Strachan v Moodie [2013] NZHC 3313 (11 December 2013)

Last Updated: 27 March 2014

IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

CIV-2013-454-000064 [2013] NZHC 3312

IN THE MATTER OF the Insolvency Act 2006

BETWEEN ELIZABETH GRACE STRACHAN Judgment Creditor

AND ROBERT ALEXANDER MOODIE Judgment Debtor

Hearing: 3 October 2013

Appearances: R A Moodie Debtor/Applicant in person

P B Churchman QC for Creditor

Judgment: 11 December 2013

JUDGMENT OF ASSOCIATE JUDGE OSBORNE

_{upon application to set aside bankruptcy notice}

Introduction

[1] Ms Strachan obtained judgment debts against Mr Moodie in June 2012 and November 2012. As a result Mr Moodie owes Ms Strachan $222,239.18 together with judgment interest.

[2] When Mr Moodie did not pay the debts, Ms Strachan had a bankruptcy notice issued.

[3] Mr Moodie applies for an order that the bankruptcy notice be set aside upon the basis that he has a cross claim which exceeds the judgment debts.

STRACHAN v MOODIE [2014] NZHC 3312 [11 December 2013]

[4] The cross claim is the subject of an existing proceeding issued by Mr

Moodie, currently contained in its sixth amended statement of claim.¹

Does Mr Moodie have such a cross claim? Setting aside a bankruptcy notice – the jurisdiction [5] Rule 24.10 provides:

Setting aside bankruptcy notice

(1) If an application to set aside a bankruptcy notice cannot be heard until after the expiration of the time specified in the notice as the day on which the act of bankruptcy will be complete, the time is treated as extended until the application has been determined.

(2) An act of bankruptcy is not committed by reason only of non- compliance with the notice until the application has been determined.

[6] Section 17(1)(a) of the Insolvency Act 2006 provides:

Failure to comply with bankruptcy notice

(1) A debtor commits an act of bankruptcy if-

...

(d) the debtor has not, within the time limit specified in subsection (4),-

(i) complied with the requirements of the notice; or

(ii) satisfied the Court that he or she has a cross claim against the creditor.

[7] Section 17(7) of the Act provides:

(7) In subsection (1)(d)(ii), cross claim means a counterclaim, set-off, or cross demand that—

(a) is equal to, or greater than, the judgment debt or the amount that the debtor has been ordered to pay; and

(b) the debtor could not use as a defence in the action or proceedings in which the judgment or the order, as the case may be, was obtained.

¹ Moodie v Strachan HC Wellington CIV-2007-485-2212.

[8] The cross-claim referred to in s 17(1)(d)(ii) must be genuine and triable in the sense that the debtor can demonstrate that he or she has a claim of true substance which he or she genuinely proposes to pursue: Sharma v ANZ Banking Group (New Zealand) Ltd.²

The basis of Mr Moodie’s cross claim

[9] Mr Moodie and Ms Strachan are both qualified lawyers. From early 2005 there was a professional relationship between them in the nature of a pupilage.³ Mr Moodie was Ms Strachan’s employer.⁴ In late-2007, Mr Moodie constructively dismissed Ms Strachan.⁵ As a result of that relationship and dismissal Ms Strachan brought the proceedings in the Employment Court which resulted in the judgment

debts which are now the subject of the bankruptcy notice. In the meantime, there occurred events as a result of which Mr Moodie issued defamation proceedings against Ms Strachan, another barrister (Anthony Joseph Ellis) and the publisher of the New Zealand Listener (APN Specialist Publications NZ Ltd). Those proceedings between Mr Moodie as plaintiff and Mr Ellis and APN as defendants were ultimately settled in September 2009. By reason of the joint tort-feasor rule, those causes of

action were also settled as against Ms Strachan.⁶ Mr Moodie could therefore no

longer sue Ms Strachan in relation to publication of her comments in an article which appeared in the New Zealand Listener. That left extant a single cause of action based on allegedly defamatory statements made by Ms Strachan to the Listener features editor, Joanne Black, in February 2007.

