Progressive Enterprises Ltd v North Shore City Council HC Auckland CIV 2004-404-7139
[2005] NZHC 1211
•14 October 2005
For a Court ready (fee required) version please follow this link
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2004-404-7139
BETWEEN PROGRESSIVE ENTERPRISES LIMITED
First Plaintiff
ANDNORTHCOTE MAINSTREET INCORPORATED
Second Plaintiff
ANDNORTH SHORE CITY COUNCIL First Defendant
ANDTHE NATIONAL TRADING COMPANY OF NEW ZEALAND LIMITED
Second Defendant
Hearing: 5 October 2005
Counsel: G P Curry, C N Whata and J D K Gardner-Hopkins for Plaintiffs
D K Hartley for First Defendant (abides decision of the Court)
A R Galbraith QC, J K MacRae and G F Weir for Second Defendant
T Arnold QC, Solicitor-General, as amicus curae
Judgment: 14 October 2005
JUDGMENT OF BARAGWANATH J
Solicitors:
Russell McVeagh, Auckland for Plaintiffs Simpson Grierson, Auckland for First Defendant Phillips Fox, Auckland for Second Defendant Crown Law Office, Wellington
Counsel:
Mr A R Galbraith QC, Auckland
PROGRESSIVE ENTERPRISES LIMITED And Anor V NORTH SHORE CITY COUNCIL And Anor HC AK CIV-2004-404-7139 [14 October 2005]
Table of Contents
Para No.
Introduction [1] The media campaign [5] The context [8] Contempt by improper pressure on the party: the legal principles [16]
The interests engaged: access to justice; freedom of speech;
freedom to trade [17] Criminal contempt [22] The attempts to clarify the law [25] The need for further guidance [28] Appraisal of “impropriety” [32]
Application of the principles [41] Result [55] Costs [56]
Introduction
[1] This case is said to concern “contempt of court”, which for lawyers is a familiar term of art. But it is as well to offer the translation of “wrongful interference with justice” which is what it means.
[2] The plaintiffs, Progressive Enterprises Ltd (“Progressive”) and Northcote Mainstreet Inc (“Northcote Mainstreet”), apply to have the second defendant, National Trading Co Ltd (“NTC”), held in contempt of court as a result of NTC’s media campaign launched following the judgment of this Court delivered on 21 June
2005. The application has potential criminal consequences. It requires consideration of the approach to be taken where a claim to exercise freedom of speech in the course of trade competition is said to infringe the administration of justice, on which authority is lacking. For that reason I invited the assistance of the Solicitor-General who as a Law Officer has responsibility for the due administration of criminal justice. He elected to appear in person.
[3] Each party’s pleading alludes to principles stated in certain leading authorities which must be considered. The plaintiffs’ application claims that the matters to which the media campaign relates are sub judice; that the media campaign goes beyond fair and temperate comment and applies improper pressure that would tend to inhibit a litigant of average robustness from fully pursuing its rights to bring
review proceedings or defend an appeal; that as a litigant NTC should have exercised greater restraint in its out of court public comments; that NTC’s actions are intended or have a tendency to interfere with or obstruct the fair administration of justice; and that it is in the interests of justice that the orders sought be granted.
[4] The second defendant’s notice of opposition denies that the media campaign was contemptuous. It pleads that the advertising was not intended to and did not have the effect of undermining or interfering with the due administration of justice; did not apply improper pressure and would not tend to inhibit a litigant of average robustness from fully pursuing its rights; was not intended to and has not inhibited either plaintiff from participating in the litigation or defending the appeals; and that the advertising was accurate in fact and not misleading or untrue.
The media campaign
[5] On 13 July 2005 NTC and the first defendant, North Shore City Council, filed notice of appeal against this Court’s decision. The media campaign began the following week and ran for 25 days. It comprised seven newspaper advertisements, 378 radio advertisements on eight radio stations, 27,000 flyers distributed to households on the North Shore and 29 bus shelter posters. The tenor of the campaign may be discerned from the flyers which were distributed in the following form:
WE’D LOVE TO LOWER YOUR GROCERY BILL BUT PROGRESSIVE’S COURT ACTION WON’T LET US
18 years ago we decided to build a PAK’nSAVE on Wairau Road. Unfortunately our policy of New Zealand’s lowest food prices posed a threat
to our competition – the Australian-owned Progressive Enterprises Ltd’s
stores: Foodtown, Woolworths and Countdown. For years they’ve been trying to stop us opening a PAK’NSAVE in Wairau Road. Building finally
started last year, but their latest court action will keep you waiting even
longer. Now, a half-built PAK’NSAVE stands on Wairau Road and it looks like the people of Glenfield and the surrounding areas won’t benefit from
our low prices for the time being.
But don’t worry.
As a 100% New Zealand-owned and operated company, we’re determined to bring you lower prices and after 18 years, we’re not going to give up now.
PAK’nSAVE
Not opening in Wairau Road. Yet.
[6] Counsel for the plaintiffs submitted that the comment was intended to deter the plaintiffs from pursuing their objection to NTC’s application and was not “fair and temperate” as required by leading authority; it was consequently in contempt of court.
[7] Counsel for NTC challenged both that test and its application.
