Birchwood Homes Ltd & Ors v Robertson

There are two applications now before the court in this action for slander, which concerns words spoken by the defendant to persons on 8th March 2002. The claimant seeks summary judgment in respect of the defence of qualified privilege on the basis that it is unsustainable on the facts, and in particular in the light of words uttered by the defendant himself on the occasion of the publication complained of. The defendant seeks permission to amend the defence to add a plea of justification. The trial is fixed for 24th February of this year, and that date was notified to the parties on 12th August 2002.

The background may be briefly stated as follows. The defendant, Mr Robertson, is a councillor for the St George’s Ward of Elmbridge Borough Council. Within that Ward lives Moira Gill at number 3, St George’s Close, Weybridge. The defendant is also a member of the West Area planning sub-committee, which covers the relevant Ward, and is on the Council’s main planning and licensing committee.

The first claimant is a company incorporated in February 1996 which carries on business developing property in the same area. The second and third claimants, Mr David Steen and Mr Ross Minerva respectively, are directors of the company. By way of history, it is right to say that, prior to the incorporation of the first claimant, the second and third claimants had been carrying on the business of property development in partnership.

The words complained of were, it now emerges, video taped without the defendant’s knowledge by Mr Anthony Rich, a private detective, who was the other publishee of the words complained on along with Mrs Gill. Those words are pleaded as follows in the form of a script:

“Moira Gill: Who was the developer at Cavendish?

Defendant: Birchwood Homes, absolute disaster. They came from a fraudulent, second-hand car dealing operation in Addlestone and moved into housing.

Anthony Rich: How can you make this transition? Don’t you have to have qualifications?

Defendant: No, no, developers start from developing their own back garden and they go on from there.

Moira Gill: Well, they are the same people that want this place.

Defendant: Well I advise you to be very, very careful. I am talking to you not as a councillor. I come as a friend. They are concentrating on this area because their top man was born and brought up somewhere and he’s got a mother still living on Gower Road or something, but boy he’s aggressive.

Moira Gill: How do you mean aggressive?

Defendant: Well, he’s persistent.

Moira Gill: What do you mean, they just keep on and on at you?

Defendant: In that way, and also what happened at Cavendish Court, their style.”

There is a reference innuendo pleaded to support the case that the publishees would have understood those words to refer not only to the corporate claimant but also to the second and third claimants. The pleaded meanings in the particulars of claim are as follows: (1) that the second and third claimants are criminally dishonest businessmen; and (2) the first claimant is a criminally dishonest business. The defence originally relied upon denials as to meanings and reference, and also upon the defence of qualified privilege. There was no reply served alleging malice, and therefore, as things stand, if the occasion of the discussion on 8th March 2002 is held to be subject to privilege, there would be a complete defence.

By application notice dated 19th November 2002, however, it is now sought to add, relatively late in the day, a substantial plea of justification. That application is supported by a witness statement of the defendant’s solicitor, Mr Nicholas Connolly, of the same date. The application is opposed. The defendant also seeks permission to amend, less controversially, for the purpose of admitting that he spoke the word “fraudulent” in the light of the content of the videotape.

The Lucas Box meanings which the defendant seeks permission to justify relate only to the first and second claimants. In other words, it is not sought to rely on the defence of justification so far as the third claimant, Mr Ross Minerva, is concerned. The Lucas Box meanings as proposed are pleaded in these terms:

“(a)

The second claimant conducts his affairs in a dishonest and aggressive manner;

(b)

By reason of the second claimant’s dishonesty the first claimant is not to be trusted.”

The particulars relied upon may be sub-divided into the following categories. Sub-paragraphs 7.1 to 7.14 relate to what is described as Cycletec/MTB Direct. Sub-paragraphs 7.15 to 7.19 relate to what is headed Magna Marketing. Those two matters go back more than ten years and concern the second claimant only. Sub-paragraphs 7.20 to 7.23 relate to the Heald proceedings. Those allegations are much more recent and also relate to the second defendant, but it is said that they also justify the proposition that the first claimant is not to be trusted. It is not suggested that the company was vicariously responsible for what was done by David Steen, but rather that if the relevant words reflected upon the company by virtue of its close involvement with Mr Steen, and would make reasonable people disinclined to have dealings with it, then any such defamatory meaning can also be justified.

