England and Wales Court of Appeal (Civil Division) Decisions

		Neutral Citation Number: [2002] EWCA Civ 1073
		Case No: A2/2001/1819

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION
Mr Walter Aylen QC (sitting as a Deputy High Court Judge)

		Royal Courts of Justice Strand, London, WC2A 2LL
		25 July 2002

B e f o r e :

LORD JUSTICE WALLER
and
LORD JUSTICE LAWS
____________________

Between:


	Colin Keathley Cornelius	Appellant/ Claimant
	- and -
	London Borough of Hackney	Respondent/Defendant

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(Transcript of the Handed Down Judgment of
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____________________

Mr John Lloyd appeared pro bono for the Appellant
Mr Martin Westgate (instructed by Messrs Akainyah & Co) for the Respondent
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HTML VERSION OF JUDGMENT
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Lord Justice Waller :

Introduction

1. This is an appeal by Mr Cornelius against the order made on 27 July 2001 by Mr Walter Aylen QC sitting as a Deputy High Court Judge of the Queen’s Bench Division. By that order he struck out the whole of the claim of Mr Cornelius. Limited permission to appeal was granted by Judge LJ on 4 February 2002. The bases of the limitations will become apparent.
2. Following permission to appeal being granted by Judge LJ, Mr John Lloyd, acting pro bono for Mr Cornelius, produced a draft amended statement of claim. It is to that amended statement of claim to which submissions on both sides were addressed. I will refer later to the full history of the proceedings but take the salient facts (which must for present purposes be assumed to be accurate) from the amended statement of claim.
3. Mr Cornelius was an accountant employed by the defendant London Borough Council from July 1982. In about August 1988 he discovered that frauds and other corrupt irregularities had been committed by a senior manager who had recently left the employment of the council. By a series of reports Mr Cornelius reported those irregularities to the director of finance of the council. It is alleged that the defendant council did not act on the irregular accounts and corrupt transactions but instead suspended Mr Cornelius on charges of professional misconduct on the basis that he had passed documents and his comments thereon to the chairman of the committee investigating those irregularities.
4. The further amended statement of claim then provides as follows:

“6. An industrial tribunal on 12 May 1994 found that the Claimant had been unfairly dismissed but that he had contributed to his dismissal because he had passed documents relating to the fraud through his union representative to the chairman of the committee. This finding of fault was overturned by the Employment Appeal Tribunal by judgment delivered on 18 January 1996. Mr Justice Tucker said it was wrong to the point of perversity for the industrial tribunal to characterize such conduct as “highly irresponsible and unprofessional.”

7. The Defendant by formal resolution of the full Council of 25 June 1997 made a full and unreserved apology to the Claimant for his unfair dismissal and for the distress and suffering caused to him and his family.

8. However, since the Claimant’s unlawful dismissal, the Defendants have published by themselves or through servants or agents in the scope of their authorized employment, four statements:

a) On 14 January 1994, the Defendants Chief Executive, wrote a letter “for publication” to the magazine Time Out. This letter was not published in the magazine but was also sent to the defendant’s elected councillors and press office. It contained the following words:

Mr Cornelius was not sacked for whistle blowing. He was sacked for circulating confidential audit documents containing defamatory and malicious allegations against the Council. Such behaviour made him unfit to hold a post requiring complete professional integrity.

The most prominent members of the Hackney Anti-Corruption Campaign, known locally as Swindlers against Corruption, are two ex-Council workers – sacked for fraud against a Council trade union.

b) On 26 August 1994, the Defendant’s Chief Executive had a letter published in the Hackney Gazette which referring to Mr Cornelius, said: Hackney Council will not allow itself to be held to ransom by false charges of racism from lazy or incompetent ex-employees with an axe to grind

c) On or around 25 June 1997, an officers’ report was prepared by the Defendant Director of Central Services which rehearsed the finding of the IT that Mr Cornelius had been “irresponsible and unprofessional” in distributing documents to a Councillor and his trade union and concluded:

1.5 The Borough Secretary and Solicitor is confident that had an appeal been pursued, the decision of the EAT would have been reversed and the finding of contributory fault re-instated.

d) On 26 June 1997, the Defendants are reported in the journal Accountancy Age as saying:

.... while it admits it treated Cornelius poorly, Hackney rejects an Employment Appeals Tribunal ruling which says he did not contribute to his own dismissal.

