Colin Graeme Craig v Jordan Henry Williams

• Jurisdiction: New Zealand
• Judge: Elias CJ,Ellen France,Arnold JJ,Ellen France J,William Young,Glazebrook JJ,William Young J
• Judgment Date: 11 April 2019
• Neutral Citation: [2019] NZSC 38
• Date: 11 April 2019
• Court: Supreme Court
• Docket Number: SC 21/2018

Between

Colin Graeme Craig

Appellant

and

Jordan Henry Williams

Respondent

[2019] NZSC 38

Court:

Elias CJ, William Young, Glazebrook, Ellen France and Arnold JJ

SC 21/2018

IN THE SUPREME COURT OF NEW ZEALAND

I TE KŌTI MANA NUI

Defamation, Tort — damages — qualified privilege — rebuttal of qualified privilege — ill will — improper purpose — jury directions — Defamation Act 1992

Appearances:

S J Mills QC, J W J Graham and T F Cleary for Appellant

P A McKnight and A J Romanos for Respondent

• A The appeal is allowed. The orders of the Court of Appeal entering judgment for the respondent on liability and directing a retrial of the respondent's claim for damages are set aside. An order for a general retrial on liability and damages is substituted.

• B The cross-appeal is dismissed.

• C The respondent must pay the appellant costs of $35,000 plus usual disbursements. We allow for second counsel.

• D The costs award made in the Court of Appeal is set aside. If costs in that Court cannot be agreed they should be set by the Court of Appeal in light of this judgment. Any costs issues arising in the High Court shall be considered by the High Court in light of this judgment.

JUDGMENT OF THE COURT

REASONS

	Para No.
Elias CJ, Ellen France and Arnold JJ	[1]
William Young and Glazebrook JJ	[83]

Elias CJ, Ellen France AND Arnold JJ

(Given by Ellen France J)

Table of Contents

	Para No.
Introduction	[1]
Background	[4]
Qualified privilege — the approach to s 19 of the Defamation Act 1992	[21]
The summing up	[32]
Extent of the response and relevance	[33]
Acting with reasonable care	[44]
Ill will	[49]
The question of Mr Craig's knowledge	[54]
A new trial?	[62]
Were the misdirections material?	[64]
Other bases for finding the privilege was lost?	[70]
Effect of counsel's election not to object	[74]
Conclusion	[77]
The cross-appeal	[78]
Result	[82]

Introduction

1 After a trial of nearly four weeks a jury found for Jordan Williams, the founder and executive director of the New Zealand Taxpayers' Union, in his claim that Colin Craig, the founder and former leader of the Conservative Party, defamed him. The jury awarded Mr Williams damages of $1.27 million. In doing so, the jury must have rejected Mr Craig's affirmative defences of truth and honest opinion and found that he had lost qualified privilege.

2 Subsequently, the trial Judge, Katz J, set aside the jury's verdict on the basis that the damages award was excessive. 1 The Judge also said she had misdirected the jury in one respect. 2 The Judge ordered a new trial of the claim by Mr Williams on

both liability and damages. Mr Williams appealed. The Court of Appeal allowed the appeal in part. 3 The Court set aside the order made by the High Court, entered judgment in accordance with the jury's verdict on liability and ordered a retrial on the question of damages. Leave to appeal and leave to cross-appeal from the decision of the Court of Appeal to this Court was granted. 4

3 On the appeal, Mr Craig seeks the restoration of the order of the High Court that there be a general retrial. Accordingly, at issue on the appeal is whether the Court of Appeal was correct to conclude the trial Judge erred in setting aside the verdict and ordering a retrial on both liability and damages. That issue turns on whether the jury was misdirected on the question of qualified privilege and, if so, whether any misdirections have given rise to a miscarriage of justice. On the cross-appeal, Mr Williams seeks to have the jury's awards reinstated in full. The cross-appeal raises issues about the findings of the Courts below that the damages awards were excessive and about the factual basis for the awards. We address these questions after first considering the factual background.

Background

4 The essential elements of the narrative of events have been well-rehearsed. 5 Drawing extensively on the judgments below, the description which follows can be brief.

5 We begin with the sudden resignation, just before the 2014 general election, of Mr Craig's long-standing press secretary Rachel MacGregor. Ms MacGregor's resignation was in part due to what Katz J described as “her ongoing discontent regarding the level of her remuneration”. 6 Ms MacGregor also subsequently filed a claim of sexual harassment by Mr Craig under the Human Rights Act 1993.

6 The next relevant point is that in November 2014 Ms MacGregor disclosed to Mr Williams on a confidential basis that Mr Craig had sexually harassed her.

