PAT NORRIS AGAINST THE NELSON MAIL

Case Number: 2181

Council Meeting: MARCH 2011

Verdict: Not Upheld

Publication: Nelson Mail

Ruling Categories: Balance, Lack Of
Accuracy
Defamation/Damaging To Reputation
Unfair Coverage

Pat Norris operates a company liquidation business in Nelson. He complained that articles in The Nelson Mail about him and his business were inaccurate, unbalanced and unfair. The complaint was not upheld.

The newspaper published seven items about Mr Norris in the period June-October, 2010. The first, on June 22, stated that Mr Norris had suddenly resigned from two liquidation cases "under a cloud" and attempts were being made to remove him from a third. It also reported that he had taken ownership of assets of companies he was liquidating which liquidators were not permitted to do.

Subsequent articles revealed that before coming to Nelson in 2006 he had headed a company that failed, and that when employed by a Hamilton panel beater he had been convicted of using a document for pecuniary advantage. The paper reminded its readers, more than once, that Mr Norris had attracted national attention when he was convicted for having secretly filmed his wife having sex during an affair.

Besides the liquidation business, Norris Management Services, Mr Norris had set up a company called Nelson Merchant Surplus which advertised itself as a dealer in "liquidated commercial office equipment, tools, machinery and other merchandise".

His first wife told the paper he had no professional qualifications and had trained as an apprentice auto electrician. In Kawerau he had done home insulation and dabbled in other work, she said, but she was unaware of him working as a liquidator before he shifted to Nelson.

The newspaper followed up these revelations with reports on Parliament's consideration of a bill to bar people with convictions for dishonesty from providing insolvency services. Nelson MP Nick Smith named Norris Management Services under parliamentary privilege as evidence of the need for legislation.

In October, the paper reported that Mr Norris was laying off staff and taking no more cases. It said the Ministry of Economic Development was investigating him.

The Complaint:
Mr Norris maintained The Nelson Mail had used its position to unfairly discredit his reputation and his company. It had conducted a biased investigation of his past personal and commercial affairs and its reporters had been influenced by third party interests who were not named and who had ulterior and sinister motives that had not been disclosed.

He said the newspaper had highlighted criticisms from directors and shareholders of failed companies. Liquidators primarily served creditors whose rights the newspaper had ignored.

He considered the paper's investigation of his personal background was a breach of privacy and had harmed children and young people by alienating him from his family, particularly his sons. The reports had blurred fact and comment, headlines were inaccurate, he had suffered discrimination and the paper's informants had undisclosed conflicts of interest.

He made specific complaints of inaccuracy that are set out, with the editor's responses, below.

The Editor's Response
The editor said The Nelson Mail stood by all its reports. They were an important exposé. The paper had not unfairly used its power to destroy the complainant's reputation. The reporters were doing their job and as a result of their work the community was better informed of the complainant's activities and reputation.

He pointed out that the complaint, dated October 27, was too late for Press Council consideration of most of the items cited. Told the Council would consider the earlier articles as background to the complaint, the editor replied to each specific claim.

Specific complaints of error in five stories:

(1.) The first story, published on June 22 was headed "Liquidator quits under a cloud," and said Mr Norris had "suddenly resigned from two cases he was working on.....". Mr Norris supplied the Council with his final reports as liquidator in the two cases cited by The Nelson Mail: Seamaster Marine and Nelson Bays Concrete. Each report stated the receiver had resigned having concluded the receivership.

The editor held that the resignations were undisputed and the phrase "under a cloud" was justified by other material in the story.

In view of the liquidation reports the Council found the headline and reference to the resignations in the opening paragraph to be inaccurate and unfair.

However, the June 22 story was out-of-time for the Council’s complaint process, and could be considered only as background to the complaints about stories published within the Council’s time limits. Since the resignations were not mentioned in the later stories the Council was unable to uphold the complaint on that error alone.

The June 22 story extensively quoted an owner of another company Mr Norris was liquidating, Murchison Buses. The woman was concerned that a car she had owned was transferred to Mr Norris' ownership before being onsold to a Richmond company. She also said one of her buses went to a company in which Mr Norris was majority shareholder, and another bus had passed to his neighbour.

Mr Norris supplied the Press Council with the Liquidator's Third Report on Murchison Buses Ltd and a signed certificate of acceptance of the report by a secured creditor, the ANZ National Bank. The report explains the steps taken to sell the assets of Murchison Buses and the dispute that arose with the shareholder quoted in the Nelson Mail. Mr Norris says a copy of his report was supplied to the newspaper.

The Press Council notes the June 22 story quoted Mr Norris in its second paragraph saying the concerns were driven by disgruntled customers and it was common to have those in his line of work. He was able to reinforce the point further down the story when he is quoted saying that people going through liquidations were often suffering emotional turmoil and huge financial strain, and it was logical he would be blamed when they weren't happy with the results.

