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
		30/07/2013

Mr Justice Dingemans:

Introduction

1. Yesterday – on Monday 29 July 2013, just before the end of the legal term - a number of applications in relation to claims for libel made by Mama Group Limited ("Mama Group") and Lovebox Festivals Limited ("Lovebox") against Daniel Sinclair and Alexandra Joseph were listed to be heard. These applications relate to a trial listed on 7 October 2013 - just after the start of the next legal term. The trial is to be heard with a jury and there is a time estimate of 5 days.
2. The applications were: (1) to strike out the claims by Mama Group and Lovebox as a Jameel v Dow Jones [2005] EWCA Civ 75; [2005] QB 946; ("Jameel") abuse of process; (2) to strike out parts of the Reply; and (3) to strike out parts of the Amended Defence. There is also a need to have a Pre Trial Review and the parties were in dispute about when such an application should be heard.
3. After argument had concluded on the Jameel application, I was asked to adjourn the outstanding hearings on the applications to strike out and not to deal with the Pre Trial Review because the applications might have become academic, and further documents have just been received from the police which might be material to the applications.

The music festival and the publication

4. On 15 June 2012 Mr Sinclair and Ms Joseph, who were at the material time friends, attended a Lovebox music festival in Victoria Park, London. It appears that Ms Joseph, who had been drinking, became concerned about the whereabouts of her mobile phone and got into a heated discussion with a member of staff at a nearby stand and says that she fell over (paragraphs 6.4 and 6.5 of the Amended Defence). In circumstances which are controversial between the parties Mr Sinclair and Ms Joseph were restrained and ejected by security personnel employed by Guardforce Limited from the festival. Guardforce Security Limited was one of the contractors retained by Lovebox to provide security at the festival.
5. Allegations and counter-allegations were made by Mr Sinclair and Ms Joseph on the one hand and by members of Guardforce Security on the other hand. One of the guards alleged that he had been bitten by Ms Joseph and even sent a copy of a photograph showing the mark that the bite had left to support his claim. It is now common ground that that photograph shows a bite mark made by the security guard on himself. However the guard maintains that the bite mark that he made and photographed was in the position where he had been bitten by Ms Joseph. There are other guards who have made witness statements saying that Ms Joseph did bite the guard.
6. Reports alleging assault against the guards were made to the police by Mr Sinclair and Ms Joseph. The police took no action but it appears that on about Thursday 25 July 2013 the police disclosed some reports about the complaints which had been made by Mr Sinclair to the police. I was also told that further materials and photographs are expected to be provided by the police.
7. Reports, complaints and demands for action against the security company were made by Mr Sinclair to Mr Butterfield, who is the head of operations at Lovebox. Mr Sinclair and Ms Joseph were unhappy with the response to their reports, complaints and demands for action.
8. On 30 August 2012 Mr Sinclair published an email to 183 recipients from a gmail account "dontgotolovebox@gmail.com". The email said that there was attached a flyer showing cuts and scars on a young woman who attended the festival and that "Lovebox festival and Mama Group (who organise the festival) don't care that their security use hugely excessive force on their paying customers … If you don't think Lovebox should ignore this sort of thing, as they have in this case, please contact Julian Butterfield … Please publish the flyer and pictures attached and please don't go to a Mama festival or venue (listed below) until they have sorted this out". A list of venues and events was then set out.
9. The flyer showed cuts and bruising on Ms Joseph saying, among other matters: "Lovebox Our Security Guards will: Stamp on your neck … Don t go to Lovebox". The flyer contained the hashtag "DONTGOTOLOVEBOX".
10. The email was sent to councillors and employees of Tower Hamlets Council, responsible for granting licences for the annual festival; employees of Bauer Media who own "Q" and "Kerrang", two influential magazines in the music industry, as well as television and online media outlets; members of UK and European Parliaments; journalists at the Standard, Metro and Shortlist; the National Union of Students and London Universities and their publications; police officers; digital media companies which specifically target the 16-34 demographic, the main age group attending the event; and human rights and women's rights groups.
11. Mr Sinclair also uploaded the email on to Twitter under the hashtag "dontgotolovebox". The evidence suggests that Mr Sinclair did not have any followers.
12. There is a dispute about whether Ms Joseph was involved in the publication of the email and Twitter. The Mama Group and Lovebox say that the photographs were private and infer that Ms Joseph must have been involved in the publication with Mr Sinclair and that some of the publications refer to Mr Sinclair in the third person. Ms Joseph says that she was not involved in the publication.

