England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)

		Royal Courts of Justice Strand, London, WC2A 2LL
		16/04/2014

LORD JUSTICE LAWS :

This is a renewed application for permission to appeal against the judgment of Tugendhat J of 31 July 2013 by which he awarded £180,000 to the respondent as damages for libel. There was also a claim in malicious falsehood, which the judge found established but for which he made no separate award. Permission was refused on consideration of the papers by Sharp LJ on 25 November 2013. She directed that in the event of a renewal of the application the proposed respondent should submit a written response and attend at the hearing. That has been done. The applicants have been represented before us by Mr Richard Rampton QC and the proposed respondent by Mr Desmond Browne QC, with their respective juniors.

1. The respondent, claimant in the action, is Mr Peter Cruddas who at the material time was Treasurer of the Conservative Party. The applicants are two undercover journalists working on the Insight Team at The Sunday Times, and Times Newspapers Ltd. The claim related to a report in The Sunday Times for 25 March 2012 (and online). The question in the case, to put it compendiously, was whether the report gave a true and accurate account of a meeting which took place on 15 March 2012 between the respondent and the first and second applicants in which the applicants posed as representatives of international financiers who were considering making a donation to the Conservative Party. The undercover journalists each carried a concealed camera to the meeting, with an audio facility. There is therefore a video of the whole occasion, lasting over two hours. The judge viewed the video, and so have I.
2. There were in fact four articles published in the Sunday Times on 25 March 2012. In the action the respondent complained of the whole of the first two and most of the third, but not the fourth. Just before publication of the articles, the respondent resigned as Treasurer of the Conservative Party.
3. The articles contained two strands of allegations. The meaning of the words complained of has already been determined as a preliminary issue, first by Tugendhat J on 5 June 2013 ([2013] EWHC 1427) and on appeal by this court on 21 June 2013 ([2013] EWCA Civ 748). The two strands of allegations have been referred to as the "cash for access" charge and the "foreign donations" charge. For the purposes of the libel claim the Court of Appeal articulated their meanings as follows.

i) The "cash for access" allegation meant that in return for cash donations to the Conservative Party the respondent corruptly offered for sale the opportunity to influence government policy and gain unfair advantage through secret meetings with the Prime Minister and other senior ministers. However in relation to this meaning the Court of Appeal differed from Tugendhat J in one respect. The court held that the word "corruptly" was not intended to connote the commission of a criminal offence by the respondent; rather it meant that the respondent's conduct was "inappropriate, unacceptable and wrong, and gave rise to an impression of impropriety" (Court of Appeal, 21 June 2013, paragraph 16).

ii) The "foreign donations" charge meant that (a) the respondent made the offer even though he knew that the money offered for secret meetings was to come, in breach of a prohibition under UK electoral law, from Middle Eastern investors in a Liechtenstein fund; and (b) in order to circumvent and thereby evade the law, the respondent was happy that the foreign donors should use deceptive devices, such as the creation of an artificial UK company, to donate the money or the use of UK employees as conduits, so that the true source of the donation would be concealed.

