England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		21 November 2002

Mr Justice Eady :

1. This litigation is due to be tried by me in December sitting with a jury. There are now a number of significant and, in some cases, fundamental applications to be ruled upon. They were heard over no less than six days between 21 and 29 October. They included applications on the defendants' part for summary judgment on issues of qualified privilege and malice, and applications by the claimants for permission to amend (including by way of adding new causes of action) and for specific disclosure of documents. As if this were not enough, there were also arguments on absolute privilege, diplomatic immunity, the so-called double actionability rule and Czech law. These were to be resolved by way of preliminary issues and, particularly, in the light of conflicting oral evidence from legal experts. It was agreed that an application on the defendants' behalf for security for costs would be postponed until the outcome of these other more substantive matters was known.
2. The first two days of the hearing were largely taken up with disclosure issues. The parties were content to take that course because the questions could be resolved on the statements of case as they then stood and were not affected by the proposed amendments. Moreover, Miss Sharp QC for the claimants wished to reserve her position to make adjustments to her case on qualified privilege and/or malice in the light of any further disclosure I might order. This was another factor affecting the sequence in which I was invited to dispose of the applications. Before turning to the subject of disclosure, it is necessary for me to identify the issues.

A Summary of the Issues

3. So much is in dispute, both as to the facts and as to the interpretation of them, that it would be inappropriate for me in advance of the trial to set out the background in any detail. I propose to content myself with a very brief summary which I hope is uncontroversial.
4. The first claimant is the Chairman of the Board of the second claimant ["MND"]. It is pleaded that in 1997 he and his father (Karel Kamarek Senior) founded SPP Bohemia which subsequently acquired a majority holding in MND. The second claimant (which can be conveniently identified in English as The Moravian Oil Mining Company) is incorporated in the Czech Republic and has substantial interests in the production, storage and distribution of natural gas and oil in that part of the world and elsewhere. Ramco Energy PLC (the first defendant) is incorporated in Scotland and carries on the business of developing, exploring and exploiting oil and gas reserves.
5. Medusa Oil and Gas Limited (the second defendant) is incorporated in England and Wales. The third defendant (Medusa Czech Operations Limited) is incorporated in Jersey. The second and third defendants are subsidiaries of Ramco and carry on the same business under its management and control. The fourth defendant, Mr Burchell, is the Managing Director of Ramco and the fifth defendant, Mr Seymour, is a director of the second and third defendants.
6. An agreement was entered into in October 1997 between MND and the second defendant with a view to the exploration, and exploitation, of reservoirs of petroleum in the Czech Republic in three areas known as Brezi Mikulov, Bulhary and Karlin. Just over a year later the second defendant transferred its rights and obligations to the third defendant. On 19 August 1999 MND entered into a joint venture agreement with the third defendant with a view to undertaking the prospecting and exploration of reservoirs of petroleum in those three areas and, ultimately, to produce and sell the petroleum found.
7. To put it neutrally, a commercial dispute arose between the various parties at some point in the first half of 2000. The defendants thought it appropriate to carry out investigations into the claimants' background and, to that end, instructed Hakluyt & Co, which apparently specialises in gathering and analysing information about companies around the world. It was founded in 1995 and is supervised by a Foundation whose members include various distinguished men, including former businessmen, diplomats and civil servants. Its status is very much a matter of dispute in these proceedings.
8. By Letter dated 20 May 2000 the defendants are alleged to have published to Her Majesty's Ambassador in Prague and to Mr Martin Day, who was the First Secretary (Commercial) at the British Embassy in Prague and Principal Representative in the Czech Republic of British Trade International, certain allegations about the claimants which are said to be defamatory and which, for the purposes of the present application, do not need to be set out in detail. In particular, they were sent a document apparently emanating from Hakluyt headed "BULLET POINTS ON THE KOMAREKS/MND". This contained a number of allegations which were undoubtedly grave and implicated the claimants in corruption and in one instance in murder. Reliance is placed in the Particulars of Claim by way of aggravation of damages upon a raft of detailed matters. There is a plea of qualified privilege, which may perhaps be regarded as the primary defence, and a plea of malice which to a significant extent overlaps with the detailed history prayed in aid for the purposes of aggravation of damages. It will be noted that there is no plea of justification and the allegations will therefore be presumed to be untrue. It is not for the claimants to prove them false.
9. That is the very broad context of the applications which now come before me.

