The judgment in Jay & Anor v Petrikas & Ors (No.4) [2022] NSWDC 628 (13 December 2022) runs for 705 paragraphs and details many ongoing disputes within the Rural Fire Service in the Hawkesbury area of NSW.  I will not repeat the facts in detail.

In short plaintiffs were a Brigade Captain and Deputy Captain. They had a long history of strongly advocating for their brigade in Group meetings and with the RFS command. Eventually three Group Captains lodged formal complaints about the plaintiffs’ behaviour alleging bullying and other conduct and alleging that this conduct amounted to a breach of relevant service standards.

The matter was dealt with as a disciplinary issue. His Honour Abadee DCJ described the process at [47]:

In summary, essentially, a member may make a written allegation of breach of discipline. The recipient decides who is to investigate it. Eventually the appointing officer appoints the investigator. It is investigated and the investigator must determine whether there is a case to answer or whether there is no case to answer. It is then a matter for the appointing officer to determine whether to refer the matter to a disciplinary panel or determine that the matter should proceed no further. The structure is such that for complaints of breach of discipline, an investigation must proceed before any hearing by a disciplinary panel.

In this case an investigator was appointed. The investigator (at [232]) ‘found insufficient evidence to support to the requisite level (the balance of probabilities) that either plaintiff breached Service Standards 1.1.42 and 1.1.7, and the allegations as particularised.’ The investigator recommended no further action and that was the decision of the RFS that was then communicated to all the parties.

That, one might think, would have been the end of it. The plaintiffs were however aggrieved that they had been subject to the complaints and the process and sued the three group captains that had made the initial complaint and the Superintendent of the Hawkesbury District.  The plaintiffs alleged that these four defendants had committed the tort of injurious falsehood. The parties agreed that what the plaintiffs needed to prove was set out in a decision of the High Court of Australia in Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388 where Gummow J said (quoted at [10]):

… generally, it is said that an action for injurious falsehood has four elements (1) a false statement of or concerning the plaintiff’s goods or business; (2) publication of that statement by the defendant to a third person; (3) malice on the part of the defendant; and (4) proof by the plaintiff of actual damage (which may include a general loss of business) suffered as a result of the statement.

Abadee DCJ then had to consider whether those four elements had been established.

(1)  a false statement of or concerning the plaintiff’s goods or business

The plaintiffs alleged that there were many false statements in the allegations against them.  The court rejected most but not all of those claims finding (at [458]) that there were four ‘false’ representations but in the context of the number alleged this was (at [703]) ‘a very limited number of false representations found in the publications’.

The fact that there were some ‘false’ representations – some of which were opinions that were unfounded rather than statements of fact – was not enough. They had to be ‘concerning the plaintiff’s good or business’. The complaints all related to the plaintiffs conduct in the RFS rather than in their employment or business.  At [268] Abadee J said:

In my respectful opinion, whilst the tort of injurious falsehood extends protection beyond a person’s proprietary interests, to protecting the person’s trading or professional interests, the protection does not extend to mere statements about a person more generally or, to put the matter another way, any statements interfering with a person’s ‘non-commercial advantage’…

And at 282-291

On the view that I favour, the statements were not directed to the plaintiffs’ economic interests (in the broadest sense of that expression). Without diminishing the admirable nature of their service as longstanding members of the RFS and the obvious pride the plaintiffs place in their offices within the RFS, the statements in the publications did not concern the economic interests of the plaintiffs. The plaintiffs did not plead, nor seek to prove that even the prospective loss of rank, or even prospective removal from a volunteer organisation (neither of which occurred) as well respected as the RFSNSW, impaired any proprietary, business, commercial, professional (including occupation or employment) or trading interest that the plaintiffs had. Simply put, their offices within the RFS had no real economic value.

Through their unpaid or voluntary service to the RFS, they were not carrying on a ‘business’. They did not profit from service in the conventional sense. Nor did they enter into any contract of employment with the RFS or derive recompense for their service.

