Nicol v Douglas
[2024] NZHC 250
•21 February 2024
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2023-409-230
[2024] NZHC 250
BETWEEN ANDREW MICHAEL NICOL
Plaintiff
AND
CRAIG DOUGLAS
First Defendant
JIMMIE KEVIN McNICHOLL
Second Defendant
Hearing: 5 December 2023 Appearances:
D M Salmon KC and S M U Lee for Plaintiff G E Slevin for First Defendant
No appearance for Second Defendant
Judgment:
21 February 2024
Reissued:
8 April 2024
JUDGMENT OF ASSOCIATE JUDGE PAULSEN
This judgment was delivered by me on 21 February 2024 at 2.30 pm pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date:
NICOL v DOUGLAS [2024] NZHC 250 [21 February 2024]
[1] The plaintiff (Mr Nicol) sues the first defendant (Mr Douglas) and the second defendant (Mr McNicholl) in defamation in respect of statements they made to the effect that he is a serial rapist. Mr Nicol seeks declarations that Mr Douglas and Mr McNicholl are liable to him in defamation along with indemnity costs but not damages.
[2] There is no dispute that Mr Douglas and Mr McNicholl made the statements, that the statements were extremely serious, and that they were untrue. Notwithstanding that, Mr Douglas applied for summary judgment and/or for an order striking out the claim as an abuse of process. His counsel abandoned the application for summary judgment at the hearing but maintains that Mr Nicol’s claim should be struck out.
[3] Mr Nicol has responded with his own application for summary judgment, for which he requires leave under r 12.4(2) of the High Court Rules 2016.
[4]This judgment deals with three applications:
(a)Mr Douglas’ application that Mr Nicol’s claim be struck out;
(b)Mr Nicol’s application for leave to apply for summary judgment; and
(c)Mr Nicol’s application for summary judgment.
[5] In broad terms, the principal issues that arise on the competing applications are:
(a)whether Mr Nicol’s claim should be struck out as an abuse of process because:
(i)there has been no real or significant tort committed; and
(ii)it would be a disproportionate use of resources to allow the claim to proceed;1 and
(b)whether Mr Nicol has satisfied the Court that Mr Douglas has no arguable defence to the claim, which turns upon whether the minimum threshold of seriousness requirement recognised in recent case law as an element of an actionable claim in defamation has been met.2
Context
[6] Mr Nicol is a property developer and managing director and shareholder of the Opes Partners group (Opes Group) of companies which are concerned with property investment.
[7] Mr Douglas is a businessman and company director with several businesses, including a building company.
[8]Mr McNicholl describes himself as a commercial cleaner.
[9] Mr Nicol considers that Mr Douglas and Mr McNicholl are both friends and associates. The extent to which this is the case is one of several issues in dispute.
[10] Opes Group publishes podcasts and on 2 October 2021 and 7 February 2023 the podcasts included material Mr Douglas considers was defamatory of him. Mr Nicol suspects that the statements Mr Douglas subsequently made about him were an act of spite or revenge for the podcasts.
[11] Mr Douglas sought a meeting with Mr Nicol to address his concerns, which he says Mr Nicol initially ignored. In the event, Mr Nicol did agree to a meeting which occurred on 8 March 2023. There is dispute as to what occurred at that meeting, to which I will later refer.
1 Dow Jones & Co Inc v Jameel [2005] EWCA Civ 75, [2005] QB 946; Russell v Matthews [2016] NZDC 17743; Opai v Culpan [2017] NZHC 1036, [2017] NZAR 1365 and Prasad v Raj [2022] NZHC 2960.
2 Thornton v Telegraph Media Group Ltd [2010] EWHC 1414, [2011] 1 WLR 1985 (QB); Craig v Slater [2017] NZHC 2392; Craig v Slater [2020] NZCA 305 and Craig v Stiekema [2018] NZHC 838, [2018] NZAR 1003.
[12] However, prior to the 8 March meeting, at around 2.10 pm on 10 February 2023, Mr Douglas sent a series of text messages to Rowan Robinson, a property developer and investor who knows Mr Nicol. There is evidence that suggests Mr Robinson is prominent in property circles and does business with Mr Nicol, but the extent to which that is the case is not clear. For ease I shall refer to these messages as “Mr Douglas’ statement”. They contained the following:
I had lunch yesterday with a chap who had a very powerful job. I asked him directly about Nicole [sic] and the rape allegations. He confirmed that he is at the centre and that he is 90% facing jail time.
Andrew Nicol
…
Date rape. 88 charges by 34 woman [sic] over 3 years. 2015 – 2018 it’s the development of the mumma [sic] hooch saga
The jury trial starts Feb 23
[13] The “mumma hooch saga” concerned a high-profile prosecution of four men accused of serious sexual offending, including rape, against a large number of female complainants. The trial was scheduled to commence in the Christchurch District Court in February 2023. The Court had made orders suppressing the names of the accused.
[14] Also on 10 February 2023, Mr McNicholl called Opes Group on an 0800 number and left a message on the answering machine as follows:
Hi, yes, hi, look, I’ve just rung up to enquire, is this the same Andrew Nicol that, um, is up for rape and stupefying girls? I’m just, just not too sure. I wanted to check. Could somebody give me a call back and confirm that it is him. Thank you.
[15] Mr McNicholl’s message was listened to by persons working for Opes Group. Mr McNicholl did not leave his name or his number but Mr Nicol, with the assistance of a private investigator, was able to identify him as the caller. Mr McNicholl accepts he was the caller. He does not explain his motivation for making the call but says it was a “genuine mistake” and that he had had a “few beers” at the time.
