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Herron v Speirs Group Ltd [2006] NZHRRT 12 (30 March 2006)

Last Updated: 6 April 2006

Decision No. 12/06

Reference No. HRRT 6/03

BETWEEN STUART WALTON HERRON

Plaintiff

AND SPEIRS GROUP LIMITED

Defendant

BEFORE THE HUMAN RIGHTS REVIEW TRIBUNAL

Mr R D C Hindle Chairperson
Dr I Vodanovich Member

Ms T McNaughton Member

HEARING: 15 & 16 December 2005 (Auckland)

APPEARANCES:

Mr R B Hucker for plaintiff
Mr P R Jagose for defendant
Mr R Stevens for Privacy Commissioner

DATE OF DECISION: 30 March 2006

DECISION

Introduction

[1]

In November 1999 the defendant notified the credit reporting agency Baynet CRA Limited (now commonly referred to as ‘Baycorp’) that Mr Herron was a defaulting debtor in respect of payments that the defendant claimed to be due to it. The relevant information was included in the Baycorp database relating to Mr Herron as follows:

Payment Defaults

(During the hearing in the Tribunal this information was referred to in a shorthand way as ‘the default’, and we will use the term in this decision as well)

[2]

Mr Herron says that the information was inaccurate and misleading. That is because he says he did not owe any money to the defendant.

[3]

In this proceeding he claims that the defendant failed to meet the standards required by Principle 8 of the Privacy Act 1993 (‘the Act’) before listing the default on the Baycorp database. It is his case that he has suffered considerable harm as a result. Mr Herron asks us to make declaratory and other orders, and to award him damages under the Act for what he claims to have been the defendant’s interference with his privacy.

[4]

For its part, the defendant says that Principle 8 did not apply in the circumstances. It argues in the alternative that even if Principle 8 did apply, the information it supplied to Baycorp was accurate, up to date, complete, relevant and not misleading –i.e. that there was no breach of Principle 8. The defendant also takes issue with Mr Herron’s claims to have suffered harm. It says that it has not interfered with his privacy at all.

[5]	Our decision is organised under the following headings:

Introduction

Conduct of the litigation

Facts

Application of Principle 8

Interference with privacy?

Issues regarding any remedy

Formal order

Costs

Conduct of the litigation

[6]

The claim was filed in January 2003. At that time it sought relief not only as against Speirs Group Limited but also as against Baycorp and the ASB Bank Limited. The Privacy Commissioner had not, however, completed all aspects of her investigation of the various allegations. As a result a timetable was fixed for an exchange of submissions to address the question of whether the matter could or should proceed before the Privacy Commissioner’s investigations had been completed. But there was considerable delay in the filing of those submissions, particularly on Mr Herron’s side. By the time the submissions were filed, the Privacy Commissioner had all but completed her investigations. The issue as to whether matters could proceed before her investigations were completed was effectively overtaken by events.

[7]

But then in August 2004 the Privacy Commissioner raised various concerns about the correct interpretation of ss.82 and 83 of the Act. Those issues were dealt with in decisions issued by the Tribunal on 22 July 2005 in Lehmann v The Radioworks Limited (HRRT Decision 20/05) and KI v Gilligan Shepphard (HRRT Decision 21/05). The parties in this matter were invited to participate in the argument of the issues, but none of them did so.

[8]

The decisions in Lehmann and in KI v Gilligan Sheppard (supra) cleared the way for Mr Herron’s claim to proceed to hearing. Timetable orders were made to complete discovery, and for a pre-hearing exchange of statements of evidence. Shortly before the substantive hearing, however, the claims were settled as between Mr Herron and Baycorp and as between Mr Herron and the ASB Bank Limited. We do not know what the terms of those arrangements were.

[9]	By the time the hearing commenced Speirs Group Limited was the only defendant.

[10]

At the commencement of the hearing on 15 December 2005 it was common ground that the Tribunal was empowered to deal with Mr Herron’s claims under Principle 2 (concerning the sources from which an agency can collect personal information) as well as Principle 8 (which relates to the use of personal information by an agency). During his opening address to the Tribunal, however, Mr Hucker indicated that the claim would not be pursued under Principle 2. As a result the only issues that we have to determine concern the applicability of Principle 8 and, if that Principle applies, then what consequences follow.

Facts

[11]

We heard from two witnesses. The first was the plaintiff, Mr Herron. For reasons we will set out below, we were left with significant concerns about the reliability of what he told us. The other witness was a Mr Richard Corliss, who was called to give evidence on behalf of the defendant. He had been involved with the relevant transaction when it took place in 1997. With the passage of time, however, he properly admitted that he had no real recollection of the events beyond what was recorded in contemporaneous documents relating to the transaction, and the correspondence that followed.

