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High Court of New Zealand Decisions |
Last Updated: 14 August 2015
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV-2013-485-939 [2015] NZHC 1854
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UNDER
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the Defamation Act 1992 and the Fair
Trading Act 1986
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BETWEEN
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CPA AUSTRALIA LIMITED Plaintiff
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AND
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THE NEW ZEALAND INSTITUTE OF CHARTERED ACCOUNTANTS Defendant
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Hearing:
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6-10 July; 13-14 July 2015
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Counsel:
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A R Galbraith QC, N J Russell and S I Jones for plaintiff
B D Gray QC, R K P Stewart and H L Coull for defendant
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Judgment:
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6 August 2015
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RESERVED JUDGMENT OF DOBSON J
Contents
The two organisations ....................................................................................................................... [2] The statements complained of .........................................................................................................[11] The flyer........................................................................................................................................ [11] The advertisement......................................................................................................................... [19] The conference addresses ............................................................................................................. [24] The National Business Review article .......................................................................................... [34] The causes of action in defamation ................................................................................................ [37] Are the pleaded meanings made out? ............................................................................................ [42] Innuendoes pleaded......................................................................................................................... [61] The requirement to make out loss.................................................................................................. [65] A threshold of seriousness?........................................................................................................... [104] Defences pleaded ........................................................................................................................... [122] Truth ........................................................................................................................................... [122] Honest opinion ........................................................................................................................... [140] Qualified privilege...................................................................................................................... [171] The Fair Trading Act claim .......................................................................................................... [183] Summary ........................................................................................................................................ [222] Costs ............................................................................................................................................... [225]
CPA AUSTRALIA LTD v THE NEW ZEALAND INSTITUTE OF CHARTERED ACCOUNTANTS [2015] NZHC 1854 [6 August 2015]
[1] These proceedings involve two causes of action in defamation and
one for breach of the Fair Trading Act 1986 (the FTA) brought
by one
professional body for accountants in respect of disparaging comments made by
another.
The two organisations
[2] The plaintiff (CPAA) has been in existence in Australia since the
1880s. It provides a range of services to its members,
including continuing
education and support for accountants providing a wide range of accounting
services. It also administers the
certification of appropriately qualified
accountants and monitors the educational content required to attain
certification.
[3] CPAA has between 140,000 and 150,000 members
worldwide.1 Those members are predominantly in Australia but also
in a number of Asian jurisdictions and, since about 2005, in New Zealand. When
Mr David Jenkins, who is currently the New Zealand country manager for CPAA,
joined the organisation in 2008 it was attracting about
15 new members a year in
New Zealand. He thought that CPAA had got to 1,000 members in New Zealand by
about mid 2013, and that membership
had risen to about 1,800 by the date of the
hearing.2
[4] CPAA’s potential stature as a professional body in New
Zealand increased from 2012 when it became accredited by the
Financial Markets
Authority (FMA) to license accountants who perform auditing assignments for
restricted categories of audit such
as those of public issuers.
[5] CPAA has a permanent office in New Zealand with staff employed to
canvass for new members and provide a range of
services to its
members. It is also supported by personnel from its more substantial
offices in Australia.
[6] The defendant (NZICA) was the only organisation in New Zealand providing services for professional accountants until CPAA set up here. The provision of a range of accounting services was, until 2012, reserved for those who were members
of NZICA and its predecessors whose status was confirmed by statute.
The situation
1 Various numbers in this range were referred to during the hearing.
2 Brief of David Jenkins at [10]–[15].
was analogous to that of legal work regulated by the New Zealand Law Society.
NZICA certifies those appropriately qualified to practise,
formerly as public
accountants and, more recently, as chartered accountants.
[7] The sequence of cause and effect in the evolving relationship
between the parties is difficult to discern and, in any event,
is not critical.
Throughout the period between 2011 and 2013, when the statements complained of
were made, NZICA perceived CPAA
as competing aggressively for new members among
accounting students and accountants in New Zealand. It appears that the
prospect
that CPAA might offer students an iPad if they joined it, and the
threat of expensive television advertisements, caused concern to
some at NZICA.
Otherwise, no actual instances of marketing by CPAA that competed
aggressively with NZICA were cited in
evidence.
[8] The mere presence of another professional body attempting to
set up in New Zealand, when NZICA and its predecessors
had enjoyed a monopoly
supported by successive forms of regulation of the accountancy profession, was
likely to have been treated
by the incumbent as “aggressive”
competition. Certainly, the internal communications around the time of each of
the
statements complained of contemplated that NZICA should respond aggressively
to the threat posed by CPAA.
[9] During 2013, and possibly for some time before then, NZICA explored the prospect of merging with another established membership organisation for accountants in Australia, the Institute of Chartered Accountants in Australia (ICAA). In October 2013, the existing members of both NZICA and ICAA approved the merger and, since the events directly relevant to these proceedings, the merged entity
has become Chartered Accountants Australia and New Zealand
(CAANZ).3
[10] I find on the evidence that there has been a relatively co-operative working relationship between CPAA and ICAA in Australia. I was cited examples of the two
organisations working jointly on the provision of guides on
independence of
practice, and on joint submissions about proposed changes to
accounting standards.4
The relationship between NZICA and CPAA in New Zealand has been
quite combative by comparison.
The statements complained of
The flyer
[11] The first initiative for NZICA that is complained of was a single
page flyer produced to give to students attending a careers
fair at Massey
University’s Albany campus in March 2011. A copy of the flyer is
annexed to this judgment as Appendix
A.5 Both CPAA and NZICA
were represented at the careers fair. It is generally accepted that once
accountants have joined one of the
professional organisations, there is
relatively little movement of members from one to the other. This means that
both organisations
target their membership initiatives towards accounting
students. The flyer was entitled “The Facts” under a
heading:
Comparing New Zealand Institute of Chartered Accountants (NZICA) and
Certified Practising Accountants Australia (CPAA).
[12] The flyer contained five categories and compared features such as the average annual salary of members of NZICA and CPAA, the number of New Zealand members and the qualifications offered. It suggested that for chartered accountants who were full members of NZICA, the average annual salary was
$140,000, compared with the average annual salary for CPAA members of
$100,000.
[13] In terms of numbers of members, it identified 32,000 for NZICA and
700 to
750 for CPAA. In comparing the qualifications offered, it stated there were
three designations to choose from for NZICA members,
but only one designation
for members of CPAA.
[14] In the last category addressing “Points of Difference”,
the flyer invited an adverse view of CPAA by stating
that:
4 There was at least one instance of the two bodies co-operating with a third, the Institute of
Public Accountants.
• CPAA only required three years of
academic study (compared with four for NZICA);
• CPAA was an Australian based qualification, new to New Zealand and
not part of an international accounting alliance, whereas
the NZICA
qualification has international recognition and reciprocity;
• NZICA had been established in New Zealand for over 100 years;
and
• graduates with NZICA qualifications were preferred by employers,
including the big four accounting firms.
[15] The average salary for CPAA members was attributed to a
salary guide produced by Hudson Recruitment, a firm that
conducted such
surveys. Although the Hudson survey did not discriminate between salary levels
for members of both organisations,
the flyer drew on NZICA’s internal
research to provide the salary figure cited for its own members. It was
therefore vulnerable
to criticism for not making an accurate comparison as the
average salaries came from different sources, and the Hudson survey did
not
support any differential in the amounts.
[16] CPAA brought the terms of the comparison to Hudson’s
attention, and it promptly confirmed it had not given its consent
to the salary
guide being quoted in the manner it was. Hudson requested that NZICA cease
representing its survey in that way.
[17] The evidence from Mr McDougall, who was the director of marketing at NZICA at the time, was that NZICA stopped using the flyer as soon as it received the complaint from Hudson Recruitment, and destroyed the remainder of the
approximately 300 copies of the flyer that had been
produced.6
6 Brief of Ian McDougall at [20].
[18] In May 2011, CPAA made more detailed complaints to NZICA as to
alleged misrepresentations in the flyer. In-house counsel
at NZICA rejected the
complaint and contended that the content of the flyer was not misleading or
deceptive.7
The advertisement
[19] The second NZICA statement complained of by CPAA was the content of
advertisements placed by NZICA in the New Zealand Herald and National
Business Review (NBR) in October 2012. The form of the full page
advertisement as it appeared in the New Zealand Herald is annexed to this
judgment as Appendix B. It comprised a dark block with the logo of NZICA inset
at the top, and in large print:
IN ACCOUNTING, THERE’S BEST PRACTICE AND THEN THERE’S SECOND BEST
PRACTICE.
[20] Beneath that in smaller type was a sequence of promotional
claims for
NZICA’s members. It began with the statements:
Accountants may appear similar. But your business can tell them apart. The
difference is in the training, the support and the professional
standards they
follow....
[21] It also claimed:
Only a member of the New Zealand Institute of Chartered Accountants has been
exposed to the highest level of industry training and
development. This is why
the top CFOs and CEOs only employ Chartered Accountants.
[22] The bottom of the advertisement, below a printed line, claimed in
bold type:
Business does better with an NZICA Member.
[23] Mr McDougall acknowledged in evidence that NZICA was aware that CPAA was planning to hold a promotional event in Auckland in October 2012, at which time it would be announcing its FMA accreditation. That accreditation meant that CPAA would be able to license practitioners, who it had granted status as certified
accountants, to undertake restricted work such as large-scale
audits which had
7 CBD 134, 136.
previously been the sole preserve of NZICA members. The NZICA advertisement
was commissioned to be published to coincide with CPAA’s
event and was
internally labelled “Project Ambush”. The intention was to diminish
the attention CPAA might get when
announcing its FMA accreditation. Mr
McDougall saw the advertisement “simply as part of a designation campaign
in a competitive
market”.8
The conference addresses
[24] The third group of statements complained of arose in addresses given
in Christchurch and Wellington on 6 and 8 May 2013 respectively.
The addresses
were given by Ms Kirsten Patterson, in her role as acting chief executive of
NZICA, at conferences called “Accountants
RePublic”. The
conferences were organised by Ms Viv Brownrigg, a former chartered accountant
who operates a business training
accountants in how to enhance their businesses.
The target audience for the events was accountants in public practice,
particularly
those in sole practice or small and medium-sized firms.
[25] When initially promoting these conferences, Ms Brownrigg
characterised participation on behalf of both CPAA and NZICA
as a “face
off”. NZICA objected to that description and noted that the brochure
circulated with the registration form
for the conferences was entitled
“Your Clients Need You”. In terms of the NZICA and CPAA
contributions, they were described
in the following terms:
NZICA & CPA Australia
Update you
[26] Unbeknown to those organising and speaking at the Christchurch conference, one of the attendees made an electronic recording of the addresses given both by Ms Patterson for NZICA, and Mr Richard Jones, a business development manager
with CPAA. Transcripts of those recordings have been prepared, and both
were in
8 Brief at [27].
evidence. The recording of Ms Patterson’s address was also
played during the hearing.
[27] The main topic addressed by Ms Patterson was the proposed
merger of NZICA with ICAA. She spoke positively about
the advantages of the
merger that was shortly to be voted on by NZICA members.
[28] One aspect of the environment that Ms Patterson described NZICA
operating in was its competition with CPAA. She stated that
she relished the
opportunity of going “head to head” with CPAA and was disappointed
that its chief executive from Australia
was not present because she was hopeful
that they might be doing “some arm wrestling”. In the course of
promoting NZICA,
Ms Patterson made numerous disparaging remarks about
CPAA.
[29] The statements that are now complained of were:
(a) “He [Alex Malley, CPA Australia’s CEO] also
doesn’t have to offer the same education offerings because
you may be
aware of the designation of CPA and think ‘oh, that’s similar to
America’ but it’s not. The
CPA designation in the USA is
different to the CPA designation in Australia. CPA Australia and United
States are not brothers
or cousins. We’re cousins of CPA in the United
States. Ourselves, the Australian Institute, Canada, Germany, USA, South Africa,
the UK are all members of the GAA, the Global Accounting Alliance. That is the
group of the preeminent CA based accountants around
the world.”
(b) “CPA Australia is not a member of the GAA because their
education standards are not recognised as being the same
as the one that you
have worked so hard to achieve”;
(c) “I can’t offer new graduates a free iPad if they
choose my program over their [CPA Australia’s] program.
But what I can
offer them is the better designation. They’re going to have to work harder
for CA, without a doubt, they will
have to work harder for our
designation”;
(d) “I don’t have the money to be able to take out
sponsorship of the entire series of CSI in prime time television
in Australia
for an entire series. I don’t have the budget to be able to do that on
33,000 members. Nor do I think it is
the best use of your spend to be fair, but
that’s the kind of environment that we’re coming into”;
and
(e) “Under the CPA model [with] CPA Australia, you can do a few modules and they’ll give you a piece of paper saying that you’re an accountant.”
