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 HIGH COURT
QUEEN'S BENCH DIVISION
(MR JUSTICE MORLAND)

		Royal Courts of Justice Strand London, WC2 Tuesday, 22 October 2002

1. LORD JUSTICE BUXTON: This is an appeal from a decision of Morland J, who granted the defendants summary judgment under Civil Procedure Rule 24(2)(a)(2), finding that the claimant, Mr Spencer, had no real prospect of succeeding on his claim.
2. The case raises again the difficulty of applying the beneficial provisions of rule 24 in a defamation case, and more particularly in a defamation case that, if it were to proceed to trial, would be tried by a jury.
3. The argument before the judge, and to some extent before us, became encumbered with quite lengthy factual inquiries which were only doubtfully consistent with the earlier guidance given by this court in respect of rule 24 cases in Swain v Hillman [2001] 1 All ER 91, to the effect that the judge, when faced with a rule 24 application, should not embark on a mini-trial. In reality, however, the facts that are relevant to the present enquiry are comparatively short and simple, albeit that they are, in one respect in particular, hotly disputed.
4. The claimant, Mr Spencer, has represented himself throughout these proceedings. He is a member of the New York Bar and indeed of the Bar of the United States Supreme Court, and is also a solicitor of the Supreme Court in this jurisdiction. He was employed for a period of some 13 years as what was described as "senior counsel" in the legal department of the second defendant, International Computers Ltd ("ICL"). The judge concluded from the documents that were put before him that Mr Spencer's work had been, and had been recognised as being, of a high standard.
5. The unusual aspect, at least to English eyes, was however that for something like the last five years of his employment he had worked from his home, using information technology to carry out his work. No complaint, as we understand it, had been made by his employers of that arrangement. However, difficulties arose when there was appointed to ICL a new Group Counsel, a Mr Richard Allnutt, who worked under the then Legal Director, Mr Richard Christou. Mr Allnutt, who joined the company in September 1999, had a very different background from that of Mr Spencer. He had previously been a partner in a well-known English firm of solicitors and he considered it desirable that Mr Spencer should work, more or less permanently, in the Finsbury Square headquarters office of ICL. That, of course, would have changed the way in which Mr spencer had been working.
6. It is clear that there was disagreement between the two men, Mr Allnutt for his part wanting Mr Spencer to work from the office and Mr Spencer considering that Mr Allnutt's approach was more suited to private practice and less suited to the corporate context in which Mr Spencer had grown up and done his work. There was also another disagreement between them (about which it is not necessary to go into detail) with respect to how the company should draw its standard form contracts.
7. Because of, in particular, the disagreement about where Mr Spencer, the claimant, should work, the Human Resources Department was called in to consider the matter. The head of that was a Miss Colquhoun, and her immediate subordinate was Mr David Sillitoe, the first defendant. As far as we know, Mr Sillitoe (and indeed the Human Resources Department generally) had not previously been engaged with anything to do with Mr Spencer, nor, generally, with the Legal Department; as indeed Miss Colquhoun said in a statement which she made later in the case.
8. It was agreed that there should be an off-the-record confidential meeting between Mr Sillitoe and Mr Spencer to see if the disagreements that existed could be ironed out. As the judge made clear, and is the case, what was said or was not said at that meeting is the basis of Mr Spencer's claim in defamation. The meeting took place on 30 June 2000, but it was not until some considerable time after that meeting that the defamatory statement attributed to Mr Sillitoe about Mr Spencer came to light. There is no dispute that at the meeting Mr Spencer criticised Mr Allnutt. Also there is no dispute that there was a discussion about three possible options for the handling of Mr Spencer's relationship with ICL, should the disagreement not be able to be resolved.
9. A good deal of evidence was given about when, and in what form, the meeting was recorded. For reasons that will become apparent later in this judgment, I do not consider it necessary to go into that, but the judge made findings about it which are to be found on page 5 of his judgment. The case turns on a note of the meeting, produced at some stage by Mr Sillitoe, which attributes various statements to Mr Spencer. The first part of the note, which the judge sets out in full at pages 5-6 of his judgment, is not controversial, in the sense that it records that there was disagreement about Mr Allnutt's rôle, and also records that the claimant, Mr Spencer, suggested three options for the handling of his position: first of all, that he should just be allowed to get on with things as he had already been doing; secondly, that he should be provided with a different post, but not one that involved moving to Finsbury Square; and, thirdly, should be made an offer to leave, on terms, however, that reflected that he was losing his position up to the date of retirement. Mr Spencer made it clear that he was not prepared simply to be made redundant.
10. We then come to the part of the note that is challenged by Mr Spencer. It was alleged by Mr Sillitoe, by means of the note, that Mr Spencer said the following -- and I shall quote it verbatim:

"He then said if we tried to engineer him out of the company through non performance or any other reason, I should understand that he could and would 'fix' the company.