[12]	As a result the following account of the relevant facts is largely drawn from the documents that were generated at the time of the transaction and, later, after the notification of Mr Herron’s alleged default was submitted to Baycorp by the defendant.

[13]

The defendant is in the business of motor vehicle financing. The transaction we are concerned with relates to the purchase in 1997 of a Holden ‘Equipe’ from a car dealer called Davies Motors Limited. The purchaser was a company called Agricultural Technologies Limited (‘ATL’). The price of the car was $37,025.00, all of which was to be financed by the defendant.

[14]

On 26 June 1997 Mr Herron filled in and signed two forms in relation to the purchase. The first was a one page credit application that was made on behalf of ATL. Mr Herron filled the form in to show that he was to be the contact person at ATL for the transaction. He stated his position in the company to be a director and one of two shareholders (the other director and shareholder was given as Mr W R Falloon).

[15]

Neither of those things was true. Mr Herron was not a director or a shareholder of ATL. In his evidence, Mr Herron told us that at the time he intended to become a director and shareholder of ATL, although ultimately he never did so. There is nothing in the documents to suggest that he ever made his true position clear to the defendant at the time.

[16]

The credit application that Mr Herron purported to make on behalf of ATL gave no financial information about the company at all. Instead he filled in a separate two-page credit application giving his own personal details (name, address, and so on). That form included a statement of his income, expenses, assets and liabilities. He showed himself as having a net worth of over $2.4 million.

[17]

We can find no reason to suppose that the defendant would ever have contemplated lending just under $40,000 to a company such as ATL without any financial information about it at all - at least not unless the transaction were to be secured in some satisfactory way. The only sensible inference is that the defendant expected Mr Herron to guarantee the agreement. To that end there was a box at the foot of the first two application forms relating the possibility of a guarantee. The box was crossed out by Mr Herron. As far as we can tell, this seems to have gone unnoticed by the defendant at the time.

[18]

That the defendant expected to obtain Mr Herron’s guarantee for the transaction is confirmed by the formal documents that were then drawn up. The transaction was to take the form of a lease: the defendant would buy the car from the dealer and then lease it to ATL for an agreed monthly rental and otherwise on terms set out in its standard form lease agreement. The documents that were prepared make it clear that the defendant intended Mr Herron to guarantee the transaction.

[19]

On 27 June 1997 the defendant sent the documentation to the car dealer together with a list of its requirements for settlement. The first requirement was that the client must sign the lease that had been drawn up. The defendant’s letter went on to say, ". . if appropriate, don’t forget the guarantor’s signature".

[20]

The evidence does not disclose exactly what happened next. Certainly it is clear that the car was uplifted, and that some payments were made to the defendant in a way that conformed with the lease that had been drawn up. But there is nothing to suggest that any documents that had been signed either for ATL or by Mr Herron were ever returned by the dealer to the defendant.

[21]

At least with respect to the guarantee, Mr Herron said that there was no signed document because it had never been intended that he would give a guarantee. For the reasons we have given (and in view of our concerns about the reliability of Mr Herron’s evidence generally) we do not accept that. We have no doubt the defendant was expecting his guarantee. On the other hand, there is no evidence that he ever did sign a guarantee. Perhaps he did, and the document has since been lost. Perhaps the dealer omitted to comply with the defendant’s requirements for settlement, and did not get any documents signed at all. All that is clear is that, if Mr Herron ever did sign a guarantee, nobody has been able to find it.

[22]

By December 1997 ATL was in default of payments due under the lease. Various notices relating to the default were sent by the defendant to ATL and to Mr Herron at a postal address in Birkenhead, which was the address that Mr Herron had given for the company when he filled out the finance application forms. It was Mr Herron’s evidence, however, that he never received or saw any of those notices. He claimed that the post box was cleared by Mr Falloon. Mr Herron asserted that none of the default notices were ever passed on to him.

[23]

The documents we were shown include a copy of a letter written by the defendant to ATL (marked for the attention of Mr Falloon) on 27 October 1998. Evidently Mr Falloon had asked for a copy of the lease. The defendant’s response to his request is of some significance, because it appears to confirm that even at that stage it was unable to locate a copy of any signed lease (the document was described as having been ‘temporarily misplaced’). We think it reasonably safe to assume that the company would have made some reasonable attempt to find the signed documents before sending Mr Falloon an unsigned copy.

[24]	On 20 November 1998 the car was re-possessed. It was sold by the defendant in December 1998. After all expenses had been taken into account, ATL was still indebted to the defendant in the sum of $10,967.

[25]	The defendant took the position that Mr Herron was liable to pay this shortfall as the guarantor of ATL’s obligations. But no payment was received. On 17 March 1999 the defendant took the step of listing what it saw as Mr Herron’s ‘default’ on the Baycorp database: see para [1] above.

