England and Wales Court of Appeal (Civil Division) Decisions

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

		Royal Courts of Justice Strand, London, WC2A 2LL Friday 29th June 2001

LORD JUSTICE PILL:

1. This is an appeal by Mr Max Mosley and the Federation Internationale de l'Automobile ("FIA") against a decision of Morland J given on 26 October 2000 whereby the appellants' claim against Focus Magazin Verlag GmbH ("the respondents") in defamation proceedings was dismissed summarily under section 8(2) of the Defamation Act 1996 ("the 1996 Act").

Section 8 of the 1996 Act provides, insofar as is material:

"(1) In defamation proceedings the court may dispose summarily of the plaintiff's claim in accordance with the following provisions.

(2) The court may dismiss the plaintiff's claim if it appears to the court that it has no realistic prospect of success and there is no reason why it should be tried.

(3) The court may give judgment for the plaintiff and grant him summary relief (see section 9) if to appears to the court that there is no defence to the claim which has a realistic prospect of success, and that there is no other reason why the claim should be tried.

Unless the plaintiff asks for summary relief, the court shall not act under this subsection unless it is satisfied that summary relief will adequately compensate him for the wrong he has suffered."

2. Section 8(4) sets out criteria to which the Court shall have regard "in considering whether a claim should be tried". The application under section 8 in the present case turned not on that limb of the sub-section but on whether the claim had a "realistic prospect of success". It is agreed between the parties (and I also agree) that "prospects of success" and "reason to be tried" are two distinct tests and that the criteria in section 8(4) apply only to the second of the tests. Mr Milmo QC, for the appellants, relies only on a claimed prospect of success and Miss Sharp QC on a claimed lack of such prospect and the section 8(4) criteria do not arise for consideration in this case.
3. Focus is a German language weekly news magazine published by the respondents whose registered office is in Munich. It has a circulation of about 900,000 copies of which about 700 are sold in England and Wales. Of those sales, over 400 are by subscription. The weekly readership is estimated at 6,000,000 people, that is over six per copy. It has been described by its Brussels correspondent as having had "a crucial influence on the market".
4. In the Issue for 27 September 1999, in the business section of the magazine at p 338, an interview with Mr Karel van Miert, recently retired EEC Competition Commissioner, was published. It occupied the whole of the page and was accompanied by a photograph. The interview was headed, in translation:

"Once I needed police protection"

The interview included the following exchange:

"Focus: Were there any threats against you personally?

van Miert There was once a case when a Belgian steel works had to close down as a result of one of our decisions, and I had strict police protection. But the worst one was the proceedings over the marketing of Formula 1. It was very clear that certain people were spending a great deal of money to destroy me. Fortunately, they did not succeed."

The first appellant is the president of the second appellant organisation and has been since 1993. FIA is the world governing body for all forms of four wheel motor racing which include the best known and prestigious series of races called "the Formula 1 World Championship". For some years FIA had been under formal investigation by a Department of the European Commission responsible for enforcing the EU competition laws which, until 1999, was under the control of Mr van Miert. The investigation was concerned with arrangements made between FIA and companies controlled by Mr Bernie Ecclestone, for the staging, televising and promotion of Formula 1 World Championship races and whether such arrangements were anti-competitive and contrary to EU law. In May 1998 FIA issued proceedings in the European Court of Justice against the Commission alleging improper disclosure to the press by Mr van Miert's office of confidential information concerning FIA. The proceedings were settled in July 1999 when the Commission issued a statement expressing regret. It will be necessary to consider further the publicity given to that dispute in England and Wales.

5. By a solicitor's letter to the respondents dated 18 February 2000, the appellants made allegations subsequently included in their particulars of claim and requested a "prominent apology" in the next edition of Focus. No apology or other offer of amends was made by the respondents.
6. Having set out the words complained of, the particulars of claim, insofar as is material, alleged:

"5. The words complained of referred and were understood to refer to the Claimants and each of them.

5.1. The First Claimant [that is Mr Mosley] is the well-known President of the Federation Internationale de l'Automobile (FIA). The second Claimant [the FIA] is the sole regulatory body of international motor racing throughout the world and is the governing and regulatory body of the Formula One World Championship, which it founded in 1950. The FIA has supervised and regulated on an ongoing basis all sporting and technical aspects of the Championship, with the objective of ensuring fair competition and the safety of participants, officials and attending public.

