Farhad Moinfar against NZME/BusinessDesk
Case Number: 3706
Council Meeting: 3 February 2025
Decision: Upheld
Publication: Business Desk
Principle:
Accuracy, Fairness and Balance
Privacy
Comment and Fact
Columns, Blogs, Opinion and Letters
Headlines and Captions
Photographs and Graphics
Corrections
Ruling Categories:
Accuracy
Balance, Lack Of
Columnists Opinion
Comment and Fact
Apology and Correction Sought
Headlines and Captions
Photographs
Privacy
Overview
1. This complaint concerns an article which names Citadel Capital Ltd (Citadel), a company owned by Farhad Moinfar, as a company that had tried to restrain the IRD from advertising its bid to liquidate the company over a substantial and long-standing bill. Citadel complains that the article was unfair and unbalanced, not labelled as Opinion, and constituted an unfair interference with the privacy of Mr Moinfar. The complaint is upheld.
The Article
2. The article, as first published on 25 November 2024, was headed “Liquidation advertisements a vital sign” and showed a photograph of Mr Moinfar directly under the heading. It would appear that in some versions of the article, directly below the headline and photo there was this statement: “Bids to restrain advertising are often used by ratbags to get out of a pickle.”
3. The article, after some general commentary on the economic downturn, refers to the fact that a creditor is legally obliged to advertise an attempt to liquidate a firm that owes it money and that “… blocking these notices turns off a vital warning sign to other creditors that they need to be uber-careful about their exposure”. The first debtor company referred to in the article is Citadel Capital, “owned by Auckland property developer Farhad Moinfar”. It is said that Citadel tried several times to restrain the IRD from advertising its bid to liquidate the company over a long-standing $616,000 tax bill. It is stated that the High Court was not persuaded and the liquidation was set down to go ahead on the coming Thursday. After commenting on some other companies there is another bold heading “‘Repeated adjournments’ of IRD vs Citadel”. The article says that the liquidation had been repeatedly adjourned to allow the firm to resolve the situation. Reference is made to a decision of an Associate Judge as having “none of it”. It was stated:
It was well settled that the court could order a restraint of advertising if the debt was in genuine dispute, but this one wasn’t, she said.
“There have been repeated adjournments, and the Commissioner [of Inland Revenue] has not advertised up until now in order to give Citadel the opportunity to try and agree a payment arrangement or a settlement,” the judge said.
4. The article then goes on to refer to some other companies under threat of liquidation that had sought a restraint on advertising.
Factual Background
5. The proceedings filed by the IRD against Citadel were first called in the High Court on 30 May 2024. On 16 September 2024, Citadel filed
an application to restrain the IRD Commissioner from advertising the proceeding. This application was resolved by consent on the basis that
the Commissioner could advertise after 25 October 2024.
6. On 25 October 2024, Citadel filed another application to restrain advertising. That application was dismissed by the High Court in an oral judgment issued on 11 November 2024.
7. On 12 November 2024, there was email correspondence between Citadel’s counsel and the journalist from NZME/BusinessDesk. The contents of these emails are set out later in this decision. After 12 November 2024 there was no further correspondence between Citadel or Mr Moinfar and NZME/BusinessDesk until after the publication of the article.
8. On 18 November 2024 at 9:30am, the IRD Commissioner provided a signed notice of discontinuance in relation to the legal proceedings. The High Court confirmed that proceedings were discontinued at 9:44am. This occurred because the full payment of the amounts sought by the IRD had been made by Citadel.
9. On 25 November 2024 at 5am, the article was published. At 8:23am, the editor of BusinessDesk and the journalist were contacted by Mr Moinfar regarding the article. At 9:02am, evidence of the legal proceedings being discontinued was provided by Mr Moinfar to NZME/BusinessDesk.
10. At 9:14am, the written correction in the body of the article and at the end of the article were added. The statement that used the phrase “ratbags” was replaced. These changes were acknowledged by the journalist via email.