In their natural and ordinary meaning the words meant and were understood to mean that the Claimant was:

i) unfit for public office; ii) a swindler; iii) incompetent; iv) responsible for his own dismissal; v) lacking professional integrity; vi) wrongly and unjustly successful in the EAT.

9. By reason of the publication of the words, the Claimant’s reputation as an accountant and auditor has been injured and he was not able to obtain full-time employment until .....

10. Further, the Defendant’s officers refused to convey the resolution of 25 June 1997 or to provide the Claimant with a reference which was essential for him finding employment as an accountant.

11. The Defendant and its officers owed the Claimant a duty of care and of mutual trust and confidence.

12. In breach of that duty, the Defendant’s officers

i. made the statements listed above;

ii. maliciously by their actions and inactions aimed to injure the Claimant; or

iii. were reckless as to whether their actions and inactions would injure the Claimant;

iv. caused damage by these actions and inactions which was foreseeable.

13. By reason of the Defendant’s negligent and/or deliberate misstatement and misfeasance in public office, the Claimant has suffered loss and damage.

Particulars of loss and damage

a) Loss of earnings at the minimum rate of £1650 net a month, plus career enhancements and increases, from July 1992 until ... £....

b) Loss of pension rights and the ability to enhance the same ..... £.....

c) The additional costs of mortgage arrears ... £....

d) Loss of future earnings .... £.... .”

5. It is right to stress that when the matter came before Mr Aylen QC on 27 July 2001, the statement of claim that he was considering was one filed on 28 April 1999. That was the second statement of claim which Mr Cornelius had filed. Master Tennant on 28 January 1999 had ordered a new statement of claim to be prepared and it was that new statement of claim that was treated as an amendment and which the deputy high court judge then had to consider. That statement of claim contained many allegations which are now not the subject of the new draft. The new draft has been composed by virtue of the limited application for permission to appeal, and the pleading of misfeasance is not the pleading considered by the Deputy judge.
6. When I first read the draft amended statement of claim quoted above I thought it contained an allegation of defamation. Mr Lloyd confirmed however that it was not intended to contain any such allegation and he made clear that the court was concerned to deal with one of those situations in which there might be an overlap between defamation and the causes of action on which he in fact relied. The causes of action on which the draft statement of claim relied were he said simply misfeasance in public office and negligent misstatement. However, in opening the appeal before us Mr Lloyd made clear that he no longer felt able to argue that there could be any claim in negligent misstatement. He thus wished to limit his argument to a claim in misfeasance in public office.
7. Mr Lloyd was clearly right to abandon any claim in relation to negligent misstatement. The only basis on which such a claim might have been arguable would have been by reference to the House of Lords decision in Spring v Guardian Assurance Plc [1995] 2 AC 296. In that case the House of Lords held (Lord Keith of Kinkel dissenting) that an employer who gave a reference in respect of a former employee owed the employee a duty to take reasonable care in its preparation. In that case the argument accepted by the Court of Appeal had been that in relation to misstatement the only remedy open to a plaintiff was for damages for malicious falsehood or defamation. The House of Lords held that there could be some overlap in the particular context of the giving of a reference. But, the only basis on which a duty could be imposed on the employer was by virtue of the reliance that the employee based on the employer, and as Mr Lloyd recognised it was simply unarguable to suggest that Mr Cornelius had relied on the defendant council in relation to the writing of the letters or articles the subject of his claim.
8. The above authority is however of some relevance in that it does demonstrate that the mere fact that there could be a cause of action in defamation does not necessarily exclude some other form of cause of action if the ingredients of that other form of cause of action are present.
9. Thus it was that the argument before us was limited to the question whether the facts pleaded in the draft statement of claim if established would entitle Mr Cornelius to succeed on the action known as misfeasance by a public officer.
10. Before turning to the authorities relating to that question it is as well to have in mind the proper approach to striking out a pleading. CPR 3.4 provides as follows:

“3.4 - (1) In this rule and rule 3.5, reference to a statement of case includes reference to part of a statement of case.

