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Strata Title Administration Ltd and Television New Zealand Ltd - 2004-214

Members

  • Joanne Morris (Chair)
  • Paul France
  • Tapu Misa
  • Diane Musgrave

Complainant

  • Strata Title Administration Ltd (STRATA) of Auckland

Dated

11th May 2005

Number

2004-214

Programme

Fair Go

Channel/Station

TV One

Broadcaster

Television New Zealand Ltd


Complaint under section 8(1)(a) of the Broadcasting Act 1989
Fair Go – item about complaints from spokespersons representing the Bodies Corporate of four residential complexes – all were dissatisfied with Strata Title Administration Limited and its director Michael Chapman-Smith – allegedly unbalanced, inaccurate and unfair

Findings
Standard 4 (balance) – issue essentially one of fairness – not upheld

Standard 5 (accuracy) – inaccurate to state that Mr Chapman-Smith had agreed to an interview and then changed his mind – other statements not inaccurate – one aspect upheld

Standard 6 (fairness) – overall item was fair – not upheld

No Order

This headnote does not form part of the decision.


Broadcast

[1] An item on Fair Go broadcast on TV One at 7.30pm on 13 October 2004 examined complaints from spokespersons representing the Bodies Corporate of four residential complexes – Tuscany Towers, Ponsonby Crest, Waterford Apartments and Garden Grove. The representatives voiced dissatisfaction with the performance of Strata Title Administration Limited and its director Michael Chapman-Smith, who had acted as secretary for each of the Bodies Corporate.

Background

[2] On 22 September 2004, Fair Go wrote to Mr Chapman-Smith advising him that the programme had received complaints about him and his company. He was told that the story would air on 29 September 2004 and was asked for a response to a series of questions.

[3] Mr Chapman-Smith asked that Fair Go postpone the item, as he was leaving New Zealand in a few days on a long-planned mountaineering trip and preferred to do a studio interview rather than presenting a written response to the questions. He advised Fair Go that he would be out of the country until the week commencing 11 October, and requested a studio interview after in the period 14 to 20 October.

[4] Upon receiving advice that a studio interview would be edited and because he was not a “practised television performer”, on 24 September Mr Chapman-Smith decided to provide written answers to the list of questions. These were faxed to Fair Go on that date along with his explanation for why he was no longer prepared to do a studio interview. He again asked Fair Go to delay the programme so that he would be able to see the programme and, if necessary, respond to it.

[5] On 28 September, after Mr Chapman-Smith had left the country, Fair Go sent a fax to Mr Chapman-Smith stating his responses had raised further questions, and advising him that the item would be postponed until 13 October. Fair Go again offered Mr Chapman-Smith the opportunity to do a studio interview.

[6] A representative from Strata’s offices replied to the fax, asking Fair Go to send a list of questions that Mr Chapman-Smith could answer upon his return from overseas. On 11 October, Mr Chapman-Smith replied in writing to the second set of questions, and stated that his position on a studio interview had not changed since his letter of 24 September.

Standards

[7] Standards 4, 5 and 6 of the Free-to-Air Television Code of Broadcasting Practice are relevant to the determination of this complaint. They provide:

Standard 4 Balance

In the preparation and presentation of news, current affairs and factual programmes, broadcasters are responsible for maintaining standards consistent with the principle that when controversial issues of public importance are discussed, reasonable efforts are made, or reasonable opportunities are given, to present significant points of view either in the same programme or in other programmes within the period of current interest.

Standard 5 Accuracy

News, current affairs and other factual programmes must be truthful and accurate on points of fact, and be impartial and objective at all times.

Standard 6 Fairness

In the preparation and presentation of programmes, broadcasters are required to deal justly and fairly with any person or organisation taking part or referred to.

Complaint

[8] Strata Title Administration Limited (Strata) complained to Television New Zealand Ltd, the broadcaster, that the item had breached standards of balance, accuracy and fairness. It sought a retraction of the statements in the programme and an apology from the broadcaster.

[9] Due to the large number of specific allegations made by the complainant, for each point below the Authority has outlined the arguments made in:

  • Strata’s formal complaint to TVNZ
  • TVNZ’s response to the formal complaint
  • Strata’s referral to the Authority
  • TVNZ’s response to the Authority
  • Strata’s final comment
  • Further information provided by TVNZ.

Balance

[10] Strata maintained that only a fraction of Mr Chapman-Smith’s answers had been shown or read out on the programme. Limited time could not be advanced as a justification for lack of balance, it said, and if an issue could not be dealt with fairly in the time available then it ought not to be dealt with at all. The complainant contended that, to counter the “dramatic entertainment” and highly emotional appeals in the item, Mr Chapman-Smith was merely given the offer of taking part in an interview or providing a written statement.

[11] In response, TVNZ argued that it had clearly complied with the requirement for balance. It had set out the concerns of the apartment owners and summarised the contents of a statement from Strata. In addition, it had attempted to persuade Mr Chapman-Smith to take part in a studio interview, delaying the item for two weeks so that the maximum opportunity was given to him.  It did not agree that Standard 4 had been breached.

Accuracy

[12] Strata identified a number of excerpts from the Fair Go programme which it alleged were inaccurate or misleading.

1. On-screen graphic saying “Body Corporate Fee $1051.00”.

[13] The complainant advised that the Body Corporate fee charged by Strata in the complexes was, on average, around $130+GST per unit per annum. This graphic would have led viewers to assume that $1051.00 was the sort of fee charged by the company, it said. Body Corporate “fees” were quite distinct from “levies” which were for insurance, maintenance and upkeep of common areas.