11. At 9:45am, Mr Moinfar again emailed the BusinessDesk editor and journalist addressing the use of his photo at the top of the article.
12. At 9:57am the editor of BusinessDesk responded to Mr Moinfar’s email stating they were “comfortable” with the presentation of the article.
13. At 10:18am Mr Moinfar sent a further email to BusinessDesk editor and there was subsequently a telephone conversation between the BusinessDesk editor, Mr Moinfar and Mr Moinfar’s lawyer.
14. By 12pm on 25 November 2024, Mr Moinfar’s photo had been removed from the top of the article.
The Complaint
Inaccuracies
15. Mr Moinfar alleges that the article contained factual inaccuracies, unattributed quotes and in the case of the screenshot of his photo,
“… what can only be construed as defamatory content”.
16. It is alleged that at the date of the article’s publication on 25 November 2024, contrary to what is stated in the article, liquidation proceedings in the High Court had been discontinued and full payment of the amount sought by the IRD had been paid by Citadel. In fact, liquidation proceedings had been discontinued on 18 November 2024 at 9:44am almost a week prior to publication of the article.
17. The essence of the complaint is that the journalist who wrote the article should have inquired ahead of the publication on 25 November 2024 to check whether the debt had been paid, and they had failed to do so.
18. When Mr Moinfar read the publication at around 7:45am on 25 November 2024, he immediately engaged with NZME, at 8:23am sent an email to the editor of BusinessDesk and the journalist involved pointing out that the debt had been paid and the proceedings discontinued.
19. There was also a complaint that Mr Moinfar’s name was adjacent to the unattributed quote about bids to restrain advertising often being used “by ratbags to get out of a pickle”. The inference being that Mr Moinfar was such a “ratbag” which he denied. There was a request to amend the link without delay and remove the image. Mr Moinfar’s barrister also attempted to contact the journalist.
Corrections
20. Further confirmation of the payment and discontinuation of court proceedings was sent at 9:02am by Mr Moinfar and at 9:40am the
journalist responded saying the column had been amended per the update. The amendment read:
The court was ultimately not persuaded, and a liquidation hearing was set down for this Thursday. However, the debt had been paid and the matter discontinued, notwithstanding the firm has an ongoing dispute with the IRD over handling of the matter, Moinfar told BusinessDesk.
21. There was added to the article at the end in italics:
This column has been amended to reflect that Citadel Capital has now paid the debt at issue.
22. The caption with the “ratbags” quote beside Mr Moinfar’s image was also changed. There were further complaints through the morning by Mr Moinfar and it was eventually agreed that Mr Moinfar’s image would be removed. This was done at midday on 25 November 2024. His photo was replaced by a photo of another individual who was a commentator.
23. At the conclusion of the article, the journalist stated: “In an environment where SMEs are battling to stay afloat and keep on step ahead of the rascals, this correspondent hopes he’s right.”
24. It is alleged that NZME/BusinessDesk deliberately misled or misinformed readers. The journalist had failed to seek comment from Citadel or Mr Moinfar or indeed do any rudimentary fact-checking. There was a period of four and a half hours where the article contained the incorrect allegation that Citadel had not paid the IRD debt and liquidation was set down for Thursday. What is more, the correction failed to note that the payment had been made a week prior to the publication, as did the correction itself. It is said this implied that the debt had been paid subsequent to the BusinessDesk article.
25. NZME/BusinessDesk is accused of a lack of journalistic integrity and rudimentary failure and it is also submitted that the use of Mr Moinfar’s image by the “ratbags” quote was a breach of his privacy and that there was a failure to draw a distinction between factual information and comment or opinion. There was a failure to attribute the “ratbags” commentary to a natural person and there was an implication that those who sought to restrain advertising were “rascals”. It is said that there was also a breach of Principle (5) which is that matters of opinion must be clearly identified. The reporter did not make it clear that it was her opinion that those who sought to restrain advertising were “ratbags” or “rascals”. It is also said that the caption did not fairly convey the substance of the report.
