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
		18/06/2009

Mr Justice Tugendhat:

1. One year ago, on 12 June 2008, I delivered a judgment in this libel action ("the first judgment") Neutral Citation Number [2008] EWHC 1263 (HC). I made certain orders in favour of the Defendant Bank, but I dismissed its application for summary judgment against the Claimant on the whole of the Claimant's claim. I also made an order (para 7 of the first judgment) restricting the reporting of the names of certain individuals. I made a fresh order to a similar effect at the start of the hearing on 3 June 2009.
2. Since June 2008 there have been a number of developments. Amongst these developments is a second application (issued on 13 February 2009) for summary judgment against the Claimant on the whole of his claim. This is directed to the same issue as the one I considered last year (namely whether, as set out in para 21 of the first judgment, X and Y caused or authorised the publication complained of: "the publication issue"). The difference on this second occasion is that the Bank has pleaded an affirmative case on publication, and the application is now supported by witness statements and voluntary disclosure. Mr Rampton submits that all of this evidence was available, and could have been relied upon, in June 2008. This is a further unusual feature of the Bank's approach to this litigation. While not a complete bar to this second application, it is material to the exercise of the court's discretion. He cites Woodhouse v Consigia Plc [2002] 1 WLR 2558 at [55] in the judgment of Brooke LJ.
3. There is also a fresh application issued on 12 May 2009 for summary judgment upon, or to strike out, a re-amendment to the Reply, by which the Claimant introduced a new case on malice against the Defendant. This new case of the Claimant is based on the Defendant's case advanced in the Amended Defence that A personally contributed to in the drafting of the words complained of. In paras 66 to 74 of the first judgment I set out the reasons why I gave summary judgment against the Claimant on a different case in malice which had been advanced on the basis of the involvement of A and another member of the Defendant's Management Board.
4. In order to avoid repetition, this judgment should be read as one document with the first judgment. In paras 1 to 65 the first judgment sets out the background facts, the steps that had been taken in the action up to that date, the issues then arising between the parties, the applicable principles of law, and my conclusion that summary judgment should not be entered for the Defendant on the whole of the Claimant's claim. No further point has arisen in relation to qualified privilege, on which I decided in favour of the Defendant in paras 75 to 100 of the first judgment.
5. Further details of these and other developments since June 2008 are, so far as material, as follows.
6. On 12 December 2008 the Defendant served an amended Defence in which (at paras 54 to 97) it pleaded in detail to the particulars of malice (see para 20 of the first judgment). Nothing turns on this part of the amendment for the purposes of the applications I now have to decide. It remains common ground that, if the Claimant can succeed on the publication issue in relation to X and Y, then he has a sufficiently arguable case in malice against them to go forward at this stage.
7. But there are other parts of the amendment which are significant for what I have to decide. First, there is a plea in paras 18 to 53 setting out who the Defendant alleges did cause and authorise the publication complained of. In the course of this it is pleaded (at paras 42 to 43) that the first reference to Bankers Trust was included in a draft of the Press Release on 7 March (less than 48 hours before it was published on 9 March) and (at para 49) that on 8 March A himself introduced some changes to the draft, "including the deletion of 'subject DB transactions' from the draft". It is upon this intervention by A that the Claimant introduced his new case in malice. When he re-amended the Reply on 26 February 2009 he introduced a new para 5.3, with new sub-paras 5.3.1 to 5.3.7.
8. On 13 February 2009 the Defendant issued the renewed application for summary judgment referred to above. At the same time he made an alternative application in relation to the publication issue, namely that it be tried as a preliminary issue by judge alone. This was supported by witness statements from the Defendant's solicitor and from eight individuals whom the Defendant alleges did cause or authorise the publication of the Press Release. It is also supported by further witness statements from X and Y, saying that they did not cause or authorise the publication, and by two other individuals, in response to points made subsequently by the Claimant.
9. On 26 February 2009 the Claimant served the Re-Amended Reply referred to above. There arose an issue between the parties as to whether the Claimant was entitled to do this as of right (because it was consequential upon the amendment to the Defence) or whether he requires permission. No time was devoted in argument to this point. I was invited to deal with the re-amendment on its merits.
10. On 26 March 2009, in support of its application for summary judgment, the Defendant gave voluntary disclosure on the publication issue. In doing this the Bank waived privilege in respect of a number of documents drafted by its lawyers. The List of Documents disclosed is verified by Mr Dodds, the Bank's General Counsel, UK and Western Europe. He explained that:

"With a view to demonstrating that X and Y had no involvement whatsoever in [the drafting, approval or publication of the Press Release, the Bank] has served witness statements from all of the key individuals who were involved (including statements from X and Y to affirm their lack of involvement), and is providing voluntary disclosure of all disclosable materials on the [publication] issue".