[10] Ms Strachan applied to strike out the remaining cause of action. In dismissing that application Ronald Young J noted the seriousness of the allegations made by Ms Strachan to Ms Black. His Honour said:⁷

They include allegations, the plaintiff says, that he is a compulsive liar, a dishonest fraudster, a false pretender, deceitful and a conman.

2. Sharma v ANZ Banking Group (New Zealand) Ltd (1992) 6 PRNZ 386 (CA) per Cooke P, delivering the judgment of the Court at 389.

³ _{Strachan v Moodie [2012] NZEmpC 95 at [17].}

⁴ _{At [64].}

⁵ _{At [123].}

⁶ _{Moodie v Strachan HC Wellington CIV-2007-485-2212, 24 August 2010 per Wild J at [34].}

⁷ Moodie v Strachan [2013] NZHC 1394 at [63].

There was also an allegation he had, as a lawyer, ripped off his clients.

[11] In Mr Moodie’s remaining cause of action, now contained in his sixth amended statement of claim, Mr Moodie seeks damages for injury to reputation in the sum of $325,000.

[12] Mr Moodie subsequently applied for leave to add two additional causes of action, which application was dismissed by Ronald Young J in June 2013.⁸ At the same hearing, his Honour heard and dismissed Ms Strachan’s strike out application in relation to Mr Moodie’s remaining cause of action. In doing so, his Honour –

(a) Rejected the submission that Mr Moodie’s continuation of the proceeding after an earlier settlement and vindication amounted to an abuse of process;⁹

(b) Found that the fact that publication was limited to one person was ultimately relevant to the quantum of damages but that where the defendant was in part pleading a defence of truth the plaintiff should have the opportunity to establish that what was said about him was

not true;¹⁰

(c) Found that the alleged defamatory comments by Ms Strachan to Ms Black were serious, going to the heart of Mr Moodie’s professional reputation. Although constituting a very limited publication (to one person) they involved a publication to a journalist whose opinion Mr Moodie could see as important;¹¹

(d) Found that it was not possible to assess the likelihood of the plaintiff succeeding in his action as the litigation was likely to be essentially

_fact-based.¹²

⁸ _{Moodie v Strachan [2013] NZHC 1394.}

⁹ _{At [54].}

¹⁰ _{At [62].}

¹¹ _{At [63] – [64].}

¹² At [64].

[13] The various streams of litigation between Mr Moodie and Ms Strachan have been affected by numerous appeals. At the time of this hearing, Ms Strachan had two unresolved appeals in the Court of Appeal against the Court’s refusal to strike out the fifth and sixth amended statements of claim. Following the filing of the appeal on the fifth amended statement of claim, the defamation proceeding was treated by the parties as stayed, a situation which persisted for months. There is apparently now no stay preventing the parties from taking the defamation proceeding to trial. The fact that there are unresolved appeals must cast some doubt on the utility of a defamation trial.

Does Mr Moodie’s defamation claim satisfy the requirements of a cross claim

under s 17(1) Insolvency Act 2006?

[14] Mr Moodie’s surviving cause of action in defamation qualifies as a genuine triable cross-demand within the formulation in Sharma v ANZ Banking Group.¹³ It is a claim of true substance which Mr Moodie is entitled to have this Court treat as one which he genuinely intends to pursue.

The amount of the cross claim

[15] The sums owing by Mr Moodie to Ms Strachan pursuant to the judgment

debts as at the date of the hearing of Mr Moodie’s application were:

1. 14 June 2012 judgment;

Principal sum – $89,239.19

Interest (7.5 percent) 14 June 2012

to 3 October 2013 at 7.5% (477 days) $8,746.66

Sub-total $97,985.85

2. 15 November 2012 judgment;

Principal sum – $132,963.69

Interest (7.5 percent) 15 November

2012 to 3 October 2013 at 7.5% (323 days) $8,824.78

Sub-total $141,788.47

_{TOTAL $239,774.32}

¹³ Sharma v ANZ Banking Group, above n 2.

[16] To this total debt of $239,774.32 the amount of Mr Moodie’s genuine triable cross demand is to be compared. Having satisfied the Court that he has a claim of genuine substance for damages for defamation, Mr Moodie must now satisfy the Court that it is a claim of true substance for at least $239,774.32, or in other words a claim which equals or exceeds the judgment debts.

