CPA Australia Ltd v New Zealand Institute of Chartered Accountants
[2015] NZHC 1854
•6 August 2015
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV-2013-485-939 [2015] NZHC 1854
UNDER the Defamation Act 1992 and the Fair
Trading Act 1986
BETWEEN
CPA AUSTRALIA LIMITED Plaintiff
AND
THE NEW ZEALAND INSTITUTE OF CHARTERED ACCOUNTANTS Defendant
Hearing: 6-10 July; 13-14 July 2015 Counsel:
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 defendantJudgment:
6 August 2015
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
3 I will continue to refer to the defendant as NZICA in this judgment. Nothing turns on the change in its formal constitution after the statements complained of were made.
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.
5 The flyer was produced in landscape format, but for convenience has been reproduced in portrait format.
· 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
· Hear from NZICA on ‘Transforming NZICA – Creating a new Institute with The Institute of Chartered Accountants Australia’
· CPA Australia speak on ‘The relevance of belonging to a professional membership body in 2013’
[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 [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.
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).
65 Taylor Brothers Ltd v Taylors Group Ltd, above n 64, at 40 (emphasis added identifying the passage NZICA particularly relied on).
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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