Scottish Court of Session Decisions

This was an action of damages in respect of verbal slander raised by Farquhar Matheson M'Larty, an engineer residing at Greenock, against David Scott Steele, also an engineer residing in that place, and it arose under the following circumstances:—In 1877 the pursuer and John Leith Wemyss, both at that time residing at Penang, in the Straits Settlements, and John Young Fox, residing at Hong-Kong, constituted the firm which carried on business at Penang under the name of the Penang Foundry Company. In July of that year they assumed the defender into the partnership. In May 1879 the said partnership was dissolved, and after an agreement had been signed by the parties with regard to the division of the profits made on the dissolution, the pursuer and Fox left Penang and returned to Scotland, the defender remaining at Penang. Soon after his arrival in Scotland the pursuer ascertained that the defender had on repeated occasions and in various companies made false and calumnious charges against the pursuer to the effect that the pursuer had been guilty of dishonest conduct in connection with the transfer of the business and the distribution of the price thereof among the partners. The defender soon returned to Greenock, but declined either to retract the above statements or to make any suitable reparation. As the pursuer had made arrangements since his return home for

Page: 267↓

beginning business as a consulting engineer, and relied largely for his success upon the connection he formed in the East, and the character and reputation which he there acquired, he was compelled to bring the present action against the defender for the purpose of clearing his character.

He pleaded—“(1) The defender having slandered the pursuer as condescended on, to the pursuer's loss, injury, and damage, the pursuer is entitled to reparation as concluded for. (2) The defender's averment of foreign law is irrelevant.”

The defender, on the other hand, denied the pursuer's averments, and averred that “the alleged statements, even though they had been made. would form no competent ground of action against the defender according to the laws of Penang and Singapore, the places where they are alleged to have been uttered, in respect that no special damage is alleged to have been sustained by or through said utterances. According to the law of Penang and Singapore, as according to the law of England, no reparation is due for verbal slander unless where special damage is alleged and proved to have been sustained.”

He pleaded—“(1) The action being for alleged oral slander in Penang, is incompetent. (2) The statements in the condescendence are not relevant or sufficient to support the conclusions of the summons. (3) The whole material statements of the pursuer being unfounded in fact, the defender is entitled to absolvitor, with expenses.”

In the Procedure Roll the Lord Ordinary ( Curriehill) ordered the adjustment of issues, and appended the following note to his interlocutor—“This is an action of damages in respect of verbal slander alleged to have been uttered by the defender of and concerning the pursuer in Penang. Damages are claimed as solatium for injured feelings, and in respect of injury to the pursuer's character and reputation as a merchant and to his business. The defence is that by the law of Penang verbal slander is not actionable unless it is alleged and proved that it has caused special damage. The law of Penang is merely one of the facts in the case which must be proved at the trial, and it will then be soon enough to determine whether or not damages can competently be allowed for anything beyond the special damage which may be proved. The proper course seems to be at present simply to order issues to be adjusted.”

The pursuer proposed four issues, while the defender proposed the following counter-issue:—“Whether according to the law of Penang and Singapore no reparation is due for verbal slander unless special damage is proved to have been sustained through said verbal slander?”

The Lord Ordinary disallowed the defender's issue, approving of those proposed by the pursuer.

The defender reclaimed, and argued—The alleged slander had been uttered at Penang. By the law of that place it was necessary, if any penalty was to attach to the utterance of verbal slander, that the pursuer should prove that special damage had been suffered in consequence thereof. In these circumstances the defender was entitled to have the question put to the jury whether such special damage had in this case been sustained by the pursuer, and therefore the defender's proposed issue should be allowed. Horne's case was distinguishable from the present, for in it a cause of action arose in both countries, and further the contract for breach of which the remedy was sought had been made in Scotland. Besides, in that case and the others cited, the question was as to how the remedy was to be given, redress in some shape or other being competent both by the lex loci and the lex foci.

Authorities— Scott v. Lord Seymour, 32 L.J. Exch. 61; Horne v. North British Railway Co., 5 R. 1057; Phillips v. Eyre, L.R. 4 Q.B. 225, and 6 Q.B. 1; Mostyn v. Fabriquas, 1 Smith's L.C. 652.