Scottish Court of Session Decisions

This was an action in the Sheriff Court of the Lothians at Edinburgh, brought by James Gibson Scott against Patrick Turnbull, chartered accountant, Edinburgh, liquidator of the Money Order Bank, Limited, to recover £2500 damages for alleged judicial slander.

The action in which the slander was alleged to have been uttered was one brought on 2d February 1883, in the Court of Session, at the instance of Scott against the Money Order Bank, Limited. The company went into liquidation on 12th February 1883, and Turnbull having been appointed liquidator, was sisted as a defender. That action concluded for £5500 damages in respect the defenders had failed to work a system invented by the pursuer, in terms of an agreement entered into between them, in consequence of which the pursuer had been deprived of his share of the profits of the company, and in respect the defenders had so mismanaged the business generally that the pursuer's system and inventions had been brought into disrepute and rendered of no value.

In that action Scott pleaded—“(2) The defenders having failed to adopt and work the pursuer's system, and having otherwise mismanaged the business of the company, and having thereby caused loss and damage to the pursuer to the extent concluded for, the pursuer is entitled to decree in terms of the conclusions of the summons, with expenses.”

The defenders pleaded—“(5) The pursuer having by his own misconduct brought about or contributed materially to bringing about the present state of matters, he is barred personali exceptione from succeeding in this action.”

In support of this plea the defenders made the following statement which constituted the alleged slander—“(Stat. 4) The pursuer was never formally installed in office as manager, but according to the agreement he acted as such till on or about the 28th May 1881, when he was suspended from that office by the chairman of the board of directors in consequence of absence from business, inattention to his duties, and general misconduct. Prior to this, viz., towards the end of April 1881, the pursuer's attention was called to the fact that he had been intoxicated during business hours, and had been seen in that state by the chairman. He was asked to apologise and pledge himself that such a state of things should not recur. He practically admitted the offence, tried to explain matters, and promised good behaviour for the future. He again misbehaved in the same way within a month or thereby. The pursuer's conduct and a correspondence between him and the chairman was brought under the consideration of the directors at a meeting held on 8th June 1881, and it was resolved that the chairman should inform the pursuer that at the next meeting his dismissal from office would be moved. The chairman reported that he had suspended pursuer from his duties, which was corifirmed by the meeting. (Stat. 10) Notwithstanding the pursuer's dismissal, he immediately thereafter began a systematic interference with the officials and agents of the company, representing himself as an official of the company, and claiming right to examine documents belonging to the company. Through this and other means of a like nature the company was commercially injured with the public, and the confidence of a number of the agents in the management and working of the business was shaken. Further, the pursuer at various times made unfounded charges against the directors and officials of the company, and threatened proceedings to enforce certain alleged rights. The pursuer was well aware that his conduct was greatly to the prejudice of and injurious to the company. His agents admitted this in the correspondence, which is produced and referred to for its terms. These charges were persisted in down to 24th August 1881, when the pursuer's agents, on his behalf, wrote that everything contained in any letter written by him to the chairman or law-agents, or communicated to them, which could be construed into an accusation against the company or anyone connected with it, was fully and without reservation withdrawn. The pursuer, however, shortly after this renewed his charges and misrepresentations.”

In that action the defenders were assoilzied.

In the present action the pursuer narrated the pleadings in the previous case and averred—“(Cond. 5.) In the statement of facts for defenders contained in the closed record in said action, the defender falsely, maliciously, and injuriously made the following statements of and concerning the pursuer, viz., ‘The pursuer was never formally installed in office as manager, but according to the agreement he acted as such till on or about the 28th May 1881, when he was suspended from that office by the chairman of the board of directors in consequence of absence from business, inattention to his duties, and general misconduct. Prior to this, viz., towards the end of April 1881, the pursuer's attention was called to the fact that he had been intoxicated during business hours, and had been seen

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in that state by the chairman. … He again misbehaved in the same way within a month or thereby … and notwithstanding the pursuer's dismissal he immediately thereafter began a systematic interference with the officials and agents of the company, representing himself as an official of the company, and claiming right to examine documents belonging to the company. Through this and other means of a like nature the company was commercially injured with the public, and the confidence of a number of the agents in the management and working of the business was shaken.—Further, the pursuer at various times made unfounded charges against the directors and officials of the company, and the pursuer … renewed his charges and misrepresentations.’ (Cond. 7) The averments of the defender were falsely, maliciously, and injuriously made with the view of representing the pursuer to be of drunken and dissipated habits, and that thereby he was an unfit and incapable person to manage or give advice in the business of the said company, and with the intention of hurting and injuring his personal and business character and ruining his reputation and credit. (Cond. 8) The said statements were wholly irrelevant to, and had no connection or bearing whatever on, the subject-matter of said action, and were made for no other purpose than to damage the pursuer.”