Pre action correspondence

13. It appears that after the email had been sent out Lovebox became aware of the publication. Mr Butterfield of Lovebox contacted Mr Sinclair, believing that he was responsible for the publication, and arranged to meet to discuss matters. In the interim Mr Sinclair had agreed not to make any further publications and deactivated the Twitter account. Mama Group also became aware of the publication.
14. By text sent on 31 August Mr Butterfield told Mr Sinclair that the matter had been taken out of his hands. This led to a protest from Mr Sinclair who said he was happy not to do anything until after the proposed meeting.
15. By letter dated 31 August 2012 Fladgate LLP ("Fladgate") wrote to Mr Sinclair and Ms Joseph complaining of the publication which Fladgate contended was defamatory and recording that Lovebox and Mama Group contended that Ms Joseph's injuries were caused by her attempts to assault security staff, rather than the other way round, and that there were incident reports. The letter asked for removal of the Twitter feed; an undertaking not to repeat the allegations; an agreed apology; damages; and costs. The letter concluded that unless Fladgate had all of the above by 4 pm on Monday 3 September 2012 libel proceedings would be started without further notice.
16. David Price QC, who has appeared on behalf of Mr Sinclair and Ms Joseph, complains that the limited time for a response was in breach of the provisions of the pre-action protocol. He notes that the letter did not deal with the issue of alternative dispute resolution. William McCormick QC, who has appeared on behalf of Mama Group and Lovebox, notes that there is no explicit need to set out proposals in relation to alternative dispute resolution in the pre-action letter. I accept that, but it is obviously in everyone's interests to address these issues at a pre-action stage.
17. An email was sent from the dontgotolovebox gmail account stating that Fladgate's letter was incorrectly addressed and contained inaccuracies. It was asserted that the email address and Twitter account were created in the public interest and the information could be justified as true. The email continued "I understand that Daniel Sinclair has agree to meet with the MD of Mama, together with Julian butterfield when they return from holiday on Tuesday 11 September 2012, when I expect the matter to be resolved". The sender of the email was not identified.
18. On 3 September 2012 Fladgate wrote to Mr Sinclair and Ms Joseph noting that the Twitter feed had been removed and looking forward to hearing from them in relation to the outstanding matters. On 4 September 2012 Fladgate made it clear that they had instructions to commence proceedings.
19. On 10 September 2012 Mr Sinclair emailed Mr Butterfield hoping that Mr Butterfield had had a good holiday and asking whether they were still meeting. Mr Butterfield replied saying that this was now a legal matter, and that as there had been no response a formal Court summons was in the process of being issued.
20. Mr Sinclair replied by email dated 11 September 2012. He referred to the proposed meeting on 11 September. He said that the threat to sue (which must have been a reference to Fladgate's letter) contained "inaccuracies and heresy" and contained unrealistic demands with an unrealistic timescale. He asked for time to discuss matters as he believed that dragging matters through the Courts would not benefit either party. He continued "I maintain our version of events is true and that if you continue to choose not to act on this, this information is entirely in the public interest in order to attempt to prevent distress and injury to others". He said that there was no malice or bitterness to Lovebox or Mama Group, and concluded with a plea for understanding saying "drunk or not, there was absolutely no need for the security guards to be as rough as they were".
21. Fladgate replied by email dated 11 September 2012 stating that counsel was drafting proceedings, and that if proceedings were to be avoided, the demands in the letter dated 31 August should be met.
22. There were some final exchanges of emails before proceedings were issued. Mr Sinclair pressed again for a meeting without legal representatives. Fladgate required an apology copied to the original recipients of the email and payment of costs and that, in that event "our client will forego its entitlement to damages". Mr Sinclair responded saying that his original email and flyer simply pointed out how Mama Group and Lovebox had responded to the circumstances and that he had to share the information "as to not share this information places other members of the public at risk". Mr Sinclair made it clear that he would be happy to contact recipients if certain steps, such as retraining for guards, took place but that apart from that "to say anything else would be a lie and irresponsible". He said the request to cover costs was a daft request.
23. Ms Joseph protested about a threatening email, saying that her only involvement had been as a victim of an assault. This led to an email from Mr James of Mama Group requesting Fladgate to issue proceedings.

