Clumsy no excuse for defamation, CPA counsel says   14 Jul 2015

Clumsy no excuse for defamation, CPA counsel says

By Suze Metherell

July 14 (BusinessDesk) - The New Zealand Institute for Chartered Accountant's "clumsy" response to the prospect of a new competitor wasn't an excuse for defaming CPA Australia, the industry body's counsel said in closing statements to the High Court in Wellington.

CPA Australia counsel Alan Galbraith QC dismissed NZICA's defence, saying "clumsiness or it didn't really mean it" in the face of a new competitive environment didn't justify defaming the new rival. Justice Robert Dobson reserved his decision at the end of closing statements today.

The accounting body claims NZICA defamed it in speeches by chief executive Kristen Patterson at industry events and breached the Fair Trading Act in statements in flyers and advertisements, which included comparisons and allegedly misrepresented issues such as potential earnings, numbers of accountants, global reach and educational standards.

It was "very clear it was an ambush against CPA," Galbraith told the court. He said NZICA's defamation defence of truth, honest opinion, based on true facts, and qualified privilege failed, as parts of Patterson's speech were incorrect and because the statements by a chief executive, who was a voice of authority, were likely to be repeated.

NZICA effectively held a statutory monopoly in New Zealand until 2012 when the newly established Financial Markets Authority accredited CPA Australia for auditing work under incoming legislation, which put it on a more equal footing with NZICA. Earlier today, NZICA's counsel Bruce Gray QC said Patterson's speeches were given in the context of the facing a new, competitive environment and explaining why it was merging with its Australian counterpart.

CPA Australia said Patterson defamed the institute when she said "lazy students" would only take what was perceived as an inferior qualification from CPA, and that it didn't have international affiliations like the Global Accounting Alliance, of which NZICA is a member.

"In the face of a competitor - it's one thing to need to respond by a merger, but that's not a justification to turnaround and denigrate the other," Galbraith said. "The plaintiff has a significant number of mutual recognition agreements with entities in Asia."

In fact, Galbraith argued CPA Australia had a stronger international presence than NZICA and was more forward-looking in seeking connections with Asian accounting institutes, while GAA was "defending an entrenched position" in the western world.

In terms of education standards, CPA Australia and NZICA were not readily comparable, as CPA was a more flexible programme, allowing electives, while NZICA's was "rigid", but both are recognised are by Financial Markets Authority and the Australian Securities and Investment Commission.

Gray argued CPA Australia needed to prove losses, however Galbraith said that it wouldn't be immediately apparent, as the deterrent was to students who were still finishing their courses.

Galbraith said the NZICA flyer, which compared salaries, education and international recognition of the two accounting institutes, failed to clear up confusion but "it did a jolly good job of creating more confusion and misinformation" and that NZICA had been "less than openly honest".

CPA is seeking a declaration of defamation, but not a damages award, and $50,000 for the Fair Trading Act breaches.

Justice Dobson reserved his decision and thanked both parties on the speed of getting through 18 witnesses in a seven day hearing.

(BusinessDesk)

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