Disclosure

10. On 22 October, I announced my conclusions in relation to the various documents, or classes of documents, which were debated before me, so that the parties could consider their respective positions accordingly. It could well be necessary to address, for example, the possibility of appeal and/or the consequences for the claimants' pleaded case. It was decided that the defendants did not wish, in the circumstances, to pursue any application for permission to appeal and the relatively few documents which I ordered to be disclosed, or unredacted, were then handed over. It is now appropriate, however, for me to explain my reasons for the course I took. I propose to do so in relatively brief and general terms.
11. The documents fall into several distinct categories, although some of them bridge more than one category. One of the main issues canvassed was that of legal professional privilege. In some cases, it was necessary to address what the dominant purpose of the relevant document was in accordance with the guidance given in Waush v British Railways Board [1980] AC 521. The subject of legal professional privilege needs sometimes to be sub-divided, as here, because legal advice privilege and litigation privilege are governed by different public policy considerations and rules of application. Miss Sharp argued that no litigation was in contemplation until the letter before action in respect of this litigation (i.e. 26 July 2000). Mr Moloney QC, on the other hand, puts the relevant date several months earlier, because the contemplation of litigation for this purpose can embrace the contemplation of arbitration proceedings, and by early March 2000 it was apparent that there was a commercial dispute between the parties to the contract governing the joint venture in the Czech Republic.
12. The facts of this case give rise to special considerations. When Mr Moloney spoke of internal discussions in the defendants' camp about "the disputes", and about various possible solutions, it became obvious that there was a need for greater definition. The word "dispute" could lead to confusion, since it could refer in some contexts to the contractual dispute, and in others to the libel dispute - and in yet other instances to the overall commercial dispute in relation to which the legal issues formed merely a part. There were many potential methods of resolving the overall commercial dispute and some of these did not involve litigation at all.
13. In the context of this case, the distinction is significant because there are important allegations of malice which may (subject to the summary judgment application) entail investigation into what the defendants genuinely believed about the claimants and the extent to which allegations about them were being used by the defendants cynically for an "improper" purpose. In untangling these issues, it is obvious that internal communications and their timing could be of significance. The scope of legal professional privilege therefore needed to be scrutinised with particular care. It is recognised that it should not be extended beyond its legitimate purpose and that it must be kept within justifiable bounds: Balabel v Air India [1988] 1 Ch 317.
14. Whereas discussions about settlement or possible strategies in litigation, or arbitration, would ordinarily be expected to attract legal professional privilege (of one or other category), wider ranging communications about commercial strategies or tactics might well not do so. I decided that on the facts of this unusual case I should attempt to draw such a distinction when deciding on the boundaries of legal professional privilege.
15. Mr Moloney presented a schedule of the various categories of documents which have to be considered. One small category (which he labelled "D") was that which comprised documents addressed to third parties containing information about legal advice received by the defendants. In one of them (D12), for example, there was reference to such advice in a letter addressed to Mr Broucher. In another (D21), such information was included in a memo from Mr Mike Burchell to Mr Mike Reynolds of Hakluyt (whose services were being employed by the defendants to make discreet enquiries into the claimants - or "dig up dirt", depending on one's point of view). Neither of these documents seemed to me to fall within any recognised protection, since the legal advice had been disclosed outside the circle of those directly concerned, and I ordered them to be unredacted.
16. On the other hand, I went through various documents and decided that they fell into Mr Moloney's category A of "instructions to lawyers or legal advice", or category B, "internal memoranda disclosing legal advice". It was clearly legitimate for these to be protected by legal professional privilege. There were five documents described by Mr Moloney as "internal memoranda disclosing negotiating positions and terms of settlement". This was a category (Ci) which required me to focus on the distinction I have described above, and in two instances (D190 and D191) I ordered passages to be unredacted. Another category (Cii) was described as "internal memoranda relating to the conduct of the dispute" and required a similar exercise. As a result, I ordered further elements of disclosure (in relation to DI0, D14, D111, D116, D117, D174).
17. The final category (E) was concerned not with privilege but with relevance. Here I concluded that there was nothing further needing to be disclosed, either because of irrelevance or proportionality.

