Crossfit, Inc v Exercise Industry Association Limited - [2018] NZHC 1093

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2014-409-733 [2018] NZHC 1093

BETWEEN
CROSSFIT, INC.

Plaintiff

AND

EXERCISE INDUSTRY ASSOCIATION LIMITED

First Defendant

RICHARD GRAHAM BEDDIE

Second Defendant

Hearing: On the Papers

Counsel:

A L Ringwood for the Plaintiff/Respondent

D Salmon for First and Second Defendants/Applicants

Judgment:

17 May 2018

JUDGMENT OF NICHOLAS DAVIDSON J (APPLICATION FOR LEAVE TO APPEAL)

Background

[1] The defendants, Exercise Industry Association Limited (“the Association”) and Mr Beddie, seek leave to appeal against this Court’s judgment of 5 May 2017.1 That judgment upheld Associate Judge Osborne’s refusal to strike out two aspects of the plaintiff’s statement of claim.2

1 CrossFit, Inc v Exercise Industry Association Ltd & Anor [2017] NZHC 899.
2 CrossFit Inc v Exercise Industry Association Ltd [2016] NZHC 1028.
CROSSFIT, INC. v EXERCISE INDUSTRY ASSOCIATION LIMITED & ANOR [2018] NZHC 1093 [17 May 2018]

[2] The parties agreed I should address the leave application on the papers. Their submissions did not reach me until a short time ago, hence the delay in delivery of this judgment.

Judgment of 5 May 2017

[3] The plaintiff, CrossFit, Inc (“CrossFit”), licenses the CrossFit brand of exercise techniques. Mr Beddie is the Chief Executive Officer and sole director of the Association.

[4] Mr Beddie was critical of CrossFit in interviews published in various forms. In essence, he called into question the safety of CrossFit’s techniques and the training of its instructors.

[5] CrossFit says that criticism was false and damaging to the CrossFit brand. It takes particular exception to suggestions that CrossFit’s exercise techniques had resulted in incontinence, serious injuries, and worse.

[6] CrossFit sues Mr Beddie and the Association in defamation, malicious falsehood, and breach of the Fair Trading Act 1986 (“FTA”).

[7] Associate Judge Osborne made an order striking out aspects of CrossFit’s claim. These included defamatory meanings pleaded by CrossFit. However, Mr Beddie and the Association were otherwise unsuccessful. They brought a review on two discrete points:

(i)Whether CrossFit’s claims that Mr Beddie and the Association are in breach of ss 9 and 11 of the FTA are untenable given the “media exception” in s 15 of the FTA; and

(ii)Whether CrossFit’s claim of a breach of s 23 of the FTA is reasonably arguable as pleaded.

[8] The review proceeded by way of rehearing. The burden lies on the applicants to persuade the court that the judgment was wrong and rested on unsupported findings

of fact and/or applied wrong principles of law. The reviewing court must come to its own opinion whether the earlier judgment is right or wrong.

[9] While discussed in the context of this application for leave to appeal, the two issues were addressed by this Court as follows.

Are CrossFit’s claims in breach of ss 9 and 11 of the FTA untenable in light of s 15 of the FTA?

[10] Mr Beddie was “in trade” when making statements about CrossFit,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2018] NZHC 1093
Decision Date: 17 May 2018

CaseChat Overview and Summary

The defendants, Exercise Industry Association Limited and Mr Beddie, sought leave to appeal against the Court's judgment of 5 May 2017, which upheld Associate Judge Osborne's refusal to strike out two aspects of the plaintiff's statement of claim. The plaintiff, CrossFit, licenses the CrossFit brand of exercise techniques. Mr Beddie, as the Chief Executive Officer and sole director of the Association, was critical of CrossFit in interviews published in various forms, calling into question the safety of CrossFit’s techniques and the training of its instructors. CrossFit sued Mr Beddie and the Association in defamation, malicious falsehood, and breach of the Fair Trading Act 1986. The defendants argued that the Court's interpretation of sections 15 and 23 of the Fair Trading Act was incorrect and sought leave to appeal to the Court of Appeal. The Court held that the interpretation contended for by the defendants simply cannot be right and there is no serious argument available. The plain wording of section 15 speaks against it. The further argument on appeal, although on the papers, reinforced the Court's earlier reasoning. Leave to appeal was refused.

Orders