I do not consider that unpaid activities within a (predominantly) voluntary organisation, even in an organisation like the NSWRFS which performs such vital (and dangerous) work for the benefit of the community, amounts to an ‘occupation’. The relevant connotation of ‘occupation’ in this regard is economic; not recreational. The plaintiffs themselves identified other paid work as their form of “occupation”.

It is also a major stretch to characterise, as the plaintiffs’ Counsel sought to do, that through the ranks or offices they held within the Glossodia Brigade, they were engaged in a ‘profession’…

Whilst I accept that both plaintiffs were passionate and dedicated to the RFS, it was not a ‘vocation’ or ‘calling’ for them. I strongly doubt whether reasonable persons in the community would regard volunteer fire fighters as belonging to a ‘profession’. Most persons engaged in a profession do not do so only on a part-time basis…

The representations were contained in internal documents for the RFS. The confinement of their circulation within the RFS would cause no harm to their economic interests; no matter how much their reputation and standing within the RFS was, or was likely to be, damaged by the publication. To the extent that their complaint, in substance, was one of damage to reputation, and injured feelings associated with their loss of ‘status’ or ‘standing’ within this predominantly volunteer organisation, this was the province of the law of defamation.

The holding of office may in certain circumstances satisfy an economic interest, but that depends on the circumstances. In the circumstances of these plaintiffs, statements potentially imperilling retention of their offices did not impair their economic interests. Their holding of a membership in a predominantly voluntary association is even less connected to an economic interest. The position in these respects might differ, on the facts, if a loss of office, or membership, gave rise to a risk of reputational loss (which might conceivably, have potentially prejudiced their real occupations)*, but, as indicated, no such case was argued; which reflected the limited class of publishees and, arguably, an expectation of confidentiality upon them. As will be remarked upon later, for a significant period, the RFS tried to withhold production of Mr Plumridge’s investigation report.

For these reasons, the first element of the tort of injurious falsehood – what Gummow J described as (false) statements ‘of and concerning the plaintiff’s goods or business’ – is not established. That being so, the plaintiffs’ claims must fail.

(* With respect to his Honour’s comments that ‘The position in these respects might differ, on the facts, if a loss of office, or membership, gave rise to a risk of reputational loss (which might conceivably, have potentially prejudiced their real occupations)…’ see the decision in Castle v Director General State Emergency Service [2008] NSWCA 231 where Mr Castle was found to have a remedy for denial of natural justice where the decision to remove him as unit controller impacted upon his economic interests given his position as an elected councillor who had been nominated for the position by the council).

(2)  publication of that statement by the defendant to a third person;

There was no issue with publication (see [3]). The three group captains wrote to the superintendent who in turn wrote file notes and other documents to more senior officers and the investigator.

(3)  malice on the part of the defendant;

His Honour rejected the claims of malice. Malice is the state of mind of the author. Counsel for the plaintiffs submitted (at 463] a publication is motivated by malice if the author makes the publication ‘knowing it to be false or with reckless indifference as to whether it is true or false’.  At [552] His Honour said:

In sending these letters, I find that:

• the complainants (who reported to the first, second and third Defendants, all Group Officers) were purporting to exercise their right to state their concerns to their supervisor, under SOP 1.1.42-1(a) [73] ;
• the first, second and third defendants were purportedly acting in accordance with their rights to make allegations about breaches of discipline under Service Standard 1.1.2 paragraph 3.4 [74] ;
• by sending the two separate Briefing Notes on 5 September 2016, Ms Hodges was exercising her right under cl 2.1(c) of SOP SS1.1.2-2 to refer the allegations to a more senior officer (in both cases Regional Officer Watson) [75] . (It may be inferred that it was Mr Watson who then passed on the allegation to the Director of Regional Services).

