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High Court of New Zealand Decisions |
Last Updated: 2 February 2018
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IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV-2016-485-414 [2017] NZHC 813
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BETWEEN
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EARL RAYMOND HAGAMAN AND LIANNA-MERIE HAGAMAN Plaintiffs
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AND
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ANDREW JAMES LITTLE Defendant
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Hearing:
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3–10 April 2017
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Appearances:
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R J B Fowler QC and B K Ferguson for Plaintiffs
J W Tizard for Defendant
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Judgment:
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28 April 2017
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REASONS FOR JUDGMENT OF CLARK J
I direct that the delivery time of this judgment is
4:45 pm on the 28th day of April 2017
HAGAMAN AND HAGAMAN v LITTLE [2017] NZHC 813 [28 April 2017]
Introduction
[1] Mr ER Hagaman, the first-named plaintiff, is a company director of
a number of companies within the Scenic Hotel Group of
companies. Together with
his wife, Mrs L Hagaman the second-named plaintiff, he holds a controlling
interest in the shareholdings
of those companies through trusts of which they
are trustees or beneficiaries. The defendant, Mr A J Little, is a Member of
Parliament
and Leader of the Opposition.
[2] In April 2016, on six occasions, Mr Little commented critically on
the award of a hotel management contract to the Scenic
Hotel Group following the
donation by Mr Hagaman of more than $100,000 to the National Party. The
plaintiffs filed proceedings based
on statements made by Mr Little on those
six occasions and claimed damages for defamation.
[3] In the course of the trial I ruled that the six
occasions on which the publications were made were occasions
of qualified
privilege. My reasons were to follow and are now provided in this
judgment.
The trial
[4] The proceeding was filed in June 2016. In August 2016 Mrs Hagaman
sought an urgent hearing because of her husband’s
age and frail health.
Medical advice was that he could die at any time and it was important to Mr and
Mrs Hagaman that his name
be cleared during his lifetime. The defendant
cooperated in expediting the hearing.
[5] The trial commenced on 3 April 2017. On the fourth day when the evidence had concluded I was asked to rule on three matters including the availability of the qualified privilege defence which the defendant pleads. Before counsel presented their closing arguments to the jury I ruled that the six occasions during which Mr Little published various statements relied on by the plaintiffs were occasions of
qualified privilege.1
1 Hagaman v Little HC Wellington CIV-2016-485-414, 6 April 2017.
[6] It was then for the jury to determine whether the plaintiffs had established that the defence failed. The jury returned its verdicts at the end of the day on
10 April 2017. In accordance with the jury’s verdicts judgment was
entered for the defendant in respect of all causes of action
pleaded by Mrs
Hagaman. Regarding one of Mr Hagaman’s six causes of action, by a
majority, the jury answered “yes”
to the question whether one of the
pleaded meanings was defamatory but was unable to reach a verdict on the
question of whether the
occasion of qualified privilege had been
lost.
[7] The question which this judgment concerns is conceptually distinct
from the issues which the jury was required to decide.
I am concerned only
with the availability of the defence of qualified privilege in the circumstances
of this case. I am not concerned
with the separate jury question whether the
defence failed on the facts.2 That said, although the two
questions are conceptually and analytically separate they will be viewed
together when determining whether
a proper balance is struck between the
competing interests of freedom of expression and protection of
reputation.3
Statement of claim
[8] The plaintiffs rely on 17 statements made by Mr Little
when he gave five media interviews and issued a media
statement on 18 and 19
April 2016. The statements relied on by the plaintiffs and the six occasions on
which they were made, are:
Media Statement published on 18 April 2016
3 Lange v Atkinson [2000] NZCA 95; [2000] 3 NZLR 385 (CA) [Lange (No 2)] at [6].
4 It was Murray McCully’s personal appointees on the Niue Tourism
Property Trust which awarded this contract ...
6 John Key must come clean on how a donor who gave more than
$100,000 to his party during a tender process, won a hotel management contract which led to a government-funded, $7.5m
upgrade to the resort, Leader of the Opposition Andrew Little says.
Television One News interview on 18 April 2016
7 There’s just something about this whole deal that really
stinks.
Radio New Zealand interview on 18 April 2016
Television One Breakfast interview on 19 April 2016
Defendant: That’s correct.
Defendant: Well they were a month apart, and the donation was one of the biggest political donations ever given, over $100,000. A month later the company then gets the contract to run the Matavai Hotel. A few months later they then get a grant of another $7.5m from the government to upgrade the hotel. And so I just think there’s something – and these decisions are made by a trust, all of whom are appointed by the government. I just think there's something here that just doesn't look quite – you know, just doesn’t look good, and I think we need a bit of transparency. I think the Auditor-General is
the person just to open it up and tell us who knew what when, and just look
at the timing of these things.
12 Interviewer: If I was to play devil’s advocate though ...
Defendant: The timing of this just doesn’t look good.
Defendant: Well I ... the point is we know there’s a significant
donation and then the person who made the donation, the company
that they are
involved in, then gets this contract to run this hotel, followed by this other
significant grant to upgrade the hotel.
So I just think there’s too much
going on here; it looks too cosy, it doesn’t look right to me and we
should find out,
and the Auditor-General should be the one to tell us.