[14] TVNZ maintained that there was no suggestion that Strata’s secretarial fees were the amount on the graphic. The voiceover had illustrated that Body Corporate funds include many expenses saying “you know – the money put aside for the maintenance and upkeep of their buildings”. The $1051.00 figure was in line with what apartment owners would and do pay for such things, it said, and the apartment owners had told TVNZ that they paid amounts ranging between $1000–$3000 to Strata.

[15] Strata reiterated its view that an ordinary viewer would have interpreted the graphic as referring to Strata’s fees being $1051.00, and observed that such a precise figure would not normally be used to illustrate a general point. It maintained that Strata’s fees, as distinct from levies, were on average $130+GST per unit per annum.

[16] TVNZ stood by its original assertion that the $1051.00 figure was an honest representation of the general amount paid for maintenance and upkeep. Viewers would not have drawn the distinction between fees and levies as Strata contended. Furthermore, TVNZ stated that it stood to reason that any figure on screen was going to be precise, as figures were precise by definition.

2. Statement that the apartment owners had been “battling Michael Chapman-Smith for more than two years”.

[17] The complainant stated that this was only partially true. The dispute with Ponsonby Crest owners dated back only four months, it said, and the dispute at Garden Grove dated back to September 2003.

[18] TVNZ noted that the apartment owners disagreed with the dates in Strata’s letter. The Ponsonby Crest owners were having difficulty with Strata back as far as December 2002, and problems at Garden Grove began in September 2002.

[19] The complainant maintained that its version of events with regard to the length of the disputes was correct, and stated that TVNZ had not advanced any concrete evidence to support its allegations.

3. Statement that the apartment owners had all had enough and “they all called an extraordinary general meeting, or EGM, and everyone voted to say goodbye to Strata Title Administration and Michael Chapman-Smith”.

[20] The complainant alleged that it was unclear who was referred to in this statement, and that an ordinary viewer would conclude that all the owners in all of the complexes were unhappy with Strata and called the EGMs. Strata maintained that no valid EGMs had been called apart from at Tuscany Towers.

[21] TVNZ contended that the phrase “they all” referred to the four Bodies Corporate discussed in the item, and “everyone” referred to all those who attended the EGMs for those Bodies Corporate. The broadcaster stated that every person who had attended the meetings had voted Mr Chapman-Smith off their Body Corporate, and Fair Go had triple checked this fact.

[22] Strata maintained that these meetings were invalid, despite TVNZ’s assertion that the owners had met in good faith.

4. Apartment owner’s statement that Mr Chapman-Smith was given a written invitation to attend the EGM, and because he did not attend he maintained that the meetings were illegal.

[23] Strata argued that it had not received any written requisitions as required by the rules to convene an EGM, or any invitation to attend EGMs. The EGMs of Waterford Apartments, Ponsonby Crest and Garden Grove were invalid because the legal procedures under the Unit Titles Act 1972 for convening an EGM were not followed, it said. Strata had attended a valid EGM of the Tuscany Towers Body Corporate on 15 April 2004.

[24] The broadcaster maintained that the Bodies Corporate were adamant that they had given Strata invitations to attend the EGMs. Mr Chapman-Smith may have been saying that he did not receive the invitations according to the correct procedures, but that would not change the fact that he had been invited to those meetings.

[25] Strata noted that while TVNZ had said that the Bodies Corporate were “adamant” that they had given Strata invitations to attend the meetings, it had not produced any evidence to support this.

[26] TVNZ advised that Fair Go had in its possession original letters and emails inviting Mr Chapman-Smith to the EGMs.

[27] Strata argued that the existence of letters and emails would not provide any proof that they had been sent or received. In addition, if the letters were indeed original they could not have been sent, it said.

[28] TVNZ contended that Strata’s response that the letters and emails would carry no weight was “somewhat dismissive and arrogant”.

5. Tuscany Towers apartment owner’s statement that Mr Chapman-Smith had “refused to step down” or hand over their money.

[29] Strata asserted that this statement was false, because Strata had in fact resigned as secretary of Tuscany Towers and there were no funds remaining. The complainant advised that the High Court had ruled that Strata was the legal secretary of the Body Corporate of Tuscany Towers in December 2003. A Deed of Settlement was then signed and Strata agreed to resign. It also sent the Body Corporate a note of its unbilled costs for professional services, which were currently under dispute and arbitration. In addition, the complainant advised that its solicitor had requested a meeting to arrange the handover of the Tuscany Towers files, but had yet to receive a reply.

[30] TVNZ said that the statement that Mr Chapman-Smith had refused to step down from Tuscany Towers was related to a time before the matter went to the High Court. The main reason Tuscany Towers went to court was because Mr Chapman-Smith would not step down or hand over money, and the owners still believed that he owed them money.

[31] The complainant contended that TVNZ had ignored the factual history of the dispute between Strata and Tuscany Towers in its response.

[32] Strata referred to TVNZ’s assertions that Tuscany Towers could not obtain financial information from Strata, and said that an updated statement of receipts and payments had been sent to them in August 2004. No further requests for information had been received, Strata argued.

[33] In response to the complainant’s final submission, TVNZ commented that the Tuscany Towers body corporate was not happy with the financial records it had finally been given. There was not enough information to allow adequate checking, it said. The arbitrator was in the process of making a ruling on the matter.

