Heptinstall v Francken HC Dunedin CP62/00

[2002] NZHC 83

IN THE HIGH COURT OF NEW ZEALAND
DUNEDIN REGISTRY CP62/00

BETWEEN ANTHONY JOHN HEPTINSTALL
Plaintiff

AND NICHOLAAS CAREL FRANCKEN
Defendant

Hearing: 14 February 2002

Appearances: L A Andersen for plaintiff
No appearance for defendant

Judgment: 15 February 2002

JUDGMENT OF DOOGUE J

Solicitors
Shona Reeve, Dunedin, for plaintiff

Introduction

[1] This is a claim for defamation in respect of four separate publications by the defendant about the plaintiff. Although the defendant filed a statement of defence and counterclaim in the proceeding, he chose not to appear at the hearing of the claim against him. He asked the Court to accept that he had not said anything about the plaintiff which he did not believe to be true and to accept that the plaintiff had seriously defamed his name with other employees of his company. In the absence of evidence from the defendant the Court cannot accept such assertions as it can only act upon the evidence before it.

[2] The plaintiff in his amended statement of claim raised four causes of action, all of which have been proved by unchallenged evidence on behalf of the plaintiff. Such evidence also conclusively negated the positive defences raised by the defendant in his statement of defence. In the absence of challenge to the evidence I have no reason to disbelieve any of the witnesses called on behalf of the plaintiff.

As the defendant has neither challenged the evidence of the plaintiff nor called evidence in support of his positive defences and counterclaim, the defences and counterclaim must inevitably fail.

Facts and Claims

[3] The background to the proceeding is that the plaintiff was employed by Corstorphine House Services Ltd, a company of which the defendant is a director, to commence as an executive chef at Corstorphine House on 4 November 2000. At the time of his engagement he was a lecturer in catering at the Otago Polytechnic. He gave notice in respect of that position and it was his period of notice that determined his starting date at Corstorphine House. However, to assist the defendant’s company, he commenced “part-time” work on 10 October. His time sheets showed that he worked 50 1/2 hours in the remaining six days of that week. The time sheets further show that he worked 49 hours over five days in the following week, 66 1/4 hours over seven days in the week after, and in the final week of his “part-time” employment 48 1/2 hours over five days. His evidence is that in the same period he had three full days’ work and other work for the Polytechnic.

[4] On 5 November 2000 the plaintiff advised his employers that he wanted to resign immediately as his marriage was suffering because of the job. The defendant and his wife made it clear they did not want the plaintiff to leave, and the position was left open for two days. However, on 6 November 2000 the plaintiff placed his formal letter of resignation in the letterbox at Corstorphine House early in the morning, returning shortly in the afternoon to sort matters out prior to his departure. He chatted with a gardener. The discussion touched upon the death of his mother-in-law and the serious ill health of his father-in-law immediately prior to his taking the employment together with the fact that he and his wife had hardly seen each other over the period of his employment with the defendant’s company. It appears he also told the gardener, apparently within the hearing of the defendant, that his wife worked for the “Otago Daily Times” and that that paper had decided not to print a story about the defendant and the defendant’s company and another ex-employee and the details had bothered his wife. However, he said both to the gardener, and to the defendant a little later, that there were two sides to every story. Immediately following the discussion with the gardener there was a discussion with the defendant when the plaintiff repeated that he was resigning, effective immediately, for the sake of his marriage. There was agreement the working relationship had been a good one and that they had not had any arguments. The plaintiff told the defendant about difficulties he had had staffing the restaurant and the long hours he had worked in the supposed part-time capacity he took before November. The defendant said that the “Otago Daily Times” should not be allowing their staff to repeat allegations that were not true, or words to that effect. The plaintiff apologised for leaving the defendant abruptly. The defendant said it was just part of business and did not seem to the plaintiff to be angry. The defendant said he thought the plaintiff was making a mistake. However, the defendant accepted the plaintiff’s resignation and wished him the best of luck and shook his hand. The plaintiff then left with the majority of his equipment, thinking that he left on good terms with the defendant.

[5] However, the business manager of the publisher of the “Otago Daily Times” deposes that in early November 2000 he received a telephone call from the defendant to make two complaints, one about an advertising issue and the other about editorial staff who the defendant thought were to run a story on difficulties that the defendant had had with his previous and present businesses. During the course of the conversation the business manager deposes that the defendant suggested that the editorial staff were being influenced to write a critical story by the wife of the plaintiff. As the conversation proceeded, the defendant made the following specific comments in respect of the plaintiff:

(a) “He had walked out of the kitchen prior to 200 people arriving for dinner”;

(b) “He was unstable in mind due to ongoing matrimonial and financial problems”;

(c) “He was having numerous affairs with women other than his wife”;

(d) “He returned to Corstorphine House several days after walking out and I overheard him telling the gardener scurrilous things about me and so I ordered him off the property”.