The international implications

18. I next turn to the international aspects of the case. From 23 to 25 October, submissions were made by Mr Maurice Mendelson QC and Mr Tom Beazley QC (for the defendants and claimants respectively), on which I was invited to rule by way of preliminary issue. I announced my conclusion at the end of the hearing and now give my reasons.
19. Since the existing cause of action turned upon the publication of defamatory words to Her Majesty's Ambassador in Prague, the claimants would need, according to the double actionability rule, to establish that the wrongful act would give rise to a claim not only in England but also by Czech law (see e.g. Boys v Chaplin [1971] AC 356). A significant part of the hearing was, therefore, devoted to the issue of how far, if at all, a remedy would be available in the Czech Republic. It was the defendants' case that the claimants are unable to establish this essential proposition and that the action is thus bound to fail. The claimants submit that they can indeed show the claim to be actionable in both jurisdictions.
20. I was, however, asked by the claimants also to rule, if necessary, that the double actionability principle, not being of universal application, should not be applied on the facts of this particular case. That is to say, even if I were to hold that the facts would not give rise to a cause of action under Czech law I should permit the action to proceed anyway.
21. It was common ground between the parties that the publication of the relevant words would give rise to a cause of action in the Czech Republic albeit not wholly analogous to an English claim in libel. A complaint would appear to be available by virtue of s.ll of the Civil Code. In general terms, such a claim would carry with it some financial compensation (although there was no meeting of minds as to whether it would be substantial).
22. There was, nevertheless, a dispute between the parties and their experts as to whether it would have any significance in that jurisdiction that the words were published in a letter from a citizen of the United Kingdom to Her Majesty's Ambassador. In English law, for example, there is a rule deriving from the inviolability of diplomatic documents whereby the court would decline to investigate the contents of at any rate some embassy documents where they were alleged to give rise to a claim in libel: Fayed v Al Tajir [1988] 1 QB 712. That was a case in which the document concerned was on any view an internal embassy document. Here, of course, the situation is rather different, in that it emanated from outside. At all events, if (a) there were a corresponding self-denying ordinance as a matter of Czech law or practice, and (b) it would apply to such a document, the defendants would wish to argue that the claimants would for that reason be unable to surmount the hurdle presented by the double actionability rule.
23. On the other hand, leaving aside the conflict between experts as to the existence or otherwise of a corresponding principle in the Czech Republic, it was the claimants' contention that any such rule would have to be regarded as procedural; in other words, the rule (if recognised at all) could only have the effect of barring a remedy rather than a substantive right. On that hypothesis, it would not preclude this court from holding that the claimants were able to establish double actionability. It would, for this purpose, be the substantive right under Czech law that would be critical and not a procedural bar: see Dicey & Morris, Rule 17 and para 35-049.
24. If that argument is correct, of course, it would render the rival contentions about the approach of the Czech courts towards diplomatic immunity otiose and academic; it would then be unnecessary for me to resolve the conflict between the two experts. The matter would simply turn upon the English principles about the double actionability rule and the relevance to it of any bar classified (as a matter of English law) as merely procedural.
25. It seems to me that logically this is the first point to be addressed. I consider it to be established as a matter of English law that the operation of any such bar against a remedy based on diplomatic considerations, whether of personal immunity or the inviolability of archives, documents or correspondence, is properly to be classified as procedural: see e.g. Empson v Smith [1966] 1 QB 426, 438 per Diplock LJ; Dickinson v Del Solar [1930] 1 KB 376, 380; Fayed v Al Tajir [1988] 1 QB 712, 725.
26. Accordingly, even if I resolve the question debated by the experts (i.e. whether a Czech court would entertain a claim in respect of the material publication) in the defendants' favour, there would be a barring only of remedies rather than the absence of a right. For the purposes of the double actionability rule, therefore, the claimants have succeeded in demonstrating that the publication would give rise to a civil claim under Czech law.