11. Mr Dodds also set out the limitations which were placed on searches carried out by or on behalf of the Defendant. The main limitations to which Mr Rampton drew attention were the dates, and the e-mail accounts searched. As to dates, documents outside the range 14 February to 15 March were excluded. As to the accounts searched, they were limited to thirteen, including all those who the Bank say were actively involved (that is the eight individuals who had also made statements and three others), together with X and Y. Also, a number of electronic media were not searched.
12. On 12 May the Bank issued the application notice (referred to above) applying for a strike out of, or summary judgment upon, the Claimant's new case in malice against A. For this purpose the Bank also included an application for a ruling on meaning pursuant to CPR Part 53 Practice Direction para 4.1. In the alternative the Bank asks that if there is ordered the trial of the preliminary issue on publication (see para 8 above), then at the same time there be tried as a preliminary issue by judge alone the issue whether A was malicious as alleged in para 5.3 of the Re-Amended Reply.
13. On 22 May the Claimant made a third witness statement. The Bank submits that this is significant in that it makes no challenge to its affirmative case on the publication issue and adds nothing to the case previously advanced as against X and Y.
14. The Claimant's cases against X and Y are clearly different and would require separate consideration at any trial. Mr Rampton accepted that Y's involvement had may not be quite as evident as X's in the documents which the Bank has so far disclosed. But for the purposes of the applications that I am considering, Mr Caldecott has not asked me to differentiate between them. This was a sensible course for the purposes of this application. It does not mean that I consider that the cases against X and Y are the same, or that they are equally strong or weak.

THE ALLEGED PUBLICATION BY X AND Y

15. Mr Caldecott took me to a number of the documents disclosed by the Bank in support of its affirmative case on publication. I shall refer to some of them only. Some are by way of background, and others show what information was given to management by the lawyers, and how the drafting process evolved.
16. Mr Caldecott emphasises the importance that the court attaches to contemporaneous documents when having to decide disputed issues of fact: see for example the extra-judicial words of Lord Bingham cited in Henry v BBC [2006] EWHC 386 (QB) (and in other cases) and The Ocean Frost [1985] 1 Lloyd's Rep 1 at [57].
17. None of the contemporaneous documents disclosed shows any direct involvement in the publication of the Press Release by X and Y. That is accepted by Mr Rampton. It follows that the Claimant's case against X and Y must remain, as it has always been, a case based on inference from the circumstances: see paras 47 to 52 of the first judgment.
18. The documents and witness statements also show, as Mr Rampton accepts, that the lawyers who had been involved in discussions with the US Department of Justice ("DoJ") (see para 9 of the first judgment) for two years since 2004 had detailed knowledge of the underlying transactions. It follows that the case that it was only X and Y who had the knowledge necessary for the drafting of the Press Release (first judgment paras 50 and 61) now has no real prospect of success.
19. Mr Rampton nevertheless maintains the case that the inference (that X and Y did authorise or instigate the publication) is one which the Claimant has a real prospect of showing at trial is one that is more likely than not. The starting point of the Claimant's case on malice against X and Y was that they were the Bank's senior managers responsible for the relevant tax-oriented transactions, in particular "Blips" (first judgment para 17 and para 7.4.6 of the Amended Particulars of Claim). The case is that X and Y had the knowledge and motive, and at least X had the influence, to ensure that the blame be cast on Bankers Trust (and on the Claimant). In some respect Mr Rampton submits that the disclosed documents strengthen the case for drawing that inference. For example the documents show that the drafting of the Press Release was (as the Claimant had maintained) carried out and approved at the highest level (that is a level occupied only by individuals of X's own, or greater, seniority), and that more documents relating to the reserve and the Press Release were communicated to X than the Claimant had previously been made aware of.
20. On 14 February 2006 the United States District Attorney for the Southern District of New York issued a Press Release headed: "German Bank HVB admits criminal wrongdoing and agrees to pay $29million as part of deferred prosecution agreement in relation to largest-ever tax shelter fraud". It included the following:

"HVB's participation in the scheme centered on its role in purportedly providing financing for fraudulent tax shelter transactions. The Information filed today focuses on 4 tax shelters …. Bond Linked Issue Premium Structure ("BLIPS") …"

21. On the same day Mr Walker, the Bank's General Counsel in New York sent to a small number of senior executives of the Bank (including A and X), and to others within the Bank, a Briefing Note describing the current status of the criminal investigation by the US authorities arising out of the Bank's "involvement in certain tax avoidance strategies a number of years ago". He explained that he had learnt that there might be a story in the New York Times naming the Bank as the target of that criminal investigation. The Briefing Note records that, as the addressees knew, the DoJ had served the Bank with a subpoena in March 2004, since when the Bank had been co-operating with the DoJ. The Briefing Note continues:

"Focussing primarily on the BLIPS loans, * the prosecutors have expressed their belief that transactions were obviously structured to create fraudulent tax benefit, and that DB [the Bank] must have known it at the time…

* Note that from 1996 to 2002, Bankers Trust and DB collectively provided banking and execution services for tax avoidance strategies pursued by more than 1400 high-net worth individuals, and that the BLIPS transactions which are the current focus on the Justice Department represent only 56 of those 1400".

22. Mr Rampton drew my attention to a passage in Mr Walker's e-mail, which is under the subject heading: "Tax Shelter Investigation…". Mr Walker wrote: "We are aggressively pursuing strategies to avoid criminal charges". Mr Rampton also referred me to X's response in an e-mail forwarded a minute later to Mr Pincombe (Head of Press and Media Relations in London). X wrote: "I hope you are in the loop on this".
23. Other e-mails whose addressees included A and X were sent with further information on the DoJ investigation on 15 and 21 February. A Risk Report prepared by the Legal Department on 27 February stated that the Bank had been directed by the DoJ to make a submission by 3 March 2006 outlining, amongst other matters, "the role played by various current and formed [sic] DB employees in each transaction".
24. On 28 February there was a meeting of the Bank's General Executive Committee attended by A and X, amongst others, at which A informed the meeting of the Bank's efforts to settle the matter with the DoJ, "and the likely accounting consequences of a settlement as event subsequent to the FY2005 financials". On the same day there was circulated to X, amongst others, the latest Annual Report on Form 20-F. This included part of the text quoted in para 9 of the first judgment.
25. Efforts to settle the matter with the DoJ have been unsuccessful. In para 20.8 of the Amended Defence it is pleaded that the investigation of the Defendant by the DoJ is still ongoing.
26. X's name does not appear on the disclosed documents in the days after 28 February, until 7 March at 4.50 pm, when an e-mail addressed to him and to Y was sent by Mr Crossman (a colleague of X and Y in London), as set out below.
27. Meanwhile on 2 March at a meeting of a committee including A and others (but not X or Y), it was decided that the Bank should make an adjustment to its 2005 preliminary results (announced on 2 February) in the sum of EUR 262m (USD 312m) "including the Return on Equity per target definition (reduction by about 1%)". The next day Mr Kopec, Director and Senior Counsel in the Bank's Legal Department in New York circulated from Frankfurt a "text to be used as a starting point for the press release". Dr Schmitt (Global Head of Investor Relations, based in Frankfurt) responded positively to the draft, but commented on the same day that "I do not believe that we get away with such a big number without explaining / describing the case behind".
28. On 5 March Mr Robert Rice (a lawyer based in New York who was Head of Regulatory and Internal Investigations for the Americas) circulated, under the heading "Overview of Tax Matters", a chronology and information relating to the Bank's establishment of the reserve which was to become the subject of the Press Release. The document made no reference to Bankers Trust, nor did it refer to any of its subsidiaries or their employees.
29. On 6 March Mr Khuzami (the Bank's General Counsel for the Americas) circulated from New York a revised version of "Overview of Tax Matters", which did include a paragraph headed "Involvement of Alex Brown in Tax Transactions prior to [the Bank's] Acquisition of Bankers Trust Alex Brown". The document stated that Bankers Trust had acquired Alex Brown in 1997 and that:

"The Alex Brown brokers did a large number of transactions prior to June 1999, but a large number after that date and through 2000 and 2001. In addition, [the Bank] did a large number of transactions separate from Alex Brown".

