Scottish Court of Session Decisions

In May 1886 John Gordon junior brought this action for damages against the British and Foreign Metaline Company, manufacturers of metaline carrying on business in Dundee, and William Bruce Thompson, William Stiven, and David Stewart, “the individual partners of the said company, as such partners and as individuals.” He concluded against the defenders, “jointly and severally,” for £1000 as damages.

The following were the material averments of the pursuer. He stated (Cond. 2) that from about 1st May 1878 to the end of April 1879 he was in the service of and interested in the profits of the Metaline Company, and that three months after that he left their service and set up in business for himself in Dundee. “Since leaving their service, the defenders, the partners of said company, have cherished the strongest feelings of ill-will

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towards him;” that on 20th October 1885 he obtained decree of the Court of Session for £350 in an action against John Shields of Balhousie Castle, Perth. “The defenders having immediately become aware of this, resolved to take that opportunity of gratifying their feelings of malice and ill-will towards pursuer, and their desire to injure him, by preventing him obtaining payment of the sum thus decerned for, and by, if possible, ruining his character and credit by means of the expedients after mentioned. They communicated with Mr Shields, requesting him to decline payment of the sum decerned for, and upon the day following the decree they threatened the pursuer with an action against him for an account which they alleged he was due, and which had never been mooted between the parties since their accounts were squared and settled shortly after the pursuer leaving their service; and they further threatened that they would use arrestments in Mr Shields' hands, and so prevent the pursuer from obtaining the money due by him. The pursuer through his agents at once protested against the arrangement with Mr Shields, and against the threatened proceedings being carried out. The defenders nevertheless intimated their determination to proceed, although warned of the great damage which would be caused, while they stated that they would not have pressed such a claim ‘but for the fortuitous concourse of circumstances in Mr Gordon's favour.’” He further stated (Conds. 4 and 5) that “accordingly” on 4th November 1885 the defenders raised an action against him for £125, 0s. 7d. sterling in Dundee Sheriff Court, which they alleged to be due to them in respect of an alleged account incurred by him between 13th January 1879 and 11th December 1880, and also used arrestments on the dependence to the extent of £140, less or more, of the money in Mr Shields' hands, and declined to restrict the sum to £140 so as to enable him to uplift the surplus of £210; that he was ultimately assoilzied from the conclusions of that action; that on 18th December 1885 they raised another action against him for £500 in the name of damages, “founding upon grossly untrue allegations as to the present pursuer having surreptitiously obtained the secret of their business, and having fraudulently made use of an alleged trade-mark,” and used similar arrestments on the dependence of this action; that “this second action was entirely groundless,” and was dismissed by the Sheriff-Substitute and Sheriff. “(Cond. 7) Neither of said actions was raised in bona fide, but both were initiated and prosecuted with the sole purpose of gratifying the malice and ill-will foresaid, and, if possible, of extorting money from the pursuer. The laying-on of the arrestments in both actions was also carried out solely from said motives, and with a view to injure the character, credit, and reputation of the pursuer. The said arrestments were so laid on and continued maliciously and without probable cause, and in spite of repeated warnings as to the great loss and inconvenience caused thereby; and further, without even the restriction already referred to, which would have amply protected their rights.” He set out (Cond. 9) that he had suffered great loss in credit and in business by these proceedings, and by the defenders' conduct in a multiplepoinding raised by Shields to distribute the money in which he had been found liable to him (the pursuer).”