(2) The court may strike out a statement of case if it appears to the court –

(a) that the statement of case discloses no reasonable grounds for bringing or defending the claim;

(b) that the statement of case is an abuse of the court’s process or is otherwise likely to obstruct the just disposal of the proceedings; or

(c) that there has been a failure to comply with a rule, practice direction or court order.”

11. The application here was under 3.4(2)(a) and in relation to that provision Mr Lloyd referred us to the notes in the current CPR under 3.4.2 which provide as follows:

“(r.3.4(2)(a) – Statements of case which are suitable for striking out on ground (a) include those which raise an unwinnable case where continuance of the proceedings is without any possible benefit to the respondent and would waste resources on both sides (Harris v Bolt Burdon [2000] L.T.L., February 2, 2000, CA). A claim or defence may be struck out as not being a valid claim or defence as a matter of law (Price Meats Ltd v Barclays Bank PLC, The Times, January 19, 2000, Ch.D). However, it is not appropriate to strike out a claim in an area of developing jurisprudence, since, in such areas, decisions as to novel points of law should be based on actual findings of fact (Farah v British Airways plc, The Times, January 26 2001, CA). A statement of case is not suitable for striking out if it raises a serious live issue of fact which can only be properly determined by hearing oral evidence (Bridgeman v McAlpine-Brown [2000] L.T.L., January 19, 2000, CA).”

12. The above approach is consistent with what Lord Browne-Wilkinson said in the Bedfordshire case [1995] 2 AC 633 740-741 which he reaffirmed in Barrett [1999] 3 WLR 79 at 83 in these terms:

“In my speech in the Bedfordshire case [1995] 2 AC 633, 740-741 with which the other members of the House agreed, I pointed out that unless it was possible to give a certain answer to the question whether the plaintiff’s claim would succeed, the case was inappropriate for striking out. I further said that in an area of the law which was uncertain and developing (such as the circumstances in which a person can be held liable in negligence for the exercise of a statutory duty or power) it is not normally appropriate to strike out. In my judgment it is of great importance that such development should be on the basis of actual facts found at trial not on hypothetical facts assumed (possibly wrongly) to be true for the purpose of the strike out.”

13. We were referred to various authorities dealing with misfeasance in public office. First, Three Rivers District Council and others v Bank of England (No 3) [2000] 3 All ER page 1 where at page 7 Lord Steyn said this:

“The rationale of the tort is that in a legal system based on the rule of law executive or administrative power ‘may be exercised only for the public good’ and not for ulterior and improper purposes. (See Jones v Swansea CC [1989] 3 All ER 162 at 186, [1990] 1 WLR 54 at 85, per Nourse LJ, a decision reversed on the facts but not on the law by the House of Lords: [1990] 3 All ER 737 at 741, [1990] 1 WLR 1453 at 1458.) The tort bears some resemblance to the crime of misconduct in public office (see R v Bowden [1995] 4 All ER 505, [1996] 1 WLR 98).

The ingredients of the tort

It is now possible to consider the ingredients of the tort. That can conveniently be done by stating the requirements of the tort in a logical sequence of numbered paragraphs.

(1) The defendant must be a public officer

It is the office in a relatively wide sense on which everything depends. Thus a local authority exercising private law functions as a landlord is potentially capable of being sued (see Jones’ case). In the present case it is common ground that the Bank satisfies this requirement.

(2) The second requirement is the exercise of power as a public officer

This ingredient is also not in issue. The conduct of the named senior officials of the banking supervision department of the Bank was in the exercise of public functions. Moreover, it is not disputed that the principles of vicarious liability apply as much to misfeasance in public office as to other torts involving malice, knowledge or intention (see Racz v Home Office [1994] 1 All ER 97, [1994] 2 AC 45).