6. Garden Grove owner’s statement that they had asked Strata for their money back over a year ago.

[34] Strata accepted that it still held funds for Garden Grove, but said that it had tried to return them. It had not heard from Garden Grove’s solicitor since February 2004 when it offered to settle the matter.

[35] TVNZ stated that the Garden Grove residents had a different account of the February 2004 meeting. They had advised TVNZ that Mr Chapman-Smith said he wanted a large amount of the $10,000 which was owed to Garden Grove, but did not forward financial records to show what this amount related to. After being told that the matter was too complicated for the Small Claims Court, the owners could not afford to take the matter to court, which was why they approached Fair Go instead. 

[36] Strata denied that there had been a meeting with Garden Grove in February 2004. Rather it said there had been an exchange of letters and Strata had offered a clear settlement, which was rejected.

[37] TVNZ denied having said that there was a meeting in February 2004, stating that it had only said there was a telephone conversation. TVNZ also advised the Authority that Garden Grove owners believe that they complied with procedures to change from a Body Corporate to freehold titles. This, it said, was no ground for Mr Chapman-Smith to hold onto their money.

7. Reporter’s statement that Michael Chapman-Smith used his own set of rules to manage Body Corporates which made it very difficult to “get rid of him”.

[38] This was misleading, the complainant said. The rules had been worded by Mr Chapman-Smith under the instructions of the solicitor for the developer of each complex. Strata contended that it was no more difficult to “get rid of” the Body Corporate secretary under those rules than under the unit title rules of most other complexes. In any event, the complainant noted that the apartment owners had all accepted the Body Corporate rules when they bought their units, and procedures existed to change the rules at the AGM or at a legally convened EGM.

[39] TVNZ maintained that the Body Corporate rules were Mr Chapman-Smith’s rules, and observed that he had admitted the rules were worded by him under instruction from a solicitor and developer. It pointed to rules which empowered Mr Chapman-Smith to hold meetings and pass resolutions on his own. In addition, TVNZ observed that a notice of rule changes to Garden Grove included the statement that the author of the rules was Mr Chapman-Smith, and that he held copyright over the rules.

[40] Strata conceded that Mr Chapman-Smith held the copyright to the booklet Body Corporate Manual, however it said that he was entitled to prevent another body corporate secretary appropriating his documents. The complainant asserted that many of the rules were used by bodies corporate that were not administered by Strata, including those rules complained about in TVNZ’s response.

8. Statements by the reporter and Tuscany Tower’s apartment owner that, following the High Court ruling that “Michael Chapman-Smith was still technically secretary”, Strata was legally obliged to hand over books and money but had invoiced them for $90,000 in legal bills.

[41] As above, the complainant said that Strata was not “obliged” to hand over books and money. This was part of the Deed of Settlement, it said, which also required Strata to send the Body Corporate a note of its unbilled costs for professional services. Any dispute over these costs was to be submitted to a professional arbitrator, and these conditions had been agreed to by the apartment owners when they signed the deed.

[42] The broadcaster contended that Fair Go was correct in concluding that Strata was “obliged” to find a resolution with Tuscany Towers. The High Court had found that Strata had improperly collected money, it said, and had expressed a provisional view that the owners were entitled to costs against Strata. Given these comments, Tuscany Towers expected their books and money to be handed over but Mr Chapman-Smith had not done so.

[43] Strata drew the Authority’s attention to part of the High Court judgment in the dispute between Strata and Tuscany Towers. The judge said that while Strata had collected levies which it was not entitled to collect, it had no doubt expended a portion of those on legitimate expenditure. Further, the judge stated that it would need to be given credit for such expenditure, and may be entitled to reasonable payment for services rendered to date.

[44] TVNZ stated that the High Court judge’s comment about Strata spending part of the levies on “legitimate expenditure” was the reason that Tuscany Towers owners were determined to receive a full set of financial records.

9. Statements that Waterford Apartments had gone to the Disputes Tribunal, where “his lawyer” served all the owners with a summary judgment for Body Corporate fees.

[45] The complainant maintained that this statement was false, and that the apartment owner had mistaken the Waterford Body Corporate’s solicitor for Strata’s solicitor. The summary judgment was in fact served on Waterford owners by their own Body Corporate for unpaid levies, Strata said.

[46] TVNZ did not believe that this statement was false, and asserted that the lawyer in question was acting under instruction from Mr Chapman-Smith. The apartment owner had not referred to Waterford Apartments’ lawyer or to Strata’s lawyer, he had said “his lawyer”.

10. Reporter’s statement that the Waterford case was “later thrown out of the District Court on technicalities” and the owners did not want to spend any more money fighting in court.

[47] Strata advised that the case was in fact thrown out because one of the apartment owners sent the trial judge a letter and documents which she opened and read. The judge then disqualified herself from the case, necessitating another hearing. At the second hearing the Waterford Body Corporate dropped its case against the owners, who had joined Strata as a third party, seeking damages for distress and anxiety. The trial judge had dismissed all their claims, and Strata had sought costs from the apartment owner whose actions had necessitated the second hearing. Apart from that owner, Strata said, it was not in dispute with Waterford Apartments owners so they did not have to “spend any more money fighting in court”.

[48] TVNZ maintained that the fact that a case was thrown out of court because an apartment owner had sent a document to the judge did qualify as a “legal technicality”. It understood that Waterford’s Body Corporate only agreed to Strata taking costs because it did not want to spend more money and time challenging Mr Chapman-Smith in court. TVNZ also noted that, while the judge had dismissed the claim for damages against Strata, he was nevertheless highly critical of the company.

