Du Claire v Palmer

• Jurisdiction: New Zealand
• Judge: Associate Judge Abbot
• Judgment Date: 07 May 2012
• Neutral Citation: [2012] NZHC 934
• Docket Number: CIV-2009-485-002638
• Court: High Court
• Date: 07 May 2012

Under the Defamation Act 1992, s 3(2) of the Crow11 Proceedings Act 1950 and s 16 of the Judicature Act 1908

Between

Lysette Lillian Du Claire

Plaintiff

and

Matthew Simon Russell Palmer

First Defendant

Crown Law Office

Second Defendant

[2012] NZHC 934

Court:

Associate Judge Abbot

CIV-2009-485-002638

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

Claim that certain communications from Deputy Solicitor-General, Dr Palmer (“Dr P”), to Inland Revenue Department (“IRD”) were defamatory and that Dr P's actions constituted misfeasance in a public office — plaintiff employed as solicitor with IRD — formal advice sought from Crown Law Office on whether certain documents privileged — plaintiff strongly disagreed with Crown Law conclusion that documents were privileged — Dr P discovered that affidavit of documents included documents that were not privileged in same section as the disputed documents — Dr P formed view plaintiff had deliberately listed these documents so as to undermine Crown Law Office's advice on privilege — subsequent communications raised concerns over plaintiff and reiterated expectation that his team should not be expected to work with her— whether defamation defences of honest opinion and/or qualified privilege were made out — whether Dr P's actions in respect of refusal to work with plaintiff constituted misfeasance in a public office.

Counsel:

Plaintiff in person

M McClelland and U Jagose for Defendants

Table of Contents

	Para No
Introduction	[1]
Background	[3]
First cause of action	[4]
Second cause of action	[27]
Third cause of action	[32]
Subsequent events	[34]
Approach to the issues	[37]
First cause of action: the 13 May 2009 letter	[39]
Honest opinion	[48]
Are the statement of opinion and not fact?	[49]
Are the statements based on facts that are true or not materially different from the truth?	[54]
The background to the affidavit of documents	[60]
The affidavit of documents — the events of 16 March 2009	[72]
Miss du Claire's later statements relating to the affidavit of document	[87]
Other matters	[94]
Conclusion as to the true facts	[97]
Whether the opinion was genuine	[102]
Conclusion on honest opinion	[108]
Qualified privilege	[109]
An occasion of qualified privilege?	[110]
Ill will?	[120]
Conclusion on first cause of action	[124]
Second cause of action: the 18 May 2009 e-mail Honest opinion	[125]
Are they statements of opinion and not fact?	[130]
Are the statements based on facts that are true or not materially different from the truth?	[133]
Whether the opinion was genuine	[140]
Qualified privilege	[144]
Third cause of action: the 25 August 2009 letter	[148]
Honest opinion	[150]
Qualified privilege	[154]
Fourth and fifth causes of action: misfeasance in a public office	[160]
Facts of the alleged misfeasance	[167]
Assessment of the misfeasance allegations — was there malice?	[182]
Other allegations of misconduct/malice by Miss du Claire against Dr Palmer	[186]
Claims against Crown Law Office	[192]
Loss	[194]
Conclusion	[195]
Suppression	[196]
Result	[200]
Costs	[201]

JUDGMENT OF ASHER J

This judgment as delivered by me on Monday, 7 May 2012 at 4.30pm pursuant to u 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Introduction

1 In 2009 the plaintiff Lysette du Claire was employed as a solicitor in the Litigation Management Unit of the Inland Revenue Department. The first defendant, Matthew Palmer, was the Deputy Solicitor-General at the Crown Law Office. On three occasions between 13 May 2009 and 25 August 2009, Dr Palmer communicated to the Inland Revenue Department concerns that he had about Miss du Claire's actions as solicitor in an Inland Revenue Department proceeding in which Crown Law was involved. He was critical of her, and set out proposed steps that would be taken by Crown Law in dealing with her in future.

2 Miss du Claire now sues Dr Palmer and the Crown Law Office claiming that Dr Palmer's communications were defamatory and that his actions constituted misfeasance in a public office.

