CPA Australia Ltd v The New Zealand Institute of Chartered Accountants

JurisdictionNew Zealand
CourtHigh Court
JudgeDobson J
Judgment Date06 August 2015
Neutral Citation[2015] NZHC 1854
Date06 August 2015
Docket NumberCIV-2013-485-939

[2015] NZHC 1854

IN THE HIGH COURT OF NEW ZEALAND

WELLINGTON REGISTRY

CIV-2013-485-939

Under the Defamation Act 1992 and the Fair Trading Act 1986

Between
CPA Australia Limited
Plaintiff
and
The New Zealand Institute of Chartered Accountants
Defendant
Counsel:

A R Galbraith QC, N J Russell and S I Jones for plaintiff

B D Gray QC, R K P Stewart and H L Coull for defendant

Application for a declaration under s24 Defamation Act 1992 (“DA”) (declaration) that statements made by the defendant were defamatory — claim for damages for breach of the Fair Trading Act 1986 (FTA) — both parties were professional bodies for accountants — the plaintiff complained that statements made by the defendant meant that (inter alia) its educational programme was inferior, that it had not been admitted to a global professional body because of that fact, and that it did not comply with internationally recognised standards of best practice for accountancy — consideration of burden of proof under s6 DA when proceedings were brought by body corporate — must prove statements had or were likely to cause pecuniary loss) — whether the statements were defamatory — whether the plaintiff had established loss pursuant to s6 DA — whether a minimum threshold of seriousness should be applied to protect the right to freedom of speech under s14 New Zealand Bill of Rights Act 1990 — whether the statements made at conferences were subject to s16 DA (qualified privilege) — whether there had been breaches of s9 FTA (misleading and deceptive conduct generally) and s11 FTA (misleading conduct in relation to services) and if so, what remedy should be given.

Held: The words were capable of the imputations that the education provided by CPAA was inferior to that provided by NZICA and that CPAA was declined membership of the Global Accounting Alliance (“GAA”) because its education did not meet the requisite standard arose from the statements made. Another imputation arose that CPAA resorted to expensive or elaborate marketing ploys to entice accountants to become members. It was another matter whether the imputation was materially adverse to CPAA's business reputation. The next pleaded imputation had two elements. The first was that CPAA was a second-rate designation, and the second was that this designation had undermined the accounting profession in New Zealand. The criticised statement was seriously demeaning of CPAA's qualification. However, the second element of the pleaded imputation that CPAA's designation had undermined the accounting profession in New Zealand did not necessarily arise in the context.

In addition to the natural and ordinary meanings alleged to be defamatory, audiences of accounting personnel would apply special knowledge based on their familiarity with educational and professional standards for accountants to attribute additional meaning by way of innuendo. The relevant statements attributed importance to NZICA's membership of GAA as a group of pre-eminent chartered accountancy organisations around the world, and that CPAA was not a member of that alliance because CPAA's education standards were not recognised as being the same as NZICA's.

The onus under s6 DA that CPAA was required to discharge was to prove that the statements complained of had caused pecuniary loss to it, or that those statements were likely to cause it loss in the future. CPAA could discharge the onus of proving the likelihood of pecuniary loss for the purposes of s6 by drawing inferences that loss would have been caused, so there was no necessary obligation to adduce direct evidence of pecuniary loss suffered as a result of the defamatory statements ( Rural News Ltd v Communications Trumps Ltd). However that did not mean that where a corporate plaintiff elected only to seek relief by way of declaration and costs, it was, in some more general way, relieved of the obligation to establish that some pecuniary loss had been suffered, or was likely to be suffered in the future. Nor did it mean that the standard of proof was in some way reduced.

The basis for CPAA's claimed loss was speculative. There was no evidentiary basis to draw an inference that what was said to the two audiences caused pecuniary loss of membership to CPAA. CPAA could not make out that it had suffered any pecuniary loss and there was insufficient prospect of pecuniary loss being caused in the future.

In case this was wrong, it was appropriate to summarise the defences that were argued. The first defence was that robust criticisms by one professional body of another did not reach a minimum threshold of seriousness to warrant the intervention of the law of defamation. The recognition of the right to freedom of expression reflected in s14 NZBORA exemplified an aspiration that New Zealanders be more tolerant of the entitlement of others to express diverse views, including criticisms of others. Obviously, that right was not unqualified and it could not provide a complete defence in respect of a statement that was otherwise made out as defamatory. However, s6 NZBORA required courts to prefer an interpretation of an enactment that was consistent with the rights and freedoms contained therein, where that was possible. Applying a threshold of seriousness would be one way to protect against unjustified infringements of the right to freedom of expression.