[6] These statements are the subject-matter of one of the four causes of action in the plaintiff’s statement of claim. It is alleged that in their natural and ordinary meaning the words meant, and were understood to mean, that the plaintiff “was in grave dereliction of his duties as a chef, mentally unbalanced, in financial difficulties, unfaithful to his wife and a malicious gossip”. The plaintiff further alleges that the words were used by the defendant “in flagrant disregard of the rights of the plaintiff as he knew the words to be untrue but made them with intent to cause harm to the plaintiff through embarrassing his wife in her place of employment”.

[7] In respect of this cause of action the plaintiff claims general damages of $75,000 and punitive damages of $10,000.

[8] The next thing that occurred was that the defendant wrote and published a letter dated 15 November 2000 to the employment agency which had introduced the plaintiff to the defendant and his company. Amongst other things that letter records:

“As you know, Mr Heptinstall resigned abruptly on Sunday 05 November 2000 for personal reasons. The reason given was that his wife had left him the Friday before and he resigned to safe [save] his marriage.

Later, we heard that saving his marriage was not the reason for his resignation; he now claims that he had difficulties with the working hours. We checked this with his time sheets; he never worked more than about 40 hours per week. We believe that his long absences from home were caused by some other extra-curricular activities which he would prefer not to mention to his wife.”

[9] These statements give rise to another cause of action by the plaintiff. He says that in their natural and ordinary meaning the words meant, and were understood to mean, that he was unfaithful to his wife, particularly in the context of the earlier discussion with the business manager of the newspaper and in the context of the conversation about to be traversed with the plaintiff’s wife.

[10] In respect of this cause of action the plaintiff again alleges that the defendant acted in flagrant disregard of the plaintiff’s rights as the defendant knew of the falsehood as to his working hours as the time sheets revealed that he worked a minimum of 48 1/2 hours and a maximum of 66 1/4 hours in addition to his employment at the Polytechnic. Further, the letter signed by the defendant went on to state:

“I believe that any future employers of Mr Heptinstall should be informed about his reliability.”

[11] In respect of this cause of action the plaintiff claims $75,000 general damages and $10,000 punitive damages.

[12] The plaintiff’s evidence is that a copy of the letter was sent to him but opened by his wife, who was distressed by it. He talked to the employment agency and later saw the agent concerned. It was apparent to him from what the agent said that she was influenced by the letter and would be unlikely to be favourably disposed towards him if he sought employment through that agency again.

[13] By the time of the plaintiff’s discussion with the agent his wife had spoken to the defendant on 18 November 2000, during the course of which the wife’s evidence is that the defendant said:

“Plaintiff’s wife: We have received a copy of a letter today that you sent to [the personnel agency]. Are you aware that we were sent a copy?

Defendant: Yes - If I write something about somebody I want them to know (or see) what I have written [or words to that effect].

Plaintiff’s wife: Even if you have written lies about them?

Defendant: I beg your pardon?

Plaintiff’s wife: This reference you have made to my husband’s “extra-curricular activities” - please explain what you mean.

Defendant: He had a girlfriend. The staff were talking about it.

Plaintiff’s wife: Oh really?!

Defendant: Yes, everyone here was talking about it.

Plaintiff’s wife: And who is this person? [meaning the “girlfriend”]

Defendant: I have no idea - someone at the Polytech I believe.

Plaintiff’s wife: Well, neither my husband nor I believe you.

Defendant: Can’t remember what he said here - something along the lines that he didn’t care.

Plaintiff’s wife: We will let the legal procedures take their course.

Defendant: Excellent. You do that.

Plaintiff’s wife: You will be hearing from us.

Defendant: Excellent, excellent.”

[14] It is alleged that these statements meant, and were understood to mean, that the plaintiff was unfaithful to his wife. Given that the defendant knew of the plaintiff’s lengthy working hours for the defendant in addition to the job at the Polytechnic, it is alleged that the words were in flagrant disregard for the rights of the plaintiff as the defendant could have had no basis for an honest belief that they were true.

[15] In respect of this cause of action no general damages were sought but exemplary damages of $15,000 are sought together with a declaration that the defendant is liable to the plaintiff in defamation pursuant to s 24(1) Defamation Act 1992.

[16] Following the communications which give rise to the first three causes of action, the plaintiff’s solicitor wrote to the defendant on 30 November 2000 inviting the defendant to mitigate the wrong that he was alleged to have done to the plaintiff by withdrawing the letter to the employment agency, giving a signed statement to the plaintiff apologising for the defamatory statements made and undertaking not to make any further defamatory statements about him and by making an appropriate contribution towards his costs.

