendant in publishing each of the matters complained of was misleading or deceptive, or likely to mislead or deceive, for the purpose of the claim under the FT Act;

the extent of damage suffered by the Plaintiffs and the calculation of damages;

whether the Plaintiffs have made out a case for injunctive relief with respect to the defamation claim, and for injunctive and declaratory relief under the FT Act;

interest; and

costs.

The Matters Complained Of

25. The evidence reveals that the Defendant has made, and has continued to make, publications to parties with whom PDC deals which make two broad types of allegations:
    

the Defendant asserts that the Mainline system is not safe;

the Defendant asserts that the rights to the invention have been stolen from him.

The Website Publication of August 2009

26. The first matter complained of is the website published by the Defendant in August 2009 (Exhibit A2). It is lengthy and a copy of it is annexed to this judgment.
    
27. The evidence reveals that the website appeared in August 2009 under a headline "Mainline Power & Data Announcement" , and was the second result appearing, on a Google search, immediately following the legitimate Mainline website.
    
28. Although it is necessary to read the website as a whole, an impression of its tone and content may be obtained from the following extracts.
    
29. The website commenced with the word "WARNING" in red capital letters at least 1.5 centimetres high. Immediately under the heading were the following words (Exhibit A2, page 1):
    

"Michael McDermott founder of McDermott Drilling Pty Ltd, Peter Higgins founder of Mortgage Choice, Jaroslav E Haba & Kevin Truskett engineers employed by the inventor, conspired and stole the Intellectual Property (IP) from the inventor, for the Mainline product, produced by Power & Data Corporation Pty Ltd (PDC).

Adding names to someone else's patent does not make them inventors ... they are the same people who never had an original idea in their lives.

It is not the intention to go into the theft of the IP, but to WARN PEOPLE about the product and some of the DANGERS you may face if you install this product in your home or office.

The product is DANGEROUS ... When PDC's fake inventors realised they could not make the product work after shafting the real inventor, they went to extreme measures to make a buck at any expense (mainly investors) ... and now the product is DANGEROUS due to its POOR design and lack of knowledge about the product. The directors of PDC are using the community and Australian schools lack of knowledge about the product to try and make a profit from a failing UNSAFE Mainline system. The directors of PDC will claim that the product is safe because it has passed testing and approval ... when they know full well, that it is not ... read on to see why."

30. The website continued to criticise the Mainline system on safety grounds, before stating in red capital letters (Exhibit A2, page 2):
    

"BE WARNED DO NOT BURN IN YOUR BED WHILST ASLEEP"

31. After further statements and diagrams concerning the safety of the product, the website said (Exhibit A2, page 3):
    

"A TIME BOMB IN YOUR HOME"

32. Further criticisms were made of the product on safety grounds, before the following statement appears (Exhibit A2, page 5):
    

"One of the directors of PDC is an ex member of parliament, he has contacts within the government and he can see a quick buck. He is hopeful to recover his lost investment in PDC making the government pay the cost through the schools and the BER scheme ... twice. Once to put it in and later to replace it at tax payers expense.

THE USE OF AUSTRALIAN KIDS TO TEST AN UNSAFE PRODUCT to make a dollar IS A LOW CALL"

33. After further criticisms on safety grounds, the following appears (Exhibit A2, page 6):
    

"To potential purchasers of the Mainline product REMEMBER, WHEN PDC GO INTO LIQUIDATION WHICH THEY WILL YOU WILL BE RESPONSIBE [sic] FOR THE COST TO REWIRE YOUR HOME. THIS REWIRE WILL BE VERY EXPENSIVE.

I am the original inventor of the Mainline system, I have represented Australian [sic] and to this day I am the only winner of 'The Oscar of Inventions' Geneva Switzerland and the Yellow Pages Channel 9 Small Business Show for the Power Track Product."

34. After further statements concerning patents and other matters, it is said (Exhibit A2, page 6):
    

"This would never have happened if the real inventor had not been shafted and his IP stolen."

35. A little later, the following words appear (Exhibit A2, page 7):
    

"DO NOT TRUST PETER HIGGINS OR MICHEAL [sic] McDERMOTT IF YOU ARE AN AUSTRALIAN INVENTOR (or anyone else) NO MATTER WHAT THEY OFFER"

36. Following statements about the patent and other matters, the website states (Exhibit A2, page 8):
    

"Should you wish to contact me about this page then click here I am happy to answer your questions or you can believe what is feed [sic] you by PDC

PDC Investors I think its safe to say ... you have been ripped off ... the patent for Mainline is worthless, certain people knew no one would invest without a patent and they knew you would not know if the patent was good or not. Mainline patent is under threat as the inventors are false and it has been superseded by my 2003 patent."

37. The website ends in the following way (Exhibit A2, page 8):
    

"You may ask yourself the question if I had any claim to the Mainline patent then why do I not take legal action against PDC, again this is quite simple 'WHAT FOR' its a waste of money. As the inventor I can re invent, as I have done with my 2003 patent and again with WiserWire. PDC's patent will not prevent me ... I know the Mainline patent better than PDC as it was me who originally instructed your patent attorney ... I'd be surprised if anyone in PDC have even read it let alone understand it.

MY MAIN INTENTION IS TO PREVENT THE UNESSACARY [sic] DEATH OR INJURY OF A CHILD DUE TO AN UNSAFE MAINLINE SYSTEM."

The Emails Sent in July 2010

38. The second matter complained of is an email sent by the Defendant on 12 July 2010 to the Australian distributor of the Mainline system (Exhibit B). That email gave a subject line "Safety Mainline Power" and said:
    

"Dear Sir

I am writing to you to warn you of serious safety features with the Mainline Product.

You may have seen the reports by Dr Grantham & Mr N Carmody stating that the product is safe.

It has always amazed me that people will put other people at risk for a dollar.

Power & Data do somewhat skirt around the facts.

As a response to those reports I have attached my report on safety.

Do not be like Dr Grantham or Carmody please use your intelligence and TRY the tests yourself.

Should you wish to continue with the distribution of the Mainline product I would like to suggest you make sure your insurance is well paid.

I am in the Supreme Court against Power Data Corporation about the safety issues and the report I have attached to this email will be public.

When the victims of Mainline seek compensation I wish it to be clear who is responsible and that the full amount is paid to them whether it be loss of life, injury or property.

Take a knife or end of a spoon, fork, scissors and TRY the test and ask yourself ... should this be in Australian schools. TRY the same test with a GPO/power point. There are many more things that can be inserted into Mainline than a GPO.

Ask your Patent attorney what happens to a Patent if its [sic] proven that extra inventors names are added to the patent who were not inventors to try and water down the real inventor.

I can assure you if my Intellectual Property was not stolen from me then the Mainline product would not have these issues.

It is my assumption that Power & Data Corporation will use you to setup their company to be public listed. The directors and investors will sell all their shares appoint new directors and leave the entire mess behind them ... This as I have said is an assumption ... what do you think?

The Awards won so far are for the INDIAN ADAPTOR not the SYSTEM don't be fooled.

I wish you the best and hope you do not become a victim as so many companies have before you.

Regards

John Sinclair

Inventor of Power Track"

39. The third matter complained of is an email sent by the Defendant on 12 July 2010 to the United Kingdom distributor of the Mainline system (Exhibit C). This email gave as a subject line "Mainline Power Data" and was in almost identical terms to the second matter complained of.
    
40. Perusal of each of the matters complained of provides an understanding of the content and tone of the publications made by the Defendant. It will be observed that the second and third matters complained of were published after the present proceedings were commenced, and referred to the proceedings and reports which the Plaintiffs had served upon the Defendant for the purpose of the litigation, together with a report which the Defendant had himself prepared (and utilised) in these proceedings.
    

The Pleaded Imputations and Representations

41. It is appropriate to set out the pleaded imputations and representations upon which the Plaintiffs rely with respect to each of the matters complained of (MFI15).
    
42. The imputations arising from the first matter complained of are as follows:
    

(a) Mr Higgins had conspired with others to steal the intellectual property in the Mainline product from the Defendant;

(b) Mr Higgins, as a director of PDC, had permitted the sale of the Mainline product to Australian schools, despite knowing that the product was much more dangerous than conventional electrical wiring systems;

(c) Mr Sharp had cynically sought to promote a product which he knew would fail, to make the government and taxpayers end up paying for the cost to replace the product when it did fail;

(d) Mr Sharp, as a director of PDC, had permitted the sale of the Mainline product to Australian schools, despite knowing that the product was much more dangerous than conventional electrical wiring systems.

43. The representations arising from the first matter complained of are as follows:
    

(a) PDC would go into liquidation, leaving its customers responsible for the cost of rewiring their homes;

(b) the Mainline system developed and marketed by PDC was likely to cause avoidable death or injury to children, because it was more dangerous than conventional power conduction systems;

(c) PDC does not own the intellectual property in the Mainline system;

(d) the intellectual property in the Mainline system produced by PDC was stolen from the inventor.

44. The representations arising from each of the second and third matters complained of are as follows:
    

(a) PDC was responsible for the Mainline system which was so dangerous that it would lead to claims for compensation for loss of life, injury or property;

(b) PDC had stolen the Defendant's intellectual property in the Mainline system from him;

(c) the validity or efficacy of the patent for the Mainline system was in doubt because extra inventors' names had been added to the patent.

45. It will be observed that representations (a) and (b) with respect to the first matter complained of (relating to the safety issue) were representations with respect to future matters, as are representation (a) concerning each of the second and third matters complained of. As will be seen, this feature is pertinent to the claims under the FT Act.
    

Publication

46. Although the Defendant has not placed in issue in the proceedings the question of publication, it is appropriate, as the Defendant is unrepresented, to set out briefly my findings in that respect.
    
47. Publication requires proof that the recipient has read or otherwise comprehended the matter complained of. Such proof may be direct or indirect, being established by the drawing of an appropriate inference.
    

Publication of the First Matter Complained Of

48. Publication over the internet does not occur until the material is downloaded by the reader (as opposed to when it is uploaded by the publisher) because that is when it is comprehended by the reader: Dow Jones & Co Inc v Gutnick [2002] HCA 56; 210 CLR 575 at 600 [26]. That principle is relevant to the publication of the first matter complained of, which was made available for publication by the Defendant on a website utilised by him in August 2009.
    
49. I accept that the version of the website, substantially as it appears in Exhibit A2 (annexed to this judgment), was the published form of the first matter complained of. There is evidence bearing directly upon the extent of publication of the website. The website was seen by Mr Sharp's bank manager, Mr Krull, who drew it to the attention of Mr Sharp.
    
50. The Defendant gave evidence that the first matter complained of was posted on his website on 5 August 2009 and remained there for two days, before being taken down on 7 August 2009. It was submitted for the Plaintiffs that the first matter complained of remained available on the internet for some considerable time after 7 August 2009, despite whatever steps the Defendant asserts that he took to take it down. Parts of the oral and documentary evidence are relied upon in support of this submission of the Plaintiffs.
    
