England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(MR JUSTICE DRAKE)

		Royal Courts of Justice Strand, London, WC2A 2LL
		21st May 1996

LORD JUSTICE HIRST: On 9th January 1994 the Mail on Sunday in its "Money" column published an article concerning the plaintiff Mr William George Stern, who, as is common ground, was declared bankrupt in 1978, and was discharged from bankruptcy in 1985. The article was headed "Stern falls into old trap with a "£3m.debt"" and was accompanied by a photograph of the plaintiff captioned "TROUBLES; Stern faces High Court Action". The article itself, which I shall shortly quote in full, asserts that Mr Stern "has allegedly failed to honour debts of more than £3m", refers to a pending action in the High Court against Mr Stern and a number of companies associated with him, and quotes a number of allegations against Mr Stern made in an affirmation sworn in these proceedings by the plaintiffs' solicitor.

On 13th May 1994 Mr Stern commenced the present action against the author of the article Mr Allan Piper, the City Editor of The Mail on Sunday Mr Clive Wolman, and the proprietors of the newspaper Associated Newspapers Ltd, claiming damages for libel in respect of the article.

The defendants by their defence plead justification on the footing that the words are substantially true if and in so far as they mean that the plaintiff was once again in financial trouble, and in that he was involved in High Court proceedings in which he was accused of the matters averred in the affirmation referred to above.

The plaintiff applied to Master Murray on 18th January 1995 for an order to strike out the plea of justification on the grounds that it disclosed no reasonable defence to the plaintiff's claim, and was vexatious and an abuse of the process of the court. This order was refused by Master Murray, and his decision was upheld by Drake J. on 15th March 1995, giving rise to the present appeal.

The text of the article was as follows:-

"Willi Stern, the Seventies property tycoon who became Britain's biggest bankrupt and then clawed his way back, is in trouble again, This time he allegedly failed to honour debts of more than £3m.

Stern who returned to the property business following his discharge from bankruptcy in 1985, again gave personal guarantees on his business loans - an error which led to his £110m bankruptcy in the Seventies.

A High Court case over Stern's default should cast light on his use of a web of UK and offshore firms with names such as Holborn, Nycal and Pidom as well as his main operating group, Dollar Land.

One of the two claimants to the £3m. is Seymour Gorman, senior partner of a London law firm Lipkin Gorman and director of a finance group, Albion Trust Holdings.

Gorman says in his submission to the Court that Stern "is quite adept at utilising companies for his own business purposes without being a direct or registered shareholder".

He says that Stern, an ultra-orthodox Jew, visited his home with his 29- year-old son Mark shortly after the Day of Atonement in October 1992 and asked for forgiveness for "untruths" in his court submissions.

Gorman adds that Stern lives a lavish lifestyle with "the use of a large and valuable house near Hampstead Heath, a penthouse in Bournemouth, a villa in the South of France with two swimming pools and a flat in Jerusalem.""

In his statement of claim the plaintiff pleads that the article in its natural and ordinary meaning meant:-

(1) that the plaintiff was in trouble for failing to honour debts of more than £3m., and was facing as defendant a High Court action in which he was being brought to book for his default;

(2) that his said default was connected with his use of a web of companies with suspect names, many of them offshore, with many of which he was adept at showing no overt connection, as a method of concealing his activities and/or avoiding his just liabilities;

(3) that the plaintiff had committed perjury or otherwise knowingly lied in his submissions to the court, and had visited one of his creditors (a claimant to the £3m) to ask for forgiveness for having done so.

The plea of justification first sets out the details of the plaintiff's bankruptcy. It then proceeds as follows:-

"By virtue of proceedings in the Chancery Division.... Seymour Gorman (and others) claim against the plaintiff and a number of companies connected with him including Holborn Ltd and Dollar Land Holdings PLC and Pidom Export Ltd the sum of £3,014,000 plus interest. The said financial liability is alleged to arise from a variety of loan agreements and deeds of guarantee and indemnity entered into by the plaintiff and/or the said companies.

