England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH DIVISION
(SIR OLIVER POPPLEWELL)

		Royal Courts of Justice Strand London WC2
		Tuesday 11th January 2000

Tuesday 11th January 2000

May L.J.

Introduction
1. The claimants, GKR Karate UK Limited, promote and teach Go Kan Ryu karate. They operate, among other places, in the Leeds area. The first defendants publish the Leeds Weekly News in whose issue of 14^th August 1997 appeared an article written by the third defendant, Mrs Holmes, under the headline "GIVE 'EM THE CHOP". The article was critical of the claimants. It quoted statements made to Mrs Holmes by the second defendant, Mr Porch, who is general administrator of the English Karate Governing Body.
2. In these libel proceedings, the claimants say that the article was defamatory of them. They claim damages for libel against each of the three defendants. They say that the natural and ordinary meaning of the publication was (in summary) that the claimants rip people off by taking money for karate club membership and then just disappearing; carry out no checks on the standard or background of their instructors; overcharge for karate lessons; teach karate through instructors who are not properly qualified; falsely claim that they have full insurance cover; and in consequence give karate teaching a bad name and should be shut down.
3. The first and third defendants ("the Newspaper defendants") have a common interest in the proceedings. By their defence they plead a Lucas-Box meaning for the publication:

"... that because of its unacceptable business practices ( the [claimants are] not a fit and proper body to instruct people in karate, but a disreputable and unethical body which puts its own profits ahead of the safety of its students or the interests of the sport of karate."

