Supreme Court Damages Of £21,500 Claimed In Libel Actions

Press, Volume C, Issue 29604, 29 August 1961, Page 21

Supreme Court Damages Of £21,500 Claimed In Libel Actions

Alleging that an article, supplied by George Maxwell Edmonds, chairman of the ■ Christchurch Milk Consumers’ Protection and printed in the “Christchurch Star” on August 18, 1960, was defamatory and harmed their business reputations, two companies concerned in the supply and treatment of milk sought a total of £21,500 damages in an action begun before Mr Justice Macarthur and a jury in the Supreme Court yesterday.

The Canterbury Dairy Farmers. Ltd., claimed £12,000 from New Zealand Newspapers. Ltd., as publisher of the “Christchurch Star,” named as first defendant, and £4500 from Edmonds, a branch manager, named as second defendant. The Christchurch Milk Company, Ltd., claimed £4OOO from the first defendant and £lOOO from the second defendant. Both defendants deny' the allegations of defamation. The first witness for the plaintiff,' Louis Raynor Fowler, manager of the Canterbury Dairy Farmers, Ltdhad been in the witness box for almost four hours, two hours and a half under crossexanination which was not completed, when the Court adjourned until today. The hearing is expected to take all this week. Mr J. G. Leggat, with him Mr E. J. Somers, appears for the plaintiffs. Mr P. T. Mahon, with him Mr J. G. Hutchison, appears for the defendants. Plaintiffs’ Case Opening for the plaintiffs, Mr Leggat said that by. arrangement with the Court and consent of counsel both the companies’ claims were being heard together, as they arose out of the same circumstances, Edmonds was the chairman of the Milk Consumers’ Protection Association, which had been somewhat outspoken on matters in relation to milk, Mr Leggat said. In particular, the association put emphasis on the right of the individual to have the choice of raw or pasteurised milk. The article complained of was somewhat explosive, he raid. It attacked the bona tides and integrity of the companies, and the purity and cleanliness of their milk without the slightest foundation in fact, and amounted to a damaging libel. “Edmonds, it appears, prepared the article, expressing his views and, presumably, those of some of the members of the association. He supplied it to the ‘Star,’ which accepted it without alteration and put it in a prominent place at the top of page 10. Edmonds pubIjhed and prepared the article. Up till then it was a little bit of abuse. , But when the ‘Star’ published it it suddenly became headlines. Counsel said that the town milk supply of milk throughout New Zealand was subject to the provisions of the Milk Act, 1944, which was an outcome of a Royal commission of inquiry into the milk industry. The act provided for the supply of milk to be handled by producer associations, for treatment s ations. and for the whole of milk affairs to be controlled and supervised by the New Zealand Milk Board. Introduction “Libellous” Mr Leggat said the plaintiffs alleged that the following introduction of the article complained of was libeHous: “The present milk tnonopoly of Christchurch, i s protective boards and suppliers’ organisations, and its compulsory pasteurisation scheme, have all been Kt about econnotives and not for irpose of protecting health.” only inference from atement was that the ptaintiffs ignored the health the public for the sake of Woey. This was completely ’al*e and utterly unfair, Mr .jSggat said. -The plaintiff companies hM not been named in the article, but the two'handled aad treated 82 per cent, of he town milk supply, so that they were the direct target of it. The Milk Act provided ’kit producers should prortde "at a reasonable price, ai. adequate supply of milk ofc- the best quality, having rijfard to the health of the of the area.” litas was the act which brought the plaintiff companies into being. Counsel said the plaintiffs alleged that the following statement in the article was a libel: “Almost three years ago, an authoritative official of the Department of Agriculture warned us that our milk, cheese, butter, and meat were in danger of becoming contaminated with D DT. No doubt the warning of penicillin contamination will be received the same way. and absolutely nothing will be done to ensure a pure milk supply.” Mr Leggat said that not until July 27, 1900. 22 days before the article was printed, had any particular notice been given officially of the problem of antibiotics getting into milk supply., A cow in a supply herd might have mastitis or some other infection and be treated with antibiotics. Minute traces of the antibiotic could then get into the milk. "Conscious of Problem" The Canterbury Dairy Farmers. Ltd., had been conscious of the problem a long time before the official circular from the Deportment of Agriculture. The chairman of the company bad addressed three meetings of producers in July of last year, and had advised that cows treated with antibiotics should be removed from the supply herd for a period. The circular, a national one, had ordered that cows be