[30] Ms Patterson used a PowerPoint presentation as an aid during her
addresses in Christchurch and Wellington. The slides displayed
included a
statement under the heading “Competition” in the following
terms:
This is changing the landscape for the Chartered Accountant designation.
Alternative qualifications are cluttering the market which
necessitates
strengthening the value of a Chartered Accountant designation in the eyes of
employers, decision makers and the public.
[31] Nobody challenged Ms Patterson on any of these criticisms during the conference in Christchurch. During the first break after he spoke, Mr Jones reported his concerns about Ms Patterson’s statements by telephone to Mr Jenkins. He followed that up with an email to Mr Jenkins the same day, which paraphrased a
number of the statements now complained of.9
[32] There is no transcript of Ms Patterson’s equivalent address at
the Wellington conference two days later. On this
occasion, Mr Jenkins was
present to speak on behalf of CPAA and he took notes of some of the comments he
considered to be disparaging
of his organisation.
[33] Ms Patterson spoke without notes, but it is accepted that the
material content of her address would have been substantially
similar to the
comments as recorded in Christchurch. Ms Patterson left the Wellington
conference shortly after Mr Jenkins completed
his address, before he was able to
raise the content of her address with her. However, he telephoned her later
that day to register
his concern at what he considered to be inappropriate
comments.
The National Business Review article
[34] The NBR of 8 May 2013 published an article entitled
“Snuggling-up accountants battle ‘declining relevance’”.
It addressed the proposed merger between NZICA and ICAA, referring to comments
made by Mr Craig Norgate who was then chief executive
of NZICA. The article
contained the following:
Competition has also emerged in recent years with the arrival of CPA
Australia in 2011. However, Mr Norgate plays down the threat
posed by the rival
group, which claims about 140,000 members worldwide.
9 CB397.
“We don’t see it as a huge threat; competition has been coming
for a long time.”
“They don’t have the same entry standards as us but the market
doesn’t understand. They seem to take the chartered
accountant
designation for granted.”
[35] The article stated that Mr Jenkins could not be reached for a
comment on
behalf of CPAA as to its rivals’ proposal.
[36] These proceedings were commenced on 24 May 2013, shortly
after the conference addresses and NBR article.
The causes of action in defamation
[37] CPAA pleaded separate causes of action in defamation in respect of
each of Ms Patterson’s addresses in Christchurch
and Wellington. Without
the full transcript of the Christchurch address, which only became available
shortly before trial, the scope
of the allegations depended on recollections as
to what she had said on each occasion. No objection was taken to CPAA
re-pleading
the allegations shortly before trial to reflect the actual words
used. The allegations in relation to the Wellington address were
more confined
than those in relation to the Christchurch address, but still alleged
substantially similar defamatory meanings for
some of her comments.
[38] In closing, it was conceded on behalf of NZICA that the Court could
treat the allegations as if the same comments recorded
from the Christchurch
address were made in Ms Patterson’s unrecorded address in
Wellington. Accordingly, it is appropriate
to deal with both of the causes
of action in defamation on the basis that the same address was made to both
audiences, and the defamatory
meanings and innuendoes pleaded in respect of the
Christchurch address are to be treated as applying at both venues.
[39] CPAA pleaded that the natural and ordinary meaning of the statements
by
Ms Patterson were understood to mean that:
(a) CPAA does not have affiliations with accounting bodies throughout the world ([29](a) above);
(b) the education provided by CPAA to its members is inferior to that
provided by NZICA and other members of the Global Accounting
Alliance (GAA)
([29](a), (b) and (c) above);
(c) CPAA was declined membership of the GAA because its education did
not meet the requisite standard ([29](b) above);
(d) CPAA resorts to expensive or elaborate marketing ploys to entice
accountants to become members ([29](c) above);
(e) CPAA cannot attract members without resorting to expensive
or elaborate marketing ploys ([29](c));
(f) CPAA wastes or misuses membership fees to pay for expensive
advertising on television ([29](d) above);
(g) CPAA’s designation is a second-rate designation
which has undermined and is undermining the
accounting profession
in New Zealand ([29](e) and [30] above).
[40] In addition to the defamatory impact alleged to arise on the natural
and ordinary meaning of the words complained of, CPAA
also pleaded that the
attendees at the conferences would have interpreted their meaning in light of
the following special facts known
to the attendees:
• best practice in the accounting profession is driven
by the development, adoption and implementation of
high quality international
standards;
• these standards are developed by international associations and
federations of accounting bodies from different jurisdictions;
• membership of an international association or federation of accounting bodies is dependent upon an accounting body meeting requisite standards;
• membership of an international association or
federation of accounting bodies provides the basis for mutual
recognition of
designations by fellow members around the world.
[41] The words complained of in [29](a), (b) and (e) were pleaded to give
rise to further meanings by innuendo, which would arise
for the audiences
applying the pleaded special facts, to the effect that CPAA does not comply with
internationally recognised standards
of best practice for accountancy
designations and/or that CPAA’s qualifications are not internationally
recognised
or transferrable.
Are the pleaded meanings made out?
[42] The first step in the analysis is to consider whether the pleaded imputations arise. To do so, the Court must decide, as a matter of law, whether the statements complained of would be taken by a reasonable person to have the pleaded defamatory meaning. The reasonable person has been described by the Court of Appeal as being of ordinary intelligence, general knowledge and experience of
worldly affairs.10 The reasonable person is capable of reading
between the lines, but
is not unusually suspicious or naïve.11
[43] The Defamation Act 1992 (the Act) does not define defamation and
instead relies on existing common law definitions, of which
there are several.
CPAA did not plead according to any particular definition of what is defamatory,
and instead asserted in a more
general sense that the statements complained of
were defamatory. I have taken CPAA’s submissions to be that the statements
are false and to its discredit.12
[44] To succeed in an action for defamation, the plaintiff need not prove the falsity of statements complained of as defamatory. It is for the defendant to make out the truth of the statements in defending the action. I will therefore consider the truthfulness of the statements in considering whether NZICA can successfully
establish relevant defences.
10 New Zealand Magazines Ltd v Hadlee (No 2) [2005] NZAR 621 (CA) at 625.
11 Lewis v Daily Telegraph Ltd [1964] AC 234 (UKHL) at 259.
12 Youssoupoff v Metro-Goldwyn-Mayer (1934) 50 TLR 581 (CA) at 584 per Scrutton LJ.
[45] The first imputation pleaded ([39](a) above) is that CPAA does not
have affiliations with accounting bodies throughout the
world. I am not
satisfied that the pleaded imputation arises from the words complained of
([29](a) above). As with each of the
passages, I have assessed it in the
context of the topics covered by Ms Patterson in the entire address, and more
proximately to
the words complained of. I have also assessed the passages by
listening to the recording again, which provided the tone of the
comments
made.
[46] The essence of the passage complained of is that CPAA is not a
member of the GAA, whereas NZICA and ICAA are. Importance
is attributed to
that membership because Ms Patterson described GAA as the pre-eminent
group of chartered accountancy organisations
around the world. That does not
involve an imputation that CPAA did not have affiliations with other accounting
bodies; just that
it did not enjoy membership of the grouping that Ms Patterson
claimed to be pre-eminent.
[47] The second imputation pleaded as arising from the first, second and
third statements complained of ([29](a), (b) and (c)
above) is that the
education provided by CPAA is inferior to that provided by NZICA and other
members of the GAA. Mr Gray QC for
NZICA denied that this imputation arose on
the words spoken. He submitted that contending CPAA did not have to offer the
same education
did not mean that its offerings were inferior, but rather that
they were different from those offered by NZICA to the standard agreed
among
members of the GAA.
[48] I do not accept the audiences at the conferences would have
appreciated the distinction between “different”
and
“inferior”. Ms Patterson was selling the attributes of NZICA,
and in a confident tone claiming its superiority
over CPAA. Assessed in the
context of the other comments about educational standards, I am satisfied that
the reasonable imputation
for the audiences would have been that CPAA provided
education that was inferior to that provided by NZICA and other members of the
GAA.
[49] The imputation of inferiority of CPAA’s educational standards
is strengthened
by comments in some of the other passages complained of. These include the
proposition that CPAA is not a member of the GAA because their
educational standards are not recognised as the same as those
required to
qualify with NZICA, and that qualifying under the NZICA programme would require
candidates to work harder (inferentially
to demonstrate knowledge at a higher
level or to study more extensive topics, or both).
[50] The next pleaded imputation is that CPAA was declined membership of
the GAA because its education did not meet the requisite
standard. I consider
that imputation does arise from the statement in [29](b) above.
[51] Three imputations are pleaded as arising from Ms Patterson’s
statement cited at [29](c).13 The first is that the education
provided by CPAA is inferior to that provided by NZICA and other members of the
GAA. I am satisfied
that imputation does arise for the reasons discussed above
when the statement is treated in the context of the others complained
of.
[52] The second imputation alleged to arise from the statement cited at [29](c) is that CPAA resorts to expensive or elaborate marketing ploys to entice accountants to become members. This arguably arises from Ms Patterson’s statement that she cannot offer new graduates a free iPad if they choose the NZICA programme over “their” programme. In context, I am satisfied that “their” refers to CPAA. I am also satisfied that this pleaded imputation does arise on the words complained of from Ms Patterson’s address. It is implicit in the statement that CPAA was offering new graduates the incentive of a free iPad if they chose to enrol in CPAA’s programme. The sentence complained of follows immediately after Ms Patterson observed that “[CPAA have] got a marketing budget that we’re really struggling to fight here in
New Zealand”.14 It is another matter whether the
imputation is materially adverse to
CPAA’s business reputation.
[53] The further imputation pleaded as arising from the statement in [29](c) above is that CPAA cannot attract members without resorting to expensive or elaborate
marketing ploys.
13 Set out at [39](b), (d) and (e) above.
14 Transcript, CB359/28.
[54] I am not satisfied that this imputation arises. There is
nothing in the statement pleaded as the source of
the imputation that suggests
CPAA could not attract members without inducements such as free iPads, and the
natural meaning goes
no further than that it is one ploy CPAA was resorting
to.
[55] The next imputation pleaded as arising from the statement at [29](d)
above is that CPAA wastes or misuses membership fees
to pay for expensive
advertising on television. That allegedly arises from Ms Patterson’s
expression of opinion on what she
considered to be other than the best way of
spending membership fees. The basis for the criticism is complicated because
of the
amount she implied CPAA spent on television advertising in Australia.
It was at least a substantial exaggeration to imply that
CPAA was the sponsoring
advertiser for a whole series of CSI on prime time television in Australia. By
consent, I accepted into
evidence a statement from the Nine Network Australia
Pty Ltd confirming that CPAA had not sponsored any such programme, but the
network
had broadcast advertisements on six occasions during air time related to
CSI episodes.
[56] I consider that the pleaded imputation does arise. It is an
expression of opinion to the effect that Ms Patterson would
not apply membership
fees to spending of that type, and it contributes to the tone of criticisms of
CPAA.
[57] The next pleaded imputation had two elements.15 The
first was that CPAA is a second-rate designation, and the second was that this
designation has undermined the accounting profession
in New Zealand. These
imputations are said to arise from the statement pleaded at [29](e) and the
PowerPoint slide detailed in [30]
above. A plaintiff is required by s 37(2) of
the Act to particularise the different imputations alleged. Where different
imputations
are pleaded, they should be particularised distinctly. I treat
these as two separate imputations.
[58] The criticised statement “under the CPA model ... you can do a few modules and they’ll give you a piece of paper saying that you’re an accountant” is seriously demeaning of CPAA’s qualification. It creates an adverse contrast with claims made
elsewhere in Ms Patterson’s address to the effect that
NZICA’s qualification provides
15 See [39](g) above.
a better designation, being one that students have to work harder for but
that will provide pre-eminence in terms of their qualification.
Although there
is no reference to the CPAA designation, or qualification achieved, as being
“second-rate”, I am satisfied
that is clearly implicit so that first
element of the imputation does arise.
[59] However, I am not satisfied that the second element of the
pleaded imputation that CPAA’s designation has
undermined the accounting
profession in New Zealand necessarily arises. The context of Ms
Patterson’s comment is
emphasising the need to encourage students to
take the NZICA qualification rather than the CPAA one, and to strongly
promote
the NZICA designation as the pre-eminent one to potential users of
accountancy services. That theme is strengthened by the
PowerPoint slide that
refers to alternative qualifications “cluttering the market”. The
presence of such alternatives
made it more important than previously for NZICA
to distinguish its own qualifications and “brand”, but maintaining
its
status is different from suggesting that CPAA’s presence is
undermining the profession.