The context
[8] The context is important. Progressive is the New Zealand subsidiary of Foodland Associated Limited (FAL), which is one of Australia’s largest listed companies. It operates the Foodtown, Woolworths and Countdown supermarkets and has approximately 44% of the New Zealand supermarket expenditure on food and groceries. In the year ending 30 June 2004 its turnover was NZ$3.3 b. NTC is a wholly owned subsidiary and the property owning arm of Foodstuffs (Auckland) Limited, a co-operative company owned by its trading members. Its brands include Four Square, New World and Pak ‘n Save which have a 56% share of national supermarket expenditure on food and groceries. Its turnover for the last year was $6.33 b. So the two groups are both economically powerful and in direct competition. Northcote Mainstreet, an incorporated society with the function of promoting the interests of businesses in the Northcote centre, supported Progressive in the proceedings resulting in the decision of 21 June as well as on the present application.
[9] One expression of the competition has seen Progressive oppose NTC’s successive attempts to secure consent to open a Pak ‘n Save on the Wairau Road site with which the June judgment was concerned. NTC estimates that there is something like $4.5 m of monthly turnover available to a lower priced Pak ‘n Save supermarket established on that site. Progressive has six of the seven supermarkets nearest to the Wairau Road site. The loss to Progressive following the opening of
such a supermarket would be of the order of $1.3 m a month or more; the advantage to Progressive of delay is thus a like amount.
[10] The June judgment discussed some of the history of NTC’s successive applications for resource consent, which go back to 1989 and were declined by the Council in 1991 and again in 1997. By decisions dated 20 April 2001 and
9 September 2002 the Environment Court declined first a change of the district plan and secondly a resource consent appeal, the latter turning on traffic considerations. On 4 February 2004 NTC lodged a third consent application. On 9 August 2004 the Council decided to consider the application on a non-notified basis and on
18 November 2004 granted the consent sought. That claim was reported in the North Shore Times on 25 November 2004. On 7 April 2005 the same paper reported Progressive’s and Northcote Mainstreet’s High Court challenge to the grant. A further report of 21 April 2005 reported the imminent hearing for the application for judicial review.
[11] The decision of 15 June 2005 was the subject of media attention. A report by the North Shore Times on 21 June 2005 read:
Supermarket loses
Supermarket chain Foodstuffs, the Fire Service and North Shore City Council have been dealt a major blow by a High Court decision ruling against a proposed Pak ‘n Save in Wairau Park.
[12] The following morning the New Zealand Herald published a substantial article under the heading “New supermarket can’t open, court rules”. The report contained a synopsis of major points in the judgment and recorded the reactions of Foodstuffs and Progressive.
[13] On 26 June 2005 the Bob Dey Property Report provided an eight page criticism of the judgment. On 5 July 2005 a letter to the editor of the North Shore Times expressed displeasure at the High Court’s conclusion. On 6 July 2005 a Herald columnist reported the opinion of the local Member of Parliament that there should be major reform of the Resource Management Act. On 13 July 2005 in an article headed “Foodstuffs quietly feeding its empire” the
paper recorded the development by Foodstuffs, described as the country’s seventh largest entity by revenue, of six supermarkets worth up to $120 m. It referred to the result of this Court’s decision and Foodstuffs’ intention to return to court hoping to finish and open the Wairau Road store.
[14] NTC’s media campaign commenced the following week. On 1 August 2005 the plaintiffs gave notice to NTC of their claim that its advertising campaign was contemptuous and advising that if it were not stopped by 4 August proceedings would be issued. The present application was filed on 5 August 2005. The following day at a meeting of the Glenfield Ratepayers and Residents Association the CEO and managing director of NTC, Mr Carter, stated:
I would sincerely ask Progressive and its overseas parents to carefully consider competing in the market rather than the courts.
[15] Journalists and crew from the TVNZ current affairs programme Close Up attended and broadcast a segment from the meeting that evening which included Mr Carter’s statement.
Contempt by improper pressure on the party: the legal principles
[16] In In re Lonrho Plc [1990] 2 AC 154, 201, the Appellate Committee of the
House of Lords observed that:
The law relating to contempt of court is fraught with difficulties and uncertainties.
Like Mason P in the leading Australian case Harkianakis v Skalkos (1997) 42
NSWLR 22, 27 I have found the most difficult aspect of the case to be the ascertainment of the principles to be applied.
The interests engaged: access to justice; freedom of speech; freedom to trade
[17] The interests engaged in the present case are three of those long recognised by the common law as important. Two are confirmed as such by the New Zealand Bill of Rights Act: s 25 according a particular status to fair trial rights and s 14 the
right to freedom of expression. Rishworth, Huscroft, Optican and Mahoney
The New Zealand Bill of Rights (2003) state at pp 331-2
…expression that is purely commercial in nature has little protection to the right… [n]evertheless, it is clear that purely commercial expression is protected by the right, which specifically includes the freedom to seek, receive and impart information and opinions of any kind in any form, without regard to context. The extension of rights to legal as well as natural persons (s 29) means that the right to freedom of expression is likely to be contested in a variety of commercial contexts.
This result is less controversial than it seems, for it is widely accepted that purely commercial expression can be regulated without raising the concerns normally associated with the regulation of expression; such expression is regulated routinely on the basis of its content in most jurisdictions...