26. It is said that in relation to Principle (6) – Headlines and Captions and Principle (11) – Photographs and Graphics that Mr Moinfar’s image led the article for seven hours which was long enough to have significantly damaged his reputation and there was inadequate care in choosing the photograph.
The Response
27. In its response, NZME/BusinessDesk sets out the history of the proceedings and relies on the decision of the Associate Judge. It explains the history of the corrections that were made and it is stated that at the time of publication, NZME/BusinessDesk, and the reporter were unaware of the liquidation proceedings being discontinued. When they became aware, a correction was published.
28. It is denied that there was any deliberate misleading or misinforming of readers. The pending liquidation has been confirmed by the decision of the Associate Judge and by the notice of intention to liquidate in the New Zealand Gazette. There had been comment sought from counsel for Citadel as to whether the hearing of 28 November would go ahead, and no advice from that counsel that the hearing was not proceeding until after publication.
29. In those circumstances it was reasonable for NZME/BusinessDesk to infer that the liquidation hearing would go ahead, particularly given that the proceedings had been ongoing for six months and repeatedly adjourned to let Citadel try to reach an agreement with the Commissioner. The liquidation application was, in any event, already in the public domain, by virtue of the publicly available Gazette notice. The use of Mr Moinfar’s image on the basis of what NZME/BusinessDesk knew was entirely appropriate.
30. As to Mr Moinfar’s privacy it is stated that it was a matter of public interest who had been seeking adjournments or restraints on advertising and NZME/BusinessDesk was entitled to feature his image. The point is also made that the image of Mr Moinfar did not appear next to the standfirst in the email newsletter.
31. Additionally, the article was an opinion column which was clearly attributed to the journalist and not Mr Moinfar so it was clear that the descriptions of “ratbags” had not come from Mr Moinfar.
32. It is stated that as the column was clearly opinion it was not necessary for the reporter to balance her opinions, particularly given that there was no dispute over the amount of the debt.
33. As to the headline and columns complaint, it is observed that it is incontrovertible that the headline and initial photograph accurately and fairly conveyed the substance of the column. Mr Moinfar’s image was not used in a way which could mislead the readers as it would have been obvious to a reader as to why it would be relevant. It is said that the corrections were published as soon as possible and that the reference to the adjourned hearing was a minor issue adequately addressed by the correction.
The Discussion
Inaccuracy/Correction
34. The implied statement that, at the time of publication, the debt had not been paid by Citadel was inaccurate. That is not
contested by NZME/BusinessDesk which, as is discussed below, promptly published a correction.
35. However, Citadel had resisted making the payment and there was a Gazette notice and High Court judgment, both from 11 November 2024, which suggested the liquidation was going ahead. Therefore, the issue of inaccuracy and fairness turns on whether it was wrong to publish the article without a further check by NZME/BusinessDesk that the debt was still unpaid.
36. On 12 November 2024 NZME/BusinessDesk had sought further information from Citadel’s barristers. The reporter who wrote the article complained about wrote asking them:
Further to your email to the NZ Herald yesterday regarding the above, I note that the IRD’s liquidation application against Citadel Capital is being advertised in the NZ Gazette, and the story has been reported in NBR today. Can you please advise what the current position is regarding advertising of this application – whether Citadel is appealing the court’s November 8 decision; whether it has gained a stay of enforcement; and whether the November 28 hearing of the IRD’s application is going ahead.
Thanks in advance,
37. The Media Council sees this as an open invitation to Citadel to keep NZME/BusinessDesk informed about any changes of position. It is asked specifically what the current position is regarding advertising, and in particular whether the 28 November 2024 hearing was going to proceed.
38. A barrister engaged by Citadel responded the same morning:
I will respond today. If you have any strict timeframes, please let us know with urgency.
39. The reporter then replied:
Thanks for that. Given competing media are already reporting the liquidation application, it would be good to find out where things are at as soon as possible.