The arguments developed by the parties turned primarily upon the following issues. It is suggested that the words published are incapable of supporting the Lucas Box meanings. The tests to be applied by the court are well known from such cases as Gillick v. BBC [1996] EMLR 267, and Mapp v. News Group Newspapers [1998] QB 520. Mr Fox says on behalf of the claimants that the words can only have conveyed the meaning that crimes had been committed. The word “criminal” certainly figures in the claimants’ pleaded meanings, but I am not sure what it adds to the notion “fraudulent”, in the context of the conversation. Moreover, it is added by the pleader. It did not appear in the actual words used. The defendant is entitled to address himself to those for the purpose of formulating his defence.

Mr Fox also submits that “aggression” is not something of which any of the claimants choose to complain. It is true that it does appear in the words complained of, but, he argues, that is by no means conclusive as to the defendant’s entitlement to justify that allegation. The fact that the jury would be entitled to see the whole of the words complained of, for the purpose of judging context, does not mean that they are also entitled to know about, still less determine, each side’s account of every defamatory allegation the words may contain. It is well known that Lord Denning MR appears to have said quite the opposite in S & K Holdings v. Throgmorton Publications [1972] 1 WLR 1036, 1039-40, but the Court of Appeal took a different approach in US Tobacco v. BBC on 15th March 1988, a case that was not reported until more than a decade later in [1998] EMLR 816. That decision was followed and endorsed in Cruise v. Express Newspapers [1999] QB 931. The current view is that it would be “to exalt form over substance”, in the words of Nicholls LJ in US Tobacco, if the mere fact that a defamatory allegation is in the words complained of meant that the defendant was entitled to justify it.

What the Court of Appeal did not make clear in either of those cases, because it was not thought necessary to do so, is how the trial judge has to approach such a non-justified defamatory allegation. In US Tobacco it was a matter left for the trial judge’s discretion, but no trial ever took place; nor did it arise in Cruise which was settled on agreed terms. It is necessary, however, to tread carefully because of what had hitherto been thought to be the principle that defamatory allegations are always presumed to be false unless and until the defendant proves them to be true. In US Tobacco and in Cruise, the defendants did wish to justify the respective meanings in question but were not permitted to do so. It would plainly be unjust for the jury, therefore, to proceed in such a case on the basis that they were false. Nor yet can they decide that they were true; they are left in limbo. The best the judge can do is to say something to the effect that the jurors need not concern themselves with those allegations since they are irrelevant to their task. That presumably goes for the assessment of damages as well as for liability.

Again one has to tread carefully so as to ensure that one does not fall foul of the injunction in Burstein v. Times Newspapers [2002] 1 WLR 579 to the effect that the jury should not be permitted to assess damages in blinkers. Nevertheless, whatever the difficulties may be for the trial judge and jury, it is undoubted the currently law and practice that the fact that an allegation is to be found in the words complained of, even a serious defamatory allegation, does not entitle the defendant to plead and prove its truth. In this respect the law is clear. What the court has to decide in any such case is whether the meaning of which the claimant does not wish to complain is one that is truly severable and distinct; as, for example, one would generally expect adultery to be distinct from an allegation of fraud.

I believe that there is therefore no dispute between the parties over the test which I must apply on the present facts. I must ask myself whether the allegation of aggressive behaviour is severable and distinct from that of fraud. Mr Fox submits that it certainly is. What is more, he argues, alternatively, that it is not even in itself defamatory to say that someone is aggressive, at least in the context.

Mr Wolanski, by contrast, argues that the allegations are all part and parcel, and different aspects, of what one might call “cowboy” business methods. According to the defendant, Mr Steen has a history of treating consumers badly and should be avoided because of both dishonest misrepresentations and high pressure “foot in the door” methods. Indeed, Mr Wolanski says that what his client wishes to prove is that Mr Steen is an “aggressive serial conman”. What matters is context, as so often in libel proceedings. I believe it is significant that the defendant issued a warning to the lady in question to be “very, very careful” in her dealings with Mr Steen and his company. That need for care seems to me to be referable back, at least arguably so, to the allegation of fraud as well as forward to what comes immediately afterwards, i.e., the warning of aggression. The warning to be “very, very careful” thus arguably provides a clear link between the two aspects of Mr Steen’s business methods as they are alleged to be.

