Case Number: 945

Council Meeting: SEPTEMBER 2003

Verdict: Upheld in Part

Publication: The Independent

Ruling Categories: Headlines and Captions

Watercare Services Ltd complained about an article published in The Independent on April 23 this year. The article was about a claim brought against Watercare and the Papakura District Council by commercial tomato growers Mr and Mrs John Hamilton regarding damage to the Hamiltons’ tomatoes. The Hamiltons’ case went through hearings at the High Court, Court of Appeal and the Privy Council, and at each level the courts found against the Hamiltons. The Press Council has upheld the complaint on the headline and the wording about the split decision.

The article headlined “Watercare threatens to bankrupt tomato grower” was about a difficult case dealt with at three levels of courts, and on the whole this report on the causes of action and complex findings of the court of first instance and the appellate courts was handled very well. The article also introduced the effect of the costs of $700,000 awarded against the Papakura tomato grower, and quoted comments from Penny Bright, a spokeswoman for the Water Pressure Group which the newspaper described as Hamiltons’ supporters.

In a letter to the editor, Watercare Services spokesman Owen Gill complained that the article was wrong on three grounds:
1. In contrast to the headline, Watercare had not threatened to bankrupt the Hamiltons.
2. While the Independent article said the Privy Council was split 3:2 on the whole of its decision dismissing the Hamilton appeal, in fact the Privy Council was unanimous in dismissing all of the Hamiltons’ claims against Watercare. The split related only to the claim against the Papakura District Council on an alleged breach of the Sale of Goods Act. The majority was against the appellants.
3. The Independent repeats what Watercare says was misleading information about the cause of damage to the tomatoes which was never established.

Watercare’s letter was acknowledged as received by the article’s author Jenni McManus who commented in a fax to Watercare that the letter was misleading. The letter was not published in the newspaper nor did the editor reply to the complaints. Subsequently, Watercare’s lawyers wrote to The Independent, repeating the complaints about the article and seeking a published correction. A Chalkie column then appeared in The Independent on June 4 headed “Publish my propaganda or I’ll, I’ll, I’ll…” The column vigorously stated The Independent’s view of Watercare’s complaints and demands, and canvassed aspects of the case again. Watercare complained to the Press Council.

In response to Watercare’s complaint, the managing editor defended the article and the headline, saying he believed the headline was true at the time the article was published and he was not persuaded Watercare would not pursue its claims against the Hamiltons.

He did not accept Watercare’s claim that The Independent suggested the Privy Council had divided 3:2 on the whole of its decision and not just on the Sales Of Goods Act claim against Papakura District Council. He wrote that “the article complained of said: ‘Unfortunately for the Hamiltons, factual causation was one of the key issues on which the High Court, Court of Appeal and the Privy Council found against them.’ The following para clearly ties the Privy Council’s split decision to the Sale of Goods Act issue - not causation.”

The following paragraph said: “In a 3:2 split decision - unusual for a Privy Council ruling which is usually unanimous - the majority decision, given by NZ Court of Appeal judge Sir Kenneth Keith, also ruled against the Hamiltons’ claims of negligence, nuisance and a breach of the Sale of Goods Act.”

But this paragraph does not make clear the Privy Council 3:2 majority decision applied only to the alleged breach of the Sale of Goods Act. The dissenting Law Lords, Lord Hutton and Lord Rodger of Earlsferry wrote (Paragraph 52): “We agree with the advice of the majority set out in the opinion of Sir Kenneth Keith so far as it concerns the Hamiltons’ claims based on negligence, nuisance and Rylands v Fletcher… We regret, however, that we are unable to agree with their opinion that the Hamiltons would not have a valid claim against Papakura under section 16(a) of the Sale of Goods Act 1908…”

Paragraph 52 makes it clear that none of the Privy Council dissented over dismissing the claims against Watercare, making for a unanimous not majority decision on those claims. In the Chalkie column published subsequently by The Independent, this was set out clearly: “While the Law Lords unanimously upheld Watercare and the council’s version of events with negligence and nuisance, on the Sale of Goods Act their 3:2 decision was nowhere near so clear-cut...”

While Watercare appears to have been sensitive about its own perspective in this story, the way the Privy Council held is a fact. Although understanding that this sets a high standard, the Press Council felt the paragraph reporting the split decision in the original article was misleading and upholds the complaint on this ground, given the more exacting nature of reporting court decisions. The Press Council notes that the publication of a letter to the editor or some form of correction of the slip might have forestalled a formal complaint.

The original April article was thorough in setting out the financial pressures facing the Hamiltons. It mentioned that the Hamiltons’ piece of land, put up as security for costs by agreement, was being claimed by Watercare and the Papakura District Council to help cover their costs. The Hamiltons’ lawyer Matt Casey was quoted as saying the land was likely to realise only half the debt for costs, and that he would like a settlement where the council and Watercare took the property but agreed not to bankrupt his client.

The headline writer has taken a very condensed version of this in the limited space available for the heading. The article represents the situation clearly. The headline “Watercare threatens to bankrupt tomato grower” does not so well. It reflects the anxiety felt by the Hamiltons, but not exactly the sequence of events. It is the bill for the appeals against the judgements on claims taken against both Watercare and the Papakura District Council which is threatening to bankrupt the Hamiltons. This is not a direct threat by Watercare, as the word is generally used. For this reason the headline cannot be said to “accurately and fairly convey the substance” of the report it was designed to cover, particularly as it omits the costs due to the Papakura District Council. This part of the complaint is upheld.

However, it is unexceptional that the article quoted Penny Bright and the well-known anti-Watercare pressure group and their claims on the damage to the tomatoes, as they were commenting on a case where Watercare’s views were already canvassed. The claims do not invalidate the findings of the courts.

The Chalkie column is always a sharply written, opinionated discussion of business and legal matters. In this case, it refers to in-house matters, in the sense of the Watercare reaction to The Independent’s article. It is almost with a sense of exasperation that Watercare complained about the “central point” of the case as reported in the Chalkie column which said ‘the central issue was whether Papakura and Watercare had breached the Sale of Goods Act’ - “even though the correct position had been explained to them twice already,” Watercare commented.

As the Law Lords reported on the Sale of Goods Act claim in the Privy Council judgement (Paragraph 9, headed The claim in contract): “The Hamiltons alleged that Papakura breached an implied term in its contract for the supply of water to them that the water supplied was suitable for horticultural use. The claim was based on s16(a) of the Sale of Goods Act 1908.” No mention of Watercare. But it is clear from the Chalkie passage quoted earlier that The Independent understood the issues decided. In a complex case of this sort, perhaps confusion at one point is understandable.

The complaint is part upheld.