The former head of a waste management company has had his defamation claim knocked back a second time following a Court of Appeal dismissal.

Grahame Christian, founder and former managing director of Smart Environmental, brought
defamation proceedings against Murray Bain, a Smart competitor and the key source for two articles published by the New Zealand Herald in 2019. The front-page news article and longer feature article focused on Smart’s provision of services to the Thames Coromandel District Council (TCDC).

In November 2019 Christian, Herald publisher NZME and freelance writer Mike Valintine reached a confidential, satisfactory settlement.

Christian did not settle with Bain, who then applied to the High Court to strike out the claim against him.

In a judgment released last December, Judge Tracey Walker concluded the articles contained imputations defamatory of Christian and that Bain was partly responsible for them as a joint tortfeasor.

But because NZME and Valintine had made reasonable efforts to verify the allegations and had offered Smart an opportunity to comment on them, Bain succeeded in making out the defence of responsible communication on a matter of public interest.

Judge Walker later ordered Christian to pay a substantial sum in costs, “including an uplift for some costs elements due in part to challenges to Bain’s evidence and the complexity of the case”. Christian, who was Smart’s main shareholder until mid-2017 and managing director until shortly before publication of the articles, appealed the liability and costs judgments.

While he accepted that the publications concerned matters of public interest, he argued that far from acting responsibly, Bain acted from “base motives” and not enough was done to ensure the publications were accurate.

In turn, Bain, who is a competitor of Smart through his company Coastal Bins and a previous Smart employee, argued the judge was wrong to find that the articles were defamatory and wrong to find him responsible for them.

The Court of Appeal released its decision last week dismissing both appeals and awarding costs against Christian.

A key issue in the case was the efforts taken to verify data used to support the published allegations.

Christian’s lawyer argued the articles were misleading by omission of important information and therefore there could be no public interest in a misleading publication.

However, the Court of Appeal judges rejected that argument.

“We do not accept the premise of these submissions, which we see as an attempt to circumscribe the defence of responsible communication on a matter of public interest by showing that the defamatory imputations were false by omission. The point of the defence is that the public interest may justify a publication shown to have been inaccurate, provided reasonable steps were taken to verify it.

“In this case the subject matter concerned the effective workings of local government and the handling of refuse and recycling. The public interest in these matters was clear and very strong.”

Christian’s lawyer also argued that Bain was motivated by malice, to which the Court of Appeal judges also did not agree.

“We have accepted that the fact that Mr Bain had an axe to grind affected verification by NZME and Mr Valintine. It was necessary to verify his claims. We agree with the Judge that Mr Valintine recognised this and went to significant effort to seek corroboration from a variety of sources.”

The Court of Appeal judges also noted that NZME was kept informed of the efforts being made to verify the story and was made aware that there was “bad blood” between Bain and Christian.

In the High Court “[Judge Walker] found that NZME took legal advice. NZME also claimed to have a rigorous process for checking stories submitted by freelance journalists. The Judge found that NZME did not follow the process on this occasion. However, she also found that Mr Bain was given to understand that there would be an independent checking process which included legal advice.”

The Court of Appeal concluded that Justice Walker was right that the defence of responsible communication on a matter of public interest was made out.

“The allegations were serious, but the subject matter was of real public importance. All the defamatory imputations related to the subject matter. There was no urgency to publish but Mr Valintine did not act in haste. Rather, he went to considerable effort to corroborate Mr Bain’s claims over a period of months. Some of the sources he relied upon were independent of Mr Bain and others he reasonably found reliable. The allegations were disclosed to Mr Christian, who was given a reasonable opportunity to comment in detail.

“This conclusion should not come as a surprise. The allegations stem from Smart’s unilateral decision to commence tolling in April 2018 without, as Mr Christian now admits, first securing the consent of the TCDC. The single most important detail in the verification process was the TCDC’s confirmation that no tolling agreement was in place. It led inevitably to questions about how Smart was able to tip commercial waste at refuse transfer stations without paying the Gate Rate.”

Christian was ordered to pay costs for a complex appeal on a band A basis and costs relating to the High Court trial of $145,670.50 plus disbursements in respect of the proceeding and trial. That was offset by an award of $13,384 to Christian in respect of certain interlocutory applications, the costs of which had been reserved pending trial.