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
		25/04/2013

Mr Justice Tugendhat:

1. By an application notice dated 17 April 2013 the First and Second Defendants asked for an order that

"the Particulars of Claim in this libel action be struck out pursuant to CPR r.3.4 because [1] they do not plead the necessary foreign law or [2] that the corporate Claimants have the necessary trading reputation, and therefore do not disclose any reasonable grounds for bringing a claim… alternatively [3] that paragraphs 7-10 be struck out as irrelevant …"

2. Mr Myerson took no point on the late service of the Application Notice. He also stated early in the hearing that the Claimants would plead the foreign law in question by amendment. So there is no need for the court to rule on that ground. The remaining two grounds remain live.
3. The Amended Particulars of Claim identify the parties and others as follows (and for the purposes of this application only, it is to be assumed that these allegations will be proved). The Second Claimant is a successful Turkish company carrying on business as a successful yacht builder, seller and charterer. The Third Claimant is a German company carrying on a similar successful business. The First Claimant is a shareholder in the Second Claimant and a consultant to the Second Claimant and the Third Claimant. The Claimants sell yachts internationally and claim that their "reputations are properly to be regarded as international".
4. The Second Defendant is an English company carrying on business as yacht consultants, surveyors and advisers. The First Defendant is Managing Director of The Second Defendant.
5. The Third Defendant is a former client of the Second Claimant. He is now in dispute with the Second Claimant about a yacht. The Third Defendant is now a client of the First Defendant and the Second Defendant. They are advising him on his dispute with the Second Claimant.
6. Mr Muller carries on business as watchmaker based in Switzerland. At the time of the publication of the words complained of he had engaged the Claimant to build him a new yacht.
7. The Claimants complain of a number of publications with a very restricted number of publishees. But the claim is for very substantial special damages. These are said to have been caused as a result of Mr Muller not proceeding with an order for a yacht that he would have placed, but decided not to proceed with, as a result of the publication to himself. While more complicated meanings are pleaded, the gist of the natural and ordinary meanings which the Claimants attribute to all the publications complained of is that they had been engaged in fraud and other wrongdoing.
8. The publications complained of are:

i) An e-mail dated 10 January 2012 published to Mr Lister, a journalist, in Germany. The First Claimant and the Second Claimant complain of this, but no special damage is alleged to have resulted, and Mr Lister is not alleged to have republished the allegation complained of.

ii) An e-mail dated 27 July 2012 published by the First Defendant to the Third Defendant. Attached to this was a draft of a letter for the Third Defendant to send to Mr Muller. This publication is technically a publication by itself, but it is relied on mainly as giving rise to the publication of the e-mail dated 28 July by the Third Defendant to Mr Muller.

iii) On or about 27 July 2012 a document in the form of a statement by the Third Defendant, attached to the e-mail of 27 July 2012, alternatively published separately to the Third Defendant.

iv) On or about 27 July 2012 a document headed "Barclays Marine Finance", attached to the e-mail of 27 July 2012, alternatively published separately to the Third Defendant.

v) An e-mail dated 28 July 2012 sent by the Third Defendant to Mr Rudaz, a business associate of Mr Muller, and addressed to and read by himself and by Mr Muller, to which were attached the documents referred to in the three preceding sub-paragraphs.

9. The publications are alleged to have been read in Germany (in the case of the e-mail addressed to Mr Lister) and in Switzerland (in the case of the documents addressed to Mr Rudaz and Mr Muller).
10. The Defendants are sued in England. It is common ground that they can be sued in England in respect of a publication made solely in Germany and Switzerland (respectively) by reason of Art 2 of the Judgments Regulation (Council Regulation (EC) 44/2001). It is also common ground that the double actionability rule applies by reason of the Private International Law (Miscellaneous Provisions) Act 1995 s.13. That may for present purposes be expressed as a requirement that a claimant in defamation must plead and prove that the publication complained of was actionable in the law of the country where the alleged tort was committed, as well as by English law.
11. The Claimants chose to plead that they relied on the so-called presumption that English law is the same as foreign law. This is a form of pleading upheld in University of Glasgow v The Economist [1997] EMLR 495, discussed in Gatley on Libel and Slander 11^th ed para 28.19. Whether that decision is still good law is an issue that I would have had to decide, but for the decision of Mr Myerson to plead the German and Swiss law the Claimants rely on. He made no concessions, but that was clearly the best way to deal with the objection. There is now some discussion of the point in law reports and commentaries, and a decision on the point could take time and resources to resolve.

TRADING REPUTATION IN THE RELEVANT JURISDICTION

12. Mr Munden submits that the claim by the two corporate claimants is defective in that there is no specific plea that they each enjoy a trading reputation in each of the jurisdictions in which publication allegedly took place. He relies on passages from the speeches in Jameel v. Wall Street Journal Europe Sprl [2006] UKHL 44; [2007] AC 359, paras [25]-[27] (Lord Bingham), [98]-[104] (Lord Hope) and [125]-[125] (Lord Scott).
13. The words of Lord Bingham are:

"24.   The tort of defamation exists to afford redress for unjustified injury to reputation. By a successful action the injured reputation is vindicated. The ordinary means of vindication is by the verdict of a judge or jury and an award of damages. Most plaintiffs are individuals, who are not required to prove that they have suffered financial loss or even that any particular person has thought the worse of them as a result of the publication complained of. I do not understand this rule to be criticised. Thus the question arises whether a corporation with a commercial reputation within the jurisdiction should be subject to a different rule.