27. Quite apart from the distinction between procedural and substantive law, the matter can be analysed in terms of more general public policy considerations. Even where the courts of particular jurisdiction stand back in respectful self-restraint from adjudicating upon publications classified as protected for diplomatic reasons, the claimants argue that there is no obvious reason why such an approach should inhibit investigation by the courts of the sending state of transactions between citizens of their own country. There may be other established reasons for denying a remedy such as, for example, a defence of qualified or absolute privilege, but comity could hardly have any bearing on the matter. Quite different policy considerations apply: see e.g. Fayed v Al Tajir at 73IF and also Article 31(4) of the Vienna Convention on Diplomatic Relations 1961.
28. Despite my conclusion on this fundamental point, it seems right that I should nonetheless go on to state my findings, such as they are, on the conflicting evidence as to Czech law. The matter turns upon the attitude of the Czech courts to diplomatic immunity and especially to Articles 24 and 27 of the Vienna Convention.
29. Two Czech law experts gave evidence. Dr Jan Barta was called for the claimants and Dr Vladimir Balas for the defendants. The former was of the view that no concept of comity is recognised in Czech law and that the courts of that jurisdiction would not apply customary international law but only, in the light of Article 10 of the Constitution, "promulgated international agreements". In the case of such agreements, provided their ratification has been approved by Parliament, and they are binding on the Czech Republic, they would prevail in the event of any conflict with domestic law. One of the treaties incorporated into Czech law is the Vienna Convention on Diplomatic Relations. It is thus clear that its provisions will take priority insofar as there may be any inconsistent rule in the Czech Republic.
30. At first it seemed to me that I should simply approach the international law issue as an English judge, and determine the meaning of the Vienna Convention in accordance with any relevant materials including any English authorities in which it has been considered and construed - and without the need of expert evidence. I am glad to have had the assistance of the distinguished Czech experts on Czech law and practice. Yet, when it comes to construing the Vienna Convention and, in particular, the notion of inviolability (to be found in Articles 24 and 27), it would appear that I do not on the face of things need to approach this exercise through Prague spectacles. It may be that Czech judges or scholars would construe it differently, but this ought not to affect my task.
31. If I were addressing the matter without regard to the Czech context, I would be satisfied in the light of the objects and purposes of the Convention that it would be inappropriate for me to take a narrow view of inviolability, such that it would be confined to physical inviolability. To put it another way, I do not believe it would be consonant with the purposes of the Convention to construe Article 24 or Article 27 as concerned solely with protecting pieces of paper and not their contents.
32. It would be surprising in the modem world if it were thought appropriate by the courts of a receiving country to enquire into the communications between diplomats and their correspondents or information passing between them in any relevant document. What is more, there is Court of Appeal authority to that effect in Fayed v Al Tajir. Dr Barta is of the view that this would carry no weight in a Czech court. He may be right, although Dr Balas certainly believes that it would be taken into account and that the reasoning might be regarded as persuasive - and particularly as the government and the judiciary of that country are becoming more internationally oriented: see e.g. the very recent amendments to the Constitution geared partly towards greater participation in a wider Europe.
33. Be that as it may, if I were attempting to assess this aspect of international law as an English judge, I should certainly give due weight to the Court of Appeal's construction and indeed, insofar as it is relevant and binding, follow it. Dr Balas's view was that the Czech courts should approach the interpretation of "inviolability" in exactly the same way. He recognised that some Czech judges might not do so, but this would only happen because of their unfamiliarity with the concepts of international law. If it were necessary for me to adjudicate on the conflicting evidence of these experts, I would prefer the analysis of Dr Balas on the broad issue. As I have already indicated, however, it makes no difference to the outcome because the self- denying ordinance would be regarded as a matter of procedure rather than substantive law. (As a matter of interest, the evidence confirms that the Czech courts would agree about this classification.)