51. Firstly, Mr Sharp gave evidence, which I accept, that after he became aware of the Defendant's website publication he was contacted by about 15 people who informed him that, in looking for the legitimate Mainline website, they had come across the Defendant's website which they had looked at and concluded was critical of the Plaintiffs (T264).
    
52. Secondly, the Plaintiffs point to emails sent by the Defendant on and after 7 August 2009 which suggest that a website adverse to the Plaintiffs continued to exist, although perhaps at a different address (Exhibit HH).
    
53. In an email sent at 2.51 am on 7 August 2009 to Mainline, the Defendant said, amongst other things, "I'll let your distributors know the new address and they can let you know" (Exhibit HH, page 2).
    
54. In an email sent by the Defendant to Mainline at 5.03 pm on 9 August 2009, he said "As you will see I have updated the web page for you ... the other page is up and running on new sites ..." (Exhibit HH, page 3).
    
55. In an email from the Defendant to Mainline at 11.04 am on 10 August 2009, the Defendant said "I know your [sic] itching to see the new site that I have sent to all your distributors" (Exhibit HH, page 4).
    
56. In a further email sent by the Defendant to Mainline at 10.08 am on 12 August 2009, he said "I'll start the web pages and I think I'll start with the UK, followed by Memphis in the US, and so on, UK should have it by tomorrow morning" (Exhibit HH, page 5).
    
57. In an email to Mainline at 12.08 pm on 19 November 2009, the Defendant said "The web page was taken down two weeks ago (thus this email address) but, I will continue to publish information about your unsafe product to warn the public and the companies you are trying to rip off, of its dangers" (Exhibit HH, page 6).
    
58. I accept that statements made by the Defendant in emails sent to Mainline personnel on and after 7 August 2009 suggest that the material on the offending website was still available. It is certainly not the case that the Defendant was offering some assurance to PDC that he had taken all available steps to remove the website. His emails to Mainline personnel suggested that the material was still there.
    
59. I am satisfied on the balance of probabilities that material along the lines of Exhibit A2 continued to be accessible on a website for at least a period of weeks after 7 August 2009. Even if I did not reach this conclusion, and a finding was made that the Defendant had taken steps to remove the offending website on 7 August 2009, this still leaves open the availability of cached copies on the internet, via a search engine such as Google, for some time. The Defendant would remain liable for such a publication. In an email from the Defendant to Mr Hield, the relevant web manager, on 7 August 2009, the Defendant appeared to acknowledge the prospect of cached copies when he said "Of coarse [sic] the WiserWire webpage will still sit just under their webpage in Google but, there is nothing you or I can do about that ... Google crawl every month and they have just completed it ... so I suppose they will have to just put up with it for another month" (Exhibit 19).
    
60. I am satisfied that the publication of the first matter complained of extended to a significant number of persons, although the exact number cannot be determined, being a class which wholly or largely comprised persons of significance to the Plaintiffs, such as potential customers for the Mainline system. I infer that a further, indeterminate but significant number of people, beyond the (approximately) 15 persons who contacted Mr Sharp, viewed the website and that these persons had a particular interest in the Mainline system so as to lead them to search for that name in the first place.
    

Publication of Second and Third Matters Complained Of

61. In relation to the second and third matters complained of, I infer that each of the emails was received by its intended recipient. As Exhibits B and C demonstrate, there were responses to these emails which fortify the conclusion that the emails were received by, respectively, the Australian and United Kingdom distributors of the Mainline system. Like letters, emails are sent to addresses and the evidence demonstrates that the emails which are the second and third matters complained of were received by those to whom they were addressed.
    
62. The second matter complained of was published to Mr Brett Euler, business manager with Rushmore Distributors, an Australian distributor of the Mainline system. It ought be inferred that publication of the second matter complained of extended to other persons who had dealings or potential dealings with PDC within the Australian market.
    
63. I am satisfied that the third matter complained of was published to GMB Info, the email address for Steljes, a United Kingdom company which was PDC's international distributor in the United Kingdom and in Europe (Exhibit C). I infer as well that the third matter complained of was published to other persons who had dealings or potential dealings with PDC at an international level.
    
64. Generally, with respect to publication of the first, second and third matters complained of, it is the case that there was not wide and unbridled publication to a general audience. However, it is probable that those accessing the website were existing or potential customers seeking to do business with PDC concerning the Mainline system. In addition, others such as Mr Krull (Mr Sharp's bank manager), had particular knowledge which would see the publication read and understood.
    
65. The emails which constitute the second and third matters complained of were targeted publications directed to the Australian and international distributors of the Mainline system on behalf of PDC. This was an audience amongst whom significant damage could be done to the business and reputations of each of the Plaintiffs.
    

Defamatory Meaning

66. The Defendant did not seek to put in issue the defamatory meaning of the matters complained of. However, as he is unrepresented, it is appropriate that I make findings as part of the determination of the Plaintiffs' claims.
    

Identification

67. For a publication to be actionable, it must be "of and concerning" the plaintiff. This requires the plaintiff to be identified. If a plaintiff is not named, then he or she must be identifiable, as the subject of the defamatory sting, to the viewer of the material by some other means. Proof of identification may arise:
    

(a) from direct evidence, where a person who read the matter complained of gives evidence that he or she identified the plaintiff as the person referred to; and/or

(b) by inference, where the Court is satisfied that, by reason of the extrinsic facts and surrounding circumstances, at least one person who read the matter complained of would have identified the plaintiff as the person referred to.

68. Whatever the form of proof, the Court needs to be satisfied as well that such identification, direct or inferential, was reasonable in the circumstances: Gardener v Nationwide News Pty Limited [2007] NSWCA 10 at [43]- [46], [50].
    
69. Mr Higgins was named expressly in the first matter complained of so that there is no question of identification of him for the purpose of his claims against the Defendant.
    
70. On the other hand, Mr Sharp was not referred to by name and it is necessary to consider whether he is identified in the first matter complained of.
    
71. The first matter complained of contains the statement extracted at [32] above.
    
72. Mr Sharp gave evidence that he was formerly a Member of Parliament, is a director of PDC and is and was at the time of publication of the first matter complained of, the only director of PDC who was formerly a Member of Parliament. An inference should be drawn that readers of the first matter complained of, who had an interest in the Mainline system and PDC, would have been aware of those facts and so identified Mr Sharp.
    
73. Apart from this inference, which ought be drawn, there is direct evidence from Mr Krull that he had read the first matter complained of and identified Mr Sharp because of those facts. This is also the case with respect to the reaction of the various other persons who contacted Mr Sharp and reported that they had read the first matter complained of and who knew that he had been a Member of Parliament (T264).
    
74. It is reasonable in the circumstances for readers to have identified Mr Sharp as the person referred to in the first matter complained of.
    

Ordinary Reasonable Reader

75. To determine whether the Plaintiffs' imputations are conveyed and are defamatory, the Court must place itself in the position of a hypothetical person, being the ordinary reasonable reader. The question is whether the defamatory sting would be conveyed by the publication in its natural and ordinary meaning.
    
76. The ordinary reasonable reader is a person of fixed, unvarying attributes. They are said to be of fair average intelligence, a fair-minded person, not overly suspicious, not "avid for scandal" , not naive, not searching for strained or forced meanings, and one who reads the entirety of the publication of which complaint is made: Farquhar v Bottom [1980] 2 NSWLR 380 at 385-386; Amalgamated Television Services Pty Limited v Marsden (1998) 43 NSWLR 158 at 165.
    
77. It is relevant to take into account the nature of the publication. The publication of the internet site was of a serious nature. It was not a transient publication, but was one that could be retained on a computer for re-reading or printed in a permanent form: Haddon v Forsyth [2011] NSWSC 123 at [20].
    
78. Each imputation relied upon has to be considered in the context of the entire matter complained of.
    
79. To determine whether something is defamatory of a plaintiff, the Court must consider whether it tends to lower the plaintiff's reputation in the minds of right-thinking ordinary members of the community, being persons of fair average intelligence. This question is to be decided by considering the plaintiff's imputations in the context of the matter complained of.
    

The Plaintiffs' Imputations

80. The imputations which the First and Second Plaintiffs plead as being carried by the first matter complained of are set out at [42] above.
    
81. With respect to imputation (a) concerning the first matter complained of, I am satisfied that this imputation arises from the whole of the first matter complained of and, in particular:
    

(a) page 1, including the first three paragraphs where Mr Higgins is named with others as having conspired and stolen the intellectual property for the Mainline product from the inventor, with a further reference to the theft of the intellectual property following shortly after (see [29] above);

(b) a further reference at page 6 to the real inventor having been "shafted and his IP stolen" (see [34] above);

(c) the statement on page 7 "Do not trust Peter Higgins ... if you are an Australian inventor ..." with a further reference shortly after to the intellectual property having been stolen (see [35] above);

(d) a further reference on page 7 to designs having been stolen.

82. Once again, the Defendant accepts that this imputation arises from the first matter complained of (T30). It is entirely clear that an allegation of conspiracy to steal intellectual property is defamatory of the First Plaintiff.
    
83. The Defendant accepts that imputation (b) arises from the first matter complained of (T30). Independently of the Defendant's acceptance of this proposition, I am well satisfied that the imputation arises from the first matter complained of.
    
84. I am satisfied that an allegation to the effect that Mr Higgins knowingly endangered school children is defamatory.
    
85. Imputation (c) of the first matter complained of is alleged to arise from the whole of that matter, especially that appearing on page 5 of Exhibit A2 under the heading "So Why The Government BER Scheme and Aus Industry" . The relevant passage concerning Mr Sharp was reproduced at [32] above.
    
86. Once again, the Defendant accepts that this imputation arises from the first matter complained of (T30). Quite apart from this concession, I am well satisfied that the imputation arises from the first matter complained of.
    
87. I accept the submission for the Plaintiffs that this allegation is to the same effect as calling Mr Sharp a conman or a fraudster, and that he promotes a product that he knows will fail. Such an allegation is clearly defamatory of him.
    
88. Imputation (d) of the first matter complained of is said to arise from the whole of that matter. Again, the Defendant accepts this imputation arises from the first matter complained of (T30). Apart from this concession, I am well satisfied that the imputation arises from the material.
    
89. An allegation to the effect that Mr Sharp has knowingly endangered school children is clearly defamatory.
    

Defence of Justification

90. As mentioned above, the Defendant relies upon the defence of justification with respect to the claim against him for defamation. Section 25 Defamation Act 2005 provides as follows:
    

"25 Defence of justification

It is a defence to the publication of defamatory matter if the defendant proves that the defamatory imputations carried by the matter of which the plaintiff complains are substantially true."

