TOWER INSURANCE AGAINST THE PRESS

Case Number: 2561

Council Meeting: JANUARY 2017

Verdict: Not Upheld

Publication: The Press

Ruling Categories: Accuracy
Balance, Lack Of
Unfair Coverage

Overview

[1] Tower Insurance complains about an article published in The Press on December 15, 2016. The complaint is under Principle 1) Accuracy, Fairness and Balance. InThe Press the story was headlined ’Withholding information to cost Tower’; onStuff it was headlined “Tower liable to cough up $1.6million after withholding report from Christchurch architect”.

[2] The article is a court report covering legal action by home-owner Greg Young and his family trust, against their insurer, Tower Insurance, after damage sustained in the Christchurch earthquakes of 2010 and 2011. The Young family made a claim that, as Justice Gendall wrote, suffered from misunderstandings from the start, leading to animosity and distrust.

[3] The story chose to focus on the angle that “Tower Insurance withheld information” from the Youngs. The information withheld was a brief report commissioned by Tower that backed the family’s claim.

[4] At its heart, the case was an argument over whether the damaged house should be repaired (as per Tower’s wishes) or rebuilt (the Young’s wishes). Justice Gendall discussed the events in dispute and, ultimately, considered Tower’s policy was central to the case. In particular, he focused on: whether Tower’s suggested reparations methods were “commonly used”, whether the repair would return the house to “as new condition”, whether the house was “damaged beyond economic repair” and whether Tower owed an implied duty of good faith to its client, and had in fact acted in good faith.

The Complaint

[5] Tower’s complaint to the Press Council was written by its head of Corporate Communications, Nicholas Meseldzija, and its complaint toThe Press, by its CEO Richard Harding. For the purposes of this decision, the Council will treat their letters as a single complaint in the name of the insurer.

[6] Tower says the headlines and story quoted selectively from the ruling and were inaccurate in suggesting that its withholding of the report led to it being found liable to pay the Youngs the $1.62m. In particular, it notes that theStuff headline “implies that the damages award was consequent on the withheld report”. In fact, it was the company’s liability under its policy that lost it the case.

[7] Further, Tower says “the true position” with the brief report is that it was prepared by its agent, Stream; Tower did not know if its existence and provided it to the Youngs as soon as it became aware of it. The withholding of the report is a minor part of the case, mentioned in just three of the ruling’s 191 paragraphs.

[8] Tower also says that if The Press is going to quote the judge saying withholding the report was “a serious breach of the defendant’s obligation of good faith”, it should also record the judge’s other comments in the same paragraph of the judgement: That the report was prepared by Stream, Tower released it as soon as it knew about it, the damages awarded for the breach were “nominal” and that the report made “little difference to the overall outcome” of the case.

[9] The story quoted the plaintiff’s claim that the house “slid at least 100 millimetres down a hillside”, but that claim was ruled to be unfounded.

[10] The complainant says it wrote to The Press “setting out its point of view” and the newspaper compounded its faults when it “refused to publish its letter”. It requestedThe Press print its letter in its entirety on page three and on Stuff, headlined “The Facts of the Young case against Tower”.

[11] Tower complains that it was not given the opportunity to comment or contribute to the story.

[12] Tower’s other complaints include: the final amount awarded was an amount nominated by their witness, not the Young’s; that the final amount awarded was closer to their pre-trial offer than the amount the Youngs were claiming and that the family’s claim was “excessive”; there is no mention of the points of law that the Young family lost on or the criticism they made that the judge found unwarranted ; Tower never disputed the accommodation costs awarded; and Mr Young’s behaviour contributed to the delay and acrimony and his claim included substantial fees to his own company.

The Response

[13] The Press’ editor Joanna Norris, rejected Tower’s complaints, arguing it is “simply a straightforward summary of Justice Gendall’s substantive judgement”. She says a news report of a 62-page judgement is by definition selective, adding “there will always be matters in a judgement of this length upon which one party or another may wish greater emphasis be placed”.

[14] On the withholding of the report by Stream, Norris acknowledges that “Justice Gendall recognises Stream’s involvement, but notes “this does not assist the defendant in this case…”. She says Stream was Tower’s agent and Tower was held accountable by the court and the plaintiffs awarded $5000 as a result.

[15] Norris notes that the withholding of the report was one of the four key findings highlighted by Justice Gendall and formed the basis for the damages awarded. What’s more, the judge said the law in this area is still unfolding and discussed in detail the good faith obligations between insurers and clients. Therefore, the issue is of public interest.

[16] Norris stands by The Press headline, but says while the Stuff headline is “technically accurate” it could mislead readers that the award was due to the report being withheld. Therefore the headline has been changed to read “Tower to pay $1.62 million after dispute with client”.

[17] On the home’s movement, she says that Justice Gendall noted the home did move, settling up to 116mm in the south-eastern corner and laterally to the east by up to 20mm.

