Contempt of Court: Improper pressure: the use of advertising campaigns to criticise an opposing party's stance in litigation - Progressive Enterprises Limited v North Shore City Council & The National Trading Company of New Zealand Limited

This case arose in the context of Progressive's and National Trading Company's (NTC) long-standing litigation over the development of a Pak'nSave supermarket in Wairau Road in Glenfield. Progressive and the second plaintiff applied to have NTC held in contempt of court as a result of an extensive media campaign it launched following an earlier judgment of the High Court which held that the decision granting resource consent for the proposed supermarket was invalid. It was alleged by Progressive that NTC's media campaign was intended to deter the plaintiffs from pursuing their objection to NTC's application for resource consent and was not "fair and temperate" and was therefore a contempt. NTC denied the allegations.

The tenor of NTC's advertising campaign was captured in the flyer that was part of it. It stated:

"WE'D LOVE TO LOWER YOUR GROCERY BILL BUT PROGRESSIVE'S COURT ACTION WON'T LET US

18 years ago we decided to build a PAK'nSAVE on Wairau Road.

Unfortunately our policy of New Zealand's lowest food prices posed a threat to our competition - the Australian-owned Progressive Enterprises Ltd's stores: Foodtown, Woolworths and Countdown. For years they've been trying to stop us opening a PAK'NSAVE in Wairau Road. Building finally started last year, but their latest court action will keep you waiting even longer. Now, a half-built PAK'NSAVE stands on Wairau Road and it looks like the people of Glenfield and the surrounding areas won't benefit from our low prices for the time being.

But don't worry.

As a 100% New Zealand-owned and operated company, we're determined to bring you lower prices and after 18 years, we not going to give up now.

PAK'nSAVE

Not opening in Wairau Road. Yet."

NTC's media campaign ran for 25 days and comprised seven newspaper advertisements, 378 radio advertisements on eight radio stations, 27,000 flyers distributed to households on the North Shore and 29 bus shelter posters.

Baragwanath J considered the numerous authorities on the topic of engaging in contempt by improperly pressuring another party. He referred to the important recent statements on this topic in Duff v Communicado Limited and Solicitor-General v Smith and emphasised the following statement from the Australian decision of Harkianakis v Skalkos (because of its significance in the case before him):

the central legal and factual issue in the present case [is]the balancing of the free speech and fair trial principles in the context of an alleged contempt by imposing improper pressure on a litigant in proceedings.

In the oft-cited passage in the Bread Manufacturers [case] Jordan CJ said:

It is of extreme public interest that no conduct should be permitted which is likely to prevent a litigant in a Court of justice from having his case tried free from all matter of prejudice. But the administration of justice, important though it undoubtedly is, is not the only matter in which the public is vitally interested; and if in the course of the ventilation of a question of public concern matter is published which may prejudice a party in the conduct of a law suit, it does not follow that a contempt has been committed. The case may be one in which as between competing matters of public interest the possibility of prejudice to a litigant may be required to yield to other and superior considerations. The discussion of public affairs and the denunciation of public abuses, actual or supposed, cannot be required to be suspended merely because the discussion or the denunciation may, as an incidental but not intended by-product, cause some likelihood of prejudice to a person who happens at the time to be a litigant.

Having reviewed the authorities, Baragwanath J considered that this particular case fell outside the precedents and as a result he would have to determined it by reference to first principles. As a result, he concluded that cases such as this must always be resolved by reference to the following questions:

• whether as a matter of practical reality there was a real risk, as distinct from a remote possibility, of interference with the administration of justice;
  
  
• whether in the circumstances the conduct was improper;
  
  
• whether it is proportionate to characterise the conduct as criminal; and if so:
  
  
• what penalty, if any, should be imposed.

Baragwanath J then considered the nature of NTC's campaign. In this regard he said:

the vigorous campaign and language employed by NTC was in the context of a heavy trade dispute and in the battle, which had already attracted media attention, for the hearts and minds of potential customers. While the language used in the flyers and other campaign material did not in terms invite Progressive to withdraw its objection, and NTC could have no real expectation that it would have done so, I do not doubt that NTC sought in the course of explaining its case to customers to embarrass Progressive in their eyes.

However, despite this perceived intention, Baragwanath J then concluded that given the respective parties' economic power and their previous positions in the litigation, the risk of the administration of justice being interfered with by NTC's campaign was "fanciful".

Accordingly he was not satisfied that NTC's conduct could be said to infringe any standard of "impropriety" that could justify a finding of contempt. He also indicated that in his view the facts were such that the Court would not have imposed any penal consequences had there been a theoretical contempt saying that in "the actual circumstances that would [have been] a disproportionate response to NTC's conduct".

The plaintiffs' application was therefore dismissed.

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