Chapter 3 Answer Guides JN

Exercise 3.6 – Online review - Tofu burger like leftover liposuction

Robin (R) likens Johnny’s (J) tofu to liposuction leftovers. Advise J about his prospects of
success if he sues R for defamation.

Defamation is a tort, a civil wrong, and so damages are available if the innocent party suffers
damage. In defamation, the damage is damage to reputation. The damage is because people
want to shun you, or they ridicule you, because of the defamatory statements. If people
shunning or ridiculing you causes you to lose income then the plaintiff can claim that loss
from the defendant. There may be additional damages if the defendant acts badly, for
example, maliciously

The starting point is to define defamation and the elements that J, the plaintiff, must prove
the three elements of the tort. The check for any defences.

Elements of defamation:

1. The defendant’s statement about the plaintiff was defamatory. It makes people think
less of, or shun, or ridicule, or not want to engage with the plaintiff.
2. The defendant’s statement identified the plaintiff. Expressly by name, or by implication,
by identifying a small group, or giving identifying facts.
3. The defendant’s statement was published to a third party capable of understanding the
defamatory meaning. Publication is about spreading the defamatory material by e.g.
telling someone, blogposts, newspapers etc etc. Note the original maker of the
statement AND those who re-publish can be liable for the defamation in the statement.

The plaintiff must also be a party entitled to damages for defamation under legislation that
changes the common law rules of defamation. J can claim damages if he is identified
individually, his business is a company but has less than 10 employees.

Applying the elements to the facts:

1. Would you, as an ordinary person, shun a chef/restaurateur who produced food
tasting like liposuction leftovers???? I think you would :)
2. Giving the style of restaurant and the street address would identify J and his
restaurant.
3. The review is clearly published as it appears on the online city guide. R has
published. The city guide has re-published the defamatory material. The digital
platform (e.g. google etc) may be said to re-publish but note they have other
defences provided to digital platforms that make holding them liable more difficult.
Essentially platforms do not have liability merely because someone uses their
platform to publish.

Any defences for R or city guide?

Can R or city guide claim justification (it is substantially true that the tofu tastes like
liposuction leftovers?). Can they claim honest opinion (the defamatory statement must be
an hoinestly held opinion based on material that si substantially true)? We would want to
know whether R actually went to J’s restaurant and ate the tofu, and really had that opinion
of the dish.

I think J will be successful unless there is evidence we have not seen that will allow R to
establish a defence. J could claim damages for loss of business.

Exercise 3.7 – Online review – Robin’s dishonest review

Robin (R) likens Johnny’s (J) tofu to liposuction leftovers, then J finds out R wrote the bad
review to support her friend Brandon (B) in his vegan restaurant.

Can J sue R for the tort of deceit? This is the first legal claim to consider. Other relevant
claims could be increased damages under defamation, and, misleading or deceptive conduct
under consumer law (ch 9).

Deceit is relevant if J has evidence that R was dishonest, which involves a person making a
statement or representation knowing that it is not true. We need to find that mental
element. Making a statement that most people would realise is not true is not sufficient.
That might show the speaker is dumb, or negligent, but does not prove they are dishonest.

As a policy point, alleging dishonesty is very serious. Even though it is a civil matter (a tort)
the defendant will effectively be publicly branded as a liar. The court will require clear
evidence to support this allegation, even though it is a civil matter, not a criminal matter. As
a rule of thumb, the more serious the allegation and consequences, the clearer the
supporting evidence needs to be. J bears the onus of proof as the plaintiff.

The elements of the tort of deceit and their application to the fact s here:
1. Def makes a statement of fact to Pl knowing that it is false.
R made the statement about the tofu to readers of city guide, not to J. This is a problem
for J.
2. Def makes the statement with the intention that the Pl rely on it.
R intended city guide readers to rely on it, not J.
3. Pl does rely on the statement.
City guide readers rely on it, not J.
4. Pl suffers harm as a result.
Yes, but other elements not made out. Harm is the lost trade.