[49] The complainant maintained that this matter reflected more than a “legal technicality”, and observed that, while critical of Strata, the comments of the judge did not affect the legal result in the dispute between Waterford Apartments and Strata.

11. Ponsonby Crest owners’ comment that they had sat in Strata’s offices for three hours and “thought we were actually at a resolution” before being handed a trespass notice.

[50] Strata maintained that there could not have been a resolution, because what the apartment owners were asking for was impossible. Had Mr Chapman-Smith handed over their funds and files he would have been in breach of his statutory duty, because he could only take instructions from the Body Corporate and not individual owners. Strata did not dispute that one of the owners had been handed a trespass notice.

[51] TVNZ said that the apartment owners had held an EGM which they believed to be legal prior to going to Strata’s offices. They had the backing and proxies of all owners in making the request for records and money for Strata.

[52] Strata said that it had received correspondence from a solicitor to indicate that the firm was acting for Ponsonby Crest, but several letters to the firm had not been answered. The solicitor then advised Strata that it had received no instructions from the Body Corporate, and Strata had heard nothing further about the matter until after the Fair Go programme.

[53] With respect, TVNZ said, it saw this as an example of Mr Chapman-Smith being difficult. Ponsonby Crest could no longer afford a lawyer and their lawyer had written to Mr Chapman-Smith telling him that they were no longer employing him.

[54] The complainant stated that it had not received advice that Ponsonby Crest was no longer employing a lawyer. There was a difference, it said, between the withdrawal of instructions and simply not having current instructions.

12. Statement that “we hoped to talk to Michael Chapman-Smith in person tonight. He originally agreed to front up and we delayed our story for two weeks at his request to allow him to join us in the studio. He’s since changed his mind and instead sent us written statements”.

[55] Strata conceded that Mr Chapman Smith had originally informed Fair Go that he would like to do a studio interview, but said that after being advised that the interview would be edited, he had sent a further fax stating that he was not happy with the arrangement. He had told Fair Go that he was sending a written response to its questions because he was not a practised television performer, and was not confident he could get his point across in the limited time available. At no point after that had he given any indication that he wanted the programme to be delayed so that he might be able to take part in an interview.

[56] TVNZ maintained that Mr Chapman-Smith had initially agreed to appear on the programme, and it was not until he returned from his trip that Fair Go learnt that he would definitely not participate in an interview. The broadcaster asserted that Fair Go would not have delayed the story for two weeks unless it was fairly confident that Mr Chapman-Smith would do a studio interview.

[57] The complainant maintained that Mr Chapman-Smith had not given Fair Go any cause to believe that he would change his mind about taking part in a studio interview. After his letter of 24 September in which he made it clear that he did not wish to take part in a studio interview, Mr Chapman-Smith had sought a delay for no other reason than that he should be in the country to view the item when it screened and respond quickly to its contents. Strata said that it was more likely that Mr Chapman-Smith’s answers to Fair Go ’s first set of questions had made it necessary for Fair Go to delay the item in order to engage in further research.

[58] TVNZ outlined Fair Go ’s version of events with regard to Mr Chapman-Smith potentially doing a studio interview. It stood by its assertion that Fair Go agreed to postpone the programme because Mr Chapman-Smith had not ruled out doing an interview altogether. After all, the broadcaster said, he had initially said that he was not interested in providing written responses and that he would do a studio interview. Fair Go would have put the programme to air on the original date if not for the expectation of an interview, it maintained.

Fairness

[59] Strata alleged that the programme had amounted to a “very personal attack” on Mr Chapman-Smith, asserting that he was a difficult and unreasonable person whose behaviour had caused unnecessary suffering and financial expense. The item, it said, was clearly defamatory and had damaged the reputation of Mr Chapman-Smith and Strata.

[60] Strata asserted that Mr Chapman-Smith had been criticised by Fair Go for refusing to act in breach of his statutory duty as a Body Corporate secretary. Further, Fair Go had asserted that Mr Chapman-Smith had forced the apartment owners to resort to expensive court actions; when in fact the court proceedings were equally expensive for him.

[61] In particular, Strata referred to two excerpts from the programme which it alleged were unfair:

Reporter’s comment “but you guessed it, there were problems”

[62] Strata contended that this comment was prejudicial in suggesting that a case had been made that Mr Chapman-Smith was obstructive and difficult, so the viewer must already expect him to continue to act this way.

[63] In response to this allegation, TVNZ argued that Fair Go is a programme about problems, so viewers would “guess” there were problems coming up in any story.

Final statements by apartment owners such as “clear your conscience Michael, and give these old folks their money back” and “pay back the money that you owe everyone”

[64] The complainant contended that this sequence of statements was defamatory and unfair to Mr Chapman-Smith. It created a clear perception in the minds of the viewer that he was dishonest, and callously holding onto money belonging to a large number of owners.

[65] TVNZ maintained that allegations of defamation were not matters to be determined by broadcasting complaints procedures. It argued that the owners’ statements showed their frustration and lack of understanding of Mr Chapman-Smith’s actions. It contended that the apartment owners had every right to express their opinions, and noted that Fair Go participants frequently make appeals to camera.

[66] With regard to Standard 6 generally, TVNZ did not believe that Strata or Mr Chapman-Smith were treated unfairly in the item. The complainant had been given every opportunity to present its side of the story, it said, and when Mr Chapman-Smith had declined to appear in person, the programme had quoted extensively from his written statement. The broadcaster noted that the guidelines to Standard 6 acknowledge the significance of the public interest, and it was TVNZ’s opinion that the matters raised in the item were of genuine public interest.