[16] Mr Nicol was not aware of Mr Douglas’ statement when the two men met on 8 March 2023. He was aware of the message Mr McNicholl had left on the answering
machine. Mr Nicol says he asked Mr Douglas directly whether he had called him a rapist and knew Mr McNicholl. Mr Douglas has a different recollection. He says he was asked by Mr Nicol whether he had heard any rumours that he was involved in the Mama Hooch offending and said he had heard such rumours. Mr Douglas did not disclose that he had sent the text messages to Mr Robinson and Mr Nicol did not become aware of them until 1 May 2023, when he and others had lunch with Mr Robinson and was told of them.
[17] Mr Nicol commenced this proceeding on 16 May 2023. At the time of filing, Mr Nicol made an application for an interim injunction preventing Mr Douglas and Mr McNicholl from making or repeating the statements about him and for search orders. Those applications were dismissed by Mander J on 17 May 2023.3
[18] On 20 October 2023, Mr Nicol applied for non-party discovery orders from One New Zealand Group Ltd (formerly Vodaphone) (One New Zealand) which was granted in part. The orders required One New Zealand to make available for inspection all available records of phone calls, text messages and voice messages between Mr Douglas and Mr McNicholl as determined by two phone numbers and any other phone numbers assigned to them between the period 7 February 2023 and 15 February 2023. Records have been supplied and relevantly show telephone calls and text messages sent between Mr Douglas and Mr McNicholl, including several on 10 February 2023.
[19] Also on 20 October 2023, Mr Nicol filed and served upon Mr Douglas a notice to answer interrogatories. The interrogatories included, with reference to Mr Douglas’ statement:
1.What is the name of the man you had lunch with on 9 February 2023?
2.What is the man’s “very powerful job”?
[20] Mr Douglas refused to answer those interrogatories on the basis they did not relate to a matter in question between the parties and were vexatious or oppressive.
3 Nicol v Douglas [2023] NZHC 1192.
The law — competing interests in defamation claims
[21] In recent years the courts have sought to balance in defamation cases a claimant’s right to protection of their reputation with another party’s right to freedom of expression. In addition, the courts have had to grapple with the extent to which the fundamental principle of access to justice should be recognised where the costs of litigation may be disproportionate to the benefit or vindication a claimant might achieve. Two cases in the United Kingdom have influenced the development of the law in this country in this area; Thornton v Telegraph Media Group Ltd (Thornton) and Dow Jones & Co Inc v Jameel (Jameel).4
[22] In Thornton, Dr Thornton published an art book which was the subject of a review published by the defendant. That review said Dr Thornton had engaged in copy approval, an interview method that gave interviewees the right to read what was written about them and alter it. Dr Thornton considered this was defamatory because, amongst other things, copy approval was considered a highly reprehensible practice and the defendant said as much in the review. Tugendhat J held that some consequence adverse to the claimant is necessary in order for a meaning to be defamatory, and therefore there is a threshold of seriousness.5 He found there was no requirement to prove that there was in fact an effect on the reader such that they saw the claimant in a poorer light, all that is needed to be proven is that the impugned statement has a tendency to defame the claimant.6
[23]The Judge said:
[93] If the likelihood of adverse consequences for a claimant is part of the definition of what is defamatory, then the presumption of damage is the logical corollary of what is already included in the definition. And conversely, the fact that in law damage is presumed is itself an argument why an imputation should not be held to be defamatory unless it has a tendency to have adverse effects upon the claimant. …
4 Thornton v Telegraph Media Group Ltd, above n 2; Dow Jones & Co Inc v Jameel, above n 1.
5 At [51].
6 At [92]–[93].
[24] On the facts of Thornton, the impugned statement did not reach the threshold of seriousness required for the words complained of to be capable of being defamatory of Dr Thornton and the defendant was granted summary judgment defeating the claim.
[25] A different issue arose in Jameel where the defendant was accused of publishing an article online implying the claimant was, or was suspected of, funding Al-Qaeda.7 On appeal, argument proceeded on the basis that only five people within the jurisdiction had clicked the hyperlink that contained the defamatory material.
[26] The Court accepted there is a presumption of damage where defamation has been proven and was not prepared to abandon that principle. It was noted that English law has been well served by a principle under which liability turns on the objective question of whether the publication is one which tends to injure the claimant’s reputation.8 However, the Court struck out the claim as an abuse of process where the costs of the litigation, particularly to the Court, are disproportionate.9
[27]In giving the judgment of the Court, Lord Phillips said:
[55] There have been two recent developments which have rendered the court more ready to entertain a submission that pursuit of a libel action is an abuse of process. The first is the introduction of the new Civil Procedure Rules. Pursuit of the overriding objective requires an approach by the court to litigation that is both more flexible and more pro-active. The second is the coming into effect of the Human Rights Act. Section 6 requires the court, as a public authority, to administer the law in a manner which is compatible with Convention rights, insofar as it is possible to do so. Keeping a proper balance between the Article 10 right of freedom of expression and the protection of individual reputation must, so it seems to us, require the court to bring to a stop as an abuse of process defamation proceedings that are not serving the legitimate purpose of protecting the claimant’s reputation, which includes compensating the claimant only if that reputation has been unlawfully damaged.
[28] On the facts, the Court considered that the claimant would not be able to get the level of vindication he wanted from proceedings limited in jurisdiction to the United Kingdom (where it was a worldwide publication) and, as the defendant was not pleading the defence of truth, there would be no direct finding that the statement
7 Dow Jones & Co Inc v Jameel, above n 1.
8 At [37].
9 At [54] and [57].
was false (but rather that would be presumed).10 The claimant was also unlikely to get an injunction given the defendant removed the article from its website and archive and there was no risk of republication in the article’s current form.11
[29]Lord Philips concluded:
[69] If the claimant succeeds in this action and is awarded a small amount of damages, it can perhaps be said that he will have achieved vindication for the damage done to his reputation in this country, but both the damage and the vindication will be minimal. The cost of the exercise will have been out of all proportion to what has been achieved. The game will not merely not have been worth the candle, it will not have been worth the wick.
