Hotchin v Sheppard - [2013] NZHC 960

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2011-404-7120 [2013] NZHC 960

BETWEEN MARK STEPHEN HOTCHIN First Plaintiff

ANDERIC JOHN WATSON Second Plaintiff

ANDBRUCE SHEPPARD Defendant

Hearing: 25 and 26 March 2013

Appearances: J G Miles QC and J A MacGillivray for Plaintiffs
B D Gray QC and N W Woods for Defendant

Judgment: 3 May 2013

JUDGMENT OF COOPER J

This judgment was delivered by Justice Cooper on
3 May 2013 at 1.00 p.m., pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar
Date:

Solicitors:
Tompkins Wake, PO Box 258, Hamilton jmacgillivray@tomwake.co.nz
Rice Craig, DX EP 76506, Papakura ( N W Woods, Rice Craig, PO Box 72 440, Papakura)
rc@ricecraig.co.nz neville.woods@ricecraig.co.nz
Copy to:
J G Miles QC, PO Box 2302, Shortland Street, Auckland miles@shortlandchambers.co.nz
B D Gray QC, DX CX 10258, Auckland bdgray@shortlandchambers.co.nz

HOTCHIN V SHEPPARD HC AK CIV-2011-404-7120 [3 May 2013]

[1] The plaintiffs in this proceeding sue the defendant, Mr Sheppard, in defamation. The trial is to take place later this year. Two interlocutory issues have been raised which need to be dealt with prior to the trial. They are:

(a) An application by the plaintiffs, made on 26 October 2012, seeking a direction that the trial of this matter be before a Judge alone; and

(b)An application by the plaintiffs for a review of the decision made by Associate Judge Doogue dismissing the plaintiffs’ application to strike out parts of the defendant’s statement of defence.

[2] Both applications are opposed by the defendant.

Background

[3] The first plaintiff, Mr Hotchin, was a director of Hanover Group Ltd and of various companies in the Hanover group, including Hanover Finance Ltd (“Hanover”). The second plaintiff, Mr Watson, was also a director of Hanover Group Ltd. Both were interested in Hanover Group Holdings Ltd, the parent company of the Hanover Group.

[4] On 23 July 2008 Hanover announced that, in conjunction with its wholly- owned subsidiary, United Finance Ltd, and its sister company, Hanover Capital Ltd, it was ceasing to accept new investments under its debenture trust deed, and suspending all payments of principal and interest to its investors (“the moratorium”). The announcement stated that it was working on a plan to restructure its business and funding arrangements.

[5] On 8 December 2008, Hanover investors voted to approve a debt restructure

proposal (“DRP”).

[6] During November 2009, Mr Sheppard, who was at all material times the Chairman of the New Zealand Shareholders Association, made a number of statements to the media and others about the DRP and the plaintiffs’ role in it.

Subsequently, he also made statements to various people about a sale by Hanover of its interests in a Queenstown property development. The statements are alleged to have been false and defamatory, and to have caused significant damage to the plaintiffs’ personal and business reputations, their credibility as businessmen and their ability to do business.

[7] The plaintiffs say that the defamatory statements meant or were intended to mean that the plaintiffs had dishonestly misled…

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.

Continue reading Hotchin v Sheppard

Details

AGLC: Hotchin v Sheppard [2013] NZHC 960
Case: [2013] NZHC 960
Decision Date: 3 May 2013

CaseChat Overview and Summary

The High Court of New Zealand dealt with an interlocutory application in the defamation proceeding of Hotchin v Sheppard. The plaintiffs, Mark Hotchin and Anderic Watson, sought a direction that the trial be before a Judge alone and also sought a review of a decision by Associate Judge Doogue to dismiss their application to strike out parts of the defendant's statement of defence. The defendant, Bruce Sheppard, opposed both applications.

The plaintiffs claimed that statements made by Mr Sheppard were false and defamatory, causing significant damage to their personal and business reputations. The defendant pleaded defences of honest opinion and qualified privilege. The plaintiffs filed notices under sections 39 and 41 of the Defamation Act 1992. In relation to the defence of honest opinion, they claimed the opinions were not genuinely held and, in relation to qualified privilege, they claimed the statements were motivated by ill-will or the defendant took improper advantage of the occasions of privilege.

The plaintiffs' application for a direction that the trial be before a Judge alone was based on the lengthy examination of documents and accounts and consideration of difficult business issues. The plaintiffs claimed that the relevant matrix of facts would involve the consideration of legal issues that are of more than background interest. The defendant argued that the case was not outside the ordinary and that a mix of factual and legal issues is common in defamation proceedings. The Court found that the statutory tests set out in s 19A(5) of the Judicature Act 1908 were well satisfied and granted the plaintiffs' application.

In relation to the application for review of Associate Judge Doogue's decision, the plaintiffs sought to strike out particulars (a) to (d) of paragraph 76 of the amended statement of defence. The plaintiffs argued that the particulars given could not possibly establish that their reputation was generally bad in the aspect to which the proceeding relates. The defendant argued that the matters raised were relevant to the plaintiffs' standing as businessmen and that the effect of the passage of time should be a factual question for determination at the trial. The Court found that the relevant aspect of the plaintiffs' character was their reputation as businessmen and declined the plaintiffs' application for review.

The Court ordered that the proceeding be tried before a Judge alone and declined the plaintiffs' application for review. The parties have both succeeded in part and failed in part, and the Court invited memoranda from counsel on costs.

Orders