40. It appears there were no further emails between the parties prior to the publication of the article.
41. This email exchange is somewhat ambiguous. There is a clear inquiry by NZME/BusinessDesk as to whether the 28 November 2024 of the IRD’s application for a liquidation order was going ahead. The reply was that there would be a response that day and a request to be advised of any strict timeframes. The response to that was that it would be good to find out “where things are at”. There was no promise to provide further updates.
42. Thirteen days then passed before on 25 November 2024 at 5am, the article was published. The Media Council considers that to not seek an update immediately prior to publishing the article was a mistake by NZME/BusinessDesk. Firstly, the situation was plainly volatile and prone to change and the lawyers for Citadel had not given any unambiguous undertaking to keep NZME/BusinessDesk updated. Second, there had been no notice given to Citadel or Mr Moinfar or his lawyers that a strongly critical opinion piece was going to be published by NZME/BusinessDesk. Third, the lack of a final check was compounded by the use of Mr Moinfar’s image beside the damaging assertion of those who seek to restrain advertising being “ratbags”. In doing so, the article made Mr Moinfar the face of the “ratbags” and “rascals”. A final check before the article was published was necessary.
43. While the Media Council thinks that it was appropriate for further inquiries to be made by NZME/BusinessDesk before publication, it records that it does not think that the fact that it was the lawyers who were being communicated with and not Citadel or Mr Moinfar themselves matters in this context. Mr Moinfar claims that this is problematic because Citadel’s lawyers could not freely disclose or confirm details of the evolving dispute without explicit instructions, particularly where any hearing might still have been technically “on foot”.
44. However, when they appear to be acting in the matter that becomes the subject of the complaint, lawyers are the agents of their clients, including in the context of media inquiries. Seeking and receiving comment from a lawyer in relation to a story about their client in which they have been speaking for their client is a common and appropriate practice. Lawyers are also not prevented from providing correspondence from a Media publisher to their client, so even if the lawyer does not respond, the client is free to do so.
45. As set out, although there was fault on the part of Citadel or its lawyers in not updating NZME/BusinessDesk of their own volition, it would have been appropriate for NZME to have done a final check before publishing the article on 25 November 2024. This error was then compounded by an inadequate correction response from NZME/BusinessDesk.
46.The Media Council considers that the correction by NZME/BusinessDesk was made promptly. At 9:02am, Mr Moinfar provided proof to NZME/BusinessDesk that the debt had been paid and court proceedings discontinued. The correction by NZME/BusinessDesk occurred by 9:14am. The timeframe for correcting the reference to the debt not being paid was therefore very short: less than 12 minutes. While it is accepted that some damage would have been done to the reputation of Citadel and Mr Moinfar over those 12 minutes, even in this modern electronic age that is a very short timeframe. This was, in terms of time, sufficient to defuse the complaint.
47. However, in terms of the content of the correction, was it enough? It is true as Citadel claims that a reader of the correction at the end of the article could well infer that the payment had been made after the publication of the article, which was not the case. This is particularly so because of the use of the word “now” in the phrase “Citadel Capital has now paid the debt at issue”. While there is an earlier sentence in the article making the correction and not using the word “now”, a reader is likely to have the overall impression of a last-minute payment, even possibly one induced by NZME/BusinessDesk’s proposed article.
48. Corrections, to adequately defuse an error whatever the nature of the fault that has led to that error, even if the publisher is not responsible for the error, should be full and fair. This correction was not full and fair, implying as it did a last-minute payment since the article was published. A correction should have specified that the payment had been made on 18 November 2024 so that a reader would realise it had been made well prior to the proposed hearing date.
49. The Council is of the view that the corrections contained an incorrect implication of last-minute payment. They also could have been more fulsome, acknowledging an error in the original article and stating the date on which the debt was paid. As it was, the correction would have undoubtedly given a reader an adverse impression of Mr Moinfar. For these reasons it does not consider the correction to have defused the complaint of error, and we uphold this aspect of the complaint.