[60] It is apparent from the transcript that Ms Patterson did not read
the words of the PowerPoint slide during her oral presentation.
I am not
satisfied that the words used in the slide, particularly when they appear not to
have been explicitly repeated in the oral
presentation, add sufficiently to make
out the imputation that CPAA’s designation has undermined the accounting
profession
in New Zealand.
Innuendoes pleaded
[61] In addition to the natural and ordinary meanings alleged to be defamatory, CPAA alleged that the audiences of accounting personnel would apply special knowledge based on their familiarity with educational and professional standards for accountants to attribute an additional meaning by way of innuendo that was defamatory of CPAA. The special facts alleged to be known to the audiences were pleaded in the terms set out in [40] above. Those overlapping propositions are pleaded in relatively general terms. They attribute to the audiences an awareness that best practice in the accounting profession depends on international standards of a high quality that are developed by domestic professional bodies co-operating with
similar entities in other jurisdictions. Membership of such international
associations is important to obtain mutual recognition,
and attaining and
retaining such memberships is dependent on the membership organisation complying
with the standards set by the
international body.
[62] I am satisfied that audiences comprising accountants in public
practice and their professional staff would know the propositions
pleaded as
special facts. The words complained of as giving rise to an additional
defamatory innuendo are those in [29](a), (b)
and (e) and the defamatory
innuendo is described at [41] above. The relevant statements attribute
importance to NZICA’s membership
of GAA as a group of pre-eminent
chartered accountancy organisations around the world, and that CPAA is
not a member of
that alliance because CPAA’s education standards are not
recognised as being the same as NZICA’s.
[63] I am satisfied that, for the audiences aware of the special facts
pleaded, the words complained of would have meant that
CPAA did not comply with
best practice for accountancy designations. This would be taken to be the view,
at least of those who accepted
that the GAA standards were indeed
pre-eminent.
[64] The second aspect of the pleaded innuendo was that CPAA’s
qualifications were not internationally recognised or transferrable.
I am not
satisfied that this was made out. Assessing the words complained of in the
context of the knowledge enjoyed by members
of the audience, the criticism
does not extend to treating CPAA’s qualifications as not having any
international recognition
or not being transferrable at all. The meaning
reasonably attributable to the statements goes no further than that they would
not
be as internationally recognised or as transferrable as NZICA’s
qualifications because of its membership of GAA.
The requirement to make out loss
[65] Section 6 of the Act provides as follows:
6 Proceedings for defamation brought by body
corporate
Proceedings for defamation brought by a body corporate shall fail unless the body corporate alleges and proves that the publication of the matter that is the subject of the proceedings—
(a) Has caused pecuniary loss; or
(b) Is likely to cause pecuniary loss—
to that body corporate.
[66] In an interlocutory appeal on the permissible scope of
pleadings by a corporate plaintiff alleging defamation,
where the plaintiff
claimed that a defendant’s conduct had exacerbated its pleaded harm, the
Court of Appeal commented:16
Section 6 of the Defamation Act provides that a defamation proceeding [by] a
body corporate will fail unless the publication caused
or is likely to cause
pecuniary loss. Although not entirely clear on its wording, we have no doubt
that the legislative intent was
to limit compensatory relief for a corporate
plaintiff to pecuniary loss. That would be consistent with the previous law:
Gatley on Libel and Slander 9th ed, para 8.16 and reflects the view of
the McKay Committee, Report of the Committee on Defamation,
1977. Pecuniary loss to a corporate plaintiff, including of course loss in the
value of its goodwill, will be a matter for proof
at trial. It cannot affect
the outcome of that whether or not there has been pleaded conduct exacerbating
the harm to the plaintiff.
[67] As to the scope of s 6, it was submitted for CPAA that the inclusion
of s 6(b) lowered the standard of proof required so
that a corporate plaintiff
need only prove that a defamatory utterance was likely to cause pecuniary loss.
However, it was argued
for NZICA that s 6(b) accommodated the different temporal
consideration of loss that a plaintiff could prove was likely to occur
in the
future. Arguably, the alternative formulations in subss (a) and (b) address
the same requirement, but in respect of past
or future pecuniary loss. It would
be inconsistent to treat the second situation as compromising the first, as if
it read “...or
... was likely to cause pecuniary loss”.
Broadening the requirement in that way could have been achieved with simpler
wording.
[68] I accept NZICA’s approach to the interpretation of the scope of the section. In the present circumstances where the matter has come to trial two years after the statements complained of, the onus that CPAA is required to discharge is to prove that the statements complained of have caused pecuniary loss to it, or that those
statements are likely to cause it loss in the
future.
16 Midland Metals Overseas Pte Ltd v The Christchurch Press Co Ltd [2001] NZCA 321; [2002] 2 NZLR 289 (CA) at
[12].
[69] CPAA also submitted that the nature of its onus under s 6 to prove
loss was lessened because it sought only a declaration,
and not any amount for
damages. The prospect of a declaration is provided for in s 24 of the Act as
follows:
24 Declarations
(1) In any proceedings for defamation, the plaintiff may seek a
declaration that the defendant is liable to the plaintiff
in defamation.
(2) Where, in any proceedings for defamation,—
(a) The plaintiff seeks only a declaration and costs; and
(b) The Court makes the declaration sought,—
the plaintiff shall be awarded solicitor and client costs against the
defendant in the proceedings, unless the Court orders otherwise.
[70] Mr Galbraith QC’s argument was that so long as CPAA could
establish that defamatory statements by NZICA were likely
to cause it pecuniary
loss, then CPAA did not have any onus to establish that any particular loss had
occurred, or the extent of
such loss, where it sought only a
declaration.
[71] This argument relied on the analysis in the Rural News Limited
litigation. In that case, a confidential briefing for New
Zealand King Salmon
Limited by the defendant public relations consultancy, Communications Trumps
Limited, contained advice on how
to avoid publicity about genetic experiments in
the production of salmon. The PR advice was leaked initially to the leader of
the
Green Party, and was then the subject of widespread criticism in various
forms of media. Rural News ran a satirical column which
included derogatory
comments about the ethics and honesty of Communications Trumps Limited.
Communications Trumps Limited sued
in respect of that column, and also
commenced defamation proceedings in the High Court against Radio New
Zealand.
[72] After a trial in the District Court, Rural News’s column was
found to be defamatory, but the Judge did not consider
damages were quantifiable
and awarded the plaintiff only a declaration and costs.17 The
correctness of that approach was
17 Communications Trumps Ltd v Rural News Ltd [2001] DCR 418.
reconsidered twice, first in an appeal to the High Court determined by
Anderson J,18 and then on an application for leave to further
appeal to the Court of Appeal determined by Fisher J.19 Both
judgments confirmed the correctness of the trial Judge’s
reasoning.
[73] In hearing the appeal, Anderson J focused on the trial Judge’s
reasoning in
the following extract from the District Court
judgment:20
I consider that the defendant has merit in its submission on the issue of
damages. I have held that the materials published were
likely to have caused
the plaintiff pecuniary loss. However, despite my conclusion that the
High Court proceedings
brought against Radio New Zealand is not
substantially the same as the present proceedings, there was a publication
of
other similar articles by other news media. These publications make the
assessment of the extent of that loss virtually impossible
to prove. I do not
think that the evidence called by the plaintiff bridges that causal gap. For
this reason I do not think that
in this case I can award the plaintiff
damages.
[74] There had been evidence at trial of a downturn in the plaintiff
’s work and revenue following the adverse publicity.
The plaintiff had
conducted a survey of its clients which asked questions including whether the
adverse publicity had affected their
opinions of, or business dealings with, the
plaintiff. Some clients had ceased doing business with the plaintiff within a
day or
two of the original press release by the Green Party, which was sometime
before the publication by Rural News. The defendant had
challenged the
admissibility and reliability of the survey evidence adduced by the plaintiff in
support of its claim of loss.
[75] The trial Judge’s analysis proceeded on the basis that the
nature of the defamatory statements was likely to have caused
a material measure
of pecuniary loss to the plaintiff. However, given the number of other
defamatory comments for which the defendant
was not responsible, it was
impossible to quantify the loss attributable to the defendant’s
publication.
[76] In that context, Anderson J
observed:21
18 Rural News Ltd v Communications Trumps Ltd AP167-SW00, 4 April 2001.
19 Rural News Ltd v Communications Trumps Ltd AP404/167/00, 5 June 2001.
20 Rural News Ltd v Communications Trumps Ltd, above n 18, at [13].
21 At [14].
Yet s 6 itself recognises the distinction and the ability to seek a
declaration without claiming damages at all, provided by s 24
of the Act,
demonstrates that a body corporate may obtain standing to sue on proof of the
likelihood of pecuniary loss without proving
actual pecuniary loss and may then
obtain relief by way of a declaration and costs.
[77] Having confirmed the grounds for the trial Judge’s finding of
some, unquantifiable, measure of pecuniary loss attributable
to the Rural News
publication, Anderson J found that the onus under s 6 had been
discharged.
[78] In dismissing the application for leave to appeal, Fisher J agreed with the approach the two other Judges had taken. Rural News had argued that the obligation under s 6 of the Act for a corporate plaintiff to “prove” pecuniary loss involved matching pecuniary harm to the plaintiff to the readership of the article complained
of. Fisher J commented on that argument:22
I would not interpret the word “proves” in s 6 in that fashion.
It seems to me that on any approach to the matter the
evidence demonstrated that
Communications was and is a commercial enterprise relying upon public relations
as the source of its business.
The defamatory statement was a direct
reflection upon its capacities and propensities in the way in which it went
about its business.
Once those items were specifically proven it was open to
the Court to move on to the inference that the publication was likely to
cause
pecuniary loss. The fact that the word “proves” is found in the
section does not in any way inhibit the
Court from drawing proper
inferences.
[79] That approach, with which I respectfully agree, justifies Mr
Galbraith’s submission that CPAA can discharge
the onus of proving the
likelihood of pecuniary loss for the purposes of s 6 by drawing inferences that
loss would have been caused,
so there is no necessary obligation to adduce
direct evidence of pecuniary loss suffered as a result of the defamatory
statements.
[80] However, I do not accept that the reasoning in the Rural News judgments supports the further proposition that, where a corporate plaintiff elects only to seek relief by way of declaration and costs, it is, in some more general way, relieved of the obligation to establish that some pecuniary loss has been suffered, or is likely to be suffered in the future. Nor does it mean that the standard of proof is in some way
reduced.
22 Rural News Ltd v Communications Trumps Ltd, above n 19, at [14].
[81] One rationale for s 6 is that, in contrast to human plaintiffs, corporate plaintiffs in defamation actions cannot claim relief for hurt feelings. Rather, they can only make out the necessary elements for any relief if the corporate plaintiff proves that the publication has caused, or is prospectively likely to cause, pecuniary loss. That rationale is not inconsistent with the Court of Appeal’s observation in Midland Metals, cited at [66] above, that the intent was to limit compensatory relief for
corporate plaintiffs to pecuniary loss.23 Not only is that the
limit of relief, but a
finding that there has been or will be some pecuniary loss is a pre-condition
to any relief.
[82] Mr Gray urged me to adopt the approach reflected in the
judgment of Paterson J in Chinese Herald Ltd v New Times Madia
Ltd.24 The plaintiffs in that case were the directors and
shareholders of a Chinese language newspaper, together with their company that
published their paper. The defendant was the publisher of another Chinese
language newspaper that had made statements disparaging
of the plaintiffs’
publication. Certain statements were found to be defamatory and the litigation
was reported on the issue
of whether the corporate plaintiff had made out
pecuniary loss.
[83] The evidence was that the publication had been acquired by the relevant owners in 1997 for no consideration from the New Zealand Herald. The shares had been sold in tranches, before and after the defamatory publications in December
2002 and 2003, for a total price of $600,000. The Judge found that the
company had not lost goodwill as a result of the publications.
The circulation
of the plaintiffs’ newspaper had remained constant from the date of
publication of the articles to the date
of the hearing, notwithstanding that
there had been an increase in the number of Chinese language newspapers during
that period.
The Judge treated the evidence as suggesting there had been an
increase rather than a decrease in revenue between the date of publication
of
the articles and the hearing.
[84] Paterson J acknowledged the analysis of Fisher J in Rural News
to the effect that the Court was able to draw an appropriate inference
regarding the likelihood of
23 Midland Metals Overseas Pte Ltd v The Christchurch Press Co Ltd, above n 16.
24 Chinese Herald Ltd v New Times Madia Ltd [2004] 2 NZLR 749 (HC).
causing pecuniary loss, and that actual evidence was not required.
Paterson J
observed:
[56] ... There may be cases where an appropriate inference can be drawn.
This is not one of them. There are no facts on which
I can draw an inference
that [the corporate plaintiff] has either suffered pecuniary loss or is likely
to suffer pecuniary loss because
of the defamatory statements. ...