A minimum threshold of seriousness would require a claimant to meet an objective seriousness threshold as an element of making out the actionability of alleged defamatory statements ( Thornton v Telegraph Media Group). It would apply across the various common law definitions of defamation. For instance, in the present case, CPAA would need to establish not only that the statements were to its discredit, but that these discrediting statements caused serious harm to its reputation.

The existence of a seriousness threshold was not decisive in this case because CPAA was required to establish that the publication complained of had caused pecuniary loss. That requirement posed a hurdle of similar height to any requirement for CPAA to clear a threshold of seriousness. If such a threshold was to be applied, CPAA could not make it out, where it had been unable to establish pecuniary loss.

A general plea of truth by NZICA relying on s8(3)(b) DA could not succeed as a defence (proceedings based on matter contained in a publication — publication taken as a whole was in substance true). The statements raised discrete defamations that were not subsumed in the more general theme of criticism. There were disparaging remarks by the NZICA acting chief executive that, if pecuniary loss had been made out, would have been defamatory of features of CPAA going beyond the general theme of the inferiority of its educational standards.

To defend a comment on the basis that it was honest opinion, its terms had to explicitly or implicitly indicate the facts on which it was based. On the other hand, it was not necessary for a defendant to prove the truth of all the facts that were relied on, but rather sufficient for them to justify the comment made in reliance on the facts. The difficulty for NZICA in pleading honest opinion was that there was a material mismatch between the facts it pleaded as being true, and the component of the acting chief executive's comments that were presented as fact.

There was also the additional issue of whether NZICA's opinions were genuinely held. The genuineness of an opinion in the current context was not assessed by its reasonableness. The acting chief executive genuinely held the beliefs. However the honest opinion defence was be available because the opinions complained of relied on facts that were not true.

The conferences were occasions of qualified privilege for the acting chief executive to address the audiences on the competition NZICA perceived itself as facing from CPAA. The acting chief executive had been genuine in the opinions offered in her addresses but had been inappropriately aggressive in criticising CPAA, where elements of those criticisms were false. The defamatory elements of her criticisms had taken improper advantage of the occasion. It followed that qualified privilege was not available to NZICA as a defence.

CPAA pleaded that the misleading and deceptive nature of NZICA's conduct under the FTA ought to have been assessed cumulatively in relation to the flyer, the advertisement and the article. They were described as “systematic and on-going” publications. However the three instances spanned two years and involved different audiences. The time lapses between the occasions were too long to attribute lingering effect that might be assessed cumulatively.

A minimum threshold of seriousness did not apply to the claim under the FTA in this context but might do so if the Court was considering an injunction or other relief under the FTA. CPAA had not been able to adduce evidence of loss from the publications. There was no provision under the FTA for a declaration and accordingly no relief was appropriate.

Applications dismissed.

RESERVED JUDGMENT OF Dobson J

Contents

The two organisations

[2]

The statements complained of

[11]

The flyer

[11]

The advertisement

[19]

The conference addresses

[24]

The National Business Review article

[34]

The causes of action in defamation

[37]

Are the pleaded meanings made out?

[42]

Innuendoes pleaded

[61]

The requirement to make out loss

[65]

A threshold of seriousness?

[104]

Defences pleaded

[122]

Truth

[122]

Honest opinion

[140]

Qualified privilege

[171]

The Fair Trading Act claim

[183]

Summary

[222]

Costs

[225]

1

These proceedings involve two causes of action in defamation and one for breach of the Fair Trading Act 1986 (the FTA) brought by one professional body for accountants in respect...

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7 cases
  • Craig v Slater
    • New Zealand
    • Court of Appeal
    • 23 July 2020
    ... [2019] 3 WLR 18 at [12], regarding the application of the test under s 1 of the Defamation Act 2013 (UK). 28 CPA Australia Ltd v New Zealand Institute of Chartered Accountants [2015] NZHC 1854 at [104]–[120]; and Sellman v Slater [2017] NZHC 2392, [2018] 2 NZLR 218 at 29 Thornton v Telegr......
  • Sellman v Slater
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    ...judgment, following Thornton v Telegraph Media Group Ltd and Lachaux v Independent Print Ltd in England, and CPA Australia Ltd v New Zealand Institute of Chartered Accountants, provides a basis for the discovery sought here. 28 There is a rebuttable presumption that a defamatory statement d......
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    ...… 35 36 37 At [97]. Employment Relations Act 2000, s 161(1)(r). CPA Australia Ltd v New Zealand Institute of Chartered Accountants [2015] NZHC 1854, (2015) 14 TCLR 149 at [116]-[117] (footnotes Notwithstanding that, it is not for the court to substitute its judgment for Ms Opai’s in choosin......
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