[18] It is unnecessary in this case to consider the kind of contest between freedom of expression and regulation of advertisements aimed at children or promoting the sale of tobacco or regulating the sale of pharmaceuticals: see Irwin Toy Ltd v Quebec (Attorney General) [1989] 1 SCR 927; RJR-MacDonald Inc v Canada (Attorney General) [1995] 3 SCR 199 and the other cases cited in Rishworth and others in various jurisdictions. Here NTC’s claim to freedom of expression is to some extent by way of a commercial response to an attack, albeit wholly legitimate, by its major commercial competitor. Just as the law of defamation recognises a limited right to respond to an attack (see News Media v Finlay [1970] NZLR 1089 (CA)) so that is a factor to take into account here in NTC’s favour.
[19] In Gisborne Herald Co Ltd v Solicitor-General [1995] 3 NZLR 563 the Full Court of Appeal recognised the importance of freedom of expression within our society. While it happened that in that case the Solicitor-General brought the contempt application whereas here he has appeared simply as amicus curiae (“friend of the Court”) there is no difference of principle between the proceedings. Each is properly, as I have noted, to be characterised as criminal with potential criminal consequences. Section 3 of the Bill of Rights requires those who exercise public functions to give effect to it: Electoral Commission v Cameron [1997] 2 NZLR 412 (CA). That includes this Court.
[20] The right to a fair trial is an absolute one: R v A (No 2) [2002] 1 AC 45 (HL). But s 14 requires the Court also to recognise the right of freedom of expression,
which in the present context is bound up with that of freedom to trade and to compete. An aspect of the latter was described by Lord MacNaghten in Nordenfelt v Maxim Nordenfelt Guns and Ammunition Company [1894] AC 535, 565:
All interference with individual liberty of action in trading, and all restraints of trade of themselves, if there is nothing more, are contrary to public policy, and therefore void. That is the general rule. But there are exceptions: restraints of trade… may be justified by the special circumstances of a particular case… if the restriction is reasonable – reasonable, that is, in reference to the interests of the parties concerned and reasonable in reference to the interests of the public…
[21] While the right to a fair trial must be preserved the Court must as far as practicable reconcile it with the interests of freedom of expression and of liberty to trade. The exercise is a different one from that undertaken by Sedley LJ in Douglas v Hello! Ltd [2001] QB 967, 1005 para 136, approved by Lord Hoffmann and Lord Hope in the House of Lords in Campbell v MGN [2004] 2 AC 457, which concerned balancing the non-absolute values of personal privacy and freedom of expression. Here the task is in my view to factor into the test of criminal contempt the public interest in the other values.
Criminal contempt
[22] The starting point, as was observed by the Full Court of the High Court in Solicitor-General v W & H Specialist Publications Ltd [2003] 3 NZLR 12, 16, is that the power to punish for contempt is an inherent criminal jurisdiction of the Courts specifically preserved by s 9 of the Crimes Act 1961. So in Attorney General v Newspaper Publishing Place [1997] 1 WLR 926, 935-936 Lord Bingham CJ required satisfaction of both the conventional criminal requirements of actus reus and mens rea. As Lord Reid said in Attorney-General v Times Newspapers Limited [1974] AC 273, 294 (Sunday Times) it is:
…founded entirely on public policy. It is not there to protect the private rights of parties to a litigation or prosecution. It is there to prevent interference with the administration of justice and it should… be limited to what is reasonably necessary for that purpose.
[23] It is the sole relict of the common law power of the Courts to create offences punishable by fine, sequestration (Quality Pizzas Ltd v Canterbury Hotel Employees
Industrial Union [1983] NZLR 612) and, in the case of individuals, imprisonment. Since 1961 such power has otherwise been excluded not only by the Crimes Act of that year but, following the controversial decision in Shaw v DPP [1962] AC 220, by the common law as well. Lord Reid’s dissenting judgment at p 275 gives the reasons why the English judges no longer create criminal offences:
Some think that the law already goes too far, some that it does not go far enough. Parliament is the proper place, and I am firmly of the opinion the only proper place, to settle that. When there is sufficient support from public opinion, Parliament does not hesitate to intervene. Where Parliament fears to tread it is not for the courts to rush in.
That statement of principle signals the care with which the New Zealand judiciary must approach their task of applying and developing the criminal contempt jurisprudence.
[24] The reason for the continued existence of the jurisdiction is its utility: it is potentially available to meet the mischief described by Lord Hardwicke in The St James’s Evening Post Case (1742) 2 Atk 469; 26 ER 683:
Nothing is more incumbent upon courts of justice, than to preserve their proceedings from being misrepresented; nor is there any thing of more pernicious consequence, than to prejudice the minds of the publick against persons concerned as parties and causes, before the cause is finally heard…
There may be… a contempt of this court, in abusing parties who are concerned in causes here…
There cannot be any thing of greater consequence than to keep the streams of justice clear and pure, that parties may proceed with safety both to themselves and their characters.
The attempts to clarify the law
[25] Judges are conscious that a legal system in order to comply with the rule of law must provide rules that are promulgated, clear and coherent with one another: Finnis Natural Law and Natural Rights (Clarendon Press 1980) p 270. And so there have been successive attempts to state the principles with specificity.