Seymour Gorman has been a Solicitor of the Supreme Court for over 30 years and is the senior partner of Lipkin Gorman, a London firm of solicitors. In his first Affirmation in the said proceedings..... Mr Gorman alleges:-

(a) The plaintiff "has had a colourful history.... and to my knowledge has a capacity of using offshore corporate entities as nominees for his own personal business activities. Indeed he told me approximately 2 years ago that when he has previously been a bankrupt, he had traded through nominees. He also has a poor record of discharging his obligations".

(b) The plaintiff "has admitted conduct towards (another) and myself which was dishonest".

(c) The plaintiff failed to honour the assurances and promises made by him to repay money lent by Mr Gorman (and another) to Dollar Land.

(d) The plaintiff had perjured himself in an affirmation made by him in support of an application to set aside statutory demands served on him by Mr Gorman (and another) on 5th August 1992.

(e) The plaintiff "said that he was prepared to make life difficult and to embarrass (another) and myself by making allegations of fraud against us".

(f) The plaintiff had told him that he had been forced to lie to First National Commercial Bank plc, because that finance house had been pressing him for repayment on a loan with which he was indirectly involved.

(g) The plaintiff "has often said to me that he considered it a religious duty or obligation that where a person in his position is being forced to relinquish an asset, he should take all steps and all means both fair and foul to avoid the consequences and if this means having to lie he will do so... . On 24th October 1992, shortly after the Day of Atonement Mr Stern and his son, Mark, came to see me at my home. Mr Stern asked for my personal forgiveness for the untruths contained in his affirmation but asked me to understand that he felt forced to do so by circumstance".

(h) The plaintiff "is quite adept at utilising companies for his own business purposes without being a director or registered shareholder of the same".

There is no complaint as to the description of the plaintiff's bankruptcy, nor as to the reference to the actual proceedings in the Chancery Division, both of which are admitted in the reply. What is objected to, and what forms the basis of this present application, is the defendants' citation of the quotations from Mr Gorman's affirmation.

The plaintiff relies on the well-established rule of the law of justification that "It is no defence to an action for defamation for the defendant to prove that he was merely repeating what he has been told" (Duncan and Neill on Defamation Second Edition paragraph 11.16 under the heading "Rumour or hearsay".) I shall refer to this in future as the "the repetition rule". Mr James Price QC on behalf of the plaintiff submits that this rule precludes the present plea.

The defendants do not contest the validity of the repetition rule. However, Mr Eady QC submits that in the present case it has not been infringed; the correct approach, he says, is to ask whether this plea goes to any conceivable meaning which the jury might reasonably hold the words to bear, and he submits that, on the authority of two cases in this court cited later in this judgment, the present plea arguably meets this test, as the judge held.

Both sides rightly invited us to approach the case on principle, rather than to side-step the issue on the grounds that the answer might not presently be so manifestly plain and obvious as to justify a striking out order at this stage.

One leading case in this field, as in so many others in the law of defamation, is Lewis -v- Daily Telegraph Ltd 1964 AC 234, on which both Mr Price and Mr Eady relied from their respective angles. However, since it came after the other relevant authorities, it is convenient to refer to them first.

The repetition rule is one of considerable antiquity, starting with two cases decided as long ago as 1829, De Crespigny -v- Wellesley 1829 5 Bing 392 and McPherson -v- Daniels 1829 10 B and C 263.

The decision of Best CJ. in the former is epitomised in the headnote which states that "In an action for a libel, it is no plea, that the defendant had the libellous statement from another, and upon publication disclosed the author's name".

The unanimous decision in the latter by a court consisting of Bayley J., Littledale J. and Parke J. is crystallised in the following passage from Bayley J.s' judgment at p 269 that "Upon the great point, viz. whether it is a good defence to an action for slander for a defendant to show he heard it from another, and at that time named the author, I am of the opinion that it is not."