5.2. The First Claimant is and would be regarded by the public as synonymous, or inextricably linked, with the Second Claimant and its actions or decisions.

5.3. The Second Respondent was one of the respondents to an investigation by the European Commission into Formula One and other international motor racing series.

5.4. Until his resignation together with the entire Commission on 16th March 1999, Mr Karel van Miert was the European Competition Commissioner who had been responsible for this investigation.

5.5. The Second Claimant was later forced to bring proceedings against the European Commission for the unlawful release of confidential documents by Mr van Miert's staff on 29th May 1998. On 26th July 1999, the European Commission issued a public apology to the FIA and was subsequently ordered to pay Euros 40,000 towards the costs of the FIA.

5.7. The Claimants will invite the jury to infer that the facts and matters set out above were known to (at least a substantial number of) readers of the words complained of, who would therefore have understood these words to refer to the Claimants and each of them.

6. In their natural and ordinary meaning, alternatively by way of innuendo, the words complained of meant and were understood to mean that the Claimants had spent large sums of money for the purpose of destroying Mr van Miert and had issued threats against him personally which were even more serious than the ones he had previously received in connection with a Belgian steelworks, for which he had required strict police protection."

7. The judge stated (p 3):

"It should be noted that neither Mr Mosley nor the FIA are named in the words complained of. The crucial question which I have to determine is whether the claimants have no realistic prospect of establishing that some reasonable readers would understand 'certain people' in the words complained of to refer to the claimants."

8. The judge made extensive reference to publicity in British newspapers of the dispute between the Commission and FIA. I gratefully adopt his formulation, which is accepted by the parties as a fair summary of the relevant material (save that Mr Milmo does not accept that the article in Business News is of limited value). Reliance was placed on 26 articles in nine different newspapers over a period between January 1998 and July 1999:

"In the Financial Times of the 30^th January 1998 there appeared an article headlined: 'Motor Race Organisers Reject Russell's claims':

'The organisers of Formula One motor racing have hit back at European Commission allegations that the sport's structure violates competition rules, accusing Brussels of meddling out of its jurisdiction.

In a letter sent to the commission yesterday, Max Mosley, head of the Federation Internationale de L'Automibile (FIA), says the claims are based on a very limited understanding of the structures of national and international motor sport.

"Its criticism raises fundamental questions about whether European competition law can or should be applied to the international sports governing bodies" said the FIA yesterday.

The anti-trust authorities wrote to the FIA before Christmas complaining about agreements between FIA and Formula One Administration, the company run by Bernie Ecclestone. The agreements give Mr. Ecclestone's outfit exclusive broadcasting rights for Grand Prix racing for 14 years – a period considered too long by Brussels.

According to Commission officials, broadcasting provides directly or indirectly the finance for most activities at all levels of motor racing. They argue that without broadcasting it would not be possible for participants to acquire sufficient sponsorship vital for financing. This, it said, allows Formula One to preserve a dominant position at the expense of rival championships.

But the FIA says this assumption is "totally wrong". It points out that most motor sport occurs without any television coverage and is financed from the private resources of competitors and sponsors.

Karel van Miert, the competition Commissioner, has courted controversy in the world of sport.'

Three days later on 2^nd February 1998 an article appeared in The Times in which this was said:

'Ufea, the European Football Association, and the FIA, the motor racing authority that runs Formula One, are both in the sights of Karel van Miert, the Competition Commissioner, as he wages a campaign against what he sees as illegal restrictive practices.'

He goes on to say:

'… the Commission is embarking on a slippery slope that could disrupt established sports and swamp it with cases. That argument is coming from Max Mosley's FIA, the motorsport body that has become Mr. Van Miert bete noir.'

I interpose to note that Mr. Mosley has been given a possessory title to FIA. The article goes on:

'On Thursday, the FIA set the scene for a mammoth fight when it rejected all the Commission's charges that the Formula One system amounted to an illegal monopoly. The claims, which focused on Bernie Ecclestone, and the power behind Formula One, "are erroneous or based on a very limited understanding", the FIA said. The quarrel has forced Mr. Ecclestone to suspend plans to float his Formula One Holdings.'