And at [562]:

In a context where members and officers have the right to receive and make complaints, where such complaints are to be subjected to the exercise of discretion as to which complaints are to be investigated and what particular matters are to be the subject of investigation, with opportunities in the form of procedures (at the investigative level, or if the matter that proceeds that far, in a disciplinary hearing) for respondents to be exonerated, in my opinion a Court would be slow to infer that the fact of making complaints ‘up the chain’, as it were, is malicious even if the content of complaints may ultimately be determined to involve a misrepresentation, substantial or trivial, of some kind or another. For a Court to infer malice too readily might have a chilling effect upon the operation of discipline within the RFS if complainants face the threat of a lawsuit because they happen to misstate a provision in a service standard contravened, state an inaccuracy or express a half-truth or opinion on identified premises one or more of which may be wrong. I also note that these rights exist just as much for those who are the subject of disciplinary complaint. It seems to me that if say, a member of the RFS makes a trivial, frivolous or vexatious complaint against another member, which is dismissed by the investigator, the course would be theoretically open to the person the subject of the complaint to make complaint against the original complainant; say for conduct contrary to the values in the Code of Conduct.

And at [580] ‘I am not persuaded that, for the high standard of proof required, in all the circumstances, it was malice which actuated the decisions of the defendants to make any of the publications.’

Being wrong is not the same as being malicious.

(4) proof by the plaintiff of actual damage

The alleged damage was the costs incurred by the plaintiffs to engage lawyers to represent them during the investigation of the complaints against them.  Remember as noted above the process involves complaints being made and investigated. If the investigation reveals sufficient evidence, then there may be formal disciplinary proceedings. This matter went no further than the investigation (see [606]).

Having found that a very small number of the allegations raised were false, His Honour found that even if the cost of legal representation was a relevant ‘damage’ it was not caused by the false allegations; those allegations were ‘immaterial’ ([597)] to the decision to commission an investigation. At [640] His Honour found had the false allegations been made maliciously then the incurring of legal fees at the investigation stage was not the ‘natural and probable’ consequence of the publication of the false claims.

His Honour considered other aspects of damages as he had too in case there is an appeal and an Appeal Court finds that he erred in his conclusions as to malice but we need not go into those details here.

Outcome

The outcome was that having been cleared by the internal examination, the plaintiffs took the matter to the Supreme Court where they converted their ‘victory’ into a ‘loss’.  What was an internal RFS issue has now been heard in open court, the court’s reasons published on accessible data bases and reported in blogs such as this one.  If the plaintiffs were concerned about the impact of the proceedings on their standing in the RFS and the community the reach is now much further than the ‘limited class of publishees’ [290] that is, the small number of people who received the initial complaints.  

There is also the issue of costs. The plaintiffs have been allowed more time to make submissions as to any order as to costs ([702]) but the normal rule is that the loser must pay the winners costs.,

Lessons identified.

The legal lesson to be identified from this decision is the nature of the tort of injurious falsehood and its limited application where a person alleges that another has made false and malicious claims. The remedy only applies where there has been an impact upon the plaintiff’s economic interests and that does not include their role as a volunteer.  A person who thinks their standing as a volunteer has been damaged by others making false allegations would be advised to consider an action in defamation but that would have its own problems that we cannot consider here.

There are other lessons too:

• Just because someone is wrong, it does not mean they are malicious;
• If there are systems in place to make complaints and to investigate concerns, raising those concerns, even if the particular concerns are not substantiated, does not prove malice. If it were open to find malice it would limit the ability of organisations to hear of concerns and investigate them. It is the investigation that is to try and determine the ‘truth’ the complaint is someone’s concern and beliefs even if, ultimately the grounds for those beliefs may not be made out.
• Don’t rush to court.

POSTSCRIPT

The issue of costs was determined on 30 January 2023 and I thank ‘Avid Reader’ for drawing this to my attention.

In Jay & Anor v Petrikas & Ors (No.5) [2023] NSWDC 7 His Honour Judge Adabee ordered (at [36]):

the plaintiffs are to pay the defendants’ costs of the proceeding:

(a) up to and including 26 November 2020, on the ordinary basis; and

(b) from 27 November 2020, on an indemnity basis.