These two cases were followed and applied in Watkin -v- Hall LR 3 QB 396 (Blackburn and Lush JJ.), which was long regarded as the leading case on the topic, and was referred to with approval by Greer LJ. in this court in Cookson -v- Harewood 1932 2 KB 478.

The point next arose in the case of Truth (NZ) Ltd -v- Phillip Holloway 1960 1 WLR 997 where the Judicial Committee of the Privy Council considered a publication concerning the plaintiff Cabinet Minister (referred to in the article as Phil), in which it was stated that a man had seen one Judd, to whom an import licence had been issued, with the object of getting information from him about import procedure, and that Judd had told him to "see Phil and Phil would fix it".

Giving the judgment of the Board, Lord Denning at p 1002 quoted the direction to the jury by the trial judge that "If you accept that those words were spoken by Judd, it is not a defence at all that a statement that might be defamatory is put forward by way of report only. It does not help the defendant that the way that it is put is that Judd said "See Phil and Phil would fix it". The case is properly to be dealt with as if the defendant itself said "See Phil and Phil would fix it".

Lord Denning continued:-

"Their Lordships see nothing wrong in this direction. It is nothing more nor less than a statement of settled law put cogently to the jury.

Gatley opens his chapter on Republication and Repetition with the quotation "Every republication of a libel is a new libel, and each publisher is answerable for his act to the same extent as if the calumny originated with him....". This case is a good instance of the justice of this rule. If Judd did use the words attributed to him it might be a slander by Judd on Mr Holloway in the way of his office as a Minister of the Crown. But if the words had not been repeated by the newspaper, the damage done by Judd would be nothing compared to the damage done by this newspaper when it repeated it. It broadcast the statement to the people at large ...".

The same quotation is repeated verbatim in the current (8th) Edition of Gatley on Libel and Slander in paragraph 261.

The first of the two Court of Appeal cases relied upon by Mr Eady is Cadam -v- Beaverbrook Newspapers Ltd 1959 1 QB 413, where the defendants published an article stating simply and solely that a writ had been issued against the four plaintiffs claiming damages for alleged conspiracy to defraud. The defendants put forward a plea of justification, based on the issue of the writ itself. The plaintiffs attacked this plea on the grounds that it offended against the repetition rule. This attack failed, Hodson LJ. stating at p 422 that it was arguable that the defence put forward of justification could be supported by a reference to the issue of a writ, and Morris LJ. stating at p 426 that it could not be said that these particulars could not justify some conceivable defamatory meaning that somebody might say was the ordinary meaning of those words.

Cadam's case was followed in Waters -v- Sunday Pictorial Newspapers Ltd 1961 1 WLR 967, in which the defendants had published an article concerning the plaintiff estate agent describing him as "a notorious dodgy operator of London slum properties" and quoting statements by Lord Goddard CJ. 8 years before describing the plaintiff's estate agency as "a fraudulent business from beginning to end". The defendants put forward a plea of justification stating that in the course of proceedings in the Court of Criminal Appeal where the plaintiff's conviction had been quashed Lord Goddard CJ. had made the observation above quoted, and also relying on judicial statements to a similar effect in two previous civil cases in which the plaintiff had been involved.

The Court of Appeal refused an application by the plaintiff to strike out this defence. Willmer LJ., having cited Cadam's case, stated at p 972 that it was impossible to say that the particulars of justification could be no answer to any conceivable meaning which the jury might find, and that it was therefore not possible to strike out the particulars which set out the effect of what was said in the various previous judicial proceedings. Danckwerts LJ. agreed.

In Lewis -v- Daily Telegraph two newspapers published articles stating that the Fraud Squad was inquiring into Mr Lewis' company. He and his company brought actions contending that the words meant that they had been guilty of, or were suspected by the police of being guilty of, fraud or dishonesty. The defendants put forward a plea of justification alleging that it was true that the Fraud Squad was inquiring into the company's affairs at the date of the article.