[26]

The information was added to an already existing database of information held by Baycorp about Mr Herron including his name and address details, a list of companies of which he was or had been an officer, a list of previous inquirers seeking information about him, and a list of two court judgments against him. There was also reference to a collection agency default and two other collections (all three of these were shown as ‘paid’).

[27]	Mr Herron says that in March 1999 he did not know that the default had been listed with Baycorp.

[28]

Documents in the bundle we were given make it clear that at July 1999 the defendant knew that it did not have any signed documents to support the transaction, and that it also appreciated that the absence of paperwork might make legal proceedings for recovery difficult. A collection agency that had evidently been instructed to collect the ‘debt’ from Mr Herron was told to cease legal action because of the absence of any agreement. In fact, as we have said, even before the default was listed it is clear that the defendant had been unable to find the original documentation that it would need to rely on in order to enforce the guarantee it had expected Mr Herron to give. We also note there is a letter dated 10 January 2000 from the defendant to the collection agency saying that the written contract could not be found.

[29]

Mr Herron’s evidence about what happened after March 1999 was insecure to say the least (we deal with our concerns in this respect in more detail below). What does seem reasonably clear, however, is that it was not until March 2000 that he learned the existence of the default notification on the Baycorp database.

[30]

Mr Herron’s evidence was that when he learned of the default he was extremely angry. He said that a mortgage broker he was dealing with at that time would not take his application for funds to any of the High Street banks, as it was clear that it would be turned down. Mr Herron said that the notification stopped him from raising funds in his own name and that, from that time onwards, he did not borrow any money. He said the notification basically meant he could not continue his business.

[31]

Taking Mr Herron’s evidence as to how devastating the default notification on the Baycorp database was for his commercial activities at face value, one would have thought that he would have immediately tried to deal with the matter and have the default notice removed. Surprisingly, however, we were not shown any documents to suggest that he did anything at the time at all.

[32]

To the contrary, the first record of any expression of concern that we were referred to was a letter written by his solicitors to the defendant on 27 October 2000, some seven months after Mr Herron first found out about the default notice. The letter certainly made it clear that Mr Herron considered the default notice to have been incorrectly listed, but as to the consequences there is only an assertion that "Our client has suffered harm and/ or disadvantage". No details were provided. As a whole the letter gives no sense of the urgency or signicance that might have been expected if what Mr Herron told us in his evidence were to be accepted.

[33]	There was some correspondence between the defendant and Mr Herron’s solicitors after 27 October 2000 but, again, there is nothing that conveys the sense of anger, urgency or significance that Mr Herron purported to give the matter in his evidence to the Tribunal.

[34]

The letter written by Mr Herron’s solicitors on 27 October 2000 referred to the possibility that a complaint might be made to the Privacy Commissioner. All that was required to initiate that process was for a letter to be written or a telephone call to be made to the Privacy Commissioner. But it was not until early 2002 that a complaint was actually made to the Privacy Commissioner. That was nearly two years after Mr Herron first became aware of the default listing, and some 14 months after the letter written by Mr Herron’s solicitors to the defendant on 27 October 2000 to threaten proceedings involving the Privacy Commissioner.

[35]

The proceedings in this Tribunal were filed in January 2003. As we have indicated, at that time not all of the Privacy Commissioner’s investigations into the various claims made by Mr Herron had been completed. But as it happened, the investigation of this particular aspect of Mr Herron’s concerns had been completed by November 2002. The Privacy Commissioner (then Mr B H Slane) decided to discontinue his investigation under s.71(1)(d) of the Act, on the basis that it was not a matter that he considered ought to be proceeded with. It is clear from his letter that a significant reason for his decision related to the way in which Mr Herron’s solicitors had dealt with the matter. Their failure to respond to a request from the Privacy Commisioner that they comment on points made by the defendant in the course of the investigation had understandably signalled to the Privacy Commissioner that Mr Herron did not really wish to pursue the matter.

[36]	We turn to consider the information that is available from the Baycorp records themselves.

[37]

We take the period after 17 March 1999 (when the default was listed) and before March 2000 (when Mr Herron found out about it) first. If Mr Herron’s evidence is to be accepted, during this period he did not know that the default was listed. A search of the Baycorp database made on 24 November 2004 shows that in this period only two enquiries were made about him. The first was on 1 November 1999 by a company called ‘CHG Limited’. There was a second enquiry made on 9 February 2000 by an enquirer identified as ‘Legal’. There is no evidence to link either of those searches with any ocassion on which Mr Herron had finance refused, or suffered any adverse consequences of any kind.