The proceedings and directions to trial

24. By a claim form and Particulars of Claim issued on 18 September 2012 Mama Group and Lovebox, both limited companies, brought claims seeking damages for libel and an injunction against Mr Sinclair and Ms Joseph.
25. Mama Group and Lovebox contend that the published words meant that Mama Group and Lovebox were unconcerned by and disregarded: violent conduct on the part of security guards employed at the festival; and the wellbeing of the customers.
26. In paragraph 8 it is pleaded that as a result of the publication, and any further republications, "the Claimants and each of them have suffered damage to their reputation". There was a claim for damages and an injunction to restrain any further publication.
27. The claims are defended on a number of bases. The Amended Defence includes claims that the words were: honest comment based on facts; true and justified; and published on an occasion of qualified privilege. It is also said that the action is an abuse of process and particulars are given. A reply, which has been amended in draft, has been served claiming, among other matters, that the email and flyer were published maliciously.
28. On 21 December 2012 Mr Sinclair and Ms Joseph obtained a direction that the case be tried by a Judge sitting with a jury.
29. Allocation questionnaires were filed. In relation to the question about settlement Mr Sinclair and Ms Joseph said that they wanted a stay to attempt to settle matters. Mama Group and Lovebox did not, stating that "further investigation is required to establish the full extent of the damage caused by the Defendants".
30. Mr Sinclair and Ms Joseph, who had retained David Price Solicitors & Advocates on a Defendants' Conditional Fee Agreement estimated in the Allocation Questionnaire that they had incurred costs of £25,000 to date and estimated overall costs at £250,000. Mama Group and Lovebox estimated their costs to date at £12,000 and overall costs at £150,000. I was informed at the hearing that there has been no cost budgeting to date for this case.
31. There was a Case Management Conference before Master Fontaine on 27 March 2013. Directions were given in an attempt to identify the continuing issue about the bite mark. Witness statements were ordered to be exchanged on 21 June 2013.
32. In correspondence from 3 October 2012 David Price Solicitors & Advocates were asking the Claimants what loss had been suffered, and asking whether the Claimants were relying on the presumption of damage. The Claimants did in correspondence say that they were making inquiries, provoking further questions, and statements that the Defendants would assume that the Claimants were relying only on the presumption of damage. In the event no claim for special damage was made by the Claimants.
33. As a result of delays in the exchange of witness statements the Claimants consented to an order directing them to serve statements of fact concerning damage and litigation purpose by 26 June 2013.

The witness statements on damage and litigation purpose

34. The Claimants served witness statements from Mr Butterfield and Mr James. Mr Butterfield stated that he was struck by the recipients of the email, noting their position as licensors, commercial partners and customers. Mr Butterfield noted that at the start Lovebox had no idea of the damage that was being done and said that "in my view the authors had clearly intended to do as much damage as possible to the reputation of Lovebox and MAMA. They had deliberately chosen individuals who would be in a position to republish the flyer or its content …". Mr Butterfield recorded that the email and flyer directly threatened the reputation and possibly the commercial viability of Lovebox as a brand.
35. Mr Butterfield said that he received calls on the day of the email and subsequently. Tower Hamlets Licensing Authority and Events were in touch straight away, particularly concerned about damage to the reputation of the event. Employees of Tower Hamlets Council were receiving press inquiries. A decision was made not to issue a response, in an attempt to avoid fuelling the Defendants' version. Mr Butterfield stated "the threat posed by the email continued long after it was sent. Not only have our commercial partners raised queries, but some of our event sponsors have as well. The contents of the email, and the way that Lovebox has dealt with the matter, may well factor into future commercial decisions when Lovebox tried to renegotiate contracts or seeks renewed or additional sponsorship".
36. Mr James said "when I saw who the recipients of the email were I was extremely concerned about the damage that something like this could do". He said that "I believed that the publications threatened to damage MAMA's and Lovebox's reputation in the eyes of three key groups; their customers; their sponsors and media partners. The potential damage to the reputation of MAMA and Lovebox would jeopardise the future of the festival".
37. Mr James noted that Lovebox and Mama Group spent significant time, finance and resources developing the reputation of the festival and other events, and relied on the relationship with key partners to provide sponsorship. Mr James noted that Lovebox promoted inclusivity and had a high proportion of female fans on Facebook when compared to other promoters. Mr James said he believed the email would damage the Claimants' reputation among potential customers, media partners and sponsors.
38. Mr James noted the potential of the email to cause problems with licensing for the licensing of this year's event, and that, until 11 June 2013, there was a real possibility that the email might have adversely affected the licensing decision. Mr James concluded by noting that the email had the ability to damage the reputation of Mama Group and Lovebox, but also relationships with customers, media, sponsors and the Council.
39. Mr Price says that these statements are full of speculation about possible damage ("could haves" and "might haves" as he put it), but do not evidence any real damage to the reputation. There is no claim for special damage because, in truth, the Claimants have not suffered any damage. Mr McCormick say that the statements show real responses to the emails and real damage to the reputation. There is no need to plead special damage to show lost ticket sales, because the costs of finding persons who had not turned up to the festival for the loss of profit on one ticket would be prohibitive. The law rightly presumed damage, and this was real damage.