While the thrust of the story was against him, his point of view was included.

He claimed that the story was unfair in a reference to a further liquidation when it mentioned there was no payout to unsecured creditors. The company's liabilities for tax and wages left no funds that could be paid to unsecured creditors. The editor conceded that the reference would have been "better considered by readers in the context of knowing whether creditors having priority have been paid". The Council found the reference fair in its context. It was intended to reflect the view of a shareholder who saw no payout despite the cost of Mr Norris' liquidation service.

(2) The second story, published July 16 concerned the failure of company he owned with his former wife. He claimed it falsely referred to his creditors being left $150,000 out of pocket. He said the item was also false in claiming he had been convicted of an offence in the Hamilton District Court on May 10, 1999 and fined $1000. And it was wrong, he claimed, in stating he was not a paid-up member of the insolvency business association INSOL.

In reply the editor supplied a copy of the final liquidator's report on Mr Norris' company that lists claims from preferential and unsecured creditors together exceeding $150,000. It stated there were no funds available for distribution to them. Mr Norris contested this to the Council, insisting the liquidator's report was out of date when it was filed and did not take into account payments made by a receiver he had appointed.

He offered a Court of Appeal decision in support of this contention but the Council found its passing reference to such payments did not provide sufficient information about them.

The editor provided the Council with a copy of a record of a conviction against Patrick Dean Norris in the Hamilton District Court on May 10, 1999 on a charge of taking, obtaining or using a document for pecuniary advantage, and a fine of $1000.

He supplied an email from the chairman of Insol confirming Mr Norris was "not a paid member" on July 14. Mr Norris gave the Council a photocopied page of Insol's 2010 directory which did list him as a member. The Council considered the newspaper was entitled to rely on the chairman's word about his "paid up" status.

It found all the contested statements in this story supported by the evidence the editor provided.

(3) A story on August 26 referred to Mr Norris as an unqualified liquidator. Mr Norris maintained this was false since professional qualifications were not required by law. He said he had the support of leading legal firms as most insolvency practitioners did. The story also misquoted him with a reference to "shareholders" when he had said "creditors".

The Council agreed with the editor that the reference to a lack of qualifications was not false, it was established by the newspaper's investigation of the complainant's background.

The editor conceded the error in the quotation but said a later paragraph made it clear Mr Norris was referring to creditors. The Council found it an honest mistake that would have caused only minor confusion in its context.

(4) A story on October 14 referred to "widespread concerns" about Mr Norris' business practices. He challenged the editor to state what those concerns were. The editor cited four business people quoted in the Nelson Mail's stories, a complaint of theft, Mr Norris' dishonesty conviction, the Companies Office and Dr Smith MP.

Mr Norris repeated his complaint at the statement that his Hamilton company had, "collapsed leaving creditors $150,000 out of pocket". The editor provided evidence for that statement in the July 14 story.

(5) The final story, published on October 19, reported that Mr Norris was under investigation by the Ministry of Economic Development. Mr Norris said he was unaware of any such investigation. The editor supplied a copy of an email of October 14 confirming the National Enforcement Office of the MED was investigating Mr Norris.

The Decision
The headline and first paragraph of the June 22 story were inaccurate but the error was not repeated in stories published in the timeframe for the complaint to be considered. If Mr Norris had lodged a complaint with the Press Council about this article, within the time limits for complaining, it would have been upheld on grounds of inaccuracy.

On the questions of fairness and balance, Mr Norris complained that it was unfair to judge the work of a liquidator entirely on the word of owners or directors of failed company since a liquidator was primarily required to serve the interest of creditors.

He complained that the newspaper did not seek the views of creditors and its reports were therefore unbalanced. The Council noted, however, that the first story, and some subsequent reports, included comment from Mr Norris that alluded to this bias.

Careful readers could have noticed that all of the criticism of his work was coming from principals of the companies in liquidation, not from their creditors.

Mr Norris complained not only of lack of balance, fairness and accuracy but that the articles breached Press Council principles of privacy, protection of children, the need to distinguish fact from comment, non-discrimination, avoidance of subterfuge and declarations of conflict of interest.

None of those principles were breached. If Mr Norris' privacy was invaded it was to raise fair questions about his fitness to be offering himself as a company liquidator. His convictions were a matter of record, the incident involving his former wife was national news.

The articles were clearly dealing in fact, they did not directly involve children, they were not guilty of gratuitous discrimination, were not gathered with subterfuge and there is no suggestion the writers had a personal conflict of interest.

The complaint is not upheld.

Press Council members considering this complaint were Barry Paterson (Chairman), Pip Bruce Ferguson, Kate Coughlan, Chris Darlow, Sandy Gill, Penny Harding, Keith Lees, John Roughan, Lynn Scott and Stephen Stewart.

Clive Lind took no part in the consideration of this complaint.