91. As s.25 makes clear, the onus lies upon the Defendant to prove that the defamatory imputations carried by the matters of which the Plaintiffs complain are substantially true.
    
92. The Plaintiffs note that the defence of justification at common law is not taken away nor modified by the Act: s.24 Defamation Act 2005 . However, for present purposes, the common law defence is no broader than the statutory defence and need not be further considered.
    
93. The term "substantially true" is defined in s.4 Defamation Act 2005 to mean "true in substance or not materially different from the truth" .
    
94. It is incumbent on the Defendant to establish that each material part of the imputation is substantially true: Howden v Truth & Sportsman Limited [1937] HCA 74; 58 CLR 416 at 420-421. However, it is the defamatory sting which must be substantially true and minor variations do not matter: Sutherland v Stopes [1925] AC 47 at 55, 79. The truth or otherwise of the imputation is to be determined in the context of the matter complained of: Greek Herald Pty Limited v Nikolopoulos [2002] NSWCA 41; 54 NSWLR 165 at 172-173 [19]- [27]. As a general rule, an imputation must be proved true by reference to facts as they were at the time that the matter complained of was published, or so close to that time as permits inferences properly to be drawn as to the state of affairs at that time.
    
95. I have mentioned that the onus of proof concerning the substantial truth of the imputation lies upon the Defendant. The standard of proof is the civil standard, on the balance of probabilities, although as the Plaintiffs submit (correctly), the serious nature of the allegations (theft and intentional exposure of children to danger) requires cogent evidence to discharge the onus: s.140 Evidence Act 1995 ; Amalgamated Television Services Pty Limited v Marsden [2002] NSWCA 419 at [61]; Palmer v Dolman [2005] NSWCA 361 at [40]-[47].
    

Defence of Justification - The Safety Allegations

96. As mentioned earlier, the factual issues falling for determination in these proceedings concern safety allegations and intellectual property allegations made by the Defendant. In this part of the judgment I will consider the evidence, and make necessary findings, with respect to the safety allegations. Although these findings will be made in the context of the defence of justification arising from the claims in defamation, these findings will be relevant as well to the claims under the FT Act, to which I will return.
    
97. The Defendant did not draw together his arguments concerning safety in closing submissions. However, his evidence and cross-examination touched upon a number of safety issues, including the following:
    

(a) ease of access of a knife or bottle opener to the active component;

(b) ease of insertion of a coin in the groove and the risk that the active component would be touched in the process of removing the coin;

the fact that promotional material indicates that the Mainline system could be installed in a kitchen near water, where additional safety issues arise from corrosion etc;

the risk of fire;

what are said to be particular safety concerns because of the corner connectors used in the Mainline system;

(f) whether the stamped copper rails in the Mainline system are "fixed in thermoplastic" (see Exhibit U).

98. The issues to be determined with respect to the safety allegations are to be considered in light of the evidence and with a sense of practical reality. I agree with the following proposition contained in the Plaintiffs' written submission (paragraph 104):
    

"In considering the safety allegations, the main issue is not one of absolute safety (which can only be an abstract concept), but relative or real-world safety. Virtually every human activity involves danger, and many aspects of modern life are routinely attended with it: driving motor cars, flying in aeroplanes, engaging in sporting or other recreational activity, all involve real risk, and in each case the question of safety can only be answered in relative terms. Perhaps less obviously, but just as certainly, ordinary domestic activities also involve a certain, but very low, level of risk, activities such as climbing stairs, using electrical appliances, gardening or lighting a barbeque."

The Plaintiffs' Evidence Concerning the Safety Allegations

99. The evidence reveals that the Mainline system has been sold since April 2008 in Australia, the United Kingdom, Germany, India and more recently, Lebanon, without incident (T78).
    
100. The evidence reveals that the Mainline system complies with detailed and specific standards, including AS/NZS61534.1:2008 entitled "Power Track Systems" (Exhibit Q) and AS/NZS3112:2004 entitled "Approval and Test Specification - Plugs and Socket Outlets" (Exhibit R). These standards contain both general provisions as to safety and function, and specific requirements relating to safety including fire risk and electrical shock risk.
     
101. Further, the evidence reveals that the Mainline system has been extensively tested by a number of independent testing laboratories, which have produced detailed testing reports in relation to the track components and the power point adaptor components (Exhibits S, T, U, V, W, X, Y, Z).
     
102. The fact that the Mainline system complies with relevant standards was confirmed in a document tendered by the Defendant, being an email dated 16 September 2010 from Peter King, principal investigator with the Department of Services, Technology and Administration (Exhibit 29). Mr King had issued a certificate of suitability dated 28 February 2007, with an addendum dated 8 April 2008 concerning the Mainline system (Exhibit U).
     
103. As mentioned earlier, the Plaintiffs relied upon the evidence of several witnesses with respect to the safety allegations, in particular, Mr Andrews, Dr Grantham and Mr Carmody. The Defendant cross-examined the Plaintiffs' witnesses and tendered a number of documents himself during cross-examination.
     

Evidence of Mr Andrews

104. Mr Andrews is the chief engineer at PDC, and he is in charge of ensuring that the Mainline system meets Australian and international standards. He was previously the design engineer. He holds a Diploma in Mechanical Engineering, a Post-Graduate Certificate of Management and is currently studying for a degree in Masters of Engineering Management (T77).
     
105. Mr Andrews gave evidence that the Mainline system has been sold in Australia, Germany, the United Kingdom and Lebanon with the first sale in April 2008 (T78). It is currently installed at Sydney University and a large school in Sydney, and there are 13 further sites in which it is being installed (T84). Mr Andrews said there had been no safety incident in relation to the product (T109).
     
106. It was the evidence of Mr Andrews, supported by relevant documentation, that the Mainline system has met all applicable safety standards and has been deemed safe for manufacture and sale in Australia and elsewhere. One of the adaptors for the Mainline system has won a design award in Australia (Exhibit O) and overseas (Exhibit P).
     
107. It is noteworthy that the matters complained of were each published after the Mainline system had undergone all of the testing identified in evidence, and had received passes in relation to all relevant standards.
     
108. Although the Defendant did not advance any detailed argument in closing submissions, it is appropriate that I refer to some of the matters taken up by him in cross-examination of Mr Andrews and express my conclusions with respect to them.
     
109. The Defendant suggested to Mr Andrews that the entire Mainline system had not been tested as an entity. Mr Andrews disagreed with that proposition and referred to a number of documents which indicated that the entire system had been tested (T111, T121, T194). I accept the evidence of Mr Andrews that the evidence concerning testing of the Mainline system demonstrates testing of the whole system. The Defendant has not demonstrated any gap or failure in this respect.
     
110. The Defendant raised issues concerning PDC's installation manual. Mr Andrews explained the development of the installation manual through various updates (Exhibits AA, BB, CC; Exhibits 4, 5). His evidence explained this process in a rational way, which did not support any of the safety concerns raised by the Defendant.
     
111. With respect to the cross-examination by the Defendant of Mr Andrews concerning temperature rise and potential for fire, Mr Andrews gave evidence, which I accept, that the system has been tested in accordance with appropriate standards to guard against fire (T136, T183).
     
112. During the course of a lengthy cross-examination, Mr Andrews, at times, sought to respond to some of the Defendant's questions by way of a general response that the Mainline system complied with all relevant standards and had been tested and had passed relevant tests. Although at times this general response did not address directly the specific issue raised in the question, I am satisfied that Mr Andrews responded in a realistic way.
     
113. The evidence reveals the existence of detailed Australian and international standards with respect to a system of this type, and that PDC has taken substantial steps to ensure that the Mainline system complies with all relevant standards. Testing had been carried out and, certainly by the time of publication of the first matter complained of in August 2009, there were no outstanding steps which PDC needed to take to satisfy relevant authorities that the Mainline system complied with all applicable standards. This is an important point given that the Defendant took it upon himself to publish the first matter complained of in August 2009.
     

Evidence of Mr Carmody

114. Mr Carmody prepared an expert report dated 27 May 2010 (Exhibit D). He is a retired senior lecturer in electrical and computer systems engineering at the University of Technology, Sydney. He has graduate and post-graduate engineering qualifications and trade qualifications, including as a qualified electrical contractor.
     
115. In his report, Mr Carmody responded to each of the Defendant's allegations in the first matter complained of, and gave his views more specifically in relation to electrical contacts and standards.
     
116. Mr Carmody expressed the view that the Defendant's claims are not factually correct and are largely speculative (Exhibit D, page 22). He expressed the view that the Mainline system does not pose a greater risk than that posed by normal power points commonly found throughout typical Australian domestic premises, and he reaffirmed that view in re-examination (T255). Mr Carmody expressed the view that all electrical contacts will eventually give rise to problems but that, if the Mainline system is used in accordance with its specifications, it would not give rise to additional problems above and beyond those encountered with standard power points (T235). He expressed the view that the Mainline system represented an acceptable trade off between utility and safety in the same way as a conventional power point does (T237).
     
117. In cross-examination, Mr Carmody accepted that if a 10 cent piece was inserted in the groove in the Mainline system, then it might be possible, in the course of attempting to prise the coin out, to come into contact with the active conductor (T252-253). Despite this, Mr Carmody stated in re-examination that the Mainline system did not pose a greater risk than conventional power point systems (T255).
     
118. Mr Carmody was cross-examined concerning the installation of the Mainline system in a kitchen setting and possible risks which might arise from this. He responded that any installation would be a matter for the electrician or electrical contractor, having regard to the particular circumstances of the layout of the kitchen and the requirements of AS3000, which made specific provision concerning the location of power points in places such as kitchens and bathrooms and wherever moisture and chances of electric shock exist (T254). In my view, this is a reasonable approach given the requirement that the electrician or electrical contractor assess the particular layout and circumstances of the room or rooms in which the Mainline system is to be located.
     

Evidence of Dr Grantham

119. Dr Grantham prepared an expert report dated 23 October 2009 (Exhibit E). Dr Grantham has a PhD and BSc with first-class honours in electrical engineering. He has in excess of 45 years' experience in the electrical industry. He is a chartered engineer and a Fellow of the Institution of Engineering and Technology (UK).
     
120. Dr Grantham was asked to comment upon the Defendant's allegations about the Mainline system in the first matter complained of. He concluded that the Defendant's allegations were alarmist, unsubstantiated and did not represent a balanced view of the Mainline system.
     
121. In cross-examination, Dr Grantham acknowledged that a problem might arise with connection of the Mainline system if it was carried out by a "really ham-fisted" electrician (T208.18). In re-examination, Dr Grantham said that perils arising from acts of a "ham-fisted electrician" , who may act incompetently, could also cause similar perils to arise from the installation of conventional power systems (T223).
     
122. In cross-examination, Dr Grantham expressed the view that the conductor was fixed and that it was part of a fixed installation (T212).
     