4. The Newspaper defendants plead justification of this meaning and they give particulars extending to 25 detailed paragraphs. They also plead that the words were fair comment on a matter of public interest. They say that the words were published on an occasion of qualified privilege, of which they give particulars. By their Amended Reply, the claimants plead extensively to the particulars of justification. They say that the words complained of do not constitute comment or that, if they do, they were not fair comment. They deny that the occasion of publication was privileged. They say alternatively that the Newspaper defendants were actuated by express malice, of which they give particulars. They say that the Newspaper defendants have not pleaded any justification of meanings of the publication alleged by the claimants and it is to be inferred that they knew that they were false or were reckless as to their truth or falsity. They say in substance that, if the Newspaper defendants had carried out proper inquiries, they would have found out that the publication was untrue. They say that the Newspaper defendants should have made close inquiries before making the publication. Instead they relied on Mr Porch whose purpose was to drive the claimants out of business and who was a manifestly tainted source. The Newspaper defendants knew or ought to have known this. If they did not know that this was Mr Porch's purpose, the Newspaper defendants were reckless as to the truth or falsity of the published allegations.
5. Mr Porch's Defence and the Reply to it are similar to those in the case of the Newspaper defendants, but the particulars of malice alleged against him are substantially more extensive. The claimants have also brought separate libel proceedings against Mr Porch alone arising out of a letter written by him dated 5^th June 1997. Common issues arise in the two actions which are to be heard together.
6. On 15^th December 1999, Sir Oliver Popplewell, sitting as a judge of the High Court, held a pre-trial review in anticipation of the trial which is fixed to begin on 11^th January 2000. Among other decisions, he ordered, at the request of the Newspaper defendants and against the opposition of the claimants, that two issues should be heard and determined at the outset of the trial by the judge and jury before the hearing and determination of the other issues. The two issues are (a) whether the article in the Leeds Weekly News was published on an occasion of qualified privilege and, if so, (b) whether in publishing the article the Newspaper defendants or either of them were actuated by express malice. The important effect of the order is that the issues of privilege and malice in the action against the Newspaper defendants are to be heard and determined before the issue of justification. The advantages of the judge's order are obvious. It is reckoned that the trial of the preliminary issues will take 3 days or so, whereas a full trial which included the issue of justification would take 4 to 6 weeks. The order does not affect the cases against Mr Porch which are to proceed in full whatever the outcome of the preliminary issues. To that extent, the order does not mean that the claimants may be denied an opportunity of vindication.
7. The claimants appeal against the judge's order of preliminary issues. The judge refused them permission to appeal saying that the order was made in the exercise of his discretion and that he did not believe that there was any prospect of a successful appeal. He pointed out that the potential saving of time and cost would be enormous. Laws L.J. gave permission to appeal on 22^nd December 1999. This court heard submissions on the appeal on 5^th January 2000. At the end of the hearing, the court dismissed the appeal but reserved its reasons. These are my reasons for having concluded that the appeal should be dismissed.
8. The judge's judgment
9. The judge said that it would be his responsibility at some stage in the trial to decide whether a claim to privilege was available to the Newspaper defendants and to rule whether there was evidence capable of amounting to malice and, if so, for the jury then to consider the issue of malice. On the issue of privilege, he quoted from the opinion of Lord Nicholls of Birkenhead in Reynolds v. Times Newspaper Limited [1999] 3 WLR 1010 at 1027. He referred to the proposed evidence of Mrs Holmes in which she stated that, before publishing the article, she had spoken to and received information from Mrs Pauline Green, who had complained about the activities of the claimants, and from Mr Burnand, an instructor. Mr Burnand suggested that Mrs Holmes spoke to Mr Porch, which she did and he made statements to her which she included in the article. She stated that she tried to contact the claimants but was unsuccessful. [The claimants deny that she tried to contact them.] The judge said that the Newspaper defendants would have to rely on the evidence of Mrs Holmes. She would have to accept that she made no further inquiries, but the judge considered that there was an arguable case of privilege. As to malice, the judge considered the particulars in the Amended Reply. He referred in particular to the contention that there were parts of the claimants' meaning of the publication which the Newspaper defendants had not met with any plea of justification.
10. The judge said that the court had ample powers, apart from those introduced by the Civil Procedure Rules 1998, to control the way in which litigation is conducted to save cost and time. He had to balance the advantage to the Newspaper defendants of having an opportunity, if their claim of privilege is upheld, to establish this relatively quickly against any risk of unfairness to the claimants. The claimants said that, if the order was made, they would not be able to deploy all the material available to them. Their case was that an investigation into what inquiries the newspaper should have made before publishing the article could not fairly be separated from the question whether the article in its natural and ordinary meaning was true. The Newspaper defendants did not intend to call as witnesses on the proposed preliminary issues either Mr Porch or the other two people to whom Mrs Holmes spoke. It would in particular be unfair if the jury did not have the opportunity of judging what sort of a person Mr Porch was, since it was relevant to the issues of privilege and malice to judge whether he was apparently reliable or manifestly unreliable.
11. The judge said that the jury would have to consider the state of mind of Mrs Holmes when the article was published. She made no further inquires beyond those referred to in her statement. Her state of mind had to be tested at the end of her conversation with Mr Porch. She had not seen Mr Porch and the jury's view of him would be no different from hers, if he is not to be called on the preliminary issues. Whether he may be manifestly unreliable was not relevant to whether she had an improper motive. The judge considered that it would cloud the waters. The jury would be inclined to attribute malice in Mr Porch, if they so found, to Mrs Holmes. Evidence (other than that available to her at the time) designed to establish that Mr Porch was unreliable would be irrelevant to her state of mind at the time of the publication. There was a great deal to be said for dealing with Mrs Holmes' state of mind as a discrete issue. The jury would simply get confused if all matters relevant to justification were fully canvassed. But the judge considered that the short and discrete issue could be dealt with simply and easily and without unfairness to the claimants.
12. Parties' submissions
13. Mr Carman Q.C. submits on behalf of the claimants that the judge's novel approach was unsound, artificial and unfair to the claimants. The effect of the order was to depart from the test of qualified privilege to be found in Reynolds and to substitute a different test. All the circumstances of the publication, including whether it was true, have to be investigated to decide whether the publication of the article was in the public interest so that the occasion was privileged. The practical effect of the judge's judgment and order was that all that would be considered would be what the journalist knew and what inquiries the journalist should have made. What the journalist would have discovered if she had made further inquiries would be left out. The reliability of the journalist's source, objectively determined, is relevant to the issue of privilege. The claimants should therefore be entitled to cross-examine Mr Porch, if he is to be called in the action as a whole. The questions whether objectively Mr Porch was a reliable source and what Mrs Holmes would have discovered if she had made further inquiries could not fairly be disentangled from the facts relevant to the defence of justification. As to malice, the claimant's case is that Mrs Holmes was recklessly indifferent. Her actions after the publication are capable of being relevant to her state of mind at the time of the publication. For example, defendants are often asked whether, in the light of evidence that has been given on the issue of justification, they are prepared to withdraw what they published. Their answers to these and similar questions are capable of bearing on the question whether they were actuated by malice at the time of publication. It would be artificial if the issues of privilege and malice are to be determined separately. What are the jury to be told about the undetermined issue of justification? Are they to assume that the publication was true or untrue? It would be difficult for the jury to decide the issue of Mrs Holmes' alleged recklessness if they are to suppose that the publication may be true. In a conventional full trial, they will have rejected the defence of justification before considering the question of malice. Where is the evidential line to be drawn? Mr Carman submits that there is no fair solution, unless the issue of justification is to be determined in full at the same time. The judge's order fundamentally restricts the claimants' proper ability to deal with qualified privilege and malice.
14. Mr Moloney Q.C. submits on behalf of the Newspaper defendants that the judge's order was a discretionary case management decision which this court should not lightly disturb. He submits that the decision was empowered by and accorded with the Civil Procedure Rules and modern litigation culture. The issue of privilege is not concerned with the truth or falsity of the publication, since a publication may be privileged irrespective of whether it is true or not. Privilege exists not only to protect certain classes of publication which are in fact untrue, but also to protect those whose publications are true from harassing libel actions. The question of a journalist's privilege is to be determined by the judge in the light of all the circumstances at the time of publication as they were or should have been apparent to the journalist. The circumstances do not extend to later events. The apparent reliability of a journalist's source of information is to be judged objectively by reference to what the journalist knew or in the light of inquiries which the journalist should have made. If the inquiries are judged to have been inadequate at the time of publication that could go to defeat privilege, but information which the inquiries might have revealed is not relevant. As to malice, what the claimants have to prove in this case is that at the time of publication the journalist was recklessly indifferent to the truth. That is a subjective question to which neither after events nor a jury's determination of whether the publication was true or not are relevant. The jury should be directed to proceed on the basis that it has not been established whether the publication was true or false and that they should make no assumption. Their task is different and does not require that question to be determined. The evidence should be limited to that which is relevant to the two issues. That does not include (a) events after the publication, (b) the question whether the publication was true or not, or (c) what Mrs Holmes might have found out if she had made further inquiries.
15. Discussion
16. Although the judge was able to decide the question under appeal by reference to the law and procedure as it was before the introduction of the Civil Procedure Rules, the CPR apply to these cases and to the judge's decision. They introduce a new procedural code which enlarges the court's management powers. Rule 3.1(1) empowers the court to direct a separate trial of any issue, to exclude an issue from consideration and to take any other step or make any other order for the purpose of managing the case and furthering the overriding objective. The overriding objective is to enable the court to deal with cases justly. That includes saving expense and dealing with the case proportionately, expeditiously and fairly. In my view therefore, the claimants' submission that the judge's order was a novel way of dealing with a libel case is, by itself, quite unpersuasive. Libel cases generally have historically been notoriously long drawn out and expensive and are especially amenable to the culture of the new procedural code. They need novel and imaginative case management to achieve what has hitherto often not been achieved. I consider that, subject to questions of substantive law and fairness to which I shall come, the judge's order was entirely in accordance with the CPR. A fair means of determining privilege and malice expeditiously in this case without having to trudge expensively through the mire of justification achieves the overriding objective. Further, under Part 32 the court may:

"... control the evidence by giving directions as to –

(a)the issues on which it requires evidence;

(b)the nature of the evidence which it requires to decide those issues; and

(c)...

(2) The court may use its powers under this rule to exclude evidence that would otherwise be admissible.

(3)The court may limit cross-examination."

17. This means, in my judgment, that the parties no longer have any absolute right to insist on the calling of any evidence they choose provided only that it is admissible and arguably relevant. The court may exclude admissible and relevant evidence or cross-examination which is disproportionately expensive or time-consuming, provided that to do so accords with the overriding objective. This could aptly apply in the present case to potential questions asking Mrs Holmes whether in the light of several weeks of evidence relevant to justification she would withdraw the sting of her publication. This may have been a well-worn forensic technique in libel cases. But whatever answers she might give in the year 2000 to questions of this kind would throw little, if any, light on her state of mind in August 1997. It would be wholly disproportionate to refuse to make the order simply to enable this kind of evidence to be adduced.
18. The opinions of the House of Lords in the Reynolds case analyse extensively the circumstances in which a publication may, subject to malice, by privileged. The classic analysis considers whether in all the circumstances the publisher had a duty to make the publication and the recipient an interest to receive it. There are occasions where publication to the world at large may be privileged. Lord Nicholls expressed the law thus at page 1020A:

"... in deciding whether an occasion is privileged the court considers, among other matters, the nature, status and source of the material published and the circumstances of the publication. ( These factors are to be taken into account in determining whether the duty-interest test is satisfied or, as I would prefer to say in a simpler and more direct way, whether the public was entitled to know the particular information. ( A claim to privilege stands or falls according to whether the claim passes or fails this test."

19. This justifies Mr Carman's submission that the test is whether the public is entitled to know the information and not, as Mr Moloney had submitted and insofar as there is any difference, what a responsible journalist would do. It does not, however, support Mr Carman's submission that after events, including the subsequently determined truth or falsity of the publication, are relevant. The court considers "the circumstances of the publication" which, in its context, are the circumstances at the time of the publication. That this is so appears also from Lord Nicholls' quotation at page 1016E from the judgment of Blackburn J. in Davies v. Snead (1870) L.R. 5 Q.B. 608 at 611 where he spoke of circumstances where a person is so situated that it "becomes right in the interests of society" that he should tell certain facts to another; and his quotation at page 1017G of the statement of Lord Buckmaster L.C. in London Association for Protection of Trade v. Greenlands Ltd. [1916] 2 A.C. 15 at 23 of "every circumstance associated with the origin and publication of the defamatory matter".
20. Part of Lord Nicholls' conclusion at 1027C was in these terms:

"Depending on the circumstances, the matters to be taken into account include the following. The comments are illustrative only. 1. The seriousness of the allegation. The more serious the charge, the more the public is misinformed and the individual harmed, if the allegation is not true. 2. The nature of the information, and the extent to which the subject matter is a matter of public concern. 3. The source of the information. Some informants have no direct knowledge of the events. Some have their own axes to grind, or are being paid for their stories. 4. The steps taken to verify the information. 5. The status of the information. The allegation may already have been the subject of an investigation which commands respect. 6. The urgency of the matter. News is often a perishable commodity. 7. Whether comment was sought from the plaintiff. He may have information others do not possess or have not disclosed. An approach to the plaintiff will not always be necessary. 8. Whether the article contained the gist of the plaintiff's side of the story. 9. The tone of the article. A newspaper can raise queries or call for an investigation. It need not adopt allegations as statements of fact. 10. The circumstances of the publication, including the timing.

The list is not exhaustive. The weight to be given to these and any other relevant factors will vary from case to case. ... The decision on whether, having regard to admitted or proved facts, the publication was subject to qualified privilege is a matter for the judge. ...

... Further, it should always be remembered that journalists act without the benefit of the clear light of hindsight. Matters which are obvious in retrospect may have been far from clear in the heat of the moment."

21. This passage, in my judgment, clearly supports Mr Moloney's submission that the existence or otherwise of qualified privilege is to be judged in all the circumstances at the time of the publication. It is not necessary or relevant to determine whether the publication was true or not. None of Lord Nicholls' ten considerations require such a determination and some of them (for example number 8) positively suggest otherwise. Nor is it necessary or relevant to speculate (for the purposes, for instance, of considerations 3, 4 or 7) what further information the publisher might have received if he had made more extensive inquiries. The question is rather whether in all the circumstances the public was entitled to know the particular information without the publisher making further such inquiries. The reliability of the source of the information is a relevant consideration, but that, in my view, is to be judged by how objectively it should have appeared to the defendant at the time. It is to be considered in conjunction with the inquiries which the defendant made at the time relevant to the reliability of the source. If the defendant made careful inquiries which, judged objectively, reasonably justified a conclusion that the source was apparently reliable, that will be a positive (though not determinative) indication in favour of the occasion being privileged. If the defendant made no, or only perfunctory, inquiries, a conclusion that the source was apparently reliable will be less likely. In neither instance is a subsequent investigation at trial into the actual reliability of the source relevant. The judge was, in my view, right so to conclude in the present case. Mr Porch may or may not have had an axe to grind. But, if he did, what is relevant is whether Mrs Holmes knew it at the time or, if she did not, whether she made proper inquiries on that subject.
22. Mr Carman referred to this further passage in Lord Nicholls' conclusion at page 1028E:

"Further, it is elementary fairness that, in the normal course a serious charge should be accompanied by the gist of any explanation already given. An article which fails to do so faces an uphill task in claiming privilege if the allegation proves to be false and the unreported explanation proves to be true."