[26] In his helpful submissions as amicus curiae the Solicitor-General referred to the important recent statements of principle by Blanchard J in Duff v Communicado
Limited [1996] 2 NZLR 89 adopted by the Full Court of this Court in Solicitor-General v Smith [2004] 2 NZLR 540. Both turn on the leading House of Lords’ decision in Sunday Times. The pleadings of both parties alluded to Sunday Times and the case was cited in passages from Duff adopted in Smith at p 548:
[42] Lord Diplock at p 309 … identified, as the three requirements of the due administration of justice, that all citizens should:
(a) Have unhindered access to Courts for the determination of disputes as to their legal rights and liabilities;
(b) Be able to rely on the Courts as free from bias against any party and for decisions based only on facts proved in evidence properly adduced; and
(c) Once the dispute has been submitted to a Court, be able to rely upon there being no usurpation by any other person of the function of the Court to decide it according to law.
[Blanchard J] added:
“Conduct which is calculated to prejudice any of these three requirements or to undermine the public confidence that they will be observed is contempt of court.”
…
Improper pressure on litigants
The allegations
[43] The Solicitor-General alleges that Dr Smith’s public campaign:
(a) Created a real risk of improper pressure on the caregiver to alter her position in the case; and
(b) Was likely to dissuade other litigants in the position of the caregiver from exercising their legal rights.
[44] This part of the case against Dr Smith concerns the first and third of the requirements identified by Lord Diplock which we have set out in para [42] above.
[45] There are two aspects to improper pressure on litigants. The first concerns litigants in the particular case. Here the concern is with the caregiver. On this aspect, [an] element… of Dr Smith’s conduct … to be considered [is]:
…
His public statements in his media releases, and on RNZ and TV3.
On the second element, the public statements, we adopt the test formulated by this Court in Duff v Communicado Ltd [1996] 2 NZLR 89 at p 98:
“A public statement about civil litigation currently before a Court will be in contempt of Court if:
(a) it goes beyond fair and temperate comment; and
(b) either,
(i) when viewed objectively, it can be seen to have a real likelihood of inhibiting a litigant of average robustness from availing itself of its constitutional right to have the case determined by the Court; or
(ii) it is actually intended by the maker of the statement to have that inhibiting effect on a litigant.
This test is primarily objective, focusing on the probable tendency of the publication rather than its actual effect; but it encompasses the unfair and intemperate comment of someone who has set out to inhibit a litigant regardless of whether the comment actually succeeds in doing so. A weak litigant needs protection against unfair publicity deliberately intended to undermine its position.”
…
[47] Th[is] aspect concerns the public as potential litigants. We draw again from what Lord Diplock said in Times Newspapers at p 310:
“. . . If to have recourse to civil litigation were to expose a litigant to the risk of public obloquy or to public and prejudicial discussion of the facts or merits of the case before they have been determined by the court, potential suitors would be inhibited from availing themselves of courts of law for the purpose for which they are established.”
[48] Pharmaceutical Management Agency v Researched Medicines Industry Association [1996] 1 NZLR 472 (Pharmac) in this Court was such a case, the Court commenting at p 476:
“. . . One must consider tendencies not only in relation to the particular case, but in relation to resort to the Courts by others.”
In Pharmac the Court held that the offending conduct, whilst it would not deter Pharmac (“not an administrative or commercial weakling”), could deter many defendants or prospective plaintiffs “from the day in Court which is their entitlement”.
[27] The formulation in Smith:
A public statement about civil litigation currently before a Court will be in contempt of Court if:
(a) it goes beyond fair and temperate comment; and
(b) either,
(i) when viewed objectively, it can be seen to have a real likelihood of inhibiting a litigant of average robustness from availing itself of its constitutional right to have the case determined by the Court; or
(ii) it is actually intended by the maker of the statement to have that inhibiting effect on a litigant.
is a fair synopsis of the effect of Sunday Times. In cases such as Duff and Smith it is both a necessary and sufficient test.
The need for further guidance
[28] But all decisions are to be read according to their context; the Latin tag secundum subjectam materiam, putting in three words the four of the English, is a reminder that the point has withstood the test of time. While the flyer could hardly be described as “temperate”, and NTC would have been delighted if its campaign had had the unlikely effect of dissuading Progressive from pursuing its objections, I am quite satisfied that NTC was not in contempt of court. I am of the view that Duff and Smith do not provide the whole of the guidance necessary in this case.
[29] In Harkianakis Mason P found it necessary to undertake a more searching examination of the principles stated in Sunday Times than had previously been required. He formulated the following principles at p 27 onwards (passages of particular importance are in bold):
1. This being an allegation of criminal contempt, the charge must be established beyond reasonable doubt;
2. The claimant must demonstrate, to the criminal standard, that the publication had “as a matter of practical reality, a tendency to interfere with the course of justice in a particular case…
In discussing a contempt which, like the present, was said to be involved in the publication of threatening words, Lord Reid said in Attorney-General v Times Newspapers Ltd… at 298-299 (the Sunday Times case) that:
... the true view is that expressed by Lord Parker CJ in R v Duffy; Ex parte Nash [1960] 2 All ER 891, 896, that there must be ‘a real risk as opposed to remote possibility’ [of interference with the
course of justice]. That is an application of the ordinary de minimis principle. There is no contempt if the possibility of influence is remote.
See also (at 303) per Lord Morris and Commercial Bank of Australia Ltd v
Preston [1981] 2 NSWLR 554 at 562.