The quality of the cross claim

[17] In his written synopsis, Mr Moodie focussed upon the amount of his cross claim in two paragraphs. He there recorded –

In respect to the likely quantum of damages that might flow from the defamation proceedings if successful, Ms Strachan and her legal advisers were also aware from on and after the 12^th June 2013 of the observation of Justice Ronald Young at paragraph 63 and 64 of His decision that, in regard to the question of damages, although the publication was only to one person, because of the seriousness of the alleged defamations (that the plaintiff was a compulsive liar, a dishonest fraudster, a false pretender, deceitful, a conman, as a lawyer ripped off his clients) and the fact that the publication was a journalist it was not possible to assess the plaintiff succeeding in his action. And these observations of His Honour on the question of damages were in relation to the first cause of action in the Fifth Amended Statement of Claim where the remedies sought included $650,000 in general damages, $388,164 in special damages and $50,000 for punitive damages.

All of these considerations warrant an award of substantial damages against both Ms Strachan and her legal advisers particularly as these bankruptcy proceedings could have had no other purpose than to embarrass and harass a judgment debtor with a substantial defamation action filed against the judgment creditor.

[18] Mr Moodie noted that Ronald Young J in the strike out proceeding referred to the “very serious” nature of the allegations made against a professional to a journalist. But Mr Moodie’s submissions thereby identified only one aspect of the alleged defamation. The publication was to only one person (which as Ronald Young J observed will no doubt ultimately be relevant to the quantum of damages).¹⁴

If Ms Strachan is found liable for defamation, it will be that single publication for

which damages must be assessed. The trial Judge will have to address carefully (either with the Jury or, if there is a trial by Judge alone, in his or her deliberations) the fact that no measure of damages is available for any subsequent degree of

_{publication (whether in the New Zealand Listener or otherwise) as all that remaining}

¹⁴ Moodie v Strachan, above n 7.

publication or re-publication has been compensated by the settlement previously concluded.

[19] These aspects of the cross claim led Mr Churchman, for Ms Strachan, to submit that Mr Moodie had failed to acknowledge the reality of the situation, which is that the publication on which he sued was to an audience of one, on one occasion. Mr Churchman submitted that, should Mr Moodie succeed in his defamation claim, there is no reasonable probability that he will succeed at a level approaching let alone exceeding the $239,774.32 total of the judgment debts.

[20] Mr Moodie did not refer me to any New Zealand authority or line of authorities which establish guidance in principle or on analogous facts in relation to appropriate figures for damages for defamation. Parliament in the Defamation Act

1992 has recognised that there will be a point in law where an amount of damages for defamation becomes excessive (or inadequate). In s 33(1) of the Act it has provided:¹⁵

33 Review of damages

(1) In any proceedings for defamation, where a verdict is set aside by the Court by which the proceedings are tried, or by any Court on appeal, on the ground that the damages awarded in the proceedings are excessive or are inadequate, the Court by which the verdict is set aside may, with the consent of the plaintiff and of every defendant against whom the award was made, substitute its own award of damages in the proceedings.

(2) Where a Court substitutes its own award of damages under subsection (1) of this section, the award so substituted shall be final.

[21] The single judgment on which Mr Moodie placed reliance was the decision of the Court of Appeal of England and Wales in Cairns v Modi.¹⁶

[22] Mr Moodie invited me to consider Cairns v Modi as coming very close to a case in which the publication was one on one. He suggested that at the very least it

_{was a very limited publication.}

¹⁵ See also s 43(2)(c) which, in given circumstances, requires the Judge to consider whether