I have no doubt that in context those two aspects are not severable and distinct. I am also satisfied, again in context that the word “aggressive” is capable of being defamatory. Mr Fox says that Mr Robertson limited the word by his own definition and equated it merely to “persistence”. That, says Mr Fox, is a good quality, at least for advocates. Well, up to a point. It depends on context. I cannot possibly hold that the only meaning attributable to “aggressive” in this present context is a non-defamatory one.

In principle, therefore, I am disposed to grant permission to justify in accordance with the Lucas Box meanings. Other factors come into play, however, once that initial hurdle has been overcome.

First, it is necessary for me also to address the stage at which the application comes before the court; in other words, whether an otherwise viable plea should be rejected for reasons of delay. In this case the delay has been explained quite adequately in a witness statement of Mr Nicholas Connolly of 19th November 2002. I need not dwell on this at any length, because I do not understand any objection to be made on that ground. Mr Connolly explained that it had not been possible to plead justification any earlier because the evidence was simply not available. It was necessary to track down video recordings, in particular relating to television programmes broadcast more than ten years ago. The first evidence to support a plea of justification only came into his possession on 3rd September last year. I am satisfied that there is no reason to decline permission for reasons of delay.

A second argument, however, is based on the particulars themselves which are said not to be capable of justifying the relevant Lucas Box meanings. This requires each of the first two groups of allegations, in particular, to be looked at more closely. The first set of allegations, as I have said, relates to Cycletec. In 1990 Mr Steen was involved with a Mr Mark Haslam in a company called Mammoth Mountain Bikes Ltd, which traded apparently using variously the names Cycletec and MTB Sales Direct. What is suggested is that he ran a “scam” involving advertising, whereby he procured people to send money for bicycles which were either not sent at all or which, when delivered, did not comply with what was required. A particular example involved a Mr David Woodrow and his son, which led to litigation in the Exeter County Court. It is said that Mr Steen disappeared owing him and other customers money. Unfortunately the other customers have not been identified yet, and Mr Wolanski recognises that the claimant is entitled to specific details. He invites me, however, not to refuse permission at this stage because enquiries are still ongoing, and Lord Woolf made it clear in McPhilemy v. Times Newspapers Ltd in 1999 that it is nowadays legitimate to identify the broad facts in a pleaded case and fill in the detail at the stage of serving witness statements.

While recognising, therefore, that the case could not go to trial with the defendant’s case in its present uninformative state, I think Mr Wolanski is probably entitled to plead the case in general terms at this stage. I will give permission subject to that important caveat.

Other points taken by Mr Fox are that the particulars do not disclose anything fraudulent, or for that matter “aggressive”, but only a commercial dispute of a type which is a daily occurrence up and down the country. He also says there is nothing to tie Mr Steen himself into this scam directly, and even if the facts are established, it could all be the fault of some other unspecified person. It is necessary to bear in mind, however, that when the television company became interested in the alleged scam and wanted to expose Mr Steen in the programme, he is alleged to have become directly involved in intimidatory tactics against the television presenter. I must, of course, at this stage proceed on the footing that the factual allegations, albeit only pleaded in outline for the moment, will be established at trial. In that event a jury might, in the light of the evidence, be prepared to draw the inference that the Cycletec episode did provide an example of dishonest and/or aggressive business methods on Mr Steen’s part.

The second group of charges, also dating back to 1990, concerns a company run by Mr Steen, again in association with Mr Mark Haslam, called Greenlake Management Ltd. It apparently traded under the name of Magna Marketing. Once again, a “scam” is alleged in connection with a scheme called “Drive Away 90”. This involved offering members of the public a car, fully taxed, for a mere £99 a year. The claim was made that the cost would be recouped from advertising space being made available, at a suitable charge, on the body of the car. The allegation is made that as many as 600 people paid the £99 hoping for a car to be supplied on those terms, but no car ever was supplied. It is then said that, in effect, Mr Steen “did a bunk”. Mr Fox argues that it would be impossible from the facts pleaded to infer dishonesty on his client’s part. Those allegations would be as consistent with poor commercial judgment, or perhaps misfortune, as with dishonesty. I find myself however quite unable at this preliminary stage to rule out that possibility.