[57] There needs to be an evidential basis before pecuniary loss can be
inferred. ...
[85] In contrast, CPAA invited me to adopt a low threshold for proof of pecuniary loss, as arguably reflected in a trial ruling of Mallon J in First Sovereign Trust v New Zealand Racing Board.25 That was a ruling on an application that liability issues ought not to be left to the jury on grounds that included a lack of any evidence on which the jury could find that the corporate plaintiff had suffered pecuniary loss. Predictably, the Judge adopted a cautious approach to what the jury might find
sufficient as evidence of likely pecuniary loss. Any analogy drawn from the
standard applied when the Judge was assessing whether
the issues ought to be
left to the finders of fact in that context is not helpful to the approach I
adopt in determining the issue
in the present case.
[86] As juries are routinely reminded, drawing inferences in the process
of fact- finding cannot involve speculation. An inference
can only properly be
drawn by proceeding to the logical conclusion from facts that are
proved.
[87] As to the evidence of loss, Mr Galbraith invited me to infer that
loss had been caused because it was NZICA’s intention
to do just that.
NZICA documents show that it intended to compete aggressively with the newcomer.
After a thorough cross- examination,
Ms Patterson was still comfortable that it
was appropriate for her to make the criticisms she did, despite accepting that
the factual
premises on which some of the criticisms depended were, or may have
been, wrong.
[88] Mr Jenkins gave evidence that the growth in membership numbers for CPAA
in New Zealand had been slower than the organisation had hoped for and
expected. He cited increased numbers of resignations,
particularly among
younger CPAA
25 First Sovereign Trust v New Zealand Racing Board [2012] NZHC 1784.
members, in 2013 and 2014. Although there was a healthy increase in overall
membership numbers (from 937 in 2012 to 1,289 in 2013
and 1,601 in 2014), Mr
Jenkins attributed the increase in the last period for which
statistics were available to a period
in which CPAA offered complimentary
membership for those joining.
[89] Overall, the retention rate for membership has been relatively
constant, as follows:
|
Year
|
Retention rate
|
|
2009
|
93.95%
|
|
2010
|
92.59%
|
|
2011
|
93.98%
|
|
2012
|
94.15%
|
|
2013
|
94.56%
|
|
2014
|
93.64%
|
[90] Although Mr Jenkins expressed concern that the retention rate in
2014 was the lowest it had been since 2011, the
extent of the
variation in a growing membership is not material.
[91] In terms of more specific initiatives, CPAA has sought to negotiate
with large employers of accountants what it calls recognised
employer
partnerships (REP). The rationale is for CPAA to have such employers accept the
CPAA designation as an equal and alternative
qualification to NZICA’s.
CPAA entered into an REP with KPMG in December 2012 and subsequently concluded
other REPs with
large employers in 2013 and 2014. However, by comparison to the
course of negotiating the first REP with KPMG, Mr Jenkins’
opinion was
that the subsequent REPs (which were in the course of negotiation when Ms
Patterson’s addresses were delivered
and thereafter) were more difficult
and took longer than CPAA might reasonably have expected.
[92] Mr Jenkins also considered that CPAA had attracted smaller audiences than it expected to promotional events it had conducted in the period after Ms Patterson’s addresses.
[93] I have reflected on the likely impact of the statements on the
audiences that heard them. The audiences comprised predominantly
members of
NZICA, with a small minority being existing members of CPAA. It is possible
that a small number of attendees were not
existing members of either
organisation, but candidates to join at least one of them.
[94] Ms Brownrigg gave evidence in response to a subpoena issued on behalf of NZICA. Her perception as the organiser of the conferences is instructive. She treated Ms Patterson’s criticisms of a competitor organisation as inappropriate and stated that her manner was aggressive. She treated the comments about CPAA as
Ms Patterson:26
... stray[ing] off topic at times to have a bit of a dig at CPA Australia. I
didn’t feel that was appropriate given what she was asked to speak
about.
[95] Ms Brownrigg treated the occasion as one that gave representatives
of both organisations a platform to update and sell the
benefits of belonging to
their respective organisations. She did not expect either representative to
use the opportunity to denigrate
their opposition and for that reason was
surprised by some of Ms Patterson’s comments.
[96] I consider that some in the audiences, irrespective of their
membership affiliation, would have treated Ms Patterson’s
criticisms
as inappropriate and unprofessional. It follows that there would, more likely
than not, have been some in the audiences
who treated the comments as harming
NZICA’s reputation, rather than damaging the reputation of
CPAA.
[97] I acknowledge that there were hearsay statements in the evidence of witnesses for CPAA, Ms Bridget Pretty and Mr Richard Jones, who reported on comments made to them by other attendees at the Christchurch conference. I recorded objections to those hearsay statements at the time, allowing them to remain in the witnesses’ evidence-in-chief de bene esse.27 I accept that the evidence was
inadmissible, and I have disregarded it. I am able to reach the view I
have expressed
26 Brief of Viv Brownrigg at [17].
27 Trial Ruling No 1.
in the previous paragraph from my own assessment of the range of reactions
that Ms Patterson’s comments would have provoked
among the members of
audiences of the type that she was addressing.
[98] There would also have been a range of reactions among the audiences
as to how inclined they were to accept or agree with
Ms Patterson’s
comments. The statements about CPAA were from the perspective of a former
monopolist that resented the
intrusion of Australian competition. Given her
aggressive tone, an educated audience including practising accountants, and
those
aspiring to that status, would be unlikely to accept her criticisms at
face value. For example, those who were already undertaking
the CPAA
modules, or who had researched the requirements for doing so,
would be unlikely to accept Ms Patterson’s
derisory observation that
students could do a few CPAA modules and CPAA would then give them a piece of
paper saying that they were
an accountant. That is not to say that the
criticisms were less than defamatory, but that the lasting effects of defamatory
comments
should not be overstated. I also consider that the fact the comments
were delivered orally lessens to a degree the impact they would
have, if
compared with a written statement circulated in the same terms.
[99] The CPAA representatives did not respond to the criticisms in either
forum. I consider that to be a neutral factor. Although
some members of the
audience might treat the lack of a denial as adding credibility to the
criticisms, others might equally treat
their refusal to engage as a dignified or
professional way to handle it.
[100] Ms Patterson’s claims to superior educational standards
and international connections for NZICA might have been
treated as puffery
– a predictable form of marketing the attributes of NZICA, in part by
denigrating its competitor. Having
regard to all these aspects of the context,
I am not persuaded that any material component of the audiences would have taken
the
criticisms to heart and relied on them to change their view on the
respective attributes of the two organisations.
[101] The essence of CPAA’s position is that, whilst its fortunes in New Zealand have improved since the May 2013 statements, the extent of that improvement is less than it would have been without the defamatory comments. The basis for that
proposition remains speculative. CPAA’s task in New Zealand, to make
inroads into a very long-established monopoly, is a difficult
one. The
incumbent has fought hard to retain its dominant position and there is no basis
for attributing the indeterminable extent
to which it has succeeded in
doing so entirely or substantially to the defamatory content of Ms
Patterson’s addresses.
There is no evidentiary basis on which to rely,
to draw an inference that what was said to the two audiences has caused
pecuniary
loss to CPAA. Accordingly, I am not satisfied that CPAA can make out
that it has suffered any pecuniary loss.
[102] Mr Galbraith argued that the prospect of pecuniary loss
caused by Ms Patterson’s statements was likely
to continue for years,
given that the audience included those who were studying accountancy or were
young accountants. He submitted
that choices they might make about which
professional organisation to belong to were likely to be made over a period of
years, in
circumstances where those decisions could be impacted by Ms
Patterson’s criticisms in May 2013. I am not persuaded that there
is any
sufficient prospect of pecuniary loss being caused in the future, if CPAA is
unable to make out such loss on the balance of
probabilities in the period of
somewhat more than two years since the addresses were delivered. With the
passage of time, an on-going
range of alternative experiences would be available
to those making choices about which professional body to belong to, so that
whatever
impact the statements had at the time is more likely to have dissipated
than to have retained its potency when added to the mix of
other influences on
the choices made by potential members.
[103] In case I am wrong in deciding that CPAA cannot make out
either the existence of pecuniary loss or that the statements
complained of are
likely prospectively to cause it pecuniary loss, it is appropriate to summarise
the full gamut of defences that
were argued to the claims in defamation, and
indicate my view on them.
A threshold of seriousness?
[104] In addition to the numerous defences pleaded for NZICA, it raised a general objection that robust criticisms by one professional body of another did not reach a
minimum threshold of seriousness to warrant the intervention of the law of
defamation. Arguably, the criticisms were part of the
cut and thrust in a
competitive environment, and CPAA had ample opportunities to respond with claims
and criticisms of its own to
the target audience. The law should not intervene
to punish utterances thought to be unprofessional or in poor taste.
[105] It is well-settled in England that all definitions of what may constitute defamatory material are subject to a requirement that the material complained of has to exceed a threshold of seriousness, so as to exclude trivial claims.28 In an extensive analysis of this issue in Thornton v Telegraph Media Group Ltd, Tugendhat J concluded that such a threshold applied, for two reasons.29 First, that it was in accordance with the true interpretation of Lord Atkins’ speech in Sim v Stretch,30 and with the more recent decision in Ecclestone v Telegraph Media Group with which Tugendhat J agreed.31 Secondly, the threshold was treated as required by the development of the law, recognised in Jameel (Yousef) v Dow Jones & Co Inc, that arose from the passing of the Human Rights Act 1998 in the United Kingdom.32
Regard for art 10 of the European Convention on Human Rights and
Fundamental
Freedoms and the principle of proportionality both required it.
[106] In the United Kingdom, the recognition of a seriousness threshold by
the courts has more recently been reflected in s 1(1)
of the United Kingdom
Defamation Act 2013, which provides:
1 Serious harm.
(1) A statement is not defamatory unless its publication has caused or is likely to cause serious harm to the reputation of the claimant.
....
[107] Mr Gray submitted that the influence of art 10 of the European
Convention recognised in the Court of Appeal decision in Jameel, has its
equivalent in the
29 Thornton v Telegraph Media Group [2010] EWHC 1414 (QB), [2011] 1 WLR 1985.
30 Sim v Stretch [1936] 2 All ER 1237 (UKHL).
31 Ecclestone v Telegraph Media Group [2009] EWHC 2779 (QB)
32 Jameel (Yousef) v Dow Jones & Co Inc [2005] EWCA Civ 75, [2005] QB 946.
recognition of the right to freedom of expression which is in broadly similar
terms in s 14 of the New Zealand Bill of Rights Act
1990 (NZBORA).
[108] Mr Galbraith resisted the adoption of any threshold of
seriousness in New Zealand. He pointed out that the matter
had been of
sufficient concern in England for a threshold to be specified by Parliament,
when there has been no such consideration
given in New Zealand.
[109] Mr Galbraith also submitted that no need has been identified
for such a threshold in New Zealand where, on his analysis,
defamation
proceedings were not frequently resorted to, and plaintiffs and their advisers
were sensible in reserving proceedings
for cases where any seriousness threshold
would be exceeded in any event. At least anecdotally, very high awards of
defamation
damages are rare in New Zealand. This may contrast with the
position in England, where plaintiffs’ aspirations may have
been
excited by numerous seemingly extravagant awards. Alternatively, Mr Galbraith
argued that if CPAA’s causes of action
had to meet some threshold of
seriousness, then the matters complained of readily did so in any
event.
[110] In Thornton, Tugendhat J cited a sequence of definitions of what constitutes defamation that was drawn from judicial analysis by Neill LJ in Berkoff v Burchill, and then commented on extra-judicially in Neill LJ’s contribution in Duncan and Neill on Defamation.33 Applying definitions that involve value judgements such as whether the words complained of would tend to lower the plaintiff in the estimation of right-thinking members of society generally, or were such as to make a plaintiff be shunned and avoided, or to deter third persons from associating or dealing with him, are factual issues that will generally be left to a jury. A difficulty in identifying the
scope of possible claims in defamation is that these definitions can apply to
an extremely wide range of circumstances, potentially
without an objective
minimum level of seriousness.
[111] As to the application of such a threshold, Gatley comments as
follows:34
34 Gatley on Libel and Slander, above n 28, at [2.4] (footnotes omitted).
Whether the threshold of seriousness has been met is a multi-factorial
question, that must be viewed in light of the rights in art
8 and art 10, and
that will require the court to consider matters such as the nature and inherent
gravity of the allegation, whether
the publication was oral or written, the
status and number of publishees and whether the allegations were believed, the
status of
the publisher and whether this makes it more likely that the
allegation will be believed, and the transience of the publication.
The result
in each case will depend on the particular facts ...