“(Cond. 10) In the first-mentioned Sheriff Court action it was averred on record by the present defenders that the pursuer Mr Gordon had improperly and illegally endeavoured to trade upon their alleged registered trade-mark, ‘Metaline.’ The allegation was and is wholly untrue. Nevertheless, in the second action in the Sheriff Court, which as already averred was raised solely with the object of extorting money from the pursuer, and of gratifying their malice and ill-will towards him, and of ruining his character, reputation, and credit, it was alleged by the present defenders in their condescendence that the present pursuer Mr Gordon ‘unwarrantably pried into and obtained insight and information in regard to the secrets of their said invention and manufacture of metaline.’ It was further alleged by defenders in said condescendence that ‘after leaving their said employment, and in the years 1881, 1883, 1884, and 1884, or during a portion of all or some of these years, the defender fraudulently and illegally represented and held himself out to the public as a manufacturer of the pursuers’ invention of metaline, and surreptitiously and illegally used and appropriated or imitated the secret of the pursuers’ invention or manufacture of metaline, and also fraudulently and illegally used and appropriated or imitated the pursuers’ said registered trade-mark, “Metaline.”’ The defenders in said condescendence further alleged as follows—‘Amongst others to whom the defender during said years or some of them fraudulently and illegally represented himself as a manufacturer of the pursuers’ said invention of metaline under the pursuers’ said registered trade-mark, “Metaline,” and also as a seller of such metaline, were the following, viz., William Alexander & Co., blockmakers, Govan; Fisher & Co., oil merchants, Leeds; A. H. Bateman & Co., East Greenwich; A. A. Rickaly, engineer, Sunderland; F. S. Sandeman, manufacturer, Dundee. The defender also during said years or some of them fraudulently and illegally got his name inserted in Slater's Directory for Scotland as a manufacturer and seller of the pursuers’ invention of metaline under their said registered trade-mark. He also fraudulently and illegally advertised himself in the London newspaper Engineering as a manufacturer and seller of the pursuers’ said invention of metaline under their said registered trade-mark, “Metalline.”’ The defenders further alleged in said condescendence that ‘the pursuers by and through the defender's fraudulent and illegal representations as before mentioned, and of his fraudulent and illegal use and appropriation or imitation of their said registered trade-mark, “Metaline,” and advertising, &c., and unwarrantably infringing the pursuers’ rights as before mentioned, sustained serious loss and damage.’ (Cond. 11) Said allegations were grossly untrue. They are of and concerning the pursuer, and were made by the defenders falsely, calumniously, maliciously, and without probable cause. They falsely and calumniously represent that he surreptitiously obtained certain secrets of the defenders’ business, and that he by means of false and fraudulent representations held himself out to the public as a manufacturer of the defenders’ invention rf metaline, by surreptitious means used and appropriated or imitated the secret of the defenders’ invention, and was guilty of fraudulent and

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illegal use and appropriation or imitation of their trade-mark, ‘Metaline.’ Said allegations further falsely and calumniously represent that the pursuer fraudulently and illegally represented himself to the persons above named as a manufacturer and seller of defenders' said invention of metaline under their alleged trade-mark, and that he fraudulently and illegally got his name inserted in Slater's Directory for Scotland, and advertised himself in the newspaper called Engineering as manufacturer and seller foresaid. The grossly false and malicious charges above mentioned were currently reported in Dundee district, and have become widely known. They have caused the pursuer the deepest pain, and they have most seriously injured his business connection, credit, and reputation. By means of them, and the arrestments before mentioned, the pursuer has suffered great loss and damage, for which the defenders refuse to make reparation to him. The pursuer estimates the damage due to him in respect of said arrestments at the sum of £500, and in respect of said slanders a similar sum.”

In defence the defenders other than Thompson pleaded—“(2) The defenders being entitled to use said arrestments, and having done so on reasonable grounds, in good faith, and without malice, should be assoilzied with expenses. (3) The allegations complained of being relevant and pertinent to the cause in which they were made, and the defenders having made them in bona fide belief that they were true, on reasonable grounds, and without malice, the defenders are entitled to decree of absolvitor with expenses.”

The defender Thompson, who made a special defence, founded on his never having been, as he alleged, an active partner in the business, and on his having retired altogether at 1st February 1886, pleaded in addition—“(4) The defender not being responsible for any of the proceedings complained of, he should be assoilzied with expenses.”