Presumed damage for corporations

40. The common law provides that a trading company which has a trading reputation is entitled to recover general damages for libel without pleading or proving special damage if the publication had a tendency to damage it in its way of business, see the majority of the House of Lords in Jameel v Wall Street Journal [2006] UKHL 44; [2007] 1 AC 359. This is because the good name of a company is a thing of value, and publications which are damaging to a corporation's commercial reputation may not result in provable financial loss, see paragraph 26 of Jameel v Wall Street.
41. This remains the state of the law as at today (30 July 2013). Mr Price relied on the provisions of the Defamation Act 2013. This provides, by section 1, that a statement is not defamatory unless its publication causes "serious harm to the reputation of the Claimant" and that "harm to the reputation of a body that trades for profit" such as the Claimants in this case is not serious harm "unless it has caused or is likely to cause the body serious financial loss". In my judgment Mr Price is not yet able to rely on these provisions for two reasons. First the Defamation Act 2013 although now enacted, has not yet been brought into force, see section 17(4). Secondly section 16(4) provides that "nothing in section 1 … affects any cause of action accrued before the commencement of the section in question", and Mr Price's attempts to use the provisions of the Act would certainly be affecting the cause of action which had accrued. This means that it is not necessary, in this case, to confront Mr McCormick's submission that this email was "likely to cause … serious financial loss" regardless of whether a claim for special damage was pleaded.
42. Mr Price also submitted that the Defamation Act 2013 gave a clear indication of where the legislature had struck the balance between the rights of trading corporations and freedom of expression. I accept that submission, and note that Parliament has provided for clear provisions about commencement of the Defamation Act 2013. The reputation of a trading corporation is worthy of protection, see the judgment of the European Court of Human Rights in Steel & Morris v United Kingdom [2005] EMLR 15 at paragraph 94. The balance to be weighed between the reputation of a trading corporation and freedom of expression is a matter for the judgment of national authorities, see Jameel v Wall Street at paragraph 20. Parliament has struck that balance by making provision for the Defamation Act 2013, by providing for its future commencement, and by leaving pre-existing causes of action unaffected by the new provisions.

The application to strike out and main contentions

43. On 2 July 2013 the Defendants issued this application to strike out the claim pursuant to CPR 3.4(2)(b) and the inherent jurisdiction of the Court "because it does not disclose a real or substantial tort and/or there is no tangible or legitimate advantage in the continuance of the claim which would outweigh the disadvantages for the parties in terms of expense and the wider public in terms of Court resources".
44. In the course of helpful submissions from Mr Price and Mr McCormick the issues on this application were defined. The Defendants contend: that it is now clear that the Claimants have not suffered any real damage; that there is no point in this action; that this action is being pursued because the Claimants do not want to discontinue and pay the Defendants' costs; and that it is in the Claimants' own interests to bring this action to an end. The Claimants contend: that the email was targeted at persons important to them; the statements in the email and flyer were very damaging to their reputation and that the Claimants want to vindicate their reputation; that the Defendants have continually refused to put the matter right with the recipients; that the Claimants do want to continue this action in their own interests and obtain damages and an injunction; and that this application is in any event too late.