30. On the same day Mr DiIorio asked Mr Walker for further information that might be in the form of slides with bullet points, for use at the Board meeting to be held the following day. The information was also to be for Mr Edelmann, (Group Head of Accounting in Frankfurt). The information was provided. It included that the DoJ were investigating:

"financial institutions (including [the Bank]) and individuals in connection with certain tax-oriented transactions executed from approximately 1997 through 2001
- …
- [the Bank] did approximately 400 of these transactions between 1997-2001.
- Alex Brown did approximately 1000 of these transactions, including approximately 260 prior to 1999, 470 in 1999, and 250 from 2000 to 2001. [The Bank] Acquired Bankers Trust Alex Brown in June 1999".

31. On 6 March Mr Khuzami advised Dr Schmitt that "the reference to not doing transactions like these since approximately 2001 is OK". It will be recalled that in the information given on 14 February the dates had been given as 1996 to 2002 (see para 21 above).
32. It will also be recalled that the dates 1997 to 2001 are identified specifically in the Claimant's Re-Amended Particulars of Claim para 7.4.17(4) as ones deliberately inserted by X and Y to point any reader who knew the facts about the Claimant's career at Bankers Trust and at the Bank to the Claimant (first judgment paras 17 and 19).
33. A draft dated 7 March referred to "transactions executed with counterparties in the US from approximately 1997 to 2001" but contained no reference to Bankers Trust, Alex Brown, or any entity other than the Bank itself.
34. The diary of Mr Walker records that on 7 March at 5pm he spoke to X and to Richard Evans (the Global Head of Market Risk). Mr Walker in his witness statement states that he was at Madrid on the way to Frankfurt (so the time is Spanish), and that he did not discuss with X the reserve or the Press Release.
35. On 7 March 2005 at 4:50pm there is an e-mail from Alex Crossman (Global Markets London) to X and Y and a third addressee, Mr Ferron (Chief Operating Officer for the Bank's Global Markets Division). Global Markets is the division for which X was responsible. The message states:

"The Bank is overwhelmingly likely to announce tomorrow its €246 mn provision against fines relating to the US tax shelter issue …"

36. In his witness statement Mr Crossman states that he did not receive a draft until the next day, 8 March, and that he did not speak to the addressees of his e-mail.
37. There is nothing in the papers before me to contradict what Mr Walker and Mr Crossman state. But Mr Rampton does not accept what they state. He does not accept that it can be a co-incidence that an hour or two later, at 6.02 pm there is an e-mail by Mr DiIorio to Mr Khuzami enclosing the latest draft which, for the first time, mentions Bankers Trust. The sentence reads:

"The subject Deutsche Bank transactions were executed from approximately 1997 through 2001, and include transactions that were executed by a subsidiary of the former Bankers Trust Corporation, which we acquired in 1999".

38. There are other variations in the drafting, but the points made to me by Mr Rampton are that there are two significant differences between this draft and the previous draft, which had referred to "transactions executed with counterparties in the US from approximately 1997 to 2001" (see para 33 above). The first difference to which Mr Rampton refers is the designation of the transactions as "The subject Deutsche Bank transactions". The second difference is the addition of the clause: "and include transactions that were executed by a subsidiary of the former Bankers Trust Corporation, which we acquired in 1999".
39. There is nothing in the contemporaneous documents before me to show the names of any individuals by whom, or at whose instigation, these two changes were made.
40. Dr Schmitt circulated this latest draft to a number of addressees on 7 March at 7.17pm. One of the addressees, Dr Ronald Weichert, was Regional Head of Press and Media Relations in Frankfurt. At 5.38 pm Dr Weichert had sent to Dr Schmitt an abbreviated version of the draft which was partly in German. At 7.19 pm Dr Schmitt replied to Dr Weichert in German the following: "CEO and A have assigned a storyline. I would be happy to tell you about it". The word "Storyline" is in English in the German message.
41. The sentence in the draft at 6.02 pm had been altered by 8.11 am on 8 March when it was sent by Dr Schmitt to Mr DiIorio and to Z. The translation of the text of the message states that the draft was "produced jointly by CON, Legal and IR". By then the draft read (with the alterations highlighted by me):

"The subject Deutsche Bank transactions were executed from approximately 1997 through 2001, and include transactions that were executed by a subsidiary of the former Bankers Trust Corporation, which was we acquired by Deutsche Bank in 1999".