[17] That letter brought a response from the defendant which denied all of the plaintiff’s allegations. The letter claimed that what was said in a private letter could not be regarded as defamatory and that the defendant had never made any defamatory statements to the effect that the plaintiff had had an extra-marital affair but only expressed his belief or understanding as gained on the basis of statements made to him and his wife by members of their staff.

[18] As a result of the nature of the defendant’s reply to the plaintiff’s solicitor’s letter, the present proceedings were commenced on 14 December 2000.

[19] Following the commencement of the proceedings, in early February 2001 the defendant telephoned the head of the School of Hospitality and Service Sector Management at Otago Polytechnic. The latter gave evidence that during the course of the conversation the defendant made the following statement about the plaintiff:

“Are you aware that he has been having an affair with a student from Otago Polytechnic?”

[20] The head of the School has attested that that statement was in the course of a conversation that included the following:

(a) He asked: “Are you aware that Mr Heptinstall is a current staff member employed by Otago Polytechnic who is taking legal proceedings against Corstorphine House in Dunedin?” I told him that I was.

(b) He suggested that as Head of School of Otago Polytechnic I should have a word to Mr Heptinstall to see if he realises the impact that any publicity may have on the Otago Polytechnic if the proceeding went to Court or were placed in the media and, in particular, the newspapers.

(c) it was at this stage that he made the statement I have previously quoted [in paragraph [19] above].

(d) He then claimed that Mr Heptinstall had had an unprofessional attitude during the time that he was employed at Corstorphine House and asked whether I was aware that he was seen chasing waitresses around the kitchen during this time.

(e) He stated that in the past he has had a good relationship with Otago Polytechnic.

(f) He also stated that their business had in the past taken Otago Polytechnic students for work experience and hoped this would continue in the future.

[21] The statement of claim alleges that these statements in their natural and ordinary meaning meant, and were understood to mean, that the plaintiff was acting in contravention of his employment obligations as a staff member of the Polytechnic by having an affair with a student and that they were in flagrant disregard of the rights of the plaintiff as the defendant had no grounds for belief that the plaintiff was having any affair with any student. Further it is alleged that the words were used deliberately to create difficulties for the plaintiff in his employment and were made after the commencement of the proceedings with the intention of persuading the plaintiff’s then employer to put pressure on the plaintiff to discontinue the proceedings against the defendant.

[22] In respect of this cause of action general damages of $150,000 and punitive damages of $20,000 are claimed.

[23] It should be noted in respect of the last cause of action the Polytechnic understandably wrote to the plaintiff, making clear that it was taking the complaint seriously and requiring the plaintiff to answer specific questions as he was liable for disciplinary action should the allegations be proven. Such was the gravity of the matter he was advised to take legal advice.

[24] The plaintiff was able to satisfy the Polytechnic that there was no truth in the allegations, but from his point of view a cloud still hangs over him because of the allegation.

[25] I do not intend to traverse each and every allegation made by the defendant in the course of his correspondence and pleadings in respect of the plaintiff. The plaintiff’s evidence specifically denies each and every allegation made by the defendant as already traversed and in the defendant’s correspondence and pleadings and, in the absence of any evidence to the contrary, such denials under oath are conclusive.

[26] The plaintiff has attested that his most important motivation for his bringing the case against the defendant is to expose the defendant’s malicious claims about him as being false so that the people who have been lied to about him know the truth and for the defendant to understand the gravity of what he has done. He is particularly concerned by the allegation that the defendant made to the Polytechnic because of its possible effect upon his profession as a teacher, although the allegation to the employment agency could also affect his employment opportunities.

Discussion

[27] The undisputed evidence of the plaintiff, his wife, the business manager of the “Otago Daily Times” and the head of the School of Hospitality and Service Sector Management at Otago Polytechnic clearly proves the four causes of action relied upon by the plaintiff in his amended statement of claim.

[28] It seems clear the first three causes of action, which were more or less contemporaneous with the cessation without notice of the plaintiff’s employment with the defendant’s company, were some form of delayed embittered reaction to what had occurred. There is a certain unfortunate irony in the plaintiff’s employment with the defendant’s company ceasing before it had really begun. It seems clear that that was largely because of the pressures on the plaintiff and his wife at that time. There is certainly no evidence that there was any sinister reason for the chain of events or that it was contributed to directly by any conversations between staff at the “Otago Daily Times” and the plaintiff’s wife. I accept the plaintiff’s evidence that, while his wife’s concerns about his position were taken into account by him, he was not influenced by gossip about the position of other past employees of his employer.

[29] In any event, whatever the position might have been in relation to the plaintiff’s wife’s understanding of events, it could not justify the defendant’s malicious and untrue attack upon the plaintiff to the business manager of the “Otago Daily Times”. However, the conversation between the defendant and the business manager of the “Otago Daily Times”, while highly defamatory of the plaintiff, was not only limited in its publication but not harmful to the plaintiff’s employment and, as events have transpired, completely corrected.

