High Court rules no damages or pecuniary loss proven in accountants' legal spat

Thursday 6th August 2015

A legal spat between two New Zealand accountancy groups has ended with the High Court ruling that some of the NZ Institute of Chartered Accountant's advertisements breached the Fair Trading Act but no damages could be proven and it stopped short of declaring any defamation had occurred because no pecuniary losses were made out.

CPA Australia had sought $50,000 damages against the NZ Institute of Chartered Accountants under the Defamation Act and Fair Trading Act claiming that its competitor had overstepped the appropriate boundaries of rivalry in statements it made in flyers, advertisements, new articles, and industry events between 2011 and 2013.

Justice Robert Dobson found CPAA had made out some elements of actionable defamation among the criticisms in an address from NZICA's then acting chief executive Kirsten Patterson at a May 2013 industry conference but as a corporate plaintiff, it was required to prove pecuniary loss and had failed to do so.

"In the event that I am wrong on the absence of pecuniary loss, not all of the defamatory comments would be defensible as truth. Nor do I consider that the sting of the defamation as to CPAA having inferior educational standards could be defended as honest opinion," he said in a written judgement.

He found some aspects of a May 2011 flyer were misleading in terms of sections 9 and 11 of the Fair Trading Act because NZICA misrepresented information in purporting to compare the earnings of CPA members with those of chartered accountants in New Zealand. But he said claims that an advertisement and comments quoted in the National Business Review were misleading under the FTA weren't made out. "To obtain any relief under the FTA, CPAA had to make out damage following from the misleading conduct and it has failed to do so," the judge said.

Justice Dobson said he agreed with the view expressed by a subpoenaed witness who is a member of both organisations that "it is a matter of real regret that the dispute between them couldn't be resolved short of litigation". On the other hand, he said CPAA's complaints were understandable and his provisional view was that the scope for criticism of NZICA's conduct was likely to reduce any justifiable quantum of costs awarded in favour of it.

CPA Australia chief executive Alex Malley said it commenced the proceedings in the High Court at Wellington as a last resort, and only after all attempts to resolve the matter outside of the legal proceedings had been exhausted.

"First and foremost we were acting as a matter of principle to defend the integrity of the CPA designation and of the profession more generally."

BusinessDesk.co.nz

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