[38]

The second period of interest is after Mr Herron became aware of the default notice. The report for 24 November 2004 shows that there were some 15 credit checks made after February 2000 and before 24 November 2004. Aside from some discussion about the check made by Merlot Group Limited on 27 November 2002, again there is no evidence that relates any of these checks to any specific instance on which Mr Herron says he suffered adverse consequences. To give just one example, there is a check shown as having been carried out by WestpacTrust on 1 February 2001 (at that time Mr Herron had known of the default listing for nearly a year). One might have thought that the information that WestpacTrust had carried out a check at that time would have enabled Mr Herron to give some reasonably specific evidence about what was involved, why the check was or might have been carried out, and what consequences he suffered when WestpacTrust found the default listed. But Mr Herron gave no specific evidence of that kind at all.

[39]

There is one last matter to note under this heading. It was Mr Herron’s evidence at the hearing on 15 December 2005 that the default listing had not yet been removed from the Baycorp database. When questioned, however, he said that he was not sure as he had not checked the database for some time. We are bound to say that his uncertainly seemed odd; after all, the default notice lies at the heart of his claim for damages. It is also difficult to imagine that it was not something that had been discussed when the claim against Baycorp was being resolved shortly before the hearing commenced.

[40]

In his final submissions, Mr Stevens drew our attention to the fact that a Baycorp report for as early as 24 November 2004 does not show the default listing. To the contrary, under the heading "Summary" defaults are shown as ‘000’. It therefore seems that the defendant’s listing was removed from the database at some time prior to November 2004. We were not told how, when or why that happened. But no doubt it explains why Mr Hucker made it clear in his closing submissions that Mr Herron was not asking us to make an order requiring the removal of the notice.

Application of Principle 8

[41]	The claim comes under Principle 8 of the Act which is in the following terms:

Accuracy, etc of personal information to be checked before use

An agency that holds personal information shall not use that information without taking such steps (if any) as are, in the circumstances, reasonable to ensure that, having regard to the purpose for which the information is to be used, the information in accurate, up to date, complete, relevant, and not misleading."

[42]	In order to establish that there has been a breach of the Principle, Mr Herron must show that:

[a] The defendant is an agency to which the Act applies;

[b] The defendant held personal information about him;

[c] The defendant used that information (in this case, the alleged use is the disclosure to Baycorp);

[d] Before using the information in that way, the defendant failed to take such steps as were, in the circumstances, reasonable (having regard to the purpose for which the information was to be used) to ensure, that it was accurate, up to date, complete, relevant, and not misleading.

[43]	The defendant is clearly an agency to which the Act applies. Mr Jagose did not suggest otherwise.

[44]

The best evidence as to what information was conveyed by the defendant to Baycorp on or about 17 March 1999 is the entry on Baycorp’s records which we have set out in paragraph [1] above. Mr Jagose submitted, however, that the information is not personal information about Mr Herron. He based his argument on the obiter dicta observations of three judges in the Court of Appeal’s decision in Harder v Proceedings Commissioner [2000] NZCA 129; [2000] 3 NZLR 80. It was his submission that the information at issue in this case has a commercial flavour and context, and that we should regard those factors as taking it outside the definition of ‘personal information’ in s.2 of the Act.

[45]

In addition or in the alternative, he submitted that the information could not be personal information to which Principle 8 applies because it is not information that can be said to have been ‘collected’ by the defendant in any way. He contended that Principle 8 only applies to information that an agency has gone out to gather in in the circumstances where Principle 2 apply. Since the assertion that Mr Herron was in default of his obligations to the defendant was not information of that kind (it having been generated within the defendant as a result of Mr Herron’s failure to pay what he was said to owe the defendant) Mr Jagose submitted there was no room for Principle 8 to apply.

[46]

We acknowledge that there is uncertainty as to exactly what is and what is not ‘personal information’ to which the Act applies. We do not propose to repeat the discussion here in detail, but note that the issue has been raised in several cases including A & Another v G [1999] NZCRT 18; (1999) 5 HRNZ 598; Mitchell v Proceedings Commissioner [1994] NZCRT 3; [1995] NZAR 274; C v ASB Bank [1997] NZCRT 21; (1997) 4 HRNZ 306; Harder v Proceedings Commissioner (Court of Appeal, supra); Boyle v Manurewa RSA Inc (HRRT Decision 16/03, 4 June 2003); CBN v McKenzie Associates (HRRT Decision 48/04; 30 September 2004); and Apostolakis v Sievwrights (HRRT Decision 1/05, 14 February 2005). The cases (in particular the CBN v McKenzie Associates and the Apostolakis decisions) refer to academic commentary and other authorities relevant to the question as well: see also Roth, What is ‘Personal Information’? (2002) 20 NZULR 40

[47]

The Apostolakis decision is presently the subject of an appeal to the High Court, with a result that some further guidance on the issue may soon be available. In the meantime, however, we stand by the view that the definition of ‘personal information’ ought not be given an unnecessarily limited or restricted meaning. In any event, even if one takes a narrow view of what ‘personal information’ might mean under the Act, we struggle to see that information that Mr Herron was in default of an obligation to pay money to the defendant was not personal information about him.