[112] Complaints of defamation that have been held not to reach the
seriousness threshold include a criticism of an author whose
book contained the
outcome of numerous substantial interviews, where her method was criticised for
giving the interviewees the right
to read what the author had said, and to
change it. So, too, where a publication described the author as being
dismissive of the
views of several well-known vegetarians in respect of their
vegetarianism.35
[113] On the other hand, an argument that the seriousness threshold had not
been reached was unsuccessful in a case where the plaintiff
complained of an
imputation that she had made an embarrassingly drunken spectacle of herself as
she proposed to her boyfriend while
singing karaoke in a pub in the early hours
of the morning.36
[114] The New Zealand Parliament has never attempted a statutory definition
of what amounts to defamation.37 Including a seriousness
threshold would provide some objective considerations helping potential
claimants decide whether to sue, in
circumstances where they are likely to be
highly incensed and consider themselves seriously slighted when relying on an
otherwise
subjective assessment.
[115] The recognition of the right to freedom of expression reflected in s 14 exemplifies an aspiration that New Zealanders be more tolerant of the entitlement of others to express diverse views, including criticisms of others. Obviously, like others, that right is not unqualified and it could not provide a complete defence in respect of a statement that is otherwise made out as defamatory. However, s 6 of NZBORA requires courts to prefer an interpretation of an enactment that is
consistent with the rights and freedoms contained therein, where that is
possible.
36 Church v MGN Ltd [2012] EWHC 693 (QB).
37 Stephen Todd (ed) The Law of Torts in New Zealand (6th ed, Thomson Reuters, 2013) at [16.3].
Applying a threshold of seriousness would be one way to protect against
unjustified infringements of the right to freedom of expression.
[116] In many circumstances, litigating a claim for defamation is among the
least efficacious forms of proceedings available for
civil wrongs. Pursuit of
vindication of a defamed plaintiff’s rights inevitably involves revisiting
the content and circumstances
of the damaging utterances, and the courts are
familiar with cases in which notionally successful plaintiffs are left
dissatisfied
with the final outcome. In an era when a focus on the substance of
civil disputes generally enables them to be litigated pursuant
to an agreed
sequence of issues, the technical requirements of pleading for both plaintiff
and defendant in defamation cases places
greater emphasis on these more
technical considerations: the accuracy of alleged defamatory meanings, the
presence of innuendo,
the justification for honest opinion or defence of matters
such as qualified privilege.
[117] In a 2010 judgment, Lord Phillips observed for the United Kingdom
Supreme
Court:38
Over 40 years ago Diplock LJ in Slim v Daily Telegraph Ltd [1968] 2 QB
157, 171 referred to “the artificial and archaic character of the tort
of libel”. Some 20 years on Parker LJ in Brent Walker Group Plc v Time
Out Ltd [1991] 2 QB 33, 46 commented on the absurdity of the “tangled
web of the law of defamation”. Little has occurred in the
last 20 years
to unravel the tangle ...
[118] In a short concurring judgment in that appeal, Lord Walker observed how the defence of fair comment (honest opinion in New Zealand) had to adapt to the vastly different conditions in which electronic media have exponentially expanded both those writing, and those reading matters of comment.39 Although the phenomenon of the electronic media is not directly relevant in this case, it is a part of the context in which the Court should assess the appropriate approach to the recognition of
actionable claims for defamation.
[119] The introduction in the Act of alternatives to a traditional
determination after trial, such as the opportunity for
a retraction or
reply, the court’s power to
38 Spiller v Joseph [2010] UKSC 53; [2011] 1 All ER 947 (UKSC) at [2].
39 At [131].
recommend corrections, and the prospect of statements in open court, suggests
legislative attempts to broaden the avenues for resolving
the harm perceived as
following from alleged defamatory utterances.40
[120] I would be minded to adopt the analysis exemplified in Thornton
and other recent United Kingdom authorities by recognising a minimum
threshold of seriousness. That would require a claimant
to meet an
objective seriousness threshold as an element of making out the actionability
of alleged defamatory statements.
The approach suggested in Gatley
appears appropriate. This threshold would apply across the various common
law definitions of defamation. For instance, in the present
case, CPAA would
need to establish not only that the statements were to its discredit, but that
these discrediting statements caused
serious harm to its reputation.
[121] The existence of such a seriousness threshold is not decisive in this
case because CPAA was required to establish that the
publication complained of
has caused pecuniary loss. In this case, that requirement poses a hurdle of
similar height to any requirement
for CPAA to clear a threshold of seriousness.
If such a threshold is to be applied, then I would find that CPAA could not make
it
out, where it has been unable to establish pecuniary loss.
Defences pleaded
Truth
[122] Section 8 of the Act provides for the defence previously
known as justification, and recognised in the Act as the
defence of truth. The
relevant parts of s 8 are as follows:
8 Truth
...
(2) In proceedings for defamation based on only some of the matter
contained in a publication, the defendant may allege and
prove any facts
contained in the whole of the publication.
40 Defamation Act 1992, ss 25, 26 and 34.
(3) In proceedings for defamation, a defence of truth shall succeed if—
(a) The defendant proves that the imputations contained in the matter
that is the subject of the proceedings were true, or
not materially different
from the truth; or
(b) Where the proceedings are based on all or any of the matter
contained in a publication, the defendant proves that the publication
taken as a
whole was in substance true, or was in substance not materially different from
the truth.
[123] In this case, NZICA has pleaded truth in respect of the following
imputations:
[124] Section 8(2) imposes the onus on NZICA to prove sufficient facts to
justify these imputations as truthful.
[125] As to the first of these imputations, Ms Patterson explained in evidence that she had been told that CPAA explored the prospect of providing free iPads to staff members who enrolled in the CPAA programme with one large accounting firm. Mr Jenkins’ evidence on this was to the effect that there had been a single exploratory discussion about such a prospect, but that it had not gone any further, and no free iPads had ever been offered. When that evidence was put to Ms Patterson, she rejected it and accepted that her stance meant that she thought
Mr Jenkins was lying on the point.41
[126] I accept Mr Jenkins’ evidence on the point. His concession that the prospect had been raised in a tentative way was entirely credible, as was his firm denial that
the matter had gone any further. There was nothing in Ms
Patterson’s evidence or
41 Notes of evidence at 71/8.
the remainder of NZICA’s case to justify rejecting Mr Jenkins’
evidence, which was consistent and reasonable.
[127] A single, exploratory suggestion that iPads might be offered
cannot be equated with CPAA resorting to that as
a marketing ploy.
It follows that the imputation that CPAA resorts to expensive marketing ploys
to entice accountants to
become members is false.
[128] As to the second imputation that CPAA cannot attract members
without resorting to expensive or elaborate marketing
ploys, I am not satisfied
that such an imputation arises from the relevant statement complained of
in Ms Patterson’s
speeches. Accordingly, no need arises to consider
whether truth might be a defence to it.
[129] The third imputation defended on the ground of truth was that CPAA
wastes or misuses membership fees to pay for expensive
advertising on
television. The impact of this criticism arose from Ms Patterson’s
statement which implied that CPAA took
out sponsorship of an entire series of
the CSI television programme on prime time television in Australia. On the
basis of what
Ms Patterson had been told by other, unidentified, persons, she
still believed that to be the case at the time of the hearing.
It had been
denied by CPAA and I accept the statement from the Nine Network Australia Pty
Ltd to the effect that CPAA advertisements
appeared on a total of six occasions
during or around the screening of the CSI programme.
[130] In argument, the justification for this imputation was evidence that CPAA had booked television advertising in New Zealand in the 2013 calendar year that was charged at $218,965.42 There did not appear to be any evidence of the amount CPAA had paid for that television advertising, given the prospect of discounts from the notional charge described in the relevant schedule as the “rate card value”. Ms Patterson’s criticism that spending membership fees on extensive television
advertising was wasteful or a misuse of membership fees was an
expression of
42 CB3/517-522. The pleading (second amended statement of claim at 42.2.6) alleged that CPAA had a media plan for February 2012 to January 2013 that costed various forms of advertising at over A$3,000,000. There was no evidence of that, and the focus was on New Zealand television advertising.
opinion dependent on a factual statement that was not correct, at least in
regard to the extent of such advertising.
[131] I am not persuaded that the placement of six discrete advertisements
during the screening of a series of CSI can be treated
as “not materially
different” from the statement that CPAA had sponsored an entire series. I
accept that the difference
is one of degree rather than kind. However, some in
Ms Patterson’s audiences would likely have treated her criticism of CPAA
using membership fees for television advertising as being justified by her
emphasis on the very substantial extent of that advertising,
rather than the
choice to use that mode of advertising at all. Others in the audience may have
treated the criticism as reflecting
adversely on the use of television
advertising per se, irrespective of its extent. A small number in the
audiences may have
recalled that NZICA had used full page advertisements in the
New Zealand Herald and the NBR some six months earlier.
[132] The matter is finely balanced. One aspect of the criticism is about
the choice of television advertising per se, which could
justify NZICA defending
the imputation on the basis that the underlying factual assertion was not
materially different from the truth.
However, the real sting in the criticism
is the implied extravagance of CPAA spending as much as would be involved in
sponsoring
a whole series of CSI as a form of promoting itself. Because that
aspect of the imputation looms larger, I am not satisfied that
it is one that
can be defended on the basis that the evidence established facts not materially
different from the truth.
[133] NZICA also invoked the defence of truth as provided for in s 8(3)(b)
of the Act by arguing that, in a review of the totality
of the passages objected
to, the overall message conveyed was in substance true or not materially
different from the truth.
[134] Counsel for both parties drew different points on the approach to s 8(3)(b) from the decision in Ansley v Penn.43 The subject matter of that case was a Listener article about a young woman who claimed to have been excluded from studying for a diploma in nursing at the Christchurch Polytechnic because she had challenged
so-called politically correct content in the curriculum. The
article commented
43 Ansley v Penn HC Christchurch A36/98, 28 August 1998 (Full Court).
adversely on her honesty, and referred to her having been an
in-patient in a psychiatric hospital and that she had not
disclosed that fact
in her application. The reference to her having been an in-patient was wrong
and the District Court Judge found
that assessments of her mental health by
health professionals were not close enough to render the statement about her
having been
an in-patient not materially different from the truth.
[135] At the District Court trial, the Judge had apparently heard extensive evidence as to her behaviour whilst enrolled in the nursing course. The District Court Judge found that during the time of her association with the Christchurch Polytechnic she was:44
... attention seeking, argumentative, disrespectful, offensive, disruptive,
divisive, manipulative, threatening, intimidating and
that this behaviour caused
distress to others.
[136] It was in that context that the High Court on appeal had to consider the trial Judge’s rejection of a plea of truth in reliance on s 8(3)(b). The Court treated that provision as affording a defence of truth where the part of the publication that the plaintiff relied on is not proved to be true, but the sting of the article as a whole is true, or in substance not materially different from the truth, so that damage to the plaintiff’s reputation flows from the article as a whole, and not from the words relied
on by the plaintiff.45
[137] Any comparison of the overall impact of a speech with the impact of component parts complained of by a plaintiff will be intensely fact-specific in each case. Here, NZICA characterised the sting of Ms Patterson’s comments in relation to CPAA as the adverse comparison to her claims that NZICA has the pre-eminent designation in terms of qualifications, so that membership of NZICA was more valuable to its members than the CPAA designation would be for its members. On the premise that NZICA’s defence had justified that proposition, Mr Gray argued that any different or more specific adverse imputations arising from particular passages
found to be defamatory would not add to the harm to CPAA. It arguably
followed
44 Ansley v Penn, above n 43, at 12.
45 Ansley v Penn, above n 43, at 13 and 14.
that the truth of the comments overall about CPAA entitled NZICA to invoke
the general form of the defence of truth as provided by
s 8(3)(b).
[138] In contrast, Mr Galbraith relied on the Full Court’s
adoption of the trial Judge’s observation in respect
of the defence of
truth under s 8(3)(b) in the following terms:46
... if a statement makes either a separate or discrete assertion as to the
plaintiff’s character the rest of the publication
in which that
statement appears cannot be ignored because it may well give the assertion a
context. However, if the allegedly
defamatory assertion means that once the
article as a whole has been read there is still a defamation then the defence is
not proved.
[139] Given the extent to which I have found the pleaded imputations were
defamatory, I consider they raise discrete defamations that
are not subsumed in
the more general theme of criticism which NZICA argues it can defend on the
overall truth of the statements in
respect of CPAA. There were disparaging
remarks by Ms Patterson that, if pecuniary loss had been made out, would have
been defamatory
of features of CPAA going beyond the general theme of
the inferiority of its educational standards. Accordingly, a general
plea of
truth relying on s 8(3)(b) could not succeed as a defence.