42. There then follow e-mails from Mr Crossman in London to Rohini Pragasam (Regional Head of Press and Media Relations in New York) under the subject heading "Blips". They both express concern that the matter is being handled in Frankfurt.
43. At 11.39 am on 8 March Dr Schmitt circulated to a number of addressees a version of the Press Release that included for the first time the paragraph "This adjustment mainly relates ….involvement in similar transactions", substantially as set out in para 3, and commented on in paras 4 and 5, of the first judgment.
44. Mr Rampton submits there is significance in the omission from this draft of the phrase "The subject Deutsche Bank transactions". The words in question then read (after further immaterial editing):

"The adjustment mainly relates to certain tax oriented transactions with US counterparties executed from approximately 1997 through 2001, which include transactions that were executed by a subsidiary of the former Bankers Trust Corporation acquired by Deutsche Bank in 1999".

45. As noted in the first judgment at para 51, a version containing these words was circulated to X amongst others on 8 March at 5.57 pm.
46. The conclusion that I have reached, based on the material that has been put before me on these two similar applications for summary judgment, is that it is not possible for me to find that the Claimant has no real prospect of succeeding on his case in malice based on his allegations against X and Y. It is not clear to me that the Claimant's case is fanciful, or that it is contradicted by all the contemporaneous documents.
47. It is important that I should emphasise that I have not conducted a trial. It has not been suggested by the Claimant that the Bank's defence lacks a real prospect of success. I have certainly made no finding to that effect. All that I have found is that the case based on the allegations against X and Y is fit for trial.
48. In the light of this finding it is not appropriate that I should set out in greater detail the reasons why I have reached this conclusion. The changes in the drafting that occurred on 7 and 8 March have been addressed in the Bank's witness statements. Before reaching my conclusion on this point, I have considered these statements carefully, both in court, with the assistance of counsel, and again in preparing this reserved judgment. It would not be appropriate for me to comment upon those witness statements at this stage of the proceedings.
49. I have reached this conclusion without regard to what Brooke LJ said in Woodhouse. What he said was this:

"55 The application of 8 November 2000 was undoubtedly a "second bite at the cherry". It was supported by evidence that was available at the time of the first application. There was no good reason for the failure to place that evidence before the court on the first occasion. We accept that the fact that the evidence relied on in support of the application that was made on 8 November could and should have been put before the court in support of the earlier application is material to the exercise of the discretion conferred by CPR r 3.9(1). There is a public interest in discouraging a party who makes an unsuccessful interlocutory application from making a subsequent application for the same relief, based on material which was not, but could have been, deployed in support of the first application. In some contexts, this is partly because, as Chadwick LJ said in Securum Finance Ltd v Ashton [2001] Ch 291, there is a need for the court to allot its limited resources to other cases. But at least as important is the general need, in the interests of justice, to protect the respondents to successive applications in such circumstances from oppression. The rationale for the rule in Henderson v Henderson (1843) 3 Hare 100 that, in the absence of special circumstances, parties should bring their whole case before the court so that all aspects of it may be decided (subject to appeal) once and for all is a rule of public policy based on the desirability, in the general interest as well as that of the parties themselves, that litigation should not drag on for ever, and that a defendant should not be oppressed by successive suits when one would do: see per Sir Thomas Bingham MR in Barrow v Bankside Members Agency Ltd [1996] 1 WLR 257, 260a -d .

56 In our view, although the policy that underpins the rule in Henderson v Henderson has relevance as regards successive pre-trial applications for the same relief, it should be applied less strictly than in relation to a final decision of the court, at any rate where the earlier pre-trial application has been dismissed.

57 To take an example: suppose that an application for summary judgment in a substantial multi-track case under CPR r 24 is dismissed, and the unsuccessful party then makes a second application based on material that was available at the time of the first application, but which through incompetence was not deployed at that time. The new material makes the case for summary judgment unanswerable on the merits. In so extreme a case, it could not be right to dismiss the second application solely because it was a second bite at the cherry. In those circumstances, the overriding objective of dealing with cases justly, having regard to the various factors mentioned in CPR r 1.1(2), would surely demand that the second application should succeed, and that the proceedings be disposed of summarily. In such a case, the failure to deploy the new material at the time of the first application can properly and proportionately be reflected by suitable orders for costs, and, if appropriate, interest. The judge would, of course, be perfectly entitled to dismiss the second application without ceremony unless it could be speedily and categorically demonstrated that the new material was indeed conclusive of the case."