[48]	We consider that the information at issue in this case is personal information about Mr Herron as an identifiable individual. As Mr Stevens submitted, when one looks at the Baycorp report in which the default listing appears, it is clear that the whole report is about Mr Herron.

[49]	Nor do we accept Mr Jagose’s argument that Principle 8 cannot apply if the information did not start with a collection by the agency. We can see no reason to approach the Privacy Principles in that way.

[50]

In our view, the question of what personal information any given agency holds about an individual at any point in time is a question of fact. No doubt some information will be on the agency’s file because it has been collected in a manner in which Principles 1, 2 and/or 3 might have applied. But as the Tribunal observed in Boyle v Manurewa RSA (supra) there are other ways in which an agency can come by personal information, not the least of which when it is generated by processes within the agency itself. We see that as being exactly the situation here.

[51]	For these reasons we have concluded that the information that Mr Herron owed money to the defendant was personal information about him that was held by the defendant, and to which Principle 8 of the Act applied.

[52]

The next element involves the concept of "use". In this part of his argument, Mr Jagose invited us to hold that, since what happened was a disclosure of information by the defendants to Baycorp, the only potentially applicable principle is Principle 11. He submitted that since the claim was not brought under Principle 11 and has not been investigated by the Privacy Commissioner under Principle 11, we cannot deal with it under that Principle, and the claim under Principle 8 must be dismissed. The effect of the argument is to invite us to treat the two principles as being mutually exclusive (at least in the present context).

[53]

Mr Stevens referred us to the Butterworth’s text ‘Privacy Law and Practice’ in which the concepts of disclosure and use are discussed by the learned author. We have no difficulty finding that disclosure is just one of the ways in which information can be ‘used’. We cannot see anything in the Privacy Principles or in the Act to support the suggestion that in any given circumstances it must be either Principle 8 or Principle 11 that applies. To the contrary, we think it is clear that Principle 8 applies whenever personal information is used by an agency and, when that use involves a disclosure of it, then Principle 11 applies as well.

[54]	For these reasons we find that when the defendant conveyed the information about Mr Herron’s default to Baycorp it ‘used’ the information in a way to which Principle 8 applied.

[55]

The final step in establishing a breach of Principle 8 concerns the steps taken by the defendant to check the information for accuracy. As we have said, the only witness who was called for the defendant was Mr Corliss. He had been involved in documenting the transaction at issue, but he was not personally involved in the decision by the defendant to notify Baycorp of the default. All that Mr Corliss was able to tell us was that, in his experience of working at the defendant, the notification of a default to Baycorp was a rare event and that it would have been a significant step for the defendant to take. This is material to our assessment of the circumstances in which the requirement to check for accuracy, etc is to be considered.

[56]	There is no evidence to establish that the defendant did anything at all to check whether the information that it was giving to Baycorp was accurate, up to date, complete, relevant, and not misleading.

[57]	At this point s.2(2) of the Contracts Enforcement Act 1956 becomes relevant. It provides:

"No contract to which this section applies shall be enforceable by action unless the contract or some memorandum or note thereof is in writing and is signed by the party to be charged therewith or by some other person lawfully authorised by him."

[58]	There is no doubt that the section appies to any guarantee given by Mr Herron in this case: see s.2(1)(d) of the Contracts Enforcement Act. Absent some sufficient memorandum or note of the guarantee, signed by Mr Herron, any guarantee given by him to the defendant cannot be enforced.

[59]

The evidence does not allow us to say whether the defendant fully appreciated this difficulty before it listed the default with Baycorp. But the documents do establish that by then it was at least aware that it might not actually have a signed guarantee from Mr Herron. Certainly a few months later in July 1999 it had instructed its collection agency to cease legal action because of the absence of any signed documents. In our assessment, if the defendant had made any realistic evaluation of the circumstances before listing the default, it must have realised that as long as it could not produce a signed document it was highly unlikely that any guarantee given by Mr Herron could ever be enforced.

[60]

Mr Jagose made the point that the effect of s.2(2) is not to invalidate a guarantee, but only to provide that without the necessary evidence an action to enforce it cannot be brought. He also submitted that the section does not make it essential to produce a signed guarantee; if the document is lost or unavailable it is still possible to produce other evidence to show that such a document did once exist, and so allow an action to proceed.