[30] In Craig v Stiekema, Fitzgerald J referred to an English text, Collins on Defamation, for guidance as to how the Jameel principle had been applied in practice and noted:12
[42] As can be seen from the above summary, the extent of publication features predominantly in determining whether a proceeding ought to be struck out. Unlike more qualitative factors such as the seriousness of the imputations alleged and the likely effect on the plaintiff’s reputation, the extent of publication will often be clearly defined. For that reason, it is unsurprising this factor features predominantly in the strike out context.
[31] It has been suggested that the principles in Thornton and Jameel may be “a ‘flip side’ of one other”,13 or part of a broader framework where the “overarching question is whether the plaintiff’s case is one which the Court, exercising its jurisdiction to control its own processes, should permit to go to trial”.14 I incline to the view that they are conceptually different.
[32] The approach in Thornton is to look at the meaning of the words used and whether that meaning passes a threshold of seriousness so as to be defamatory. Jameel, on the other hand, is concerned with whether a proceeding is an abuse of process as a disproportionate drain on judicial resources because no real and substantial tort has been committed. Under Jameel, all the elements of the tort can be
10 At [67].
11 At [75]–[76].
12 Craig v Stiekema, above n 2.
13 Craig v Stiekema, above n 2, at [51].
14 Adamson v Hutt Valley District Health Board [2022] NZHC 1403 at [28](c).
proven but the claim still struck out because its seriousness does not justify the use of resources.
[33] In the United Kingdom, the minimum threshold of harm requirement was codified by s 1(1) of the Defamation Act 2013 (UK). It provides: “A statement is not defamatory unless its publication has caused or is likely to cause serious harm to the reputation of the claimant”. In Lachaux v Independent Print Ltd, the Supreme Court held that the enactment of s 1 materially changed English law:15
… [section 1] not only raises the threshold of seriousness above that envisaged in Jameel (Yousef) and Thornton, but requires its application to be determined by reference to the actual facts about its impact and not just to the meaning of the words.
[34] Therefore, the law in the United Kingdom has changed beyond the common law requirement of a threshold of seriousness of harm and requires proof by the claimant of actual damage.16
[35] Jameel has been applied several times in New Zealand to strike out defamation proceedings. A thorough analysis was undertaken by Katz J in Opai v Culpan, but Jameel was also applied in X v Attorney–General (No 2), Prasad v Raj, Adamson v Hutt Valley District Health Board and Russell v Matthews.17
[36] As far as Thornton and a minimum threshold of seriousness is concerned, in CPA Australia Ltd v New Zealand Institute of Chartered Accountant Dobson J expressed the view that:18
[120] I would be minded to adopt the analysis exemplified in Thornton and other recent United Kingdom authorities by recognising a minimum threshold of seriousness. That would require a claimant to meet an objective seriousness threshold as an element of making out the actionability of alleged defamatory statements. The approach suggested in Gatley appears appropriate. This threshold would apply across the various common law definitions of defamation. For instance, in the present case, CPAA would need to establish
15 Lachaux v Independent Print Ltd [2019] UKSC 27, [2020] AC 612, [2019] 3 WLR 18.
16 Corbyn v Millett [2021] EWCA Civ 567 at [10]; and Johnson v McArdle [2020] EWHC 644 (QB) at [15]–[16].
17 Opai v Culpan, above n 1; X v Attorney-General (No 2) [2017], NZHC 1136, [2017] NZAR 1365; Prasad v Raj, above n 1; Adamson v Hutt Valley District Health Board, above n 14; Russell v Matthews, above n 1.
18 CPA Australia Ltd v The New Zealand Institute of Chartered Accountant [2015] NZHC 1854.
not only that the statements were to its discredit, but that these discrediting statements caused serious harm to its reputation.
[37] In Sellman v Slater, Palmer J said while it was conceivable that in extreme circumstances in which a legal proceeding imposed a disproportionate burden on the litigants and the court system in terms of time and resources it should not be allowed to proceed as an abuse of court process:19
But I have difficulty with the notion, that seems implicit in Jameel, that a court can routinely use its ability to deal with abuses of process to stop a proceeding properly founded in law, because of something the law does not require (insufficient damage to reputation). The right of a person or group to access the courts in order to vindicate their legal rights has a high constitutional value in New Zealand, against however powerful or popular a defendant. As the United Kingdom Supreme Court stated in July 2017 in Unison v Attorney- General “[t]he constitutional right of access to the courts is inherent in the rule of law”.
[38] Palmer J considered that whatever the status in New Zealand of Jameel, “the Thornton/CPA Australia Ltd/Lachaux approach is preferable in shaping defamation law”.20 He was of the view that the best way for the threshold of seriousness to be established was for damage to be presumed but that presumption to be rebuttable.21 Where a publisher could show there was not, or was likely not to be, sufficient damage to reputation, then that could be raised as a defence to the tort. He felt the publisher is in the best position to prove this defence as they have access to information, such as how many times a blog post has been read.22
[39] Importantly, Palmer J thought that a threshold of “more than minor harm to reputation” should be required to found an action in defamation which would be consistent with New Zealand Bill of Rights Act 1990.23 He summarised his views as follows:
[69] So I consider the common law of defamation in New Zealand is that damage to reputation is presumed to occur on publication of a defamatory statement. But that presumption is rebuttable. If a defendant can show their statement has caused less than minor harm to the plaintiff’s reputation, that will defeat a defamation claim. It may therefore be a basis for showing a cause of action is clearly not tenable in a strike-out application. …