BFM Breakfast interview on 19 April 2016
Television One News Interview on 19 April 2016
[9] Mr Hagaman pleads six causes of
action each based on one of the six media publications.4 General
and exemplary damages are sought in respect of each. Mrs Hagaman’s
claim mirrors her husband’s claim.
Thus the statement of claim pleads 12
causes of action in total and an overall sum of $2.3 million in damages is
sought.
[10] The statement of claim particularises every meaning the plaintiffs
allege is borne by each of the 17 statements. It is not
necessary that I set
out the meanings that are pleaded. The general thrust of the plaintiffs’
claims is that the defendant’s
statements meant, and were understood to
mean, that Mr Hagaman corruptly secured a hotel management contract for the
Scenic Hotel
Group by making a donation of more than $100,000 to the National
Party at the same time that the Scenic Hotel Group was tendering
for that
contract. Further, that by making the donation Mr Hagaman facilitated a
$7.5 million upgrade to the resort to
which the hotel management contract
related. Mr Hagaman also pleaded that the published words meant that by making
a donation to
the National Party at the time it was made Mr Hagaman sought to
influence the Government’s appointees on the Niue Tourism Property
Trust.
Statement of defence
[11] Mr Little denies that any of the 17 statements bear any of the
meanings set out in the statement of claim and he denies that
the meanings are
defamatory. In addition Mr Little pleads a defence of qualified
privilege:
QUALIFIED PRIVILEGE
on an occasion of
qualified privilege in that the Defendant, as Leader of the Opposition, had a
social or moral duty to respond to
questions raised by members of the public who
had a corresponding interest in knowing his response.
Particulars
10.1 In 2012, following requests by Opposition parties (including the Labour
Party) and public criticisms, the Auditor-General conducted
an inquiry into the
Government's decision to negotiate with SkyCity Entertainment Group Limited for
the construction of an international
convention centre following the revelation
that SkyCity agreed to enter into the contract in exchange for gambling
concessions granted
by the Government without public consultation or through a
competitive tender. The Auditor General reported that SkyCity was treated
“very differently” to others who would have tendered for the
contract.
10.2 In 2013 to settle a long running dispute with a Saudi Arabian businessman, the Government established a Saudi Arabia Food Security Partnership. Following revelations in the media in 2015 that the Government had spent more than
$11.5m on the partnership, including a $4m cash payment to the trading company of Mr Hmood Al Ali Al Khalaf as a
contract for his services, the Minister of Foreign Affairs, Murray McCully claimed the payment had been made on
legal advice but he failed to produce any written such advice either to the
Cabinet or the Auditor-General.
10.3. The Matavai Resort in Niue is that island’s only tourist hotel
accommodation.
10.4. In July 2012, a delegation from New Zealand, which included the
Minister of Foreign Affairs, Murray McCully, visited
Tonga where the Minister
opened the Scenic Circle Hotel Tonga.
10.5. At the opening the Minister commented “It will also require
more investment from long sighted companies like Scenic that can clearly see the
opportunities presented
by Pacific tourism”.
10.6. On 25 July 2012, the delegation then visited the Matavai
Resort.
10.7. Discussions took place with the Scenic Circle Hotel Group
(Scenic) in 2010 and subsequently as to how it could assist the owners of
the Matavai Resort and Scenic.
10.8. In June 2013, Scenic visited the Matavai Resort and
subsequently provided proposals for assistance.
10.9. In June 2013, the Minister was presented with a request for additional funding for the Matavai Resort.
10.10. In July 2013, Scenic contacted Horwarth HTL, who had been
appointed by the Ministry of Foreign Affairs and Trade (the
Ministry) to advise
it on the Matavai Resort.
10.11 In September 2013, Scenic expressed interest in entering into a
management contract for the Matavai Resort.
10.12. In February 2014, the Minister intimated New Zealand Government funds
might be available for the expansion on the Matavai Resort.
10.13. In May 2014, Scenic was identified as the preferred operator of the
Matavai Resort.
10.14. On 5 June 2014, the Prime Minister (of New Zealand) announced an
investment of $1.25 million to support tourism and renewable
energy in
Niue.
10.15. On 8 September 2014, the first named Plaintiff donated
$1,000 to the New Zealand National Party and on
18 September [2014] a further $100,000, declared to the
Electoral Commission on 23 September [2014].
10.16. On 8 October 2014, Scenic was awarded the management contract for the Matavai resort and commenced its duties on
1 December [2014].
10.17. Between February and September 2015, Scenic collaborated with the
owner of the Matavai Resort and the government of Niue to
seek funding from the
New Zealand government for the expansion of the Matavai Resort.
10.18. In October 2015, the Minister approved and the investment of
$7,500,000 to expand the Matavai Resort.
10.19. On 18 April 2016 on Morning Report, Radio New Zealand
broadcast an item reporting that one month before the Scenic Hotel Group
announced it had won the contract to
manage the Matavai Resort, its founder and
executive chairman, the First Plaintiff, had made a donation of $101,000 to the
National
Party.
10.20 Following the broadcast of that report, a [Radio
New Zealand reporter] sought comment from the Defendant
on the
report.
[12] The defence is pleaded in the same terms in response to each of the 12 causes of action.