The central issue in the case was whether the words were capable of meaning that the plaintiff was actually guilty of fraud, and it was held by the House of Lords that they were not so capable, and that the gravest meaning of which they were capable was that the plaintiff was reasonably suspected of being guilty of fraud.

Lord Reid, who was a party to the Truth(NZ) decision, stated at p 260:-

"Before leaving this part of the case I must notice an argument to the effect that you can only justify a libel that the plaintiffs have conducted their affairs so as to give rise to a suspicion of fraud, or as to give rise to an inquiry whether there has been fraud, by proving that they have acted fraudulently. Then it is said that if so there can be no difference between an allegation of suspicious conduct and an allegation of guilt. To my mind there is a great difference between saying that a man has behaved in a suspicious manner and saying that he is guilty of an offence, and I am not convinced that you can only justify the former statement by proving guilt. I can well understand that if you say there is a rumour that X is guilty you can only justify it by proving that he is guilty, because repeating somebody else's libellous statement is just as bad as making the statement directly. But I do not think it is necessary to reach a decision on this matter of justification in order to decide that these paragraphs can mean suspicion but cannot be held to infer guilt".

Lord Hodson stated at p 274:-

"It has been argued before your Lordships that suspicion cannot be justified without proof of actual guilt on the analogy of the rumour cases such as Watkin -v- Hall. Rumour and suspicion do, however, essentially differ from one another. To say that something is rumoured to be the fact is, if the words are defamatory, republication of the libel. One cannot defend an action for libel by saying that one has been told the libel by someone else, for this might be only to make libel worse.... . It may be defamatory to say that someone is suspected of an offence, but it does not carry with it that that person has committed the offence, for this must surely offend against the ideas of justice which reasonable persons are supposed to entertain. If one repeats a rumour one adds to ones own authority to it and implies that it is well founded, that is to say, that it is true. It is otherwise when one says or implies the person is under suspicion of guilt. This does not imply that he is in fact guilty but only that there are reasonable grounds for suspicion which is a different matter."

Finally there are two important passages in Lord Devlin's speech on which close attention were focused during the argument. The first, on which Mr Price particularly relied, is at p 283:-

"In the first place (counsel for the plaintiff) relies on what is called the "rumour cases". I agree, of course, that you cannot escape liability for defamation by putting the libel behind a prefix such as "I have been told that" or "It is rumoured that" and then assert that it was true that you had been told or that it was in fact being rumoured. You have, as Horridge J. said in a passage that was quoted with approval by Greer LJ. in Cookson --v- Harewood "to prove that the subject-matter of the rumour was true". But this is not a case of repetition or rumour.... . Anyway, even if this were to be treated as a rumour case, it is still necessary to find out what the rumour is. A rumour that a man is suspected of fraud is different from one that he is guilty of it.

For the purposes of the law of libel a hearsay statement is the same as a direct statement, and that is all there is to it. (Emphasis added).

The second passage, on which Mr Eady particularly relies, is at p 285:-

"It is not, therefore, correct to say as a matter of law that a statement of suspicion imputes guilt. It can be said as a matter of practice that it very often does so, because although suspicion of guilt is something different from proof of guilt, it is the broad impression conveyed by the libel that has to be considered and not the meaning of each word under analysis. A man who wants to talk at large about smoke may have to pick his words very carefully if he wants to exclude the suggestion that there also a fire; but it can be done. One always gets back to the fundamental question: what is the meaning that the words convey to the ordinary man: you cannot make a rule about that. They can convey a meaning of suspicion short of guilt; but loose talk about suspicion can very easily convey the impression that it is a suspicion that is well founded.