Finally, there are the more recent allegations which relate directly to Mr Steen and amount to forgery and an attempt to pervert the course of justice, as well as a dishonest attempt to extract money from an unfortunate woman called Eleanor Heald. Indeed, the allegations of criminality are such that the papers might, at a later stage, find their way to the Director of Public Prosecutions.

It is properly conceded by Mr Fox that for the most part, as a pleading, he cannot challenge its relevance to the plea of justification. He made clear that his client denies the truth of the allegation, but recognises that the court cannot resolve that question on an application to amend. Nevertheless, he does challenge one aspect of the pleading. It is said that paragraph 7.23 is “irredeemably bad”. This alleges that Mr Steen was trying to recover damages against Ms Heald flowing from her failure to complete a property sale on the basis of lies and a forged document. He was claiming that he incurred the cost of having to accommodate a person called Jennifer Jones and her children elsewhere when they would otherwise have moved into the property. Mr Wolanski explained that his client’s case is that Jennifer Jones never existed and the tenancy agreement Mr Steen produced for the purposes of the litigation was forged by his then secretary Emma Davis, who has provided Mr Robertson’s solicitor with a witness statement. Miss Davis has admitted that she forged the signature attributed to Jennifer Jones.

Mr Wolanski intends to invite the jury to draw the inference that she must have done this on Mr Steen’s instructions. After all, it is difficult to envisage why she would wish to do it for her own purposes. On the facts as they stand at the moment, that seems to me to be a perfectly reasonable inference to draw. Miss Davis does not actually say in her witness statement that she was instructed to do it by Mr Steen, but that does not prevent the inference being drawn. No independent or documentary evidence has been produced, so far, to confirm the genuineness of the tenancy agreement or the existence of Jennifer Jones or her family. That may in due course be remedied, but meanwhile, serious though it is, Mr Wolanski is fully entitled to press ahead with that allegation of deceiving Ms Heald and attempting to pervert the course of justice. I therefore grant the defendant permission as sought.

On the privilege issue Mr Fox takes the bold course of submitting that the defendant is bound to fail and that accordingly his clients should have summary judgment under Part 24. It is to be noted that, unlike the plea of justification, that of qualified privilege is raised as affording a defence in respect of all the claimants, including Ross Minerva, assuming of course that he has been defamed. Mr Wolanski argues that the defence is not just arguable but highly likely to succeed on the facts as they are pleaded, and known about, at the moment. He makes the point that, since there is no reply, it is not yet possible to be confident as to the extent of any factual dispute there may be as to the background relied upon by the defendant as giving rise to the occasion of qualified privilege.

The factual assertions pleaded to ground the defence are short and straightforward. They were summarised by Mr Wolanski in five propositions. (1) Mr Robertson was at the time of the publication Miss Gill’s local councillor; (2) Miss Gill invited Mr Robertson to her house to discuss the approach that had been made to her by property developers; (3) Miss Gill used the occasion to seek the advice of Mr Robertson about the development process, and the fact that she may have been lying to him, says Mr Wolanski, about the purpose of the meeting should be irrelevant; (4) Mr Robertson’s comments about the claimants were made in an attempt to provide information he believed to be relevant to the proposed development; (5) Mr Robertson was told before the meeting began that Miss Gill wished to have a friend present at the meeting. The friend, in fact the surveillance expert employed by the claimants secretly to record the meeting, was Mr Rich.

Mr Wolanski may well be right as to the likely outcome. Certainly it seems to me that there is, as things stand at the moment, a strong defence of qualified privilege, but that is not the test I have to apply at this stage. The question is whether Mr Fox can satisfy me that the defence is bound to fail, making all factual assumptions in favour of the defendant. In my judgment, he cannot satisfy that test. His main argument is that Mr Robertson took himself outside the scope of privilege by his remarks to the effect that he had come “as a friend”. That seems to me an artificial way of approaching the defence of qualified privilege. The matter will be for the court to judge objectively from all the circumstances as they finally emerge at trial. If a judge were to weigh a defendant’s every word or phrase over a long conversation, watching out for slips of the tongue or infelicitous ex tempore remarks whereby to disqualify him, this would be quite inconsistent with the approach taken to this defence by Lord Diplock in Horrocks v. Lowe [1975] AC 135. A person speaking on a privileged occasion should not be regarded as a tightrope walker without a safety net, with the judge waiting underneath with baited breath hoping for a tumble. In my judgment, Mr Fox’s submissions involve an over-analytical approach which would, if generally followed, have the effect of rendering the protection afforded by qualified privilege “illusory” (in Lord Diplock’s word).

