England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH DIVISION
The Honourable Mr Justice Tugendhat

		Royal Courts of Justice Strand, London, WC2A 2LL
		19/03/2013

LORD JUSTICE LAWS:

INTRODUCTION

1. This is an appeal, with permission granted by myself on 20 April 2012, against the judgment of Tugendhat J ([2012] EWHC 177) handed down on 10 February 2012. The action was a claim for damages for libel. After a four day trial Tugendhat J gave judgment for the defendants, Associated Newspapers Ltd (ANL). He upheld a defence of justification which (in its final form) had been added by amendment after a vigorous interlocutory contest. The judge introduced the case thus:

"… Mr Rothschild sues… ANL for libel on an article headed 'EXCLUSIVE: Mandelson, an oligarch and a £500m deal' which was published in the issue of the Daily Mail dated Saturday 22 May 2010 and online… The article was described as a 'special investigation', and extended over the front page and pages 2, 8 and 9 of that issue. The headline on page 9 reads: 'Revealed: the astonishing story of the night Lord Mandelson was flown to Moscow by private jet to join a billionaire friend desperate to strike a deal that cost British jobs'".

2. It is convenient at the outset to identify two general issues, though they will need a good deal of refinement. The first is whether in its true meaning the defamatory material in the article was essentially concerned only with the single specific incident which occupied most of the text, or whether it distinctly included a wider or more general defamatory charge of whose sting the single incident was no more than an example. If the former, the plea of justification should have failed: it is common ground that the article's description of the single incident was false in critical respects. The second broad issue is whether, assuming the article includes a more general libel, proof of its truth will justify the whole. It may only do so if the defamatory sting of the wider charge is as grave as that of the specific charge, and the latter is properly seen as no more than an example of the former. I shall address the law as fully as the case requires in due course.

DRAMATIS PERSONAE

3. The judge gave thumbnail sketches (judgment, paragraphs 3 – 7) of the individuals involved in the events behind the article sued on. Mr Rothschild, the claimant/appellant, is a member of the well known banking family and himself a banker and businessman. Amongst other things he provides, and in 2005 provided, financial advice to Mr Deripaska, of whom more directly. Mr Rothschild is a member of the International Advisory Board of a Russian company to which I will refer as Rusal. Rusal is the world's largest producer of alumina and aluminium. It is controlled by Mr Deripaska, who also controls other very substantial Russian businesses. He is extremely wealthy; and is what is often referred to as a "Russian oligarch". Mr Munk is chairman of a very large gold mining company. Since 2006 he, Mr Deripaska and Mr Rothschild have had business interests in common, including the exploitation of mines in Tajikistan and Kyrgyzstan and the acquisition of a Russian gold production company, Polymetal. Lord Mandelson is the well known Labour politician. He and Mr Rothschild have been close friends for many years. Lord Mandelson has at various times served as a government minister. He was European Commissioner for Trade between 22 November 2004 and 3 October 2008. He was in post in that office at the time of the events material to this case. It is useful to set out the judge's account of the Trade Commissioner's responsibilities:

"7. As Commissioner, Lord Mandelson was responsible for the European Commission's Directorate-General for Trade. That is the body charged with designing, implementing and communicating EU trade and commercial policy. The Directorate-General's stated remit includes: defining the trade interests of the EU in defensive and offensive terms; negotiating bi-lateral, regional, or multilateral agreements with third countries; monitoring the implementation of international agreements and tackling unfair practices; devising and monitoring internal and external policies which have a bearing on the EU's trade and external investments (including policies relating to inter alia, the single market, consumer, energy, competitiveness and competition)."

4. The judge was at pains to stress (paragraph 10) that neither Lord Mandelson nor Mr Deripaska (nor others involved in the story, save of course Mr Rothschild) was a claimant. "Nothing in this judgment should be taken as a criticism by me of anyone who is not a party to the action. That would not be fair..." The judge was plainly right to say so. But the narrative of the case, founded on the evidence accepted by the judge, must inevitably throw light on the conduct and character of participants in the relevant events.

OUTLINE FACTS

5. I will have to revisit some of the detail, but what follows will suffice to introduce the case.
6. The setting for the article in the Daily Mail was a trip to Russia at the end of January 2005. On Sunday 30 January Mr Rothschild, Lord Mandelson, Mr Munk and a Mr Taylor flew from Switzerland to Moscow, arriving in the evening. Lord Mandelson, who had no visa to visit Russia, had dinner with a Russian government minister: a dinner arranged by Mr Rothschild with the assistance of Mr Deripaska or his office. Mr Rothschild and Mr Munk attended another dinner at the same restaurant, with Mr Deripaska and executives of Rusal and also of Alcoa, an American aluminium producer. A multimillion pound deal – referred to as "the £500m deal" – had earlier been concluded between Rusal and Alcoa for the sale of Russian aluminium plants to Alcoa. Although Lord Mandelson looked in on the Alcoa dinner before the Russian minister arrived to say hello to Mr Deripaska, it was common ground at the trial that he did not attend the dinner itself and did not discuss EU tariffs on aluminium or assist with the £500m deal.
7. That night, Sunday 30 January 2005, Mr Rothschild, Lord Mandelson, Mr Munk, Mr Taylor and Mr Deripaska all flew to Siberia in Mr Deripaska's private jet, leaving Moscow at about midnight. Mr Rothschild's own plane went there too. The party stayed in Mr Deripaska's chalet, spending the Monday night there. They accompanied Mr Deripaska on a visit to an aluminium smelter and foil plant. On the Tuesday morning Lord Mandelson returned to Brussels on Mr Rothschild's plane: he had to get up at 3 am to travel 150 kilometres to the airport. The others went on to Tajikistan and Kyrgyzstan, to discuss projects for various joint ventures.
8. As I will show, the trip to Siberia is a crucial element in the case: ANL's defence of justification depends in large measure on what the court makes of it.