123. At the request of the Defendant during cross-examination, Dr Grantham was able to insert part of a flat metal bottle opener (Exhibit 15) into the sample of Mainline track (Exhibit N) (T221-222).
     
124. In re-examination, Dr Grantham acknowledged that there were risks that items such as a pin or an unfolded paperclip could be inserted into a conventional power point giving rise to a risk of shock, but that the existence of that risk involved an acceptable trade off between the risk of shock and fire and the need for the supply of power to people in their everyday life. He agreed that the Mainline system involved a similarly acceptable trade off between the need to ensure safety and the need to provide accessible power to people in their ordinary life (T224).
     
125. In further cross-examination by leave, Dr Grantham pointed to possible safety issues with respect to standard power points and the Mainline system, including the greater visibility of a standard power point, and associated with the risk of insertion of items by children into it, and he acknowledged that the use of a metal object to try and remove a 10 cent coin from the groove in the Mainline system might give rise to a risk of touching the active element. Dr Grantham observed that it was "similar if someone used a fork in an attempt to remove toast, a piece of bread from a toaster, that also could touch the active conductor" (T225-227).
     
126. I observe that the various experiments carried out in Court (at the request of the Defendant), involving insertion of a coin or a flat bottle opener into the Mainline product, utilised a short section of track (Exhibit N). It should immediately be observed that insertion of items into that section does not, in my view, provide particular assistance to the Defendant. When used in practice, the Mainline product is fixed to the wall with corner connectors, which would give the track additional rigidity. I accept the Plaintiffs' submission that this impacted significantly upon the use that could be made of these in-Court demonstrations.
     
127. The Plaintiffs submit that, in any event, the possibility of a person of any age mischievously inserting a metal object, such as a paper clip, hairpin or wire into a conventional power point is one of those risks which is inherent in the use of electricity. Dr Grantham noted in evidence that a standard power point is more visible to a child and more likely to attract a child's attention than the Mainline system (T225). I accept the Plaintiffs' submissions in this respect.
     

The Defendant's Evidence

128. The substance of the Defendant's case emanated from his own evidence. Mr Smark SC made a number of submissions concerning the weight to be attached to the Defendant's evidence and it is appropriate that I express my conclusions on that aspect.
     
129. The evidence reveals that the Defendant has no tertiary qualifications. He left school after Year 10 and worked for a period as a carpenter. He has no formal training or qualifications in electrical engineering, nor as an electrician.
     
130. That said, the Defendant has immersed himself for some years in the field of invention with respect to Power Track-type systems. In 1997 and 1998, he received awards for activities in this field (Exhibits 22, 23). The Defendant was nominated as the inventor in the provisional patent application dated 18 December 2002 with respect to the system which is now the Mainline system (Exhibit H), and was nominated as one of four inventors with respect to that process in the standard patent application dated 18 December 2003 (Exhibit K).
     
131. It may be seen that all of these matters equipped the Defendant to give admissible opinion evidence with respect to safety issues in the case. The Defendant prepared a report dated 12 June 2010 entitled "Mainline Power Track System Safety Report" (Exhibits 3, 3A) which was admitted in the proceedings. The Plaintiffs did not object to the tender of that report, but submitted that limited weight could be attached to it because of the Defendant's limited expertise (certainly in contrast to Dr Grantham and Mr Carmody) and because the Defendant is not independent.
     
132. The ability to give admissible expert opinion evidence does not depend upon the holding of relevant tertiary qualifications. Section 79(1) Evidence Act 1995 provides that if a person has specialised knowledge based on the person's training, study or experience, then the person may give opinion evidence that is wholly or substantially based on that knowledge. It may be said that the Defendant has acquired specialised knowledge as a result of his experience. The Defendant has emphasised that feature during the course of the hearing. However, that is only one aspect of the matter.
     
133. Dr Grantham and Mr Carmody have tertiary qualifications in electrical engineering and have taught for significant periods in that field, as well as acting as consultants and providing opinions with respect to issues in that field. The areas under consideration in this case include not just the practical features of the Mainline system, but the broader concept of functional electrical safety, the nature and effect of relevant safety standards which apply to such a system and electrical engineering issues bearing upon all these aspects.
     
134. Although the Defendant has the advantage of a longer history of involvement with the development of such systems, his ability to give expert opinion evidence on broader electrical safety and electrical engineering issues was limited. That is not to say his opinions ought be given no weight. The Defendant's report of 12 June 2010 constituted, in reality, the high point of his case to make out the defence of justification with respect to the safety allegations.
     
135. This brings me to a significant factor which impacts upon the weight to be given to the Defendant's report and evidence. The Defendant is not an independent expert witness. He is, of course, a party to the proceedings. This does not mean that he is not able to give admissible opinion evidence: Sydney South West Area Health Service v Stamoulis [2009] NSWCA 153 at [186]- [225].
     
136. It should be kept in mind that the origin of this litigation lies in the making of very strong allegations by the Defendant that the Mainline system is fundamentally unsafe in a number of respects which were said to endanger lives. More than once during the hearing, the Defendant said that he published these matters so that he would be taken to Court and would have an opportunity to prove the unsafe nature of the Mainline system. Under cross-examination, he readily acknowledged that he had taunted or threatened the Plaintiffs in his website and emails so that he would be taken to Court (T398, T403-404, T407).
     
137. When the matter came to hearing, the only evidence which the Defendant had in this respect was his own. He acknowledged, under cross-examination, that his concerns did not appear to have been taken seriously by the various bodies with whom he had raised them (T394-395).
     
138. It cannot be said that the Defendant brought a detached and calm mind to the resolution of the issues in the proceedings. The Defendant himself said that he was "emotional" about the product (T426). It is fair to say that the Defendant appears to be totally convinced as to the correctness of his own position and that he will not entertain any contrary position.
     
139. When a court comes to assess expert opinion evidence, a witness who adopts such an approach provides a troubling foundation for a court to act on. The Defendant was literally an advocate (and a passionate advocate) in his own cause, using strong and colourful language in the matters complained of and at the hearing. He spoke as if the issues he wished to raise were self-evidently correct, expressing a level of irritation when his stance was challenged.
     
140. That said, none of these aspects lead me to disregard the Defendant's evidence. After all, he has considerable practical knowledge of the relevant system and is in a position to express opinions concerning it, arising from his practical experience and knowledge in the field. However, the detached and rational assessment of the issues in the case provided by Dr Grantham and Mr Carmody may be contrasted with the Defendant's inflexible approach to issues in dispute. The Plaintiffs' expert witnesses displayed a balanced and objective approach, consistent with their obligations under the Expert Code of Conduct: Rule 31.23, Schedule 7 Uniform Civil Procedure Rules 2005 .
     
141. I accept the submission of the Plaintiffs that considerable caution must be taken in approaching the Defendant's evidence on these issues, and that it is appropriate to consider the opinion evidence by reference to objectively measurable features, such as compliance of the Mainline system with specified standards, and evidence concerning testing of the system by relevant independent testing laboratories. There is a significant volume of evidence of this type in the proceedings. It must be said that it provides no assistance to the Defendant.
     

Some Conclusions Concerning the Safety Allegations

142. The Defendant has made very strong allegations concerning the safety of the Mainline system, with those allegations accompanied by dramatic headlines and illustrations. The Defendant has not alleged a theoretical risk arising from use of the Mainline system. Rather, his safety allegations involve claims that life-threatening events will certainly occur so that the Mainline system ought not be used in its present form. In my view, there is a very significant gap between the risks or concerns which the Defendant can point to with the Mainline system and the allegations which he makes in that respect.
     
143. In my view, the evidence of Dr Grantham and Mr Carmody concerning possible insertion of items into conventional power points and the Mainline system serves to emphasise the point which the Plaintiffs make in this case. There are risks in the real world with both systems, but the risks are not materially greater with respect to the Mainline system than with a conventional power point.
     
144. Further, safety concerns raised by reference to incompetent installation do not advance the Defendant's case. Incompetent installation can give rise to significant safety hazards in the context of conventional power points as well.
     
145. The difficulty for the Defendant is that the publications in the matters complained of involve strong allegations of grave danger in the Mainline system, which are not supported by the evidence which he has adduced in this case through cross-examination if the Plaintiffs' expert witnesses and in his own evidence.
     
146. The conclusions which I have expressed so far do not assist the Defendant with respect to the defence of justification insofar as the imputations contend that the Mainline system is much more dangerous than conventional electrical wiring systems in various respects. The evidence does not support such a conclusion.
     
147. The topics raised by the Defendant, including those referred to at [97] above, were adequately addressed in the evidence of Mr Andrews, Dr Grantham and Mr Carmody.
     
148. In reality, the Defendant is indissolubly wedded to the proposition that the Mainline system is gravely unsafe and life threatening, even though, in my view, the objective evidence advanced by him to support that proposition simply fails to do so.
     
149. I accept the submission of the Plaintiffs that the evidence reveals that the Mainline system has been properly tested, complies with all relevant standards and does not pose any substantial or unreasonable risk to human safety or health, in any way which is substantially different from the risk posed by conventional power point systems. The evidence of Dr Grantham and Mr Carmody, which I accept, was to this effect.
     

Evidence of Knowledge of Danger by First and Second Plaintiffs

150. The imputations with respect to the first matter complained of go far beyond a claim of a lack of safety. Imputations (b) and (d), with respect to the website publication of August 2009, assert that each of the First and Second Plaintiffs knew that the Mainline system was much more dangerous than conventional electrical wiring systems. There is evidence which is entirely inconsistent with each of Mr Higgins and Mr Sharp having such knowledge. It is appropriate that I refer to it.
     
151. Mr Sharp denied having such knowledge (T269-270). He was not aware of any injury, fire, electric shock or other incident involving the Mainline system (T270). Mr Sharp said that, had any such reports been made, he would, as chairman of the board, have become aware of them. I accept that no such reports were made. This was the evidence of Mr Andrews and each of the First and Second Plaintiffs.
     
152. Mr Sharp gave evidence that the Mainline system was installed in the boardroom of Rex Airlines (of which he was a director), in his apartment, in the workshop at his farm and at the PDC offices (T271). All of this placed Mr Sharp in a position to use the Mainline system. He was in a position to have direct knowledge as to whether there had been any problems with respect to the system. Further, and tellingly, the use in a variety of personal and business settings of the Mainline system by Mr Sharp is entirely inconsistent with him having knowledge or a belief that the system was unsafe, let alone much more dangerous than conventional electrical wiring systems.
     
153. Mr Higgins likewise denied the knowledge as contained in the imputations. He had never been told of any fires, injury, electrocution or property destruction in relation to the product (T286). Tellingly, Mr Higgins had sought to introduce the Mainline system into the schools attended by his own children (T291). He stated that he believed in the product and would not have presented it if he had any doubt about its safety (T291).
     