J is unlikely to be successful in deceit, but note other options.

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Exercise 3.8 – Johnny’s ‘bat pizza’ and passing off

Johnny (J) has created a pizza based on the bat-signal ….. (appetising???). Warner Media
(WM) are upset and threaten to sue J for passing off.

WM are the plaintiff and have the onus of proving the elements of passing off, and if
successful will be able to claim damages from J.

The elements of passing off that WM will have to prove are:

 J has made a misrepresentation that their goods or services are connected with WM,
The representation is the visual representation of the ‘bat-signal’ from the Batman
movies. People see the visual and think something like “that’s the logo for Batman. This
product is part of the Batman franchise.”
 J made the misrepresentation in the course of trade, and
J is clearly in trade given he is putting the bat-signal on pizzas that he sells in his
restaurant.
 Potential purchasers are likely to be misled and think J’s goods are connected with WM.
Because the bat-signal is such a well known logo/visual that is so well known to be part
of the Batman franchise people will think anything with the bat-signal is connected to
WM, either as authorised products (e.g. licensed merchandise), or manufactured by WM.

What remedy will WM seek? Damages, yes, but other remedies may also be suitable in
passing off.

WM’s damages depend on proving lost revenue or loss of reputation (people buy the fake
brand goods which turn out to be rubbish and damage the real brand). Sometimes
additional damages are payable when the party who passes their goods off is particularly
badly behaved.

The financial remedy to a plaintiff might also be an account of profit. If J made profit then
WM could claim that profit. The courts will not allow the party in breach to keep their ill-
gotten gains.

Passing off is a tort where the plaintiff will be very keen to stop the defendant. WM may not
be able to prove J has caused them damage, or that he has made much profit on the pizzas,
but WM wants J to stop. An injunction would be appropriate and WM would succeed. J
would then be liable to pay WM’s legal costs ($$$$$).

Exercise 3.10 – Brandon wants Vegan Lifestyle products despite Johnny having a
contract with Vegan lifestyle giving him exclusive distribution rights.

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Johnny (J) is upset when he hears about his competitor Brandon (B) pestering Vegan
Lifestyle (VL) to supply B – despite the exclusive distribution contract between J and VL. B is
trying to get VL to breach that exclusive distribution contract. B is trying to interfere with
the contractual relationship that exists between J and VL. This is a tort. But note the
contract is not broken yet, so no actual damages yet.

The mere fact that VL supplies other restaurants in breach of its exclusive contract with J is
not the fault of the other restaurants. J’s remedy would be damages for breach of contract
against VL. But if those other restaurants know about the contract and then go ahead and
try to get VL to breach that contract then those other restaurants are blameworthy. Not in a
criminal sense, but certainly in a civil sense, and J would have a remedy in tort against those
other restaurants. So the starting for the tort of interference with contractual relationships
is whether or not B knows of the exclusive supply contract between J and VL.

There is no evidence on the facts that B knows of the contract between J and VL, or that if
VL supplied B that this would be a breach of that contract. B hasn’t done anything wrong as
yet.

J’s first step should be to put B on notice that there is a contract between him and VL and
that if VL supplies B it would be a breach and that B must stop asking VL to breach the
contract.

If B continues to “pester” VL then B will commit the tort of interference with contractual
relations because the elements are satisfied.

1. B makes a statement intended to induce VL to breach a contract with J, and

B pesters VL to supply him
2. B’s statement does in fact induce VL to breach the contract, and
This would be established if VL did supply B and this supply was a breach of the exclusive
contract between J and VL
1. J suffers harm as a result of the breach.
This would be proven if J lost sales in the restaurant because customers went to B’s
restaurant where they could buy the same products.

Our advice to J is that he needs to do the prepatory work of giving B notice of the contract
and his exclusive rights, and waring B of the possible consequences of he does not. This sort
of letter is commonly called a ‘cease and desist’ letter.