Judges should limit juries on defamation damages

Trial judges should give juries limits on how much to award in defamation damages, the Court of Appeal has ruled after knocking out a jury decision to make politician Colin Craig pay more than $1.2 million to political lobbyist Jordan Williams.

It was New Zealand's highest defamation award by far.

The court confirmed Justice Sarah Katz' decision at the end of that case to set aside the award, finding the jury to have inflated the amount because of its feelings about Craig's alleged sexual harassment of his former media adviser and the way he conducted his defence against Williams. 

It said the jury's award of the maximum $200,000 to Williams for 'punitive' damages was also wrong.

The appeal judges said the amount of damages awarded should reflect the character and reputation of the person defamed and, given some of Williams' behaviour which emerged in evidence at the trial, that also should have led the jury to a lower sum.

"The law must be concerned with the reputation he deserved and compensate accordingly."

And the Court of Appeal said the judge should have set parameters for the jury on how much it could award in damages. This went against some previous indications from the appeal court but was necessary in a case like this.

Both men had appealed Justice Katz' decisions - Williams to overturn an order that the whole matter be retried, and in a cross appeal Craig wanted the jury's verdict that he had defamed Williams overturned.

The Court of Appeal decided only the issue of the amount of damages should be retried, not the whole defamation claim, having confirmed the $1 million plus award was untenable and dismissed Craig's cross-appeal that the jury had got the main findings on defamation wrong.

Williams claimed Craig, who led the Conservative Party at the 2014 election, had defamed him in a leaflet the politician produced. It claimed Williams had deliberately set out to destroy Craig by stimulating and spreading allegations that Craig had sexually harassed his former media adviser.

The case revealed Craig had sent the press secretary, Rachel McGregor, unsolicited cards and notes of a deeply personal nature, containing romantic poetry and compliments about her physical attributes, that he had told her he dreamed of sleeping on her legs and stopped payments to her when his interest was not reciprocated. Craig denied improriety, saying it was an emotionally close mutual relationship which had been kept like brother and sister.

Williams made these allegations known to members of the Conservative Party, then became romantically involved with McGregor himself. Justice Katz had found Williams' version of the sexual harassment was more serious than McGregor's own view in evidence at the trial.

Williams wrote a post under a nom-de-plume which ran on the Whaleoil website setting out his allegations against Craig. Craig resigned but then produced at the cost of $250,000 a leaflet he distributed to 1.6 million homes claiming Williams was "a member of the Dirty Politics brigade" and had organised that there would be a "media agenda at work against Craig".

The Court of Appeal says the trial at which Williams sued for defamation involved "inexcusable... evidential hyperbole".

"Much of the evidence was of questionable relevance to the real issues. Indeed, some of it was plainly inadmissible. We refer to Mr Williams’ gratuitous insults about Mr Craig’s character, which had no place in a trial of this nature. For example, he called Mr Craig a 'prick'. On the other side, there was the evidence of left-wing blogger Martyn Bradbury, called by Mr Craig. During cross-examination by Mr McKnight, Mr Bradbury described Mr Williams as a 'venomous spider', 'political sadist' and a 'hyena'."

The jury's decision to impose such high damages against Craig was in part a result of Craig's conduct of his defence, the appeal judges found.

"Mr Craig mounted a very aggressive counter-offensive against Mr Williams. He played for high stakes and lost. It is common ground that the jury’s verdict reflected its wholesale rejection of Mr Craig’s defences and of his credibility. It was satisfied that his statements were predominantly motivated by malice towards Mr Williams so as to deprive himself of any legal privilege. The damages award also reflects the jury’s dissatisfaction with Mr Craig’s use of the trial process, not only to deny Mr Williams’ core allegation of sexual harassment but also to perpetuate an unrelated, and thus diversionary, attack on Mr Williams’ general character and reputation."

The Court of Appeal backed Justice Katz finding the jury was wrong to impose the highest damages award ever because it had double-counted damages claimed under two separate claims by Williams, that it ignored the fact some of what Williams claimed to be defamation of him was actually true and that Craig's leaflet and statements about Williams were in response to an attack by Williams on him and his character.

But it said the judge ought to have intervened earlier, before the decision.

"In our view, the Judge should also have directed the jury on the appropriate financial parameters of an award. We appreciate this statement may run counter to the traditional restraint cautioned in earlier cases. However, modern authorities allow a judge to give more specific guidance.

"There is an apparent recognition of the weight now given to relativity between awards and the risk of excess or aberrance.

"Juries deserve a compass with reference points fixed by the judge following his or her comparative analysis with other awards. There is little utility in leaving a jury free to award the maximum claim where the inevitable result will be that it is set aside," it said.

"Awards which are wildly disproportionate to any damage possibly suffered by a plaintiff give rise to serious and justified criticisms about the relevant court’s procedures."

The appeal judges say Williams' claim set the scene. "Mr Williams must take primary responsibility for the jury’s delivery of an unsustainable award. His claim was pitched at a plainly extravagant level."

They found the jury should have been told a maximum of $250,000 could be awarded for the general damages and just $10,000 for punitive damages.

There will be no retrial of the claim of defamation, just the amount awarded. The Court of Appeal said: "In our judgment, a retrial on damages alone will meet the ends of justice. It would be wrong to allow Mr Craig to re-litigate issues which have been exhaustively traversed in evidence and argument and decisively determined. His objective of using a retrial on liability to secure a different verdict on the same facts would call the proper administration of justice into question. We add that the proceeding has already exhausted a substantial amount of judicial resources."

The appellate judges said: "It may fairly be observed that the trial process exposed serious flaws in the characters of both protagonists."

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