19 Sellman v Slater [2017] NZHC 2392 at [60].
20 At [63].
21 At [65].
22 At [65].
23 At [68].
[40] In an article titled “A Principled Approach to Defamation Claims in New Zealand: Untangling the Harm Threshold”, Emma Croskery argues that Palmer J’s approach in Sellman v Slater was not a straightforward application of Thornton.24 This was because Palmer J replaced the requirement in Thornton for “substantial harm” with a requirement for “more than minor harm”, and because under Thornton the claimant carries a burden to show that the statement has a tendency to cause harm to their reputation, whereas Palmer J considered such damage would be presumed but was rebuttable by the defendant showing the statement caused “less than minor harm”.25
[41] However, in Craig v Slater the Court of Appeal appeared to approve Palmer J’s statement of the law and this has been cited in subsequent High Court cases.26
[42]The Court of Appeal said:27
[44] For a meaning to be defamatory, it must tend to affect the claimant’s reputation adversely. And it must do so in more than a minor way. That qualification was contended for by Mr Miles, for the appellant. Mr Akel queried it. It reflects the serious harm threshold developed in United Kingdom courts, and since legislated for there. The High Court in New Zealand has approved and adopted that qualification, but it has not yet been considered by this Court.
[45] We approve adoption of the “more than minor” harm requirement in New Zealand common law, for three reasons. The first is that damage to reputation is an essential element of the cause of action of defamation, for the reasons Tugendhat J canvassed in Thornton v Telegraph Media Group Ltd. The fact that damage is rebuttably presumed (in most cases) does not alter the fact that damage to reputational credit remains an element of the tort. Principle and proof should not be confused. Secondly, a threshold of this kind is a necessary consequence of the right to freedom of expression protected by s 14 of the New Zealand Bill of Rights Act 1990. We agree with the reasoning of Palmer J in Sellman v Slater on that point. Thirdly, we consider the requisite threshold standard — “more than minor harm” — was correctly identified in the same decision and is to be preferred to a higher standard based on the word “serious”.
24 Emma Croskery “A Principled Approach to Defamation Claims in New Zealand: Untangling the Harm Threshold” (2019) 50(1) VUWLR 33 at 52, citing Sellman v Slater, above n 19, and Thornton v Telegraph Media Group Ltd, above n 2.
25 At 53.
26 See Craig v Slater, above n 2, at [45]; Talley’s Group Ltd v Television New Zealand Ltd [2023] NZHC 696 at [86]–[89] and Wilson Parking New Zealand Ltd v DLA Piper New Zealand [2023] NZHC 2705 at [40]–[41].
27 Craig v Slater, above n 2, (footnotes omitted).
[43]While it could be argued that the views expressed in both Sellman v Slater and
Craig v Slater to which I have referred are strictly obiter dicta, they are persuasive.28
[44] The position reached in this country appears to be that there is an objective requirement for a statement to tend to cause more than minor harm to reputation in order for the statement to be defamatory and actionable at law. Once the statement is shown to have a tendency to affect a claimant’s reputation adversely there is a presumption of harm and damage that does not need to be positively proved by the claimant, but a defendant has a defence to the claim where it can prove the actual harm caused was less than minor.
[45] However, the law in this area is developing and far from certain. It is unlikely that the Court of Appeal’s decision in Craig v Slater will be the last word on the matter. Several issues remain unclear. For instance, whether the focus of the screening exercise is only upon the tendency of a statement to cause reputational harm or the enquiry is multifactorial.29 It is not clear either what role (if any) the principle in Jameel now has to play in the law of New Zealand, notwithstanding the decisions of this Court that have applied it. In Craig v Slater, the Court did not mention Jameel and, as far as I am aware, there is no Court of Appeal authority as to its application in this country.30
Mr Douglas’ strike out application
Strike out principles
[46]Rule 15.1 of the High Court Rules provides:
15.1 Dismissing or staying all or part of proceeding
(1)The court may strike out all or part of a pleading if it
28 Sellman v Slater, above n 19; Craig v Slater, above n 2.
29 Recently in Talley’s Group Ltd v Television New Zealand Ltd, above n 26, at [90] Associate Judge Gardiner, citing Godwin Busuttil and Richard Parkes (eds) Gatley on Libel and Slander (13th ed, Sweet & Maxwell, London, 2022) at 2.004, said: “In my view, a plaintiff’s pre-existing bad reputation is not relevant to the ‘more than minor’ threshold. The investigation of whether the threshold has been crossed is confined to issues bearing on the gravity of the meaning of the statement, and possibly, the circumstances of its publication.”
30 Dow Jones & Co Inc v Jameel, above n 1; Craig v Slater, above n 2.
(a)discloses no reasonably arguable cause of action, defence, or case appropriate to the nature of the pleading; or
(b)is likely to cause prejudice or delay; or
(c)is frivolous or vexatious; or
(d)is otherwise an abuse of the process of the court.
(2)If the court strikes out a statement of claim or a counterclaim under subclause (1), it may by the same or a subsequent order dismiss the proceeding or the counterclaim.
(3)Instead of striking out all or part of a pleading under subclause (1), the court may stay all or part of the proceeding on such conditions as are considered just.
(4)This rule does not affect the court’s inherent jurisdiction.
[47] The general principles applicable to the exercise of the Court’s power under r 15.1 are well known.31 Pleaded facts, whether or not admitted, are deemed to be true. Normally the Court will not consider evidence inconsistent with the pleading as a strike out application proceeds on the basis that what has been pleaded may be proved.32 This does not extend to pleaded allegations which are entirely speculative and without foundation.33 The cause of action or defence must be clearly untenable before it will be struck out, so the jurisdiction is to be exercised sparingly and only in clear cases.