154. In summary, the evidence of the First and Second Plaintiffs, which I accept, revealed that:
     

(a) each of them expected that the Mainline system would operate safely and that it complied with all relevant standards;

(b) given the business reputations of each of them concerning safety standards and quality, each expected the Mainline system to comply with all relevant safety standards;

(c) at all relevant times, and certainly in August 2009, each of them believed that the Mainline system was safe, as demonstrated by their own use of the system in personal, family and business settings and a willingness to promote it in circumstances where their own family members may utilise it;

(d) all of this was entirely inconsistent with either of them knowing (or even suspecting) that, as the imputations suggest, the Mainline system was much more dangerous than conventional electrical wiring systems.

155. Applying the relevant principles mentioned earlier with respect to the defence of justification (at [90]-[95]), the Defendant has failed to establish the substantial truth of the safety allegations made by him in the first matter complained of.
     

Defence of Justification - The Intellectual Property Allegations

156. The intellectual property allegations arise in:
     

(a) imputation (a) concerning the first matter complained of;

(b) representations (c) and (d) concerning the first matter complained of; and

(c) representations (b) and (c) with respect to each of the second and third matters complained of.

157. The Defendant appears to claim that the patent now utilised for the Mainline system was stolen from him, or that it is somehow invalid because of the names of the inventors on the patent itself. The Plaintiffs observe that the Defendant has not pleaded any particulars of these allegations and that it should fail on its face. In any event, the Plaintiffs submit that the Defendant's position is essentially misconceived.
     
158. The Plaintiffs called Mr Redfern, a patent attorney, to give evidence and he was cross-examined by the Defendant. In addition, the Plaintiffs have made submissions concerning patent law.
     
159. The Defendant appears to have a fixed personal view concerning patent law, and the concept of invention, which he has sought to apply in the case. He has not referred the Court to any statute, case or text which supports his position. He put a number of propositions concerning patent law and the concept of invention to Mr Redfern in cross-examination. The evidence of Mr Redfern has not assisted the Defendant.
     
160. Against this background, it is necessary to express certain conclusions with respect to patent law insofar as it arises for consideration in these proceedings.
     

The Patent Issue

161. It is the case that the provisional patent application lodged on 18 December 2002 nominated PCL as the applicant and the Defendant as the inventor (Exhibit H). Likewise, it is the case that the standard patent application lodged on 18 December 2003 nominated PCL as the applicant, and the Defendant, Kevin Truskett, Jaroslav Emil Haba and Jeffrey Allan Jackson as the inventors (Exhibit K).
     
162. The evidence reveals that the Defendant, together with others, formed PCL for the purpose of exploiting the invention. A document containing Heads of Agreement dated 25 November 2002 between the Defendant, Mr Michael McDermott and Mr Haba (Exhibit 2) provides support for this proposition. PCL was incorporated on 22 November 2002. The Defendant was a director of PCL from 22 November 2002 until 21 March 2003 (Exhibit G).
     
163. In order to exploit the invention, PCL engaged the services of Mr Redfern of Shelston IP Patent Attorneys, filed the patent application in the name of PCL and sought interest from investors, namely Mr Higgins. The Defendant, as a director of PCL, gave instructions to Mr Redfern for the purpose of preparing the patent application.
     
164. Upon being invited to consider the invention by PCL, Mr Higgins and Mr Jason Hine formed PDC for the sole purpose of commercialising the invention. PCL and PDC then entered into a series of agreements which had the effect of transferring the ownership of the patent to PDC (Exhibits J and L).
     
165. PCL lodged a provisional patent application on 18 December 2002 at a time when the Defendant was a director of PCL. This was done with his consent. I accept the submissions of the Plaintiffs that there can be no doubt that all parties, including the Defendant, understood that the rights in the invention vested with PCL.
     
166. The following findings are made by reference to the evidence of Mr Redfern, whom I accept as a credible and reliable witness in the proceedings.
     
167. Mr Redfern took instructions from the Defendant, as a director of PCL, for the purpose of the provisional patent application in December 2002. The Defendant first contacted Mr Redfern on 9 December 2002 and meetings took place thereafter. On 11 December 2002, the Defendant wrote to Mr Redfern on PCL letterhead enclosing drawings for the provisional patent application (Exhibit M, pages 3-4). On 16 December 2002, Mr Redfern communicated with the Defendant and noted that, although the drawings were rough, they could be used for the provisional application.
     
168. On 18 December 2002, Mr Redfern spoke to the Defendant who confirmed that he had reviewed the draft provisional application which was then filed by Mr Redfern (Exhibit M, pages 10-14).
     
169. The Defendant spoke to Mr Redfern regularly in late 2002 and early 2003. At no time did the Defendant suggest to Mr Redfern that PCL should not be the applicant on the provisional patent application. At no time did the Defendant indicate that PCL was not entitled to exploit the invention which was the subject of the provisional patent application (T50).
     
170. I accept the submission for the Plaintiffs that, as at 18 December 2002, the Defendant consented to a provisional application being filed for the invention in the name of PCL, with the Defendant listed as the inventor. The Defendant's conduct in that regard evidences his intention that PCL ought be the registered owner of the provisional patent, and therefore the entity entitled to exploit the invention.
     
171. On 17 March 2003, PCL instructed Mr Redfern that he should no longer accept instructions from the Defendant (Exhibit M, pages 25-26). After March 2003, Mr Redfern took instructions from other officers of PCL to progress the preparation of the patent application (Exhibit M, pages 27-52).
     
172. On 7 April 2003, it was noted that Mr Haba and Mr Truskett were continuing to develop the technology for the purpose of the patent application, and Mr Redfern was provided with documents in that respect (Exhibit M, pages 31-42). Documents were provided to Mr Redfern so that the inventors could be identified, and this was noted in Mr Redfern's email of 7 April 2003 (T56). Mr Truskett provided further drawings in May 2003 (T56-57).
     
173. In light of the documents provided, Mr Redfern included Mr Haba and Mr Truskett as inventors in the standard patent application filed on 18 December 2003 (Exhibit K). Mr Redfern explained that, under patent law, inventors are not just the persons who conceive an invention. He said that persons who reduce the invention into practise are also inventors for the purpose of patents (T57).
     
174. The evidence reveals further communications in November and December 2003, including variations to the embodiments of the invention developed by Mr Jackson, with involvement as well by Mr Truskett and Mr Haba in certain respects (Exhibit M1; T328-329).
     
175. In due course, as mentioned earlier, the names of the Defendant, Mr Truskett, Mr Haba and Mr Jackson were included as inventors for the purpose of the standard patent application filed on 18 December 2003.
     
176. In re-examination, Mr Redfern said that he considered it appropriate that the names of each of the four persons be included as inventors because of their involvement revealed in the documentary evidence (T347). Mr Redfern had earlier stated that the standard patent application included updated material over and above that contained in the provisional patent application (T57-58). Mr Redfern said that it was apparent that the additional inventors named on the patent had contributed to the updated material, but that the inclusion of the names did not suggest that each of them had an equal role to play (T59). In any event, Mr Redfern stated that the inclusion of an additional inventor would not deprive the patent holder of the validity and force of the patent (T59).
     

The Defendant's Grievance Concerning the Patent

177. I pause at this stage to note the apparent grievance of the Defendant with respect to the patent. It appears that the Defendant has a firm view that he has been dealt with wrongly by, amongst others, Mr McDermott and Mr Haba, the other parties to the Heads of Agreement (Exhibit 2), in a way that affects the patent. Mr McDermott and Mr Haba are not parties to this litigation, nor are Mr Truskett or Mr Jackson. There is no suggestion that the Defendant has made application to the Commissioner of Patents or the Federal Court of Australia with respect to the question of inventorship and the 2003 patent. In any event, there is no question that PCL was the applicant for the patent at the provisional and final stages and that PCL had assigned the patent to PDC.
     
178. To the extent that part of the Defendant's grievance is that the names of three other persons were included as inventors in the standard patent application filed on 18 December 2003, I accept that the law does not require that a co-inventor's contribution to an invention itself be inventive. What should be considered is the contribution made to the invention by the person, such as whether it led to some enhancement that was material and whether the enhancement would have occurred without the person's contribution: Colin Bodkin, "Patent Law in Australia" , Law Book Company, 2008, paragraph [8040]. Rights in an invention are determined by objectively assessing contributions in the invention, rather than an assessment of the inventiveness of respective contributions: JMVB Enterprises Pty Limited v Camoflag Pty Limited [2005] FCA 1474; 67 IPR 18 at 93-94 [132] (Crennan J). These statements are supported by the evidence of Mr Redfern, a patent attorney with considerable expertise in the field (although not a lawyer). His background in terms of patents is in the field of electrical engineering (T328). His evidence explains how and why the four persons were nominated as inventors in the standard patent application filed on 18 December 2003.
     
179. It is necessary to keep in mind that the relevant imputation and representation with respect to intellectual property allegations involve assertions that Mr Higgins conspired with others to steal the intellectual property, and that PDC does not own the intellectual property in the Mainline system, or that the validity or efficacy of the patent for the Mainline system was in doubt because the extra inventors' names had been added to the patent.
     
180. In order to prove the truth of imputation (a) in the first matter complained of, the Defendant must prove that Mr Higgins conspired with others to steal the intellectual property. Mr Higgins denies this allegation (T289-290). The evidence reveals that Mr Higgins met the Defendant in about 2000 in order to invest in a business known as Universal Power Track, and there were subsequent meetings where this topic was discussed. In cross-examination, the Defendant did not put to Mr Higgins that he had conspired with others to steal the intellectual property in the Mainline system from him. There was some cross-examination concerning steps taken by Mr Higgins to undertake what was described as due diligence in 2003, to ensure that PCL owned the intellectual property rights in the invention. Mr Higgins stated that he was assured that this was the case by the law firm which he had instructed to undertake that task (T301).
     
181. Whatever possible grievances the Defendant may have with other persons who are not parties to this litigation concerning events in 2002-2003, there is no evidence to support imputation (a) with respect to the first matter complained of, which contains the strong allegation that Mr Higgins conspired with others to steal the intellectual property in the Mainline system.
     

Conclusions on Truth of Imputations

182. With respect to the safety allegations, I accept the submission of the Plaintiffs that the Defendant has not proved the imputations regarding safety. He has not proved that the Mainline system is unsafe, either generally or in the sense of being more dangerous than conventional electrical wiring systems. I accept the submission of the Plaintiffs that the evidence points to the Mainline system being as safe as conventional electrical wiring systems, as well as having significant advantages of convenience.
     
183. With respect to the intellectual property allegations, I accept the submission of the Plaintiffs that the Defendant has failed to prove his allegations of theft against the First Plaintiff and PDC. It is common ground that the Mainline system is based upon the tendered patent (Exhibit K). The evidence reveals that PDC took title of the patent from PCL in circumstances where PCL was the registered owner of the patent.
     