Privacy
50. The image that was displayed in the article of Mr Moinfar appears on the website of Citadel. It is difficult therefore for Mr Moinfar to
claim a breach of privacy when he had obviously consented to his photograph and association with Citadel being in the public domain. Mr
Moinfar can therefore be seen to have waived any right to object to the fair and reasonable use of his image.
51. It is stated in Principle (2) – Privacy that the right should not interfere in the publication of significant matters of public record or public interest. If it was fair and reasonable for NZME/BusinessDesk to assume that at the time of publication the debt was still unpaid, then it was not a breach of privacy to publish Mr Moinfar’s publicly available photograph. The non-payment of a significant debt to the IRD is a matter of public interest.
Comment/Fact/Opinion
52. The part of the BusinessDesk publication in which the article was placed had, as its general heading, “Opinion”. The reporter or some
other person was clearly being quoted when the reference was made to “ratbags” and “rascals”. Obviously, the person being quoted was
not Mr Moinfar himself. Citadel claims the use of these terms in the article blurs comment and fact. However, the ascription of such
terms is clearly a matter of opinion given their inherent subjectivity.
53. We are satisfied that the articles in the relevant publications that have placed them in the “opinion” section have not blurred the distinction between factual information and comment or opinion.
54. While the heading “opinion” was present in relation to the online publication it was not present in relation to the newsletter that went out to BusinessDesk email newsletter subscribers. That publication did not clearly present the article as opinion, although the words of opinion remained the same. This was a notional breach of Principle (4).
55. However, this is the first time the Council has received a complaint about clearly identifying opinion in a newsletter under Principle (4). Because this is a novel complaint we have decided not to uphold it but rather use this opportunity to make clear to our member publications that the requirement to clearly label opinion as such applies to all formats and publications. The failure to clearly identify opinion as such in any form of publication in the future can be expected to be met with any complaint being upheld. Holding the line between fact and comment is critical in upholding the public's trust in journalism.
Assertion of Serious Slander and Need for Apology/Censure
56. Citadel and Mr Moinfar have asserted that linking the complainant’s image to a term like “ratbags” is potentially defamatory. However,
the law of defamation is distinct from Media Council principles and does therefore not form part of the Council’s analysis.
57. We have, however, considered whether the strong language used of “ratbags” and “rascals” and the use of the image warranted correction or apology or censure.
58. On balance we think not, accepting as we do that NZME/BusinessDesk had a basis to assume the debt was still unpaid at the time of publication (although as we have found they should have done more). The language was strong and colloquial, but as an expression of opinion held because of the belief that the debt was still unpaid, we do not consider that the conduct warrants anything more than an uphold. Indeed as we have stated, it could have been fixed by a fulsome correction and unfortunately that was not done.
Headlines and Captions
59. There was nothing wrong with the heading “Liquidation advertisements a vital sign”, in that the headline and caption has not been shown
to be inaccurate and to have not reflected the contents of the article.
60. There was, however, the error in the caption referring to “ratbags” insofar as Mr Moinfar’s image was beside it. However we have upheld the complaint about the inaccuracy and failure to correct the caption under Principles (1) and (12) above.
Result
61. The complaint is upheld on the basis that there was an error in the article which would have been avoided if an inquiry had been made in the few days before the hearing by NZME/BusinessDesk, and because the correction that was made in a timely way was insufficient. A publisher should be fulsome and fair in its corrections, but in this case, there was not a full acknowledgement of error or the fact of a payment some 7 days earlier. Instead, there was the adverse implication of a last-minute payment.
62. The claims based on an alleged failure to label it as an opinion piece, and the claim for censure, are not upheld.
63. The complaint is upheld in relation to Principle (1) – Accuracy, Fairness and Balance and Principle (12) – Corrections. It is not upheld on the basis of Principle (2) – Privacy, Principle (4) – Comment and Fact, Principle (5) – Columns, Blogs, Opinion and Letters, Principle (6) – Headline and Captions and Principle (11) – Photographs and Graphic.
Decision: The complaint was upheld.