[67] The basic issue, TVNZ said, was that Strata was believed to be acting against the wishes of the residents, and was putting up legal arguments and technicalities to counter their arguments. The broadcaster submitted that it would be common sense that a Body Corporate secretary who had lost the confidence of those he was representing would willingly resign. Fair Go was interested in this matter because Mr Chapman-Smith had not done this, nor had he ensured that accounts were immediately finalised so that each party could go their own way without dispute.

[68] TVNZ maintained that the apartment owners were entitled to express their opinions whether or not the complainant agreed with them. Mr Chapman-Smith had been given every opportunity to respond and his side of the story was included in the broadcast, it said. It concluded that Standard 6 had not been breached.

[69] In its final submission to the Authority, Strata asserted that Fair Go had a statutory obligation to be accurate and fair, and it was not relieved of that obligation simply because it examined complaints from members of the public.

[70] Finally, Strata maintained that Fair Go had criticised Mr Chapman-Smith for refusing to breach his statutory duty as a Body Corporate secretary. It alleged that many of the delays complained of in the programme were a result of the apartment owners’ failure to respond.

Further Information Requested by the Authority

[71] The Authority sought further information from both Strata and TVNZ in order to assist its determination of this complaint. The Authority asked the following questions of TVNZ:         

  1. What evidence can TVNZ provide to show that the spokespeople shown on Fair Go were truly representative of each of the Bodies Corporate?
  2. Did those people have the backing of 25% of the owners which Strata says would have been required in order to call a valid EGM?
  3. What evidence can TVNZ provide to show that the two owners from Ponsonby Crest had the “backing and proxies of all owners in making the request for records and money” from Strata when they went and sat in Strata’s offices?

[72] TVNZ provided the following information with respect to question 1:

a) Tuscany Towers

TVNZ advised that the spokesman for Tuscany Towers on the programme was one of three members of the Body Corporate Committee, and he had signed the affidavit on behalf of the majority of owners in the court case against Strata.

b) Ponsonby Crest

The spokesman for Ponsonby Crest was a member of the informal owners’ committee and was the person who sent correspondence to Strata on behalf of all owners. He was also the chairperson for the EGM, TVNZ advised.

c) Garden Grove

The man who spoke on behalf of Garden Grove held a proxy for his mother-in-law, who owned one of the apartments. He had been elected as chairman by the owners.

d) Waterford Apartments

The spokesman for Waterford Apartments had taken on caretaker responsibilities as well as co-ordinating paperwork during the period the Body Corporate was having problems with Strata.

[73] As to whether the representatives on Fair Go had the backing of 25% of the owners which Strata said would have been required to call a valid EGM, TVNZ replied:

a) Tuscany Towers

TVNZ advised that an EGM had been held at which 54% of the owners wanted Mr Chapman-Smith to step down.

b) Ponsonby Crest

All eight resident apartment owners were present at the EGM and the Fair Go spokesman had proxies for all four retail units, TVNZ said. The owners unanimously agreed to remove Strata.

c) Garden Grove

All 17 owners had approved the removal of Strata at the EGM in August 2003.

d) Waterford Apartments

All 16 apartment owners were in agreement that Strata should be removed, and agreed to change the Body Corporate to another firm.

[74] TVNZ advised the Authority that the two apartment owners from Ponsonby Crest who had sat in Strata’s offices had the full backing of the Body Corporate. All owners had unanimously voted to remove Strata, it said.

[75] The Authority asked Strata for the following information

1. What evidence can Michael Chapman-Smith provide to show that many of the Body Corporate rules he has drafted “are used by bodies corporate not administered by Strata. These include Rules 18a and 40 which are complained about in TVNZ’s response”?

2. Would you please provide a breakdown of the $90,000.00 invoice that Strata sent to the Tuscany Towers Body Corporate as per the Deed of Settlement.

[76] Strata provided the Authority with a selection of rules from seven Bodies Corporate. These contained rules similar to those identified by TVNZ. Strata also contended that analogous rules would be adopted in other developments throughout the Auckland area.

[77] Strata also provided the Authority with copies of invoices sent to the Tuscany Towers Body Corporate. These confirmed that the total amount claimed was $94,566.07. Out of the total figure, Strata’s legal fees amounted to approximately $54,000 and the balance was made up of fees for Michael Chapman-Smith’s time spent in preparing for litigation and attending court.

Authority's Determination

[78] The members of the Authority have viewed a tape of the broadcast complained about and have read the correspondence listed in the Appendix.  The Authority determines the complaint without a formal hearing.

[79] The Fair Go item focused on four Bodies Corporate that were dealing with the complainant, Strata Title Administration Ltd. The representatives shown from each Body Corporate all claimed that Strata had been difficult to deal with, and had refused to step down and return records and funds to the owners. The final warning in the item stated that there was currently no specialist tribunal or other body overseeing the activities of businesses that administer Bodies Corporate, and that the law in this area was outdated and up for review.

[80] Strata complained that the item was unbalanced, inaccurate and unfair.

Balance

[81] In considering Standard 4, the Authority notes that the complainant’s allegations about balance focused largely on the contention that it was not given sufficient opportunity to respond.  In essence this same issue will be dealt with under fairness (refer to paragraphs [111]–[119]).  In these circumstances, the Authority declines to uphold the balance aspect of the complaint.

Accuracy

[82] The complainant has identified several alleged factual inaccuracies in the programme, all of which have been outlined in the summary of correspondence. The Authority has considered each allegation in turn.

