CALIBRE ASSET SERVICES LTD AND MONEY MANAGERS LTD AGAINST THE DOMINION POST

Case Number: 2042

Council Meeting: AUGUST 2008

Verdict: Upheld in Part

Publication: The Dominion Post

Ruling Categories: Accuracy
Misleading

Background
On Saturday, February 23, The Dominion Post published an article headlined “Out of Step”. The article concerned the dealings of unit trusts called First Step, enterprises associated with Money Managers, a business founded and substantially owned by Doug Somers-Edgar. The report also referred to First Steps trustee, Calibre Asset Services. The article quoted David Peach, owner of a public relations company, who the article stated represented Mr Somers-Edgar.
The article further quoted a press statement released by Mr Peach.
The report also referred to a legal action brought by Mr Somers-Edgar against a financial adviser whose website had been critical of First Step and said that the action had been discontinued.

One of the three complaints is upheld; two are not upheld.

The Complaint
In a letter to The Dominion Post dated March 7 the lawyers for Money Managers complained about several aspects of the article. On March 12 lawyers for the newspaper responded to the complaints, broadly rejecting them. Following this response Money Managers’ lawyers lodged a complaint with the Press Council on May 1 pursuing three of their original objections to the article.
They complained on the grounds of inaccuracy in that Mr Peach did not represent Mr Somers-Edgar or Money Managers but was a spokesman for First Steps’ asset manager, Matrix Funding Group Limited. It said this had been specifically pointed out to the reporter.
The complainants said it was vital for PR companies’ clients to be correctly identified and that attributing statements to the PR companies rather than to the clients compromised the PR companies’ independence. In this case First Step, Money Managers, Calibre and Matrix Funding Group all performed distinct roles.
The second complaint referred to the report that the legal action brought by Money Managers and Mr Somers-Edgar against a critic had been discontinued. The proceedings were discontinued only because a settlement had been reached in the action. This reference was a breach of the Council’s principles on accuracy and the failure by the newspaper to correct this after it had been pointed out was a breach of the council’s principles on the publication of corrections.
The third complaint objected on the grounds of accuracy to the newspaper treating a press statement issued by Mr Peach on behalf of the asset manager of the First Step trusts as if it was a statement by Mr Peach rather than by his clients.
The complainants submitted notes taken by Mr Peach with an explanation of his conversation with the reporter. This stated he had told the reporter he did not work for Mr Somers-Edgar or Money Managers but for Matrix. The complainants also submitted an affidavit from Joseph Peart, principal lecturer in communication studies at AUT, stating his opinion that the media convention involving PR companies is that statements of the kind referred to in the article are not attributed to the PR company but to the client.

The Response
In a letter to Money Managers lawyers, dated March 12, the lawyers for The Dominion Post responded to the complaint that Mr Peach did not represent Mr Somers-Edgar. They pointed out that the reporter had been directed to Mr Peach by Mr Somers-Edgar and he was entitled to conclude Mr Peach represented both Mr Somers-Edgar and the companies with which he is involved.
On the matter of the discontinued legal proceedings this was a statement of fact and they did not agree the reference to it was misleading.
Concerning the attribution of the disputed statement the reporter was entitled to say Mr Peach was the author. It was issued by Peach Communications Limited and Mr Peach’s name and no other was on the document.

