Creative Resins International Ltd v Glasslam Europe Ltd & Ors

In this libel action the Claimant is a company called Creative Resins International Limited. There were originally three Defendants, the first being Glasslam Europe Limited, the second Donne Mileham & Haddock, a firm of solicitors, and the third Mr Stephen Howes. The Second Defendant went out of the litigation some time ago and the First Defendant has at the eleventh hour settled the action this morning, so far as the cause of action against it is concerned, on the basis of a statement in open Court and a Tomlin order. That leaves now remaining only the Third Defendant, Mr Stephen Howes.

Mr Howes's attitude is that he wishes to take no part in the proceedings. He lives in the United States and has apparently done so for some time. The claim against him has therefore proceeded in his absence. He has, for good measure, sent a letter, dated 21 st November, to the solicitor for the Claimants in rather insulting terms not only to the people behind Creative Resins (and one person in particular) but also insulting to the solicitor. The letter offers the challenge:-

There are quite a number of residents in the United States who strongly disagree with the approach which English Courts take in relation to defamation, but my responsibility, of course, as a Judge operating in this jurisdiction, is to apply English law as it stands. There is no doubt that the Third Defendant knows of these proceedings and that it is his choice not to participate.

Against that background, therefore, I have heard brief evidence from two of the Claimant's witnesses and I have given permission for the other evidence, which has been served by them, to be relied upon without the need for calling the witnesses and on the basis of their witness statements only. That is in accordance with the CPR. The object behind that is, of course, to save time and money and to ensure, so far as possible, that the time and money spent on the case are proportionate.

The Claimant company produces manufacturing equipment, processes and raw materials used for the purpose of producing glass resin bevels and other decorative glass panels. The First Defendant, to whom I have already referred, is in a broad sense a competitor of the Claimant company. Mr Howes, the Third Defendant, has a significant shareholding in the First Defendant. He is also the Chief Executive Officer of an associated company, Glasslam NGI Inc. in the United States.

It was explained in the course of the evidence that there has been a history over some years of aggressive and threatening behaviour by the Defendants towards the Claimant company and to some of its officers. It is submitted by Mr Rushbrooke on behalf of the Claimant that the libels complained of in these proceedings form part of that campaign. The evidence would certainly appear to bear that out.

The proceedings were commenced on 5th November 2004. Originally, two publications were sued upon. One related to a letter published on 7th September 2004 by the firm of solicitors who were originally the Second Defendants on behalf of the First Defendant to one of the Claimant's customers. The Third Defendant, I should make clear, is not sued in relation to that publication. The article in respect of which he is sued appeared from about the beginning of February 2003 on a website and also in a magazine called US Glass, which has a large circulation among people particularly interested in the glass industry and involved in it throughout the world. It is right that I emphasise that the present claim is confined to publication of the words complained of in this jurisdiction, that is to say to publications by means of the website and through the hard copies of the magazine itself. The headline of the article was "Creative Resins Served by Glasslam".

I turn now to the words complained of from the article, which are in these terms, underneath the heading which I have already read:-

The natural and ordinary meanings pleaded in the Particulars of Claim are:-

I have no difficulty in holding that the words complained of do indeed bear those meanings, and those meanings are plainly defamatory of the Claimant company, and seriously so. They are calculated to undermine its commercial reputation and no doubt also to discourage people from dealing with it in commercial transactions.

The extent of publication in this jurisdiction of the words complained of cannot be determined accurately or even approximately. All I need to say is that, in the light of the evidence, I am satisfied that this is not one of those cases where the publication can be regarded as purely technical in character: cf Jameel (Yousef) v Dow Jones, recently considered by the Court of Appeal. Here, the likelihood is that there have been a significant number of readers of the words complained of both in the hard copy in the magazine and on the website, significant in the sense not only numerically but also that they are likely to be people in whose eyes the Claimant's reputation is of some importance. I say that for the reason which is obvious, that the words will have been read primarily by people involved in and interested in the glass industry and, in particular, people who might be likely in the ordinary course of business to have dealings with the Claimant.

I heard evidence this morning from two witnesses, as I have said, namely Mr Patrick Sumner and Mr Trevor Cox. They have set out at some length in their witness statements the background to this matter not only in relation to the campaign, as I described it earlier, by the First and Third Defendants, but also in relation to the background of the specific publication complained of in this case and what took place in Germany in 2002 in particular.

It is manifest that there is no truth in the allegations which have been published and persisted in for some time. It appears that the words remained accessible on the website between February 2003 and November 2004. Attention was apparently drawn to it from time to time by various officers of the Defendant company. In particular, I can illustrate the inaccuracy of the allegations by making these points, which emerge clearly from the evidence.