THE MEANING OF THE ARTICLE ATTRIBUTED BY THE JUDGE

9. The Daily Mail article complained of is very long. The judge set out much the greater part of it at paragraph 22 of his judgment, and I shall have to return to certain passages. Mr Price QC for the appellant referred to the text in order to show that its whole content was effectively concerned with the Alcoa dinner. At paragraph 29 the judge set out the meaning which he found the article to bear:

"29. The meaning which I find the Article to bear, which both refers to Mr Rothschild and is defamatory of him, is as follows:

(a) Mr Rothschild flew Lord Mandelson (at that time the EU Trade Commissioner) in his private jet to Moscow in January 2005 when he had no official reason to go there, and where, unknown to EU officials, he and Mr Rothschild were to attend a business dinner held for the purpose of closing a multimillion pound deal ('the Alcoa deal') attended by representatives of Rusal and the American aluminium producer Alcoa, and by a gold magnate Mr Munk (another member of the advisory board of Rusal) ('the Alcoa dinner'), in circumstances in which he (Mr Rothschild) must or ought to have foreseen that this would (as in fact it did):


(1) bring Lord Mandelson's public offices and personal integrity into disrepute, and expose him to accusations of conflict between his duties as EU Trade Commissioner and his private interest in the enjoyment of private jets and other luxuries, and thus in pleasing those from whom he accepted such generous hospitality: and


(2) give rise to reasonable grounds for suspecting that Mr Rothschild had done this so that Lord Mandelson would engage, and that Lord Mandelson had engaged, in improper discussion with the representatives of Rusal and Alcoa about tariffs on aluminium imports from Russia into the EU, and thereby shown to Rusal and Alcoa that he was well disposed towards, and thus assisted in the closure of, a deal between them for the sale of two of Mr Deripaska's Russian based Rusal factories to Alcoa.


(b) This incident is an example of how Mr Rothschild sought to impress and keep close to him Mr Deripaska, the billionaire businessman who controlled the Russian aluminium producer Rusal, of whose advisory board Mr Rothschild is a member."

10. I should also set out paragraph 30:

"30. In reaching my conclusion on meaning, I have upheld a submission of Mr Caldecott that the words complained of include a general allegation, that is, an allegation that the alleged conduct of Mr Rothschild in relation to the Alcoa dinner is an example of how Mr Rothschild acted to impress Mr Deripaska: see para 29(b) above. The Article expressly states at para (57) that 'The Cantinetta Antinori dinner which followed threw a fascinating light on the dynamics in the relationship between Deripaska, Rothschild and Mandelson' and at para (59) it included a quote from a person who said that 'Mandelson's sudden arrival was one of the games Rothschild played to impress Deripaska and keep him close'. I did not accept that these were merely incidental background to the words complained of, in so far as they refer to Mr Rothschild."

11. As I have indicated it is common ground that although Lord Mandelson looked in on the Alcoa dinner to say hello, he took no part in it but dined elsewhere in the same restaurant. The judge's meanings at (a)(1) and (2) set out at paragraph 29 are therefore false and cannot be justified as self-standing allegations. Accordingly the justification defence rests on meaning (b), and critically depends on the view to be taken about the trip to Siberia.

THE JUDGE'S CONCLUSIONS

12. The judge proceeded to undertake a careful analysis of the testimony of Mr Rothschild (paragraphs 64 – 77). Neither Lord Mandelson nor Mr Deripaska gave evidence. The judge then embarked upon detailed findings of fact (paragraphs 78 – 110). His conclusions on justification are set out at paragraphs 111 – 113. Paragraph 111 reads:

"111. Mr Caldecott submits that on his own version of events, or on the facts that I have found, Mr Rothschild's conduct was inappropriate in a number of respects. I accept that submission. In my judgment that conduct foreseeably brought Lord Mandelson's public office and personal integrity into disrepute and exposed him to accusations of conflict of interest, and it gave rise to reasonable grounds to suspect that Lord Mandelson had engaged in improper discussions with Mr Deripaska about aluminium."

Paragraph 112 sets out the conduct to which the judge was referring. I shall return to that. At paragraph 113 he finds in terms that ANL have established that the words complained of were substantially true in the meaning which he had found them to bear.

THE APPELLANT'S CASE – OUTLINE

13. The essence of the appellant's case was expressed in this way at paragraph 15(1) of counsel's skeleton argument: "There is a mismatch between the meaning found by the learned judge, which relates to a specific incident, and the basis on which he found justification, which relates to a general charge". But the true nature of the claim, and of ANL's response to it, are more complex. Mr Price's essential points are these. (1) The judge's meaning includes (crucially from ANL's point of view) the formulation set out at (b) in paragraph 29. Mr Price does not accept that this is to be treated as a "free-standing" meaning. (2) However if it is so to be treated, he submits that meaning (b) is not defamatory at all: "[n]obody could reasonably think the worse of [Mr Rothschild] for wanting to impress and keep close to him the businessman who controlled Rusal..." (skeleton argument paragraph 27(5)). (3) Insofar as meaning (b) is held to bear any defamatory sting, Mr Price says that it pales into insignificance beside the gravity of the article's essential accusation. This was understated by the judge at meaning (a)(2); its true meaning was that Mr Rothschild "rushed" Lord Mandelson to a meeting in Moscow (the Alcoa dinner) at which discussions were to take place to conclude a deal for the sale of aluminium plants; and he did so in order to provide "improper reassurance", needed by the prospective buyers, about the future of EU tariffs on imports of aluminium (skeleton paragraph 15(2)). (4) Such criticism of Mr Rothschild as meaning (b) contains "falls so far short in gravity of [this essential accusation] that it cannot substantially justify the sting of that charge..." (skeleton paragraph 42(3)). Mr Price undertook a detailed critique of the judge's findings at paragraph 112 of the judgment.

THE RESPONDENT'S CASE – OUTLINE

14. Mr Caldecott QC for ANL first takes issue with the contention that at (a)(2) in paragraph 29 the judge pitched the sting of the specific charge about the Alcoa dinner too low. The judge had put it no higher than "reasonable grounds to suspect" that Mr Rothschild's purpose had been to cause Lord Mandelson to engage in improper discussions (see also paragraph 31 of the judgment). Mr Caldecott submits that he was right to do so, given the terms of the article and the appellant's pleading.
15. Mr Caldecott's next argument addresses meaning (b), and this is plainly at the centre of the case. He says that meaning (b) correctly articulates a free-standing libel contained in the article: it bears a general sting which, being justified, justifies the whole. He submits moreover that meaning (b) is not only independently defamatory, but its sting is necessarily at least as sharp as the false Alcoa dinner accusation (meaning (a)(2)), since on a fair reading the latter is no more than an example – as the judge said – of the wider allegation at (b). And he submits that this wider sting is, as the judge found, well justified on the facts.