3. Intention to interfere with the due administration of justice is not necessary to constitute a contempt: Registrar of the Court of Appeal v Willesee (1985) 3 NSWLR 650 at 673-676 (where the authorities are discussed by Hope JA)…
4. Where however intent to interfere has been proved, this has usually been sufficient to sustain a prosecution: see, eg, Smith v Lakeman (1856) 26 LJ (NS) Ch 305; Ex parte Bread Manufacturers; Re Truth and Sportsman Ltd (1937) 37 SR (NSW) 242 at 248-249; 54 WN (NSW) 98 at
99; Hinch [v Attorney-General (Victoria) (1987) 164 CLR 15] (at 43); cf Lane v Registrar of the Supreme Court of New South Wales (Equity Division) (1981) 148 CLR 245 at 258. It is not self-evident why this is so. Two possible explanations are that the court is applying the principle that a person who does an act with such intent is admitting a belief that he or she has a reasonable chance of success, with this admission being used as evidence of the fact (Attorney-General v Hislop [1991] 1 QB 514 at 535, per McCowan LJ. As to the general principle, see Australian Woollen Mills Ltd v F S Walton & Co Ltd (1937) 58 CLR 641 at 657); or that such a case involves an inchoate offence in the nature of attempt, where intent plus preparatory acts will be sufficient to sustain the charge.
5. The cases have recognised a category of criminal contempt in which improper pressure is placed on a party to court proceedings through the public dissemination of material. There is a useful discussion by the Australian Law Reform Commission in a Research Paper prepared by Ann Riseley entitled “Improper Pressure on Parties to Court Proceedings”. It was published in 1986 as part of the Commission's reference on “Contempt of Courts” (ALRC RP 3, 1986). Such contempt may include public discussion involving injurious misrepresentations concerning a party (see Re William Thomas Shipping Co Ltd [1930] 2 Ch 368; Fry v Bray (1959) 1 FLR 366) or abuse and public obloquy of a party (Re St James’ Evening Post; Roach v Garvan (1742) 2 Atk 461 at 471; 26 ER 683 at
684-655; the Sunday Times case). These and other instances of “trial by newspaper” tend to undermine the rule of law, because they risk impeding access to the courts of law for vindication of legal rights. The gravamen of the contempt is the tendency to deter both the individual litigant and litigants similarly placed who would wish to seek curial vindication of their rights. (All criminal contempts “share a common characteristic: they involve an interference with the administration of justice either in a particular case or more generally as a continuing process”: Attorney-General v Leveller Magazine Ltd [1979] AC 440 at 449, per Lord Diplock, cited with approval in Australasian Meat Industry Employees’ Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 106.)
6. In judging the real tendency issue, the time relationship between publication and the “particular case” allegedly interfered with is usually significant... However, delay between publication and anticipated trial date of pending proceedings is not relevant to contempt by improper pressure on
a litigant, because such pressure is capable of diverting the litigant at any stage in the proceedings. The gravamen of this particular type of contempt is the potential interference in the litigant’s freedom to conduct the litigation as he or she chooses. “The right to bring an action in relation to a civil matter is really a bundle of rights that includes the freedom to originate, not to originate, to negotiate rather than litigate the settlement of the dispute, and/or to withdraw an action or a defence after setting it in motion…
7. Successful interference with a party’s conduct of proceedings is not necessary for proof of liability for contempt by improper pressure…
8. There is a question as to whether the tendency is to be measured against the capacity to withstand pressure of the particular litigant party involved, or whether the court should have in contemplation some hypothetical litigant of “ordinary” fortitude who might be capable of influence by similar pressure applied in similar circumstances: cf Hislop (at 526). The dual focus of the law of contempt referred to in the passage cited at the end of par 5 above suggests that the latter is the correct approach...
9. In punishing certain types of interference with litigants, the law is concerned to distinguish between proper and improper pressure: see Meissner v The Queen (1995) 184 CLR 132. This is because the litigant’s freedom to conduct litigation as he or she chooses is not an absolute one. The distinction between proper and improper pressure is also encountered in restitution and contract law with their categories of economic duress: Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19
NSWLR 40 especially at 46, per McHugh JA; Equiticorp Finance Ltd (In Liq) v Bank of New Zealand (1993) 32 NSWLR 50 especially at 106, per Kirby P. The fixing of an early hearing date by a judicial officer puts pressure on a litigant, but no one would categorise such pressure as improper. Likewise with the disinterested persuasion to settle by a member of the litigant's family. But not all pressure is as disinterested, or can claim such obvious justification in the public interest. Pressure may be actual or threatened, conditional or unconditional. What is done (or threatened) may be lawful or unlawful conduct. The mere fact that something that is lawful is threatened does not mean that the pressure is necessarily proper. Were it otherwise, a threat to report a legal practitioner to a professional disciplinary body (cf In re Martin, The Times, 23 April 1986) or to commence a prosecution (cf Smith v Lakeman) could not constitute a contempt. Yet it clearly may.
Balancing competing public interests:
The foregoing discussion is but the prelude to the central legal and factual issue in the present case. This concerns the balancing of the free speech and fair trial principles in the context of an alleged contempt by imposing improper pressure on a litigant in defamation proceedings.