removed from the herds for 72 hours. “The company had taken steps to acquaint its members of the problem, whereas the article contains a somewhat sneering attack with the whole imputation that the company had done nothing and would do nothing,” Mr Leggat said. “The company has an outstandingly good record. It has spent £15,000 of its own money, over and above anything it has been required to spend, on conditions of safety, hygiene, and purity for its milk. The company is personally out of pocket for this amount, and naturally takes umbrage quite legitimately at the imputation that it has done nothing and will do nothing.” The plaintiffs allege that the following statement in the article was a libel, said counsel: “A few suppliers may take the necessary precautions, but most, upon reflecting they are paid the same price for a gallon of contaminated, diseased milk as they receive for a gallon of pure milk, will allow the ‘she’ll be right, so in she goes’ philosophy to prevail.” There was no justification for this whatsoever, said Mr Leggat. It was utterly unfair and slanderous. The company had its milk graded, and the suppliers received less for first-grade milk than for fifiest, and less still for second-grade milk. Therefore it paid them to produce the purest milk. The plaintiffs, said counsel. also claimed that the following statement in the article was libellous: “It is denlorable to think that, as milk is the main diet of babies and infants, they are forced to consume certain drugs and poisons which will seriously affect their health in later’years.” Mr Leggat said that this was a most irresponsible and most damaging statement to make. There was no evidence whether traces of antibiotics in milk would have aftereffects on children. Some world experts on the subject of milk would be called, and would say there was no scientific or medical or anv other evidence on which such a statement could be based. Company’s gales Referring to a statement in the article that the “Christchurch Milk Company was complaining about the decrease in sales.” counsel said this was completely untrue. The company in that year had made record sales of milk and had never complained of falling sales. The statement was wrong in fact. Evidence would be given by senior officers of the dairy and animal industry divisions of the Department of Agriculture and the Health Department. some of them regarded as world authoritiesThis evidence would show that the plaintiff companies had done, and were doing their best to supply the best and cleanest milk, and that much of the work had been done voluntarily. The Canterbury Dairy Farmers. Ltd., had voluntarily instituted a scheme of destroying cows with brucellosis. which could cause «undulant fever in humans There was no regulation requiring this, but the company did it although its members, as pro. ducers. lost money by destroying the cows. "There will be complete unanimity among the witnesses called that the companies have been and are doing their best to supply pure milk. To say that the companies adopt a ‘she’ll be right’ attitude goes quite beyond the bounds of fairness and reason.” Mr Leggat said. Newspapers’ Rights “A newspaper has no more right than an Individual in what it cares to sav. The law preserves the safety of a company’s reputation against a false attack as well as that of an individual. “Neither of the defendants has made anv offer of anologv or retraction, although this matter has been almost a ’•ear in coming to trial. This ! s a matter you can take into account when assessing damages. The defendants maintain that their action was excusable. “Any public body or pepson is open to comment, but ‘he comment must ue fair. There is no special protection for a newsnaner. The privileges and rights of the press have been honestly won over the years and are iealouslv guarded. But a newspaper is not privileged to make irresponsible and untruthful statements which ran cause serious damage. Tn imply what this article does is contrary to fact, and could only be said with an interest to misrepresent the truth," Mr Leggat said. First Witness The first witness called for ‘he plaintiffs. Louis Raynor Fowler, said he bad been the manager ot the Canterbury Dairy Farmers. Ltd., a cooperative compare. for the last 10 years. All its 222 members were farmers prosiding milk to the town sunnly The other firm In Christchurch in the sarne business was the Metropolitan Milk Suppliers’ Co-ope-atsve Association. Ltd. The Canterbury Dairy Farmers. Ltd. supplied all i<» milk to the Christchurch Milk Cnmwnv