184. I accept the submission of the Plaintiffs that, under patent law, the right to exploit the patent belongs to the holder of the patent, or to any person authorised by the patent holder. It has been established that PCL became the registered holder of the patent upon which the Mainline system is based, and that PCL assigned its rights under that patent to PDC both prior to the granting of the patent (Exhibit J) and by way of further agreement after the final application was filed (Exhibit L). In these circumstances, PDC has had, at all material times, full right to exploit the patent upon which the Mainline system is based.
     
185. The Defendant has failed to establish the defence of justification with respect to either the safety allegations or the intellectual property allegations contained in the relevant imputations.
     

The FT Act Claims

186. There is very substantial factual overlap between the imputations which are relevant to the defamation claim and the representations which are relevant to the claims under the FT Act. I will return to the facts, for the purpose of making appropriate findings, a little later in this judgment. It is necessary to refer at this point to relevant principles applicable to the claims under the FT Act.
     
187. I have regard to the FT Act in the form in which it stood in August 2009 and June 2010, the times of publication of the matters complained of. Sections 41, 42, 65, 68 and 72 FT Act have particular application to this case. Those provisions have now been repealed and replaced by substantially identical provisions in the Competition and Consumer Act 2010 (Cth) . The new legislation is not retrospective so, in this case, the now repealed provisions of the FT Act apply.
     

Sections 41 and 42 FT Act

188. Sections 41 and 42 provided relevantly as follows:
     

" 41 Interpretation

(TPA s 51A)

(1) For the purposes of this Part, where a person makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act) and the person does not have reasonable grounds for making the representation, the representation shall be taken to be misleading.

(2) The onus of establishing that a person had reasonable grounds for making a representation referred to in subsection (1) is on the person.

(3) Subsection (1) shall not be taken to limit by implication the meaning of a reference in this Part to a misleading representation, a representation that is misleading in a material particular or conduct that is misleading or is likely or liable to mislead.

42 Misleading or deceptive conduct

(TPA s 52)

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

(2) Nothing in this Part shall be taken as limiting by implication the generality of subsection (1)."

189. PDC submits that the Defendant has, in trade or commerce, engaged in conduct that is misleading or deceptive or is likely to mislead or deceive for the purpose of s.42 FT Act.
     
190. The following representations are alleged to be with respect to a future matter, so as to attract s.41(1) and (2) FT Act:
     

(a) representations (a) and (b) of the first matter complained of; and

(b) representation (a) of each of the second and third matters complained of.

191. The following representations are said to relate to existing circumstances at the time of the making of the representation, so that s.41 FT Act has no application:
     

(a) representations (c) and (d) of the first matter complained of; and

representations (b) and (c) of each of the second and third matters complained of.

Relevant Legal Principles

192. The relevant legal principles with respect to a claim of this type are not in doubt.
     
193. For conduct to be misleading or deceptive, the conduct must convey a misrepresentation: Taco Co of Australia Inc v Taco Bell Pty Limited [1982] FCA 136; (1982) 42 ALR 177 at 187. Whether or not conduct amounts to a misrepresentation is a question of fact to be decided by considering what is said and done against the background of all surrounding circumstances: Taco Co of Australia Inc v Taco Bell Pty Limited at 202.
     
194. It is not necessary for the Plaintiffs to demonstrate a deceptive intention on the part of the Defendant. The intent of the maker of the representation is not relevant under s.42. All that is relevant is whether, tested objectively, the conduct was misleading or deceptive or likely to mislead or deceive: Hornsby Building Information Centre Pty Limited v Sydney Building Information Centre Limited [1978] HCA 11; [1978] HCA 11; 140 CLR 216 at 223. Conduct that objectively leads one into error is misleading: Butcher v Lachlan Elder Real Estate Pty Limited [2004] HCA 60; 218 CLR 592 at 626 [111].
     
195. Conduct will be likely to mislead or deceive for the purposes of s.42 if there is a real or not remote chance or possibility of misleading or deception, regardless of whether it is less or more than 50%: Equity Access Pty Limited v Westpac Banking Corporation [1989] FCA 506; (1989) 16 IPR 431 at 440. The words "or is likely to mislead or deceive" in s.42(1) make it clear that it is unnecessary to prove that the conduct in question actually deceived or misled anyone: Butcher v Lachlan Elder Real Estate Pty Limited at 626 [112].
     
196. Conduct will only be misleading or deceptive if it induces or is capable of inducing error: Parkdale Custom Built Furniture Pty Limited v Puxu Pty Limited [1982] HCA 44; 149 CLR 191 at 198; Butcher v Lachlan Elder Real Estate Pty Limited at 625-626 [111]. Whether particular conduct is misleading or deceptive is a question of fact to be determined in the context of the evidence as to the alleged conduct and to the relevant facts and circumstances: Butcher v Lachlan Elder Real Estate Pty Limited at 625 [109].
     
197. The Plaintiffs must establish a causal link between the impugned conduct and the loss that is claimed: Butcher v Lachlan Elder Real Estate Pty Limited at 604 [37].
     
198. To fall within s.42(1) FT Act, the relevant conduct must be engaged in "in trade or commerce" . The term "trade or commerce" includes any business or professional activity: s.4(1) FT Act. The term "business" includes a business not carried on for profit and a trade or profession: s.4(1) FT Act.
     

Was the Defendant's Conduct in Trade or Commerce?

199. I accept the Plaintiffs' submission that the Defendant's conduct was in trade or commerce within the meaning of the FT Act. In particular, I accept the submission that:
     

(a) the matters complained of comprised publications which were intended to be read by, and which were read by, the trading partners or potential trading partners of PDC;

(b) at all material times, the Defendant was the holder of various patents relating to power distribution technology (for example, Exhibit 1);

(c) by the time of the publications, the Defendant was apparently involved in promoting an alternative power distribution technology known as "WiserWire" ;

the content of the first matter complained of was concerned with commercial dealings in which the Defendant had participated, and which were apparently connected with his intellectual property allegation;

each of the matters complained of was explicitly directed to influencing business decisions to deal with PDC and, in the case of the second and third matters complained of, the specific decision whether to distribute PDC's Mainline product.

200. Further, I accept that the Defendant published the website and the emails as part of his trade or profession as an inventor. He was expressing concern about various aspects of the Mainline system and the effect that the system and its commercialisation might have on his reputation as an inventor. I accept the Plaintiffs' submission that the Defendant's conduct in publishing these matters was part of his ongoing passion as an inventor of electrical conduction systems.
     
201. I do not consider that the apparent lack of profit to the Defendant with respect to the conduct surrounding the publications stands in the way of a finding that his conduct was in trade or commerce. The extended definition in s.4 FT Act provides that trade or commerce includes a business or professional activity, even if the business is not carried on for profit.
     
202. I accept the Plaintiffs' submission that the present case may be distinguished from a case such as Plimer v Roberts (1997) 80 FCR 303 at 304-305, 308-311, 322-329. The free publication of material has been held to constitute conduct in trade or commerce: Shahid v Australasian College of Dermatologists [2008] FCAFC 72; 168 FCR 46 at 49-51 [4]- [13]. In deciding whether a particular publication is made in trade or commerce, it is important to consider the cumulative significance of the evidence: Shahid v Australasian College of Dermatologists at 53 [25].
     

Were the Representations Misleading or Deceptive?

203. Insofar as a number of representations by the Defendant relate to future matters, the representation shall be taken to be misleading unless the Defendant had reasonable grounds for making the representation, with the onus of establishing that the Defendant had reasonable grounds lying upon him: s.41(1) and (2) FT Act.
     
204. Both representations (a) and (b) in the first matter complained of relate to the safety allegation, about which I have made a number of findings adverse to the Defendant earlier in this judgment (at [96]-[155]). Those findings serve to explain my conclusions with respect to these representations as well.
     
205. Representation (a) in the first matter complained of was that PDC would go into liquidation, leaving its customers responsible for the cost of rewiring their homes. I am satisfied that this representation was made by the Defendant in the website published in August 2009. It is a representation with respect to a future matter. The Defendant has not established, on the balance of probabilities, that he had reasonable grounds for making the representation, with the consequence that it is misleading for the purposes of ss.41 and 42 FT Act.
     
206. Representation (b) in the first matter complained of was that the Mainline system developed and marketed by PDC was likely to cause avoidable death or injury to children, because it was more dangerous than conventional power conduction systems. I am satisfied that this representation was conveyed by Exhibit A2. It is a representation with respect to a future matter. The Defendant has not established reasonable grounds for making the representation, with the consequence that the representation was misleading.
     
207. Representation (c) in the first matter complained of was to the effect that PDC does not own intellectual property in the Mainline system. This is a representation as to an existing state of affairs as at August 2009. It is for PDC to establish, on the balance of probabilities, that the representation was misleading or deceptive or was likely to mislead or deceive. For reasons expressed earlier with respect to the imputations arising from the intellectual property allegations (at [156]-[185]), I am satisfied on the balance of probabilities that this representation is misleading or deceptive. The evidence reveals clearly that PDC owned the intellectual property in the Mainline system.
     
208. Representation (d) in the first matter complained of states that the intellectual property in the Mainline system produced by PDC was stolen from the inventor. This is a representation as to an existing state of affairs. The onus lies upon PDC to establish that the representation is misleading or deceptive or is likely to mislead or deceive. For reasons expressed earlier in this judgment concerning the defamation imputation arising from the intellectual property allegations (at [156]-[185]), I am satisfied on the balance of probabilities that this representation was misleading or deceptive.
     
209. I will deal with the second and third matters complained of together. The representations are expressed in identical terms with respect to the two publications.
     
210. Representation (a) in the second and third matters complained of states that PDC was responsible for the Mainline system which was so dangerous that it would lead to claims for compensation for loss of life, injury or property. This is a representation with respect to a future matter: s.41 FT Act. I am satisfied that the representation is conveyed by the relevant publication. For reasons expressed earlier in this judgment with respect to imputations from the safety allegations (at [96]-[155]), the Defendant has failed to demonstrate that he had reasonable grounds for making the representation. The representation is misleading.
     
211. With respect to representations (b) and (c) in the second and third matters complained of, each representation relates to an existing state of affairs so that s.41 FT Act has no application. Representation (b) states that PDC had stolen the Defendant's intellectual property in the Mainline system from him. Representation (c) states that the validity or efficacy of the patent for the Mainline system was in doubt because extra inventors' names had been added to the patent. I am satisfied that these representations are conveyed by the relevant publications. For reasons expressed above when dealing with the intellectual property allegations in the context of the defamation claim (at [156]-[186]), PDC has demonstrated, on the balance of probabilities, that each of these representations is misleading or deceptive.
     
212. In summary, I am satisfied that PDC has established that the Defendant, in trade or commerce, engaged in conduct that was misleading or deceptive with respect to each of the representations relied upon concerning the first, second and third matters complained of.
     