50. The unusual course the Bank has taken in these proceedings, attempting to proceed serially, one step at a time, instead of the normal course of advancing the whole defence in parallel, has caused me concern.
51. Mr Caldecott submits that in para 57 of his judgment Brooke LJ is only giving an example, and not laying down an additional condition that an applicant under part 24 must satisfy upon making a second application. I accept that submission. Further Mr Caldecott refers to Johnson v Gore Wood [2002] 2 AC 1. He submits that, in relation to the Henderson principle, at page 30 Lord Bingham was directing attention to the question whether there had been an abuse of process.
52. The Bank's case is that it has acted in this way pursuant to the overriding objective (CPR r1.1), given the exceptional complexity of the case, in particular the plea of malice against X and Y which raises multiple subsidiary issues relating to events going back very many years. However, no time has been spent on that plea of malice, which, for the purposes of the interlocutory applications I have heard, is accepted as having a sufficient prospect of success to go forward at this stage.
53. The Claimant submits that the Bank is acting oppressively and that the decision was no more than a delaying tactic that has successfully deferred the hearing of the trial for a further year, and that the Bank has done this to avoid the revelation of the names of X and Y by keeping in force the order I made restricting reporting (para 7 of the first judgment). The Claimant contends that the Bank's approach to the litigation has placed an inordinate strain on his time and resources, particularly having regard to the very different financial positions of the parties (CPR r1.1(2)(c)(iv)).
54. I have not been able to conclude on the material before me that there has been an abuse of process on the part of the Bank. But neither can I see a good reason for the Bank's failure to put before the court in June 2008 the pleaded case on the publication issue which it now advances. If I had been minded to allow the application of the Bank, I would have sought to remedy the injustice to the Claimant arising out of there being a second application for the same relief by a suitable order for costs.
55. I have concluded that the new material does not make the case for summary judgment unanswerable on the merits. Nor does it make the Claimant's case on this issue lack the real prospect of success required if it is to be allowed to proceed in the face of an application under Part 24.

THE ALLEGED MALICE OF A

56. The allegation of malice against A arose in the manner I have described above in para 7. The malice alleged is in a form which is rare in practice. It is not alleged that A was aware that he was saying anything false about the Claimant, but it is alleged that he abused the occasion by saying something which he knew was false in circumstances where (unknown to him) his words referred to, and defamed, the Claimant. Commenting upon the words of Lord Diplock in Horrocks v Lowe [1975] AC 135 at 149, the editors of Gatley on Libel and Slander 11^th ed para 17.8 put the relevant law this way:

"Since it is the misuse of the occasion which takes away the privilege it is not essential that the defendant should be actuated by malice towards the claimant in the ordinary sense. He might e.g. be acting solely to further his own interests in a manner not allowed by the privilege and without thought of harm to the claimant".

57. Mr Caldecott has not challenged Mr Rampton's submission on the law in this point. I have not been referred to any authorities, although in his written submission Mr Rampton cites Pratt v British Medical Association [1919] 1 KB 244, 276.
58. It has been the Claimant's case from the beginning that the Press Release was deceitful: see para 48 of the first judgment. In para 6.3 of the Reply it was pleaded that the Press Release:

"… was apt … to mislead the market by implying that Bankers Trust was the only corporate entity that had engaged in the relevant tax-oriented transactions on a scale warranting specific reference in the Press Release. In the event, this deceitful stratagem was successful. Both the press and the market were misled into believing that the impugned transactions were historical problems which the Defendant had inherited when it acquired Bankers Trust in 1999 and that the responsibility for those transactions lay solely or mainly with Bankers Trust, …".