[61]

The second of these possibilities really has no application in this case. We have not seen anything to suggest any guarantee was ever signed by Mr Herron. Mr Corliss told us that the money for the transaction would not have been drawn down until the defendant had received the documents back from the vehicle dealer, and those documents had been checked to ensure that they had been adequately signed. But he could not and did not altogether exclude the possibility that there may have been some error or oversight. More importantly, he was unable to give any direct evidence about what had actually happened in this case. And, whatever the defendant’s expectation may have been at the time, the fact is that Mr Herron had not filled in the section in the application form that referred to the giving of a guarantee. He had crossed it out. Just as it seems clear that the defendant was expecting to get his guarantee, it seems equally clear that Mr Herron did not intend to give it.

[62]	Overall, there is nothing in the evidence to suggest to us that the defendant ever had any realistic prospect of being able to mount an action in the Courts for recovery under a guarantee from Mr Herron on the basis of collateral evidence that such a document had been signed by him.

[63]

Mr Jagose’s first point does not in our view assist either. Of course it is true to say that the Contracts Enforcement Act deals with the enforceability of the contract of guarantee, and not its existence or validity. But we think it is impossible to suggest that the fact that a guarantee may be unenforceable is not material when it comes to listing a default on the Baycorp database. We illustrate the point by considering what the position would be were the defendant to try and sell its book of lease agreements to a third party. It is impossible to suggest that anyone in that position would not be interested to know whether or not the associated guarantees are enforceable as well as valid.

[64]

We think that when the defendant notified Baycorp that Mr Herron was in default of an obligation said to be owed to it, the notification was incomplete, inaccurate and misleading. That is because the underlying ‘obligation’ was not one the defendant could ever realistically have enforced by action in the Courts, and there was nothing in the listing that would have made that clear to those who might read the information when accessing Baycorp’s records for Mr Herron.

[65]	We conclude that there was a breach of Privacy Principle 8 when the defendant notified the default by Mr Herron to Baycorp. The information did not meet the standard required by Principle 8, and there is no evidence that any steps were taken to see that it did.

Interference with privacy?

[66]	That is not, however, the end of the matter.

[67]

The Tribunal has no power to grant any of the remedies referred to in s.85 of the Act unless it is satisfied that there has been an interference with the privacy of the plaintiff. The term ‘interference with privacy’ is defined in s.66 of the Act. For present purposes, it is common ground that in addition to establishing that there has been a breach of a privacy principle it must also be shown that Mr Herron has suffered harm or adverse consequences of one or more of the kinds listed in s.66(1)(b)(i) – (iii) of the Act.

[68]	As a result it is necessary to assess the evidence that Mr Herron gave concerning the consequences that he suffered as a result of the listing of the default notice with Baycorp.

[69]

Insofar as the claimed interference with privacy relies on either or both of ss.66(1)(b)(i) or (ii), Mr Herron’s obligation is to show that there have been losses or adverse effects on his rights. Insofar as the claimed interference with privacy relies on s.66(1)(b)(iii), his evidence needs to cross a threshold of significance – i.e., to establish that he suffered ‘significant’ humiliation, ‘significant’ loss of dignity and/or ‘significant’ injury to his feelings.

[70]

As a matter of intuition and common-sense, we accept that for someone to learn that a creditor such as the defendant has placed a default notice on the Baycorp database in circumstances such as the present might give rise to feelings of frustration and anger. We also accept that a notification of the kind has the potential to make it more difficult for the subject to raise finance, and to cause embarrassment and awkwardness when it comes to having to explain to third parties why the default listing appears on a credit check.

[71]

Mr Herron certainly gave evidence that he suffered adverse consequences as a result of the listing. The difficulty, however, is that his evidence in this regard was in parts obviously overstated, and in other respects it was vague to the point of being almost meaningless. His account of important events changed as he was giving evidence. His evidence was also at odds with the conduct, content and tone of the correspondence in the matter after he did learn of the listing.

[72]

The situation is made more difficult by virtue of the fact that Mr Herron did not at any stage stipulate exactly what he was asking the Tribunal to award him. His claim asked for an award of damages " ... for losses suffered ... as a result of the breaches of his privacy ..." but there was no attempt to itemise the value of the losses he asserted, or to explain what they were in any specific way, or to show how or to what extent they might fall under each of ss.66(1)(b)(i), (ii), and/ or (iii) of the Act.

[73]

Mr Herron’s brief of evidence (which was given as his evidence-in-chief at the hearing) did say something about the value he placed on his credibility as a borrower. However the closest it came to identifying what loss he had suffered was an assertion that "I estimate I have lost the opportunity of making many hundreds of thousands of dollars as a result of my inability to borrow due to the problems with my credit report caused by Spiers Group Limited and Baycorp".