Availability of qualified privilege – Submissions
Plaintiffs’ position
[13] Mr Fowler characterised the following final lines of paragraph 10 of
the statement of defence5 as being the important element of the
qualified privilege pleading:
...the words ... were therefore published on an occasion of
qualified privilege in that the Defendant, as Leader of the
Opposition, had a
social or moral duty to respond to questions raised by members of the public who
had a corresponding interest in
knowing his response.
[14] Mr Fowler’s concise submission highlighted three aspects of
the pleading:
(a) The pleading is a conventional qualified privilege pleading in the
sense that it pleads a reciprocal duty and interest.
It is not a Lange v
Atkinson type of qualified privilege.6 (I discuss this
decision later in the judgment. For the moment it is sufficient to note that,
following the lead of the Court of
Appeal in Vickery v McLean,7
when I refer in this judgment to the “Lange privilege”
I am referring to the privilege at issue in Lange v
Atkinson.)
(b) In any event the defendant in this proceeding is not a media defendant
but an individual.
(c) The particular qualified privilege pleaded is unknown to the law
of
New Zealand.
[15] Mr Fowler submitted it could not possibly be the case that privilege could be justified merely because members of the public are asked questions on a matter of public interest. Were that the case a person only needs to be asked a question on a matter of public interest and he or she would be protected if the answer is defamatory of another. Such a protection does not exist and it could not be available
to the Leader of the Opposition yet not to other members of the
public.
5 See [11] above which sets out the defendant’s pleaded qualified privilege defence.
6 Referring to Lange (No 2), above n 3.
7 Vickery v McLean [2006] NZAR 481 (CA) at [15].
Defendant’s position
[16] Mr Tizard was likewise succinct. His first point was that
the privilege claimed “would be novel”.
As had Mr Fowler, Mr
Tizard disavowed any similarity with Lange v Atkinson.
[17] Mr Tizard emphasised two aspects of the privilege pleaded by Mr
Little:
(a) The matters upon which Mr Little commented were matters already in
the public arena.
(b) Mr Little does not contend for a privilege arising from a personal sense
of moral responsibility but from his position as Leader
of the Opposition
responding to questions about Government’s conduct. Once the issue of
Mr Hagaman’s donation to
the National Party and the award of a contract to
the Scenic Hotel Group had become the subject of media attention the question is
whether the Leader of the Opposition had a duty to comment and respond to
questions about the government’s conduct.
The applicable principles
[18] I take as my starting point the observation of Elias J (as she then
was) concerning the values of freedom of speech and the
protection of individual
dignity which the law of defamation seeks to balance:8
The modern law of defamation represents compromises which seek to
achieve balance between protection of reputation and freedom
of speech. Both
values are important. Both are public interests based on fundamental human
rights.
Freedom of speech has long been recognised at common law as essential to
liberty and representative government.
[19] Defences of “truth”, “honest opinion” and
“privilege” may be available to a
defendant in a defamation action. Privilege may be absolute or qualified.
The
Defamation Act 1992 confers privileges to protect different types of
publications but
8 Lange v Atkinson [1997] 2 NZLR 22 (HC) [Lange HC] at 30.
qualified privilege may also arise at common law. This proceeding is not
concerned with any of the statutory privileges.
[20] Statements published on an occasion of qualified privilege are
protected “for the common convenience and welfare of
society”.9
[21] The unifying principle around which the common law has developed the
concept of qualified privilege is the duty–interest
test. Two
formulations of the law in this area have been described as “almost
canonical”.10 The “first classic
exposition”11 of the principle is the dictum of Baron Parke in
Toogood v Spyring:12
In general, an action lies for the malicious publication of statements which
are false in fact, and injurious to the character of
another, ... and the law
considers such publication as malicious, unless it is fairly made by a person in
the discharge of some public
or private duty, whether legal or moral, or in the
conduct of his own affairs, in matters where his interest is concerned. In such
cases the occasion prevents the inference of malice, which the law draws from
unauthorised communications, and affords a qualified
defence depending on the
absence of actual malice. If fairly warranted by any reasonable occasion or
exigency, and honestly made,
such communications are protected for the common
convenience and welfare of society; and the law has not restricted the right to
make them within any narrow limits.
[22] The celebrated passage emphasises that the protection of such
communications is for the “general interest of society”13
not the convenience of individuals or the convenience of a
class.
[23] Lord Atkinson’s briefer formulation is equally
famed:14
A privileged occasion is ... an occasion where the person who makes a
communication has an interest, or a duty, legal, social or moral,
to make it to
the person to whom it is made, and the person to whom it is so made has a
corresponding interest or duty to receive
it. This reciprocity is
essential.
[24] The reciprocity which Lord Atkinson regarded as essential is not
supported in
New Zealand. In addressing the emphasis which some commentators and
judges
9 Toogood v Spyring [1834] EngR 363; (1834) 1 CM & R 181 at 193.
11 Watts v Times Newspapers Ltd [1997] QB 650 CA at 659 cited in Gatley, above n 10, at 546.
12 Toogood v Spyring, above n 9, at 193–194.
13 Lange HC, above n 8, at 35.
14 Adam v Ward [1917] AC 309 (HL) at 334.
have placed on the requirement for reciprocity the Court of Appeal explained
that the need to avoid a strict concept of reciprocity
is supported
by:15
(a) the broad principle of the ‘common convenience and
welfare of society’ which underpins qualified privilege;
(b) the “infinitely various combinations of circumstances” in
which the privilege might arise and “the absence in
many of them of [the]
particular bilateral relationship [found for instance when a confidential
reference is given by one
employer to a potential future
employer]”;
(c) the words “interest” and “duty”, themselves
indicating the relationship without any requirement
for reciprocity.