4. As regards the malicious falsehood claim, to which the single meaning rule did not apply, the Court of Appeal held that although the natural and ordinary meaning of the cash for access allegation was as I have described, a substantial number of reasonable readers would have understood it as meaning that the respondent was guilty of criminal corruption. However the Court of Appeal described this meaning as "peripheral".
5. The only defence raised in the libel suit to the articles with the meanings found by the Court of Appeal was justification. Tugendhat J's judgment extends to 418 paragraphs (including two annexes, the second being a detailed account of the meeting of 15 March 2012 taken from the transcript of the recording and the recording itself, and a summary of the judgment in 8 paragraphs at the end). The judge made comprehensive findings in favour of the respondent. He found the allegations complained of, bearing the meanings determined by this court, to be false (paragraphs 118, 190), so that the defence of justification failed. As for malicious falsehood, he found (paragraphs 276 – 278) that the journalist applicants were malicious, knowing that the allegations were false in the meanings which they knew them to bear, and having a dominant intention to injure the respondent. He held that the articles were likely to cause the respondent pecuniary damage (paragraph 309). He awarded £180,000 for libel (paragraph 311). There was as I have said no separate award of damages for malicious falsehood.
6. I turn to the judge's treatment of the cash for access allegation, and the applicants' assault upon it.
7. Mr Rampton has a whole raft of criticisms of the judge, but I conceive the core of his case to be twofold: (1) Tugendhat J did not ask and answer the question enjoined by this court's decision on meaning, namely: did the respondent offer for sale the opportunity to influence government policy and gain unfair advantage through secret meetings with the Prime Minister and other senior ministers, so that his conduct was "inappropriate, unacceptable and wrong, and gave rise to an impression of impropriety"? (2) Tugendhat J made insupportable findings as to what in fact transpired at the meeting, holding that the respondent held out to the applicants no more than what was envisaged for donors in published statements on behalf of the Conservative Party.
8. Referring to his skeleton argument in the court below, Mr Rampton said that his case had always been that potential donors should not be led to expect that they would get anything for their money other than success for the Party at elections; but the respondent had entertained an approach from the applicants which avowedly sought commercial advantage if they (or rather their clients) were to donate, and had given them cause to believe that their donations would bear fruit accordingly.
9. Central to the judge's conclusions are paragraphs 80 – 83. I will just pick out these short passages from paragraphs 81 – 83:

"[81]… [W]hat [the respondent] described was the kind of access which Mr Cameron was advertising in the Brochure, and of which he had explained the benefits in his February 2010 speech. [82] If the Defendants had chosen to defame Mr Cruddas for doing no more than raise funds in accordance with the law, and with the publicly stated positions of Mr Cameron and Lord Feldman, then they could have done so. The CSPL Reports show that many people regard the present practice as discreditable. And if they had defamed Mr Cruddas solely on that basis, they might have been able to raise a defence of honest opinion… But they could not defend such a case by the defence of truth… [83]… This court cannot declare to be corrupt, as a matter of fact, the system of party funding authorised by Parliament and adopted by the Conservative and other parties. That may or may not be an opinion which people may honestly hold. It is not true as a matter of fact that the system is corrupt."

10. The judge seems to have proceeded on the footing that if it was shown that the respondent, by his words and actions on 15 March 2012, went no further than was contemplated in Conservative Party materials (and Mr Rampton took us to statements by the Prime Minister and Lord Feldman), then the defence of justification was simply not available; and that, he found, was in fact the position. Mr Rampton submits that this approach does not squarely confront the defamatory meaning of the cash for access charge found by this court: indeed the judge, at paragraph 75, had attributed a different meaning to the words complained of:

"So what the Articles alleged is that Mr Cruddas was acting corruptly because he was acting contrary to the publicly stated positions of Mr Cameron and Lord Feldman, not that the Party line was itself corrupt."

11. Although Mr Rampton criticises this paragraph, I think it points the way to the real bite of his case, which is that the respondent indeed acted "contrary to the publicly stated positions of Mr Cameron and Lord Feldman": he was prepared to contemplate the receipt of donations in return for the prospect of commercial advantage through secret meetings with politicians at the top of government, and that was "inappropriate, unacceptable and wrong" – whatever the rights and wrongs of Conservative Party policy relating to donors. In fact, says Mr Rampton, the Conservative Party materials demonstrate that donations are invited and welcomed only for the promotion of Conservative policy, and not at all for the advancement of the donors' own interests.
12. In order to obtain permission to make this case, Mr Rampton has to show a better than fanciful prospect of persuading this court that the judge went wrong on the facts to a radical degree. That is a tall order on any view, and it is right to note that the trial judge in this case has a wealth of experience in the field of defamation.
13. There are, however, some singular features in the case. First, it seems to be clear that the applicants, masquerading as representatives of foreign financiers, made it very plain that their interest in approaching the respondent was entirely commercial. I will note these short passages (there are others that might equally be chosen):

[The second applicant, Ms Blake – D2] "And so we'd like to have some of that contact [sc. with David Cameron], we'd like to have an opportunity to some extent to have our say in policy areas which we feel affect our business… in the UK and our investment strategy…" (Bundle 1, tab 7 p.93)