THE LAW

16. Before confronting these submissions I will give some account of the relevant law.
17. It must be obvious that a publication may contain a specific allegation, but also a more general charge. And there are bound to be cases – this is one – in which the publisher, sued in defamation, seeks to justify his publication by reference to the general charge, even though he cannot justify the specific allegation taken on its own. But the law imposes limits on when that may be done. A general starting-point may be taken from an observation by the judge in this case, at paragraph 33 of his judgment:

"In a case where a defendant is not able to prove the whole of the defamatory allegation he has made, the law is that he may nevertheless succeed if he can prove, on the balance of probabilities, that what he has alleged is substantially true. See Sutherland v Stopes [1925] AC 47 at 79 and Maisel v Financial Times Ltd (1915) 84 LJKB 2145."

In like vein the judge proceeded (paragraph 34) to cite my Lord Eady J's judgment in Turcu v News Group Newspapers Ltd [2005] EWHC 799 at paragraph 109:

"English law is generally able to accommodate the policy factors underlying the Article 10 [the right to freedom of expression] jurisprudence by means of established common law principles; for example that a defamatory allegation need only be proved, on a balance of probabilities, to be substantially true. The court should not be too literal in its approach or insist upon proof of every detail where it is not essential to the sting of the article..."

18. These broad observations reveal a degree of flexibility in the law's approach to justification, but do not in terms confront the particular case where a general charge is prayed in aid to justify a publication which contains a specific allegation not justifiable on its own. This is addressed in Warren v Random House Group Ltd [2009] QB 600, in which Sir Anthony Clarke MR (as he then was) said this:

"102. The principle on which the judge struck out the Lucas-Box meaning and the particulars is that a claimant is entitled to confine his complaint to a published defamatory meaning, and that a defendant is not then entitled to enlarge the ambit of the contest by asserting and seeking to justify a separate and distinct meaning, in the sense that the defamatory imputation is different, of which the claimant does not complain and which is not embraced within a common sting of the publication complained of. An example of this would be if a publication asserts that the claimant is a thief, and the defendant seeks to assert and justify a quite separate meaning to the effect that the claimant is an adulterer. By contrast, provided it is not oppressive to do so, a defendant is entitled to justify a common sting derived from parts of a publication, taken as a whole, of which the claimant does not complain, in so far as they are relevant to the meaning of the words complained of and to the sting of the alleged libel. The claimant is not entitled to use a blue pencil on the words published of him so as to change their meaning and then prevent the defendant from justifying the words in their unexpurgated form. Whether a defamatory statement is separate and distinct is a question of fact and degree in each case. The action should concern itself with the essential issues necessary for a fair determination of the dispute between the parties..."

19. The key notion here is the need to show a "common sting". There will be different kinds of such cases. One is where the publication contains a number of distinct allegations which are, however, all connected by the common sting. My Lord's case of Turcu was such an instance. It concerned a piece in the News of the World about an alleged plot to kidnap Victoria Beckham. The claimant sued on assertions in the article involving him. My Lord said:

"103. My own conclusion is quite clear. The Claimant was willing to participate in criminal activities and to make a contribution, in particular, to the discussions about the proposed Beckham kidnap. I believe that most reasonable onlookers would think that sufficient to support the sting of the libel. The allegations against the Claimant are therefore substantially, if not wholly, accurate.

104 There may be a good deal of sloppiness and inaccuracy in what was published. There was no plot to kidnap the Beckham children as such. Gashi managed to extract comments to the effect that they would be kidnapped if they happened to be with their mother – but that was as far as it went. Nor could the gang be said to be 'on the brink' of the kidnap. Nor was there any evidence that the Beckhams' Cheshire home was being kept under surveillance. The Claimant was not allotted a surveillance role; nor had he done or said anything to support the allegation – at least anything which the News of the World journalists knew about. There was nothing to justify the assertion that he was in charge of surveillance. The only conclusion I can draw is that it was a bit of creativity on the part of Mr Mahmood or one of the sub-editors.

105 Nevertheless, the Claimant's willingness to participate in apparently genuine discussions about kidnapping Victoria Beckham, the timing of the operation, and the feasibility of obtaining several million pounds at short notice is said to be enough to establish that the sting of the libel is substantially true. It becomes important in such a case to isolate the essential core of the libel and not to be distracted by inaccuracies around the edge – however extensive."

20. It is useful to contrast Turcu with the case of Grobbelaar [2002] 1 WLR 3024. Mr Grobbelaar was a prominent football player. The Sun published an article containing two distinct allegations: (1) that he had fixed or attempted to fix matches for bribes he had received; (2) that he had taken bribes with a view to fixing matches in the future. The jury found for the plaintiff and made an award of £85,000 damages. This court held that the verdict was only consistent with the jury having found both that the plaintiff had not engaged in any actual match fixing, and that he had not been party to any corrupt agreement; and that such a finding was (given the evidence of the corrupt agreement) perverse. Their Lordships' House held that the jury had been entitled to find that the sting of the articles lay not in the allegation of conspiracy but in that of match fixing on the field of play, and the verdict in favour of the plaintiff was consistent with the jury having come to that conclusion. But given his conduct demonstrated in the evidence, he had no reputation worth protecting, and the damages would be reduced to £1.
21. Mr Caldecott says that these two instances illustrate the contrast between a case where there is a common or general sting (Turcu) and one where there is not (Grobbelaar). The present case is in the former category, but is unlike Turcu, where there was essentially a single charge with a number of defamatory elements only some of which were established: enough, however, to satisfy the defendant's justification plea. Turcu, I think, may be seen as a straightforward example of the general rule that a justification defence may run if the defendant proves that what he has alleged is substantially true.
22. In this case the unproved specific charge (the Alcoa dinner) represents an example of the general accusation. In such a case the general charge may be justified, and the action successfully defended, by reference to other examples which are shown to be true. These may be facts which are not even asserted in the publication. Mr Caldecott says that is the case here: the other example, proved to be true, is the trip to Siberia.
23. It is common ground that such a case – what Mr Caldecott called an "exemplar" case – may arise, although Mr Price does not accept that this is one. It is also common ground that if the sting of the example(s) prayed in aid to justify the general accusation is less sharp than that of the unproved specific charge, the justification plea will fail (though the proved examples may have effect to mitigate the damage). The point was noted by Sedley LJ, giving the judgment of this court in Berezovsky v Forbes Inc [2001] EWCA Civ 1251 [2001] EMLR 45, by reference to Article 10 of the European Convention on Human Rights:

"12. To require a defendant, albeit a serious and reputable publisher, to be able to justify not a diminished version of a damaging assault on a claimant's reputation but the essence or substance or sting of that assault is not in our judgment a disproportionate invasion of the right of free expression. It meets the legitimate purpose, recognised by Article 10(2), of protecting people from the publication of damaging and unjustified falsehoods. The important question for Convention purposes is whether it does so by disproportionately restricting the ability of the press, even at the cost of exaggeration or inadvertent error, to bring to light serious matters of public concern... [I]t seems to us that it is not disproportionate, nor therefore unacceptable in a democratic society, to limit justification to the essential damage done by the publication..."

24. These authorities establish a series of interlocking principles. They are: (1) A justification defence will run if the defendant shows that what he has alleged is substantially true. This general rule is given more concrete effect by the other principles. Thus it is limited by principle (2): a libel cannot be justified by proof of obliquity on the claimant's part which is unconnected with the accusation complained of. (3) However a defendant is entitled to justify a common sting derived from parts of a publication, taken as a whole – but there must be a common sting. (4) An instance of (3) arises where a general charge is justified by proved examples, even where the published example is unproved. But (5) in such a case the sting of the instance or instances which are proved must in essence be as sharp as the published, unproved libel: so that the claimant has no more reputation to lose by force only of the published, false accusation.
25. These interlocking principles have to be understood in light of defamation's place in the modern common law. The focus is not on reputation as akin to a right of property. It is on the balance to be struck between public interest and individual right: between free speech and private claims. See for example (in a different context) Jameel v Dow Jones [2005] QB 946 per Lord Phillips MR at paragraph 55, and my judgment in Lait v Evening Standard Ltd [2011] 1 WLR 2973 at paragraph 42. Much learning, not least Sedley LJ's observations in Berezovsky, demonstrates the plain influence of Articles 8 and 10 of the European Convention on Human Rights and the Strasbourg jurisprudence in this evolution. But the development of the law of defamation along these lines belongs to the common law.
26. In particular the balance between free speech and private claim is struck by the application of principles (3), (4) and (5): they resolve, in a case like the present, what Mr Caldecott called a tension in the law of free expression. On the one hand a claimant is not to obtain relief which he does not deserve. On the other the defendant is not to be allowed a roving brief: he must justify what he has alleged, both as to content and pitch. Without principle (4), the balance swings too far in favour of the claimant; without principle (5), too far in favour of the defendant.
27. With these observations on the law in mind, I may turn to the issues in the case.

DID THE JUDGE UNDERSTATE THE STING OF THE ALCOA DINNER ALLEGATION?

28. I will take this first because it may be disposed of shortly. For convenience I will set out again the meaning the judge described at (a)(2) in paragraph 29 of his judgment. It was that the appellant flew Lord Mandelson to Moscow for the Alcoa dinner when he knew, or should have known, that that would give rise to reasonable grounds for suspecting that Lord Mandelson would engage in improper discussion with the representatives of Rusal and Alcoa about tariffs on aluminium imports from Russia into the EU.
29. I consider that the judge correctly pitched the Alcoa dinner sting, essentially for the reasons advanced by Mr Caldecott. As he submitted, the Daily Mail article states "it is hard to believe that aluminium was not discussed". It also states (for example): "Mandelson... was in a position to allay 'concerns' over tariffs on imports from Eastern Europe"; '"But Peter Mandelson's presence at that dinner was a very valuable extra for Deripaska"' (quoting, or purportedly quoting, "a source close to Rusal"); and "... it is very hard to believe that by being there Mandelson had not done Deripaska an enormous business favour". All this is the language of suspicion, albeit very strong suspicion; but no more. Mr Caldecott also relies on the appellant's pleading: paragraph 5(2) of the Particulars of Claim itself asserts only "strong grounds to suspect". He says that Mr Price should not be allowed to raise the bar now. This has, to be sure, a certain forensic appeal; but it amounts to no more than the fifth wheel of the coach, since in my judgment the terms of the article itself justify Mr Caldecott's argument. The judge was clearly entitled to conclude as he did at (a)(2) in paragraph 29. I should note also, if only for completeness and because Lord Mandelson is not a party to these proceedings, that the judge did not accept the submission that the article alleged there were grounds to suspect Lord Mandelson of corruption; only error of judgment (see paragraph 31).

DOES THE ARTICLE CONTAIN A GENERAL DEFAMATORY STING?

30. This issue rolls together two points disputed between counsel, namely (1) whether there is a general allegation in the article, beyond the Alcoa dinner accusation, and (2) if there is, whether it is defamatory. But it will make for greater clarity if I take them together.
31. Mr Price's case is that there is no general charge in the article. His skeleton argument is in terms to that effect (paragraph 15(1)). Before us he submitted that the Alcoa dinner is essential to the article's sting, and in reply he urged that the article was about "one event". Alternatively if, contrary to his first case, the article contained a general assertion along the lines of meaning (b) in paragraph 29 of the judgment, it was not defamatory.
32. The article contains these passages, quoted in part by the judge at paragraph 30 of his judgment:

"The Cantinetta Antinori dinner... threw a fascinating light on the dynamics in the relationship between Deripaska, Rothschild and Mandelson...

