CAANZ continues to fudge outcome of defamation case

By Jenny Ruth

Chartered Accountants Australia and New Zealand (CAANZ) says it’s a very different organisation now but it continues to fudge the outcome of the recent defamation case against its New Zealand arm.

It also says it has “every confidence” in New Zealand Country head Kirsten Patterson, despite statements she had made having been judged defamatory and her conduct criticised.

CAANZ was created by the merger of the New Zealand Institute of Chartered Accountants (NZICA) and its Australian counterpart.

CPA Australia had sued NZICA for defamation and breaches of the Fair Trading Act and, technically, CPA lost the case and was therefore liable for some of NZICA’s costs.

In a statement announcing CAANZ has been awarded $124,058 in costs, chief executive Lee White says Justice Robert Dobson of the High Court “found that the statements complained of had not crossed the required threshold of seriousness.”

Mr White says Ms Patterson, who was NZICA’s chief operating officer at the time she made the statements complained about, has “apologised for the inaccuracy of some of the statements made.”

As a responsible employer, CAANZ “judges the performance of Kirsten Patterson on the positive contribution she has made leading the organisation through its transition,” Mr White says.

“These events occurred prior to the amalgamation and the appointment of Kirsten Patterson as NZ Country head of the new organisation in November 2013.”

The statement didn’t mention that Ms Patterson was employed by NZICA during the events complained of or her key role during the trial.

“We acknowledge Justice Dobson’s comments regarding the settlement,” he says.

CAANZ had tried to settle the dispute before it got to court because “we did not believe it was in the interests of either party, the accounting profession or our members,” he says.

“We had genuine intention to settle the case before it got to court.”

What the judge actually said

But what Justice Dobson actually said is quite different from how Mr White has represented his findings.

“I found that the plaintiff, CPA, had made out defamatory utterances by an officer of the defendant, NZICA,” he says in his judgment on costs.

But because CPA is a company with no feelings to hurt, and it was unable to establish it had lost money as a result of those “defamatory utterances,” CPA lost the case.

For the same reasons, its complaint of breaches of the Fair Trading Act also failed.

“Numerous affirmative defences were pleaded to the defamation cause of action and, in some cases by narrow margins, I found that those defences would not have availed NZICA,” Justice Dobson says.

As for trying to settle the dispute, “I consider CPA’s rejection of the offer was reasonable,” the judge says.

The wording of the settlement statement NZICA had proposed didn’t acknowledge there had been any defamatory statements.

“It was established at trial that aspects of the utterances on behalf of NZICA were defamatory,” the judge says.

“I am also satisfied that NZICA had intended to disparage CPA” and that was inconsistent with the terms of NZICA’s proposed settlement.

Justice Dobson says NZICA “contributed unnecessarily to the time or expense incurred by failing to admit facts subsequently established.”

NZICA had denied Ms Patterson had made the statements complained about at a conference until a recording became available shortly before the trial.

NZICA gets just over half it sought

NZICA had asked for about $247,000 in costs, including $62,566.02 – both parties had agreed on the latter amount.

Justice Dobson awarded the $62,566.02 already agreed on to NZICA plus another $61,492.50, which he said was 75 per cent of what NZICA might otherwise have been awarded.

CPA’s chief executive, Alex Malley, says the court accepted his organisation’s submissions that the amount awarded “should be reduced to reflect NZICA’s conduct prior to and during the trial.”

Mr Malley says the rival accounting organisation’s “behaviours are now in the public domain.”

He says his organisation will “always move decisively to defend the integrity of the CPA designation, and I will have much more to say about these matters in the near future.”

Justice Dobson’s judgment deciding the substantive case included some pungent comments about NZICA, and about Ms Patterson in particular.

His judgment is peppered with comments such as that Ms Patterson’s statements could be regarded as “inappropriate and unprofessional,” showed “recklessness as to truth” and were more likely to reflect badly on NZICA than on CPA.

Ms Patterson had said under cross-examination that she thought CPA’s country manager for New Zealand, David Jenkins had been lying during his evidence.

But Justice Dobson said he accepted Mr Jenkins’ evidence, which he described as “entirely credible.”

Comments by Alex Malley, chief executive

The High Court found that we proved NZICA had breached provisions of the Fair Trading Act (Sections 9 and 11) and we had “made out defamatory utterances" by an officer of NZICA.

While a declaration was not made on the basis we were unable to establish pecuniary loss, the High Court has accepted our submissions in respect of NZICA’s costs application that the amount should be reduced to reflect NZICA’s conduct prior to and during the trial.

NZICA's behaviours are now in the public domain and the substantially reduced costs awarded are reflective of those behaviours.   

While $247,000 was sought by NZICA, only $61,492.50 plus disbursements has been awarded.

In his substantive judgment, Justice Dobson concluded that CPA Australia's "complaints were understandable”.   

We will always move decisively to defend the integrity of the CPA designation, and I will have much more to say about these matters in the near future. 

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