Pell v Express Newspapers

It is necessary to preface this judgment with what I fear will be a lengthy recital of the facts of the case in order to make sense of the arguments which arise on the applications before the court.

Before doing so, however, I should explain what these applications are. The first in time is an application by the Defendant, Express Newspapers (“EN”) for summary judgment and/or to strike out the Particulars of Claim or for a stay. The second application is made by the Claimant, Mr Benjamin Pell (“BP”) for permission to amend the Particulars of Claim. Since the Amended Particulars of Claim supersede the original Particulars of Claim which are the subject of EN’s application, it follows that EN’s application is largely, but by no means entirely, academic.

Mr Justin Rushbrooke, who has relatively recently been instructed on behalf of BP, has provided me with a clear and comprehensive recital of the somewhat complex background facts and I acknowledge my debt of gratitude to him for his industry. My summary of the facts is largely based on the facts relied on in the Amended Particulars. I will of course supplement that summary with the additional facts and comments of Mr Andrew Caldecott QC who appears on behalf of EN.

BP describes himself as a law reporter and legal researcher. EN publishes the Sunday Express.

Some years ago in 1999 BP was prevailed on by men named Jones and Mappin to pay them a substantial sum to appear in a film. Jones was the cameraman and Mappin was present during the filming. The film was not intended to be a factually accurate documentary, nor was it meant for broadcast or for public consumption. On the film BP made various claims suggesting that he had obtained from the dustbins of the chambers of counsel to the Inquiry documents naming some of the soldiers due to give testimony to the so-called “Bloody Sunday” Inquiry. BP made clear on the film footage that he would not sell the names of the soldiers to a newspaper, still less, by implication, to terrorists, because that would be “too scary”.

BP subsequently brought proceedings against Mappin and his company claiming damages for deceit or alternatively misrepresentation in the sum of £77,000 odd, that being the sum which BP had paid to be filmed. The hearing of that claim came, as it turned out, before me in March 2002. Mappin served a witness statement for use at that trial which, as he accepted in a supplemental witness statement, gave a false account of events.

It is BP’s case, which is largely undisputed by EN at this interim stage, that Mappin, together with Jones, hatched a plan to discredit BP in the hope that he would be induced to abandon his claim against Mappin and his company.

The plan was as follows: Mappin enlisted the services of a freelance journalist called Kevin Cahill to assist in giving the maximum possible publicity to a story to the effect that BP had supplied to Irish Republican terrorists a secret list of names and addresses of British paratroopers due to give testimony to the “Bloody Sunday” Inquiry. The story was to include the assertion that BP had stolen the list from the wastepaper bins of the chambers of counsel to the Inquiry. The only basis for this story was the film footage taken by Jones in the presence of Mappin to which I have referred. In truth BP never had a list of soldiers’ names. Moreover the filming had taken place over two years earlier. There was no story of any real journalistic value.

The plan was implemented in the following way: Cahill agreed to feed the story to an MP with an interest in the Bloody Sunday Inquiry who would be asked to make a statement, including the serious allegations against BP, under the protection of Parliamentary privilege. This would enable the press to publish a report of what the MP had said with the protection of qualified privilege. Neither Cahill nor anyone else saw fit to mention to the MP the highly material fact that Mappin was being sued by BP for fraud and that the trial of that action was imminent. Cahill further agreed to place the story with a friend of his named Mark Watts, who was then a journalist working for the Sunday Express. Watts was content to oblige by writing the story.

In accordance with the plan that BP asserts, Cahill sent an e-mail to the chosen MP on 6 February 2002. Cahill told the MP:

“The story is simple. The people who made the Benjie Binman movie say that he has documents retrieved from the bins of the MoD barristers, listing the names and addresses of the soldiers due to give testimony to Saville. Benjie did not give them the documents, but showed them during filming and said what they were to camera. The only way the filmmakers could see to get the story out was under Parliamentary privilege, hence their approach to me.

…

Talk with you some time tomorrow when the material has arrived. Be glad if you’d keep this very close to the chest until Sat/Sun.”

Meanwhile Watts set about compiling an article for publication in the Sunday Express. He was told, prior to publication, by Mappin and Jones that they had not seen any list of the names of soldiers of the kind referred to by BP. Moreover Watts had no evidence that BP had supplied or would supply such a list to terrorists. Watts made reference in the article to an MoD investigation into the “leak” but did not mention the fact that it was Jones who had instigated that investigation. It would appear that Jones had done that in order to enable Watts to mention the investigation in the article which he was preparing for publication.