[48] Importantly, while the jurisdiction is not excluded by the need to decide difficult questions of law requiring extensive argument, the Court should be particularly slow to strike out a claim or defence in a developing area of the law. As Elias CJ and Anderson J said in Couch v Attorney-General:34
[33] It is inappropriate to strike out a claim summarily unless the court can be certain that it cannot succeed. The case must be “so certainly or clearly bad” that it should be precluded from going forward. Particular care is required in areas where the law is confused or developing. ...
31 R A Osborne McGechan on Procedure (online ed, Thomson Reuters) at [HR15.1.02(1)], citing Attorney-General v Prince [1998] 1 NZLR 262 (CA) at 267 and Couch v Attorney-General [2008] NZSC 45, [2008] 3 NZLR 725.
32 Attorney-General v McVeagh [1995] 1 NZLR 558 (CA) at 566.
33 R A Osborne McGechan on Procedure, above n 31.
34 Couch v Attorney-General, above n 31, (footnotes omitted).
Mr Douglas’ submissions
[49] It is accepted for present purposes that the meaning of Mr Douglas’ statement was that Mr Nicol was a prolific serial rapist and serious sexual offender. However, Mr Douglas argues that Mr Nicol’s claim ought to be struck out as an abuse of process given what he says is the absence of any harm to Mr Nicol’s reputation resulting from the very limited publication of the statement. This argument is founded upon Jameel.35
[50] As far as publication is concerned, Mr Nicol alleges that Mr Douglas’ statement was published to Mr Robinson, Mr McNicholl and likely other persons. Mr Douglas accepts publication of the statement to Mr Robinson, but not to other persons. Mr Slevin argues the evidence shows that Mr Douglas’ statement was published only to Mr Robinson through a private means of communication (a text message) not accessible to third parties. He contends publication to Mr McNicholl or other persons did not occur and it has already been the subject of a non-party discovery order. Further discovery, he argues, would not advance matters.
[51] Mr Slevin then submits Mr Robinson’s evidence is that he did not believe the statement, did not republish it, and thought no less of Mr Nicol as a result of receiving it. He says this is unchallenged and there is no reason to believe his evidence would differ at trial. He goes further and argues that if Mr Robinson had momentarily thought the statement might have been true that would not satisfy the threshold requirement of actual and more than minor damage to reputation. He says the absence of more than minor harm is demonstrated by Mr Robinson’s continued preparedness to do business with Mr Nicol.
[52] It follows, Mr Slevin argues, that where Mr Douglas has proven there was no actual harm to reputation caused by the publication of his statement the cost of allowing this case to proceed to trial would inevitably be disproportionate to the interests at stake.
[53] He also relies upon evidence that Mr Nicol’s legal costs were around $43,000 shortly after the proceeding was commenced, and that Mr Nicol has already made four
35 Dow Jones & Co Inc v Jameel, above n 1.
interlocutory applications with another application anticipated to determine whether Mr Douglas’ objections to interrogatories should be allowed.
[54] While accepting that vindication is a legitimate objective of defamation proceedings, and of particular importance where the defamatory allegations have been widely published or a defendant intends to argue they are true or in some other way justified, Mr Slevin submits that is not the case here where Mr Douglas apologised to Mr Nicol following service of the proceeding and disavows the truth his statement.
[55] In addition, Mr Slevin contends this proceeding is an abuse of the Court’s process because Mr Nicol seeks to expose the identity of the person who was the source of the false information that Mr Nicol was to be tried as part of the “mumma hooch saga” and was facing jail time. Mr Slevin says the identity of that person is not relevant to Mr Douglas’ alleged liability in defamation and, in that sense, the proceeding is pursued for a collateral purpose. Mr Douglas also believes that Mr Nicol wishes to harass, embarrass and impose costs on him which, it is said, is also not a legitimate use of the Court’s processes.
[56] Mr Slevin relies on Prasad v Raj as being similar to this case.36 It too concerned an application to strike out a defamation proceeding. The allegations made have been redacted from the judgment, but Powell J considered them serious. Powell J struck out the proceeding in part because there was admissible evidence of only one publication to a member of the plaintiff’s wider family who made an affidavit that the statements had not changed his view that the plaintiff was a person of integrity. There was also evidence to suggest the proceeding had been brought to bring inappropriate pressure on the defendant in the context of an acrimonious marriage separation.
My analysis
[57] Mr Douglas’ application for summary judgment was withdrawn because Mr Slevin, quite correctly, acknowledged there are factual disputes that made summary judgment inappropriate. The strike out application can fare no better for the
36 Prasad v Raj, above n 1.
same reason. There are plainly factual disputes that mean the strike out application cannot succeed.
[58] Mr Douglas’ statement contains extremely serious allegations. Mr Salmon submits that if true it would make Mr Nicol one of New Zealand’s most prolific serial rapists; that must be correct. There can be little doubt that the statement has a tendency to do very significant damage to Mr Nicol’s reputation. It is to be noted also that the statement was sent to Mr Robinson who does business with Mr Nicol.
[59] Despite Mr Slevin’s reliance upon Prasad v Raj, there were clearly several factors in play in that case that led Powell J to conclude the proceeding should be struck out. However, there are cases where publication of a defamatory statement to just one or very few persons has been held to be sufficient. One such case was Coker v Nwakanma where there was only one proven publication to a third party, the defendant’s sister, of an allegation of rape.37 The Judge held:
[33] As to serious harm, I am also satisfied that based on the meaning alone, and without any necessary additional evidence, the test under section 1(1) of the 2013 Act is satisfied. Although I have found that the scope of the publication was limited to the Defendant’s sister, this is one of those cases where the nature of the language allows one to infer serious harm. Assessment of harm to reputation has never been just a ‘numbers game’ and very serious harm to reputation can be caused by publication to a relatively small number of publishees. …
[60]In Mardas v New York Times Company Eady J said:38
What matters is whether there has been a real and substantial tort within the jurisdiction (or, at this stage, arguably so). This cannot depend upon a numbers game, with the court fixing an arbitrary minimum according to the facts of the case.