The following month, on 22^nd March, an article appeared in the Independent on Sunday entitled: 'Mosley finds a stock answer'. In the article is written these words:

'Last season Ecclestone's plans to float Formula One on the London and New York stock markets were uncharacteristically unsuccessful as he encountered a number of stumbling blocks, not the least of which was the suggestion from the European Union that the manner in which Formula One is run contravenes several European monopoly regulations. Mosley, in particular, has been the target for significant criticism from the European Union official Karel van Miert. Frank Williams recently pointed out the significance of that development. "It's obvious to me that van Miert could cause Formula One a certain amount of trouble. He cannot stop it taking place, but he is a man with a lot of power. I think it's a worry because he and Max [that is Mr. Mosley] seem to be on a collision course. They want to take each other on, they want to demonstrate which is stronger."'

In The Guardian on 30^th May is written under a headline: 'Europe sued over television rights':

'The sport's governing body, the FIA, has begun legal proceedings against the European Union in the European Court of Justice.

The move comes as a result of statements made about the FIA by the competition Commissioner, Karel van Miert, together with what is alleged to be the transmission by his staff to journalists, of confidential documents sent by the Commissioner to the FIA.

Asked at the Monaco Grand Prix last weekend whether such legal action might be considered, the FIA President, Max Mosley, simply replied: "I have been told by our lawyers that I cannot discuss our relationship with the Commission".

The FIA would appear to be irked that van Miert has made critical comments to the media before examining the arguments it put forward. Although the Federation is seeking only nominal damages for harm to its reputation, and further damages to be assessed for harm to its interests, it also wants a declaration from the European Court that van Miert's action in allegedly providing copies of the confidential documents to the press was unlawful.'

Moving ahead to November and the Evening Standard, on 3^rd November in a part of the Evening Standard indexed as 'Capital Markets', under the headline: '£50 million for bank in Formula One Bond Race' is written:

'European Union Competition Commissioner, Karel van Miert, is investigating the exclusive 25 year contract between Formula One Holdings and the FIA, the sport's non-profit making governing body headed by Max Mosley, and other exclusive sports broadcasting rights. Formula One sought an exemption from the relevant articles of the Treaty of Rome but a company spokesman said there was no ruling yet.'

Two days later, The Evening Standard returned to the same subject. It was written:

'Max Mosley, Ecclestone's long standing associate who is head of the Federation International De L'Automobile, the sport's governing body, said it was possible that van Miert's investigation might raise objections to Formula One's deal. It is conceivable but they may give an exemption and then say they will look at it again, Mosley said.

Mosley added that Formula One was protected even if objections arose, because if the rights were deemed to belong to the racing teams or the individual race organiser, Ecclestone had separate deals with them'.

The Telegraph picked up the story on 16^th November with a headline: "van Miert says he will not bow to Formula One pressure". The article begins with this sentence:

'A THREAT has allegedly been made to pull Formula One races out of Europe.'

Further into the article is written:

'The European Commission has been investigating Formula One's links with the FIA, the sport's governing body. FIA grants television contracts to Formula One.

According to a BBC TV Panorama documentary to be broadcast tonight, Max Mosley, President of the FIA has demanded a comfort letter from Karel van Miert, the EU Competition Commissioner, confirming that its contracts with Mr. Ecclestone were lawful and not anti-competitive.

Otherwise, Mr. Mosley said one option would be to relocate both the FIA and Mr. Ecclestone's company outside the EU and severely limit the number of Formula One races in Europe. A similar threat was made before over the ban on tobacco advertising on racing cars.

Mr. Van Miert said: "threats against me will not prevent assessment of all the relevant issues in the proper manner"'.

On the same day The Financial Times wrote:

'The difficulty is that both Mr. Ecclestone and Mr Mosley have been conducting their business with little regard to the competition authorities in Europe which are taking an increasing interest in the previously closed or highly lucrative business of sport.'

The next day The Times wrote under a headline 'Ecclestone aims to thwart EU by buying Formula One rights:

'Karel van Miert, the European Competition Commissioner, launched an investigation in the middle of last year into the contracts that link Formula One, the FIA, the teams that race in the sport and the media companies that televise it.'

The Times returned to the story on 20^th November under the headline: 'Ecclestone hits Formula One TV Barrier'. The article begins:

'Max Mosley, President of the FIA, the governing body of world motor sport, yesterday said he expected the European Commissioner to make a concerted attempt to unwind deals struck between the FIA and Bernie Ecclestone's Formula One group over the rights to televise the sport.'