1. On-screen graphic saying “Body Corporate Fee $1051.00”.

[83] The complainant has argued that its fees were a fraction of this amount, being a small part of the total Body Corporate levy. The Authority notes that when the graphic appeared, the reporter was speaking about “the money they put aside for the maintenance and upkeep of their buildings”. Accordingly, the Authority is of the view that the reporter was talking about the whole amount paid by an owner for services in respect of the building. It considers that the ordinary viewer would not have distinguished between “fees” and “levies” as the complainant did. In light of the voiceover, the Authority finds that the graphic was not inaccurate.

2. Statement that the apartment owners had been “battling Michael Chapman-Smith for more than two years”.

[84] Having considered the information provided by Strata and TVNZ on this issue, the Authority concludes that it may have been an overstatement of the true position to say that the owners had all been battling for over two years. Given the conflicting accounts, however, the Authority is unable to assess whether or not the statement was accurate.  Accordingly, it declines to determine this aspect of the complaint.

3. Statement that the apartment owners had all had enough and “they all called an extraordinary general meeting, or EGM, and everyone voted to say goodbye to Strata Title Administration and Michael Chapman-Smith”.

[85] Strata has alleged that this statement was inaccurate because there were no valid EGMs apart from a later meeting called by Tuscany Towers. Strata said the statement gave the impression that it had refused to comply with a valid vote at a valid EGM, and had thereby acted illegally.

[86] A majority of the Authority does not consider that this statement breached Standard 5. The majority is of the view that while a strictly legalistic interpretation might support Strata's contention on this point, the statement "they all called an extraordinary general meeting, or EGM" was not inaccurate when considered in context.  At this point in the item, the reporter was recounting the story as told by the apartment owners. The basis for the statement was that the apartment owners had called, and attended, what they believed were EGMs. The fact that these were later found not to have been legally convened EGMs did not, in the majority's opinion, materially change the message, which was that a majority of owners had taken steps to remove Strata as their Body Corporate secretary.

[87] The majority considers that the validity of the "EGMs" was immediately called into question by the Waterford Apartment owner’s statement that “because [Mr Chapman-Smith] didn’t attend those meetings and have the chance to speak for himself, he maintained that the meetings that we had to install a new body corporate were illegal”. It further notes that by the end of the programme viewers were left in no doubt that Mr Chapman-Smith had acted legally at all times; it was the manner in which he had carried out his role that was being questioned in the item.

[88] A minority, Joanne Morris, agrees with Strata that this statement created an impression that the apartment owners had been through a valid EGM and held a valid vote. The minority considers that the statement implied that Mr Chapman-Smith had acted unlawfully by failing to comply with a valid resolution passed at an EGM.  Further, the minority considers that the Waterford Apartment owner’s statement that Mr Chapman-Smith had maintained the meetings were invalid, was neither clear nor strong enough to outweigh the implication that Mr Chapman-Smith had acted unlawfully. In the minority’s view, it was only towards the end of the programme that the lawfulness of Mr Chapman-Smith’s actions was established clearly. The minority finds that the statement was therefore misleading and in breach of Standard 5.

4. Waterford Apartment owner’s statement that Mr Chapman-Smith was given a written invitation to attend the EGM, and because he did not attend he maintained that the meetings were illegal.

[89] The majority of the Authority does not uphold this aspect of the complaint. While the EGMs may not have been legally convened, the majority notes that the apartment owners believed they were following the proper procedures, and had invited Mr Chapman-Smith to the meetings. In the opinion of the Waterford Apartment owner, Mr Chapman-Smith had maintained that the meetings were illegal because he had not attended. While the majority agrees that his statement was a very brief summary of the complex facts surrounding this matter, it does not consider that it was an inaccurate statement.

[90] A minority (Joanne Morris) disagrees. Ms Morris finds that the statement suggested that Mr Chapman-Smith had failed to attend validly called meetings, and had then used his non-attendance as an excuse to declare them invalid. In fact, the EGMs were invalid because the owners did not follow the proper procedures for calling the meetings. Accordingly, the minority finds that this statement was misleading and in breach of the accuracy standard.

5. Tuscany Towers apartment owner’s statement that Mr Chapman-Smith had “refused to step down” or hand over their money.

[91] Strata argued that this statement was incorrect because it had now resigned as secretary of Tuscany Towers, and the dispute over funds was currently under arbitration. Conversely, TVNZ maintained that the apartment owner was speaking, not of the current situation, but of the time prior to the High Court case when Strata would not resign as secretary of the Body Corporate.

[92] The information before the Authority confirms that the Tuscany Towers apartment owners went to the High Court because they were unable to remove Strata as their Body Corporate secretary. The Authority notes that the High Court judge accepted that Mr Chapman-Smith had refused to cooperate and negotiate with the owners’ committee prior to the court case.

[93] While the owner did not specify that he was speaking about the period prior to the High Court hearing, this was made clear by the surrounding remarks. The other apartment owners were commenting about Mr Chapman-Smith’s conduct during their initial difficulties with Strata. It was not until after these remarks that the presenter said “and that brings us to round two, court action”.

[94] While acknowledging that the apartment owner did not capture the complex nature of the situation with his brief statement, the Authority agrees there had been a time when, in common parlance, Strata had “refused to step down” or hand over their money. Consequently, the Authority does not find that this statement was in breach of Standard 5.