Principles of law to be applied on the application

45. It is established that in order to deal with cases justly, proportionately and to maintain a proper balance between the Convention right to freedom of expression and the protection of other rights, the Court is required to stop as an abuse of process defamation proceedings which serve no legitimate purpose, see Jameel v Dow Jones [2005] EWCA Civ 75; [2005] QB 946 at paragraph 55. The test proposed in that case and accepted by the Court was whether "a real and substantial tort" had been committed in the jurisdiction, see paragraph 50 of Jameel. The test has been expressed in a number of different ways, namely whether "the game is worth the candle", see paragraph 69 of Jameel, or whether there is any prospect of a trial yielding "any tangible or legitimate advantage such as to outweigh the disadvantages for the parties in terms of expense, and the wider public in terms of court resources", see Schellenberg v BBC [2000] EMLR 296.
46. A number of cases were cited in which the principle has been applied. It might be noted that in some of those cases the determinations that the action had become an abuse of process was against a background where rulings on meaning and comment had been given. In such cases it is sometimes easier to show that the proceedings would not achieve anything of practical utility for the Claimant, see Cammish v Hughes [2012] EWCA Civ 1655; [2013] EMLR 13 at paragraph 60 and Euromoney Institutional Investor Plc v Aviation News Limited and another [2013] EWHC 15050 (QB) at paragraphs 142-144.
47. It should be noted that dismissing an action for an abuse of process is a draconian power vested in the Court, see Haji-Ioannou v Dixon and others [2013] EWHC 1505 (QB) at paragraph 30. This must not prevent the Court from exercising the power in appropriate cases where there is no legitimate purpose in the proceedings.

No abuse of process

48. In my judgment this action is not an abuse of process for a number of reasons. First the email and the attached flyer were obviously intended to cause damage to Mama Group and Lovebox. This is because the email asked persons not to go to relevant festivals and venues and indeed the Twitter hashtag and email account both included the words "don't go to lovebox". Although it does not necessarily follow that a person's intent to cause damage by a publication will always be successful, it is, to say the least, not particularly attractive to seek to strike out an action brought in respect of such a publication as an abuse of process on the basis that the proposed campaign was so unsuccessful that it did not achieve its purpose.
49. Secondly the evidence suggests that damage was caused. The email did cause persons to react and raise issues with the Claimants, according to the witness evidence now before me. Mr Price is entitled to say that the evidence shows that queries raised with Mama Group and Lovebox were handled successfully by Mama Group and Lovebox, and that the email did ask persons concerned to contact Mama Group and Lovebox. However it is plain that not every person will raise queries with Mama Group and Lovebox, and this was a very extensive publication. If the Claimants succeed in their claims they will be entitled to real, and not nominal, damages.
50. Thirdly I accept that Mama Group and Lovebox do have a genuine intention to vindicate their reputation. It was apparent in pre-action correspondence that one thing that divided the parties (in addition to issues of costs) was whether Mr Sinclair and Ms Joseph should apologise and circulate that apology to the recipients of the email. It is common ground that I am not in a position to give any vindication by this judgment (compare Cammish) because these issues, if the action is not an abuse of process, are for the jury and not for me. In these circumstances Mama Group and Lovebox are entitled to seek vindication from the jury.
51. Fourthly I am not able to say, on the material before me, that it is not in the Claimants' interests to bring this action. The Claimants consider that they will not be blamed for the guard's faked bite mark on the basis that he was not their employee and they have investigated matters fairly and properly. The Defendants consider that it will very considerably damage the Claimants' reputation. Both outcomes are possible and will be for the jury.
52. Fifthly, although I do not consider that the lateness of this application would be a reason for refusing to strike out the action if I considered it to be an abuse of process, I do consider that the timing of this application part demonstrates that this is a real action. As noted above, the question about what loss had been suffered by the Claimants has been raised in correspondence by the Defendants throughout the action. The Claimants have said that they have been making investigations but have not, in the end, pleaded special damage. The Defendants did not make the application in October or January because they were concerned that the Claimants might adduce some evidence of loss, and they wanted to be sure that there was none. This seems to me to have been a proper stance to take by the Defendants. However it does demonstrate that the Defendants considered (in my judgment rightly) that this action was not being pursued for an illegitimate purpose. Real loss, even provable special damage, was exactly what was likely to follow from the publications. The fact that no provable financial loss has been alleged or pleaded does not change the action from a real one into an illegitimate one.
53. In these circumstances this action is "worth the candle" and there is a legitimate and proper purpose for pursuing the action. I should record my provisional view that, even though this is a proper action, the costs estimates of both parties are excessive. The Court has powers to control the disproportionate expenditure on costs.

Conclusion

54. For the reasons set out above I dismiss this application. The further applications, the Pre-Trial Review, and issues about budgets for costs, will all need now to be addressed.