'Mandelson's sudden arrival was one of the games Rothschild played to impress Deripaska and keep him close. It was all about Nat... Rusal was full of young, ambitious Russians and they did not like Nat taking all the glory. But Nat was literally dictating the colour of the loo paper at Rusal' (quoting a 'former Rusal executive')."

An earlier passage, not cited by the judge, has this:

"One of the new arrivals [sc. at the Alcoa dinner] was financier Nat Rothschild, scion of the British banking dynasty and ultra-loyal special adviser to Deripaska.

Rusal executives will tell you that Rothschild liked nothing more than to please his billionaire patron. And to that end Rothschild had brought with him a 'surprise' VIP guest..."

33. In advance of the trial there was a substantial interlocutory argument before Tugendhat J upon the question (amongst others) whether ANL should be permitted to recast its defence of justification given its acceptance that it could not prove the Alcoa dinner allegation. In his reserved judgment delivered on 21 December 2011 ([2011] EWHC 3462) the judge said this, after referring to various passages in the article:

"32. In my judgment Mr Caldecott is correct to submit that the Article does include, as a significant theme, wider allegations about the inappropriateness of Lord Mandelson's relationship with Mr Deripaska and Mr Rothschild's facilitating role. It is not confined to the Alcoa dinner. And I accept that this theme does have a common sting with the allegations which are specifically related to the dinner."

The judge's interlocutory decision was not appealed. Strictly it was not, of course, a conclusion on what the article's true meaning was, but only as to the meaning it was capable of bearing. But on the evidence and argument before us, there is in practical terms no gap between the two, however hallowed the divide may be in theory.

34. It is true that by far the greater part of the article is taken up with the Alcoa dinner. But in my judgment, not least given the passages I have cited, it was not confined to "one event". Tugendhat J was right to conclude that it contained the wider themes to which he referred. The cross-currents of "Lord Mandelson's relationship with Mr Deripaska and Mr Rothschild's facilitating role" were the backdrop for the lurid tale of the dinner; and the dinner was, I accept, portrayed as an example of those cross-currents in action. This is precisely what was conveyed by the judge at meaning (b) in paragraph 29: "[t]his incident is an example of how Mr Rothschild sought to impress and keep close to him Mr Deripaska..." Accordingly I accept Mr Caldecott's submission that this is an "exemplar" case. Principles (3) and (4) set out above apply.
35. Mr Price submits that as it stands meaning (b) is not defamatory. However the force of the submission depends upon reading meaning (b) in isolation. It is true that on the face of it, out of context, there is nothing disreputable about seeking "to impress and keep close... Mr Deripaska". But this ignores the judge's finding, which I have accepted, that the Alcoa dinner was an example of the appellant's "facilitating role". The sting of meaning (b) is the implicit accusation that Mr Rothschild was prepared to use his long-standing friendship with Lord Mandelson as a means by which "to impress and keep close to him Mr Deripaska" – and in doing so should have foreseen that he would "bring Lord Mandelson's public offices and personal integrity into disrepute..." (see meaning (a)(1)). The Alcoa dinner was an example of this. ANL's case is that the Siberian trip was another.
36. I may also dispose at this stage of the question whether the sting of the general charge was as sharp as that of the specific charge in the article – the Alcoa dinner. The point is as short as this: once it is accepted that the Alcoa dinner is an example of the wider allegation at meaning (b), the latter's sting is necessarily as sharp as that of the Alcoa dinner accusation precisely because the one is no more nor less than an example of the other. The more substantial question – ultimately the question which decides the appeal – is justification: can Mr Caldecott demonstrate that principle (5) applies? Is the sting of the Siberian trip as sharp, in essence, as that of the Alcoa dinner accusation?

JUSTIFICATION – THE FACTS

37. The accurate resolution of this central issue depends to an unusual degree on the flavour of the case and the nuances in the evidence, whose translation into objective judgment is a much more elusive enterprise for this court than it was for the judge. Lord Hoffmann's well known observation in Biogen Inc v Medeva Ltd [1997] RPC 1 is especially apt:

"The need for appellate caution in reversing the trial judge's evaluation of the facts is based upon much more solid grounds than professional courtesy. It is because specific findings of fact, even by the most meticulous judge, are inherently an incomplete statement of the impression which was made upon him by the primary evidence. His expressed findings are always surrounded by a penumbra of imprecision as to emphasis, relative weight, minor qualification and nuance... of which time and language do not permit exact expression, but which may play an important part in the judge's overall evaluation."

38. On the facts, there are first some general points. Mr Deripaska was a man of enormous wealth, with very substantial business interests including exports of aluminium into the EU. Mr Rothschild gave him financial advice and was a member of Rusal's advisory board. Lord Mandelson was a very senior EU official with extensive responsibilities in areas of obvious concern to Rusal and therefore Mr Deripaska. The trip to Siberia was a business trip, at any rate in the minds of Mr Rothschild, Mr Munk and Mr Deripaska (judgment paragraph 96). The hospitality enjoyed during the trip by Lord Mandelson at the hands of Mr Deripaska (whom he did not know at all well) was to say the least extremely lavish.
39. These points form the backdrop to other findings made by the judge. I should cite the greater part of paragraphs 103 – 108 of the judgment:

"103. In my judgment the fact that this [sc. the trip to Siberia] had occurred would have been likely to give to Mr Deripaska (and to the public, if they had known about it) the impression that Lord Mandelson would be more favourably disposed to Mr Deripaska than would otherwise have been the case, if and when any question arose in the course of Lord Mandelson's performance of his official duties which related to any of Mr Deripaska's businesses.

104. Further, by facilitating the development of a relationship between Mr Deripaska and Lord Mandelson, Mr Rothschild was, in my judgment, conferring a benefit on, and seeking to please, both Mr Deripaska and Lord Mandelson. So far as Lord Mandelson was concerned the benefit was the trip and the hospitality itself. So far as Mr Deripaska was concerned it was a relationship with the EU Trade Commissioner. A businessman with such extensive and global interests as Mr Deripaska would be likely to welcome an opportunity to get [to] know a person in Lord Mandelson's position...