I find equally unconvincing his argument that the offending words were not uttered in response to an enquiry from Miss Gill. Mr Robertson anticipated her by getting in first. In my judgment, what matters is the occasion, purpose of Mr Robertson’s visit to Miss Gill’s house, and whether or not the subject matter of the conversation was of common and corresponding interest. The issue cannot be determined on the accident of who happened to speak first: see e.g., Greenlands Ltd v. Wilmshurst [1913] 3 KB 507, 535 per Hamilton LJ.

Mr Wolanski argues for good measure that, even supposing that Mr Robertson’s role as Moira Gill’s councillor were irrelevant, and he had been consulted in her own home as a knowledgeable friend, there would still be a strong argument in favour of qualified privilege. I have no doubt at all that the claimant’s application on qualified privilege, however attractively presented by Mr Fox, is hopeless.

There is another matter concerning mitigation of damages to which I must now turn and consider in the light of Burstein v. Times Newspapers Ltd [2001] 1 WLR 579. It is not easy to define precisely the ratio of that decision, or to assess the full impact of the changes it has brought about, although they are potentially far-reaching. Tentatively, one may conclude that in future the court will be more generous in admitting particular facts about the circumstances in which a libel came to be published, including facts about the claimant and to his discredit, for the purpose of mitigating damages rather than to support a plea of justification.

An important part of the reasoning is that juries should not be asked to assess damages for injury to reputation in blinkers, or to give a more generous vindication than is warranted by those circumstances. It was a similar policy consideration that led the Neill Committee in 1991 to recommend to the Lord Chancellor that the so-called rule in Scott v. Sampson (1882) 8 QBD 491 should be abrogated. Nonetheless, it is necessary to interpret and apply Burstein without losing sight of the fact that the legislature quite specifically rejected that recommendation. There was significant opposition to it in Parliament. One Member of Parliament, for example, described the proposal as “a muck-raker’s charter”.

Against that background of developing law, it is clear that judges need to guard against too readily acceding to invitations to strike out factual allegations relied on for the purposes of mitigation on the ground that they could not possibly be classified as part of the relevant “background context” (as contemplated by the Court of Appeal).

The relevance of this to the present case is that Mr Wolanski has included paragraphs 11.1 and 11.2 in his defence expressly for mitigation purposes. The various allegations in paragraph 11.1 are directed to showing that Mr Robertson was, in effect, being “set up” by Moira Gill who tried “to lure [him] into uttering actionable or otherwise compromising words about the claimants” which would be secretly videotaped by the equipment set in place by Mr Rich.

Mr Fox does not object to that, but he does take issue with paragraph 11.2. This suggests that the second and third claimants entrapped Mr Robertson on 8th March last year and brought these proceedings as part of a scheme to ensure that the defendant was compromised in his work as a councillor, and disqualified from taking part in planning applications issued by the claimant company. Mr Fox objects to the references contained in the pleading to earlier complaints of bias against Mr Robertson, made by his clients, towards the end of 2000 and in February 2002. In any event, he submits, those matters give rise to a range of new issues which are not necessary to a fair disposal of this case and should be excluded for case management reasons.

The final sub-paragraph, 11.2.6 makes the point that the second and third claimants did not suffer any injury to their feelings on scrutinising Mr Rich’s video tape, but would have been pleased since they would have perceived themselves as having achieved their objective (in precluding Mr Robertson’s involvement in any of their planning applications). The facts are very unusual. It could hardly be said that the circumstances surrounding the “set-up” of 8th March are irrelevant to the question of damages. Indeed, the conduct of a claimant has always been recognised as a relevant factor in that context, even before the emergence of the new approach explained in Burstein. It think it is arguable that the full circumstances should be before the jury to avoid the danger of their assessing quantum, if it comes to that stage, in blinkers. It would naturally be open to the trial judge to take a more restrictive approach in due course as a matter of case management.

Once again, therefore, I find that I have to reject Mr Fox’s submissions. Accordingly, I refuse the Part 24 application.