6. Garden Grove apartment owner’s statement that they had asked Strata for their money back over a year ago.

[95] The parties have provided conflicting information on this point, and both Strata and TVNZ each remain adamant that their version of events is correct. The information provided was not sufficient for the Authority to make a definitive ruling on the matter. Accordingly, the Authority declines to determine this aspect of the complaint.

7. Reporter’s statement that Michael Chapman-Smith used his own set of rules to manage Bodies Corporate which made it very difficult to “get rid of him”.

[96] While TVNZ stood by its original assertion that Mr Chapman-Smith’s rules gave him more power as secretary than the apartment owners, Strata maintained that these rules were no different from the rules of most other complexes.

[97] Strata has provided the Authority with examples of similar Body Corporate rules used by other companies. While it appears that Strata’s rules are not unique, in the Authority’s view they do give extensive powers to the Body Corporate secretary which could lead to difficulties removing them.

[98] The information before the Authority certainly suggests that the four Bodies Corporate in the Fair Go programme found it difficult to remove Strata as their secretary. Accordingly, it does not find that this statement was inaccurate.

8. Statements by the reporter and Tuscany Towers apartment owner that, following the High Court ruling that “Michael Chapman-Smith was still technically secretary”, Strata was legally obliged to hand over books and money but had invoiced them for $90,000 in legal bills.

[99] According to Strata, it was not “obliged” to hand over books and money as a result of the court case. Rather, it was as a result of the Deed of Settlement which was signed after the court case.

[100] In the Authority’s view, Strata’s argument is excessively rigid and focussed on a level of detail that did not affect the overall message. While the obligation to hand over funds and files may not have been required by the High Court ruling itself, the Deed of Settlement – itself a legally binding document - followed as a direct consequence of the court case. The Authority notes the following statement made by the High Court judge:

Strata is, in my view, legally the secretary and if it does not choose to resign, the newly constituted committee, once two further appointments have been made, can terminate its appointment. It appears inevitable that this will happen. In those circumstances, Strata will be required to deliver up its books and any moneys it holds on behalf of the Body Corporate.

[101] In the High Court decision, the judge found that Strata had improperly collected levies and expressed a provisional view that the owners would be entitled to costs against Strata. In these circumstances, it is clear why the Tuscany Towers residents were surprised when Strata invoiced them for over $90,000; the majority of which was for Strata’s legal costs and Mr Chapman-Smith’s preparation for and attendance at the court hearing. The Authority finds that this statement did not amount to a breach of Standard 5.

9. Statement that Waterford Apartments had gone to the Disputes Tribunal, where “his lawyer” served all the owners with a summary judgment for Body Corporate fees.

[102] While the complainant has argued that the statement implied that the proceedings were issued by Mr Chapman-Smith’s lawyer, the Authority is of the view that this statement was not inaccurate.

[103] In support, the Authority notes that the District Court judge in the Waterford Apartments case was surprised that the Body Corporate had issued proceedings against its own members. It is clear that the lawyer at the Disputes Tribunal was acting on instructions from Mr Chapman-Smith in his capacity as the secretary of the Waterford Apartments Body Corporate. Given Mr Chapman-Smith’s instructing role, it was not inaccurate to state that the lawyer was “his lawyer”.

10. Reporter’s statement that the Waterford case was “later thrown out of the District Court on technicalities” and the owners did not want to spend any more money fighting in court.

[104] Strata has argued that this statement was false because the apartment owner’s actions amounted to more than a “technicality”. In the Authority’s view, the use of the word “technicality” simply illustrated that the lawsuit had not been thrown out on the merits of the case.

[105] The complainant has also said that there was no further dispute between Strata and Waterford which would require additional money to be spent. TVNZ replied that Waterford agreed to pay costs to Strata because it did not want to spend further money in court.

[106] The Authority agrees that, while not absolutely clear, the statement that the owners did not want to “spend any more money fighting in court” was intended to mean that the Waterford owners had resolved the matter because they did not want to spend any more money on legal costs. The Authority does not find that this statement was inaccurate.

11. Ponsonby Crest owner’s comment that they had sat in Strata’s offices for three hours and “thought we were actually at a resolution” before being handed a trespass notice.

[107] Strata’s position on this matter is that there could not have been a resolution, because it could not legally hand anything over to these apartment owners. If it had done so, Strata says, it would have been in breach of its statutory duty to take instructions only from the Body Corporate.

[108] TVNZ has provided the Authority with information to confirm that the two Ponsonby Crest owners had the backing and proxies of all the owners. When they attended Strata’s offices, they believed that they were “actually at a resolution”. This statement was clearly the opinion of the owner in recounting his experience of the meeting, not a statement of fact. Therefore the Authority finds that it did not breach Standard 5.

12. Statement that “we hoped to talk to Michael Chapman-Smith in person tonight. He originally agreed to front up and we delayed our story for two weeks at his request to allow him to join us in the studio. He’s since changed his mind and instead sent us written statements”.

[109] Strata alleged that this statementimplied that Mr Chapman-Smith agreed to an interview and then broke his promise. Having viewed the correspondence between Fair Go and Mr Chapman-Smith prior to the broadcast, the Authority agrees that this statement was inaccurate.

[110] Mr Chapman-Smith’s original agreement to participate in an interview was quickly recalled and explained in writing. Further, his written answers to Fair Go ’s questions were then supplied by the deadline set by Fair Go .

[111] TVNZ’s assertion that the programme was delayed because Mr Chapman-Smith had agreed to an interview is not supported by the facts. It is quite clear from the correspondence that Fair Go delayed the item after receiving Mr Chapman-Smith’s letter stating that he no longer wished to participate in an interview. Mr Chapman-Smith made it quite clear that he wished to supply written answers instead, and this stance did not change throughout the subsequent correspondence. Accordingly, the Authority finds that this statement breached Standard 5 (accuracy).