Honest opinion
[140] NZICA also pleaded honest opinion as an alternative defence in
classic terms as follows:
Insofar as the statements consisted of statements of fact, they were true in
substance and in fact, and so far as they consist of
an expression of opinion,
they are the honest opinion of the defendant.
[141] The defence then particularised what were asserted as statements of fact, and the facts and circumstances relied on, followed by a claim that all of the pleaded meanings complained of constituted opinions, and that they were genuinely held by
NZICA.
46 Cited in Ansley v Penn, above n 43, at 12.
[142] CPAA complained that the pleading did not specify which of the
allegedly defamatory statements were defended as honest opinion,
when the
distinction was not made in NZICA’s pleading between the components
characterised as fact and those characterised
as opinion. A defendant pleading
honest opinion is obliged to identify the facts on which the defendant was
commenting, and to establish
that such facts were true. Mr Gray identified
matters at that level of detail in his closing submissions. I am not concerned
that
there was a material deficiency in the pleading that caused prejudice to
CPAA.
[143] To defend a comment on the basis that it is honest opinion, its terms
must explicitly or implicitly indicate the facts on
which it is based.47
On the other hand, it is not necessary for a defendant to prove the truth
of all the facts that are relied on, but rather sufficient
of them to justify
the comment made in reliance on the facts.48
[144] The difficulty for NZICA in pleading honest opinion is that there is a material mismatch between the facts it pleads as being true, and the component of Ms Patterson’s comments that were presented as fact. For instance, the pleaded facts relied on included that NZICA is a member of the GAA whilst CPAA is not, and that NZICA has an arrangement for reciprocal membership with GAA members, whereas CPAA does not. That ignores the fact that Ms Patterson’s assertions of inferior educational standards being applied by CPAA were based on the proposition that CPAA could not qualify for membership of GAA because its educational standards
were different.49
[145] Similarly, the true facts cited as justification for the criticisms of CPAA’s promotional tactics were that it had “contemplated offering new graduates a free iPad”, and that it had appeared to spend over $218,000 on television advertising. That was not the substratum of fact that was relevant to Ms Patterson’s criticisms. Her comment about iPads was reasonably interpreted as meaning that CPAA did offer new graduates a free iPad, not merely that it had contemplated doing so.
Further, that CPAA had been the sponsor of an entire series of CSI on
Australian
47 Spiller v Joseph, above n 38, at [105].
48 Mitchell v Sprott [2001] NZCA 343; [2002] 1 NZLR 766 (CA) at [24].
49 Which in context was reasonably interpreted as inferior.
prime time television, when the fact relied on to advance honest opinion in
closing was different to that.
[146] On each of the topics of the alleged inferiority of
CPAA’s educational standards, and the nature and
prudence of
CPAA’s marketing tactics, I am not satisfied that the more confined
factual propositions that could be proven
as true formed a sufficient basis for
expressions of opinion that were defamatory. That is because the expressions of
opinion were
made by reference to different assertions of facts that NZICA
cannot make out as being correct. That conclusion would preclude NZICA
invoking
the defence of honest opinion.
[147] There was considerable argument and evidence on the question of
whether the education provided by CPAA is inferior to that
provided by NZICA. I
note that in pleading truth as a defence, NZICA did not plead as a true
statement of fact that CPAA’s
educational standards were inferior to
NZICA’s.
[148] On this issue, CPAA called Professor Tony van Zijl, professor of
accounting at Victoria University, and NZICA called Professor
David Lont,
professor of accounting at Otago University. After producing briefs, these two
experts were directed to confer and
produce a joint report that identified the
extent of common ground on material issues, and to list the different opinions
still maintained
by each of them. Their evidence was given in a hot tub format
after all other evidence had been completed.
[149] The experts agreed that NZICA and CPAA were well-respected as professional bodies in New Zealand and Australia, and internationally, by other accounting professional bodies, tertiary institutions and regulators. The experts treated both organisations as having long-standing accreditation processes for accounting degree programmes. Beyond that point, the experts diverged on the criteria for assessing the relative quality of the educational programmes, and whether the programmes offered by NZICA could be ranked as superior to those offered by CPAA.
[150] Professor Lont placed some weight on the existence of a
post-graduate diploma issued by NZICA to recognise successful
completion of the
requirements to achieve registration as a chartered accountant. He also placed
store on the independent ranking
of the courses for that study in
Australia as being at post-graduate level, whereas there is no
equivalent independent
ranking of the courses that are offered by CPAA.
Professor Lont was critical of the substantially greater extent to which CPAA
tests candidates by use of multiple choice questions, whereas more of the
testing of students for the NZICA qualification was by
way of written
answers.
[151] Professor Lont also cited what he considered to be the invariable
requirement for NZICA candidates to complete a university
commerce degree before
embarking on the professional study. In contrast, CPAA allows exceptions to
that requirement for candidates
who undertake the professional subjects before
they have completed a university degree, and in some cases not a commerce
degree.
[152] The experts agreed that the combined academic and professional
education requirements for CPAA candidates included a minimum
of one course in
each of auditing and tax, whereas the NZICA requirement was for two courses in
each area. Professor Lont considered
that the NZICA requirement would produce
candidates with a greater extent of knowledge in those important
areas.
[153] The content of NZICA’s curriculum has to conform with the
requirements of a group convened by the GAA and known as
Chartered Accountants
Group of Executives (CAGE). Professor Lont saw compliance with the CAGE
framework as providing another external
quality assessment for NZICA’s
programme.
[154] Professor van Zijl held credibly to contrary views on each of these potential indicators of quality. On the existence of a separate diploma awarded for completing the course, Professor van Zijl was persuasive in his view that the decision of an institution to issue such a diploma cannot, of itself, alter the quality of the study required to earn it.
[155] As to the assessment of the level of study attributed to the
Australian version of the NZICA course by an independent higher
education body,
Professor van Zijl was not persuaded of its relevance when the same organisation
did not rank CPAA’s modules
on the same basis. He reasoned that there was
no basis for assuming that CPAA’s modules would be ranked any lower than
NZICA’s,
when the exercise has not been undertaken by the independent
organisation.
[156] CPAA does self-assess the level of its modules, which puts
an overall weighting at less than eight, which is recognised
as the appropriate
(post-graduate) level in the independent assessment of NZICA’s
papers.
[157] Professor van Zijl was not persuaded that the educational
standard for CPAA’s modules is lower by virtue of
the fact that some
students may embark on them before having completed a university degree, whether
in accounting or in other disciplines.
His view was that the alternative
offered by CPAA to non-accounting students to complete certain foundation
courses to achieve the
equivalence of the academic learning involved in an
accounting degree is a healthy means of attracting students with learning in
different disciplines, without necessarily down-grading the standards required
in accounting learning to achieve the requisite qualification.
On this point,
Professor Lont acknowledged that NZICA has more recently relaxed the previously
rigid requirement for an accounting
degree as a pre-requisite to commencing
study, enabling a measure of diversity to be achieved in its
students.
[158] Professor van Zijl did not accept that testing students with multiple choice questions necessarily indicated that the learning involved was at a more elementary level. His point was that, depending on the skill applied in setting the questions, relatively sophisticated testing could be achieved successfully by the use of multiple choice questions. He also made the point that given the very large numbers of students sitting CPAA exams, resort to multiple choice questions was likely to be a necessity to enable efficient processing of candidates’ exams.
[159] I am inclined to accept Professor Lont’s view that written
answers enable a more discerning assessment of the skills
of students, not only
to know the subject matter but to analyse and evaluate
it.50
[160] That cannot be decisive, however, given the diverse nature of the
subject matter desirably covered in competing courses.
The same observation
applies to the quality of study achieved by undertaking two modules of auditing
and tax, rather than one.
For accountants in public practice in New Zealand,
additional study in those areas could reasonably be expected to enhance the
skill
level that those with the qualification brought to those types of work.
Additional study in respect of auditing would be a matter
of indifference to
accountants whose work had nothing to do with auditing.
[161] Professors van Zijl and Lont also took different views on projections
of the hours of study that they considered would
be required to complete
the courses required by each organisation. There were too many imponderables
in the assumptions made
for their views on that point of comparison to be
substantially helpful.
[162] Having regard to the detailed analyses in the experts’
respective briefs, the narrowing of their differences in
the joint
statement they produced, and the exchanges of views elicited during their
oral evidence, I do not consider it is
appropriate to make a definitive finding
either that the educational courses offered by the parties are substantially
similar, or
that NZICA’s is superior to that of CPAA. As the debate
between the experts demonstrated, any such ranking would require evaluation
on
a number of criteria where subjective elements justify reasonable assessors
arriving at inconsistent views.
[163] I am satisfied that there can be legitimately different views attributed to the weighting given to various criteria relevant to the quality of the respective qualifications. For example, the syllabus for CPAA offers greater flexibility in the
range of courses and the sequence in which students can study
them. It may
50 Professor Lont cited Blooms Taxonomy which postulates a hierarchy of learning starting from knowledge and comprehension at the bottom to analysis, synthesis and evaluation towards the top of the pyramid.
therefore provide a more meaningful accounting qualification for students
intending to practise in jurisdictions such as Singapore
or Hong Kong, where
CPAA has a presence. On the other hand, for trainee accountants
intending to practice in New Zealand,
taking NZICA’s advanced modules
in tax or auditing is likely to involve a higher level of learning.
[164] If Ms Patterson’s unqualified statements in relation to
CPAA’s educational standards being inferior were treated
as statements of
fact, then they would be false. I accept that in terms of the words in which
this topic was addressed, and the tone
in which the comments were
delivered, Ms Patterson was presenting them as statements of fact.
However, she was speaking
to discerning audiences that would be unlikely to
accept such assertions uncritically. She was obviously advocating for her
organisation
and the more aggressively she expressed herself, the more likely it
would have been that her audiences treated her assertions as
matters of
opinion.
[165] Professor Lont readily justified his opinion that NZICA’s
qualifications were superior by applying the criteria he considered
to be most
important. If Ms Patterson had qualified her statements by saying, for example,
that NZICA considered its qualification
was superior for those wishing to
practise in New Zealand, and in particular in public practice, then such
comments would be defensible
as honest opinion if they relied on an analysis
such as that undertaken by Professor Lont.
[166] The difficulty is that the propositions Ms Patterson relied
on for the unqualified statement as to inferiority were
not the equivalent of
Professor Lont’s considerations. They were instead to the effect that
CPAA was excluded from the GAA
because its educational standards were
inferior, and that the CPAA qualification could be obtained after
students
had completed a few modules. Those were not true statements of fact,
so honest opinion could not avail NZICA on the sting of the
defamation.
[167] In the event that I am wrong as to the inadequacy of true facts as a foundation for the opinions expressed, the additional issue of whether NZICA’s opinions were genuinely held would arise. CPAA issued a notice under s 39 of the Act disputing that the opinions expressed by Ms Patterson were genuinely held. When cross-
examined, Ms Patterson maintained her belief that CPAA had sponsored a series
of CSI in Australia on the basis of what she had been
told by other unidentified
persons. She ultimately accepted that there was no evidence that such
sponsorship had occurred, and
NZICA did not contest the documentary
confirmation from Nine Network Australia of a far more limited extent of
advertising
in association with a CSI programme.
[168] Ms Patterson accepted in cross-examination that she was
mistaken about
CPAA not being a member of GAA because of different educational
standards.51
[169] The genuineness of an opinion in this context is not assessed by its reasonableness.52 Even if there is a degree of irresponsibility in the way opinions relied on have been formed, that does not necessarily mean that it was not genuine. I accept the criticisms for CPAA that Ms Patterson was inadequately briefed to express the opinions, and was cavalier in confidently asserting matters on which she was wrong. However, those criticisms are not sufficient to deprive the opinions
expressed of a genuine character.
[170] Having reflected on the tone of Ms Patterson’s recorded
presentation, its text and the totality of her evidence, I accept
that the
relevant opinions she expressed were genuinely held by her for that
component of the honest opinion defence.
However, on my analysis it would
not be available because the opinions complained of relied on facts not made out
as true.
Qualified privilege
[171] The last alternative defence pleaded for NZICA is that Ms
Patterson’s statements were made on occasions of
qualified privilege. The
consequence would be that there can be no liability for statements found to be
defamatory unless the rebuttal
arising under s 19 of the Act applied.
[172] CPAA disputed that the Christchurch and Wellington conferences
constituted occasions of qualified privilege for Ms Patterson
to address
the audiences on
51 Transcript at 96, 97.
52 Mitchell v Sprott, above n 48, at [24].
criticisms of CPAA. Alternatively, CPAA pleaded that, if qualified
privilege otherwise applied, it was not available to NZICA because
s 19 of the
Act applied, which provides:
19 Rebuttal of qualified privilege
(1) In any proceedings for defamation, a defence of qualified
privilege shall fail if the plaintiff proves that, in publishing
the matter that
is the subject of the proceedings, the defendant was predominantly motivated by
ill will towards the plaintiff,
or otherwise took improper advantage of
the occasion of publication.