59. After submissions from Mr Caldecott, I gave to Mr Rampton the opportunity to redraft the case in malice against A. I did this not because I had concluded that the Re-Amended Reply was defective, but because Mr Caldecott had complained that it lacked clarity. It can be difficult for a pleader to introduce a new case into an existing pleading with the same clarity as can be achieved when starting a fresh draft.
60. The revised draft ("the Revised Draft") put forward after the close of the oral argument is an improvement in terms of clarity. The meaning of the Press Release (so far as relevant to the case against A) is now pleaded as follows:

"… the effect, or 'message' of the [Press Release] was that Bankers Trust was the only corporate entity that had engaged in the impugned transactions on a scale warranting specific reference to it in the [Press Release] and that the Defendant's current legal obligation to deal with the consequences of those transactions was an unfortunate historical legacy that it had inherited from [Bankers Trust]".

61. I shall refer to this as the "impugned meaning".
62. It is to be noted that the impugned meaning is not the meaning defamatory of the Claimant which the Claimant alleges that the words complained of bear: that is not challenged in these interlocutory proceedings – see the first judgment paras 10 and 11. The impugned meaning is not alleged to be a meaning defamatory of the Claimant. In its original form this plea was relied on only in support of the Claimant's case that X and Y were publishers of the defamatory words complained of. By the re-amendment it is now also relevant to his case in malice, upon which he must succeed if he is to overcome the Bank's defence of qualified privilege.
63. The falsity to which the Claimant directs attention at this stage of his argument is not primarily in the statement that Bankers Trust was involved (although it is his case that this is false: see the first judgment para 47-48). The falsity to which the Claimant emphasises is in the implied statement that the Bank was not materially involved (assuming that that is what the words mean).
64. What is new in the Re-Amended Reply is not the allegation that the Press Release falsely implies an exoneration of the Bank, but that A knew that what he was publishing was false in this respect.
65. The plea of falsity given in the original Reply was that "it was the Defendant itself that was responsible for the vast majority (in terms of value) of the impugned transactions" and that in fact the responsibility for the impugned transactions lay solely or mainly with the Bank itself.
66. It is now pleaded that the Press Release was false in what it said about the Bank and Bankers Trust in that:

i) "[Bankers Trust] had not at any time … had any hand in any of …. the impugned transactions", and that the subsidiary that had was Alex Brown, which had always traded as a quasi-autonomous entity - the Revised Draft paras 4 and 5;

ii) The Bank had itself executed approximately 400 of the impugned transactions (para 30 above) - the Revised Draft para 8.1;

iii) That the great majority in number of the transactions executed by Alex Brown had been executed after the acquisition of Bankers Trust by the Bank in June 1999 (para 30 above) - the Revised Draft para 8.2;

iv) The DoJ was focussing primarily on the 56 BLIPS transactions in which the Bank had participated (para 21 above) - the Revised Draft para 8.4, 9.1;

v) The value to be attributed to the Bank's impugned transactions was substantially greater than that of the transactions by Alex Brown, and that it was the total value of the transactions, and not their number, that determined the size of the reserve that the Bank was being compelled to make - the Revised Draft para 9.2.

67. The Claimant alleges that the true position (and so the falsity of the Press Release) was known to A and that the entity which A decided should be identified in the Press Release was an entity which A, in his witness statement, refers to as "Alex Brown" (the Revised Draft para 1). It is further pleaded that in approving the Press Release and in deleting the word "Deutsche Bank" A's purpose was to deflect attention away from the Bank's responsibility and so to mislead readers into believing that it was Bankers Trust rather than the Bank that should carry the principal blame for the damaging consequences of those transactions.
68. I accept that the Claimant has a real prospect of establishing that A knew much, if not all, of what is pleaded in para 66 above. As to the first four items there is not dispute that he knew it. But as Mr Caldecott submits, A also knew that Alex Brown had carried out approximately 260 such transactions before the Bank acquired that company in 1999, because the Bank's lawyers had so informed him (see para 30 above).
69. Mr Caldecott first invites me to rule on meaning pursuant to CPR Part 53 Practice Direction para 4.1(1). The whole paragraph reads as follows:

"At any time the court may decide –

(1) whether a statement complained of is capable of having any meaning attributed to it in a statement of case;

(2) whether the statement is capable of being defamatory of the claimant;

(3) whether the statement is capable of bearing any other meaning defamatory of the claimant."

