McCullah v De Hek - [2023] NZHC 2230

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2023-409-97

[2023] NZHC 2230

IN THE MATTER of a claim under the Defamation Act 1992

BETWEEN

STEPHEN ANDREW JAMES McCULLAH

Plaintiff

AND

DANNY JAMES DE HEK

First Defendant

AND

DANNY : DE HEK LIMITED

Second Defendant

Hearing: On the papers

Counsel:

B I Hood for Plaintiff

P A McKnight and A J Romanos for Defendants

Judgment:

17 August 2023

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 17 August 2023 at 2.30 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

McCULLAH v DE HEK [2023] NZHC 2230 [17 August 2023]

[1] The plaintiff resides in the United States of America and describes himself as an entrepreneurial chief executive officer of companies operating internationally within the finance and investment sector.

[2] The first defendant is the director of the second defendant and engages in dropshipping electronics and providing web-hosting and related consultancy services. He is also active in exposing what he regards as scams in the cryptocurrency space. He says this work brought the plaintiff to his attention and he has posted videos to YouTube about the plaintiff and his activities.

[3] The plaintiff commenced this proceeding against the defendants seeking compensatory and exemplary damages along with injunctive relief in respect of the YouTube videos. There were seven causes of action for defamation in the statement of claim, and in respect of each cause of action $500,000 as compensatory damages and injunctive relief were sought. In respect of the fifth, sixth and seventh causes of action, exemplary damages of either $100,000 or $150,000 were also sought. In addition, the plaintiff made claims for interest on damages awarded and costs.

[4] The defendants filed statements of defence and pleaded affirmative defences of truth, honest opinion, qualified privilege, insufficient reputational harm and responsible public interest communication. The second defendant also pleaded an additional defence of non-publication.

[5] At the same time, the defendants applied for security for costs and an order for stay until the plaintiff provided security. The defendants’ application for security for costs was set down to be heard on 22 June 2023. On the morning of the hearing, the plaintiff filed a notice of discontinuance against both defendants.

[6] The first defendant is seeking costs against the plaintiff as all costs have been incurred in his name. He is in receipt of legal aid, but there is no suggestion this affects his entitlement to an award of costs in this proceeding.1

1 David Bullock and Tim Mullins The Law of Costs in New Zealand (LexisNexis, Wellington, 2022) at [2.39].

[7]Consistent with this, in Body Corporate No. 207715 v McNish, Katz J said:2

No order for costs can be made against a legally aided person unless the Court is satisfied that there are exceptional circumstances. A legally aided party who succeeds in litigation, however, is entitled to costs. The fact that a legally aided…

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 McCullah v De Hek

Details

AGLC: McCullah v De Hek [2023] NZHC 2230
Case: [2023] NZHC 2230
Decision Date: 17 August 2023

CaseChat Overview and Summary

The High Court of New Zealand dealt with a defamation claim initiated by Stephen McCullah against Danny De Hek and Danny De Hek Limited. McCullah, a United States-based entrepreneur, sought compensatory and exemplary damages as well as injunctive relief regarding YouTube videos posted by De Hek. The defendants filed statements of defence and affirmative defences, including truth, honest opinion, and qualified privilege. The defendants also applied for security for costs and an order for stay, which led to McCullah discontinuing the proceedings. De Hek, who is receiving legal aid, applied for indemnity costs, arguing that the proceedings were a "gagging writ" and vexatious, while McCullah argued for scale costs.

The court noted that under the High Court Rules, a plaintiff who discontinues proceedings is generally obligated to pay the defendant's costs. However, there are circumstances where this presumption does not apply, such as when the proceeding has become redundant due to external factors or when the defendant's actions rendered the litigation unnecessary. The court considered the Defamation Act provisions, which aim to prevent the misuse of defamation proceedings, and the authority of indemnity costs in exceptional cases. The court found that McCullah had no intention of proceeding to trial and had used the proceedings as a means to suppress further publications by De Hek. The court concluded that an award of $27,500 in indemnity costs was reasonable, considering the complexity and specialised nature of the case, and the disproportionate amount of time billed by De Hek's solicitors.

Orders