It mentions an agreement:

'Mr Mosley, however, indicated yesterday that this agreement may actually be rendered null and void by Karel van Miert, the European Commissioner.'

I am not referring to a number of other articles that appear in "MM1". I have made a selection which is particularly germane to the words complained of. On 1^st July 1999 The Guardian wrote:

'The Competition Commissioner, Karel van Miert, said: "We have found evidence of serious infringements of EU competition rules, which could result in substantial fines".'

That was in particular in relation to Bernie Ecclestone's Formula One Grand Prix empire. The article went on to say:

'Relations between the motor racing body and the Commission have been acrimonious since Mr. Van Miert criticised the way Mr. Ecclestone and FIA chief, Max Mosley, organise motor racing.'

Mr. Mosley also exhibits to his statement an article in an English magazine, Business Age, for January 1999, which gives a highly personalised account of the control that Mr. Mosley and Mr. Ecclestone have over Formula One motor racing. A section of the article is headed: 'The Battle with the Commission'. A sentence in it says that:

'Mr. Van Miert was upset and blamed Mr. Mosley for causing a constitutional crises in Belgium.'

However, in my judgment the Business Age article does not advance much the claimants' case because it would have a more restricted readership than the national newspapers that I have referred to."

9. The judge concluded (p 12):

"Although I accept Mr Milmo's contentions, that if a person had read and recollected one or more of the articles to which I have referred, and then later had read in German the Focus article, he could reasonably have reached the conclusion that certain people, including Mr Mosley, and because Mr Mosley and the FIA and almost synonymous, both were the subject matter of the defamatory imputations."

(I interpose that I also accept each of those contentions of Mr Milmo.)

"However, in my judgment, the existence of such a person is fanciful and not realistic. Who might he or she be? No doubt millions of people read daily the newspapers from which I have quoted. But only a proportion will read a newspaper from cover to cover; only a proportion, albeit many several hundreds of thousands would have read the articles from which I have quoted with sufficient attention and retention to have been able to conclude later that certain people, and the words complained of, included Mr Mosley. However, before reaching that conclusion, they would have to have been able to read German and to have read the particular article on p 338 of the 27th September 1999 edition of Focus. In my judgment it is fanciful to suggest that it would be a person whose first language was not German.

The Focus magazine is a glossy, generalist magazine costing 4 Deutschmarks, 50 pfennig. Only about 700 copies are distributed in England. In my judgment, realistically, readership in England would be confined to Germans living or working in England or visiting England. Bearing in mind that only 700 copies are distributed, it is unlikely, in my judgment, that readership would exceed about 3,000 people. But of those 3,000 only a small percentage would have read p 338. The magazine has a total of 394 pages. The index on pp 6 and 7 divides the magazine so to speak into sections under headings such as Germany, culture, modern living, entertainment, foreign affairs, and between 330 and 358 business or company matters.

Although I accept that most Germans living and working in England, or visiting England, would be able to read English newspapers, I consider it so far fetched as to be fanciful that such a German would have read a relevant article in an English newspaper with sufficient attention and retention, and they then later read in German at p 338 and have understood certain people to include Mr Mosley.

To succeed in a libel action a claimant must prove that the words complained of do not only identify the person against whom the defamatory imputation is made, but also that one or more publishees could reasonably have understood from knowledge of facts known to the publishee extrinsic to the words complained of that the defamatory imputation was referable to the claimant."

It was for these reasons that the judge concluded that the appellants had "no realistic prospect of success". The judge went on to consider the second limb of section 8(2) and section 8(4) but, for reasons given earlier, that does not now arise.

10. The parties agree that the expression "no realistic prospect of success" in section 8(2) of the 1996 Act should be construed in the same way as the expression "no real prospect of succeeding" in CPR 24.2. In Swain v Hillman [2001] 1 All ER 91, Lord Woolf MR stated:

"The words 'no real prospect of succeeding' did not need any amplification, they speak for themselves. The word 'real' directed the court to the need to see whether there was a realistic, as opposed to a fanciful, prospect of success."