Damages and Injunctive Relief

Damages

213. The First and Second Plaintiffs have established their cause of action in defamation against the Defendant with respect to each of the pleaded imputations. In determining the amount of damages to be awarded in defamation proceedings, the Court is to ensure that there is an appropriate and rational relationship between the harm sustained by the Plaintiffs and the amount of damages awarded: s.34 Defamation Act 2005 .
     
214. Damages are capped at $250,000.00 by s.35 Defamation Act 2005 , with the maximum damages amount being increased from 1 July 2010 to the sum of $311,000.00.
     
215. As Carson v John Fairfax & Sons Limited [1993] HCA 31; 178 CLR 44 at 60 makes clear, the purposes to be served by an award of damages in defamation are:
     

(a) consolation for the personal distress and hurt caused by the publication;

(b) recompense for harm done to reputation, including business reputation; and

(c) vindication of the plaintiff's reputation.

216. With respect to extent of publication, I note that this was not a mass media publication, but was a publication available to the world at large over the internet. Although the initial publication may not have been extensive, the "grapevine effect" would have been such as to do damage to the First and Second Plaintiffs.
     
217. In Palmer Bruyn & Parker Pty Limited v Parsons [2001] HCA 69; 208 CLR 388 at 416 [88]- [89], Gummow J described the "grapevine effect" in the following way (excluding footnotes):
     

"[88] The expression 'grapevine effect' has been used as a metaphor to help explain the basis on which general damages may be recovered in defamation actions; the idea sought to be conveyed by the metaphor was expressed by Lord Atkin in Ley v Hamilton as follows:

It is precisely because the 'real' damage cannot be ascertained and established that the damages are at large. It is impossible to track the scandal, to know what quarters the poison may reach: it is impossible to weigh at all closely the compensation which will recompense a man or a woman for the insult offered or the pain of a false accusation.

[89] The 'grapevine effect' may provide the means by which a court may conclude that a given result was 'natural and probable'. However, this will depend upon a variety of factors, such as the nature of the false statement and the circumstances in which it was published. The 'grapevine effect' does not operate in all cases so as to establish that any republication is the 'natural and probable' result of the original publication. This was what was meant by Heydon JA, when his Honour referred to the appellant's submissions being put 'as though the grapevine effect was some doctrine of the law, or phenomenon of life, operating independently of evidence'. As Heydon JA correctly identified, the appellant can point to no evidence that the 'grapevine effect' operated in this case."

218. As will be seen, there is direct evidence in this case which bears upon damage to reputation. The "grapevine effect" has particular application with electronic publications on the internet, where the publication is available to the world and may be downloaded easily or forwarded as a link to others.
     
219. Damage to reputation need not be proved as it is presumed. I accept the Plaintiffs' submission that the seriousness of the imputations in this case would increase the likelihood of damage.
     

Damage to Reputations of First and Second Plaintiffs

220. Mr Sharp gave evidence, which I accept, of his personal history as a member of Federal Parliament for 14 years, and then as a businessman involved in the aviation industry. In the past, he has demonstrated a close interest in public safety as a member of Federal Parliament and in his business life. Mr Sharp did not know the Defendant personally. He found out about the first matter complained of when his personal banker, Mr Krull, telephoned him and drew it to his attention. Mr Krull informed Mr Sharp that the website made alarming and derogatory remarks about the Mainline system and the people involved in it, and he suggested that Mr Sharp "Google" it and read it. He did so, using the search term "Mainline Power" , clicking on "Australia Only" and the matter complained of appeared as the second search result (T259-261).
     
221. On reading the first matter complained of, Mr Sharp believed that the words referring to an ex-Member of Parliament (see [32] above) related to himself as he was the only director who was an ex-Member of Parliament (T261). He formed the view that the publication was saying that the system was more dangerous than conventional systems, and that it endangered school children, and that he cynically sought to promote a product that he knew would fail (T262). Mr Sharp gave evidence that he was "flabbergasted" , "offended" and "outraged" that those matters were alleged. He did not think that the product was going to fail.
     
222. Mr Sharp gave evidence, which I accept, that he had been contacted by other people who had told him that they had seen the first matter complained of. He said that he often spoke to people about the product and referred them to the PDC website. Approximately 15 or so people had reported to him that they had, in the course of looking for the PDC website, seen the first matter complained of (T264). Mr Sharp said that he had a "sinking feeling" when he heard from these people. That "sinking feeling" was for himself and for PDC, with the company also being damaged by the accusations. He said that all of those people would have known him as a former politician (T266).
     
223. Mr Sharp said that he was concerned and assumed that other persons whom he referred to the PDC website, who had not spoken to him since, had also seen the first matter complained of (T266).
     
224. The evidence revealed that the Defendant had previously threatened to defame Mr Sharp in an email dated 22 April 2009 (Exhibit FF), and that he continued to send a raft of emails (including the second and third matters complained of) about the product and PDC from August 2009 until December 2010 (Exhibits B, C, GG).
     
225. Mr Sharp said he had a present concern about the likelihood or prospect of the Defendant continuing to make such publications unless restrained from doing so (T269).
     
226. I accept the Plaintiffs' submission that the evidence of Mr Krull demonstrates how easy it was to find the first matter complained of, if a person was looking for Mainline on the internet.
     
227. Further evidence concerning Mr Sharp's reputation was given by Mr Webster. His evidence was not challenged and I accept it. He has known Mr Sharp for 27 years, from a time when Mr Sharp was in Federal Parliament and Mr Webster was in the New South Wales Parliament. Since their respective retirements, they have had contact with each other in a business setting.
     
228. Mr Webster expressed the view that Mr Sharp had the highest of ethical values and that the first matter complained of was a great slur on his character. Mr Webster considered that the allegations made by the Defendant would be extremely damaging to Mr Sharp in the event that he was nominated for or applied to be a director of a public company. Mr Sharp had spoken to Mr Webster of his hurt as a result of the publication, including his concern about the damage done to his reputation.
     
229. It was the evidence of Mr Higgins that he established Mortgage Choice with his brother in 1991. Mortgage Choice is now a substantial business with a current loan book in excess of $40 billion (T279-280). Mr Higgins gave evidence of his involvement in a number of businesses, including businesses in the agricultural and technology fields. He places high importance on his reputation in those dealings.
     
230. The first matter complained of was brought to Mr Higgins' attention in 2009 by Mr Hine, a director of PDC. Mr Higgins understood the website to carry the imputations pleaded and gave evidence that those imputations were false. When he read those allegations, he was shocked. He thought that the allegations were unreasonable and bizarre. He was very angry as he considered that it challenged his ethics and integrity, and he was very concerned that the website damaged his reputation and that of his family (T290).
     
231. Mr Taylor has given unchallenged evidence of Mr Higgins' high reputation.
     

Assessment of Damages

232. Mr Smark SC drew the Court's attention to a number of recent damages awards in defamation cases where the publications did not involve mass media publications. Whilst acknowledging that each case must be considered separately, he submitted that consideration of recent damages awards can be helpful. He referred to the following cases:
     

(a) Huyn v Tang (District Court of New South Wales, 2003) - $140,000.00 for imputations of immigration fraud in notices pinned up in public places;

(b) Zarth v Williamson [2006] NSWCA 246 - $80,000.00 for publications to a mortgage company, orally within the hearing of the defendant's own receptionist, and to an officer of the Legal Services Commission, carrying imputations of negligence against solicitors;

(c) Trantum v McDowell [2007] NSWCA 138 - $50,000.00 damages for a letter to some 16 tenants about their building's manager, imputing dishonesty and incompetence;

(d) SMEC Holdings Ltd v Boniface [2007] NSWSC 1402 - from $75,000.00 to $120,000.00 (various plaintiffs and publications) for imputations alleging divisiveness, published to a small number of recipients;

(e) Martin v Bruce [2007] NSWDC 1497 - $25,000.00 for a publication against club secretary/manager of anonymous broadsheet alleging dishonesty in job application and bad reputation, proof of publication only to four persons;

(f) Holmes v Fraser [2008] NSWSC 570 (overturned on appeal with respect to malice finding, but no appeal on question of damages: Fraser v Holmes [2009] NSWCA 36) - $70,000.00 for publication to 629 nurses of imputations alleging abuse of position as General Secretary of the Nurses Union;

(g) PK v BV (No. 2) [2008] NSWDC 297 - $50,000.00 for each plaintiff for a publication to one person of allegation of theft;

(h) Webster v Coles Myer Limited; Thompson v Coles Myer Limited [2009] NSWDC 4 - allegations of dishonesty and fraudulently obtaining gift vouchers published to one to three people (the matter also involved a claim of false imprisonment) - $70,000.00 for one plaintiff for defamation and $50,000.00 for the second plaintiff;

(i) Ryan v Premachandran [2009] NSWSC 1186 - $80,000.00 for publication to 14 people - imputations of incompetence and dishonesty with aggravation.

233. Mr Smark SC submitted that in this case the range of damages lay between $70,000.00 and $150,000.00 for each of the First and Second Plaintiffs.
     
234. I have regard to the purposes to be served by an award of damages in defamation (see [215] above). Each of the First and Second Plaintiffs possesses a high reputation in business and related areas. The content of the website published in August 2009 was strongly defamatory of each of them. Mr Higgins was mentioned by name and Mr Sharp, although not named, was clearly and obviously identifiable. I have already found that the website remained available for a period of weeks beyond 7 August 2009.
     
235. Although each of Mr Higgins and Mr Sharp were affected by the defamatory publication in somewhat different ways, I am satisfied that the award of damages for each of them ought be the same figure.
     
236. In the circumstances of the case, I am satisfied that an award of damages in the sum of $100,000.00 each ought be made in favour of the First and Second Plaintiffs.
     

The Third Plaintiff's Claim

237. PDC is a corporation and its cause of action is confined to that under the FT Act. A claim for damages was made under s.68 FT Act.
     
238. The Third Plaintiff claims that it suffered damage to its reputation by reason of the Defendant's misleading and deceptive conduct in contravention of s.42 FT Act. Reference was made to the evidence of Mr Higgins that the publication of the second and third matters complained of was of a nature that was likely to cause damage to the important commercial relationships which PDC had with its distributors in Australia and in the United Kingdom.
     
239. The Plaintiffs' written submissions (paragraph 273) invited the Court to consider an award of substantive damages under s.68 FT Act, or an award of nominal damages in the event that injunctive and declaratory relief was to be granted, which would prevent the publications from having substantial ongoing harmful consequences to PDC.
     
240. Having considered the matter further, Mr Smark SC invited the Court, if an entitlement to relief had been otherwise demonstrated, not to proceed to an award of damages under the FT Act in favour of PDC but to proceed, if the Court saw fit, by way of a grant of injunctive and declaratory relief (T501-502).
     