…In the oft-cited passage in Bread Manufacturers (at 249-250; 99-100), Jordan CJ said:
It is of extreme public interest that no conduct should be permitted which is likely to prevent a litigant in a Court of
justice from having his case tried free from all matter of prejudice. But the administration of justice, important though it undoubtedly is, is not the only matter in which the public is vitally interested; and if in the course of the ventilation of a question of public concern matter is published which may prejudice a party in the conduct of a law suit, it does not follow that a contempt has been committed. The case may be one in which as between competing matters of public interest the possibility of prejudice to a litigant may be required to yield to other and superior considerations. The discussion of public affairs and the denunciation of public abuses, actual or supposed, cannot be required to be suspended merely because the discussion or the denunciation may, as an incidental but not intended by-product, cause some likelihood of prejudice to a person who happens at the time to be a litigant.
It is well settled that a person cannot be prevented by process of contempt from continuing to discuss publicly a matter which may fairly be regarded as one of public interest, by reason merely of the fact that the matter in question has become the subject of litigation, or that a person whose conduct is being publicly criticised has become a party to litigation either as plaintiff or as defendant, and whether in relation to the matter which is under discussion or with respect to some other matter. ... If, however, under colour of discussing, or continuing to discuss, a matter of public interest statements are published the real purpose of which is to prejudice a party to litigation, the contempt is none the less serious that an attempt has been made to cloak it: ...
The last sentence must not be misunderstood, nor the earlier reference to a “not intended by-product” of a particular discussion. Sir Frederick Jordan was not saying that absence of intent to prejudice will preclude a finding of contempt: see further par 3 of the general principles summarised above.
As Hinch demonstrates, the application of the Bread Manufacturers’ principle involves a balancing of competing public interests, being the interests of a fair trial and the interest of free discussion concerning matters of public concern. Each of those public interests invites closer investigation in the particular context of the present type of alleged contempt. Although the principal litigation allegedly interfered with in Bread Manufacturers were proceedings for libel and conspiracy, Bread Manufacturers did not involve contempt in the form of improper pressure on a litigant (see at 246;
98-99), and the alleged contemnor there was not a party to the particular proceedings said to be interfered with by the publication (see at 245-246;
98-99). To draw attention to these distinguishing features does not, of
course, preclude resort to such of the judgment in Bread Manufacturers as yields presently pertinent guidance…
In Commercial Bank of Australia Ltd v Preston Hunt J analysed the majority judgments in the Sunday Times case as deciding:
…it is a contempt of court to make a public statement:
(i) which is calculated by abuse or otherwise to influence a party to pending proceedings in the conduct of those proceedings, but only if that
public statement mis-states the facts and/or consists of intemperate opinion or discussion; or
(ii) which exposes such a party to the prejudice of pre-judgment of the issues or of the merits of those proceedings, however accurately or temperately that public statement may be expressed.
[30] Mason P however pointed to the criticism of the Sunday Times test, the decision being overruled by the European Court of Human Rights in Sunday Times v United Kingdom [1979] 2 EHRR 245 and being criticised by the Report of the (Phillimore) Committee on Contempt of Court. That led to the Contempt of Court Act 1981 (UK) which altered the common law as it had been declared in the Sunday Times case. Indeed at p 208 of In re Lonrho the Appellate Committee, referring to the Lords’ concern in Sunday Times about the will of trial by media, said:
How far these passages from the speeches of their Lordships may still be relied upon as accurate expressions of law is extremely doubtful…
[31] These considerations led Mason P not to rely on Sunday Times but rather to apply more directly the principles in Ex parte Bread Manufacturers Ltd; Re Truth and Sportsman Ltd (1937) 37 SR (NSW) 242. I respectfully agree with that approach.
Appraisal of “impropriety”
[32] As was observed by Spigelman CJ in Bhagat v Global Custodians Ltd [2002] NSWCA 160 at para 35 it is essential to avoid begging the question of what pressure is “improper”. I have concluded that that is a matter of fact and judgment to be discerned from an application of the principles in Bread Manufacturers rather than by any bright line rule. While guidance can be obtained from the formulation by Lord Cross of Chelsea in Sunday Times at p 326:
To seek to dissuade a litigant from prosecuting or defending proceedings by threats of unlawful action, by abuse, by misrepresentation of the nature of the proceedings or the circumstances out of which they arose and such like, is no doubt a contempt of court; but if the writer states the fact clearly and accurately, and expresses his view in temperate language the fact that the publication may bring pressure – possibly great pressure – to bear on the litigant should make it a contempt of court.
that does not deal with the intermediate case where there is neither tortious nor criminal conduct and yet the language used cannot fairly be described as temperate.
[33] In the search for specificity there is always risk that salient factors will be hardened into rules which will create distortion. A familiar example is the case of what is sometimes called “discrete evidence” (see R v Mokaraka [2002] 1 NZLR
793). There had been an encrustation of specific rules upon the general principles stated in Makin v Attorney-General for New South Wales [1894] AC 57 (PC). It took a century to clear them away: see Director of Public Prosecutions v P [1991]
2 AC 447 (HL).
[34] The judicial formulations of principle are not a statute but decisions on the facts of particular cases. Maugham J used the adjective “temperate” in In re the William Thomas Shipping Company Ltd [1930] 2 Ch 368, 377 as an example of a case in which the Court would not have interfered. But that is not a test of when it would do so.