_{damages claimed are “grossly excessive”.}

16. Cairns v Modi [2013] 1 WLR 1015 (CA) (on appeal from [2012] EWHC 756 (QB), a judgment given by Bean J).

[23] The subject matter of Mr Cairns’ libel action was a Tweet published by Mr Modi on the Twitter website, subsequently repeated on the Cricinfo website. The publication on the Cricinfo website was quickly settled with a payment of £7,000 in damages and approximately £8,000 in legal costs. Mr Modi defended the proceeding in relation to the Twitter publication on a plea of justification. The claim was heard in Queens Bench by Bean J, who awarded Mr Cairns £90,000 damages,

comprising a £75,000 base figure with a £15,000 uplift for aggravation.¹⁷ His

Lordship accepted that the scope of the readership of the tweet would be a specialist one, being those with a particular interest in cricket. Only 65 people were the immediate publishees of the tweet.¹⁸ In the Court of Appeal, the Chief Justice Lord Neuberger accepted that the allegations would “percolate” by way of the internet, a matter which his Lordship ultimately found was to be taken into account in the assessment of damages.¹⁹

[24] I accept Mr Churchman’s submission that the offending publication in Cairns v Modi was not a “very narrow” publication. Furthermore, there were features of Mr Modi’s allegation and conduct which marked the case out. Bean J awarded £15,000 to reflect a specific aspect of aggravation, namely the conduct of Mr Modi’s former counsel in the conduct of the trial. Special features of the litigation were identified by Lord Neuberger in introducing the judgment of the Court of Appeal in this way:²⁰

Cairns v Modi involved a sustained attack on the professional reputation of a world-famous cricketer. The award came at the conclusion of a hotly contested trial in which the defendant maintained a plea of justification down to the moment of judgment, and caused even more aggravation to the claimant’s feelings by the way the trial was conducted and by the additional adverse publicity generated.

[25] Bean J granted the defendant permission to appeal the award of £90,000.

_{[26] In the Court of Appeal five issues were raised, namely:}

_{The need for proportionality in libel awards}

¹⁷ _{Cairns v Modi [2012] EWHC 756 (QB) at [138].}

¹⁸ _{Cairns v Modi, above n 16, at [26].}

¹⁹ _{At [27].}

²⁰ At [2].

The scope of the tweet’s publication

The Judge’s approach towards the need for vindication

Should the Judge have given a more detailed breakdown of the award?

_{The limited impact of the Cricinfo settlement.}

[27] The Court of Appeal reviewed those five issues before concluding:²¹

We reject the criticisms of the Judge’s reasoning or of the total award based on a starting point of £75,000 with a £15,000 uplift directly linked to the conduct of the hearing. In our judgment they were proportionate to the seriousness of the allegation and its direct impact on Mr Cairns himself and will serve to vindicate his reputation. The appeal is accordingly dismissed.

[28] Accordingly, the Court of Appeal upheld an award of damages of £90,000. That figure, at the date of the Queen’s Bench judgment (26 March 2012), was the equivalent of NZ$174,761.79.²²

[29] The Court of Appeal, in discussing the need for proportionality in libel awards, made the following observation relevant to the extent of publication:²³

The process of assessing damages is not quasi-scientific, and there is rarely a single “right” answer. Nevertheless, it is virtually self-evident that in most cases publication of a defamatory statement to one person will cause infinitely less damage than publication to the world at large, and that publication on a single occasion is likely to cause less damage than repeated publication and consequent publicity on social media. By the same token, rapid publication of the withdrawal of a defamatory statement, accompanied by an apology, together with an admission of its falsity given as wide publicity as the original libel diminishes its impact more effectively than an apology extracted after endless vacillation while the libel remains in the public domain, unregretted and insidiously achieving greater credibility.

[30] It is clear from this passage in the judgment of the Court of Appeal, and from the judgment as a whole, that an award of damages at the level of £90,000 or

²¹ _{At [41].}

22. Exchange rate as per Bank of Canada website: www.bankofcanada.ca/rates/exchange/10-year - converter.

²³ Cairns v Modi, above n 16, at [24].

thereabouts would not have been sustained had there been, as in the case before me, a publication on a single occasion to one person (even had that person been a person of influence such as a newspaper editor).