He said he could fix contracts which would change ICL down stream, and could not be detected. He also said I should remember he was a good lawyer and understood how to fix contracts.

I said he should not threaten the company and make this type of comment and he said the meeting was private and confidential on a 'without prejudice' basis.

He said he would enjoy fighting ICL in court and looked forward to the challenge. He repeated his comments that we should not attempt to fire him; that he would fix contracts and ensure that no blame could be directed to himself.

He looked forward to me resolving the matter as quickly as possible."

11. Mr Spencer's case is that that last part of the note was simply untrue. He had not said what he was represented to have said: the note was a deliberate and false fabrication on the part of Mr Sillitoe. I interpose here to say that it is clear that if the note did not represent what Mr Spencer said, the only explanation for that was that Mr Sillitoe had deliberately invented the matter. There is no room here in this case, nor has there been suggested to be room, for what otherwise might be a possibility, that there had been a misunderstanding or that Mr Sillitoe had mistranscribed something that Mr Spencer in fact said.
12. I have already said that the claimant, Mr Spencer, is a solicitor, but he made it plain that he is not an experienced or a skilled litigator and his pleadings contain a significant amount of irrelevant matter. However, he was quite clear in his claim that the nub of the case was that he had not said what Mr Sillitoe alleged and that it was defamatory of him for a note attributing threats and very serious disloyalty to his employers to be made and then circulated within ICL. That is what he pleaded in paragraph 16 of his points of claim. I quote:

"More seriously, Defendant Sillitoe's notes falsely and maliciously attributed to the Claimant a series of statements which the Claimant had not made. Specifically, Defendant Sillitoe alleged that the Claimant 'said if we tried to engineer him out of the company through non-performance or any other reason I should understand that he could and would "fix" the company. He said he could "fix" contracts which would change ICL downstream and could not be detected. He also said I should remember he was a good lawyer and understood how to "fix" contracts.'"

In paragraph 16 of the claim there then follows, in brackets, a comment about the form and punctuation of Mr Sillitoe's note, a comment that was possibly of relevance at some point of the case but inappropriate to be contained in this pleading. However, the last sentence of paragraph 16 goes on as follows:

"The natural and ordinary meaning of the quoted words was that the Claimant, a solicitor and long-serving senior employee, was a potential saboteur and could not permitted further participation in Defendant ICL's business activities or continued access to its sites or computer system."

13. In my judgement, nothing really could be clearer as to what the claimant alleged and as to what he had set himself to prove at the trial. The defendants responded to that particular part of the claim in paragraphs 12 and 13 of the defence. They said this, having dealt with the facts and so forth, and with reference to the note:

"12. This was a truthful record of what the Claimant had in fact said. The words meant and would naturally be understood to mean that the Claimant threatened to use his expertise and experience so to arrange contracts to which ICL would be party that such contracts would in the future operate in a manner contrary to the commercial interests of ICL.

13. In addition, Mr Sillitoe wrote this truthful record without malice on an occasion of qualified privilege. He had a legal (that is to say, contractual) and/or moral duty to report the Claimant's threats to ICL, and ICL had a corresponding interest in receiving the report, concerning as it did a statement of intention to harm ICL made by a senior in-house lawyer thereof."

14. It is clear from that pleading that the primary defence was one of justification. There was a straightforward clash of evidence between Mr Spencer and Mr Sillitoe about a meeting at which no one apart from themselves had been present. A secondary (and I emphasise secondary) defence was that the publication within the company had been on an occasion of qualified privilege and without malice. There is no doubt that the occasion of publication was in law qualifiedly privileged, although that issue simply did not arise if, as the defendants pleaded and set themselves to prove, the statement that was published was in fact true.
15. The defence of qualified privilege could be rebutted by demonstrating malice on the part of Mr Sillitoe. That issue, however, in itself led directly back to the question of the truth or falsehood of Mr Sillitoe's note. If it was untrue there could in practical terms be no arguable possibility that it had not been written maliciously. The judge, of course, appreciated that that was so, because he said at page 17D of the judgment:

"If there were grounds for thinking that there could reasonably be a finding that Mr Sillitoe had dishonestly fabricated the allegations, clearly, so far as Mr Sillitoe was concerned, there would be malice on his part, and the use of the fabricated allegations would, certainly so far as he was concerned, bring to an end any defence of Mr Sillitoe of qualified privilege."