[35] As Lord Esher MR showed in Emmens v Pottle (1886) 16 QBD 354, in developing and applying the common law the ultimate touchstone is conformity with common sense. In identifying the boundaries of what conduct is legitimate the Court must bear in mind the purpose of the criminal contempt jurisdiction which is to avoid the real likelihood that a potential litigant will be improperly deterred from pursuing or participating in litigation (or here objection proceedings). In determining what is improper the principles as to abuse of position of power, discussed by Professor Taggart in the literature and arguments debated in Jones v Sky City Auckland Ltd [2004] 1 NZLR 192 (CA), may afford some analogy. I have concluded that, absent any tort or other recognised legal wrong, where impugned conduct occurs in the course of trade competition the Court must determine whether by the standards of an ordinary informed New Zealander the conduct would be said to abuse a position of strength.
[36] Mr Galbraith QC did not dispute that if the flyers and like material had been used in a full-blooded campaign aimed not at Progressive but at Northcote Mainstreet the position could well have been different. That follows from
North Australian Aborginal Legal Aid Service Inc v Bradley (2001) 1 88 ALR 312 where NAALAS secured a declaration that the Chief Minister and Attorney-General of the Northern Territory was guilty of contempt of court for deliberately using a press conference to disparage the plaintiff’s principal proceeding. The case turned upon the vulnerability of the plaintiff which was reliant upon government funding.
[37] If Pharmaceutical Management Agency v Researched Medicines Industry [1996] 1 NZLR 472, 477 suggests that such discriminating approach is wrong I respectfully decline to follow it. Nor do I regard the Smith formulation, of “inhibiting a litigant of average robustness”, as helpful in this case unless one is speaking of one with Progressive’s characteristics. To use a test of a notional vulnerable person who is not under attack, or of some “averagely robust” person, when the only attack is on a formidably robust party, is not appropriate as a measure of criminal liability. Rather, as the Solicitor-General submitted as to overall approach to this case, context is everything.
[38] The approach adopted by the Court of Appeal in Gisborne Herald Co Ltd v Solicitor General may be described as one of proportionality of result. It was expressed by the High Court of Australia in John Fairfax & Sons Pty Ltd v McRae (1955) 93 CLR 351, 370:
…because of its exceptional nature, the summary jurisdiction has always been regarded as one which is to be exercised with great caution and, in this particular class of case, to be exercised only if it is made quite clear to the Court that the matter published has, as a matter of practical reality, a tendency to interfere with the due course of justice in a particular case.
At p 371 of that decision the Court stated:
The actual intention or purpose lying behind a publication in cases of this kind is never a decisive consideration. The ultimate question is as to the inherent tendency of the matter published. But intention is always regarded by the Court as a relevant consideration, its importance varying according to circumstances.
[39] I am attracted by the proposal of Roy Baker in “Determining Contempts by Improper Pressure on a Litigant: an Objective or Subjective Test?” (2003) 8(1) MALR 19, 29 that the test should be of:
The effect of the impugned conduct on a hypothetical litigant of “ordinary” fortitude… imbued with the major characteristics of the actual litigant… limited to those of which the alleged contemnor either had knowledge or should have knowledge.
[40] The attempt by the Law Lords Sunday Times case to codify the law has not been wholly successful. In a case falling outside the precedents there is no alternative but to return to principle. In my view while as factors in the ultimate decision the guidance both of that case and of Mason P’s list of numbered paragraphs is invaluable the question must always resolve into:
a) whether as a matter of practical reality there was a real risk, as distinct from a remote possibility, of interference with the administration of justice;
b) whether in the circumstances the conduct was improper;
c) whether it is proportionate to characterise the conduct as criminal; and if so
d) what penalty, if any, should be imposed .
Application of the principles
[41] The litigation in potential contemplation comprised:
a) the appeal to the Court of Appeal;
b)if the appeal were dismissed an on notice hearing of NTC’s application by the Council; a further logical possibility was
c) the pending costs applications in this Court, which were not however the subject of argument.
[42] As was put to counsel at the hearing, I see as the essential question the identification of what risk to whom. Progressive’s argument understandably did not
relate to apprehension that the Court of Appeal or the Council would be vulnerable to influence. Mr Curry mentioned specifically Progressive, Northcote Mainstreet, Transit New Zealand, “Catherine” a notional resident, and motorists.
[43] Mr Curry submitted that there is an implication in the flyer and other media material that Progressive was motivated solely by selfish competition concerns rather than by reason of interest in proper planning such as, in his submission, concentrating redevelopment within existing centres as required by the district plan. He drew attention to evidence that Progressive has received calls, facsimiles and letters from residents of the North Shore expressing disappointment and anger at Progressive’s decision to pursue the review proceedings and in some cases existing customers of Progressive have said that they will be taking their business away from Progressive stores. One letter said:
Attached is a printoff showing how much we have spent at Countdown Westgate in the last two years. We all have to be morally and ethically aware of how we spend our money to ensure that decisions are made correctly in the best interests of the overall community if our world is to improve; yet this appears to be a concept that you do not comprehend.
If you do not withdraw your legal action against Pak ‘n Save in the next two weeks, thus allowing the construction of the new supermarket to recommence, we will be switching our business from Countdown to Pak ‘n Save on Lincoln Road instead.
[44] A letter to the editor said:
I have just read Supermarket Loses (NST June 21) and am flabbergasted.