A principled approach to the assessment of damages

[31] The fact that neither Mr Churchman nor Mr Moodie provided me with any list of the amount of damages taken from New Zealand cases may reflect two or more realities. First, there is the high resolution rate of defamation claims in New Zealand short of trial. Secondly, there may have been a “traditional reluctance” on the part of Courts to interfere with or critique awards. In their chapter on “Defamation” in Stephen Todd’s The Law of Torts in New Zealand, John Burrows

and Ursula Cheer observed:²⁴

Because assessment of damages is so much a matter of impression on the particular facts, judges and appeal courts have traditionally been reluctant to disturb jury awards unless there has been legal error or misdirection by the judge. It is not enough that the judge subsequently disagrees with the award.

[32] There nevertheless is a point at which both the Court of first instance and an appeal Court may be required to reach a conclusion as to the appropriateness or inappropriateness of a particular level of damages claimed or a range of damages available. The Court of Appeal of England and Wales in Cairns v Modi²⁵ recognised as still applicable the principles identified in John v MGN Ltd, by Sir Thomas Bingham MR when his Lordship observed:²⁶

The successful plaintiff in a defamation action is entitled to recover, as general compensatory damages, such sum as will compensate him for the wrong he has suffered. That sum must compensate him for the damage to his reputation; vindicate his good name; and take account of the distress, hurt and humiliation which the defamatory publication has caused.

[33] The Court of Appeal went on to note that the three distinct features of the assessment of compensation apply to every defamation case but that the emphasis to

_{be placed on each will vary from case to case.}

²⁴ _{Ursula Cheer and John Burrows “Defamation” in Stephen Todd (ed) The Law of Torts in New}

_{Zealand (6}^th _{ed, Brookers, Wellington, 2013) at [16.6.01(1)].}

²⁵ _{Cairns v Modi, above n 16, at [21].}

²⁶ John v MGN Ltd [1997] QB 586 (CA) at 607.

[34] As difficult as it may be for a Judge sitting with a jury to provide guidance on the appropriate level of awards to that jury, the New Zealand Court of Appeal in Television New Zealand Ltd v Quinn has confirmed that there is a legitimate role for the Judge in that regard^.27 Lord Cooke, in reviewing the principles as to damages, first reviewed English, Canadian and Australia approaches. His Lordship observed that the judgment in John v MGN Ltd must be assumed to indicate at least a current English general guideline,²⁸ a view subsequently reinforced by the Court of Appeal

judgment in Cairns v Modi.²⁹ Lord Cooke observed a tendency of Canadian Courts

not to interfere with large awards.³⁰ On the other hand, his Lordship observed that the Australian trend was the other way, with a greater need to protect defendants discerned in Australia.³¹ His Lordship made reference to the judgments of the majority of the High Court of Australia in Carson v John Fairfax & Sons Ltd³² where the majority referred to the guidance of damages which could be offered by trial Judges, including such as inviting a jury to consider the investment or buying power

of the amount of an award or perhaps even indicating a range of damages which might be considered appropriate (while ensuring that the jury knows that they are to reach their own decision).³³

[35] Lord Cooke then made a number of conclusions in relation to the New

Zealand position including:³⁴

There has been no law or practice in New Zealand precluding the Judge from providing guidance to the jury in either of those ways [enunciated in Carson]. A reference to investment or buying power, with a practical comparison such as the cost of a house or car, will often be helpful; but it is undesirable to add to the specific duties falling on a Judge in summing up ...

[36] Gault J expressed full agreement with the judgment of Lord Cooke.

[37] Sir Ivor Richardson would have dismissed the appeal for the same reasons as given by Lord Cooke, McKay J and McGechan J, but added:³⁵

²⁷ _{Television New Zealand Ltd v Quinn [1996] 3 NZLR 24 (CA) at 33-38.}

²⁸ _{At 34.}

²⁹ _{Cairns v Modi, above n 16.}

³⁰ _{Television New Zealand Ltd v Quinn, above n 27, at 34-35.}

³¹ _{At 35.}

³² _{Carson v John Fairfax & Sons Ltd [1993] HCA 31; (1993) 178 CLR 44.}

³³ _{Television New Zealand Ltd v Quinn, above n 27, at 35.}

³⁴ At 35.

While I would not impose a requirement on the trial Judge to indicate a ceiling or a range, there may be many circumstances where it will be appropriate to do so. I also suggest that the trial Judge should comment on the amount claimed if he or she considers it to be exorbitant.