All that was ever "served" on the Claimant company was a letter before action. That letter was served upon them in accordance with German procedure. No proceedings have ever been brought against the Claimant company in respect of any of the alleged infringements in Germany, whether by the First Defendant or by any individual or associated company. That was true in February 2003 and it remains true today.

It is also untrue to suggest that any evidence was supported in any sense by a German Court. There was never, it must follow, any Court order for the Claimant to obey or disobey. Nor did the Claimant behave in any way at all in violation of a Court order. Obviously, in the light of the brief summary of the facts I have just given, that simply could not be true. Likewise, it cannot be true to say that Creative Resins failed or refused to respond to an order of the German Court.

As the evidence makes clear, all that happened was that, confronted with a legal document in a foreign language, Mr Sumner of the Claimant company did agree, as he put it at the time in a letter:-

It is important to emphasise that Mr Sumner has never admitted that there was anything in the claims put forward in that letter. He said at the time that his removal of the products was without prejudice to his legal rights, and there is no reason to suppose that his position is any weaker today than it was then in terms of his legal rights. There has never been a claim and, therefore, never any finding of any kind which would go to support the defamatory allegations which I have read out.

The Third Defendant put in a Defence in these proceedings in which he relied upon qualified privilege. There was no defence of justification, nor, in the light of what I have said, could there possibly have been one. The plea of qualified privilege is based on a number of subparagraphs which are pleaded, which I need not read out. It is perhaps fair to say that the nub of the basis of the plea is to be found in paragraph 6.9 in these terms:-

I see no basis for publication on the widespread scale which took place which could fall within any doctrine of qualified privilege. There was no duty and no legitimate interest which would justify publishing these words on that scale.

In any event, the Claimant has sought to meet the plea with an allegation of malice. If, contrary to my ruling, there was an occasion of qualified privilege, I have no doubt that it would be defeated by malice, because the evidence discloses quite clearly, as I have already said, that the allegations contained in the publication were totally false. It is inconceivable that the Third Defendant was unaware of the falsity and the publication of those words, therefore, took place cynically and dishonestly.

There has been no attempt to make amends or to apologise for that publication, notwithstanding the change of heart at the last minute on the part of the First Defendant. In those circumstances, there being a defamatory publication on a wide scale, over a considerable period of time, to which there is no defence, the Claimant is entitled to damages.

It must be said straightaway that the damages must be confined to publication within this jurisdiction and I must bear in mind, as Mr Rushbrooke has readily acknowledged, that the only Claimant in these proceedings is a corporate entity. Therefore, there are no injured feelings to be compensated. There is no claim for punitive damages and there is no claim for special damages either. Accordingly, the exercise upon which I am embarked is purely that of fixing proportionate and fair general damages for a corporate entity in the light of this publication.

The important purpose of libel damages in that limited context is to compensate for injured reputation and, in particular, to vindicate the reputation of the Claimant company. That is to say, to make clear to any interested onlookers that the defamatory allegations were without foundation. Malice is not, in my judgment, directly relevant to this exercise because, as I have already said and as is obvious, the corporate entity does not have feelings to hurt and, therefore, considerations of aggravation which might be relevant in a malice context where the Claimant was an individual do not apply. Nevertheless, because the allegation has been repeated over a considerable period of time, because it has never been withdrawn and because from time to time it has been drawn to the attention of people in the glass industry, who, like any other human beings, may be inclined to say "There is no smoke without fire", I have to bear in mind those considerations when going about the task of vindicating the Claimant.

The damages should clearly not be nominal for this purpose, but I bear in mind, as was said many years ago in the House of Lords, that a company can only be hit in its pocket. There is no evidence of actual financial loss, although one can readily infer that people may well have been put off entering into commercial transactions with this Claimant as a result of the publication.

Mr Rushbrooke has reminded me also that it is not appropriate for me to discount damages for the purpose of vindicating the Claimant by reason only of the fact that I am giving now what is a reasoned judgment, justifying the Claimant's success on liability. I should approach damages in the same way as would a jury giving simply a verdict without a reasoned judgment. It is an artificial exercise. The important point is to make it clear that the Claimant is entitled to vindication. The damages are inevitably modest, compared to the gravity of the allegations, for the reason that I am concerned solely with a corporate entity.

In all the circumstances, it seems to me to be right to award the sum of £15,000 by way of general damages, and that ought to leave no doubt in the minds of anyone who has read the article in question that the allegations are demonstrably false and that the Claimant has fought determinedly, and with justification for so doing, to vindicate its reputation and it is so entitled.

There was a defect in the manufacturing process used by the Claimant which caused the laminate to crack after a period of time;

The First Defendant and/or its parent company had had to obtain an injunction against the Claimant on a previous occasion in Germany arising from an infringement of the First Defendant's intellectual property rights and therefore the Claimant had a history of infringing activity.