CATHERINE GAO AND LAM YEUNG AGAINST THE NATIONAL BUSINESS REVIEW
Case Number: 3400
Council Meeting: 8 MAY 2023
Decision: Upheld
Publication: National Business Review
Principle:
Accuracy, Fairness and Balance
Privacy
Comment and Fact
Confidentiality
Subterfuge
Ruling Categories:
Balance, Lack Of
Court Reporting
Defamation/Damaging To Reputation
Unfair Coverage
Overview
- The complaints against the National Business Review (NBR) are based on a lack of accuracy, fairness and balance. The article related to an alleged pyramid scheme known as the MFC Club and a claim brought in the High Court of New Zealand by investors in the scheme as plaintiffs against the two complainants, Catherine Gao and Lam Yeung as defendants. The article is in general one-sided, painting Ms Yeung and Ms Gao in a bad light as promoters of the scheme. There are no counter-balancing statements setting out their position.
- No evidence was provided by Ms Yeung or Ms Gao who lodged separate complaints of any inaccuracy in the article. The complaints based on inaccuracy are not upheld.
- The grounds of lack of balance and fairness are upheld. Ms Yeung and Ms Gao were given no chance to respond to the serious allegations and any efforts to contact them were inadequate. Further, disguising the names of the plaintiffs while naming Ms Yeung and Ms Gao gives the reader an unfair sense that the plaintiffs have to be protected while Ms Yeung and Ms Gao are fair game.
The Article
- The article is headed MFC Club Pyramid Scheme Ripped Off Their Own, Investors Claim. The article is about a Malaysian-based investment scheme which “preyed on unsophisticated Chinese New Zealanders by promising extraordinary returns”. There was reference to an “alleged pyramid scheme”. The article refers to a group of mostly Chinese New Zealanders who have applied to the High Court to take an opt-in class action against the MFC promoters in New Zealand, complainants Lam Yeung and Yuhong Gao. They are named for the first time, six paragraphs into the article.
- Much of the article is about the Malaysian operation, and the MFC promoters in Malaysia. It tells the story of how a group of investors from Australia and New Zealand went to Malaysia to confront the alleged leader of MFC. Then under the heading “Standing Up,” it tells the story of the 33 New Zealand investors who have sued the complainants in the High Court in New Zealand. One of the investors is reported as having received an anonymous threatening call. Another says that Ms Gao offered her a bribe. It is stated that despite being aware of the MFC Club, neither the financial markets regulator (the FMA), nor the Commerce Commission, which oversees the Ponzi scheme provisions in the Fair Trading Act, have taken further action. The Commerce Commission did investigate but its work ceased last year. Litigation was therefore the investors’ last chance.
- The claimants are seeking orders stopping Ms Yeung and Ms Gao from disposing of real estate assets. In early 2021, they had failed in a bid to freeze 12 properties relating to MFC Club promoters. Adverse comments about the promotion are quoted, including how a single mother who had invested died from a stress related heart attack and Shirley Lay alleging that Ms Gao, when confronted, wanted to give her $300,000 to “zip my mouth”.
The Complaint
- On behalf of Ms Yeung it is said that the allegations reported in the article, and the allegations that are made in the court action, are denied. It is said that the article is not accurate, fair or balanced. There is an unfair implication that Ms Yeung and Ms Gao are associated with gangs, who have threatened the plaintiffs. It is said that the article uses emotive language designed to favour the plaintiffs over Ms Yeung and Ms Gao and does not address their position at all. The article does not mention that Ms Yeung is represented by experienced counsel and that there are ccounterclaims made by the complainants against the plaintiffs. Ms Yeung says that the plaintiffs’ names are changed, whereas the defendants’ names (those of Ms Yeung and Ms Gao) are stated in full, together with general details of properties they own.
- It is said that neither Ms Yeung nor her representatives were approached for comment about the article, and that the article is therefore unbalanced. It is asked that the NBR does not circulate the article further and publishes a clear apology.
- Ms Gao makes similar assertions. She denies being a promoter of MFC or being involved in it. She says she was an investor in MFC and lost money. She was not contacted for comment. She says that the statements in the article are incorrect and she is strongly defending the proceedings. There was a photograph published of her and a close member of her family without consent. It has increased her distress.
- The lawyers for Ms Yeung submit that the NBR could have and should have got their details which are shown on the Court file where documents have been filed for the defendants. The defendants’ lawyers have also appeared in Court. The lawyers’ comments should have been obtained to give balance.
The Response
- In response, the NBR says that the allegations against the complainants were made by the plaintiffs in Court documents and are publishable as part of a reporting on a Court proceeding. The media must have freedom of expression when reporting on Court documents. Moreover, the allegations against the complainants were corroborated by numerous sources, and reasonable checks were taken to check that the information was reliable. It is denied that there is any implication of a gang connection. The quotes in relation to the Proceedings in the Article are taken from the High Court file. The NBR says that the article made clear that leave is being sought to bring a class action and this has not been granted yet. It was made clear in the article that both complainants were defending the proceedings.
- The NBR journalist had not been able to reach Ms Yeung for comment, and there were no contact details available as to how she could be reached outside of the country. Since this complaint was made she has been offered an interview but that offer has been declined. The same situation applied to Ms Gao, who the NBR could not contact and who has declined an interview.