[61] However, more fundamentally, here there is a genuine and substantial dispute as to whether the statement was published only to Mr Robinson or also to Mr McNicholl and other persons. Mr Nicol pleads there has likely been broader dissemination.39 In the context of a strike out application pleaded facts are assumed
37 Coker v Nwakanma [2021] EWHC 1011 (QB).
38 Mardas v New York Times Company [2008] EWHC 3135 (QB) at [15].
39 See for instance Wilson Parking New Zealand Ltd v DLA Piper New Zealand, above n 26, at [69] where in a slightly different context the extent of publication was a reason to decline summary judgment.
to be true unless lacking all foundation.40 It cannot be said that Mr Nicol’s assertion that there has, or may have been, wider publication lacks all foundation for several reasons.
[62] First, Mr Nicol has clearly put Mr Douglas’ credibility in issue, alleging he is a known criminal with dishonesty offending. Mr Robinson has also given evidence of a similar kind. Mr Douglas’ credibility and veracity will be trial issues that cannot be resolved in a summary context.
[63] Second, Mr Douglas and Mr McNicholl would ask the Court to accept that the fact they made the similar and very serious allegations about Mr Nicol on the same day is entirely coincidental, yet they have attempted to downplay the true extent of their relationship which makes such a coincidence all the more surprising.
[64] In his first affidavit, Mr Douglas acknowledged knowing Mr McNicholl for a long time but that “the extent of my involvement with him over that time was that I built a house for him 6 or 7 years ago. I do not socialise with him and do not regard him as a friend or associate.” Mr McNicholl said in his affidavit “Craig Douglas and I are not friends, we do not see each other in social situations or communicate on a regular basis, except for when we were served documents”.
[65] Subsequently, however, the disclosure of the One New Zealand phone records showed Mr Douglas and Mr McNicholl were in regular contact with each other on and around the relevant dates.
[66]In an affidavit filed shortly before the hearing, Mr Douglas then said:
I have never said there were no communications between myself and Jimmie McNicholl. I have simply said we are not friends or associates and do not socialise together which is true. The fact he might contact me about someone who is looking to build a house from time to time does not in my view mean we are associates.
[67] This evidence was not correct. In his earlier affidavit Mr Douglas was clear that the “extent” of the relationship was “[to build] a house for him 6 or 7 years ago”.
40 Attorney-General v McVeagh, above n 32.
He said nothing about regular phone calls and text messages with Mr McNicholl or the referral of business.
[68] Mr McNicholl also filed a late affidavit claiming that during a telephone call with Mr Nicol “I said I have contacted Craig now and then to say I have recommended him to someone who is looking for a builder but we do not meet up or socialise and he had nothing to do with my phone message”. It is difficult to see how the apparently regular phone calls and text messages between the two men was contact “now and then”.
[69] Next, the fact that both men made similar statements about Mr Nicol on the same day is clearly suspicious and, given their relationship, it might well be thought likely they coordinated their activities. This is particularly so when the One New Zealand phone records show that between 8 and 14 February 2023 they were in regular contact with each other, and on 10 February 2023 alone they shared 14 calls or text messages.
[70] Mr Slevin submits one possible innocent explanation is the widespread publicity that the Mama Hooch offenders’ identities had been suppressed and that the trial had commenced on 7 February 2023. He said there was likely speculation about who might have been involved, including about people who regularly frequented the location of the offending which it might emerge included Mr Nicol. I do not accept those submissions as there is no evidence from Mr Douglas or Mr McNicholl that these were reasons they made statements about Mr Nicol.
[71] The next matter is Mr Douglas’ refusal to disclose the identity of the source of his information. Mr Slevin submits that both the identity of the source and Mr Douglas’ motivation for making his statement are irrelevant. Contrary to that submission, it appears to me that the existence of motivation to damage Mr Nicol’s reputation might suggest it more likely that publication of the statement was wider than to just Mr Robinson. Related to this, if it was the case there was in fact no source of Mr Douglas’ information, then the existence of motivation to damage Mr Nicol can be readily inferred. This is particularly so in circumstances where it is also not clear what motivation Mr McNicholl could have had to make his call to Opes Group.
[72] Mr Douglas relies heavily upon the evidence of Mr Robinson to the effect he did not believe the statement. Mr Robinson has made two affidavits, one at the request of Mr Nicol and then at the request of Mr Douglas. In his first affidavit, Mr Robinson makes comments critical of Mr Douglas and his character and says that when he received his text messages he had “suspicions about them” but that:
I know some of the people in the Mama Hooch trial. I know of three of the main defendants in the Mama Hooch trial […]. I know none of them [are] Andrew. That leaves the fourth person who could have been Andrew.
(emphasis added)
[73] In his later affidavit, on behalf of Mr Douglas, Mr Robinson’s evidence has a different tone and he states:
I know the two brothers who were convicted as a result of the Mama Hooch investigation and already knew who three of the four defendants were at that time. I have since been told who the fourth defendant was and can confirm it was not Andrew. I didn’t think he could have been involved when I read the messages and can’t imagine him being involved in anything like that.
[74] Mr Robinson also says that when he previously swore the affidavit at Mr Nicol’s request he was in a dispute with Mr Douglas over a tenancy matter, and he regrets expressing some of the opinions.
[75] In my view, given the somewhat changing tenor of Mr Robinson’s evidence, this is certainly not a case where the Court can be satisfied that he “was confident the allegations were not true” or that he did not speak of it to other persons. Indeed, he confirms it was over the course of lunch on 1 May 2023 with his business partner, Mr Nicol and another person that he mentioned the texts from Mr Douglas.