105. Further, I infer from the fact that Lord Mandelson accompanied Mr Deripaska, Mr Munk and Mr Rothschild on a visit to the aluminium smelter, and I find, that they probably talked about aluminium. There are photos of their party wearing Rusal's jackets and safety helmets on their visit to the smelter, and standing with a guide, to whom they appear to be listening. It is probable that on a visit to an aluminium smelter and foil plant they talked about aluminium. It does not follow that it is probable that they talked about tariffs on aluminium, and I do not find that they did talk about tariffs. Nor do I find that there are reasonable grounds to suspect that Lord Mandelson talked about aluminium tariffs.

...

107. Mr Rothschild's different and developing accounts of the purpose of the visit to the plants in Siberia are confusing. Once it had become clear (after service of the second witness statements) what the joint venture projects included, and that the only visit to a facility connected with Mr Deripaska was the visit to the smelter and foil plant, the use of language in Mr Rothschild's first statement appeared particularly confusing: 'to view some relevant industrial plants in Siberia'. Without an explanation, it is difficult to see the relevance of an aluminium smelter and foil plant to any of the joint venture projects relating to gold or gold and silver.

108. I formed the impression that on this point Mr Rothschild had not been entirely candid throughout the different stages of the case, or in evidence. That reflected his appreciation that it was foreseeable that this part of the visit, in particular, would expose Lord Mandelson to accusations of conflict of interest, and give rise to reasonable grounds for suspecting that Lord Mandelson had engaged in improper discussions with Mr Deripaska about aluminium. It was clear from his evidence that the visit to the smelter was one of the few things that can be done on a visit to that part of the world. He had done it a number of times before, he had expected to do it again at the time when he invited Lord Mandelson to join him on the trip, and the visit was itself highly memorable."

40. These findings lead on to the judge's conclusions on justification. Before addressing those I should notice two other features of the case which, though not perhaps central, have figured much in the course of argument.

What the appellant knew about the trip; and what he told Lord Mandelson

41. In January 2005 Mr Simon Fraser (now Permanent Under-Secretary at the Foreign Office) was Lord Mandelson's chef de cabinet. In a witness statement made on the appellant's behalf he recalled a meeting shortly before Lord Mandelson was due to attend the World Economic Forum in Switzerland. Lord Mandelson told him that "he wanted to go on a one day trip to Siberia with Mr Rothschild for purely recreational purposes". He "had no idea who else was going to be on the trip". Mr Fraser said in evidence (judgment paragraph 85) that "if he had thought that the trip had anything to do with official duties of the Commissioner he certainly would have explored it further".
42. When the appellant was asked in the witness-box about what Lord Mandelson was told when he was invited on the trip to Siberia, he shifted ground. The judge found (paragraph 87) that when he spoke to Mr Fraser "Lord Mandelson had not understood that there would be a stop in Moscow, nor had he been told of any of the details of who was to go to Siberia with himself and Mr Rothschild, nor that he would receive hospitality from anyone other than Mr Rothschild. The meeting with the Russian Minister had not yet been thought of". However it is clear from his second witness statement and his evidence that the appellant knew, when he issued the invitation to Lord Mandelson, that Mr Deripaska would actually be the host in Siberia, and the trip's main purpose was the pursuit of a business venture. But he did not tell Lord Mandelson. At paragraph 100 the judge said this:

"In my judgment there is [sic] at the very least reasonable grounds to believe that Mr Deripaska's interest in providing to Lord Mandelson such luxurious and generous hospitality was as Mr Caldecott suggested [viz. Lord Mandelson's trade and business responsibilities]. And I cannot accept that Mr Rothschild was unable to foresee this at the time he invited Lord Mandelson on the trip. In my judgment Mr Rothschild did appreciate this at the time. A holder of public office such as a Commissioner is required to make a clear distinction between his public life and his private life..."

43. This leads directly to the judge's findings at paragraphs 103 – 108, which I have set out; not least the conclusion that the appellant's want of candour "reflected his appreciation that it was foreseeable that this part of the visit... would expose Lord Mandelson to accusations of conflict of interest, and give rise to reasonable grounds for suspecting that Lord Mandelson had engaged in improper discussions..." (paragraph 108).

Lord Mandelson's BBC Interview

44. Lord Mandelson was interviewed on the BBC on 29 October 2008, rather less than four years after the Moscow/Siberia trip. In the interview he was asked seven times whether he had discussed aluminium tariffs with Mr Deripaska when he was EU Trade Commissioner. Each time he declined to answer. Yet in an official statement issued on 5 October 2008 it had been asserted on Lord Mandelson's behalf that he had "never had a conversation with Mr Deripaska about aluminium". In the same statement it was said that Lord Mandelson had met Mr Deripaska "at a few social gatherings in 2006 and 2007". That was corrected only four days before the BBC interview, when Lord Mandelson accepted in a letter to The Times that they had first met in 2004 and on several occasions since. On 16 October 2008 a question had been raised in the House of Commons concerning actions taken by the European Commission that were beneficial to Rusal. The EU Trade Director General told The Times that Lord Mandelson had not intervened personally in favour of Rusal.
45. Mr Caldecott deploys this material to show that the very ills which Mr Rothschild must or should have appreciated would happen in consequence of his having embroiled Lord Mandelson in the Siberia trip indeed came to pass. Mr Price says that the interview and what happened around that time cannot colour the court's judgment of the appellant's conduct in January 2005; he cannot possibly have foreseen the interview. So far as it goes, that is no doubt right. But the judge said this at paragraph 78:

"Although in his letter to The Times Lord Mandelson did not expressly mention the trip to Moscow and Siberia commenced on 30 January 2005, that was one of the occasions on which he had met Mr Deripaska since 2004, to which Lord Mandelson had referred in that letter. I infer it was one of the matters which gave rise to the repeated questions in the BBC interview of 29 October 2008. To that extent it is effectively not in dispute (or, if it is, I find) that the trip to Moscow and Siberia was at least one of the matters that had in fact brought Lord Mandelson's office and his personal integrity into question and exposed Lord Mandelson to accusations of conflict of interest in 2008."

46. ANL's argument based on the interview goes no further, so to speak, than proof of the pudding; as such the judge accepted it, and in my view was plainly entitled to do so.