[38] McKay J adopted the reasons given by McGechan J for dismissing the appeal. His Honour, having referred to the jury directions recognised by the English Court of Appeal in John v MGN Ltd as appropriate, added:³⁶

There may be cases where the Judge feels it appropriate to suggest what he considers an appropriate level of damages, perhaps where counsel have been either extravagant or absurdly low, but the Judge is not required to do so, and he must be careful not to usurp the jury's function.

[39] McGechan J dealt with the conflicting submissions made as to whether the

Court is entitled to look at other awards for comparisons. His Honour concluded:³⁷

In my view, comparisons can have some value — not by any means determinative, but some value — at the extreme of determination whether an award is so irrational as to be set aside. It is a matter of common sense. If a figure is "completely unheard of" or "unparalleled", that may be some guide as to whether it is supportable. It is artificial to ignore that human reality. However, it is only at that extreme that the exercise is at all useful; and even then, given the very different circumstances of individual cases, applicable only with real caution. As I will develop infra in relation to submissions juries should be assisted with "ranges", there simply is not the data or consistency of awards in New Zealand to allow routine comparisons case by case. Comparisons are some guide to extreme limits; but within that, no guide to the appropriate.

[40] Later in the judgment his Honour concluded that there is insufficient data in

the “small New Zealand context” to compile worthwhile “ranges”.³⁸

[41] McGechan J made reference to the trial Judge’s direction to the jury which included observations as to “you all know what a dollar is worth” and “what you can buy for that much”. Having then referred to the High Court of Australia observations in Carson v John Fairfax & Sons Ltd in inviting a jury to consider the

_{investment or buying power of the amount it might award, McGechan J noted:}³⁹

³⁵ _{At 40.}

³⁶ _{At 47.}

³⁷ _{At 53-54.}

³⁸ _{At 60.}

³⁹ At 62.

It would have been wise for the trial Judge to have gone a little further. General exhortations to think about what a dollar is "worth" and, "can buy", may rather wash over a jury. There is nothing like an example to drive a message home, and ensure it is remembered, even if it takes a little precious time.

Would $239,774.32 constitute an excessive award of damages in this case?

[42] I now stand back.

[43] I assume first that Mr Moodie succeeds in persuading a Judge or jury that he has been defamed and that Ms Strachan has no defence.

[44] I then ask myself whether there is a reasonable probability that Mr Moodie will succeed in recovering an award of damages of $239,774.32 or more. The prayer for relief (framed as a claim for $325,000 damages) is a claim for compensatory damages and does not pursue any element for aggravated or punitive damages. It is correct in this case to approach the question as a purely compensatory exercise – there is no basis on the claim as filed by Mr Moodie or on the evidence to assume that there will be any justification to add a sum of damages for aggravation, as was done in Cairns v Modi.

[45] In the present context it is not for me to predict a precise figure at which Mr Moodie, if successful would likely recover damages. Rather, it is for me to determine whether there is any reasonable probability that the range within which he might be awarded damages is as high as $239,774.32.

[46] I begin with the way in which a jury (or trial Judge), uninformed as to similar or comparable cases, might consider the principles to be applied.

[47] First, I take it as self-evident on the facts of this case that generally the publication of a defamatory statement to one person on a single occasion is likely to cause less damage than broad and repeated publication.

[48] Secondly, I take into account the fact that the recipient of the information is a journalist whose view and assessment of Mr Moodie will be important to Mr Moodie. That said, I must also realistically take into account the fact that of all

people a journalist, whose journal has already settled a defamation claim relating to other publications concerning Mr Moodie, is likely to avoid any fresh publication so as to avoid any prospect of a further lawsuit.

[49] What compensatory damages would remain to achieve for Mr Moodie may then lie in one or more of the three interlocking purposes as described by Sir Thomas Bingham in John v MGN Ltd.

[50] First, there is Mr Moodie’s reputation. The judge of fact (be it judge or jury) may come to a conclusion that Mr Moodie had a significant and favourable reputation in legal circles. That reputation may have extended to Ms Black before she undertook her investigations and published her article. As the only recipient of the publication on which Mr Moodie now sues, her evidence as to the reputation held in her eyes by Mr Moodie will be important at trial. For now, it must be assumed there may have been a reputation of value and that some significant damages might flow. That said, their ambit must be limited by the fact Mr Moodie’s reputation may have been diminished, albeit only in the eyes of one person.