[D2] "… at the moment our investment strategy in the UK is in its very early stages… but one thing is that we might say… we wanted to take an interest in an asset like the Royal Mail,… we'd like to ask him 'How do you feel…'" (tab 7 p.99)

How did the respondent reply? Mr Rampton submits that far from rebuffing these approaches, he encouraged them. It is true that he insisted that access could not be bought; that the Conservative Party was "clean"; that he emphasised more than once the need for "compliance" by donors; and that donors do not have a voice to change policy. But after the reference to Royal Mail he seems to have said "Spot on, spot on… You could ask him about that"; at p.97 he refers to "one of the people involved [in a big commodities merger] was sitting at the table [at a private dinner with the Prime Minister and others]"; at p.123 he says that some of the bigger donors have been for dinner at the Prime Minister's private apartment at 10 Downing Street. When he is asked by the first applicant (p.131) whether it would be worthwhile to make a donation to the Liberal Democrats, he answers: "The Lib Dems, Nick Clegg's not going to do anything for you, because he's not in power, I mean he's in power but Cameron's the main man."

14. I have not forgotten Mr Browne's strictures against "cherry-picking" the evidence. The judge's treatment of the evidence of the meeting, at Annex II of the judgment, is painstaking. He dealt specifically with the Royal Mail exchange at paragraphs 103 – 105. He heard the oral testimony of the parties, and roundly preferred that of the respondent. Mr Browne attaches importance to that; I can see that nuance and emphasis play their part, and it is true that the record is not always clear as to the order of speaking; but by and large I would have thought that the record speaks for itself.
15. Why did the respondent not simply show the applicants the door? Mr Rampton says it is clear that they were, in effect, offering to pay for political favours; and the respondent, despite all his reservations and qualifications, in fact whetted their appetite. It is submitted that if the judge had looked at the case in that light and made findings accordingly, he might well have found the defence of justification established.
16. Not without misgiving I have come to the conclusion that Mr Rampton's points on the facts are enough to justify permission to appeal in relation to the cash for access allegation. He may well face formidable difficulties; but I have an uneasy sense that the judge may not, despite his painstaking treatment of the case, have confronted the realities of the exchanges on 15 March 2012.
17. Mr Rampton also faces an uphill task in relation to the foreign donations allegation, not least as regards the disarray of his clients' evidence. If this aspect of the case had stood alone, for my part I would have refused permission. But there is force in Mr Rampton's submission that if he gains a fair wind on cash for access, that may affect the court's approach to the respondent's attitude – as revealed in the discussions on 15 March – to the means of getting cash into this country from foreign donors. I would grant permission also in relation to this part of the case.
18. I turn lastly to the malicious falsehood claim. As I have said, the judge found the applicants to have acted maliciously. He made findings about their having deceived their editor. He clearly formed a very poor view of the quality of their testimony. Again, if this part of the case had stood alone it is very difficult to see that it would merit permission to appeal. But it cannot be fanciful to suppose that if Mr Rampton's case is good on cash for access, that may have an important influence upon the judgment to be made, on the facts, as to the charge of malice against the applicants. Mr Rampton said it would have a "terminal effect"; I would not put it quite so high.
19. I have considered whether an appeal on the malicious falsehood part of the case would be disproportionate, given there was no separate award of damages on that claim, and it is to say the least difficult to see that the respondent might fail on libel but succeed on malicious falsehood. But the finding of actual malice against the applicants is a serious matter. I would therefore give permission to appeal in relation to the judge's conclusions on malicious falsehood, save as regards one discrete aspect. That concerns the judge's findings at paragraphs 306 – 310 as to the likelihood of pecuniary damage for the purposes of s.3 of the Defamation Act 1952. Here I agree with the reasoning of Sharp LJ at paragraph 17. On this aspect only I would refuse permission to appeal.
20. I have not dealt with all the detailed arguments canvassed before us in writing and at the hearing on 8 April, which (save in relation to pecuniary damage) will be available to the parties on the appeal before the full court. What I have said sets out the reasons why, in this unusual and in some ways troubling case, permission to appeal should in my view be granted.

LORD JUSTICE MAURICE KAY:

21. I agree.