(2) Subject to subsection (1) of this section, a defence of
qualified privilege shall not fail because the defendant
was motivated by
malice.
[173] Qualified privilege will arise if the person making the communication
has an interest, or a legal, social or moral duty, in
making it to the person to
whom it is made, and the audience has a corresponding interest or duty in
receiving it.53 The definition of occasions of qualified privilege
were considered by the Court of Appeal in its second decision in Lange v
Atkinson:54
[20] A privileged occasion thus had to be an occasion in which
the duty/interest test was satisfied. If in the circumstances
that test was
satisfied, the occasion was capable of being regarded as one of qualified
privilege. But despite a communication being
made between persons who might in
other circumstances have a shared interest in the subject-matter it could happen
that the maker
and recipients of the statement did not in the
particular circumstance of the publication have the necessary interest or
duty
to satisfy what we are calling the shared interest test.
[174] That judgment emphasises that consideration of whether the relevant occasion was one of qualified privilege, and whether the privilege was misused by the defendant, are separate inquiries. I note that although the terms of s 19(1) generally have plaintiffs assuming an onus to rebut qualified privilege by establishing that the defendant was predominantly motivated by ill-will, the concept of misuse of an otherwise privileged occasion is an explicit alternative, where a
defendant has otherwise taken improper advantage of the
occasion.
53 Adam v Ward [1917] AC 309, at 334 per Lord Atkinson.
54 Lange v Atkinson [2000] NZCA 95; [2000] 3 NZLR 385 at [20].
[175] I am satisfied that the Christchurch and Wellington
conferences were occasions of qualified privilege for Ms Patterson
to address
the audiences on the competition NZICA perceived itself as facing from CPAA.
She was invited to speak on behalf of NZICA,
and did so as a senior executive.
She was speaking to an audience who were either members of that organisation,
members of the
relevant competitor, or a potential member of either of them.
NZICA’s on-going status, and its merger with ICAA, were matters
of
important mutual interest shared by the speaker and her audiences.
[176] However, did the nature and extent of her defamatory statements take
her outside the protection that qualified privilege would
otherwise afford? In
Lange, the Court of Appeal made the following observations about the
misuse of an occasion of privilege:
• If the privilege is not responsibly used, its purpose is
abused and improper advantage is taken of the occasion.
• A publisher who is reckless or indifferent to the truth of what is
published cannot assert a genuine belief that it was
true.
• While carelessness will not of itself be sufficient to
negate qualified privilege, its existence may well support
an assertion by the
plaintiff of a lack of belief or recklessness. In this way the concept of
reasonable or responsible conduct
on the part of a defendant in the particular
circumstances becomes a legitimate consideration.
• Recklessness as to truth has traditionally been treated as
equivalent to knowledge of falsity.
• Indifference to truth is not the same thing conceptually as failing to take reasonable care with the truth, but in practical terms they tend to shade into each other. It is useful, when considering whether an occasion of
qualified privilege has been misused, to ask whether the defendant has
exercised the degree of responsibility which the occasion
required.55
[177] Mr Galbraith submitted that Ms Patterson’s conduct was
influenced by NZICA’s deliberate policy to compete
aggressively
with CPAA. He cited Ms Brownrigg’s assessment as organiser of
the conferences that Ms Patterson’s
presentations were inappropriate
and that Ms Brownrigg was surprised that she used the opportunity to denigrate
NZICA’s opposition.
[178] Mr Galbraith also submitted that a defendant’s subsequent
rationale for statements complained of could be relevant
to the attitude
attributed to her at the time the addresses were made. In cross-examination, Ms
Patterson accepted that she was
trained as a lawyer, and had not undertaken
accounting studies. She had depended on relatively high-level briefings from
others
at NZICA, whom she did not identify in her evidence, as the basis
for her criticisms of CPAA. She was disinclined
to withdraw criticisms
despite having to acknowledge in cross- examination that she had no first-hand
or reliably accurate information
to support them. On her belief that CPAA had
offered iPads as an incentive to students, she was prepared to reject Mr
Jenkins’
evidence as not being truthful without offering any foundation
for doing so.
[179] In considering whether Ms Patterson abused an occasion of
qualified privilege, or otherwise took improper advantage
of it, it is
appropriate to stand back and reflect on the broader circumstances of
NZICA’s agenda in communicating with members
and potential members at the
time. I have accepted that she was genuine in the opinions offered in her
addresses that are complained
of. I find that NZICA was genuine in perceiving
CPAA as a major threat, and the then proposed merger with ICAA represented an
important
part of the strategy in meeting that threat. It follows that there
was a close connection between the topics that made the occasions
ones of
qualified privilege, and the topics on which defamatory statements were
made.
[180] On the other hand, I accept that Ms Patterson was inappropriately
aggressive in criticising CPAA, where elements of those
criticisms were
false. I am also
55 Lange v Atkinson, above n 54, at [42]–[46].
satisfied that she took substantially less care in ascertaining the state of the facts than should have occurred if NZICA was to retain the protection of qualified privilege for specific criticisms of its competitor in the course of promoting its own interests. Without more justification in terms of the advice she relied on to criticise CPAA, the level of carelessness verges on recklessness. Ms Patterson’s denigration of CPAA in the criticisms she made and the overall tone contrasts starkly with the measured acknowledgements of the expert whose assessment NZICA has relied on in the proceedings. Professor Lont accepted that CPAA was a well-respected professional
body in both New Zealand and Australia, and
internationally.56
[181] A rejoinder to this is that CPAA was represented at the conferences
and I infer from Ms Patterson’s opening comments
that she expected a
robust response. If the more aggressive of her comments were wrong, such as
that CPAA could not join GAA because
its educational standards did not match
those required, or that the CPAA designation could be obtained simply by doing a
few modules,
then she might well have thought that she would be challenged on
the point by the speaker for CPAA. I have indicated that I think
it
understandable that Mr Jones did not join issue in Christchurch, but Ms
Patterson was not to know that when she spoke first. Although
the prospect of
being corrected does not exonerate her for careless false statements, it is
relevant to the issue of whether she
is to be treated as having taken improper
advantage of the occasion to an extent that disqualifies NZICA from
claiming
qualified privilege.
[182] Disqualifying NZICA from claiming qualified privilege is
another finely balanced issue. In the end, I would
find that the
defamatory elements of her criticisms did take improper advantage of the
occasion. It follows that qualified
privilege would not be available to NZICA
as a defence.
The Fair Trading Act claim
[183] CPAA claimed that, individually or cumulatively, the publication of the flyer in or about May 2011, the advertisement which appeared in October 2012, and the
May 2013 comment from NZICA’s then chief executive reported in an
article in the
56 See [149] above.
NBR constituted misleading and deceptive conduct in trade.57
CPAA has pleaded breach of both ss 9 and 11 of the FTA. Section 9
prohibits misleading and deceptive conduct generally, in the following
terms:
No person shall, in trade, engage in conduct that is misleading or deceptive
or is likely to mislead or deceive.
[184] Section 11 addresses misleading conduct in relation to services and
is in the following terms:
No person shall, in trade, engage in conduct that is liable to mislead the
public as to the nature, characteristics, suitability for
a purpose, or quantity
of services.
[185] In its 2014 decision in Godfrey Hirst New Zealand Ltd v Cavalier Bremworth Ltd, the Court of Appeal reviewed the level of discernment attributed to the audience for any promotional claims that are alleged to be misleading or likely to deceive.58
The level of discernment to be attributed to the typical member of the
audience was relevant in the case of a competing carpet manufacturer
complaining
that the defendant’s descriptions in its advertisements of the warranties
it would provide were misleading because
they were qualified by limitations that
were allegedly not sufficiently brought to the attention of readers of
the advertising
claims. The headline representation was “superb
warranties with new synthetic ranges” whereas limits or qualifications
on
the scope of such warranties were in much smaller print and appeared
elsewhere.
[186] The Court observed:59
[43] We see no real divergence in the way all these cases have answered
the question “who is the consumer?”. All
the formulations seem to
us to encompass most of the public, where the representation is made to the
public at large, or most of
the consumers in any class specifically targeted.
Many of the cases refer, almost interchangeably, to the “average”
or
“ordinary” or “reasonable” member(s) of the public or
the class. That perhaps is a consequence of the
High Court of Australia in
Campomar perceiving the need “to isolate by some criterion a
representative member of that class”. That representative member,
which
the Court in Campomar described as “this hypothetical
individual”, is none other than the average or ordinary or
57 The flyer is described at [11]–[18], the advertisement at [19]–[23] and the NBR comment at [34]
and [35] above.
58 Godfrey Hirst NZ Ltd v Cavalier Bremworth Ltd [2014] NZCA 418, [2014] 3 NZLR 611.
59 Footnotes omitted.
reasonable member of the class. In a similar endeavour Tipping J, as he
explained in Marcol, used the expression “average shopper”
“to try and capture the synthesis necessary to reflect our multicultural
society”. As we observed in [26], we think Tipping J used the
word “average” as synonymous with typical,
not in its mathematical
sense. The same, we think, applies to the other cases. Because of the
potential for confusion, “average”
is a term best
avoided.
[187] In summarising the approach, the Court rejected the
application of the statutory criteria in s 9 and (in the case
of goods) s 13
of the FTA to an “hypothetical individual”. The Court concluded
that “it is best and easiest
to apply the two sections to the actual
consumers in the target class excepting the outliers”.60 The
outliers included those who are quite unusually stupid, perhaps the gullible,
and those whose reactions are extreme or fanciful.61
[188] CPAA also invited me to apply five principles listed by the Court of Appeal in Godfrey Hirst as appropriate when assessing whether an advertisement is misleading or deceptive.62 However, those principles were distilled in the particular situation where a “headline representation” was arguably insufficiently limited by later, less prominent, qualifying information. Principles such as the need to assess the overall impression of a dominant message, and rejecting an analysis of the separate effect of each representation, are appropriate where inconsistencies between a broad claim and qualifications to it are in issue. That is not a relevant feature here.
I consider it appropriate to discern the attributes of the appropriate
audience, and to form my own view as to whether the readers
in the relevant
audience would be misled.
[189] CPAA alleged the content of the flyer was misleading because it would
be understood to mean that:
• NZICA members earn significantly more than CPAA
members;
• CPAA’s requirements for its qualification were less
rigorous than
NZICA’s requirements to acquire its designation as a
chartered
accountant;
60 Godfrey Hirst at [49].
61 At [47].
62 At [59].
[190] Mr McDougall accepted responsibility for the content of the
flyer. His perception at the time it was produced was
that NZICA members saw
a need to promote their chartered accountancy designation more assertively to
counteract what was seen as
aggressive campaigning by CPAA. A further purpose
was to address apparent confusion in the tertiary education sector as to what
was involved in the two organisations’ accounting
designations.
[191] Although the flyer was withdrawn as soon as NZICA was challenged on
the accuracy of the comparison about average salaries,
Mr Gray was
correct in submitting that CPAA had not proved that the projected average
salary for CPAA members of $100,000 per
annum was wrong, or by how much.
However, the salary comparison remained misleading because it impliedly
reflected a comparison
of salaries that had been measured on the same
basis for members of both organisations. I am satisfied that
misrepresentation
arose, notwithstanding that the acknowledgement of Hudson
Recruitment as the source of the average salary was cited only in respect
of the
CPAA figure.
[192] As to the comparison of member numbers, CPAA’s complaint was
that the NZICA number of 32,000 included all NZICA members,
irrespective of
whether they were working in New Zealand or overseas. It was suggested that a
material number of New Zealand NZICA
members are working outside New Zealand at
any given time. Arguably, they did not qualify as “New Zealand
members”
when working out of the country. If CPAA members were assessed
on the same basis, then its worldwide membership, which was put
at 133,000 at
the time, would swamp NZICA’s.
[193] Mr Gray argued that inclusion in NZICA’s membership of those working outside New Zealand did not make the comparison materially misleading. He
argued that even assuming between 10 and 20 per cent of NZICA members were
not working in New Zealand at any given time, the comparison
was still valid.
The focus in respect of CPAA was the extent of its membership in this
country.
[194] CPAA complained that the comparison of office locations
was also misleading when NZICA’s reference to
its 20 branch offices and
150 support staff was misleadingly compared with CPAA’s staff only in New
Zealand. Arguably, the
reality ought to have been a comparison with 19 offices
internationally.