In the libel which the House has to consider there is, however, no mention of suspicion at all. What is said is simply that the plaintiffs' affairs are being inquired into. That is defamatory, as is admitted, because a man's reputation may in fact be injured by such a statement even though it is quite consistent with innocence.... . But a statement that an inquiry is on foot may go further and may positively convey the impression that there are grounds for the inquiry, that is, that there is something to suspect. Just as a bare statement of suspicion may convey the impression that there are grounds for belief in guilt, so a bare statement of the fact of an inquiry may convey the impression that there are grounds for suspicion. I do not say in this case that it does; but I think the words in their context and in the circumstances of publication are capable of conveying that impression." (Emphasis added).

In his careful judgment Drake J. cited the leading authorities, and concluded that the case arguably fell within the Cadam principle on the footing that "If all the article does is to report that a claim is being made by one protagonist against another in an action in legal proceedings, the party against whom that claim is made can be met, if he sues for defamation, with the defence that the report is a true one".

At the forefront of Mr Price's argument was the submission that the case falls fairly and squarely within the repetition rule, which he submitted applies precisely to the report of the contents of Mr Gorman's affirmation, which is a hearsay report of what Mr Gorman affirmed; from this it follows, in the words of Lord Devlin, that it is the same as a direct statement, and that is all there is to it.

Mr Price did not for present purposes seek to challenge the decisions in the Cadam and Waters cases, but he submits that their ambit is strictly limited to reports of the issue of a writ or of the institution of other legal proceedings, (which, he says, constitute public acts or events), or reports of public judicial pronouncements. By contrast, he says, the statements relied upon in Mr Gorman's affirmation are not public material at all. If, he asked, the Cadam/Waters principle applied to such statements, what would be left of the repetition rule?

Mr Price stressed that, as is common ground, this publication is not protected by either absolute or qualified privilege, since those defences only cover fair and accurate reports of proceedings in open court, in the former case reports published contemporaneously in a newspaper or other media, and in the latter case reports whenever published, unless the plaintiff alleges and proves that the publisher was actuated by express malice.

Mr Eady in his argument strongly relied on the Cadam and Waters cases, and submitted that the same principle applies in the present case, the acid test being whether the meaning sought to be justified is one which the words are reasonably capable of bearing. There is, he said, no authority to distinguish an affidavit from other court documents such as a writ or statement of claim, nor can any valid distinction be drawn between an allegation in a writ (Cadam), the evidence to support that allegation (the present case), and judicial pronouncements (Waters). He submitted that the essential question is to determine what is the range of possible meanings, which, in the words of Lord Devlin, is the fundamental question to which one always goes back. If in the present case the words are held by the jury to convey guilt, ie, that there is no smoke without fire, then the defence will fail.

Mr Eady did not challenge the repetition rule, but submitted that it does not apply here, on the footing that where republication is of what he described as "a second order" allegation, ie, a republication of an original allegation (in the present case by re-publishing Mr Gorman's affirmation), it falls outside the repetition rule, and is justifiable by proving that the original allegation was in fact made. If on the other hand the re-publication conveys in any way that the allegation is true, then its substance must be justified.

Mr Eady acknowledged that his formulation of the "second order" test applied primarily to reports of legal proceedings, which he suggested a reasonable reader would approach in a sceptical frame of mind, not assuming that the allegation was well-founded, but inferring that it represented one side only of a current dispute. This he sought to contrast with what he called a village rumour, which he said would have no point unless it was conveying the truth.

He submitted that the defence of justification may be maintainable in a case such as the present where a defence of privilege (absolute or qualified) would not be available, though where, as here, the publisher anticipates the open court proceedings, and so has no privilege defence, he does so at his peril; but provided he chooses his words carefully, as Lord Devlin said, he may succeed in being able to justify them.

As a matter of legal policy Mr Eady submitted that if the plaintiff is right, the media would never be able to report legal proceedings unless or until they were heard in open court and therefore potentially protected by privilege, which would be an unwarranted fetter on free speech.

These arguments on both sides were extremely well presented, and I have not found this an easy case to decide.