34. Mr Beazley does not accept that it would be correct for me to approach the issues simply as an English judge construing international law. He submits that the law or usage of the Czech courts (insofar as it can be authoritatively established at all) ought to govern my consideration of the matter, because the Vienna Convention is not for present purposes merely a free-standing instrument; its only relevance is that it has become part of Czech law. It is necessary, therefore, to focus on the Convention as it would be construed in that jurisdiction. Moreover, it is necessary to construe it free of any overtones of customary international law. There is nothing in the Constitution of the Czech Republic (either in its original form or in its very recent amended form) to justify the conclusion that those principles would be applied in the Czech Republic - still less that they would prevail in the event of conflict.
35. To the extent that Dr Balas was contending to the contrary, Mr Beazley argued that this was merely an afterthought. It had not occurred to him at the time of his first report. Moreover, when he resorted to Article 1(2) of the Constitution to support his argument, he was merely doing so "on the hoof' as a means of justifying the stance he had already adopted. Mr Beazley submits that, if customary international law has to be excluded from the equation, the provisions of the Vienna Convention (and, in particular, Articles 24 and 27) should not be construed in accordance with the approach of the English Court of Appeal in Fayed v Al Tajir, because that was informed by those wider customary principles.
36. I have the very strong impression that no one really knows how such a problem would be approached in this day and age by the Czech courts because there is no clear guidance either way. Dr Balas was, I believe, much influenced by his own assessment of the growing internationalism of the Czech Republic and its aspiration to join the European Union. Even if he is right, however, in broad terms, in saying that a Czech judge would adopt a similar approach to that of the Court of Appeal in Fayed, and treat inviolability as applying to contents as well as to physical pieces of paper, it does not necessarily follow either (a) that such a judge would extend the principle so far as to cover not only truly internal documents but also every letter addressed to the embassy, or (b) that such a policy of self-restraint would apply in circumstances where it is possible (as here) to establish what was published without any reliance at all upon a document from within the embassy falling into the category of either "correspondence'' or "archive" material.
37. One of the curious features of this case is that a copy of the document complained of was sent to the claimants, in the first instance, rather than to the Ambassador. This is said to have been an unfortunate error (although I am not sure that Miss Sharp would accept that). At all events, it so happens that the claimants were aware of the contents of the publication even prior to the Ambassador's copy arriving. It is thus obvious that they are in a position to prove the contents of the document without the Ambassador's copy having been in any way "violated" or relied upon. Dr Barta's clear evidence was that there would be no Czech rule of evidence or procedure which would prevent publication being demonstrated by that means. Dr Balas takes the view that, even so, a Czech judge would not adjudicate on the publication to the Ambassador. On balance, insofar as I am in a position to make a judgment on the matter, I prefer the evidence of Dr Barta relating to these more specific questions.
38. I am now therefore in a position to state my findings and conclusions in relation to the arguments directed to the international aspects of the case. First, I am quite satisfied that any inhibition there may be in Czech law, such as to prevent adjudication upon the document in question, would properly be classified both as a matter of English and Czech law as being procedural rather than substantive. It follows that, since there is a sufficiently comparable cause of action in Czech law under the Civil Code, the requirements of the double actionabilty rule can be fulfilled.
39. Secondly, there is no reason of public policy to justify the English court refusing jurisdiction in any event. For example, one of the principal factors underlying the double actionability rule is the public interest in discouraging forum shopping. That is not a factor which arises in this case. Moreover, the policy reasons underlying the Court of Appeal's decision in Fayed v Al Tajir would not in themselves militate against this court accepting jurisdiction to deal with the publication of defamatory material by a United Kingdom citizen to an ambassador. There may be various defences tailored to those circumstances (e.g. privilege of one kind or another) but there is no reason to decline jurisdiction. Indeed, the right of access contemplated by Article 6 of the European Convention on Human Rights would incline the court in borderline cases to err on the side of entertaining such a claim.
40. Thirdly, although I cannot pretend that the position is by any means clear, I have concluded on balance that a Czech court would probably not decline jurisdiction to adjudicate upon a claim under s.ll of the Civil Code in a case where there was no physical violation of embassy correspondence and it was possible to prove the relevant publication without reliance upon material falling within that category.