[195] In terms of the “points of difference”, the first
comparison between four
years’ study for NZICA and three for CPAA was criticised as misleading
when, by
2011, NZICA must have had plans to reduce its requirements for academic study
to accommodate a three year course, making it comparable
with CPAA. As to the
second difference, CPAA complained of the adverse comparison on the need for
face-to-face training in post-graduate
study for NZICA, when CPAA’s
position was characterised as only “on-line training”. It may be
that some components
of the mentoring or face-to-face training available under
the CPAA requirements were optional, and the amount of face-to-face
training
may have been less. There may be scope for NZICA to argue that the substance of
the point of difference was not materially
misleading, because there was a
greater extent of, or greater emphasis on, face-to-face training in the NZICA
programme.
[196] The next point of difference focused on NZICA’s claim to
international reciprocity through GAA, linked to the claim that
its chartered
accountancy qualification is recognised internationally whereas CPAA was not
part of an international accounting alliance,
and its qualification was
“Australian-based”.
[197] The first of these points was objected to on the basis that CPAA does enjoy mutual recognition arrangements with a range of accountants’ organisations, including IFAC, and the Confederation of Asian and Pacific Accountants (CAPA). NZICA’s rejoinder is that those arrangements do not have the same standing as it derives from membership of the GAA.
[198] CPAA’s general counsel in Australia protested about the
misleading and deceptive content of the flyer by letter
dated 5 May 2011. That
complaint raised the misleading impression as to salary differential, the
impression that CPAA only had a
total membership of 750 whereas it was a global
organisation with 133,000 members worldwide, that the CPAA designation could not
be acquired with only three years’ academic study and on-line training
after graduation, and that CPAA had mutual recognition
agreements with other
accounting bodies in numerous countries.
[199] That protest was responded to by NZICA’s general counsel on 17
May 2011. It appears from the content of that letter
that the prompt challenge
in respect of the salary comparison was to be addressed in an amended form of
flyer. In other respects,
NZICA disputed that the remaining aspects complained
about were misleading.
[200] On their own, many of these points of difference are not
materially misleading. For instance, because the comparison
had a focus on New
Zealand, I do not find the contrast in membership numbers misleading, nor is the
contrast in office locations
and the size of New Zealand domiciled staff.
However, I accept that they contribute to a pattern of adverse comparisons
that
portrayed CPAA in a misleadingly inferior light.
[201] CPAA submitted that the misleading points of comparison were made more serious because the chart of comparisons was headed “The facts”, which was likely to suggest to readers that the comparisons reflected matters of fact that were accurately stated, and could therefore be accepted at face value. While that reaction may be appropriate for a component of the audience of interested tertiary students, I am not satisfied that the claim to be citing “the facts” when assessed in the overall layout of the flyer would lead to such an audience accepting the content uncritically. I consider the preponderance of that readership would appreciate that it reflected the version of the so-called facts cast favourably from NZICA’s perspective. Students taking an active interest in the competing attributes would be unlikely to make a decision if they were considering joining CPAA solely in reliance on NZICA’s claims.
[202] Turning to the advertisements that appeared in October 2012, I am
satisfied that this was an intentional attack on CPAA, the
timing of which was
to coincide with CPAA obtaining the status necessary to authorise practitioners
to undertake tasks such as certain
audits.
[203] I am not persuaded that the heading was misleading or likely to
deceive. Readers of the NBR and the business section of the
New Zealand
Herald would, by and large, treat it as a form of puffery. I anticipate
that reactions would range from accepting it as a legitimate competitive
claim
for NZICA to make in responding to competition from CPAA, through to a rejection
of it as unethical and a regrettable departure
from appropriate standards for a
professional organisation. The preponderance of reactions would likely
include that it was an
expensive attempt by the incumbent to blunt the intrusion
by a newcomer. I am not satisfied that any material part of those reading
the
advertisement would accept from NZICA that a competitor’s designation
necessarily meant that members of that competitor
were “second best
practice”.
[204] On the other hand, I do not accept Mr McDougall’s opinion that
possibly only five per cent of readers went on to read
the statements appearing
below the heading. With respect to Mr McDougall’s many years’
experience in advertising, that
opinion is inconsistent with the extent of
effort applied in drafting and re- drafting the wording in the remainder of the
advertisement.
In assessing whether the advertisement was likely to mislead or
deceive readers, I adopt the approach that a meaningful portion
of those who saw
the advertisement would have been sufficiently attracted by the large bold
heading to also read the text appearing
below it.
[205] Two statements in that text claimed exclusivity for members of
NZICA. First, that only they had been exposed to the highest
level of industry
training and development, and secondly, that only NZICA members would be
employed by “top CFOs and CEOs”.
[206] Both claims amount to puffery, and are to be assessed accordingly. The exaggeration in any claim that “only” NZICA members enjoy the two forms of status claimed for them means that they would not be read literally. The first claim
involves a subjective judgement on undefined terms as to what
comprises the “highest level of industry training and
development”.
The second involved similarly undefined and subjective criteria as to who
constitutes the “top CFOs and
CEOs”. The claim left unstated the
range of roles for which such employers would restrict recruits to only those
qualified
as chartered accountants.
[207] Assessing the advertisement in the context of the likely readership
of the publications in which it appeared, I am not satisfied
that the content
complained of made it misleading or deceptive.
[208] Turning finally to the statement attributed to Mr Norgate in the May
2013
NBR article, CPAA pleaded that it gave the misleading impression
that its designation was inferior to NZICA’s because
CPAA had less
rigorous entry requirements.
[209] The article was headed “Snuggling-up accountants
battle ‘declining relevance’”. It
addressed the proposed
merger between NZICA and ICAA, and it was in that context that the comments from
Mr Norgate were reported.
The evidence did establish that the standards for the
qualifications issued by the parties were different. The contentious issue
was
whether NZICA could establish that CPAA’s qualifications were
inferior.
[210] It follows that, in literal terms, Mr Norgate was correct to say that CPAA did not have the same entry standards as NZICA. The question is whether his reported comment would reasonably be interpreted as asserting that CPAA’s standards were inferior to, as well as being different from, NZICA’s. I am not satisfied that that misleading impression did arise from a reading of Mr Norgate’s comment in the context in which it was reported. A theme of the article was NZICA’s concern to protect the standing of the chartered accountants’ qualification. His comment acknowledged that competition had been coming for a long time, and that the market seemed to take the chartered accountant designation for granted. Although some readers might infer that his concern was that the competition had lower standards, the context also suggests a concern that qualifications having different standards or different components might not be recognised as such by “the market”.
[211] I am not satisfied that there was a material risk of these comments
misleading readers of the NBR.
[212] CPAA also pleaded that the misleading and deceptive nature of
NZICA’s conduct ought to have been assessed cumulatively
in relation to
the flyer, the advertisement and the article. They were described as
“systematic and on-going” publications.
[213] The three instances span two years, occurring in May 2011, October
2012 and May 2013. They involved different audiences,
with the first being
addressed to students who might qualify in accounting at Massey
University’s Albany campus. Although
the plaintiff alleged that the
flyer may have been used on additional occasions, I am not satisfied there
was any more
than publication of it on the single occasion.
[214] The readership of the October 2012 advertisements would be those who
were exposed to the NBR and the business pages of the
New Zealand Herald.
Clearly, that is the widest audience, but I am not satisfied that it would
overlap to any significant degree with the much smaller
audience exposed to the
May 2011 flyer. It is safe to assume that there is a substantial measure of
continuity in the readership
of the NBR between the advertisement in 2012
and the report of Mr Norgate’s comments in May 2013. With that
exception,
I am not satisfied that there is any sufficient overlap in the
audiences for CPAA to be entitled to have the impact of allegedly
misleading or
deceptive conduct reflected in them assessed cumulatively. Any cumulative impact
would also be diminished by the relatively
wide spread of the timing. The time
lapses between the three occasions are too long to attribute lingering effect
that might be
assessed cumulatively.
[215] There was no evidence from witnesses who claimed they had been misled by the terms of the flyer or the advertisement or the NBR article. However, that cannot be decisive given their subject matter and the nature of each of the audiences. Certainly, on the approach to liability under s 9 applied by the Supreme Court in
Red Eagle Corporation Ltd v Ellis,63 proof
that the claimant or others were actually
63 Red Eagle Corporation Ltd v Ellis [2010] NZSC 20, [2010] 2 NZLR 492.
misled or deceived is unnecessary. The inquiry is more simply whether the
claimant has proved a breach of s 9, and then, before being
entitled to relief,
whether the claimant has established loss or damage that was caused by the
conduct of the defendant in breach
of s 9.
[216] For NZICA, Mr Gray relied on the Court of Appeal’s early analysis of the scope of remedies under the FTA in Taylor Brothers Ltd v Taylors Group Ltd, which reflected on the jurisprudence on the equivalent Australian provisions at the time.64
Consistently with the requirement he proposed for a minimum threshold of
seriousness in the defamation causes of action, Mr
Gray argued for the
same threshold as being required in cases under s 9 of the FTA, in
reliance on the following
passage from Taylor
Brothers:65
Certainly the degree of impact or likely impact on consumers is important. It
goes both to whether there is a real likelihood that
persons will be misled or
deceived and to whether the Court in its discretion should grant an injunction
(or other remedy) under
the Act. The case has to be sufficiently serious to
warrant a remedy. But s 9 and the remedy sections of the Act are not
limited to cases of identifiable economic loss. Members of the public have a
right
not to be misled about with whom they are dealing.
[217] That leads to a consideration of the range of remedies provided for
under the FTA. Here there could be no possible utility
in an injunction as
provided for under s 41, nor is there any contractual commitment between the
parties, the content of which had
been influenced by misleading conduct on the
part of the defendant so as to justify remedial intervention in that
contract.
[218] CPAA has sought damages in the sum of $50,000 in reliance on its
pleading that it has suffered, or is likely to suffer, pecuniary
loss in the
form of damage to goodwill, reduced applications for membership and an increase
in resignations by numbers.
[219] I am not persuaded that any threshold of seriousness relevantly applied in this context. In other circumstances, that may be a relevant consideration where, for
example, the Court is considering whether there was justification for an
injunction or
64 Taylor Brothers Ltd v Taylors Group Ltd [1988] 2 NZLR 1 (CA).
other forms
of relief provided for under the FTA. In the present context, the imposition
of the ordinary onus for a claimant to
make out quantifiable loss is
sufficient.
[220] However, CPAA has not been able to adduce evidence of loss. Applying
the same analysis relied on for my finding of absence
of loss in the defamation
cause of action, I am not satisfied that any quantifiable loss was suffered by
CPAA as a result of any
of the publications to the extent that they were
misleading or likely to deceive.
[221] There is no provision under the FTA for a declaration and accordingly
no relief is appropriate on this cause of action.
Summary
[222] I have found CPAA has made out elements of actionable defamation
among the criticisms in Ms Patterson’s addresses at
the May 2013
conferences. However, as a corporate plaintiff, CPAA is required to make out
pecuniary loss and I am not satisfied
that it can do so. It is accordingly not
entitled to the declaration it seeks under s 24 of the Act. Without it being
necessary
to my reasoning for the outcome, I endorse the proposition that the
law ought to adopt the requirement insisted on in England for
a plaintiff to
make out a threshold of seriousness for actionable defamation.
[223] In the event that I am wrong on the absence of pecuniary loss, not
all of the defamatory comments would be defensible as truth.
Nor do I consider
that the sting of the defamation as to CPAA having inferior educational
standards could be defended
as honest opinion. Further, I have found (by a
narrow margin) that NZICA would not be entitled to invoke qualified
privilege.
[224] I have found that some aspects of the May 2011 flyer were misleading in terms of ss 9 and 11 of the FTA. However, claims that the advertisement and Mr Norgate’s comments quoted in the NBR were misleading for the purposes of the FTA cannot be made out. To obtain any relief under the FTA, CPAA had to make out damage following from the misleading conduct and it has failed to do so.
Costs
[225] The proceedings appear not to have been categorised for costs
purposes. I am unaware of possible cost consequences of any
pre-trial attempts
to settle the proceedings. If issues as to costs cannot be resolved, I invite
the parties to file memoranda:
(a) within 28 days of this judgment on behalf of the NZICA; and
(b) 14 days after service of that memorandum on behalf of CPAA.
[226] I identify with the view expressed by Ms Brownrigg as a subpoenaed
witness who is a member of both parties that it is a matter
of real regret that
the dispute between them could not be resolved short of litigation. On the
other hand, CPAA’s complaints
were understandable, and my provisional
view is that the scope for criticism of the standard of NZICA’s
conduct
is likely to reduce the justifiable quantum of costs awarded in
favour of NZICA.
Dobson J
Solicitors:
Chen Palmer, Wellington for plaintiff
Izard Weston, Wellington for defendant
Appendix A
Appendix B
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