The following issues were proposed by the pursuer:—“1. Whether, on or about the 4th day of November 1885, the defenders, or one or more of them, maliciously and without probable cause, used or caused to be used against the pursuer an arrestment in the hands of John Shields of Balhousie Castle, Perth, for the sum of £140, less or more, and caused the same to be continued until on or about the 18th day of May 1886, to the injury and damage of the pursuer. Damages laid at £250. 2. Whether, on or about the 18th day of December 1885, the defenders, or one or more of them, maliciously, and without probable cause, used or caused to be used against the pursuer an arrestment in the hands of the said John Shields for the sum of £500, and caused the same to be continued until on or about the 18th day of May 1886, to the injury and damage of the pursuer. Damages laid at £250. 3. It being admitted that the defenders raised an action of damages for £500 in the Sheriff Court of Forfarshire at Dundee at their instance against the pursuer on or about the 18th Day of December 1885, and that a record was made up and completed in said action, and it being further admitted that the condescendence annexed to the petition in said Sheriff Court action contains the following passages:—[The passage in question is fully quoted in Cond. 10 as above given]—Whether the said statements or part thereof are of and concerning the pursuer, and are false and calumnious, and were maliciously inserted or caused to be inserted in the said condescendence, to the loss, injury, and damage of the pursuer. Damages laid at £500.”

On 27th October the Lord Ordinary ( Lord M'Laren) disallowed the third issue, and approved of the first and second issues as the issues for the trial.

“ Opinion.—The issues which I propose to allow, being the first and second of those given in by the pursuer, are intended to raise the question of the pursuer's right to damages for the illegal arrestment of his funds. They are in the usual form, and under them the pursuer must prove malice and want of probable cause as conditions of his claim to recover damages. The chief question regarding these issues is as to the insertion of the words ‘or one or more of them.’ The defenders object to these words on the ground that the action is instituted against them jointly and severally. They contend that under an action instituted in this form it would not be competent to obtain a decerniture against one or more of the defenders, but only against the whole body of partners collectively. They further object to the action altogether in so far as instituted against a mercanttle firm or copartnery.

“I think that as the arrestments complained of were used by the company and its partners, the pursuer is within his rights in bringing the action against the parties who used the arrestments, designing them in the terms which the defenders used in laying on the arrestments, as descriptive of the character in which they claimed to attach the pursuer's property. I think, also, that the pursuer is entitled to insert the words ‘or one or more of them’ to meet the possible case of one or more of the defenders establishing that he or they did not authorise the use of the arrestments. The pursuer is not proposing to discharge any of the defenders, or to withdraw his action against any of them; and in these circumstances I think the distinction founded on the circumstance of the action being directed against the defenders ‘jointly and severally’ is too critical, and is not supported by the authorities referred to.

“The third issue (which I propose to disallow) is intended to raise the question of the pursuer's right to recover damages in respect of allegations affecting his reputation made by the defenders in an action instituted against him in the Sheriff Court of Forfarshire.

“The representations made in that action were to the effect that the pursuer had infringed a patent, the property of the defenders, and had also improperly made use of information as to trade secrets which he acquired while in their employment. The claim in the Sheriff Court action was for damages in respect of these alleged wrongs, and there can be no doubt that the description of the alleged wrong was pertinent to the action. The action, however was dismissed as irrelevant, because, as the Sheriff-Substitute explains, it did not appear that there was any subsisting patent, and it was not explained what were the trade secrets which the defender (the present pursuer) had used or disclosed. The case intended to be made under the issue is that there was no real cause of action to justify the Sheriff Court proceedings, and that these proceedings were merely the vehicle of spiteful insinuations against the pursuer's honesty or integrity. However

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this may be, I am very unwilling to make a precedent for sending to trial an issue of judicial slander where the matter alleged to be libellous is really the whole subject-matter of the action. It is the privilege of any member of the community to submit his supposed claims and grieyances to judicial decision, even where these are unfounded or, it may be, purely imaginary. If the charges are investigated and disproved or dismissed as irrelevant, no injury is done to the reputation of anyone unless to the party whose statements are found to be absurd or untrue. There may be exceptions. But I have difficulty in figuring a case where a defender would be injured by charges from which he successfully defends himself in a court of law. I think also that it is for the public interest that litigants should not be deterred from discussing their claims and grievances in open court through the apprehension that if unsuccessful an action of damages would lie against them.