Additionally, “duty” may be moral or social not necessarily
legal.
[25] Gatley on Libel and Slander summarises the position in this
way:16
The duty or interest may be common to both parties, but this is not
essential. It is enough if there is a duty or interest on one
side, and a duty
or interest, or interest or duty (whether common or corresponding or not) on the
other.
[26] No exhaustive list of the circumstances giving rise to the privilege
has been attempted. Indeed, it has been said that the
privilege might be
invoked in an “infinite variety” of circumstances.17
The key point is that the categories of qualified privilege are
not closed.18
[27] While the Defamation Act 1992 introduced significant reforms it did not codify common law privilege. It has been left for the courts to continue to develop the common law in this area in light of each jurisdiction’s evolving political, social
and economic conditions.19 In the words of Elias
J:20
15 Lange v Atkinson [1998] 3 NZLR 424 [Lange (No 1)] at 441.
16 Gatley on Libel and Slander, above n 10 at 549.
17 Lange (No 1), above n 15, at 441.
18 At 437.
19 Lange (No 2), above n 3, at [40].
20 Lange HC, above n 8, at 34. See also Lange (No 1), above n 15, at 443.
[the common law has been left] to develop in accordance with the principles upon which it is based:
The principle upon which these cases are founded is a universal one, that the public convenience is to be preferred to private interests, and
that communications which the interests of society require to be unfettered may freely be made by persons acting honestly without actual malice, notwithstanding that they involve relevant comments
condemnatory of individuals (Henwood v Harrison (1872) LR 7
CP 606, 622 per Willes J).
[28] Thus, the development and application of common law qualified
privilege is guided by principle rather than precise rules:21
The rule being founded upon the general welfare of society, new occasions for
its application will necessarily arise with
continually changing
conditions.
[29] Qualified privilege is vulnerable to being defeated. The defence will fail if a plaintiff can prove the defendant was predominantly motivated by ill will towards the plaintiff in making the publication or otherwise took improper advantage of the occasion of publication.22 As I have already mentioned23 I am not concerned in this judgment with any issue bearing on whether Mr Little’s defence fails for misuse of the occasion of qualified privilege those questions having been left to the jury to
decide.
Is qualified privilege available in this case?
[30] The essence of the defendant’s qualified privilege claim is in
his asserted social or moral duty to respond to questions
raised by members of
the public who had a corresponding interest in knowing his response.24
It is incumbent on the defendant to establish this duty. Mr
Little’s evidence that he felt he had such an obligation is not,
of
itself, determinative.
[31] Whether Mr Little had a duty to communicate, recognised by the law as creating a privileged occasion, depends on all the circumstances including
Mr Little’s position, his relationship to the audience
to whom he was
22 Defamation Act, s 19.
23 At [7] above.
24 Amended statement of defence set out at [11] above.
communicating, the nature and importance of the subject matter and the
relationship of the allegedly defamatory matter to those matters.
A duty arising from role as Leader of the Opposition?
[32] What is a “Leader of the Opposition”? In New Zealand the Standing Orders of the House of Representatives provide for recognition of Leader of the Opposition:25
The leader of the largest party in terms of its parliamentary membership that
is not in Government or in coalition with a Government
party is entitled to be
recognised as Leader of the Opposition.
[33] Professor Jeremy Waldron has written on the
“Principle of Loyal Opposition”.26 In this
extensive and scholarly paper Professor Waldron writes that parliamentary
systems throughout the English-speaking world do
not just tolerate opposition
“they institutionalize it in the structure of the
constitution”.27 With the best will in the world
“focused resolutely and honestly on the common good” people disagree
and take different
positions on what members of a community should do
together.28
[34] These “burdens of judgment”29 apply beyond religion and ethics to issues of justice and social policy. Modern democracies pride themselves on preserving rights of robust dissent and tolerating “as a matter of routine normality the free expression of oppositional views”.30 Historically, it became desirable to distinguish “party opposition from sedition, treason, and a prelude to civil war”.31 Faction became institutionalised and a settled part of the political landscape. Rotation in office
became more than “business as usual ... something more or less
institutionalized”.32
25 Standing Orders of the House of Representatives 2014, SO 36.
27 At 9.
28 At 1–2.
29 John Rawls Political Liberalism (Columbia University Press, New York, 2005) as cited in
Waldron, above n 26, at 2.
30 At 6.
31 Nancy Rosenblum On the Side of Angels: An Appreciation of Parties and Partisanship
(Princeton University Press, Princeton, 2010) at 11 and 105 as cited in Waldron, above n 26, at 8.
32 Waldron, above n 26, at 8.
The achievement was to bring opposition “into the frame of government,
regularise
it, eventually legalise it, and make it politically
mundane”.33
[35] In developing the theme that loyal opposition “is a matter of
constitutional empowerment”34 Professor Waldron refers to
observations over time which I have found to be relevant and helpful to my
consideration of Mr Little’s
position as Leader of the Opposition and his
plea of qualified privilege.
(a) The Leader of the Opposition has a “definite and distinct
part to play in constitutional government”.35
(b) Sir Ivor Jennings remarked on the apparent oddity of the government
funding its principal opponent to criticise the government.