Mr Milmo submits that the Practice Direction on the summary disposal of claims is also relevant in the present context. Paragraph 1.3 provides that an application for summary judgment under Rule 24.2 may be based, amongst other things, on "the evidence which can reasonably be expected to be available at trial or lack of it". That requires the judge to look forward, Mr Milmo submits, and not to confine himself to evidence available at the time of the application. The judge should have had regard to the likelihood that disclosure of documents by the respondent, such as subscription lists and any correspondence with the editor, would have helped to establish that readers of the interview had the knowledge needed to identify the claimants.

11. No specific publishee was identified in the particulars of claim and the question also arose whether, in the circumstances of this case, such identification was necessary. As to that, the judge stated:

"In my judgment this is not one of those exceptional cases where the extrinsic facts, Mr Mosley's involvement in proceedings against the Commission, were so notorious that a specific publishee is not to be identified."

12. Mr Milmo relies on the wide and persistent coverage of the dispute between the appellants and the European Commission in widely circulated quality newspapers. Motor racing, especially Formula 1 racing, and the business ventures which surround it, attract enormous publicity in England and Wales and throughout the world. Readers of Focus were likely to be well informed. There is a substantial subscription list in England and Wales and it is likely to include libraries, information centres, Embassies, and newspapers. Readers are likely to include people whose first language if English but have an interest in German affairs and perspectives. The inference that readers of the interview in Focus will do so with a knowledge of the dispute between the appellants and the European Commission can readily be drawn.
13. Mr Milmo disputes the judge's findings that only persons whose first language is German would read Focus. He submits that readers of Focus are likely to be well-informed on sporting and business issues, such as the dispute between the appellants and the European Commission, and are likely to have remembered it when reading the interview. In reaching his conclusion, the judge should have kept in mind that discovery and exchange of witness statements had not occurred at the time of the application and that evidence establishing a link between the readership of Focus and knowledge of the dispute was likely to emerge.
14. The questions whether an inference should be drawn to establish the link and the question whether there is a requirement to identify a specific publishee are closely linked in this case. If the judge was wrong in declining to draw the inference that readers of Focus would be likely to be aware that the "certain people" referred to in the interview included the appellants, he was also wrong to hold that a specific publishee needed to be identified.
15. In Fulham v Newcastle Chronicle and Journal Ltd [1977] 1 WLR 651 a local newspaper circulating in Teesside, where the claimant had been appointed deputy headmaster of a school, published an article in 1973 saying of the claimant that he was a former Roman Catholic priest who had left his parish in the Salford diocese and later married and it was claimed of him that he "went off very suddenly from the parish where he was a curate about seven years ago". In fact he had given up the priesthood in 1962, married in 1964, and his wife had a child in 1965. It was held that only a reader with special knowledge of the facts, either of the date of the claimant's marriage or of that of the birth of his child, could derive an adverse impression from the article and that it was unlikely that readers with such special knowledge lived in the area of the newspaper's circulation. That being so, the claimant was bound to identify readers whom he alleged knew of those facts. Lord Denning MR stated, at p 656, that it was "just possible" that someone "had jumped to the conclusion that before he left the Salford diocese, and while still a priest, he [the claimant] had married and fathered a child. But such a person would be so rare and so exceptional that the case on legal innuendo would not stand a chance unless that person was called". At p 659, however, Scarman LJ stated that "there may well be cases in which it would not be necessary to plead more than the fact of publication by a newspaper and the extrinsic circumstances, leaving it to be inferred that there would be readers with knowledge of the facts".
16. In Grappelli v Derek Block Ltd [1981] 1 WLR 822, Dunn LJ, at p 830, expressed agreement with the view that there may be cases "where the publication is in a national newspaper with a very wide circulation, and the only reasonable inference is that some of the readers of that newspaper must have knowledge of the facts which are said to give rise to the innuendo."
