Salmon v McKinnon - [2007] NZCA 516

IN THE COURT OF APPEAL OF NEW ZEALAND
CA251/06
[2007] NZCA 516
BETWEENBRIAN MONTGOMERY SALMON

Appellant

ANDLYNETTE ANNE MCKINNON

Respondent

Hearing:16 October 2007

Court:William Young P, Glazebrook and Robertson JJ
Counsel:J G Miles QC and D H McLellan for Appellant

M E J Macfarlane for Respondent

Judgment:20 November 2007 at 11 am

JUDGMENT OF THE COURT

AThe appeal is dismissed.
BMr Salmon is to pay Ms McKinnon costs of $12,500 and usual disbursements.

____________________________________________________________________
REASONS OF THE COURT
(Given by William Young P)
The appeal
[1] Brian Salmon maintains that an email written by Lynette McKinnon ostensibly about a company he controls was defamatory of him. He sued her in the High Court seeking a declaration under s 24 of the Defamation Act 1992 and solicitor and own client costs. In a judgment delivered on 26 October 2006, Allan J dismissed the claim and ordered Mr Salmon to pay Ms McKinnon costs on a 2B basis. Mr Salmon now appeals.
[2] The appeal raises four issues:
(a)Was the email published of and concerning Mr Salmon?
(b)Was the email defamatory of Mr Salmon?
(c)Would relief be appropriate if defamation were established?
(d)What orders as to costs should be made?

[3]       We will discuss the appeal by reference to these questions but, before we do so, it is necessary to say something more about the background.
Background
[4]       Mr Salmon runs The $2 Shop Ltd, a company which owns the $2 Shop brand and franchise. There are $2 Shop retail stores throughout New Zealand operated by 34 franchisees. Ms McKinnon was the principal behind Two Bob Ltd, the franchisee for the Hastings area.
[5]       Under the franchise agreement, which all the franchisees had entered into, the franchisees were required to pay to The $2 Shop Ltd an advertising levy (calculated by reference to gross sales). The $2 Shop Ltd in turn was required to:
use such funds solely for the purpose of advertising as determined by the Franchisor.

There were mutual obligations between The $2 Shop Ltd and the franchisees to consult regularly on advertising but The $2 Shop Ltd had:
the final approval as to what advertising will be done by the Franchisor on behalf of the Franchisee.

[6] In May 2003 The $2 Shop Ltd (using its own money and not the advertising fund) bought a 2002 Lamborghini motor vehicle. Mr Salmon announced this purchase to the franchisees in letters which were expressed in this way:
Re: Promotions
This letter is to advise that The $2 Dollar Shop Limited has purchased a Lamborghini 2-seater motor car.
Coloured gold, it will go well with our corporate blue and yellow and we have secured the personalised plate:

THE
2DOLAR
SHOP

The photographs below show the unusual, eye-catching design of the vehicle. [Photographs of the car were on the letter]
This vehicle will be available for some promotional purposes and should be a real crowd puller.
The car will be used at the Franchising Exposition which is going to be held at Epsom…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Salmon v McKinnon

Details

AGLC: Salmon v McKinnon [2007] NZCA 516
Case: [2007] NZCA 516
Decision Date: 20 November 2007

CaseChat Overview and Summary

In the case of Salmon v McKinnon, the Court of Appeal of New Zealand dismissed an appeal brought by Brian Salmon, who alleged that an email written by Lynette McKinnon was defamatory of him. Salmon, who runs The $2 Shop Ltd, a company with multiple franchisees throughout New Zealand, claimed that McKinnon's email insinuated that he had misused the advertising fund to purchase a Lamborghini motor vehicle. McKinnon, the principal behind Two Bob Ltd, the franchisee for the Hastings area, had sent an email to other franchisees suggesting that the Lamborghini should be sold and the funds returned to the advertising fund. Salmon's solicitors wrote to McKinnon's solicitors, alleging defamation and demanding a retraction and an apology. McKinnon's solicitors responded by retracting the statement and apologising, but Salmon's solicitors demanded a more grovelling apology and compensation for their costs and disbursements. When McKinnon's solicitors refused to meet these demands, defamation proceedings were issued.

The appeal raised four issues: whether the email was published of and concerning Salmon; whether the email was defamatory of Salmon; whether relief would be appropriate if defamation were established; and what orders as to costs should be made. The Court of Appeal found that the email was not defamatory of Salmon, as reasonable franchisees would not have interpreted the email as implying that Salmon had acted dishonestly or misused franchisees' funds. The Court also found that the absence of adverse reaction from the recipients of the email was admissible evidence in determining the meaning of the email. Furthermore, the Court held that relief under s 24 of the Defamation Act would not have been appropriate in this case, as the proceedings were motivated by a desire to punish McKinnon rather than a genuine desire for vindication. Finally, the Court ordered Salmon to pay McKinnon's costs on a solicitor and own client basis, quantifying them at $12,500 and usual disbursements.

Orders