[74]

We note:

[a] The evidence is in such general terms that it is impossible to make much sense of it;

[b] In any event, our power to award damages is no greater than that of the District Court, so a claim for "many hundreds of thousands of dollars" is clearly well beyond us. And yet Mr Hucker made it clear that Mr Herron wanted to proceed in the Tribunal, and was asking the Tribunal to assess damages. The concession that our jurisdiction would do in the circumstances left us with an impression that the claim for losses amounting to "many hundreds of thousands of dollars" was not real, and that (to use a colloquial expression) Mr Herron was just flying a kite to see where it might land;

[c] The situation has to be judged against the fact that the Baycorp credit report for November 2004 includes a list of people and entities who have made inquiries about Mr Herron after March 1999. One would have thought that, armed with that information, Mr Herron might have been able to volunteer some reasonably specific examples of what he was complaining about, relating to actual transactions. But he made no real attempt to do so without being prompted, beyond mentioning a transaction involving the Merlot Group (which evidence has its own difficulties, as we mention in more detail below);

[d] In any event, the cause of the harm claimed was said to be due to the problems with the defendant "and Baycorp". But the claim was pursued to hearing as against the defendant only. That leaves an obvious issue about how we might fairly assess any compensation due from the defendant given the fact of settlement of Mr Herron’s dispute with Baycorp.

[75]

At the hearing and on futher direct examination by Mr Hucker, Mr Herron elaborated a little on the question of what the impact of the default listing had been for him. It was then that he told us that he was "extremely angry" when he found out about the listing by the defendant, and that it " ... basically meant I couldn’t continue my own business, I couldn’t operate and the only way that I was able to borrow money was to actually borrow it through, under my wife’s name which severely resricted my ability to borrow ... I ceased to borrow, from that time onwards". But at least one difficulty with these sweeping assertions is Mr Herron’s own evidence that, at a point some years after the default was listed, he was involved in at least one major commercial project involving an apartment development in central Auckland having a value he estimated to be in the order of $35 million. It will also already be clear from matters we noted when dealing with the facts of the case that there is nothing in the contemporaneous correspondence about the listing (such as it was) that begins to reflect the seriousness of the situation Mr Herron now says that he found himself in. To the contrary, for about seven months after he first found out about the listing there is nothing to suggest that he did anything about it at all.

[76]

At one point Mr Herron said " ... I specifically recall the meeting with Grant (??) of the Merlot Group and he said you’ve got a default with Spiers Group and that’s, that’s the first I recall knowing of it." But the Baynet information showed only one enquiry by Merlot Group which was made on 27 November 2002. Elsewhere in evidence Mr Herron said that he was first aware of the listing in March 2000. If that is correct, then in fact the Merlot enquiry came about 20 months after Mr Herron knew of the default listing. When this was raised with him, Mr Herron said that he ‘may’ have known about the listing before the Merlot enquiry, but suggested that it was the Merlot enquiry that had lead him to do something about the listing. When it was pointed out to him that the enquiry was also about about a year after his lawyers had first written to the defendant about it, Mr Herron said his memory of the matter had ‘let him down’. But this is hardly a peripheral point. The picture painted by his evidence in chief was of a fairly dramatic event that lead to the cessation of his ability to borrow. We are asked to award damages against the defendant inter alia because of the injury to Mr Herron’s feelings when he learned of the default listing. In our assessment the fact that Mr Herron was incapable of remembering when and how he first found out about the listing, and his inability to place the event within anything more accurate than an 18 months to 2 year time frame, significantly undermines the credibility of what he told us.

[77]

There were other features of what Mr Herron told us that cause us to doubt his reliability. As we have said, he asked us to accept that the effect of the listing of the default was to bring his ability to participate in normal commercial life almost to an end. He said he could not borrow funds in his own name thereafter. We have already noted that the contemporaneous correspondence does not support his account. In addition to that, if the situation was really as dire as he suggested, he could have taken steps to deal with it outside the arena of the Privacy Act. He could, for example, have urgently issued declaratory proceedings in the Courts to have the question of whether or not he was liable under the guarantee tested. He could have taken a commercial view and paid out the $10,790 under protest. Even if he decided that he was going to take the Privacy Act route, he could have pursued that with a great deal more vigour than he did. When we asked him about these things Mr Herron seemed to want to convey the impression of someone who did not know what his rights were, and who believed on advice that he had no option but to go through the process of investigation by the Privacy Commissioner. The option of court proceedings, for example, was raised by the Chairperson who pointed out that in the end this was just a dispute between the defendant and him (Mr Herron) about whether he owed money; and that contractual disputes like that get dealt with in the Courts. Mr Herron (who is on his own evidence an experienced businessperson, and one who has clearly been involved in litigation more than once) gave the surprising evidence that he was "unaware" of that.