“If the issue in question is allowed, it will be difficult to assign limits to such claims. Any person against whom an action of damages for negligence is unsuccessfully maintained may retaliate with an action of judicial slander on the ground that his capacity for the conduct of his business, or his character otherwise, is affected by imputations of inhumanity or want of care in matters affecting the safety of his men. I do not know any instance of an action of judicial slander being sent to trial, except where the slander was extrinsic to the subject or motive of the action. And there is nothing that I can see in the present case to warrant a departure from precedent in this respect. Any annoyance or discomfort which the pursuer may have experienced in consequence of the epithets applied to his conduct in the defender's pleading is, in my view, no more than a part of the friction incident to public business, which everyone must submit to for the sake of general convenience. I do not enter into the question of the sufficiency of the averments of malice, for I rather incline to the opinion that no action will lie for injury arising from the mere fact of a claim of reparation being made unsuccessfully in a court of law.”

The pursuer reclaimed, and argued— On the third issue—In the case of judicial slander the pursuer must no doubt prove that the statements he complains of were maliciously inserted in the record, upon which he founds his action of damages, but here the pursuer was willing to do that— M'Intosh v. Flowerdew, November 28, 1851, 14 D. 116; Mackay v. The Commercial Bank of New Brunswick, March 14, 1874, L.R., 5 P. C. App. 394. It was not enough, doubtless, to aver malice, but here there was a sufficient detail of the circumstances to enable a jury to infer malice from the conduct of the partners. 1st. and 2d. issues—The action was laid against all the members as well as the company, and all the members were liable for the slander committed by the company. Thompson's individual case was based solely upon statements made by him which were denied. There was no doubt that an action for slander could be brought against a company as such— Abrath v. The North-Eastern Railway Company, June 22, 1883, L R., 11 Q.B.D. 440; Whitfield and Others v. The South-Eastern Railway Company, April 29, 1858, 27 L.J., Q.B. 229; Keith v. Outram and Company, June 27, 1877, 4 R. 958,

Argued for the defender Thompson—If any of the partners of a company had cherished ill-will against any party, and made slanderous statements regarding him in an action at law, that slander could not be imputed to the company, and through the company to anyone who, although a partner of the company had taken no part in promulgating, and indeed did not know of the slanderous statements until after they were made. If the slander had been used in the course of the company's business, it might be different, but here it was not so— The Western Bank of Scotland v. Addie, May 20, 1867, 5 Macph. (H. of L.) 80; Houldsworth v. The City of Glasgow Bank, &c., March 12, 1880, 7 R. (H. of L.) 53. These two cases showed that a company could not be found guilty of fraud, and by analogy could not be guilty of malice— Stevens v. The Midland Counties Railway Company, June 22, 1854, Hurl & Gordon's Reps. 353; Western Bank of Scotland v. Bairds, March 20, 1862, 24 D. 859. The words “or one or more of them” ought to be taken out of the issues; if these words were left in, the case was made to bear more heavily against the individual partners— Taylor v. M'Dougall and Sons, July 15, 1885, 12 R. 1304. The third issue ought not to be allowed— Scott v. Turnbull, July 18, 1884, 11 R. 1131.

Argued for the defenders Stiven and Stewart on the third issue—The case of Scott v. Turnbull (reported supra) was distinctly against the giving of such an issue. The insertion in the record of the word “malice” would not make a relevant averment of malice if the Court were of opinion that the facts did not show that the allegations in the record were malicious. Here there were no facts averred relevant to show malice. The arrestment had been laid on for a perfectly proper reason, viz., to recover a debt which the present pursuer owed to the Metaline Company. There was a higher privilege in judicial pleading than in the use of diligence; malice in the arrestment must be proved.

At advising—