- The Council sought further details. The NBR pointed out that only two of the plaintiffs have their names on the Court documents and were representative plaintiffs and the other plaintiffs are not named on the available Court documents. The exact addresses of Ms Yeung and Ms Gao are not discernible from the article. It is a very long bow to suggest that the plaintiffs’ names were changed to protect them. It is said that the names of Ms Yeung and Gao’s lawyers are not in the Court documents. Ms Yeung and Ms Gao have not taken up the recently extended offer of a reply.
The Discussion
Accuracy
- While the claims in the proceedings are very much denied, and Ms Gao has described herself as a victim, there is in the complaints of Ms Yeung and Ms Gao no specific repudiation of any particular fact. Apart from strong denials by Ms Yeung of wrongdoing, and a general assertion by Ms Gao that she was a victim, there is no evidence or detail given of how it was that they were involved. There are only general denials of participation by Ms Yeung and Ms Gao in the MFC Club. The NBR says that the allegations against Ms Lam and Ms Gao were corroborated by numerous sources, although it gives no details as to these sources.
- The complainants could have put before the Council material indicating that the NBR was wrong but they have provided nothing.
- We note that the allegations in the article are largely taken from what the alleged victims have said, rather than being presented as a matter of reporting. In the circumstances we are unable to find that the complainants have shown that there is any inaccuracy in the article.
Balance and fairness
- We do not consider that the issue of free speech arises. We accept that the NBR was fully entitled to report on the Court proceeding in full, and that investigative journalism about such matters as alleged pyramid schemes is to be encouraged. The issue is rather one of balance and fairness within the article.
- The NBR article sets out the position of the plaintiffs in the proceedings in some detail, and does not set out the defendants’ position, save that it is clear that the proceedings are being defended and there is a counterclaim, and the lack of any steps being taken by the FMA or the Commerce Commission, despite being aware of the MFC Club.
- However, the tone of the article is that the plaintiffs have been done wrong, having lost their investments in a misrepresented pyramid scheme, and that the Court proceedings are their last chance. The claims in the article are extremely negative about the “MFC Club.” It is described as a “pay to play” pyramid scheme. Investors are quoted as saying that in hindsight it was “brainwashing”. A single mother had died from a stress-related heart attack. It is said that gang members had been sent to follow the protesting investor group around. Ms Yeung and Ms Gao are described as “the MFC promoters”. We accept a reader would see Ms Yeung and Ms Gao as implicated in the bad things said about MFC.
- In such circumstances it was only fair that the NBR would approach Ms Yeung and Ms Gao for comment. It should have been obvious given the serious allegations, that real effort was necessary to enable the defendants to set out their side of the story.
- The NBR says this was not possible because there were no contact details for them known in New Zealand. That may be so, however the NBR had followed the court proceedings and must have been aware that there were lawyers acting for Ms Yeung and/or Ms Gao. There have been numerous documents filed in the High Court over a considerable period of time for Ms Yeung and Ms Gao, and if the High Court file had been examined the contacts would have been available. Moreover the plaintiff’s lawyers could have been asked for the names of the lawyers for the defendants. The lawyer for Ms Yeung could have been approached for comment.
- Given these were very serious allegations that were being made against Ms Yeung and Ms Gao, the NBR should have contacted those lawyers and sought comment before publication. With the very severe criticisms made of them, more effort should have been made by the NBR to get their side of the story. Failure to do this or to provide any information in answer to the specific assertions of the alleged victims was not balanced or fair.
- There is another aspect of Ms Yeung’s complaint that concerns the Media Council. That is the publication of the defendants’ names, while the plaintiffs’ names are not published or are disguised.
- It is the view of the Media Council that fairness and balance indicates that in the absence of suppression orders, there should be consistency in reporting the names of parties to a dispute. If plaintiffs’ names are not stated in a way in which they can be identified, there must be a good reason for then disclosing defendants’ names. Otherwise one side is favoured over the other.
- The NBR says that no implication can be drawn adverse to Ms Yeung or Ms Gao because of the non-naming of the plaintiffs. We do not agree. Given the sinister things said about the MFC club involving gangs, and an alleged bribe proposal by Ms Gao, the implication can be drawn that the claimants need to be protected from Ms Yeung and Ms Gao by not stating their names.
- There could have been no danger of recrimination from the complainant defendants against the alleged victims. The alleged victims’ names and identities are already known to the complainants, as those victims as plaintiffs in the High Court have brought complaints against them and all their names are in a schedule to the statement of claim.
- On the basis of fairness, we find that Ms Yeung and Ms Gao have not been treated in the same way as the claimants who have brought proceedings against them. One group, Ms Yeung and Ms Gao, has suffered the disadvantage of being named. The other group, the plaintiffs, has not. We can see no fair explanation for this inequality of treatment.
Other Principles
- The complainants also cite a breach of Principle (2) Privacy and Principle (8) Confidentiality. The Council does not consider that given the article is public court proceedings that any issue of privacy or confidentiality arises. Principle (4) relating to Comment and Fact is relied on, but we do not see the distinction between comment and fact as relevant. Finally, there is also reference to Principle (9) Subterfuge. There is no evidence of subterfuge.
Decision
- The complaint of lack of fairness/balance is upheld because no comment from Ms Yeung and Ms Gao or their lawyers was published and no, or inadequate, efforts were made to get their comment. This unfairness was compounded by the plaintiffs being protected from identification by the publisher while the defendants, Ms Yeung and Ms Gao, were not.
Council members considering the complaint were Raynor Asher, Hank Schouten, Tim Watkin, Scott Inglis, Katrina Bennett, Ben
France-Hudson, Jo Cribb, Judi Jones, Marie Shroff, Alison Thom.