I have been watching with keen interest the progression of the soon to be
Pak ‘n Save building.
I am at a loss as to how the High Court comes to the conclusion that the traffic along Wairau Rd would be greatly affected. As a comparison, there doesn’t appear to be a problem with Foodtown entering and exiting Barrys Point Rd.
I am also of the understanding that there will not be an entry/exit directly on to Wairau Rd.
I feel that the Northcote Mainstreet and Progressive Enterprises are being extremely picky trying to stop the progression of a “much needed” Pak ‘N Save.
They are just trying to have a monopoly.
It is obvious that the North Shore needs another Pak ‘n Save. Have you ever tried to shop at the Albany Pak ‘N Save in the weekends?
I also feel that Foodstuffs is the innocent party in this debacle. The council made a mistake. Why should Pak ‘N Save be disadvantaged?
As stated in your article that Foodstuffs have been trying to build a supermarket in Wairau Rd for 18 years.
I am now making the conscious decision NOT to shop at the Northcote or Foodtown/Woolworths and will encourage others to follow suit, especially as they are Australian owned.
Pak ‘N Save is a 100 percent New Zealand-owned company.
[45] In my view the first question is whether the express language of NTC’s advertising or any implications it may contain were either defamatory or were otherwise legally improper in the sense discussed in para [35]. There is no basis for a claim that the campaign was unlawful unless it can be said to have abused NTC’s position and created a real risk that Progressive would be shamed into abandoning its opposition to NTC’s application.
[46] In the present case the vigorous campaign and language employed by NTC was in the context of a heavy trade dispute and in the battle, which had already attracted media attention, for the hearts and minds of potential customers. While the language used in the flyers and other campaign material did not in terms invite Progressive to withdraw its objection, and NTC could have had no real expectation that it would have done so, I do not doubt that NTC sought in the course of explaining its case to customers to embarrass Progressive in their eyes; I have noted that NTC would have been delighted to see Progressive adopt the unlikely course of
abandoning its objection. Although Hart and Honoré Causation in the Law (2nd ed)
p 170 describe the “sweeping maxim” that ‘intended consequences can never be too remote’ as “too widely stated”, the remote prospect of Progressive’s buckling under the media campaign in a sense makes Progressive’s case stronger than that of the plaintiff in Hakianakis where for the most part that seems not to have been contemplated.
[47] But unlike that case here there was no malicious falsehood or defamation. There being no conduct in itself tortious or otherwise unlawful there can be no bright line test of the kind for which Mr Curry contended. I do not accept his argument
that a willed act coupled with a logical possibility that it might bring about termination, added to conduct that is more than temperate, satisfies the test for contempt.
[48] Whether one applies Mr Baker’s test ([39] above) or the subjective one of what NTC itself intended the answer in this case is that the submission of real risk is fanciful. Given Progressive’s economic firepower I can see no risk whatever to that effect. It is unsurprising that there is no evidence from Progressive as to that. Rather The adverse consequences in prospect are rather to NTC by reason of delay resulting from Progressive’s legitimate resistance to NTC’s appeal and any further application to the Council
[49] As to Northcote Mainstreet the affidavit of its town centre manager, Mr Wilson, states:
To date, very little public criticism has been levelled against Northcote Mainstreet. I suspect that this is largely because NTC’s campaign has been focused on Progressive, and very much of the public might not associate Northcote Mainstreet with Progressive or the review proceedings. However, if that link were to be made and if Northcote Mainstreet were to come “under fire” for its involvement in the proceedings, then we would need to look very hard at whether Northcote Mainstreet would continue to defend the appeals.
This is because Northcote Mainstreet is a small incorporated society with limited resources, and dealing with reporters and calls from the public takes time away from our core functions. We are also cognisant of the fact that our funding comes through the Council’s separate Mainstreet rate… Accordingly, we are very careful to ensure that any proceedings with which we are involved are well founded and do not subject us to unfounded public criticism…
There is no suggestion that there is current criticism.
[50] If NTC were to mount a campaign against Northcote Mainstreet the risk of improper interference might well arise. But in the absence of any suggestion that NTC have that in mind the possibility does not satisfy the legal test.
[51] There is no reason to believe that Transit with its statutory responsibilities would be deterred from pursuing objections to an on-notice application.
[52] The other persons said to be potentially affected – “Catherine” and the motorists – received no mention in any affidavit. I can see no basis on which “Catherine”, if she were otherwise minded to put in an individual objection to the development, would feel constrained from doing so by NTC’s campaign which terminated in August. I say nothing about the consequences of a renewed campaign that might conceivably have such effect. The same must apply to the notional motorist.
[53] Progressive therefore fails to satisfy the first test. I am not satisfied that NTC’s conduct, whatever one might otherwise think of it, could be said to infringe any standard of “impropriety” that could justify classification as crossing the threshold of contempt of court.
[54] Still less is this a case where the Court would determine that any theoretical breach of such standard be attended by penal consequences. In the actual circumstances that would be a disproportionate response to NTC’s conduct.
Result
[55] It follows that the application must be and is dismissed.
Costs
[56] There are questions of costs outstanding from the decision of 21 June. I direct the plaintiffs to file their submissions on costs overall within 14 days; the Council to file its submissions within a further seven days and NTC to respond
within a further 14 days and the plaintiffs to reply within seven days.
W D Baragwanath J
17
12
0