N. Zealand leashes consumer watchdog

A High Court ruling is raising doubts about the future of a council that protects and promotes consumer interests in New Zealand. A Wellington High Court jury found that the Consumer Council, an independent body set up by the government 24 years ago, was motivated by malice in publishing a report on furrier Arthur Goodman in its monthly magazine, ''Consumer.''

The article, published three years ago, cited a case of a $233 fur jacket Constance Wood of Wellington wanted to buy for her daughter. She made payments totaling $89 on a ''layby'' system, in which payments can be made at intervals but the goods are not received until totally paid for. She changed her mind six months later, but Mr. Goodman declined to repay her money in full.

Mrs. Wood complained to the Consumer Council, which reported her case in the magazine under the headlines: ''Some shops aren't afraid of the Layby Sales Act. After nine years it is still openly flouted.'' Mr. Goodman, the magazine stated, ''has no respect for the law.''

The article claimed that Mr. Goodman had refused any refund, which would be illegal under the act. But Mr. Goodman said he had offered a partial refund, after deducting $20 for selling costs and depreciation.

The jury awarded Mr. Goodman only $16,435 - half what he had sued for - but the malice finding stunned lawyers. The council, concerned that the verdict threatens its official role as a guardian of consumers' interests, has given notice that it will file for a new trial.