Further comment
Following the lodging of the complaints with the Press Council The Dominion Post, in a letter dated May 27, provided additional material to the Council. It included transcripts from a recorded telephone conversation between the reporter and Mr Peach and a letter from Hugh Rennie QC who had acted for the defendant in the discontinued case instituted by Money Managers and Mr Somers-Edgar. Mr Rennie said that after negotiations a correction was published on the defendants’ website withdrawing any suggestion that Money Managers and Mr Somers-Edgar had acted in a dishonest way. Following some delay after this publication the proceedings were discontinued.
The newspaper disputed Mr Peach’s account of the conversation between him and the reporter. It said Mr Somers-Edgar had identified Mr Peach as the sole spokesperson for First Step which, it said, was essentially a group of funds and companies with which Mr Somers-Edgar was involved.
Its report that the defamation case had been discontinued was correct. There was no false impression conveyed that the case had been withdrawn because Mr Somers-Edgar and Money Managers had concluded their claims were without merit.
On the attribution of a media statement to Mr Peach the newspaper contended there was nothing unusual in doing so. The Dominion Post and other newspapers regularly named PR people speaking on behalf of companies. The newspaper supplied the Council with several examples of this practice.
On June 18 the lawyers for the complaints responded to the newspaper’s reply. They said the transcript of the conversation had been raised with Mr Peach who said it was not complete and omitted some earlier parts, including his making it clear he did not work for Mr Somers-Edgar or Money Managers Limited.
The statement from Mr Rennie was consistent with the complaint. The essence of the complaint was that it was misleading simply to state the proceedings had been discontinued when there was a settlement that had required a correction to be published. The clarification from Mr Rennie substantiated the need for The Dominion Post to have published its own correction.
The examples of public relations practice provided by The Dominion Post had correctly identified those on whose behalf the spokesmen were speaking. This had not been the case in the article that was the subject of the complaint.
In its final response to the Council on July 3 The Dominion Post took strong issue with the claim that vital parts of the transcript of the conversation had been omitted. It omitted only the first 30 or 60 seconds when the reporter introduced himself. The newspaper disputed that Mr Peach had stated he did not work for Mr Somers-Edgar and challenged other parts of Mr Peach’s account of the conversation.

Discussion
The Council has consistently taken the view it is not in a position to rule on disputed matters of fact and that is the situation in this case in which the accounts of the conversation between the reporter and Mr Peach are at such odds.
It is, however, not disputed that Mr Somers-Edgar referred the reporter to Mr Peach to discuss the material of the article. In Mr Peach’s own account of the conversations it is clear that he offered to provide background on the matters under review and “if he [the reporter] had any more detail and therefore specific questions around that detail I could get answers and come back to him." Given the close links between the companies involved it was not unreasonable for the conclusion to be drawn that Mr Peach did have some standing in these matters. The claim that he could only speak for his client, Matrix, is to draw an unrealistic separation between the bodies involved, despite their differing business functions.
The practice of naming public relations consultants is not unusual and does not compromise their independence. The question is whether readers are misled by such attribution and it is difficult to see that The Dominion Post readers were misled into any lack of clarity that Mr Peach’s statement was issued on behalf of a client. It might have been preferable for that specific client to be identified but there is no reason to believe the reader would be unaware he was speaking for Money Managers or an associated body.
On the matter of the discontinued defamation action there is no challenging the fact that it was discontinued. The issue is whether the reader might be reasonably expected to conclude this was because the claim had no merit. The newspaper disputes this. In the context of a critical article, however, there is an implicit assumption of fault that would suggest this was the case and the omission of the detail that there had been a correction published on the website does tend to mislead. A simple correction would have satisfied this complaint.

The Decision.
The first and third complaints are not upheld. There are different accounts of whether or not Mr Peach was specific in his identification of his clients but the reader was not misled, nor were Money Managers or Calibre Asset Services connected with matters to which they had absolutely no connection. The report was neither unfair nor inaccurate on this point.
The naming of Mr Peach as the source of a media statement was neither unfair nor inaccurate.
The second complaint is upheld. The failure to point out, even briefly, the circumstances of the withdrawal of the legal action was misleading. It could, and should, have been corrected.

Press Council members considering this complaint were Barry Paterson (Chairman), Aroha Beck, Ruth Buddicom, Kate Coughlan, John Gardner, Penny Harding, Keith Lees, Denis McLean, Alan Samson and Lynn Scott.
Clive Lind took no part in the consideration of this complaint.