Media vs media in defamation fight

Newsroom has asked the district court to end a defamation action by business site NBR over a news story discussing NBR and ex National MP Steven Joyce.

Lawyers for two media companies went toe-to-toe in court today over whether a defamation action brought by NBR against Newsroom should be struck out.

NBR is suing Newsroom over a story from March 2018 that quoted what a lawyer for former MP Steven Joyce said about the NBR in relation to a legal complaint Joyce was pursuing against the business website. That, separate, case was heard earlier this week in the High Court at Auckland and judgment has been reserved.

In the Auckland District Court on Thursday, Newsroom's lawyer, Andy Glenie, asked Judge Nicola Mathers to bring to an end what he called a "vain and wasteful" action as NBR had no documentary evidence to prove any financial loss from that Newsroom story. Individuals must show harm to reputation, but companies must demonstrate financial loss in actions under the Defamation Act.

NBR's counsel, Phil Ahern, said while NBR could not prove actual financial loss, there was evidence from its publisher Todd Scott from which the court could infer there had been loss and this evidence should be allowed to go to trial to be tested.

The story quoted a letter Joyce's lawyers had sent NBR in which they alleged NBR had "knowingly and willingly twisted the knife" by publishing a column about Joyce despite his prior objections.

NBR wants a declaration against Newsroom that the story was defamatory and for Newsroom to pay its legal costs. It is not seeking financial damages.

Glenie said NBR had destroyed any documentary evidence that could prove any loss of subscribers was as a result of the story. It had provided "not one email, not one social media post, not one phone call where any single subscriber says 'I'm leaving because of the Newsroom article'".

"If any such communication existed, NBR would have preserved it, discovered it [provided it to Newsroom's lawyers during the legal process], and we would have it here today.

"There is only one inference to be drawn: that any such communications do not prove any loss."

In October, NBR added to its claim of subscriber loss the fact it had also suffered due to the cost of executive and consultant time spent dealing with the effects of the Newsroom story.

Glenie said NBR relied on assertions from Scott that his business had suffered loss through having to use executive time, including his own, and take public relations and human resources advice to mitigate damage arising from Newsroom's story.

"Mr Scott asserts he took steps. He does not say when. He does not say who he spoke to. He does not say how he communicated with people. He does not annex or discover any communications to support this claim. 

"There's no invoice from a PR or HR [firm], there's no advice from either of them. There is just ... assertion."

When Newsroom had sought such documentation after NBR's late addition of such loss as an effect of the publication, Scott had signed an affidavit which, in answer to a list of categories of documents that he could provide had said "Nil. Nil. Nil. Nil and Nil."

Glenie said Newsroom had a right under the freedom of expression provision of the Bill of Rights Act to publish the story, including the lawyer's comment, and had an obligation to do so in the public interest as a prominent and powerful person was involved.

"Even if NBR could prove it suffered pecuniary loss on any of these bases, it cannot prove the Newsroom article was the cause.

"There was lots going on in NBR's world at the time. They had just published the [original, Matthew Hooton-authored] polarising column. Hooton had just left NBR. Joyce had threatened legal action. There had been two other publications of the same article by BusinessDesk and Scoop. On top of all of that we have the colour of Mr Scott's tweets," Glenie said.  

"All of which could have contributed to any loss that NBR is able to prove."

The lawyer said the NBR defamation action was trivial and pointless, suing over wording that it was difficult to read as even theoretically defamatory. "There is no sting in those passages. There's not enough to justify even the expense that has been incurred in getting this proceeding to this point."

If Judge Mathers allowed the case to go on, it would likely be a costly and potentially drawn out action similar to those of former Conservative Party leader Colin Craig. "Defamation cases can get out of hand. There's a real concern that this could turn into another version of that."

Glenie said the lack of evidence of any harm to NBR underlined the triviality of its claim. It could not succeed as companies had to be able to show pecuniary loss, which NBR had not, and, because it claimed no longer to have any documents on the matter, could not. It would be unfair for Newsroom for the case to be tried when no actual evidence now existed.

"You cannot have a fair trial when the other side has shredded the documents."

He told the judge: "Newsroom filed this application in order to bring an end to the madness."

But Ahern, for NBR, disputed the basis for Newsroom's application for summary judgment and for the case to be struck out.

The defamation was serious, there was enough evidence of impact on NBR from the Newsroom publication for the court to infer pecuniary loss and NBR deserved to be able to have its facts tested before a judge.

"You could not make a more scathing allegation against the news media than to say they deliberately published false news with the intention of harming someone," he said, adding Newsroom had made no attempt to establish the veracity of the claims made by the lawyer quoted in the BusinessDesk story it published.

"The defendant made no attempt to verify but chose to publish."

Ahern said NBR was a national publication of longstanding integrity "and when you publish something that says it is publishing fake news, clearly that goes to the heart of what it is".

NBR could not prove it had suffered financial loss. "Yes, they cannot prove actual loss but there is significant evidence that there was loss suffered and once you combine that evidence with the case law, it could not possibly be said that there is no chance of this case succeeding."

While Glenie had quoted from sworn answers from NBR that its subscriber numbers were 5134 on March 2, 2018, rising to 5172 on March 9, with the Newsroom article published in between on March 6, and said "three days after publication, the subscriber numbers had gone up", Ahern said there had been a "thumping churn" a week later.

"The plaintiff says that following publication the plaintiff lost 49 subscribers. I accept the fact there will be criticisms about that, but that is a matter that needs to be tested at trial. It cannot be said that what Mr Scott has given in his evidence is completely untenable around the loss of subscribers. There's a direct dispute between the parties on that point."

He put forward cases in which courts had commented that it was possible for a company to succeed in defamation cases without being able to prove actual financial loss - and that courts should not shy away from inferring financial losses from the cases before them.

Ahern said of the NBR action: "The court would need to draw the inference that the loss had been in relation to the subscriber issue."

While Glenie claimed NBR could claim vindication if it won in its High Court case against Joyce, Ahern said the cases were totally separate. "The only place my client can get vindication is in these proceedings."

Ahern conceded NBR had added the alleged financial loss arising from Scott's executive time and deployment of staff to mitigate damage from the Newsroom story late in the piece after becoming aware of a judge's comments in another case. "The relevance was not known until that came to light," he said. "He is well entitled to draw that observation. Yes, we identified the claim could be strengthened by that evidence."

Judge Mathers reserved her decision.

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