He then
acknowledged that “in truth opposition is an essential part of democratic
government”.36
(c) Beyond matters of institutional responsibility37 the important thing is:38
... for the opposition party to oppose, to “scrutinise the government,” to “hold them accountable for their decisions,” “to limit the extremity of the Government’s action, to arouse public criticism of any dangerous policy, and to make the Government behave reasonably”– in short, it is the duty of the opposition to serve
... as a “vigilant watchman over those in power.”
(d) The main role of the official opposition is to prepare for government.
The constitution assumes that at any moment an alternative
government can be formed from the opposition. “...this
duty–to
33 Rosenblum, above n 31, at 121 as cited in Waldron, above n 26, at 8.
34 Waldron, above n 26, at 8.
36 Ivor Jennings Parliament (2nd ed, Cambridge University Press, Cambridge, 1970) at 82 cited in
Waldron, above n 26, at 9.
38 Waldron, above n 26, at 12 (citations omitted).
provide a government-in-waiting–affects the way in which the duty
to
criticize is performed.”39
[36] Although Professor Waldron’s observations are made in the
context of the British Parliament the constitutionally important
theme is
reflected in the work of David McGee, former Clerk of the House of
Representatives in New Zealand and author of Parliamentary Practice in New
Zealand:40
Leader of the Opposition is a most important constitutional office,
marked at the State Opening of Parliament, where the Leader of the Opposition
and the Prime Minister flank the Governor-General
as the Governor-General reads
the Speech from the Throne. In no other instance is the peculiar strength of
the parliamentary system
of government so vividly demonstrated that in its
recognition of the office of Leader of Opposition. By this means the
opposition is enlisted as an official Government-in-waiting.
[37] While New Zealand is a constitutional monarchy it is the people,
that is the citizens of New Zealand who, through periodic
elections, have
ultimate power. And, as the Court of Appeal observed in Lange (No
1):41
The electoral system now recognises more directly the
competition organised by and through political parties
for the power of
the state exercised through Parliament and the ministry. The role of party
leaders in that competition is of course critical–as it has been for the
last century.
[38] There can be no question that the Leader of the Opposition plays a vital role in New Zealand’s political and constitutional setting and the successful performance of that role will be judged by the effectiveness by which he or she – in the words of Professor Waldron – scrutinises the government, holds it to account, arouses public
criticism of dangerous policy and makes it behave
reasonably.42
41 Lange (No 1), above n 15, at 463 (emphasis added).
42 Waldron, above n 26, at 12 as set out at [35](c) above.
[39] When the Leader of the Opposition scrutinises and criticises
government and holds it to account what is at play is the very
freedom of
expression which the common law recognises “as essential to liberty and
representative government”.43
[40] The public, to whom it may be assumed Mr Little’s
statements were ultimately addressed, has a corresponding
interest in
receiving, in fact a right to receive, communications emanating from the Leader
of the Opposition in the discharge of
that role. On that basis alone the
duty–interest test may be regarded as satisfied in the circumstances of
this proceeding.
In the event that I am wrong about that I turn to the subject
matter of Mr Little’s statements.
The occasions of publication and the subject matter
[41] I have set out in chronological order (rather than the order in
which they were pleaded in the statement of claim) the six
occasions during
which Mr Little made the statements which are the subject of the
proceeding:
(a) RNZ interview on 18 April 2016 12:00 pm;
(b) Media Statement released on 18 April 2016 at 12:20 pm; (c) TV One News interview on 18 April 2016 at 6:08 pm;
(d) TV One Breakfast interview on 19 April 2016 at 7:12 am; (e) BFM Breakfast interview on 19 April 2016 at 7:48 am; and (f) TV One News Interview on 19 April 2016 6:03 pm.
[42] As the statement of defence pleads the broad subject matter concerned the award in September 2014 of a hotel management contract for the operation of the Matavai Resort in Niue to the Scenic Hotel Group. Mr Hagaman, the founder and director of a number of companies in the Scenic Hotel Group had, approximately
one month earlier, donated $100,000 to the National Party. Then in
October 2015
43 Lange HC, above n 8, at 30.
the Minister of Foreign Affairs and Trade approved an investment of
$7,500,000 to expand the Matavai Resort.
[43] Mr Little’s evidence was that his interest was
“piqued” by an item which he heard on Radio New Zealand’s
(RNZ) Morning Report as he was preparing to leave for work on 18 April 2016. An
audio recording of the broadcast, which lasted approximately
three minutes, was
played during the trial. The following matters were amongst those reported
during the three minute broadcast:
(a) In October 2014 the Scenic Hotel Group announced it had secured the
Matavai Resort in Niue. The Niue Tourism Property Trust
whose trustees are
appointed by the Minister carried out what the Minister said was a “fully
commercial process” to find
a company to manage the resort. That contract
was won by the Scenic Hotel Group.
(b) “Just weeks earlier Earl Hagaman, the company’s founder,
donated
$101,000 to the National Party making him National’s biggest living
financial donor in 2014.” The Minister of Foreign
Affairs and Trade, Mr
McCully, said there was no link between a businessman’s donation
to the National Party and his
company winning a contract to manage a resort in
Niue.
(c) In 2015 the government announced a further $7.5 million in funding
to expand the Scenic Matavai Resort to help grow tourism.