Undoubtedly there is very considerable force in Mr Eady's submission that this case falls into the Cadam/Waters category, and that it would, if Drake J.s' judgment was upheld, carry those two cases only a very short step further forward.

However in the end I have firmly concluded that, in the face of the repetition rule, Mr Eady's argument cannot prevail.

It is, I think, very important to appreciate the weight of authority behind the repetition rule, which was well-established throughout most of the 19th century, which was given unqualified endorsement as settled law by the Privy Council in the Truth (NZ) case, and which gained the final seal of approval from the House of Lords in the Lewis case.

In the present case we are concerned with a report of statements in an affirmation, which palpably falls directly within the rule, since it is essentially hearsay.

Mr Eady seeks to escape from this difficulty by means of his "second order" theory. I am bound to say I find that theory very difficult to grasp. What, one asks, is the basis for a material distinction between the newspaper reporting what Judd said in the Truth (NZ) case, and the Mail on Sunday reporting what Mr Gorman said in the present case? I can see none. Furthermore, why should the reader be more sceptical about the validity of an allegation sworn in an affirmation in court proceedings, than about the validity of a village rumour? I can see no good reason, and would incline to think that it was more likely to be the other way round.

I would thus hold that this plea of justification clearly falls foul of the repetition rule, and that it is therefore unsound in principle and should be struck out.

The Cadam and Waters cases are both decisions of this court, and the former to my mind does not create any difficulty, since I think it is acceptable that a statement that a writ or equivalent civil proceeding has been issued (or for that matter that an indictment or similar criminal proceeding has been laid) may be capable of conveying no more than the fact that the relevant proceedings have in fact been launched; moreover, and most important, there is no hearsay problem.

The Waters case presents more difficulty, since there was a hearsay problem, and I think that case can only be explained, as Mr Price suggested, on the basis that the statements reported were judicial pronouncements made in open court, and therefore fell into a special category. But I for my part regard Waters as on the outer fringe of this class of case, and consider it should not be followed save on similar facts.

In considering the relationship between justification and absolute or qualified privilege, I fully accept Mr Eady's submission that the defence of justification may be maintainable where a defence of privilege would fail. This is indeed demonstrated by the Cadam and Waters cases, and indeed in the latter it is very unlikely that a defence of qualified privilege would have been maintainable, since a fair and accurate report of Lord Goddard's remarks would surely have required mention of the fact that Waters' appeal against conviction in fact succeeded, albeit on the ground of misdirection.

However I think it is significant that privilege only protects reports of proceedings taking place in open court, and that its foundation is that those proceedings took place in public, so that the public in general should have access to fair and accurate reports thereof (Webb -v- Times Publishing Co 1960 2 QB 535). This is a consideration of public policy, and does not extend to court documents which have not been brought into the public arena.

In paragraph 624 of his chapter on Qualified Privilege in the section entitled Judicial Proceedings, under the heading "Publication of contents of documents not brought up in open court", Gatley (op cit) quotes a statement by Oliver Wendell Holmes J. in Cowley -v- Pulsifer (1884) 137 Mass. R at p 394 that "It would be carrying privilege farther than we feel prepared to carry it, to say that, by the easy means of entitling and filing a statement of claim in a cause, a sufficient foundation may be laid for scattering any libel broadcast with impunity".

This statement was made in the context of common law privilege, but I think it is nonetheless pertinent, and that if reports of affidavits, or other court documents, not produced in open court, were to have the protection of privilege extended to them, it could only be done by statute. I do not for one moment suggest that such an extension would be either practicable or desirable, since it would be very difficult to frame a rule which was just to all parties involved; but in the unlikely event of such a reform being attempted, it is unthinkable that considerations of accuracy and fairness would not require both sides' allegations to be reported, and not, as here, only one side's.

It is indeed the one-sidedness of the present publication which to my mind vindicates the justice of applying the repetition rule to the present case, avoiding the unfairness similar to that identified by Lord Denning in the Truth (NZ) case of a private court document emanating from one side being disseminated on a very wide scale to the public at large.