Where costs are ordered on an ‘ordinary basis’ they cover something like 2/3 of the winning parties actual costs.  Costs on an indemnity basis means the plaintiffs have to cover 100% of the winning party’s costs.

The reason for the two different orders is that the plaintiff’s refused an offer from the defendant and, if they had accepted that offer, they would have been better off than the result at trial.  The previous offers had been an offer by the plaintiffs to settle with no order as to costs and further, that earlier costs orders in favour of the defendants would be vacated (or waived).  To put that another way, it was an offer to settle where each party would pay their own costs. Had they accepted that offer they would have saved everyone the costs incurred from that date and would have been better off than they were at the conclusion of the trial.

It is worth noting that although the defendants were four named individuals (3 volunteer group captains and one employee) they were all represented by the Crown solicitors office and their costs were covered by the Rural Fire Service.  The ‘RFS funded representation to the recipients of the demands to ‘protect the integrity of its grievance and disciplinary procedures’ (Jay & Anor v Petrikas & Ors (No.4) [2022] NSWDC 628 [248]). One hopes that the defendants were not out of pocket at all.

It was a total loss for the plaintiffs who will be liable for the defendants costs estimated to be in excess of $90,000 on an ‘ordinary basis’ ([9]) so significantly more on an indemnity basis, plus their own legal costs.

Further comment

I am reminded of the case Chapman v Victoria State Emergency Service Authority (Review and Regulation) [2020] VCAT 722 discussed in the post Dysfunction within Victoria SES (July 2, 2020). In that post I said:

This is a sad and sordid tale for an organisation that depends on volunteers.  I have not repeated the details of the complaints against the Chapmans but they are set out in the Supreme Court judgement at [166]-[168]. If even some were true it must have made attendance at that SES unit very unpleasant.

I said at the start that ‘the matter may have been finally resolved’ but actually one would have no reason to believe that. Given the history of this matter and the ‘depth of ill-will, distrust and disrespect that had developed’ [Chapman v Chief Officer of the Victoria State Emergency Service [2017] VSC 547, [253]) it is hard to see how this, or any decision will go toward rebuilding the unit.

What I don’t understand is why the Chapmans, or the 50 or so other members in the ‘other group’ would choose to remain either in the SES or in a unit that is so dysfunctional.  Why is membership of the SES so important you would spend years and thousands of dollars fighting to stay when others clearly don’t want you; and why if people are behaving as the Chapmans’ were alleged to have done (acknowledging of course that the allegations have not been proved) would anyone else want to stay? Given the story, as told through judicial decisions, it is beyond me how the members of this unit find the will to turn up for training or to turn out to an emergency.

This decision raises similar concerns. His Honour, although finding there were some allegations made against the plaintiff that were false (but not motivated by malice) these were a very small number of the allegations made. And I do not repeat what his honour said about the behaviour and credit of the plaintiffs (but His Honour’s comments are available in the judgment at [328]-[332]) suffice to say that for both the plaintiffs and the defendants and the other members of the brigade it must have been, and I imagine continues to be, a struggle to continue to volunteer in what sounds like such an unpleasant environment. 

The original complainants thought the plaintiffs were in breach of the RFS Code of Conduct, lodged a complaint that was investigated, and they were told ‘no, in this case, no breach occurred’. For the plaintiffs that was not sufficient vindication, and they took that matter to court, incurring costs in excess of $100 000 to lose on every point. As lawyers know, any client who wants to go to court ‘for the principle’ is looking to throw their money away.

This blog is made possible with generous financial support from the Australasian College of Paramedicine, the Australian Paramedics Association (NSW), Natural Hazards Research Australia, NSW Rural Fire Service Association and the NSW SES Volunteers Association. I am responsible for the content in this post including any errors or omissions. Any opinions expressed are mine, and do not necessarily reflect the opinion or understanding of the donors.