Background

3 The events that led to the communications that are the subject of this proceeding began in 2002, when the Serious Fraud Office (‘the SFO’) issued two mutual legal assistance requests to the Attorney-General for the Bailiwick of Jersey. The requests concerned documents that could help the SFO in an investigation and prosecution. The SFO, through its director in formal written requests for assistance, provided an undertaking to the Attorney-General for the Bailiwick not to use the documents for any use other than the matter the SFO was pursuing, and that after the SFO criminal investigation and any prosecution was completed, the documents would be returned. A confirmation was given that the purpose of the investigation for which the documents were sought was not the collection of tax.

First cause of action

4 The SFO in due course received a number of documents from Jersey (‘the Jersey documents’). It proceeded to use the documents in its prosecution which, for confidentiality reasons, will be called ‘the R v D proceedings’.

5 On 30 January 2004 in an unwitting breach of the undertakings the SFO disclosed the Jersey documents to the Inland Revenue Department (‘the IRD’). The material was then used by the IRD in civil litigation relating to the tax affairs of a number of taxpayers. In all the material before me it is stated and not contested that the IRD received and used the documents in good faith and was not aware of the terms of the undertaking or confirmation.

6 On 14 March 2008 the IRD was granted leave to search and copy documents in the court file of the R v D prosecution in which documents covered by the undertaking had been used. It wished to use the Jersey material in a tax proceeding which, for confidentiality reasons, will be called X v C. However, shortly after leave to search the file was granted, the IRD was informed by the SFO of the existence of the Jersey undertaking for the first time.

7 Following the realisation that such an undertaking existed, the SFO and the IRD differed as to how the Jersey documents should be dealt with in relation to the X v C proceedings. The SFO considered that the IRD had received the documents on the same conditions as the SFO and should stop using the Jersey documents. The IRD on the other hand took the view that, given that the documents had already been used, the discovery obligation that now arose to disclose them, and the IRD's obligation to collect revenue, it was entitled and indeed obliged to continue using the Jersey documents in the tax proceedings.

8 Mr Harry Ebersohn was the lead counsel at Crown Law, representing the Commissioner of Inland Revenue (‘the Commissioner’) in the X v C proceedings. Miss du Claire was working as an IRD solicitor on the case. Mr Ebersohn explained in his evidence that Crown Law relies heavily on the assistance of the IRD's Litigation Management Unit (‘LMU’) solicitors in discovery. He dealt extensively with Miss du Claire in relation to the proceeding and to the issue of discovery. Miss du Claire was strongly of the view that the documents should be used by the IRD and discovered without claiming privilege, as the horse had well and truly bolted. She took the view that the IRD was the client and had the ultimate say in what should happen in the proceedings. She saw the Crown Law Office as being in the position of a private law firm that is duty bound to follow a client's instructions.

9 Miss du Claire had initially taken the view that Mr Ebersohn should not express an opinion on the discoverability of the Jersey documents. Mr Ebersohn indicated in his evidence that he found it difficult to deal with Miss du Claire on the issue as she had a very fixed view and disliked the idea of Crown Law dictating to her.

10 Mr Ebersohn formed the view that the IRD's prospects of success in the X v C proceedings were strong, irrespective of whether the Jersey documents were used. The SFO maintained its strong view that the Jersey documents should not be used. In the end, to resolve the impasse, on 5 December 2008 the IRD and the SFO agreed jointly to seek formal advice from the Crown Law Office as to how the Jersey documents should be treated. The request for advice made it clear that the advice would be relevant to litigation against a taxpayer (in the X v C proceedings).

11 The draft advice in response of Crown Law was initially prepared by the team leader of the tax and commercial team at Crown Law, with assistance from an associate Crown counsel. A first draft was prepared on 24 December 2008. It was provided to Dr Palmer for review, as he was to sign the advice.

12 Dr Palmer considered and worked on the draft advice on 24 December 2008 and on 12 January 2009. On 13 January 2009 he sent a copy of a draft letter of advice to the Director of the SFO, Mr Grant Liddell, and the Director of the LMU, Ms Karen Whitiskie. A copy was also sent to Ms Carolyn Tremain, the Deputy Commissioner at the IRD.

13 The draft advice was detailed. It stated in essence that the undertaking applied and the documents were ‘protected’ and should not be used by the IRD in proceedings. Steps should be taken to seal the SFO prosecution file R v D, rescind the order allowing the IRD access to the court file, and return the documents to the SFO. Once that had happened, the position should be reported to the Jersey authority.

14 Provision of the advice in draft was to allow for comments and feedback, in accordance with Crown Law practice. Dr Palmer requested a quick response as discovery was due in the X v C proceedings on...