So the issue was simply one of fact. Had Mr Spencer made the threats recorded by Mr Sillitoe?

16. The application under rule 24, however, took an unusual course. It has to be remembered that there was no dispute that (1) Mr Sillitoe's statement about Mr Spencer had in fact been made and (2) that statement was, if untrue, defamatory of Mr Spencer. The defendants did not, however, take what might be thought the obvious course of arguing that their claim of justification must succeed because Mr Sillitoe would be believed when he said that Mr Spencer had indeed made the remarks attributed to him. Rather, they argued that they must succeed on their defence of qualified privilege, a defence that was unnecessary and irrelevant if they were right about justification, because Mr Spencer would not be able to establish malice.
17. That in my view was an unfortunate way of approaching the matter. It had at least three consequences that did not assist the judge in determining the application. First, the judge placed the burden of proof on Mr Spencer. He said at page 7B:

"My approach should be that I should take an overview of the material before the court, and answer the question: does the claimant have a realistic prospect of successfully establishing, in this particular case, the allegations recorded against him in the note that I have read out, were deliberately and dishonestly fabricated by Mr Sillitoe?"

That in particular required Mr Spencer to prove dishonesty on the part of Mr Sillitoe when, properly understood, the case required the defendants to prove the truth of the statement. Secondly, the concentration on "malice" caused the defendants to lead the judge into a detailed inquiry into how the allegations had been handled and whether other members of ICL were in collusion with Mr Sillitoe. Those considerations were relevant to the issue of plausibility of Mr Spencer's claims as a matter of fact and I accept that the judge so treated them. I quote from page 16G of the judgment:

"In my judgment, looking at the way in which really everybody in ICL dealt with the claimant, in my judgment, with a degree of apparent decency, realising that he was an excellent worker, so far as his job was concerned, that there was the problem of personalities between himself and Mr Allnutt, that it really is preposterous to suggest that Mr Sillitoe has fabricated this story that the claimant threatened to fix contracts and that the whole thing was manufactured long after the meeting of 30th June because of Richard Christou in effect telling Mr Sillitoe that the claimant had to go."

But the vice of the way in which the matter was introduced was that it underpinned concentration on the general attitude and merits of ICL and of other of its employees, rather than upon the particular factual issue between Mr Spencer and Mr Sillitoe. Thirdly, the wide inquiry into the general conduct of ICL concealed the real point that the judge indeed had identified. If ICL proved that Mr Spencer made the statement, that was the end of the case. If they did not prove that, they would have no defence of qualified privilege, because Mr Sillitoe's allegations would then be shown to have been necessarily malicious.

18. The judge cites no authority in his judgment but the main relevant authorities were shown to him by Miss Addy, who represented the defendants before us and before the judge. They all have to be looked at on the basis that the judge should have seen the application as starting and finishing with the factual issue that, if the case were tried, would have to be decided by the jury: did Mr Spencer say what Mr Sillitoe alleged that he had said? Accordingly, cases stressing the difficulty and burden of proving malice, such as Turner v MGM [1950] 1 All ER 555 are of little or no relevance, since this case should not have been approached on the basis that the claimant bore a burden of proving malice. Nor is assistance obtained, in this respect, from the case particularly relied on by the defendants, Alexander v Arts Council for Wales [2001] 1 WLR page 1840. In that appeal, two publications were complained of as being defamatory. There was no dispute that the first statement had been made, but there was dispute as to its meaning. There was dispute as to whether the second statement had been made at all, at least in the form alleged. This court, however directed its attention to the claimant's assertion that a defence of qualified privilege was not available, because the statements had been made maliciously. The structure of the argument was therefore quite different from that in our case, because the claimant there relied on evidence as it were extraneous to the defamatory statements themselves to establish malice. May LJ found that such a claim could not succeed on the facts. Relevantly to our case, he said, at paragraph 44 of the judgment:

"In the circumstances of this case, where the objective meaning contended for is scarcely supportable, a subjective dishonest intention is not in my view reasonably capable of being sustained by what she is alleged to have said on another occasion, but which she denies saying."

And, generally, he found that the evidence relied on to show malice unconvincing to the extent that a jury, if it accepted it, would have been perverse. The Lord Justice said, for instance, at paragraph 41:

" . . .  the claimant's case on malice is an unsound and artificial one, forensically constructed without any proper evidential basis."