[76] I consider the issues of what Mr Robinson took from Mr Douglas’ statement and whether he repeated the content of the statement to others (as he says he believed Mr Douglas intended) are also matters that need to be explored at trial.
[77] To the extent that Mr Douglas relies upon Mr Nicol’s legal fees as evidence of a disproportionate use of resources, I note the Jameel principle is principally
concerned with the appropriate and proportionate use of the Court’s resources.41 It is more relevant that almost all aspects of Mr Nicol’s claim are admitted by Mr Douglas. He acknowledges making the statement, that it was made about Mr Nicol and that its meaning was that Mr Nicol was a serial rapist. He has not raised any affirmative defences except that no real or substantial tort was committed. That will limit the scope and length of any trial and the resources that will be expended in this case.
[78] Mr Douglas has not satisfied me that Mr Nicol is advancing his case for an improper purpose. Given the nature of the allegations made against him it is entirely understandable he would seek to vindicate his reputation and quash rumours which he believes to be circulating in the community including, according to Mr Douglas, by someone with “a very powerful job” and apparently close to the investigation into the Mama Hooch offending. I do not accept that a private apology offered by Mr Douglas provides such vindication.
[79] An additional reason that I consider Mr Douglas’ strike out application must fail is because the status of Jameel is uncertain, particularly since the Court of Appeal in Craig v Slater accepted the threshold of harm requirement identified by Palmer J in Sellman v Slater.42 As I noted above at [48], the Court should strike out a proceeding only in clear cases and be slow to do so in a developing area of the law.
Mr Nicol’s application for summary judgment
Application for leave
[80] A plaintiff’s application for summary judgment will generally be made at the time a proceeding is commenced and served on the defendant. An application may be made at a later time with leave of the Court. Rule 12.4(2) High Court Rules provides:
An application by a plaintiff may be made either at the time the statement of claim is served on the defendant, or later with the leave of the court.
[81] The High Court Rules do not provide any guidelines as to when leave of the Court will be granted. The commentary in McGechan on Procedure states:43
41 Dow Jones & Co Inc v Jameel, above n 1.
42 Dow Jones & Co Inc v Jameel, above n 1; Craig v Slater, above n 2; Sellman v Slater, above n 19
43 R A Osborne (ed) McGechan on Procedure, above n 31, at [HR12.04.1].
… The question is clearly a discretionary one, and it will be up to the party applying for leave to show why it should be granted. If the absence of a defence has only become apparent after discovery or the exchange of briefs, this may well be an adequate reason for granting leave. In many cases, as with appeals, the leave question will be bound up with the merits, and it may be difficult to determine the leave question without some consideration of the merits.
[82] In Stephens v Barron, the Court of Appeal noted it was important that leave applications be dealt with as a step prior to a full consideration of the merits of an application for which leave is required.44 The Court said the criteria for granting leave needed to be addressed, even if the merits of the substantive application are, themselves, an important aspect of the leave decision.45
[83] The overriding consideration in deciding whether to grant leave must be the interests of justice having regard to the stated objectives of the High Court Rules to secure the just, speedy and inexpensive determination of proceedings.46
[84] Mr Slevin argues that Mr Nichol should not be granted leave to apply for summary judgment. He submits there is no reasonable explanation for the delay in applying for summary judgment as while Mr Nichol says it only became apparent there was no defence to his claim after Mr Douglas filed his statement of defence, in an affidavit filed in support of interim orders Mr Nicol deposed to a belief that no defences were available. He says there was no reason he could not have applied for summary judgment earlier.
[85] Mr Slevin also argues that Mr Nicol’s claim lacks merit for reasons already canvassed earlier in this judgment and is frivolous or vexatious, being primarily intended to put financial pressure on Mr Douglas and to pursue objectives not material to the claim against him.
[86] Mr Slevin speculates that granting leave may cause delays, as if Mr Nicol was successful in obtaining summary judgment there would almost inevitably be an appeal prolonging the proceeding.
44 Stephens v Barron [2014] NZCA 82.
45 At [13].
46 Corbans Viticulture Ltd v Waihopai Valley Management Ltd [2012] NZHC 2799 at [60].
[87] Contrary to the approach that found favour with the Court of Appeal in Stephens v Barron, here the leave application was not heard as a separate application.47 I have formed a clear view that the substantive application for summary judgment ought to be dismissed, and it serves little purpose in those circumstances to spend time considering the leave application. To the extent it is necessary, I will provide brief reasons why I would grant Mr Nicol leave to pursue his application.
[88] While it is the case that upon commencing the proceeding Mr Nicol swore an affidavit deposing that he did not consider Mr Douglas could have a defence, I accept he could not know at that point whether Mr Douglas would plead any recognised defence to a claim of defamation or raise factual disputes that would make summary judgment inappropriate. That only became clear when Mr Douglas filed his statement of defence.
[89] For reasons given above, I do not accept that Mr Nicol’s claim is frivolous or vexatious. Further, and most importantly, Mr Nicol’s summary judgment application was a response to the application for summary judgment/strike out filed by Mr Douglas. Fundamentally the applications give rise to similar issues of fact and law. There was no prejudice to Mr Douglas, and indeed a great deal of sense, to deal with the competing applications simultaneously.
Summary judgment
[90] Mr Nicol’s application for summary judgment is brought pursuant to r 12.2(1) High Court Rules which provides:
The court may give judgment against a defendant if the plaintiff satisfies the court that the defendant has no defence to a cause of action in the statement of claim or to a particular part of any such cause of action.