17. The claim in Dwek v Macmilian Publishers Ltd [2000] EMLR 284 arose out of a photograph of the claimant and a woman in a book. The caption to the photograph erroneously stated that the photograph was of Mr Dodi Fayed and that the woman was a prostitute. May LJ held that it was possible as a matter of law that old friends or acquaintances of the claimant would have recognised him from the photograph and that it would be "for the jury to decide whether the inference was to be drawn in all the circumstances." Mr Milmo submits that the present claim comes into the same category.
18. Mr Milmo's further submission is that the judge failed to have regard to what was the reasonable expectation that further evidence would become available at the trial. It was premature to dismiss the claim before discovery of documents. Mr Milmo relies on Electra Private Equity Partners and ors v KPMG Peat Marwick and ors (unreported 23 April 1999). The defendant auditors sought to strike out a claim for negligent misstatement. Auld LJ stated that "the court should proceed with great caution in exercising the power of strike-out on such a factual basis when all the facts are not known to it, when they and the legal principles turning on them are complex and the law, as here, is in a state of development". Clarke LJ stated that "an action should only be struck out as bound to fail on the facts if two requirements are met. The first is that it is bound to fail on the material available at the time the application is heard and the second is that there is no reasonable possibility that evidence which might be sufficient to support the plaintiff's case and to give it some prospect of success might become available to the plaintiff in the future, whether by further investigation, cross-examination, discovery or otherwise".
19. Electra is one of a long line of cases in which it has been held that a claim should not be struck out without full examination of the circumstances which only a trial could give. That principle has particular force in negligence claims involving complex commercial transactions. The present claim does not involve such complexities and, in the context of the 1996 Act, a party to defamation proceedings is entitled to seek a ruling under section 8 on the basis of material currently before the court. If it is made before discovery and there are prospects that disclosure of documents will significantly affect the prospects of a successful claim, the remedy of the respondent to the application is to seek its adjournment until after discovery. No adjournment was sought in this case, nor was a point on prematurity expressly taken. Whether an adjournment should be granted depends on the circumstances of the particular case. I do not consider that the judge can be faulted for making a judgment upon the limited material available to him. Moreover, he could not assume that evidence establishing the link would subsequently become available. It is far from plain that disclosure of documents would have enhanced the prospects of a successful claim; the difficulty in establishing that readers of the single statement in a magazine interview would identify the "certain people" as the claimants is in the circumstances formidable. The particular difficulty is in establishing that persons will read the interview who have read and retained the information set out in the newspaper articles.
20. I agree with the judge that the crucial question is whether the appellants have a realistic prospect of establishing that readers of the interview in Focus would understand the words "certain people" in the interview to refer to the appellants. The judge was asked to rule on that issue as were the courts in the earlier cases I have cited. I do see force in Mr Milmo's criticisms of what, with respect, I would regard as the insularity of the judge's reasoning; the assumption that only people whose first language which was German would read Focus and the absence of any acknowledgement that some Germans living in or visiting England would be likely to have knowledge of Formula 1 and the sporting and business issues surrounding it.
21. I have nevertheless come to the conclusion that the judge was correct in holding that there was no real prospect that the inference could properly be drawn that readers of the interview in the section of Focus would conclude that the reference to "certain persons" was a reference to the appellants. I give what weight I can to the fact that knowledge of the extrinsic events cannot be confined by country or by language but I also bear in mind the small circulation of Focus within the jurisdiction, the less than prominent position of the interview in the magazine and the comparative lack of prominence of the words complained of in the interview itself as well as the fact that the words are not in the main language of the jurisdiction. I also bear in mind that those readers of Focus interested in Formula 1, even if they had some general knowledge of the business ramifications of the sport, may well not have known or remembered the close involvement of the appellants in a particular dispute. On the material before the court, the judge was entitled to rule that the inferences on which the claim depended could not in the circumstances properly be drawn with the result that the appellants had no realistic prospect of success.
22. For those reasons, I would dismiss this appeal.