Fairness

[112] The complainant has argued that, in addition to being inaccurate, the item was unfair to Strata and Mr Chapman-Smith and therefore in breach of Standard 6 (fairness). The Authority has dealt with each allegation of unfairness separately.

Reporter’s comment “but, you guessed it, there were problems”

[113] On this point, the Authority agrees with TVNZ that Fair Go is a programme about problems, and viewers would guess there were going to be problems coming up in any story. Accordingly, it finds that this statement was not prejudicial and did not amount to a breach of the fairness standard.

Sequence of appeals to camera by apartment owners

[114] The second specific allegation of unfairness by Strata was that the sequence of final appeals to camera from the apartment owners was unfair to Mr Chapman-Smith. The Authority considers that these were the genuine opinions of the apartment owners which they were entitled to express. The right of individuals to express their own opinions is expressly acknowledged in Guideline 6d to Standard 6. The Authority does not uphold this aspect of the complaint.

Right of reply

[115] Similarly, the Authority does not agree with Strata’s contention that it was not given sufficient opportunity to respond to the allegations. The programme contained a summary of its written responses which, in the Authority’s view, amounted to a reasonable effort to present Strata’s position. There has been no suggestion that the extracts used were not a true reflection of Strata’s responses. The Authority considers that Strata was treated fairly in this respect.

Impression that Mr Chapman-Smith was difficult and obstructive

[116] Strata has argued that the Fair Go item created an impression that Mr Chapman-Smith was a difficult and obstructive person. As an example of this, Strata pointed to Fair Go ’s statement that Mr Chapman-Smith had agreed to do a studio interview and then changed his mind once the item had been delayed at his request.

[117] While the Authority has found that this statement was inaccurate, it considers that, in the context of the entire item, it was insufficient to amount to a breach of the fairness standard. The majority of the Authority has not identified any other inaccurate statements or aspects of unfairness in the item. It considers that this one statement, while in breach of Standard 5, did not result in unfairness to the complainant or to Mr Chapman-Smith.

[118] As to the argument that the item overall made Mr Chapman-Smith seem a difficult and obstructive person, the Authority notes the High Court judgment in the Tuscany Towers case. The judge commented that Strata and Mr Chapman-Smith had adopted a “very autocratic view towards the proprietors” which had “no doubt caused them considerable inconvenience, anxiety, and cost”. The judge was of the opinion that Mr Chapman-Smith had refused to cooperate and negotiate with the owners’ committee.

[119] In addition, the Authority notes the following comments by the District Court judge in the Waterford Apartments case:

The actions of Strata are not above criticism, and may well be considered high-handed and provocative. It may well be that those action justified the removal of the secretary, and the appointment of another. This has in fact occurred.

This has been a most unfortunate series of events for all concerned. Frankly, I am surprised that it was deemed necessary to issue proceedings by the Body Corporate against its own members, who no doubt feel aggrieved on that score…I do not believe that the issuing of proceedings was the only reasonable course open to the third party, using the Body Corporate as a vehicle for this.

[120] Accordingly, the Authority finds that it was not unfair for Fair Go to create the impression that Mr Chapman-Smith had been difficult to deal with. The weight of the evidence before the Authority suggests that Mr Chapman-Smith displayed the same characteristics when dealing with all of the Bodies Corporate shown on the Fair Go programme.

[121] In the Authority’s view, the overall message of the Fair Go programme was that while Mr Chapman-Smith had acted legally at all times, the apartment owners were frustrated and unable to terminate Strata’s services due to his Body Corporate rules and his refusal to negotiate. The Authority finds nothing unfair in that message. Accordingly, the Authority considers that Standard 6 was not breached on this occasion.

Bill of Rights

[122] For the avoidance of doubt, the Authority records that it has given full weight to the provisions of the New Zealand Bill of Rights Act 1990 and taken into account all the circumstances of the complaint in reaching this determination.  For the reasons given above, the Authority considers that its exercise of powers on this occasion is consistent with the New Zealand Bill of Rights Act.

 

For the above reasons the Authority upholds one aspect of the complaint that the broadcast by Television New Zealand Ltd on 13 October 2004 breached Standard 5 of the Free-to-Air Television Code of Broadcasting Practice.  It declines to uphold the other aspects of the complaint.

[123] Having upheld an aspect of the complaint, the Authority may make orders under ss.13 and 16 of the Broadcasting Act 1989.  It does not intend to impose an order on this occasion.  One aspect of the extensive complaint was upheld as being inaccurate.  In the context of the item, the inaccuracy identified was insufficient to result in overall unfairness to the complainant. The Authority considers that the breach of the Code was at the lowest end of the scale and that no further action is warranted. 

Signed for and on behalf of the Authority

 

Joanne Morris
Chair
11 May 2005

Appendix

The following correspondence was received and considered by the Authority when it determined this complaint:

  1. Strata Title Administration Ltd’s formal complaint – 20 October 2004
  2. TVNZ’s decision on the formal complaint – 10 November 2004
  3. Strata’s referral to the Authority – 7 December 2004
  4. TVNZ’s response to the Authority – 2 February 2005
  5. Strata’s final comment – 23 February 2005
  6. Further correspondence from TVNZ – 10 March 2005
  7. Further information provided by TVNZ – 29 March 2005
  8. Further information provided by Strata – 7 April 2005