THE JUDGE'S CONCLUSIONS

47. I repeat for convenience paragraph 111 of the judgment:

"Mr Caldecott submits that on his own version of events, or on the facts that I have found, Mr Rothschild's conduct was inappropriate in a number of respects. I accept that submission. In my judgment that conduct foreseeably brought Lord Mandelson's public office and personal integrity into disrepute and exposed him to accusations of conflict of interest, and it gave rise to reasonable grounds to suspect that Lord Mandelson had engaged in improper discussions with Mr Deripaska about aluminium."

At paragraph 112 the judge set out the conduct to which he referred:

"The conduct in question included the part Mr Rothschild played in arranging the following:

i) Lord Mandelson's dinner with the Russian Minister in Moscow, which he arranged either through Mr Deripaska (as he said in his first witness statement) or through Mr Deripaska's office (as he said in his second witness statement);

ii) the hospitality provided to Lord Mandelson by Mr Deripaska, including the flight in his luxurious private jet from Moscow to Abakan, and the entertaining at his chalet near Abakan;

iii) Lord Mandelson's presence on a trip which, for the main participants Mr Rothschild, Mr Munk and Mr Deripaska, was a business trip to advance one or more of their proposed joint ventures, even if (as is accepted) Lord Mandelson did not take part in business discussions;

iv) Lord Mandelson's taking part in the visit, which he had expected to take place, to the aluminium smelter and Sayanal foil plant."

WAS THE JUDGE RIGHT TO FIND JUSTIFICATION?

48. Mr Price advanced detailed submissions to show that the specific facts set out in paragraph 112 involved nothing disreputable to the appellant (skeleton argument paragraphs 31 – 42). Much of his argument seeks to exonerate Lord Mandelson: "there is nothing... wrong in the EU Commissioner for Trade meeting a Russian minister" (paragraph 31); "there was [nothing] of particular significance about the entertainment" (paragraph 32); "it is... unclear that there is any conflict of interest in such conduct by Lord Mandelson" (paragraph 4(3)); "the EU Commission takes the view that acceptance of this sort of hospitality does not involve a Commissioner in any conflict of interest" (paragraph 34(5)); "Lord Mandelson did not take part in business discussions" (paragraph 35; judgment paragraph 106); "it [was] perfectly proper... for a EU Trade Commissioner to discuss commodities or manufactured products with producers or manufacturers" (paragraph 39). On the back of these points Mr Price submits that there was nothing wrong in the appellant's playing the part he did in facilitating the dinner with the minister and in particular the trip to Siberia; or if there was, its obliquity paled into insignificance beside the Alcoa dinner accusation.
49. It is true, moreover, that the judge distinctly declined to find that there was talk about tariffs on the Siberia trip, or that there were "reasonable grounds to suspect that Lord Mandelson talked about aluminium tariffs" (paragraph 105); true also that Lord Mandelson was not involved in fixing the "£500m deal". It seems to me, however, that the objective rights and wrongs of Lord Mandelson's behaviour, viewed through the eyes of a fully informed and dispassionate observer, have no conclusive force. The question is whether in facilitating the trip as he did the appellant, in seeking to impress Mr Deripaska and "keep him close", knew or should have foreseen that he would expose Lord Mandelson to suspicion or accusations of conflict of interest and improper discussions.
50. As regards that the judge's conclusions at paragraphs 111 and 112 have to be viewed against the whole penumbra of facts as he found them. Just as with the question whether meaning (b) is defamatory at all, the propositions at paragraph 112(i) – (iv) may seem innocuous if they are looked at in isolation. But their sting is in the context; and the context reveals a web of relationships – Mr Rothschild, Lord Mandelson, Mr Deripaska – which indeed shows the appellant's determination "to impress and keep close to him Mr Deripaska", and to do it by facilitating close contact with Lord Mandelson. Mr Price does not as I understand it seek to challenge the judge's findings which, in essence, supply this context. If he does, the challenge is baseless: the judge was in full command of the evidence.
51. Thus the appellant's conduct described in paragraph 112 is coloured by the context established in the judge's findings. Inherent in those findings is the conclusion, critical to ANL's justification defence, that in acting as he did the appellant knew or should have foreseen that he would expose Lord Mandelson to suspicion or accusations of conflict of interest and improper discussions – suspicions or accusations which in fact eventuated. The judge's plain finding that the appellant knew or should have known that that would happen is no more fragile than any of his other conclusions. And this is the sting of the Siberia trip; the sting of the proved instance of the general charge. But it is also, in essence, the sting of the published, unproved instance – the Alcoa dinner. Meaning (a)(2) in paragraph 29 of the judgment, which I have held correctly pitched the Alcoa dinner sting, demonstrates as much. Accordingly, in my judgment, principle (5) is met. Once the proved instance of the general charge – the Siberia trip – is understood against the whole background of the evidence, Mr Rothschild had no more reputation to lose by the false tale of the Alcoa dinner.
52. I would dismiss the appeal.

LORD JUSTICE McCOMBE:

53. I agree, after some initial hesitation, that this appeal should be dismissed for the reasons given by my Lord, Laws LJ, whose judgment I have had the benefit of seeing in draft. My hesitation was caused because I had difficulty in accepting that an article which had been so inaccurate, in such a material way, could be justified in the circumstances of this case. The description of the article as a "special investigation" was somewhat of a misnomer in all the circumstances.
54. Nonetheless, in the light of the principles collected together in paragraph 24 of the judgment of Laws LJ, and in particular on the facts as found by the Judge, I am satisfied that the Judge reached the correct conclusion.
55. I have also seen in draft the proposed judgment of my Lord, Sir David Eady in which he expresses doubt as to point (5) in paragraph 24 of Laws LJ's judgment. Clearly, it is not necessary to resolve this doubt in the present case. However, I am inclined to think that point (5) is supported to some limited extent by authority (e.g. per Sedley LJ in Berezovsky v Forbes Inc. [2001] EMLR 1030 at [12]) and that it may be desirable in principle for the reasons that caused my hesitation as to the result in the present case: i.e., there can be no public interest in the dissemination of untruths. I can see that Sedley LJ's remarks in Berezovsky are directed to more general matters than the particular issue of "exemplar" cases, as Sir David Eady points out. However, the woeful inaccuracy of the Alcoa dinner allegations in this case makes me think that the existence or otherwise of a "point (5)" is of potentially significant importance for review when it has direct impact on the outcome of a case. It seems, however, that the resolution of the doubt is perhaps desirably left for another day.