It had spent more than
$10 million over previous years developing the resort but Mr McCully was adamant
there was no link between
the winning of the contract, the new aid funding and
the donation to the National Party.
(d) Mr McCully was asked whether he had any concern about perceptions that
financial donors are the recipient of New Zealand aid.
(e) An excerpt from an interview with the person who runs
an
organisation which analyses and critiques New Zealand’s aid
programme and whose view was that the funding was likely to benefit the
Scenic Hotel Group more than the people of Niue.
(f) Records show that Mrs Hagaman “also donates to the
government’s
support partner, ACT” and was that party’s largest donor in
2013.
[44] Mr Little’s interest was “piqued” by the report
against what he described as a range of other concerning
matters involving the
government at around about that time: the SkyCity controversy, the Saudi
sheep deal and the Panama
Papers. Mr Little gave evidence about the
particular aspects of these public matters which he found concerning. It is not
necessary
to recount that evidence. The relevant point is that, from Mr
Little’s point of view, the events “pointed to a failure
of this
Government to manage conflicts of interest”.
[45] The steps Mr Little took in the hours immediately following the
Morning Report item are an important aspect of the overall
context in which his
publications were made. When Mr Little arrived at work he was told that RNZ had
been in touch and was interested
in speaking to him about the story concerning
the donation to the National Party and the award of the hotel management
contract to
the Scenic Hotel Group. After consulting with his senior staff as
to what action was appropriate beyond commenting in the media,
Mr Little
requested his staff to check a number of facts: to check with the Electoral
Commission as to whether the donations had
been disclosed; to check whether
there had been any publicity about the award of the Matavai Hotel contract and
generally to be sure
that what had been reported on RNZ was accurate and
reliable. That having been done the judgement Mr Little then made was to refer
the matter to the Auditor-General. A letter was accordingly
prepared.
[46] As these preparations were underway it occurred to Mr Little that the issue was likely to be of interest to media outlets beyond RNZ and that therefore a media release should be prepared confirming that he had referred the matter to the Auditor- General. Mr Little’s evidence was that he was more likely to make a media statement when an issue of wider interest and importance arose. Referring a matter to the Auditor-General was just such an occasion.
[47] Having made the decision to refer the matter to the Auditor-General
Mr Little decided to give the interview with RNZ but
first he required
confirmation the letter to the Auditor-General had been sent. Mr Little’s
recollection was that the letter
was sent between 11:45am and
midday.
[48] Because RNZ had made the first request for an interview and because
RNZ had run the story throughout the morning Mr Little
agreed to speak to RNZ at
about the time his letter had been transmitted to the Auditor-General. Shortly
afterwards the media statement
was issued by his office.
[49] That then is the immediate backdrop to the first and second
publications. I turn now to the third occasion which was the
TV One interview
broadcast at 6:08pm on 18 April 2016. That week Parliament was in recess. Mr
Little was due to speak to GreyPower
Christchurch in Christchurch on the 18th.
In accordance with a prior arrangement with TVNZ Mr Little gave the TV One
interview once
he arrived at his hotel and before his speaking engagement. He
recalled the interview lasted for five to seven minutes. Several
questions were
asked over that period of time but only a small fraction of the whole interview
was used. The broadcast itself contained
two quotes from Mr Little or, as they
are called in the industry, “grabs” from the interview.
[50] The fourth, fifth and sixth occasions were on 19 April
2016. Three interviews were scheduled: two with TVNZ
and one with BFM. The
fourth publication was an interview with TV One Breakfast. Usually a list of
topics to be covered is provided
the previous evening. Mr Little could not
recall precisely but considered it more likely than not that he knew in advance
of the
Breakfast interview that he was to be asked about his referral to the
Auditor-General. Normally the interview will cover three or
four topics. Mr
Little said it was unusual to simply focus on one topic but he confirmed that
the transcript in evidence was a
full transcript of the interview on the
specific topic of his referral to the Auditor-General.
[51] Similarly, the transcript of the interview of the BFM Breakfast
interview
started with the words “let’s move our attention to Niue now” suggesting that more
was discussed than the award of the Scenic Hotel contract. This interview
was
conducted at the University Student’s Association Building in
Auckland.
[52] The sixth, and final, publication was the interview broadcast on TV
One News at 6:03 pm. That interview was conducted outside
the Auckland
Airport. Mr Little’s recollection was that it lasted 10 to 12 minutes.
The actual broadcast included four excerpts,
or grabs, from the
interview.
[53] Several points emerged in the course of Mr Little’s evidence that are pertinent to all six occasions of publication. The first is that Mr Little’s comments were sought on a matter already in the public arena. The Morning Report item referred to the fact of the award of the contract to the Scenic Hotel Group and the fact of a $101,000 donation by the “company’s founder ... making him the longest living donor in 2014.” Beyond the reporting of those facts the item included questions of the Minister regarding concerns about the perception of a political party
financial donor being the recipient of New Zealand aid.44
[54] The second point is that Mr Little’s criticisms were not
directed towards Mr and Mrs Hagaman but at the government
because of its
“record in the SkyCity Convention deal, the Saudi sheep deal and more
recently over Panama Papers”. Mr
Little had never met Mr or Mrs Hagaman.