On the other hand I do not think that this decision will have the dire effect on the freedom of the press which Mr Eady predicts. The media will be free to report the issue of proceedings in both civil and criminal cases, and will have the full protection of privilege (whether absolute or qualified according to the circumstances) for fair and accurate reports of all proceedings of either kind in open court. This to my mind furnishes ample scope for keeping the public properly informed.

For all these reasons I would allow this appeal.

LORD JUSTICE SIMON BROWN: I agree and add a short judgment of my own in recognition of the importance of the point at issue and the excellence of both sides' arguments before us.

The repetition rule (I gratefully adopt my Lord's term for it, as well as his exposition of the facts, authorities and arguments) is a rule of law specifically designed to prevent a jury from deciding that a particular class of publication - a publication which conveys rumour, hearsay, allegation, repetition, call it what one will - is true or alternatively bears a lesser defamatory meaning than would attach to the original allegation itself. By definition, but for the rule, those findings would otherwise be open to the jury on the facts; why else the need for a rule of law in the first place?

Take the present case. If, as I would hold, the rule applies, it applies to prevent the respondents from pleading and then inviting the jury to conclude that their article is true because it does no more than recite what in fact is alleged in Mr. Gorman's affirmation, alternatively is less defamatory than Mr. Gorman's affirmation itself (which, of course, attracts absolute privilege) because it does not assert the truth of the affirmation but merely reports that it contains such allegations. (It would, of course, be another thing entirely if the respondents were able to deny that the publication was defamatory at all - if, say, the defamatory sting of the article had been wholly removed by surrounding words. Then, to use Baron Alderson's famous phrase in Chalmers v Payne (1835) 2 CrMR 156: "The bane and the antidote must be taken together." But such cases are rare and this plainly is not one of them.)

The policy underlying and justifying the rule is that stated by Lord Reid in Lewis v Daily Telegraph Ltd [1964] AC 234 at 260:

"I can well understand that if you say there is a rumour that X is guilty you can only justify it by proving that he is guilty, because repeating somebody else's libellous statement is just as bad as making the statement directly."

In such a case as the present the justification for the rule is more obvious still. As Lord Denning said in Truth (NZ) Ltd v Phillip Holloway (1960) 1 WLR 997 at 1002:

".....if the words had not been repeated by the newspaper, the damage done by [the maker of the allegation] would be nothing compared to the damage done by this newspaper when it repeated it. It broadcast the statement to the people at large.......".

The essence of Mr. Eady's argument is that the rule has no application to what he calls "second order" allegations, the reporting of allegations made in particular in the context of the administration of justice. In considering that argument, however, one must note that in this very context the strict operation of the repetition rule is tempered in two important respects: first, by the law of absolute and qualified privilege; second, by the court's decisions in cases such as Cadam v Beaverbrook Newspapers Ltd [1959]) 1 QB 413. Let me say a brief word about each in turn.

Privilege (currently under fresh legislative consideration)

Absolute privilege attaches inter alia to:

i. All the various documents - pleadings, affidavits, statements and the like - brought into being for legal proceedings when being used for that purpose;

ii. Fair and accurate reports of proceedings in open court which are

a. contemporaneous,

b. by newspapers (or possibly TV).

Qualified privilege attaches to such reports of proceedings in open court as are not

a. contemporaneous, or

b. published by newspapers. These in other words are actionable on proof of malice.

