At first instance in the High Court of New Zealand, Smellie J allowed Prebble's application and struck out parts of TVNZ's defence. TVNZ appealed to the Court of Appeal.[2] The Court of Appeal upheld Smellie J's decision, but raised the question of whether it was just to allow Prebble to continue with his action in view of TVNZ's inability to deploy all relevant evidence in support of the plea of justification. The Court of Appeal ordered a stay of Prebble's action unless and until privilege was waived by the House of Representatives. The Privileges Committee of the House held that the House had no power to waive the privileges protected by article 9.[1]: 331
Prebble appealed to the Privy Council against the stay order, and TVNZ sought to challenge the decisions of Smellie J and the Court of Appeal on the question of privilege. TVNZ first argued that privilege only applies in proceedings which seek to assert legal consequences against the maker of the statement. In the alternative, TVNZ argued that where a member of parliament brings proceedings for libel, parliamentary privilege should not prevent a defendant from justifying the libel by challenging the plaintiff's statements in Parliament.[1]: 331
TVNZ's first argument was based on the decision of the Supreme Court of New South Wales in R v Murphy.[3] During the trial of Lionel Murphy, the Supreme Court allowed a witness's previous evidence to a parliamentary committee to be put to the witness in cross-examination, even though article 9 provided that proceedings in Parliament "ought not to be impeached or questioned in any court." The Parliamentary Privileges Act 1987 (Cth) was then enacted, making clear that R v Murphy did not represent the law of Australia. The Privy Council accepted that the Act reflected the common law to be applied in the United Kingdom and elsewhere in the Commonwealth, and refused to apply R v Murphy.[1]: 333
TVNZ's second argument relied on Wright v Lewis,[4] a decision of the Supreme Court of South Australia. Peter Lewis, a member of the South Australian House of Assembly, sued the publisher of The Advertiser for publishing a letter to the editor which accused Lewis of abusing parliamentary privilege. The Supreme Court held that privilege did not extend to legal proceedings initiated by the maker of a privileged statement. The Privy Council also declined to apply Wright, holding that an individual member of Parliament's decision to sue could not override the collective privilege of the House to judge whether a member had misled it or acted improperly.[1]: 335
The Privy Council concluded that "parties to litigation, by whomsoever commenced, cannot bring into question anything said or done in the House by suggesting (whether by direct evidence, cross-examination, inference or submission) that the actions or words were inspired by improper motives or were untrue or misleading." However, the court accepted that Hansard could be used to prove what was said in Parliament as a matter of history. It was a matter for the trial judge to ensure that the proof of historical facts is not used to suggest that words were improperly spoken or legislation improperly passed.[1]: 337
The Privy Council held that there may be cases in which the exclusion of material on the grounds of parliamentary privilege makes it impossible fairly to determine the issue between the parties, but a stay should only be granted in the most extreme circumstances. The court gave Wright as an example of such a case, where the whole subject matter relates to conduct in Parliament. However, TVNZ's reliance on statements made in Parliament was "comparatively marginal." The Privy Council allowed the appeal against the stay order granted by the Court of Appeal, finding that "the plaintiff is entitled to have his case heard – and the defendant is able to put forward the overwhelming majority of the matters upon which it relies in justification of the alleged libel."[1]: 338–339