That is plainly not our case. Here there is evidence to be provided by the claimant of untruth, and thus malice, on the part of Mr Sillitoe. That evidence may or may not be believed, but this is not a case where it can be said that there is no evidence at all.

19. Of more relevance within Alexander is what this court said about cases that turn on the evaluation of disputed facts. May LJ said at paragraph 37 of the judgment (a judgment that was agreed in its entirety by Jonathan Parker LJ) as follows:

"There are of course a variety of possible circumstances in libel cases in which issues of law may arise for decision by the judge. In so far as questions of this kind properly depend on an evaluation of evidence so as to determine material questions of disputed fact, these are matters for the jury. But, as [counsel] accepted in the present appeal, it is open to the judge in a libel case to come to the conclusion that the evidence, taken at its highest, is such that a jury properly directed could not properly reach a necessary factual conclusion. In those circumstances, it is the judge's duty, upon a submission being made to him, to withdraw that issue from the jury. That is the test applied in criminal jury trials: see R v Galbraith [1981] 1 WLR 1039, 1042C."

This court therefore imported into this jurisprudence the test applied by the Criminal Division of this court to determine whether there is a case to answer.

20. I quite accept that in a libel case the Galbraith test has to be applied to all the available evidence, wherever it has come from, and not limit itself simply, as in the criminal jurisdiction, to the evidence of one side, that is to say, of the prosecution or claimant. However, if one looks at the way in which the court in Galbraith expressed itself, in the passage cited by May LJ it said this:

"Where however the prosecution evidence is such that its strength or weakness depends on the view to be taken of a witness's reliability, or other matters which are generally speaking within the province of the jury and where on one possible view of the facts there is evidence upon which a jury could properly come to the conclusion that the defendant is guilty, then the judge should allow the matter to be tried by the jury."

21. We further have to have regard in this jurisdiction to section 69 of the Supreme Court Act 1981. That is not mentioned by the judge in his judgment, and it is not clear whether he was taken to it. That section in its relevant part reads as follows:

"Trial by jury.

Where, on the application of any party to an action to be tried in the Queen's Bench Division, the court is satisfied that there is in issue  . . .  a claim in respect of libel, slander, malicious prosecution or false imprisonment  . . .  the action shall be tried with a jury unless  . . .  "

Then there are exceptions that do not apply in this case.

22. The question, therefore, is whether there is an issue in the case of the nature that should be tried by a jury, as Lord Woolf CJ (whose judgment was also agreed by Jonathan Parker LJ) makes plain, particularly at the end of paragraph 56 of his judgment. Lord Woolf also cited, with approval, what was said by Otton LJ in the earlier case of Safeways Stores v Tate [2001] 2 WLR 1377. Otton LJ said this at page 1386 (and this in particular is in relation to an application under rule 24):

"I am satisfied that an application under rule 24(2)(a) can properly be made in order to determine certain questions which fall within the jurisdiction of the judge in a libel action. These include, for example, whether the words complained of were published on an occasion of absolute privilege. On the other hand, the rule does not permit a judge alone to determine questions of fact which Parliament has determined should be decided by a jury and, in particular, whether the words complained of are defamatory of the claimant."