(3) The third requirement concerns the state of mind of the defendant

The case law reveals two different forms of liability for misfeasance in public office. First there is the case of targeted malice by a public officer, ie conduct specifically intended to injure a person or persons. This type of case involves bad faith in the sense of the exercise of public power for an improper or ulterior motive. The second form is where a public officer acts knowing that he has no power to do the act complained of and that the act will probably injure the plaintiff. It involves bad faith inasmuch as the public officer does not have an honest belief that his act is lawful.”

14. In the Three Rivers case there was no issue in relation to the question whether a public officer was “exercising a power”. Mr Westgate for the defendant council on this appeal sought to suggest that it was a necessary ingredient of the tort that the public officer should be “exercising a power”. It was his argument that on any view nothing that was alleged as against the council could be suggested to be the exercising of a power and thus it was on that basis that the claim pleaded could not succeed. He referred us to a further decision of the House of Lords in Calveley and others v Chief Constable of the Merseyside Police [1989] 1 AC 1228 and in particular to a dictum of Lord Bridge at 1240 where he said:

“I do not regard this as an occasion where it is necessary to explore, still less to define, the precise limits of the tort of misfeasance in public office. It suffices for present purposes to say that it must at least involve an act done in the exercise or purported exercise by the public officer of some power or authority with which he is clothed by virtue of the office he holds and which is done in bad faith or (possibly) without reasonable cause. The decision to suspend the plaintiff Park under regulation 24 was taken by the deputy Chief Constable. If this had been done maliciously in the sense indicated, this would certainly be capable of constituting the tort of misfeasance in public office. But it was conceded that no malice is alleged against the deputy Chief Constable and that malice on the part of Grant cannot be imputed to him. The pleaded case must therefore stand or fall according as to whether it identifies any act done by Grant in the exercise or purported exercise of a power or authority vested in him as investigating officer which was infected by the malice pleaded against him. I can find no such act identified by the pleading.

No formal application to amend the pleading was made in the course of the argument, but at a late stage a document was placed before your Lordships indicating a pleading of additional particulars under paragraphs 22 and 24 which the plaintiff might seek leave to add by way of amendment if those two paragraphs in the statement of claim were allowed to stand. The particulars which it is suggested might be added under paragraph 24 would read:

“From an early stage (the date whereof the plaintiff cannot further particularise until after discovery and/or interrogatories herein) Grant knew or believed that there were no proper grounds for suspending the plaintiff yet procured the imposition of and/or the continuation of the suspension by continuing the investigation and giving misleading and/or incomplete reports concerning the same.”

It is evident that if a police officer investigating suspected criminal or disciplinary offences makes a false report to his superior officer which is defamatory of the suspect and that report is made maliciously so as to lose its status of qualified privilege, the suspect has a cause of action in tort against the author of the report. But the tort is defamation not misfeasance in public office, since the mere making of a report is not a relevant exercise of power or authority by the investigating officer. I express no opinion as to whether in those circumstances the Chief Constable would be vicariously liable under section 48(1) of the Act of 1964. However that may be, the suggested additional particulars under paragraph 24 of the statement of claim would do nothing to validate the pleading of misfeasance in public office and obviously fall far short of disclosing a reasonable cause of action in defamation.”

15. On the basis of the above dictum Mr Westgate submitted that if the making of a report would not come within the concept of the exercise of power or authority, then still less would be the writing or drafting of letters and thus Mr Cornelius’ pleading in relation to misfeasance should be struck out.
16. However, in Peter Elliott v Chief Constable of Wiltshire Constabulary (the Times 5 December 1998) but of which we have a transcript dated 20 November 1996, the Vice-Chancellor Sir Richard Scott had to consider the question whether to strike out a statement of claim based upon alleged misfeasance by a police officer in his public office. The allegation against the police officer was that he had deliberately and falsely supplied details of convictions to the press. The point taken in that case was that it was not concerned with a police officer “purporting to exercise any relevant power” and on that basis it was suggested that the pleading should be struck out. The Vice-Chancellor however had the case of Calveley and the dictum of Lord Bridge cited to him, but said as follows:

“I would agree that the tort of misfeasance in public office does require that the misconduct complained of should be sufficiently connected with the public office that has allegedly been abused. A police officer may, out of hours and not in uniform, commit an assault. In doing so, he does not abuse his office as a police officer, notwithstanding that he will of course be liable for damages for assault and may have committed a criminal offence. On the other hand, a police officer who, as a police officer, affects an arrest but does so unlawfully, either without reasonable cause or with excessive violence, and with a malicious motive – for example, with the intention of revenging himself against an individual against whom he has a grudge – does, I would have thought, clearly abuse his office. Both cases involve unlawful assault, but the latter involves also, as the former does not, an abuse of office.