He was aware of Mr Hagaman without being clear about what Mr Hagaman did until
the hotel
management contract issue emerged. He certainly knew nothing about Mr
Hagaman’s ownership interests in Scenic Circle. It
was not the fact of Mr
Hagaman’s donation that prompted his media release but the fact there had
been a significant donation
to the National Party within a month of what Mr
Little described as a government contract, going to the donor. That was the
issue
for Mr Little and in the context of a government that had, to his mind,
“a very strong widely known track record of managing
conflicts of interest
poorly”.
[55] Thirdly, the reason Mr Little took the actions he took and made the comments he made was because of the suspicion aroused by one of the largest
political donations being made to the governing party in close proximity
to the award
44 See [42] above.
of a contract to the donor – again at a time when the government had a
demonstrated track record of poorly managing conflicts
of interest. Mr Little
felt the right thing to do was to refer the matter for inquiry and reassurance
that there was nothing untoward.
[56] The fourth point is that Mr Little was emphatic about what his role
as Leader of the Opposition entailed. He was to call,
or hold, the Government
to account. Throughout his evidence-in-chief and under cross-examination Mr
Little emphasised this aspect
of his role as Leader of the Opposition –
his obligation:
in public office to call the government to account, to take appropriate steps
to ensure the public can be reassured that this government
is acting properly
and in accordance with widely accepted rules of conduct.
[57] In that role Mr Little considered he had to be sure “that the
government, that its ministers and ministries and agencies
act with due probity
and propriety manage their conflicts of interests properly”.
[58] To that end Mr Little said it would have been improper,
to accept as reassurance, the assertion of an interested
party in the very
matter that was putting the Government under suspicion.
[59] Finally, Mr Little acknowledged that sometimes “calling the
government to account” will reflect on others but
he could not be deterred
or dissuaded from fulfilling his moral obligation by accepting unquestioningly
the assertions of an interested
party. Mr Little considered that to do so would
be a failure, indeed a dereliction, of his duty.
[60] Mr Little’s statements were made in pursuance of his duty as Leader of the Opposition and were made about matters bearing on the propriety of the government’s approach to funding ostensibly private interests. Assuming a spectrum of political topics ranging from the mundane (perhaps political gossip) to matters of demonstrable public interest, questions of transparency in the award of contracts by government to private interests who happen also to be significant donees to the party in government are matters of demonstrable public interest. That view takes some
support from the Auditor-General’s decision to inquire into the matters
referred to
her (to the extent of her jurisdiction).45
Qualified privilege conclusion
[61] The common law in this area is to be developed in light of New
Zealand’s evolving political, social and economic
conditions.46
Key to that context is New Zealand’s system of representative
democracy in which:47
the transcendent public interest in the development and encouragement of
political discussion extends to every member of the
community. ...
Comment upon the official conduct and suitability for office of those exercising
the powers of government is essential
to the proper operation of a
representative democracy. Political discussion in a democracy inevitably on
occasion will entail the
making of statements which are likely to injure the
reputation of others.
[62] On all six occasions the subject-matter of Mr Little’s communications concerned the tender process by which the hotel management contract had been awarded and whether due process had been followed. What Mr Little characterised as the government’s poor track record of managing conflicts of interest was to the fore when he raised questions about the links between the donation and any influence of the donation on the tendering decisions. These concerns, as well as disquiet about the $7.5 million being prioritised to develop the resort and the extent to which benefit would accrue to the Niue people, were all questions which Mr Little
not only raised publicly but framed for the
Auditor-General.
46 Lange (No 2), above n 3, at [40].
47 Lange HC, above n 8, at 46.
[63] The Leader of the Opposition has a duty to criticise and to call the government to account.48 In that context freedom of expression becomes acutely relevant. Effective opposition, and thus the public interest, would be compromised if scrutiny, challenge, criticism and comment were confined to debate in the House. By exercising his or freedom of speech the Leader of the Opposition makes information bearing on responsible government accessible to the public. In
New Zealand’s political and constitutional setting in which the
Leader of the Opposition has a duty, and the public
have a right, to call the
government to account the free flow of information and opinion such as that
published by Mr Little attracts
qualified privilege because protection in this
context advances the “common convenience and welfare of
society”.
[64] Two final observations: first, to the extent that my assessment represents an expansion of common law privilege the expansion is “matched” by the check on misuse of the occasion which s 19 of the Defamation Act effects. The expansive approach which the courts take to what constitutes misuse of an occasion of privilege results in a proper overall balance. Those who do not “exhibit the necessary responsibility” when speaking on a privileged occasion thereby may lose the
protection of the privilege.49
[65] The second point is that in the course of public debate on matters of public concern individuals may be “swept involuntarily into political controversy”.50 But while private interests and reputation are also entitled to the law’s safe-guard ultimately the common law defence of qualified privilege recognises that it is for “the general good that individuals should occasionally suffer than that freedom of communications between persons in certain relations should be in any way
impeded.”51
48 See the discussion at [35] above.
49 Lange (No 2), above n 3, at [39].
50 Lange HC, above n 8, at 46.
51 Bowen v Hall (1881) 6 QBD 333 at 343 per Lord Coleridge CJ.
Lange defence
[66] My analysis and conclusion have proceeded on the basis of the defendant’s pleading and by reference to first principles.52 That is, Mr Little has established his duty to make the communications he made to an audience who had an interest in receiving those communications and he has shown that it is in the public interest that his freedom of expression should prevail over protection of reputation. The further observations I make do not arise from the pleadings, nor from any argument
advanced on behalf of either party, but given the political context in which
this proceeding is brought I believe them to be apt.