My Lord has already cited the terms in which Holmes, J. in Cowley v Pulsifer (1884) 137 MASS.R at 394 refused to allow privilege to attach to a report of a statement of claim: the filing of such a document was not, he held, "a sufficient foundation......for scattering any libel broadcast with impunity." True, as Mr. Eady submits, there are occasions when a defence of justification may be maintainable when the defence of privilege would fail - the Cadam line of cases is one illustration of this; proof of the subsequent conviction of an accused whose trial had been unfairly reported would doubtless be another. But this does nothing to diminish the force of Mr. Price's argument that, if the repetition rule can be avoided in a case like the present, then much of the law of privilege is otiose - because an accurate report of allegations in legal proceedings (whether or not, indeed, fair, in the sense of balanced, and, in the case of non-contemporaneous reports, whether or not malicious) would in any event be justifiable as true. The very existence of the law of privilege to cover the fair and accurate reporting of proceedings surely postulates that otherwise such reports would fall foul of the repetition rule. As was said by the New South Wales Court of Appeal in Wake v John Fairfax [1973] 1 NSWLR 43 at page 50:

"It seems to us that, in a case where there is no qualified privilege to report or repeat the defamatory statements of others, the whole cohesion of the law of defamation would be destroyed, if it were permissible merely to plead and prove that the defamatory statement was made by another; that this fact was stated in the matter complained of and that the defamatory imputation was not adopted or affirmed. The law as to qualified protection of the reports of certain designated matters would be largely if not wholly redundant."

Cadam's case

This line of authority, although, as I recognise, not analysed in the judgments as exceptions to the repetition rule, should in my judgment be so regarded. The exceptions are justified -in the case of Waters v Sunday Pictorial Newspapers Ltd (1961) 1 WLR 967 with difficulty - as reports of public acts or events (including public judicial findings). Cadam in particular appears to fall into the same category of case as English and ScottishCo-operative Properties v Oldhams [1940] 1 KB 440: it puts reports of the issue of civil proceedings on the same footing as the reporting of criminal charges.

In my judgment these cases strike an acceptable balance between the public interest in freedom of speech - the right to disseminate and receive information - and the public interest in protecting peoples' reputations. If any different balance is to be struck, it should not be by expanding these exceptions to the repetition rule but rather, as my Lord observes, by legislation. One can quite well understand, however, why the law of qualified privilege does not extend to the pre-trial reporting of allegations contained in court documents: it is one thing to report proceedings contemporaneously or even retrospectively - then both sides' stories are being, or will have been, told in open court; quite another to be privileged to do so when perhaps (as here) only one side's allegations are being related and at a time likely to be months or even years before the full picture will emerge in open court.

I would finally say a word about Lewis v Daily Telegraph Ltd, a case which at first blush might have appeared to support Mr. Eady's argument. What amongst other things Lewis decided was that an allegation that someone is suspected of guilt is different to and less serious than an allegation that he is actually guilty. It is in that context that Lord Devlin spoke the words upon which Mr. Eady places such reliance:

"One always get back to the fundamental question: what is the meaning that the words convey to the ordinary man: you cannot make a rule about that.

As, however, my Lord has shown in the passages he cites from the various speeches (including Lord Devlin's), so far from Lewis undermining the repetition rule, it in fact reiterates it. And, as I began by pointing out, the repetition rule is indeed a rule which, where it applies, dictates the meaning to be given to the words used. Had Mr. Gorman's affirmation alleged, not that the appellant is guilty of dishonesty and perjury, but only that he is suspected of such misconduct, then Lewis would be in point: the respondents on repeating such lesser allegation would then have had to prove merely grounds for suspicion and not actual guilt. As it is, however, Lewis affords Mr. Eady no support whatever.

In short, there can in my judgment be no doubt but that the repetition rule applies to the publication here complained of. The fact that the respondents did not actually assert the truth of Mr. Gorman's allegations may be available to them by way of mitigation of damages; it cannot, however, found a defence.

For these reasons in addition to those given by my Lord, I too would allow this appeal.

SIR RALPH GIBSON: I agree with both judgments

Order: Appeal allowed. Paragraphs 4 and 5 of the Defence to be struck out. The Plaintiff's costs of this appeal and before Mr Justice Drake and Master Murray to be paid by the defendant.

Leave to appeal to the House of Lords refused.