23. I am not persuaded by Mr Carman's submission that this implies that the question whether the allegation is true or false is relevant to the question of privilege. In its context, this refers to the circumstances of the Reynolds case, where Mr Reynolds had given his explanation but the article did not report its gist; and assumes that the question of privilege is addressed after the defence of justification has been determined against the defendant. The emphasis is on not reporting the gist of the explanation already given.
24. The issue of malice requires a determination of the subjective state of mind of Mrs Holmes at the time of the publication. As Lord Diplock said in his opinion in Horrocks v. Lowe [1975] A.C. 135 at 149:

"... the motive with which the defendant on a privileged occasion made a statement defamatory of the plaintiff becomes crucial. ( he is entitled to be protected by the privilege unless some other dominant and improper motive on his part is proved. 'Express malice' is the term of art descriptive of such a motive. Broadly speaking, it means malice in the popular sense of a desire to injure the person who is defamed and this is generally the motive which the plaintiff sets out to prove. ...

The motive with which a person published defamatory matter can only be inferred from what he did or said or knew. ...

Apart from those exceptional cases, what is required on the part of the defamer to entitle him to the protection of the privilege is positive belief in the truth of what he published, or, as it is generally though tautologously termed, 'honest belief'. If he publishes untrue defamatory matter recklessly, without considering or caring whether it be true or not, he is in this, as in other branches of the law, treated as if he knew it to be false."

25. These passages confirm (what is logically obvious) that the defendant's state of mind is to be determined at the time of publication. The subsequently determined truth or falsity of the publication is not material. Where, as in the present case, the contention is that Mrs Holmes was reckless and that she did not consider or care whether her publication was true or not, this is to be inferred (or not) "from what [s]he did or said or knew". A failure to make further or proper inquiries is capable of being an ingredient from which recklessness may be inferred. What the response to those inquiries might have been is not capable of being such an ingredient.
26. It is evident that a central part of the consideration in the present case of both privilege and malice will be the inquires which Mrs Holmes did or did not make of and about the claimants and of and about Mr Porch. They are not, of course, the only circumstances relevant to privilege, but they are important. Equally for malice, it may be that a decision on recklessness or careless indifference would turn mainly on Mrs Holmes' state of mind in relation to the inquiries which she did make and her reasons for not making further inquiries. If the judge decides that the occasion was not privileged, the issue of malice does not arise. If the judge decides that the occasion was privileged, he must have decided that in all the circumstances at the time of the publication, including the extent of Mrs Holmes' inquiries, the public was entitled to know the particular information available to Mrs Holmes without her making further inquiries. It is a little difficult to see how the same inquiries which objectively sustained the occasion as privileged would be capable of contributing to a conclusion that subjectively she was recklessly indifferent to the truth or falsity of her publication. I can well understand, therefore, that Mr Moloney would be thinking of submitting that there was no evidence capable of amounting to malice, if, on the same evidence, the judge had ruled that the occasion was privileged.
27. Conclusion
28. For these reasons, I consider that the judge's order was entirely consonant with the Civil Procedure Rules and that it is not amenable to appeal. Determining the issues of privilege and malice first in the proceedings against the Newspaper defendants and in advance of the issue of justification is fair, sensible and economic. The truth or falsity of the publication is not relevant to those issues, nor is any present determination of Mr Porch's reliability in the light of any evidence he might give in these proceedings. It will be for the judge to determine the precise extent of the evidence which it is fair to admit in the trial of the preliminary issues exercising, if necessary, his powers under Part 32 of the CPR in accordance with the overriding objective.
29. Tuckey L.J.
30. I agree.

ORDER: The respondents to have their costs of the appeal whatever the outcome of the trial; the appellants to have liberty to apply on the question of costs within 7 days of the conclusion of the trial. Leave to appeal to the House of Lords refused.

(Order not part of approved judgment)