[51] Secondly, there is the vindication of Mr Moodie’s good name. An award of a modest amount is likely to serve as the Court’s vindication of that good name, particularly having regard to the fact that APN, as the owner of the New Zealand Listener, had very early effected a settlement with Mr Moodie, involving a public retraction of the allegations.

[52] Thirdly and finally, there is the distress and humiliation which a defamatory publication causes. The judge of fact (again whether judge or jury) is likely to conclude that a person in Mr Moodie’s position will have suffered some element of distress through defamatory statements of the kind made being published to the Features Editor of the New Zealand Listener. It is equally likely that the judge of fact will conclude, having regard to the limited publication and to Mr Moodie’s evident strength of personality, that the distress and hurt will have been relatively limited.

[53] Bringing all those considerations together, the defamatory allegations concerning Mr Moodie upon which his cross claim is based, and the circumstances in which they were made, fall into a very different category from those in the case in which Mr Moodie sought to place most reliance, namely Cairns v Modi. The awarding of £90,000 to Mr Cairns was, as the Court of Appeal found, within the range open to the trial Judge. It was a sum proportionate to the seriousness of the allegations against Mr Cairns, to the direct impact on him, and was an appropriate vindication of his reputation.

[54] An award to Mr Moodie of $239,774.32 or more, in the circumstances of the extremely limited publication on which his cross claim is based, would be outside any reasonable range of damages. I am satisfied that this is a case in which, if Mr Moodie elects a jury trial, the Judge would be entitled in terms of the Court of Appeal judgments in Television New Zealand Ltd v Quinn to advise the jury that compensatory damages in excess of $239,774,32 would be in the Judge’s view plainly excessive. The Judge would be entitled to point out to the jury that an award of over $200,000 would represent more than 50 percent of the New Zealand median

house price.⁴⁰

Outcome

[55] Mr Moodie has not established that he has a triable cross claim which exceeds the judgment debts which he owes to Ms Strachan.

[56] His application to set aside the bankruptcy notice must fail.

[57] Had Mr Moodie established a reasonable probability of succeeding in his cross claim (for defamation damages) in a sum more than $239,774,32, the effect of s 17 Insolvency Act 2006 would have been to require me to set aside the bankruptcy notice, even had there seemed to be an element of injustice to Ms Strachan in that course. As it is, there is on the facts of this case and in the conclusion I have had to come to, no injustice to Mr Moodie. If he is unable to pay the judgment debts as

_{required his adjudication in bankruptcy will almost inevitably follow. He will retain}

⁴⁰ Sourced from the REINZ Stratified Housing Price Index as at May 2013.

his entitlement to pursue his defamation claim as that is a claim which is personal to him and does not vest in the Assignee.⁴¹ For the time being, Ms Strachan and any other creditors will be entitled to have the Official Assignee conduct the appropriate investigations into whether there are any assets within Mr Moodie’s estate from which any recovery can be made for the benefit of such creditors.

Orders

[58] I order:

(a) Mr Moodie’s application to set aside his bankruptcy notice is

dismissed;

(b) Mr Moodie is to pay to Ms Strachan the costs of his application on a

2B basis together with disbursements to be fixed by the Registrar, the Court certifying for Mr Churchman’s reasonable costs of travel and accommodation;

(c) The time for payment pursuant to the bankruptcy notice is extended to

24 December 2013, and failing payment on or by such date, Mr Moodie will have failed to comply with Ms Strachan’s bankruptcy notice in terms of s 17(1)(d) Insolvency Act 2006.

Associate Judge Osborne

Solicitors:

P B Churchman QC, Wellington for Judgment Creditor

Moodie & Co, Feilding for Judgment Debtor

⁴¹ Dobie v McCullough HC Rotorua CP6/95, 10 July 1995; see also Brookers Insolvency Law and

Practice (looseleaf ed) at [IN101.06].