LORD JUSTICE THORPE:

23. Whilst I accept Mr Milmo QC's submission that the judge in determining a strike-out application under section 8 of the Defamation Act 1996 is not exercising a discretion but rather a judgment as to the claimant's prospects at trial, nevertheless where that judgment is taken by the Queen's Bench judge with responsibility for the jury list it is a judgment founded on considerable experience in the specialist field and as such should not in my opinion be lightly reversed in this court.
24. Mr Milmo's criticisms of the judge essentially highlight three sentences in his judgment all on page 13, the first at line 12, the second at line 16 and the third at line 27. Each of these three sentences is a statement of judicial speculation. The first, to the effect that all the 3,000 odd English readers would have German as their first language, seems to me unsustainable. The second, to the effect that the same group would all be Germans living in, working in or visiting England, seems to me to be overstated. Had the judge said that the readership was largely confined to such a group, Mr Milmo's criticism would evaporate. The third sentence to the effect that the German reader of the article complained of would not have read a relevant article in an English newspaper with sufficient attention and retention to comprehend that the unnamed persons in the Focus article included Mr Mosley is only secure if the first and second speculations are sound. Thus the third sentence also falls victim to Mr Milmo's criticism.
25. I digress to say that I do not consider that Mr Milmo can fortify his argument by the speculation that readers of the Focus article in England might have acquired their necessary understanding of the dispute between the claimants and the European Commission from the German press rather than the English press. As Mr Milmo candidly conceded in reply he did not in October 2000 have in his possession evidence to justify such a submission. Nor do I consider that Mr Milmo's submission that the judge's ruling was premature and should at a minimum have awaited disclosure of documents (particularly the defendant's English subscribers list referred to in Mr Pepper's affidavit of 17 October 2000) has any validity. As Miss Sharp QC stressed the case before the judge was run on the basis that the defendant's application was neither inappropriate nor premature. Again Mr Milmo frankly conceded that the claimants had missed a trick in not applying for an adjournment and/or for disclosure of the subscription list.
26. So for me the only question in the appeal is as to whether Mr Milmo is entitled to succeed on the basis of the criticisms of the three sentences at page 13 of the judgment. In that regard I would observe that this was an extempore judgment. But I am driven to the conclusion that the speculations individually and cumulatively are unsustainable even as judicial speculation in the absence of evidence. That it is open to judges to speculate in such a situation is well illustrated by the judgment of Lord Denning MR in Fulham v Newcastle Chronicle [1977] 1 WLR 651 at 656C-F. But common-sense speculations must on any appellate review read as realistic, convincing and well justified. These in my opinion do not meet those standards and I accept that it is open to this court to determine for itself whether the claimants demonstrated a reasonable prospect of establishing a reference by innuendo at trial.
27. For me the answer to that question lies in the submissions of Miss Sharp and her reliance upon the decisions of this court in Fulham v Newcastle Chronicle and also in Grappelli & Anr v Derek Block (Holdings) Limited and Anr [1981] 1 WLR 822. In the paragraph of the judgment of the Master of the Rolls to which I have already referred he said:

"In such cases as those, the identity of the person (who has knowledge of the special circumstances) is a most material fact in the cause of action. It is the publication to him which is the very foundation of the cause of action. So he should be identified in the pleading itself or in particulars under it."

28. To the same effect is the judgment of Scarman LJ who said at 659:

"There may well be cases in which it would not be necessary to plead more than the fact of publication by a newspaper and the extrinsic circumstances, leading it to be inferred that there would be readers with knowledge of the facts.

For instance, the facts may be very well known in the area of the newspapers distribution - in which event I would think it would suffice to plead merely that the plaintiff will rely on inference that some of the newspaper readers must have been aware of the facts which are said to give rise to the innuendo." (My emphasis added.)

29. In Grappelli the Master of the Rolls cited another passage from his own judgment in Fulham v Newcastle Chronicle to the effect that the claimant must specify the particular publishees and the special circumstances known to them. Dunn LJ agreed with the Master of the Rolls formulation of the general rule and also with Scarman LJs exception. He said at 830B

"I would only add this, that I agree also with Scarman LJ that there may be cases which are exceptions to that rule, such as the cases that he refers to at page 659 of the report, where the publication is in a national newspaper with a very wide circulation, and the only reasonable inference is that some of the readers of that newspaper must have knowledge of the facts which are said to give rise to the innuendo."

30. The formulation of the exception in the judgments of Scarman LJ and Dunn LJ is both clear and strong. In my judgment the publication in a German magazine with limited English sales does not begin to qualify for inclusion within the exceptional class. In the present case, as Morland J emphasised, the claimants had not pleaded or advanced any evidence that any named reader or identified reader understood the words complained of to refer to the claimants. So, in my opinion, although some of the judge's speculations as to the likely readership were unfounded, he was perfectly right to conclude that the extrinsic facts were not so notorious that a specific publishee was to be inferred.
31. Mr Milmo has pointed to the draconian nature of the judicial conclusion. That submission always requires the court to question whether the dismissal of the appeal would risk injustice. In my opinion it would not. My impression is that at best the claim would have emerged at trial as insubstantial.
32. I agree with my lord's conclusion and reasoning.

LORD JUSTICE MANTELL:

33. I, too, would dismiss this appeal for the reasons given by my Lords.
Order: Appeal dismissed with costs, subject to detailed assessment. (Order does not form part of approved Judgment)