25.   There are of course many defamatory things which can be said about individuals (for example, about their sexual proclivities) which could not be said about corporations. But it is not at all hard to think of statements seriously injurious to the general commercial reputation of trading and charitable corporations: that an arms company has routinely bribed officials of foreign governments to secure contracts; that an oil company has wilfully and unnecessarily damaged the environment; that an international humanitarian agency has wrongfully succumbed to government pressure; that a retailer has knowingly exploited child labour; and so on. The leading figures in such corporations may be understood to be personally implicated, but not, in my opinion, necessarily so. Should the corporation be entitled to sue in its own right only if it can prove financial loss? I do not think so, for two main reasons.

26.   First, the good name of a company, as that of an individual, is a thing of value. A damaging libel may lower its standing in the eyes of the public and even its own staff, make people less ready to deal with it, less willing or less proud to work for it. If this were not so, corporations would not go to the lengths they do to protect and burnish their corporate images. I find nothing repugnant in the notion that this is a value which the law should protect. Nor do I think it an adequate answer that the corporation can itself seek to answer the defamatory statement by press release or public statement, since protestations of innocence by the impugned party necessarily carry less weight with the public than the prompt issue of proceedings which culminate in a favourable verdict by judge or jury. Secondly, I do not accept that a publication, if truly damaging to a corporation's commercial reputation, will result in provable financial loss, since the more prompt and public a company's issue of proceedings, and the more diligent its pursuit of a claim, the less the chance that financial loss will actually accrue.

27.   I do not on balance consider that the existing rule should be changed, provided always that where a trading corporation has suffered no actual financial loss any damages awarded should be kept strictly within modest bounds."

14. Lord Hope added at para [93]:

"…it is the fact that the statement was calculated to injure the claimant in his character or reputation that makes the action maintainable. Proof that he has a reputation that is capable of being injured in this way is an essential element. In the case of an individual it can be presumed that he has a reputation of that kind. In all other cases this is something that must be proved."

15. Mr Munden submits that the corporate claimants must aver that they had relevant reputations in Germany and Switzerland respectively, and that they have not done so.
16. Mr Myerson submits that, on the facts of this case, where the publications were to such a limited number of publishees, the pleading is sufficient. In the case of Mr Muller it is pleaded, at para 15 of the Amended Particulars of Claim:

"… Mr Muller is a watchmaker and businessman based in Switzerland at the time of the publication who had engaged the Claimants to build him a new yacht".

17. In my judgment that is sufficient. It is plainly being alleged that the corporate claimants had a reputation in the mind of Mr Muller, in that he had engaged the Claimants to build him a yacht. There are also further averments in the part of the plea relating to special damage which make the same point, but it is not necessary to refer to them.
18. In the case of the publication to Mr Lister, the relevant averment is only to be found in the part of the pleading relating to damages:

"Mr Lister is known to both the Claimants and the Defendant. He is a freelance journalist. His work is published in national and international magazines, especially in the yachting sector. Unbeknown to the First Defendant, rather than rely on the e-mail, Mr Lister sent a copy of the said publication to the Claimants".

19. This part of the pleading is not directed to the point, but in my judgment it is sufficient. It is implicit that Mr Lister knew who the Claimants were.
20. It seemed to me that Mr Munden was inviting the court to read into Jameel and Gatley more than those texts actually require. He submitted that the corporate claimants had to plead a reputation in the respective jurisdictions which existed before the publications complained of. In para 28.4 footnote 16 of Gatley the editors wrote that the House of Lords had held that claimants must:

"establish that they have a reputation in this jurisdiction which is capable of being damaged".

21. Mr Munden submitted that in the present case what the corporate claimants have to establish is that they had reputations in each of the two foreign jurisdictions before the publications in those jurisdictions had occurred.
22. It does not appear to me that that is what the House of Lords decided. But I have held that a plea of a pre-existing reputation in the minds of Mr Lister and Mr Muller is to be found in the Amended Particulars of Claim. So I do not have to decide what would have been the situation if the reputation was created by the words complained of themselves. What matters is whether a corporate claimant has pleaded that it "has a reputation that is capable of being injured". A relevant reputation is thus one that exists in the mind(s) of one or more the persons to whom the words complained of are alleged to have been published.

BACKGROUND

23. The paragraphs of the Amended Particulars of Claim which the Defendants complain of are headed "Background". They set out alleged facts which do not appear to be ones upon which the Claimants rely in support of their claim.
24. CPR r16.4(1)(a) states that particulars of claim must include a concise statement of the facts on which the claimant relies.
25. Mr Munden submits that particulars of claim should not include anything else. If they do, then it will not be clear to a defendant what the claim is, and a defendant has to plead to them, and that will be wasteful.
26. Mr Myerson submits that the background is necessary to an understanding of the claim, and that the matters pleaded in these paragraphs will in any event become relevant at some point, for example on credibility. But he disavowed any reliance on these matters as relevant to meaning or to damages, or to any other matter which a claimant has to establish as part of his cause of action.
27. In my judgment Mr Munden is correct. Pleading matters which are not those on which a claimant relies is contrary to the overriding objective. If the matters in these paragraphs become relevant to any defence that is raised, then they should be pleaded in a reply. The claim can be understood without any background other than that which is pleaded in paras 1 to 6. If the remaining "background" is relevant, for example to aggravation of damages, then that should be stated. But a history of previous matters in dispute between the parties has no place in a claim for libel, unless it is relevant to a constituent of the cause of action.

CONCLUSION

28. For these reasons paragraphs 7 to 10 of the Amended Particulars of Claim will be struck out. The Defendants' application to strike out the claims of the corporate claimants will be dismissed. The parties are invited to agree the form of the order.