Qualified Privilege and Malice

41. It would seem to be convenient to deal with qualified privilege and malice together because there is a good deal of overlap in Miss Sharp's submissions. Mr Moloney has sought summary judgment, somewhat optimistically, on the basis that it is possible even at the present stage to conclude not only that the defence of qualified privilege is bound to succeed but also that no jury could ever decide that the defence was tainted by malice on the part of any relevant person.
42. It is true that the court can entertain such applications prior to trial: see e.g. S v Newham London Borough Council [1998] EMLR 583. Nonetheless, it will in the nature of things be rare that a judge can say in advance of trial, purely on the basis of witness statements and documents, that a plea of malice is bound to fail. This is because such a plea will often depend upon the claimant's inviting an inference from conduct or statements of the defendant that are in dispute. The facts from which such an inference is to be drawn have to be pleaded and, if not agreed, established in evidence. The modem practice is for each side to serve witness statements before trial and it should therefore be to some extent easier to identify at an early stage, upon a consideration of the claimant's statement of case and witness statements, whether there are indeed any facts from which a jury could ultimately infer malice. A judge performing such a task, however, should only rule out malice if it can be done on the assumption that all relevant factual issues have been resolved in the claimant's favour.
43. It has long been clear, and has recently been re-affirmed in the Court of Appeal, that such facts need to be more than neutral or equivocal: see Somerville v Hawkins (1851) 10 CB 583 and Alexander v Arts Council of Wales [2001] 1 WLR 1840, C.A. The material relied upon must fulfil the requirement of being more consistent with malice than its absence. If the facts alleged do comply with that threshold criterion, it is difficult to see how a judge could safely predict that no jury could conscientiously draw the inference. Almost inevitably the exercise of attempting to foretell the outcome would draw the judge into the forbidden domain of conducting a mini-trial: see e.g. Swain v Hillman [2001] 1 All ER 91.
44. Mr Moloney recognises the high hurdle which these applications require him to surmount, but he was undaunted. His arguments on qualified privilege and malice were attractively presented. In each case they depended on persuading the court of certain fundamental propositions of fact.
45. As to qualified privilege, the defendants' pleaded case depends on a limited number of such propositions which are incontrovertible, he suggests, and which establish a relationship between the defendants and the recipient of the defamatory words, Mr Broucher, of a nature such that the occasion of publishing the Bullet Points memorandum needs to be protected by privilege "for the common convenience and welfare of society" (to adopt the hallowed formulation used in Toogood v Spyring (1834) 1 C.M. & R. 181). The claimants' case, however, is first that these limited factual propositions (or the "pillars", as they were described) are not in themselves to be taken as uncontroversial and, secondly, that the whole of the circumstances have to be taken into account whether the court is concerned with common interest privilege (which seems to be the primary case here) or with the situation of media publications to the world at large, which depend upon the establishing of a social or moral duty: see e.g. Reynolds v Times Newspapers Limited [2001] 2 AC 127, 195. Here, says Miss Sharp, when the whole of the circumstances have been investigated it is likely that they will put a different complexion on the bare bones of Mr Moloney's deceptively simple case.
46. Mr Moloney drew an analogy with the recent case of Kearns v General Council of the Bar [2002] EWHC 1681 (QB). That too was primarily a common interest case, but it turned upon the well established relationship between the Bar Council and members of the Bar and communications between them on the subject of professional rules and standards. The issue was not fact-sensitive, therefore, in the sense that it would become necessary to investigate the particular circumstances surrounding each individual publication. Here, by contrast, the common and corresponding interest contended for is not, so to speak, "off the peg" and is being tailored to the individual circumstances and people involved. There is more room therefore for factual enquiry at trial before it can be finally determined that the common interest alleged would be classified as "legitimate" by the law of defamation. I am far from saying that all communications between British citizens abroad and local embassy staff would require close scrutiny. It would, for example, be obvious that a communication between a traveller and the British consul about a lost passport would attract such privilege. Here I am prepared to accept that the situation is not so clear cut.
47. As to malice, Mr Moloney argues that the claimants are going to be unable to point to anything which demonstrates that the defendants knew or believed the contents of the Bullet Points document to be false or that they were genuinely indifferent to their truth or falsity. Miss Sharp argues, however, that the disclosed documents tend to show that the defendants simply treated the Bullet Points as "grist to the mill" in the conduct of a tactical campaign directed at persuading (or, as she also put it, "blackmailing") the claimants into resolving the ongoing commercial dispute more favourably from their point of view.
48. She submits, therefore, that a possible interpretation which should be left for the jury to consider, is that the defendants were indifferent to the truth of these grave allegations and merely using them for their dramatic effect.
49. Moreover, she argues that I should allow for the other pleaded possibility that the defendants were, irrespective of their true belief, publishing the relevant allegations from the dominant motive of injuring the claimants' reputation - rather than of protecting any legitimate interest justifying the blanket of privilege. If proved, she would wish to submit that the circumstances fell within the scope of "malice" as contemplated by their Lordships in Horrocks v Lowe [1975] AC 135. Although it may well be true that no one can ever cite an example of malice having been found solely on this basis, i.e. despite the defendants' honest belief in the words, this is a case turning on rather unusual facts. The attribution of dominant motive may not be capable of disposal without establishing the full circumstances in evidence and conducting an analysis of them.
50. Miss Sharp goes further and wishes to allege actual knowledge of falsity. Since it is manifest that the defendants were expressing a wish to go on doing business in partnership with the claimants over the best part of the year 2000, she wishes to be free to persuade the jury that they simply cannot have believed that they were dealing with persons guilty of such seriously criminal conduct. Mr Moloney responds by saying that they merely wished to protect their investment and could not afford to be too fastidious over their choice of business partners in former Eastern block countries. He may or may not be right about that, but this debate seems to have all the hallmarks of a mini-trial.
51. The defendants' "bare bones" case on qualified privilege depends essentially upon the following six "pillars" (identified in paragraph 6 of the amended defence):

(a) The functions and duties of United Kingdom diplomats relating to trade and investment abroad;

(b) the defendants' general relationship with British diplomatic missions overseas;

(c) the ongoing commercial relations between the defendants and the claimants;

(d) the content of the "report" commissioned from Hakluyt;

(e) the specific communications between the defendants and the British Embassy in Prague concerning the claimants;

(f) the events of 18, 19 and 20 May 2000 which are said to form the immediate background context of the publication.