SIR DAVID EADY:

56. I gratefully adopt my Lord's summary of the facts and issues. I agree that the appeal should be dismissed. I only add a few words of my own as I am doubtful of the need for a "fifth principle" as identified in paragraph [24] (and also summarised at paragraphs [2] and [36]) above, specifically to be applied in "exemplar" cases, and governing when a plea of justification can succeed in relation to a general allegation. It is said that "… in such a case the sting of the instance or instances which are proved must in essence be as sharp as the published, unproved libel: so that the claimant has no more reputation to lose by force only of the published, false accusation" (emphasis added). I am not sure that the law needs to be stated quite so prescriptively.
57. It is a matter of how the court should deal with more than one defamatory imputation. This is not surprisingly a common problem and I believe that the law already provides the means of solving it without any need for the "fifth principle", specially designed for general charges. Parliament has made provision to take account of at least some of the difficulties which this presents in s.5 of the Defamation Act 1952:

"In an action for libel or slander in respect of words containing two or more distinct charges against the plaintiff, a defence of justification shall not fail by reason only that the truth of every charge is not proved if the words not proved to be true do not materially injure the plaintiff's reputation having regard to the truth of the remaining charges".

58. Sometimes the charges made will be "distinct", but sometimes not. It does not seem to matter, so far as principle is concerned, whether the relevant meanings are to be characterised as general or specific. In this case, as it happens, the court has to consider one meaning that is specific (as to the Alcoa dinner) and another that is general. The latter was found to be justified and the former was not. Care needs to be taken to address them separately. It becomes necessary to determine the extent to which, if at all, the Claimant's reputation needed to be compensated in respect of damage attributable to the unproven allegation – having regard to the successful defence of justification on the general charge. That is clearly a separate issue from whether the plea of justification in relation to the general charge should or should not succeed.
59. The conclusion reached by the Judge, having carried out the necessary comparative exercise, was that there was no such marginal damage to be compensated. There could easily be a case, on the other hand, in which a defendant sought to prove a general defamatory charge by reference to a particular example of misconduct which, in the event, is found to have been notably less serious than the instance originally published. The fifth principle identified above would appear to entail that the defence of justification in relation to the general charge should fail for that reason. I do not see why this should necessarily be so or, indeed, why existing authority compels such an outcome. (The passages cited from Sedley LJ in Berezovsky and from Sir Anthony Clarke in Warren seem to me to be more general in their import and not to be addressing the particular issue of "exemplar" cases now before the court.)
60. There is no doubt that the judge or jury (as the case may be) would have to decide whether the specific allegation (ex hypothesi unproven) left some reputational damage requiring to be compensated – notwithstanding the truth of the general allegation. It does not seem logical, however, that the plea of justification in relation to the general charge should automatically fail for the reason that the defendant had originally put forward what purported to be a supporting example of that general charge which turned out to be false – even if it happened to have been more serious than the instance proved at trial. After all, the general charge would still have been fully established (albeit by the lesser example). It is important to distinguish this from a case of merely partial justification, where the gravamen of the defamatory allegation has not been made out. In such a case, the fact that there has only been a partial justification will mean that the defence of justification fails, but yet the elements proved may have the effect of diminishing the level of the damages appropriate to be paid (perhaps even to "vanishing point"): see e.g. Pamplin v Express Newspapers Ltd (No 2) [1988] 1 WLR 116, 120, per Neill LJ.
61. Nevertheless, in the case I am positing, a specific allegation (in itself defamatory) would not have been proved and will thus be presumed to have been false. Sometimes, the unproved allegation might be of quite a different nature from that of a general charge that has been shown to be true. For example, a defendant may succeed in proving a general allegation that the claimant is (say) dishonest or (to become rather more focussed) a misappropriator of his employer's funds. Yet he may have failed to make good a separate and distinct charge of adultery. The latter allegation may well require compensation notwithstanding the general allegation of dishonesty. (How much will be for the court to assess in all the circumstances.)
62. In another case, the specific unproved allegation might be of the same character as the general charge which has been established to be true. It is not to be regarded necessarily as separate and "distinct". Take the example of a claimant who was accused (in the old terminology) of being an embezzler and, for good measure, an instance was cited relating to £10,000. At trial, however, he is only proved to have taken £5,000. The general charge would surely have been justified. It should be open, for that reason, for the court to conclude with regard to the unproved specific charge of taking £10,000 that no reputational damage falls to be compensated. It may be helpful to express the point in the language now commonly used in abuse of process cases of the kind considered in Jameel (Yousef) v Dow Jones Inc [2005] QB 946. In the example of the "embezzler", his claim in respect of the £10,000 allegation would no longer be "worth the candle" – because he has been proved ex hypothesi to have been an embezzler.
63. I would thus conclude that a defence of justification to a general charge should not necessarily have to fail merely because a supposed example of it, contained in the published article, happened to have been more serious than that ultimately proved at trial (and might even, correspondingly, have merited a more severe penalty in criminal proceedings). Indeed, I am by no means sure that any such rule or principle would pass the tests of necessity and proportionality so as to comply with Article 10 of the European Convention on Human Rights and Fundamental Freedoms.
64. It will always be for the court to make its individual assessment on the particular combination of facts before it. Likewise in relation to compensation, the matter will have to be judged on the circumstances. There may well be cases where the court concludes, because a general allegation has been justified, that no compensation should be payable in respect of a specific charge even though it happens, when taken individually, to be rather more serious than any example(s) proved at trial. There may be others where the example originally alleged is so much more serious that some compensation will be called for.
65. The facts of libel cases vary infinitely, so that sometimes there is no substitute for the good judgment of the tribunal of fact on the evidence before it. I would wish to avoid situations arising in which the tribunal feels inhibited in its task by having to apply a general principle, apparently relating to the justification of general defamatory charges in exemplar cases, which may point to an answer not warranted by the facts before it.