23. I seek to draw these strands together. Bearing in mind the emphasis placed on the right to jury trial in section 69 and the analogy drawn by this court in Alexander with the criminal practice in Galbraith, the question in a case such as the present comes down to whether there is an issue of fact on which, on the evidence so far available, the jury could properly, and without being perverse, come to a conclusion in favour of the claimant.
24. That question has to be answered against the background of the great respect that is paid to a jury's assessment of witnesses after seeing and hearing them, and hearing them cross-examined. It is unlikely that a judge will be able to find that a witness will necessarily be disbelieved by a jury; or that for a jury to believe him would be perverse; when he has not actually heard that witness give evidence and be cross-examined: unless, of course, there is counter evidence that plainly demonstrates the falsity of the witness's evidence, as opposed, in this case, to rendering it, in the judge's view, implausible.
25. The judge here held, in the passage that I have already read, that it was preposterous to suggest that Mr Sillitoe had fabricated his story. That might at first sight seem to be a finding on the correct basis, and one which therefore this court should not disturb. But because of the way in which the case was put to him, the judge was led away from appreciating that the first question was whether there was any evidence at all to challenge Mr Sillitoe (which there plainly was, in the shape of Mr Spencer); and then, secondly, considering whether he could conclude with a sufficient degree of certainty that Mr Spencer's evidence could simply be discounted. If he had asked himself those questions, he would, I think, have found that he could not so conclude; and that is what I find, taking anew, as I have to, the decision that originally fell to the judge. I would therefore allow this appeal.
26. I should add as a footnote that we were shown the decision of this court in Wallis v Valentine [2002] EWCA Civ 1034, which cited, with approval, some observations of Eady J in Schellenberg v BBC [2000] EMLR 296, set out in paragraph 32 of Wallis v Valentine, which I do not need to read. Those observations were, however, addressed to a case of abuse of process, which is not alleged in this case. What is, if I may say so, those statements' robust approach to issues that properly fall to the judge do not give the judge licence, whether before or after the Civil Procedure Rules, to enter into areas which are properly those of a jury: as indeed Sir Murray Stuart-Smith, who gave the judgment in that case, emphasised in the next paragraph of it, paragraph 33.
27. I should also add that I am sure that Mr Spencer will appreciate that this judgment goes no further than to say that, under the very limited jurisdiction available under rule 24 of the Civil Procedure Rules in relation to questions of fact, his claim cannot be stopped at this stage. The judgment does not in any way encourage him to continue, or suggest that he will succeed at the end of the day. The view taken of the sense and plausibility of his case by Morland J may well be the view taken of it by the jury. But if Mr Spencer insists, he is in my view entitled to have that question determined by a jury, and not by a judge.
28. LORD JUSTICE CARNWATH: I agree.
29. LORD JUSTICE SIMON BROWN: There is ultimately but a single question raised upon the facts of this case: did the appellant make the threat which Mr Sillitoe later said he had made? If he did, then the defence of justification is made out and the claim fails. If he did not, then the defence of justification fails and the claim succeeds, there being no possibility here of any misunderstanding as to what the appellant said at the relevant meeting: either he uttered the threats alleged or Mr Sillitoe must necessarily have invented them. In this latter event, no defence of qualified privilege could succeed: Mr Sillitoe's malice would inevitably have destroyed it.
30. With some hesitation I too agree that the appellant is entitled to have that factual issue decided by a jury. I hesitate in reaching this conclusion because, in common with the judge below, I regard the claimant's case on the facts as singularly unconvincing and as highly likely to fail at trial. All the probabilities appear to me to favour the respondents. There are several features of the evidence which tend to suggest that the claimant might indeed have made the threats he is alleged to have made. Not least amongst these are the undisputed fact that he made lesser threats of "leaving blood on the streets"; his outrageous e-mail to Mr Allnutt of 24 July 2000; and his readiness to make wild allegations against various members of the respondents' staff in the course of these proceedings. By contrast, there appears no credible basis for supposing that Mr Sillitoe would invent these threats and no motive for his having done so.
31. All that said, I do not think that the court's rule 24 power properly extends to denying a claimant the chance of persuading a jury, albeit against all the odds, that his account of a meeting is the truth and his adversary's is not. Were the jury in this case actually to find for the claimant, I do not think that this court could then strike down their verdict as perverse; and that, as I believe, is the touchstone by which the rule 24 power falls to be exercised in a case like this, in which the defendants admit having made the defamatory statement, and in which the burden of proving justification, namely, on the facts of this case, that the alleged threats were uttered, accordingly lies on them.
32. This is not, it is important to recognise, a case in which a defence of qualified privilege, discrete from that of justification, arises and in which, therefore, the burden of proving malice lies on the claimant. In such a case, the authorities establish that the court is entitled to take an altogether more robust stance and dismiss the claim unless the evidence raises a probability of malice in the sense that the evidence is more consistent with its existence than its non-existence. The fact that the defamatory statement here was made in circumstances which ordinarily attract qualified privilege is, in the particular circumstances of this case, irrelevant.
33. I would, however, add just this. As this court recently decide in Olatawura v Abiloye 17 July [2002] All ER (D) 253 July, the court nowadays has power under the Civil Procedure Rules, even when dismissing a strike out application under rule 24, to order the claimant to make a payment into court: see, particularly, paragraphs 4 and 5 of Practice Direction 24, which as I myself observed in that case:

" . . .  necessarily contemplate an order akin to that for security for costs".

I certainly do not wish to prejudge any application that may now be made for such an order. It may indeed already be too late to make it. I do, however, say that this would seem to me precisely the sort of case in which the future exercise of that power would fall to be considered.

34. For the reasons earlier given, however, I too would allow this appeal.
ORDER: Appeal allowed with costs. The respondents' application that the appellant make a payment into court be remitted for determination by Morland J. (Order does not form part of the approved judgment)