[91] An often-cited summation of the correct approach to summary judgment applications is contained in Krukziener v Hanover Finance Ltd as follows:48
[26] The principles are well settled. The question on a summary judgment application is whether the defendant has no defence to the claim; that is, that
47 Stephens v Barron, above n 44.
48 Krukziener v Hanover Finance Ltd [2008] NZCA 187, [2010] NZAR 307; confirmed in Mitchell v Trustees Executors Ltd [2011] NZCA 519, (2011) 12 NZCPR 659 at [35].
there is no real question to be tried: Pemberton v Chappell ... The Court must be left without any real doubt or uncertainty. The onus is on the plaintiff, but where its evidence is sufficient to show there is no defence, the defendant will have to respond if the application is to be defeated: MacLean v Stewart … The Court will not normally resolve material conflicts of evidence or assess the credibility of deponents. But it need not accept uncritically evidence that is inherently lacking in credibility, as for example where the evidence is inconsistent with undisputed contemporary documents or other statements by the same deponent, or is inherently improbable: Eng Mee Yong v Letchumanan
… In the end the Court's assessment of the evidence is a matter of judgment. The Court may take a robust and realistic approach where the facts warrant it: Bilbie Dymock Corp Ltd v Patel …
Mr Nicol’s submissions
[92] Mr Salmon argues that Mr Nicol is entitled to summary judgment as all elements of a cause of action for defamation have been made out because it is defamatory to accuse someone of being suspected or convicted of serious sexual offending, there was publication by Mr Douglas of the statement identifying Mr Nicol as a serial rapist, and it is sufficient the statement was published to at least Mr Robinson.
[93] He argues there has never been a case like this in New Zealand involving the “more than minor” threshold. The allegations are, he notes, striking in their seriousness. He submits that the primary consideration in determining whether the threshold is met is the inherent nature of the statement and its tendency to defame.
[94] He also says that, as a matter of policy, the courts should be slow to give their imprimatur to the making of serious false allegations of criminality, which can have no legitimate New Zealand Bill of Rights protection and then providing the makers of such allegations with a liability shelter in the form of limited publication. He says this is not the kind of case that the “more than minor” filter was ever designed to catch.
[95] Mr Salmon then argues the only question that can arise on this summary judgment application is whether the “more than minor” threshold articulated in the case law has been made out. He contends that if the Court accepts that the statement passes the “more than minor” test the statement is defamatory and summary judgment should be entered.
Mr Douglas’ submissions
[96] Mr Slevin says Mr Douglas’ case is not that the making of false allegations of rape is a protected right nor that the actionability of such statements is not a justified limitation on the right to free expression. He says the actionability of such statements is, however, not a justified limitation on the right to freedom of expression where they have not caused more than minor harm to reputation.
[97] Mr Slevin submits Mr Douglas has an arguable defence to Mr Nicol’s claim as given the limited publication of the statement, no real or substantial tort was committed. He argues that while Mr Nicol insists that it is the inherent tendency of a statement to cause harm to reputation that will be sufficient to determine whether a defendant has liability, that is not consistent with the Court of Appeal’s recognition that the presumption of damage is rebuttable, and that actual harm to reputation is an essential element of the tort.
[98] He argues there is evidence the sole recipient of the statement was Mr Robinson, and that Mr Nicol’s reputation was not in fact harmed. He argues there is no direct evidence of publication of the statement to Mr McNicholl who denies that there was any collusion between him and Mr Douglas, and Mr Douglas cannot be held responsible for the actions of Mr McNicholl in any event.
My analysis
[99] On my view of the present state of the law, to which I earlier referred, Mr Douglas will have a defence to the claim if he can establish that the statement has caused less than minor harm to Mr Nicol’s reputation. In this regard, I consider that the tendency of the statement to defame Mr Nicol is an important matter that the Court must consider but so too are other matters such as the extent of publication, the method of publication, the identity of the person to whom the statement is published, and the existence of any evidence of actual damage.
[100] Whether there has in fact been less than minor (or indeed any) harm to Mr Nicol’s reputation can only be determined at trial, once the parties have had the benefit of discovery and cross-examination. If it is found that Mr Douglas did in fact
publish the statement to only Mr Robinson and that Mr Robinson did not believe the statement to be true, and there is no other evidence of damage to Mr Nicol’s reputation arising from the publication of the statement, then I accept it is arguable that Mr Douglas may have a defence to the claim.
[101] Despite having reservations, I do not consider the evidence of Mr Douglas, Mr McNicholl and Mr Robinson (in so far as he says he didn’t’ think Mr Nicol could be involved in the Mamma Hooch offending) so lacking in credibility or inherently improbable that I can be satisfied Mr Douglas does not have an arguable defence to the claim.
[102] It follows, essentially for the same reasons as Mr Douglas could not satisfy me that the claim should be struck out, that Mr Nicol’s summary judgment application must also be dismissed.
Result
[103]Mr Douglas’ application for summary judgment was withdrawn.
[104]Mr Douglas’ application to strike out this proceeding is dismissed.
[105]Mr Nicol’s application for summary judgment is dismissed.
[106] In respect to costs, my initial view is that costs should be reserved. However, if, despite my indication, any party wishes to seek costs they may do so within 14 working days, with seven days for any reply submissions, and costs will be determined on the papers. Submissions are not to exceed six pages.
[107] The case should be listed for a telephone case management conference so that it can be timetabled to trial. Counsel should file a preferably joint memorandum at least three working days prior to the telephone conference with proposed directions or, in the event that they cannot reach agreement, separate memoranda.
[108] In the first instance this judgment is to be released only to the parties. If any party considers there are any matters in this judgment that should be suppressed, they
must file a memorandum within seven days, with seven days reserved for any memorandum in reply to be filed. I will then make a decision on any application on the papers.
O G Paulsen Associate Judge
Solicitors:
Wynn Williams, Christchurch Davidson Legal Ltd, Christchurch
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