[78]

The inherent improbability of some of what he told us is also significant. On the evidence he gave us concerning the Merlot project there was, if his account is to be accepted, a commercial opportunity open to him that he conservatively valued at $1.5 million for himself. But he said that because of the default listing, he had to abandon it with nothing more than the seed capital that he had put into the project and the value of one apartment that he was going to be given from the development (Mr Herron valued that at about $250,000). Apart from our concerns about the lack of detailed evidence, and Mr Herron’s failure to discover any of the documents relevant to the transaction at all, what Mr Herron suggested just seems naïve to the point of impossibility. If Mr Herron was capable of recognising a commercial opportunity, seeing it through the process of obtaining resource consents and negotiating for a joint venture that could yield returns in the order of $9 million (with a share to him in the order of $1.5 million), we feel confident he could have worked out a better and more efficient way to have dealt with the default listing than to simply leave it sitting on the Baycorp records.

[79]	We were left with other concerns about aspects of Mr Herron’s evidence as well. It will suffice to say that, for these and other reasons, we found Mr Herron’s evidence regarding the adverse consequences to him arising out of the listing of the default notice by the defendant to be unreliable.

[80]

To the extent that the claim relies on s66(1)(b)(iii), the evidence has not persuaded us that Mr Herron suffered any sufficiently significant loss of dignity, humiliation or injury to feelings to establish an interference with his privacy. With respect to the other elements of s.66(1)(b), the evidence simply lacks any sufficient detail to be cogent.

[81]	Mr Herron has failed to establish that he has suffered harm of any of the kinds listed at s.66(b)(1)(i)-(iii)of the Act. It follows that this second ingredient for a finding of interference with privacy has not been made out.

[82]	The claim must be dismissed.

Issues regarding any remedy

[83]

We think it appropriate to indicate that, even if we had been persuaded that an interference with privacy was established, we would not necessarily have awarded Mr Herron a remedy. Perhaps a declaration that there has been a breach of Principle 8 might have been indicated, but beyond that there were a number of issues that would have had to be dealt with before any award of damages could be made or any other order granted.

[84]

Aside from making an award of damages, Mr Hucker invited us to fashion some other relief to deal with the situation and to prevent any similar occurrence in future. But no specific order was suggested, and we cannot see that there is anything in the case that would justify the making of any restraining orders, or the issuing of any generalised statement about how either the defendant or Baycorp ought conduct themselves in future. Any order concerning Baycorp would in any event face the difficulty that Baycorp was not a party to the hearing.

[85]

The question of damages also raises issues that would have to have been addressed further. For example, while we accept that the question of whether or not the defendant has interfered with Mr Herron’s privacy is different from the question of whether Baycorp might have been liable in respect of the allegations that were advanced against it, it is not clear to us that the settlement of the claims as between Mr Herron and Baycorp is irrelevant to a fair assessment of what it might have been appropriate to award as between the defendant and Mr Herron.

[86]

We do not know what the terms of the settlement between Baycorp and the defendant were, and as Mr Jagose submitted it may not be necessary for us to know anything more than that those claims were settled. It can be argued that Mr Herron must have chosen to accept whatever the terms of that settlement were in lieu of any claim for damages relating to harm suffered as a result of the fact that the default was listed on the Baycorp database. Perhaps that might even be sufficient to operate as a bar against any further award. Even if that is not so, there must surely be a considerable overlap between any harm suffered because the defendant notified Baycorp of the default, and any harm suffered because the listing then remained on the Baycorp database for a time (which was the essential basis of the claim against Baycorp that was settled).

[87]	We do not have any final view of these matters, but we would not have fixed damages against the defendant in this case without inviting further argument about whether and to what extent the terms of the resolution that was reached between Mr Herron and Baycorp ought to be taken into account.

Formal order

[88]	The claim is dismissed.

Costs

[89]	We reserve the question of costs to be dealt with in accordance with the following time-table:

[a] Any application for costs is to be made by way of memorandum, supported if needs be by an affidavit or affidavits to produce any further evidence. The materials in support of any application for costs are to be filed and served within 28 days of the date of this decision;

[b] Any memorandum in reply and supporting materials are to be filed and served within a further 21 days;

[c] Unless any of the parties indicate to the contrary, the Tribunal will then deal with the question of costs on the basis of those materials without any further viva voce hearing.

[90]	If the timetable is impracticable, we will leave it to the Chairperson of the Tribunal to make such other timetable orders as may seem appropriate in order to bring the question of costs to a conclusion.

_______________ _______________ _______________
Mr R D C Hindle Ms T McNaughton Dr I Vodanovich
Chairperson Member Member