Mr Williams took notes of their discussion. He sent her a note the next day so that she could correct any mistakes but received no reply. The Court of Appeal described what was conveyed to Mr Williams by Ms MacGregor in this way: 7

… Mr Craig had sexually harassed her, including by: (a) sending her unsolicited letters and cards of a deeply personal nature with romantic poetry and compliments about her physical and personal attributes; (b) falling asleep on her lap once during the 2011 general election campaign, and telling her subsequently that he dreamed or imagined himself lying or sleeping on her legs which helped him sleep; and (c) stopping salary payments because of a dispute over her pay rate which she believed was attributable to her failure to reciprocate his romantic interest.

7 The Court of Appeal also recorded the nature of Ms MacGregor's allegations as follows:

[10] Ms MacGregor alleged that the nature of Mr Craig's harassment started off as comments and shoulder touches but progressed to kissing and physical affection on the night of the 2011 election. Ms MacGregor said Mr Craig sent her inappropriate text messages; would change his clothes in front of her and say he wanted her to move into an apartment above his office; had installed a curtain in her office which he would often close when they were together; and had entered her hotel room uninvited and without knocking, leaving her uncomfortable about staying in the same building when they travelled together.

8 About a week after Ms MacGregor spoke to Mr Williams, her lawyer contacted Mr Williams. In the course of their conversation, Mr Williams undertook to keep Ms MacGregor's sexual harassment allegations confidential.

9 Mr Craig denied any sexual harassment. His conception of the relationship with Ms MacGregor was described by Katz J as essentially “an emotionally close and intense mutual friendship”. 8 He accepted that his behaviour at times had been inappropriate for a married man. His account was that apart from an incident which occurred on election night in 2011, which it is accepted was consensual, there was “no intimate or inappropriate physical contact”. 9 To foreshadow an aspect which assumed some importance at trial, Ms MacGregor did not describe having received any sexually explicit text messages.

10 As a result of what he had been told by Ms MacGregor, Mr Williams formed the view that Mr Craig was not fit to continue as leader of the Conservative Party. Katz J said that early in 2015 Mr Williams “spoke to various leading figures associated with the Party”. 10 In those conversations, he expressed his concerns about Mr Craig and began to “divulge details of Mr Craig's alleged sexual harassment of Ms MacGregor to senior figures” in the Party. 11

11 Ms MacGregor's claim under the Human Rights Act was settled in May 2015. The parties' confidential agreement acknowledged some inappropriate conduct on occasions on both sides. Mr Craig apologised for any inappropriate conduct on his part. Ms MacGregor withdrew her claim. Mr Craig did not pay Ms MacGregor any money apart from $16,000 due for wages. 12 But he did also forgive Ms MacGregor's liability on a $20,000 loan. The parties agreed not to make any media comment.

12 As Katz J noted, from Ms MacGregor's perspective, the settlement was “the end of the matter”. 13 Mr Williams took a different position and, as Katz J described it, “mounted a campaign in the following weeks to remove Mr Craig as Conservative Party leader on the basis of his treatment of Ms MacGregor”. 14 The Judge described Mr Williams' actions over this period as follows:

[13] Mr Williams met, sent text messages to, or spoke with, Christine Rankin (the former Chief Executive of the Conservative Party), Bob McCoskrie (a director of Family First NZ and a supporter of the Conservative Party), Mr Day, Mr Dobbs, and John Stringer (a Conservative Party board member). He told them that Mr Craig had sexually harassed Ms MacGregor, and showed some of them Mr Craig's letters to Ms MacGregor. He referred repeatedly to Mr Craig having sent sext messages to Ms MacGregor, an allegation that Mr Williams acknowledged at trial was particularly damaging. Mr Williams also indicated to people that he had copies of the sexts, which he had not. He claimed that Mr Craig had made a big payout to settle Ms MacGregor's claim in the Tribunal.

[14] Witnesses at trial also claimed (but Mr Williams disputed) that he had told them that the election night incident was non-consensual. … Other

witnesses said that Mr Williams had told them that they had to keep his identity secret as he was breaching the confidentiality of the Tribunal processes, that Mr Craig had put pressure (including financial pressure) on Ms MacGregor to sleep with him, and that Ms MacGregor had resigned as a result of Mr Craig's sexual harassment in 2013 but had been lured back by an increased pay offer. Some of this evidence was supported by contemporaneous file notes made by the relevant witnesses.

13 A factor, which on Mr Williams' evidence assumed some importance in prompting his approach, was the interview Mr Craig conducted in a sauna on 8 June 2015. In the course of that interview, Mr Craig referred to Ms MacGregor's resignation and, in...