52. Miss Sharp in a detailed and sustained argument took me through the various allegations made in the defence in order to demonstrate the extent of the factual disputes. If I were to rehearse those arguments in the course of this judgment, in comparable detail, and to pronounce even tentatively upon their merits, I fear that the exercise could easily be characterised as the conduct of a "mini-trial".
53. As a matter of first impression, I left the parties in no doubt that I regard the defendants as having a strong prima facie defence of qualified privilege - especially having regard to the role of modem diplomats in facilitating international commercial activity. I am quite prepared to acknowledge, however, that no final determination could be made on that issue by reference solely to the assertions contained in the defence and in the defendants' witness statements. The factual substratum of the defence inevitably involves the investigation of complex events and relationships extending at least over several months. Naturally, I accept that the existence of privilege must be judged as the date of publication but, on the other hand, it may well be necessary in this case to tease out the true nature of the events and relationships by reference to longer term developments. Miss Sharp argues that a significant number of the defendants' assertions, both by way of pleading and evidence, would appear to raise as many questions as they answer.
54. Suffice it to say that I am satisfied that in this unusual case I should be pre-empting the fact-finding role of the jury if I were to purport to rule definitively upon the issue of qualified privilege. Indeed, I became somewhat concerned in the course of argument as to whether the necessary exploration of the factual background can be accommodated within the three week period in December which is currently allocated for the whole of the trial. It seems to me quite clear that the jury will need to examine closely a large number of documents and pay attention, in relation to a number of them, to the explanations offered by several witnesses. Nobody has suggested, so far, that the case is unsuited to jury trial but the exercise is bound to take some time.
55. So too with malice. Here I must be even more careful about expressing a tentative view on the merits of the respective arguments. What is clear to me, however, at this stage is that this is not one of those cases where a claimant has dredged up a number of merely formulaic assertions in the hope of keeping malice alive for the purpose of negotiating a settlement. Far from it, there is much to be probed and interpreted in the documents and in the transactions between the various personalities involved. I can foresee various possible scenarios emerging at trial which would require careful legal analysis, and directions to the jury accordingly, before the issue of malice can be resolved. It is quite possible, at the end of such an investigation, that the jury will conclude that all of the evidence can be explained on the basis of the defendants merely playing "hard ball" (in one of their phrases) in order to protect their investment and their legitimate commercial interests. One can, of course, be tough and aggressive in one's business dealings without being malicious, and without behaving in a way that can be characterised as "improper", when applying the relevant tests.
56. Findings of malice are in fact very rare. Nonetheless, I find myself quite unable to say with confidence at this stage that no jury, properly directed, could interpret the totality of the conduct, conversations and documents as consistent with bad faith. It is always attractive to judges, especially under the CPR regime, to seek out a short route through the parties' dispute and thus save time and money. In this case, I am sure that I should be exceeding my function if I were to cut a swathe through qualified privilege and malice on the basis of first impression.