Ltd., which was the treating company. Metropolitan Milk Suppliers, Ltd., supplied its milk to Wright’s Metropolitan Milk Company, Ltd., a treating company. The Canterbury Dairy Farmers’ Company and the Christchurch Milk Company had nothing to do with the Wright's and Metropolitan milk companies. Fowler said that the-Can-terbury Dairy Farmers, Ltd., supplied 82 per cent, of the town milk supply and the Metropolitan Milk Suppliers, Ltd., supplied 18 per cent. Outlining tests.of the milk which arrived at his company's treating station. Fowler said that if the milk did not pass the grader the fanner received nothing for it. The rejected milk was taken for further tests to the company’s laboratory at Kaiapoi. If it was found unfit for human consumption it was tipped down the drain. If it was found to measure up to the lesser standard of manufacturing milk it was used for that purpose. “If the milk does not pass the grader at the treating station, the supplier gets nothing for it, whether it is tipped down the drain or used for milk manufacturing purposes. It thus matters a great deal to the farmersupplier if his milk is not up to standard. The farmer receives a bonus of 2d a gallon if his milk is of the finest grade.” Fowler said. If the farmer’s milk was first grade he received a standard price. If it was second grade he received 6d a gallon less. In the year ended August 31, 1960. of 8.435,000 gallons of milk supplied to the treating station, 96 per cent, was graded finest, just under 4 per cent, first grade, and 0.31 per cent, second grade, 0.11 per cent. being graded second grade because of lack of cleanliness. Tuberculosis The approximate number of cows in herds supplying milk to his company was 12.000, and the rate of tuberculosis in the herds was at the irreducible minimum, said Fowler. Only 12 cows in the 12,000. 0.1 per cent., showed as F.B.' tuberculosis reactors. Tuberculosis had been eliminated as far as was practicable, and Christchurch was the first major area in New Zealand to have town supply herds free from tuberculosis. When tuberculosis was eliminated, the company in 1959 began a voluntary investigation into the elimination of brucellosis in its supplying herds. Cows suffering it, a total of 695, had been destroyed, and the elimination of brucellosis was now almost complete. The farmer received some compensation from the company from animals destroyed, but still lost heavily because of loss of production and cost of replacement. In its investigations into brucellosis, which could cause undulant fever, the Company was also inquiring into the means of lessening the use of antibiotics in the treatment of cows suffering from infections such as mastitis. “Spent £15,009” “Apart from measures required to be taken because of regulations enforced, the company has spent- £15,000 on investigations and schemes to safeguard the health of the herds and quality of the milk,” Fowler said. In three cases, when it had been found that water had been added to milk, the supplier had been asked to resign from the company, Fowler said. His company had never refused the “Christchurch Star” or reporters access to any part of the milk-treat-ment processes of his company. The company had always extended an open invitation to them, but the invitation had never been accepted. Both defendants had written a great deal about milk in Christchurch. The Milk Consumers’ Protection Association had been invited on a tour of the company’s operations from the farm to the bottling. Edmonds was not then chairman of the association, Fowler said. Cross-Examination Cross-examined by Mr Mahon. Fowler said that the Canterbury Dairy Farmers, Ltd., owned haff the shares in the Christchurch Milk Company. Ltd., and that the chairmen of directors of the first company was a director of the second. The companies were two separate entities in the eyes of the law. The Christchurch City Council owned 50 per cent, of the shares in the Christchurch Milk Company, Ltd.. and his company owned 50 per cent., Fowler said. He said he did not know bow much the milk company was claiming against the defendants. To further questions. Fowler said the statements complained of definitely damaged both companies. He knew that Wright’s Metropolitan Milk Company had issued writs for libel against both defendants. He did not know’ of his own knowledge that the company was claiming the same amount of damages against the defendants as the Christchurch Milk Company. Ltd., bad claimed (£4OOO and £looo*. Fowler said he was a member of a committee which met regularly to discuss questions arising from the supply of milk, and members of the Metropolitan Milk Suppliers’ Association were on that committee. Milk Board Members Some members of the Christchurch City Council were directors of the Christchurch Milk Company, Ltd,, and members of the Christchurch Milk Board. They were representing the City Council on the milk company as owners of half the