[67] Mr Little did not plead a defence of qualified privilege based on
“political discussion” but in my view there
is an equivalence
between the qualified privilege in this case and the Lange privilege
which protects political discussion.
[68] In Lange HC Elias J reached this
conclusion:53
Qualified privilege attaches to political discussion communicated to the
general public. “Political discussion” is discussion
which, by
developing and encouraging views upon government, bears upon the function of
electors in a representative democracy. ...
The defence is available equally to
individuals and the news media.
[69] Elias J’s decision was upheld by the Court of Appeal whose consideration of the development of the law led it to reach five conclusions about the defence of qualified privilege as it applies to political statements which are published generally.54 That decision, Lange (No 1), was appealed to the Privy Council. Their Lordships thought it appropriate to give the New Zealand Court of Appeal the opportunity to reconsider the issue in light of a recent decision of the House of Lords on a virtually identical issue.55 Accordingly the matter was remitted to the Court of
Appeal.
52 Vickery v McLean, above n 7, at [18].
53 Lange HC, above n 8 at 51.
54 Lange (No 1) at 467.
55 Lange v Atkinson [2000] 1 NZLR 257 (PC) referring to Reynold v Times Newspapers Ltd [2001]
2 AC 127 (HL) which was delivered on the same day and by the same Judges as those who sat in the Privy Council on the appeal of Lange (No 1).
[70] The Court of Appeal in Lange (No 2) decided to adhere to its
previous conclusion and in particular to confirm the five-point summary in
Lange (No 1) to which it added a sixth point to ensure that what was
previously implicit was now made explicit.56
[71] The Court of Appeal’s summary of conclusions is to be read as
a whole. The conclusions proceed from the Court of Appeal’s
first point
which is that the general publication of a statement does not of itself
defeat the defence of qualified privilege:57
(1) The defence of qualified privilege may be available in respect of
a statement which is published generally.
(2) The nature of New Zealand’s democracy means that the wider
public may have a proper interest – supporting
the defence – in
respect of generally-published statements which directly concern the functioning
of representative and responsible
government, including statements about the
performance or possible future performance of specific individuals in elected
public office.
(3) In particular, a proper interest does exist in respect of the statements made about the actions and qualities of those currently or formerly elected to Parliament and of those with immediate aspirations to such office, so far as those actions and qualities directly affect or affected their capacity (including their personal ability and willingness) to meet their public responsibilities. In amplifying this passage the Court of Appeal stated:58
[this third conclusion] is to be read in the context of the previous two.
The proper interest does exist and the defence is accordingly
capable of
applying to the statements identified in that conclusion so long as those
statements directly concern the
functioning of representative and responsible
government.
(4) The determination of the matters which bear on that
capacity will depend on a consideration of what is
properly a matter
of public concern rather than of private concern.59
The fourth conclusion is a further essential element. It is only those
matters which are properly of public concern that are protected.
The
assessment of the occasion to see whether it establishes the privilege must
address that issue,
56 Lange (No 2), above n 3, at [41].
57 At [12].
58 At [12].
59 At [12].
along with the contextual elements indicated in the second
conclusion.
(5) The width of the identified public concern justifies the extent of the
publication.
(6) To attract privilege the statement must be published on a qualifying
occasion.
[72] Mr Little’s statements were made in a constitutional and
political setting in
which the role of party leaders is critical.60
Not only that, members of the population of New Zealand who through
the electoral system give public power to those who are elected and who through
other proper processes
of debate and participation attempt to influence their
exercise of that power and call them to account, have a proper interest in
having access to information which directly affects their capacities to
carry out their public responsibilities.61
[73] Thus the matters on which Mr Little communicated were not just
matters of mere interest to the public but concerned the functioning
of
representative and responsible government in which the wider public can be
assumed to have a proper interest.
[74] Mr Little’s statements may be regarded as being in the nature
of political discussion in that they were communications
“[bearing] upon
the function of electors in a representative democracy by developing and
encouraging views upon government.”62 And the public which Mr
Little addressed through various media outlets had not only a (relevant)
interest in receiving the communications
but a right to receive
them.
Summary
[75] Opposition is an essential part of democratic government. The Leader of the Opposition has a duty to hold the government to account for the decisions it takes. By exercising his or her freedom of speech the Leader of the Opposition makes information bearing on responsible government accessible to the public. The public
has a proper interest in receiving this information. In New
Zealand’s system of
60 Lange (No 1), above n 15, at 464; See also [38] above.
61 At 464 (emphasis added).
62 Lange HC, above n 8 at 46.
representative democracy protection of communications about matters of proper
public concern facilitates discussion and comment about
official conduct and the
exercise of powers of government.
[76] Mr Little’s communications followed a nationwide broadcast of a report on a matter of public interest. They were communications made in pursuance of his role as Leader of the Opposition and on a matter of public interest. The communications attract qualified privilege because protection in the contexts in which they were
made advances the “common convenience and welfare of
society”.
Karen Clark J
Solicitors:
Meares Williams, Christchurch for Plaintiffs
Oakley Moran, Wellington for Defendant
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