[18] The “letter setting out [Tower’s] point of view” was in fact a 1100 word statement.The Press invited Tower to instead write a letter to the editor in line with its letters policy, but Tower has not responded to the offer.

[19] As the story was a straight forward report on court proceedings, neither party was contacted for further comment. That is standard practice.

[20] The story reports as “a straightforward statement of fact” that the court ordered Tower to pay $25,000 in accommodation costs. She does not accept Tower’s interpretation that the story implies that was in dispute. Similarly, she says the story accurately reports the amount awarded to the plaintiffs, Tower’s offers and the amount claimed by the Youngs.

[21] Norris concludes that Tower’s complaint is “wholly self interested”; while the company would have preferred a greater emphasis on its arguments, the story was a fair, accurate and balanced report of the judge’s findings.

The Decision

[22] At the heart of any consideration of this complaint, is that the article is a report on a judge’s ruling. While the story concerns the battle between Mr Young and Tower, it is not for the Council to rule whether this report is a fair, balanced and accurate report of the prolonged battle between the parties. That was the matter before Justice Gendall. The question facing this Council is simply whether the article is a fair, balanced and accurate record of Justice Gendall’s judgment.

[23] It’s important to note that 1) Ultimately the Young family won its suit to have their home rebuilt and 2) court reports are always limited to the facts of a judge’s ruling.

[24] On that second point, it is perfectly normal then for The Press to have not contacted either Tower or the Youngs for comment; that is no cause for complaint. On the letter, Tower does itself no credit with its misleading comment thatThe Press “refused to publish its letter”. It turns out Tower was demanding the printing verbatim of an 1100 word statement on a certain page with a certain headline.The Press has every right to reject such a disproportionate request and acted reasonably offering them the right of reply via a letter to the editor.

[25] A number of Tower’s complaints can be viewed as an attempt to relitigate the argument with the Young family. For example, reporting the offers and claims by both parties and that the court ordered Tower to pay $25,000 in accommodation costs are both simple statements of fact. It would have been pushing the boundaries of court reporting forThe Press to enter into discussion as to whether one claim was “excessive” or whether the final amount awarded was closer to one party or another’s initial position.

[26] Similarly, The Press headline “Withholding information to cost Tower” is a fair statement of fact.Stuff’s headline “Tower liable to cough up $1.6million after withholding report from Christchurch architect” does imply that withholding the report led to Tower losing the case, which is inaccurate. However, asStuff has corrected the headline in accordance with the Council’s requirement to act promptly to correct such errors, we do not uphold on that point.

[27] Journalists are free to choose their own angle from the many offered by a 62-page ruling, so it is not for Tower to approve or disapprove of the headline or tell the newspaper which parts to report. As Norris says, any news story will “by its nature report selectively”.

[28] Withholding the report prompted Justice Gendall to embark on the lengthy discussion [20 pars] on good faith between an insurer and its client, noting an insurer’s obligations have “never been settled in New Zealand” [Par 157]. So that was certainly a matter in the public interest. Further, as Norris points out, withholding the report was one of the four main “results” focused on by Justice Gendall. The story covers the other three, including the core fact that the Youngs won the right to a rebuild in the second paragraph.

[29] The Council also notes that withholding the report was the first “event” addressed by Justice Gendall in his judgement [at par 13]; was the reason for the damages awarded to the plaintiff; and, aside from the long discussion on good faith, was referred to in at least seven pars, not three as contended.

[30] However, it was not the most substantive part of the ruling nor at the core of the case. As Justice Gendall wrote, it made “little difference to the overall outcome” and soThe Press took some risk going with this angle.


[31] In its coverage of the report being withheld, The Press then failed to say that it was Tower’s agent, Stream, which wrote and “intentionally withheld the report” and that Tower released it to the Youngs as soon as it was aware of its existence.

[32] While Tower’s frustration at the exclusion of these details is understandable andThe Press could have done better, Tower is unquestionably responsible for their agent. The court is clear that Tower is “bound by Stream’s actions”. The judge awarded nominal damages against Tower for “the defendant’s failure to disclose this document”, clearly laying responsibility at Tower’s door.

[33] Similarly, it’s understandable that Tower would complain about The Press’ decision to quote the plaintiff’s claim about house movement of 100mm down the hillside to the east rather than the “agreed” movements discussed later in the ruling. The various measurements Justice Gendall reports are in the range of 10mm-116mm, but the 116mm movement (the closest number to the “at least 100mm” quoted) is in fact in the “south-eastern corner” of the house. But while the reporting is sloppy shorthand and seems confused about where the settling occurred, it is not sufficient to consider the story unfair or inaccurate.

[34] The complaint against Principle 1 is not upheld.

Press Council members considering the complaint were Sir John Hansen, Liz Brown, Peter Fa’afiu, Jenny Farrell, Sandy Gill, John Roughan, Marie Shroff, Vernon Small, Mark Stevens and Tim Watkin.

Ruth Buddicom took no part in the consideration of this complaint.

Vernon Small stood down to ensure a public member majority.