[30] So far as the defendant’s letter to the employment agency is concerned, the position is rather more serious as the defendant lied about the plaintiff’s hours of work and made unjustified allegations which could not help but affect the plaintiff’s employment opportunities through that employment agency. That is so whether the reference to alleged extra-curricular activities bore the sting relied upon by the plaintiff or not. It was clearly intended by the defendant to refer to the plaintiff keeping female company as his earlier conversation with the business manager of the “Otago Daily Times” and his later conversation with the plaintiff’s wife make clear. However, in the context of the particular letter it did not necessarily lead to that interpretation by a reasonable objective reader in the employment agency or elsewhere. Nevertheless it had to be intended to be critical of the plaintiff. In any event, regardless of an employee’s extra-curricular activities, the allegation that the employee had not fulfilled the appropriate hours of work when he had been voluntarily assisting the defendant’s company and had worked very long hours was certainly defamatory of the plaintiff.

[31] In respect of the cause of action relying upon the conversation between the defendant and the plaintiff’s wife the plaintiff rightly does not seek general damages. The conversation was initiated by the plaintiff’s wife. The conversation showed a continuity of conduct by the defendant but little more.

[32] As already mentioned, the three incidents already discussed were closely related in time to the ending of the plaintiff’s employment with the defendant’s company and by themselves could be regarded as something of a storm in a teacup justifying nothing more than a quite modest award of damages. However, the final cause of action relying upon the defendant’s communication with the plaintiff’s head of department at the Polytechnic is a different matter. This was entirely unrelated in time to the plaintiff’s cessation of employment with the defendant’s company. The conversation could have been for no other purpose than to disadvantage the plaintiff in his employment. It was by far the most serious incident.

[33] Damages in a case such as this are at large but difficult. I have been assisted by the authorities made available to me by Mr Andersen and in particular the decision of the Court of Appeal in Television New Zealand Ltd v Quinn [1996] 3 NZLR 24, 53 and following. I have noted also the statement in The Laws of New Zealand, Defamation para 227, “. . . a limited publication might also be extremely damaging, for instance if it is to an employer”, where the text is discussing factors tending to increase or aggravate damages.

[34] I do not consider that this is a case for any award of punitive or exemplary damages in respect of any of the causes of action. I have no doubt that the defendant has acted in disregard of the plaintiff’s rights and that the plaintiff is entitled to protection from the type of attack made by the defendant upon him. However, in the context of the limited nature of the publications I consider that the appropriate course is to limit damages to general damages and to treat the exacerbating conduct of the defendant already touched upon and traversed as aggravating features rather than calling for punitive damages. In the overall context I see no reason for a declaration as to the defamatory statement by the defendant to the plaintiff’s wife. It was defamatory but it is not appropriate to bring into play the provisions of s 24 Defamation Act 1992.

[35] As is submitted for the plaintiff, this is not a case of exaggeration by the defendant of things that were true but a case of deliberately untrue statements by the defendant. In particular in respect of the plaintiff’s hours of work the defendant’s statements were simply contrary to the facts known to him and were either deliberate or reckless lies. The other defamatory statements may have been careless or reckless rather than deliberate lies.

[36] I bear in mind that a sense of proportion must be kept in relation to the limited publication, the background to the publications and the limited consequences for the plaintiff.

[37] This decision in itself will be a substantial vindication of the plaintiff’s position. While the damages to be awarded should not be derisory, they must be modest, notwithstanding the defendant’s peculiar attitude to the litigation in which he is prepared to make allegations that he is not prepared to support by evidence on oath. That in itself is a further aggravating feature of his conduct.

[38] I look at the position in respect of the different causes of action severally and collectively. In respect of the defamatory statement to the business manager at the “Otago Daily Times”, I award the sum of $2,500 general damages. In respect of the defamatory statement in the letter to the employment agency, I award the sum of $7,500 general damages. In respect of the defamatory statement to the wife of the plaintiff there will be no award of damages. In respect of the most serious of the defamatory statements to the head of the plaintiff’s department at the Otago Polytechnic, I award general damages of $15,000. Damages thus total $25,000.

Decision

[39] There is judgment for the plaintiff against the defendant in the sum of $25,000, the make up of that judgment being as already stated. There is also judgment for the plaintiff on the defendant’s counterclaim.

[40] In addition, the plaintiff is entitled to costs and reasonable disbursements. Costs are to be fixed by the Registrar in accordance with category 2 of the Second Schedule and column B of the Third Schedule to the High Court Rules. Disbursements are to be in accordance with Item 12 of the Third Schedule of the High Court Rules. The plaintiff is entitled to witnesses’ expenses in respect of each of the three witnesses who gave their evidence orally.