I have taken the example of assault for the purpose of making the point which I think underlies Mr Rubin’s submissions. The distinction is no different if the injury caused by the conduct complained of is economic, as in the present case, rather than physical, as in my examples. Nor, in my view, does it matter whether the conduct complained of is physical or consists, as it does in the present case, of the giving of information. In either case there must, in my view, be a connection between the misconduct complained of and the office of which the misconduct is an alleged abuse. I express no view as to whether a mere omission could ever suffice.

In the present case, on the pleadings, there is, in my opinion, the requisite connection. The senior police officer, who provided the information to the news editor, was, it is to be inferred, in possession of the information about the convictions, or at least that part of the information that was true, because he was a police officer. The inference is that either he, or some subordinate acting on his instructions, had obtained information about the plaintiff from the National Police Computer. So the police officer came into possession of that information in his capacity as, and because of his office of, police officer. Second, the senior police officer in giving the information to the news editor was purporting to act in his capacity as a police officer. That that is so is to be inferred from paragraph 9 of the statement of claim. It appears from paragraph 9 that the individual identified himself to the news editor as a senior police officer. Among other things, he said to the news editor, “We do not want him down here.” “We”, in that context, must have meant the police. He said that if there were a robbery or rape, the police would “pull in” the plaintiff for questioning. That, too, is an indication that the individual, in supplying the information to the news editor, was speaking as a police officer.

Police officers have a status at common law, and perhaps at statute as well, which is both a privilege and the source of powers and duties. If in the apparent performance of functions pertaining to their office police officers commit misconduct, then if the other ingredients of the tort of misfeasance in public office, and in particular the requisite intention to injure and resulting damage, are present the tort of misfeasance in public office is, in my opinion, made out.”

17. In that reasoning of the Vice-Chancellor I suggest a distinction is being drawn between a public officer exercising a power and a public officer abusing his position as a public officer. Thus, although I accept that what is alleged in the draft statement of claim quoted above could not be said to be an allegation relating to the exercise of a power, that is not as I see it, an answer to Mr Cornelius’ case. The draft as it seems to me does allege that the Chief Executive and other councillors were abusing their position as public officers. That seems to me to raise three questions. First, whether the position of Chief Executive of the defendant council and/or the position of any other members of the defendant council is such a public office that liability for its abuse could give rise to a claim by someone in Mr Cornelius’ position. The answer to that question seems to me to be clear that they could.
18. The second question is whether the defendants could be vicariously liable for the Chief Executive or the servants or agents of the council abusing their position and as I understand it, Mr Westgate did not contest that they could be.
19. The third question is whether the facts as alleged if proved could establish that the Chief Executive and/or other members of the council did abuse their public office. I have to say that I have had considerable doubts about that question. But it seems to me that it is very difficult without a full resolution of the facts to see whether this case is on one side of the line or the other. The question whether somebody is abusing their public office is essentially a question of fact and it is a very difficult question to answer without a full exploration of the facts. It must be remembered that this strike out is taking place prior to any disclosure of documents and prior to any evidence being given.
20. In my view this is one of those cases where it is not appropriate to strike out. It is possible that evidence will give context and colour to the facts pleaded which will enable Mr Cornelius to succeed. I do not give him great encouragement in that direction but it would seem to me wrong to strike out that aspect of his claim.
21. Before however leaving the case I would say this. In paragraph 8A what is relied on there is a draft of a letter but we have been shown by Mr Westgate an actual publication of a letter. It is a little unclear why only the draft should be relied on and consideration may need to be given to that. I would accordingly allow the appeal.

Lord Justice Laws:

22. I agree.
Order: Appeal allowed a minute of order to be lodged with the court. (Order does not form part of the approved judgment)