company’s shares. Thia bad been so since 1951. Mr Mahon: Would not a person who complained to the Christchurch Milk Board about the rmlfc supplied by the Christchurch Milk Company, Ltd., have his complaint considered by some members of the milk board who. were directors of the milk company? Fowler: Some of them could be. Do you think that is a satisfactory position yourself, Mr Fowler?—Not altogether. And is not the Christchurch Milk Company half-owned by your company?— Yes. And is not your company owned by the farmers that supply the milk to the Christchurch Milk Company? —Yes. Have not continual references to that position been made by newspapers in Christchurch over the last 10 years?—There have been I don’t know whether you could say they have been continual. Do the solids other than fats in milk contain the nutritious parts of milk?— Only partly. Is milk from the Christchurch area wel known for its deficiencies in solids other than fats?—Yes. Your clients have made it known at every opportunity. Does not the Health Department year after year report milk from Christchurch as deficient in solids not fiats?—Yes. To further questions. Fowler said that some of the public in Christchurch for 10 years had argued that Christchurch people should have the right of choice of raw milk or pasteurised milk. His company had consistently opposed the wishes of this portion of the public, voiced by the Milk Consumers’ Protection Association. “We respect their views and the sincerity with which they are put, but we think they are wrong. We have consistently opposed the right of choice, primarily on the ground of public health. This is because we are aware of the dangers that can arise to the public from drinking raw milk,” Fowler said. “No Difference” He said it would make no difference to his company’s revenue if raw or pasteurised milk was dealt with. The company pasteurised 800 gallons at Kaiapoi, but the Id a gallon allowance for this barely covered costs. It would cost the Christchurch Milk Company more to treat and bottle both raw and pasteurised milk at the same time, Fowler agreed to further questions by Mr Mahon. Speaking generally, Fowler said, his company’s profits had risen from £15,000 a year in 1951 to £25,000 to £30,000 last year. His company’s reserves had risen from £75,000 in 1951 to nearly £300.000 at present. “They are not profits in the general sense,” he said. “They are accumulations of money the shareholders have decided to leave in the company after they have been paid progress payments and bonuses. They are for the future of the company. For instance, tanker collection and refrigeration on farms are being investigated by the company and these alone would cost £250,000,” Fowler said. i To further questions, he said that the production level of the company this year would be about the same as last year, but the company’s revenue would be down because of lower prices. Mr Mahon: So the libels of August last year have not hurt your company? They have not affected your turnover. "Serious Damage” Fowler: The activities of the Milk Consumers’ Protection Association and the “Christchurch Star” over a number of years have seriously damaged the company. To illustrate this, if there was a fall in consumption of milk of .1 of a pint a person today, the turnover of the company would drop £50,000. In view of the kind of campaign the association and the “Star” have conducted I consider ■this a light estimate. But you have no figures to show this effect?—No. but when you talk of the effects on milk consumption you are talking of intangibles. The Christchurch Milk Company, formed in 1950, was in grave difficulties in 1951. Fowler agreed. H 6 did not agree that pasteurisation of milk was the only way that company had been saved —it had been saved by better management and direction. His company was limited to a dividend of no more than £lOOO a year from its shares in the Christchurch Milk Company. Fowler said. He agreed that there had been other milk suppliers in the years since 1951, but they had gone out of business “voluntarily.” His company had made several offers to take over the Metropolitan Milk Suppliers’ Association. Ltd. Some shareholders had thought the merger would be a good thing, but, as a group, the merger proposal had always been resisted. Recently his company had warned the Metropolitan company that this would be the last occasion on which an equal merger could be obtained by that company. His company was going to develop along certain lines that the other would not follow, and after that a merger would be inequitable for his company's shareholders. Offers to Council Fowler agreed that his company had made offers to the Christchurch City Council to buy out the council’s 50 per cent, of shares in the Christchurch Milk Company. If this company succeeded in this, merged the Metropolitan Suppliers’ Company and acquired the Wright's Metropolitan Milk Company,

Fowler agreed that his company would handle and treat all the milk for town supply in Christchurch. He said that Metropolitan Supnliers had one-third of the shares of the Metropolitan Milk Comnanv. but that any merger of the suppliers with his company would not mean his company taking over the Metropolitan Milk Company, unless the remainder of shareholders voted for it. Fowler agreed that milk graded “finest duality” by the Christchurch Milk Company did not contain the minimum 8.5 per cent, of solids other than fats as laid down by the Food and Drugs Act. The standard, however, complied with that of the New Zealand Milk Board. Fowler produced volumes of clippings from the "Christchurch Star” relating to milk in Christchurch from 1951 to the present. He agreed with Mr Mahon that the newspaper, basically, had maintained that the dairy farm was the first link in the chain to improve the standard of milk for town supply, and that the consumers should have the right of choice to have raw or pasteurised milk. The milk from Christchurch was the worst in New Zealand, as far as solids not fat was concerned, but, generally speaking, well above average in other respects.