The pursuer pleaded—“(1) The defender having falsely, maliciously and injuriously made the averments regarding the pursuer above set forth, is liable to the pursuer in compensation therefor.”

The defender pleaded that the pursuer's averments were not relevant.

The Sheriff-Substitute ( Rutherfurd) on 28th January 1884 pronounced this interlocutor—“Finds that the pursuer has not set forth any relevant or sufficient ground of action: Therefore sustains the defender's first plea-in-law: Dismisses the action, and decerns: Finds the pursuer liable to the defender in the expenses of process, &c.

Note.—On the 2d of February 1883 the pursuer raised the action referred to on record against the Money Order Bank, Limited, in which he sued the company for £5500, on the ground that by the alleged mismanagement of its directors he had been deprived of large profits which he would otherwise have realised under an agreement between him and the bank, in terms of which the bank was to work an invention of the pursuer for conducting money order business. The company went into liquidation on the 12th of February 1883, and the present defender having been appointed liquidator was sisted as a party to the suit on the 27th of the same month. In his condescendence in that action the pursuer alleged (article 14) that ‘the defenders never asked the pursuer for the working plans of his system, and never consulted him, although they held out that they would work his system, and they refused to allow the pursuer to explain to and instruct them and their agents, and other persons employed by them, in the details and working of his system as provided by the said agreement. The pursuer ceased to be manager of the company on 30th May 1881, being one month before the company commenced business, and there was no official of the defender's company (other than the pursuer while he was their manager) who was acquainted with the working of the said system. The officials employed were wholly unskilled and untrained to any such business.’

In order to meet these and the pursuer's other charges of mismanagement, the defenders made the averments contained in the 4th and 10th articles of their statement of facts, which are partially quoted by the pursuer in the 5th article of the condescendence in the present action. In the opinion of the Sheriff-Substitute these statements were not impertinent to the cause, and the case is therefore one of privilege, in which the pursuer must libel and prove malice on the part of the defender. For as the Lord President (then Lord Justice-Clerk) observed in Mackellar v. The Duke of Sutherland, 1861, 24 D. 1125—‘In such a case as this the law does not presume a malicious motive in the defender, because there is another obvious and innocent motive, namely, to promote his rights and interests in the cause in which the statement is made. Therefore no action will lie for such a statement unless the pursuer undertake to prove as matter of fact that the motive was malicious.’

The pursuer was therefore bound to aver malice, and as the defender was acting merely in an administrative capacity, and not as a private individual, it may be a question whether it was not also necessary for him to allege both malice and want of probable cause (opinion of the present Lord President in Gibb v. Barron, 1859, 21 D. 1103). It does not, however, appear to the Sheriff-Substitute to be necessary to express any opinion upon that point, for although the pursuer alleges that the statements of which he complains were made ‘falsely, maliciously, and injuriously,’ the Sheriff-Substitute is of opinion that in a case of privilege the mere use of the word ‘maliciously’ is not sufficient without a distinct statement upon record of the grounds from which malice is to be inferred.— Urquhart v. Grigor, 1864, 3 Macph. 289, per Lord Ardmil—lan; Mackintosh v. Weir, 1875, 2 R. 880, per Lord Ordinary (Lord Craighill); Craig v. Peebles, 1876, 3 R. 441. It therefore appears to the Sheriff-Substitute that the pursuer has failed to set forth a relevant case. The defender was merely the liquidator of the company, and it cannot be inferred from the pursuer's statement on record that he acted maliciously, in the absence of any averment tending to instruct a malicious motive.”

On appeal the Sheriff ( Davidson) adhered on 15th February 1884.

“ Note.—There is here no averment of facts, from which malice can be proved or inferred. The mere introduction of the word maliciously’ will not do. Instead of there being any sufficient statement of malice, it seems that the averments complained of were quite relevant and proper in the circumstances set forth by the pursuer.”

The pursuer appealed to the Court of Session, and argued his case in person.

The defender argued that there was no sufficient averment of malice. — Urquhart v. Grigor, Dec. 21, 1864, 3 Macph. 283; Mackintosh v. Weir, July 3, 1873, 2 R. 877.

At advising—