241. In these circumstances, I will put to one side the claim for damages in favour of PDC under s.68 FT Act.
     

Injunctive Relief

242. The Plaintiffs seek injunctive relief with respect to the claims in defamation and under the FT Act.
     
243. Mr Smark SC acknowledged the long-established reluctance of courts to grant interlocutory injunctions to restrain defamatory publications: Australian Broadcasting Commission v O'Neill [2006] HCA 46; 227 CLR 57 at 66-67 [16]; Hatfield v TCN Channel 9 and Ors [2010] NSWCA 69.
     
244. He submits, however, that this principle had no application in relation to a final injunction and that the public interest is not offended by the restraint of indefensible defamation.
     
245. The Plaintiffs submit that, in many cases, damages will be an adequate remedy, leaving no need for a final injunction. However, it was submitted that some defendants may, for a variety of reasons, be likely to publish similar allegations unless restrained, despite having been afforded the opportunity to defend those allegations, and despite having those allegations found by a court of competent jurisdiction to be unwarranted.
     
246. In some cases, it was submitted that this may be because a defendant has an irrational view of the truth of the allegations he makes. In others, it may be because he does not take a damages award seriously, perhaps because he may lack substantial resources against which a judgment may be executed. In other cases, a defendant may reveal a disinclination to conform to anticipated findings of the court which may verge on disrespect for legal process.
     
247. The Plaintiffs submit that, if a defendant is likely to repeat the defamatory allegations and has failed to prove them true, then he should be restrained from repeating them. If he wishes to do so in the future, the onus will be on him to approach the Court and seek to be relieved of the orders, upon adducing admissible evidence that satisfies the Court that the orders should not remain in place.
     
248. If an injunction is not granted in those circumstances, the Plaintiffs submit that the onus and expense would fall to a plaintiff to commence proceedings again. A plaintiff is not entitled, as a matter of right, to commence such proceedings. In order to do so under the Defamation Act 2005 , by reason of the operation of s.23, a plaintiff must seek the court's leave. It was submitted that this provision, which has not yet been considered by any court, increases the utility of an injunction.
     
249. The Plaintiffs submit, in addition, that the FT Act confers a broad discretion on the Court to order injunctions and make declarations in relation to misleading or deceptive conduct. Section 65(1)(a) FT Act empowers the Court to grant an injunction in relation to contraventions to Part 5 of the FT Act, which includes ss.41 and 42. Section 72 FT Act empowers the Court to make a declaration in relation to conduct that has been found to contravene Part 5.
     
250. PDC sought declarations and injunctions in terms set out in the Further Amended Statement of Claim. However, Mr Smark SC submits, in the event that the Court was minded to grant such relief, that the better course may be to frame the precise orders only after the parties had an opportunity to consider the Court's reasons for judgment, and to propose draft orders for the Court's consideration.
     

Decision Concerning Claim for Injunctive and Declaratory Relief

251. I observe that, at various points in the proceedings, the Defendant invited the Court to make a restraining order against him. At one point, when under cross-examination, the Defendant said (T392.40):
     

"I would appreciate it if the Court did put a gag order on me. That protects me."

He made a similar comment in closing submissions (T509.25).

252. These comments were made whilst the Defendant appeared to be somewhat emotional. The Court should not proceed upon the basis that the Defendant had made a considered decision to consent to orders of this type. The appropriate way forward is to consider and determine whether, as a matter of principle and in accordance with the evidence, the Court is prepared to grant injunctive and declaratory relief. If that point is reached, then I will give the parties an opportunity to consider the terms of such relief after reading this judgment.
     
253. The Plaintiffs submit that the evidence demonstrates that there is a real risk that, even if the Defendant fails in his justification defence and is found to have engaged in misleading and deceptive conduct (as is the case in light of the Court's findings), he will continue to repeat the imputations and the representations, thereby further harming the reputations and business of the Plaintiffs.
     
254. The evidence and my findings reveal that the Defendant has made, and continued to make, strong defamatory and misleading statements concerning the Plaintiffs both before and after this litigation has been on foot.
     
255. I shall refer to some of the evidence in this respect.
     
256. On 22 April 2009, the Defendant sent to PDC what can only be described as a volatile and threatening email concerning Mr Sharp (Exhibit FF).
     
257. In August 2009, the Defendant published the first matter complained of (Exhibit A2). Thereafter, the Plaintiffs commenced proceedings against the Defendant on 12 November 2009.
     
258. Despite the currency of the proceedings, the Defendant persisted in publishing the same allegations on 12 July 2010 (Exhibits B and C) and in a range of emails sent between 18 August 2009 and 2 December 2010 (Exhibit GG). The last email in Exhibit GG was sent by the Defendant, on 2 December 2010, to the principal of a school in Sydney in which the Mainline system had been installed.
     
259. Other emails were sent by the Defendant between 5 August 2009 and 24 November 2009 to the offices of PDC (Exhibit HH). As Mr Sharp noted in evidence, a number of these emails were sent to customers or distributors of PDC or to other participants in the company's activities (T268).
     
260. The Plaintiffs referred to particular emails sent by the Defendant contained in Exhibit HH, culminating in an email of 24 November 2009 (Exhibit HH, page 7) which included the following statement:
     

"I cannot thank you enough for bringing the matter before the courts, now all Australia will see you cannot say my motive is money as I have already made it public that I do not want one cent and you can't say it because I am producing WiserWire as I am not ... nor do I intend to ... WiTricity is just around the corner. So what is my motive other than the fact you have produced an unsafe product?

I cannot lose this case before the courts and I think you know that even if the judge finds me guilty, I will still win as all Australia will see and you cannot get blood out of a stone."

261. The Defendant agreed that he had taunted and threatened the Plaintiffs so that they would commence legal proceedings against him (T398, T403-404, T407)
     
262. When the hearing proceeded, the Defendant relied upon his own evidence. He called no witness to support his case. Having taunted the Plaintiffs to bring the proceedings, the Defendant has failed clearly on the merits.
     
263. When asked in cross-examination concerning his email of 24 November 2009 (see [260] above), the Defendant said (T412.24):
     

"Q. And you wrote this: 'And you cannot get blood out of a stone.' What do you mean by that?

A. I am unemployed. I've got no money.

Q. You were there reflecting the fact that money judgments against you, that is, an order for you to pay damages, wouldn't be a deterrent as far as you were concerned?

A. It wouldn't be a deterrent if I can't afford to pay them, no."

264. Although the Defendant denied in cross-examination (T447.8) that he had "built up a deep-seated grievance against PDC and the Mainline system" , I accept that this accurately states his approach to the Third Plaintiff and its product.
     
265. The Plaintiffs submit that the vehemence of the language of the matters complained of supports the conclusion that the Defendant will continue to defame the Plaintiffs, or engage in misleading conduct concerning them, unless he is ordered not to do so. The Plaintiffs submit that the sanction of damages does not appear sufficient to deter him, and that only the sanctions which may accompany the breach of court orders may have that effect.
     
266. The Plaintiffs submit that, having regard to the manner in which the Defendant has published material about the Plaintiffs, there is a real prospect that future publications may be surreptitious, and may only come to the attention of the Plaintiffs after substantial harm to their reputations and commercial interest has been caused. It is submitted that an injunction is the best means to deal with such a prospect.
     
267. The Plaintiffs submit that the grant of such orders would not be unfair or unduly restrictive to the Defendant. They submit that, so far as fairness is concerned, the Defendant has been given every opportunity to defend the allegations which he so fulsomely made against the Plaintiffs. So far as any restriction upon him is concerned, it is submitted that the Defendant would be free in future, should he wish to make some publication which might be thought to breach the orders, to seek the permission of the Plaintiffs, or ultimately to seek the leave of the Court, to vary the orders if appropriate.
     
268. I accept the submissions of the Plaintiffs that the matters complained of, and other communications made by the Defendant with respect to the Mainline system, demonstrate a fixed view on his part accompanied by a desire to repeatedly vent his grievances irrespective of pending court proceedings. The means of communication which the Defendant has utilised are electronic, namely the internet and by email. In various emails, and when before the Court at the present hearing, the Defendant has stated that he effectively threatened or taunted the Plaintiffs to bring these proceedings so as to give him an opportunity to ventilate these matters in Court.
     
269. The Defendant has now had the opportunity to do so and has failed clearly to establish the substantial truth of his allegations or to justify the misleading and deceptive representations made by him. The Defendant described himself as being emotional about the subject matter of this litigation (T426.25). It is apparent from his emails, some of which were sent late at night, that he has in the past not been able to restrain himself from communicating with others concerning the subject matter, usually by email.
     
270. The Defendant's conduct at the hearing supports the view that there is a very real prospect that he will communicate again in the future by email concerning the subject matter of this litigation. He states that he is impecunious so that any damages award is not likely to act as a deterrent.
     
271. In the unusual circumstances of this case, I am satisfied that a proper foundation has been demonstrated for the grant of injunctive relief with respect to the defamation claim. The reluctance of the Courts to grant injunctive relief at the interlocutory stage of defamation proceedings has no application to this case. The matter has proceeded to final hearing and the Defendant has failed comprehensively. The considerations referred to by Mr Smark SC at [245]-[248]) are very much alive in this case. In my view, the response of the law ought be to provide the Plaintiffs with an appropriate level of protection which will flow from a properly and reasonably framed injunctive order.
     
272. I propose, as well, to grant injunctive and declaratory relief under ss.65 and 72 FT Act. I accept the Plaintiffs' submission (T503) that the Defendant is likely to engage again in misleading and deceptive conduct unless restrained from doing so, and that there is an imminent danger to PDC's business if he does engage in such conduct.
     
273. I will give the parties an opportunity to consider the terms of any injunction and declaration, consistent with the request made to me at the conclusion of the hearing.
     

Conclusion

274. The Plaintiffs have made good their claims in defamation and under the FT Act with respect to each of the imputations and representations pleaded in the Further Amended Statement of Claim.
     
275. The Defendant has failed to establish the defence of justification with respect to the claim in defamation.
     
276. With respect to the claims in defamation by the First and Second Plaintiffs, I propose to award damages in the sum of $100,000.00 each in favour of those Plaintiffs.
     
277. With respect to the claim by the Third Plaintiff, I decline to award damages, but I will make appropriate orders by way of injunctive and declaratory relief.
     
278. I am satisfied that injunctive relief is also appropriate with respect to the defamation claim.
     
279. I will allow interest in favour of the First and Second Plaintiffs concerning the monetary judgments to be made in favour of each of them.
     
280. The solicitors for the Plaintiffs should draw up short minutes of order to give effect to the foreshadowed orders concerning damages and interest.
     
281. I will allow the parties an opportunity to consider this judgment and to make submissions concerning the form of injunctive relief and declaratory orders, together with an opportunity to make submissions on the question of costs.
     

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Annexure A