The proposed amendments

57. Finally, I must rule upon Miss Sharp's applications to amend pursuant to CPR 17, which are dated respectively 27 August and 10 October 2002 (insofar as they are disputed). The first in time relates to the claimants' wish to add two new paragraphs (14 and 15) to the particulars of claim to raise a claim in respect of the publication of the same words (i.e. the contents of the Bullet Points document) to Sir Jeremy Mackenzie. They also wish to rely on the republication of the contents by Sir Jeremy to other individuals, including the Czech Ambassador to the United Kingdom, the Czech Ambassador to NATO, Mr John Goulden and Mr Malcolm Howarth (paragraph 16). These other alleged publications only apparently came to the claimants' attention this summer through the process of disclosure in this action.
58. It is clear that, in these respects, the clients are seeking to add new causes of action very close to the trial date (although it is fair to say that they made their application to do so at the earliest reasonable opportunity after the information came to light). They are different publications giving rise to potentially different defences. I have little doubt that qualified privilege would be raised but, this time, different factors would be pleaded and there is also the real possibility of new matters having to be raised on the issue of malice. Whether there could also be further disclosure of documents I do not know. It would be difficult to fit all this in to the timetable only a few weeks from trial. More fundamentally, however, each of the new causes of action would be statute barred because the one year limitation period has obviously expired. The relevant publications took place in 2000,
59. Mr Moloney, in opposing these late applications, points first to the provisions of s.35 of the Limitation Act, as amended. (I noted after argument was complete Ferris J, on 4 November 2002, decided an issue on s.35 although in a negligence context: Greymalkins Ltd v Copleys [2002] All ER (D) 27 (Nov). The parties have made no submissions in relation to the case and it has not had any bearing on my decisions.)
60. Mr Moloney's primary argument on the fresh publications was simply that the court has no power to allow the amendments: s.35(3) and (5). The proposed claims do not arise "out of the same facts or substantially the same facts as are already in issue on any claim previously made in the original action". It is not, therefore, a question of discretion, he submits, but simply of complying with the statutory prohibition contained in s.35(3).
61. Reference was made to Lloyds Bank v Rogers, unreported, 20 December 1996, CA. The statutory provisions were then considered in the context of libel. So far as it is relevant, the case concerned the wish of the Bank's customer to rely on defamation in respect of the dishonour of certain cheques where the acts of dishonour were already pleaded as founding a claim in breach of contract or tortious duty. As Hobhouse LJ put it, "The facts pleaded to support the claim for breach of contract and/or duty were substantially the same as those relied on to support the claim in libel. The requirement of the Act... was satisfied". That is not so here.
62. In one sense, the facts sought to be relied upon in the proposed amendments are similar to those already pleaded; that is to say, the allegations about the claimants are similar. The essence of a claim in libel, however, is not the nature of the allegations but their publication. Each publication gives rise to a different cause of action. The publication to Sir Jeremy cannot, therefore, be characterised as (even "substantially") the same fact as the publication to the Ambassador. Miss Sharp relied on the words of Hobhouse LJ where he described the policy of the section as being that, if factual issues are in any event going to be litigated between the parties, they should be able to rely upon any cause of action which substantially arises from those facts. But, as I have said, one could foresee quite different issues arising in relation to other publications. Therefore the litigation of the factual issues relating to the 20 May publication does not mean that the issues relating to the alleged later publications to and by Sir Jeremy are bound to be litigated in any event.
63. Miss Sharp has another point, however, based on her plea in aggravation of damages contained at paragraph 12.3.4 where, inter alia, she alleges that a later publication "of further defamatory allegations" to Sir Jeremy aggravated the hurt to the First Claimant's feelings. As Mr Moloney has argued, on the other hand, what was then relied upon was presumably a slander (since it took place at a meeting) consisting of unidentified words, which I cannot assume were identical to the bullet points. It relates, in other words, to a different publication. Nor is there currently an allegation of onward publication by Sir Jeremy.
64. It appears from the proposed amendments to paragraph 16 of the particulars of claim that the claimants now wish to rely upon publication by Sir Jeremy of the Bullet Points document "and/or its contents". The latter formulation is presumably directed to a slander because it is sought to plead the necessary ingredients appropriate to spoken words actionable without proof of special damage. It is raised as a new cause of action dependent on different facts.
65. Mr Moloney submits that, since the new causes of action do not arise out of the same facts, there is no power or discretion. By virtue of s.35 I must simply refuse the amendments in paragraphs 14-16. That seems to me to be correct. If I am wrong about that, I should in any event (as a matter of discretion) refuse permission to amend in respect of each of these new causes of action so close to trial. It would not be possible to fit in all the consequential matters (amending the defence, disclosure and witness statements) without severe disruption. Moreover, proportionality would not justify such disruption. If the claimants have been wronged, they will be effectively vindicated in respect of the allegations already pleaded. To recover in respect of different publications would not be likely to make any significant difference to the restoration of reputation.
66. Mr Moloney's fall back position was that the new causes of action were inadequately particularised and should be refused, at least so close to trial, for that reason. I take the same view.
67. I turn therefore to the second tranche of proposed amendments to the extent that they are controversial. Mr Moloney opposes the new paragraph 12.3.6 which seeks to rely on internal correspondence passing between the defendants as aggravating the hurt to the first claimant's feelings. There is nothing, he says, in the witness statement dealing with this. It seems to me that it is an unnecessary "make weight". If it was a significant factor, it would have been mentioned. I therefore refuse permission.
68. This paragraph is also sought to be incorporated in the Reply by way of adding yet further material on malice. That is a different matter. It would not need, in that context, to be covered in the first claimant's witness statement. But, insofar as it would add anything, it is too lacking in particularity for the purposes of a plea which is tantamount to bad faith. I will again refuse it.
69. Paragraph 12.11 is also opposed. Its purpose is to allege that the defendants were, in any event, responsible for information coming into the public domain about a meeting in May or June 2000 between the Czech Ambassador, Sir Malcolm Rifkind and Sir Jeremy Mackenzie which found its way into an article published on 3 August 2000 in a Czech newspaper. It is already pleaded that the defendant had leaked the information. The only significance of the amendment seems to me to be to establish responsibility even if they did not leak. Mr Moloney argues that it is clear from the article (D101) that it derived from leaks from the Czech Foreign Office and that the defendants therefore cannot be responsible. I will allow this gloss on the existing pleading because it does not seem to me that it will cause any prejudice to the defendants. It is a short point.
70. There is a further dispute over the proposed paragraph 6.9.1 of the Reply. This was to rely upon the defendants' "refusal" to disclose the identity of the author of the bullet points document. I do not see any reason to draw an adverse inference about Hakluyt (or the defendants) from the non-disclosure (which could be explicable, as Mr Moloney asserts, through lack of knowledge on the defendants' part). I therefore refuse permission.
71. Needless to say, those proposed amendments which are consented to will be granted.