70. There is no dispute between the parties that para 4(1) gives the court jurisdiction. This may at first seem surprising, because the history of the paragraph, and (so far as I am aware) its application hitherto, has related solely to meanings complained of as being defamatory: see Gatley 11^th ed paras 32.2 – 32.3. But there is nothing in the Practice Direction which excludes from the jurisdiction statements complained of as being made falsely to the knowledge of the maker, but not defamatory.
71. There are principles established as to the application of the jurisdiction: see Gatley para 32.5 to 32.7. These principles are directed to cases where the statement in question is complained of as being defamatory. The parties have not addressed me on any different principles that might apply to this case, where the impugned meaning is not alleged to be defamatory. The function of the first instance judge has been said by Simon Brown LJ to be to pre-empt perversity (on the part of the jury).
72. Applying these principles, in my judgment the impugned meaning is one that the Press Release is capable of having attributed to it. The hypothetical reasonable reader could understand that blame is being attributed in some way to Bankers Trust, which the Bank took over in 1999, and he could fail to notice that the word "mainly" does not govern the subordinate clause, and so understand the statement to be that the transactions in question are mainly ones executed by the subsidiary of Bankers Trust. It is to be recalled that the hypothetical reader is assumed to be an ordinary reasonable reader who reads the statement without the analysis that a lawyer or accountant would give to it, and is capable of some loose thinking and understands the words to refer to the Claimant (see the first judgment para 6).
73. This conclusion is helpful to the Claimant so far as it goes, but it is far from conclusive of what I have to decide. Since the issue is malice, the question is whether the Claimant has a real prospect of showing that the evidence is more consistent than not with A knowing the Press Release was false and with his intending to mislead. Obviously he cannot do this unless A knew or intended that the impugned meaning should be conveyed.
74. Here the Claimant's case runs into a serious obstacle. The hypothetical reader is assumed to be as described above. No such assumptions can be made about A. On the contrary. A is a very senior banker, who was engaged in preparing a document of great importance to the Bank. Unlike the case against X and Y, it is not suggested that he understood the words to refer to the Claimant, or that he had any personal motive for casting blame on the Claimant. It is common ground that he personally altered the words of the draft. He studied the draft, and had the benefit of legal advice. It is unreal to suppose that he might have misunderstood the grammar, and so the effect of the word "mainly".
75. So there is no real prospect of the Claimant establishing that A understood the meaning of the Press Release as referring to Bankers Trust (as opposed to a subsidiary of Bankers Trust), or as meaning that the Bank was not responsible, or as meaning that the subsidiary of Bankers Trust was mainly responsible, for the impugned transactions giving rise to the reserve. Nor is there a real prospect of the Claimant establishing that A intended readers to misunderstand the Press Release.
76. Mr Rampton places emphasis upon the fact that A removed the words "Deutsche Bank". However, the Press Release was a statement by the Bank about its own position. I cannot accept that the Claimant has a real prospect of showing that by removing of the words "Deutsche Bank" A intended materially to alter the meaning of the document. The removal of those words can be seen, from the contemporaneous drafts, to be part of an extensive re-ordering of the contents of the Press Release.
77. The Revised Draft pleads, and Mr Rampton has placed some emphasis upon, the fact that the Press Release was actually reported in some media as conveying the meaning attributed to it by the Claimant, but the Bank did not issue any corrections: see first judgment para 49. On the other hand Mr Caldecott points to other media reports which convey the meaning that the Bank was entirely responsible for the reserve and which make no mention of Bankers Trust or any other entity. The Bank did not correct these reports either. Further Mr Caldecott notes that contemporaneous documents show that the Bank had at that time a policy of not commenting to the media, in the light of the investigations being conducted by the DoJ. The Press Release was an exception, because it was required by law. In my judgment the reception and reporting of the Press Release by some of the media cannot give the Claimant's plea of malice in this case a real prospect of success.
78. The Claimant relies on other matters in support of the plea of malice against A, but in the light of what I have decided already, they cannot give that case a real prospect of success, and it is not necessary for me to deal with each of these points.
79. The result is that in my judgment the plea of malice against the Bank based on the allegations directed to A has no real prospect of success, and summary judgment must be given against the Claimant on that issue.

OTHER MATTERS

80. At the hearing counsel submitted that the resolution of other outstanding matters should await the handing down of this judgment.

CONCLUSION

81. The Defendant's second application for summary judgment against the Claimant on the whole claim is dismissed. The Defendant's application for summary judgment on the plea of malice relating to A succeeds.