Meanwhile on 15 February 2002 Mappin’s then solicitors wrote to BP’s solicitors threatening a wasted costs order against him in the deceit action on the footing that he had no reasonably credible evidence to establish a prima facie case of fraud.

At about 11.50am on 16 February 2002, the day before the publication of the first Sunday Express article complained of in the subsequent libel proceedings, Watts approached BP as he came out of his synagogue after attending morning service. In the hearing of a number of fellow congregants of BP, Watts asked BP if he had sold the list to anybody. He told BP that it would be very serious if the list had “found its way to the Real IRA or whoever”. Mr Rushbrooke described this as an “ambush” of BP by Watts.

On 17 February 2002 EN published the first article written by Watts which was the subject of complaint in the libel proceedings. It was headlined:

“This grubby snooper found the names of Bloody Sunday Paras in a lawyer’s dustbin. Now the IRA know just who they are…”

The second article complained of appeared the following Sunday 24 February 2002. It was also written by Watts. Its headline was:

“Dustbin snooper with the names of Bloody Sunday Paras is facing MI5 probe”

It is unnecessary for the purposes of this judgment for me to quote the articles in full.

BP complained about the two articles. His solicitors’ letter to the Editor dated 28 February 2002 asserted:

“The sources of the film footage and the articles were John Mappin and Iain Jones, who shot and supplied the alleged ‘documentary’; Mappin is being sued by our client for the return of £77,500 paid to Mappin in reliance on a fraudulent misrepresentation and the trial is due to start on 11 March 2002. It is to be inferred that the dominant purpose of…Mappin and Jones, of which Watts was aware, behind the publication of the articles, is an attempt to place undue pressure on our client to discontinue and/or settle that action.”

Proceedings claiming damages for libel and slander were commenced by BP against EN and Watts on 18 July 2002. The two defendants had previously made unqualified offers of amends pursuant to section 2 of the Defamation Act 1996 which were rejected by BP.

BP’s Particulars of Claim included detailed particulars in support of his claim for aggravated damages. It was alleged in those particulars that the failure of EN and Watts to obtain BP’s response to the story was reckless because the sources for the allegations were Mappin and Jones who, to the knowledge of EN and Watts, had a clear axes to grind by reason of the imminence of the trial of BP’s claim for damages against them. BP’s case was that the object was to put improper pressure on BP to discontinue or settle his action.

Neither EN nor Watts relied on any substantive defence to BP’s libel claim. They relied solely on the offer of amends which had been made. In his Reply BP alleged that both defendants “knew or had reason to believe” that the material complained of was both false and defamatory of BP within the meaning of section 4(2) of Defamation Act, 1996. That allegation, if proved, would have disentitled the defendants from reliance on the offer of amends. BP’s case is that Watts was aware that Mappin and Jones were the sources for the EN articles and that they had a plain and obvious reason for smearing BP in the press so as to put him under pressure to discontinue or settle his action for damages for deceit.

BP’s pleaded case is that it was in the interests of both EN and Watts to suppress the fact that it was Mappin, with Jones’s assistance, who was the instigator of the Sunday Express articles through the instrument of Cahill. He alleges that EN and Watts sought instead to portray the articles as being the product of Watts’s own independent journalistic researches. BP’s case is that EN, through Watts, embarked on a course of conduct designed to deceive both BP and the Court.

The Defence of EN and Watts, served on 11 December 2002 and endorsed with statements of truth by both Mr Walford of the Legal Department of EN and by Watts, contained the following denials:

EN and Watts served their first list of documents on 29 January 2003 and disclosed further documents at the time of exchange of witness statements in April 2003. Redactions were made to certain of the disclosed documents in order, so BP alleges, to conceal from him and from the Court the following facts:

BP contends that the redactions were made in order to conceal the real genesis of the articles and the role of Cahill as the instrument of Mappin’s plan. It is further BP’s case that Watts’s claim that the articles were the product of his own independent journalistic researches was false and dishonest. BP alleges that Watts prevailed on Cahill to sign a witness statement in which he knowingly made false statements designed to corroborate Watts’s case that he (Cahill) had no involvement in the preparation of or supply of information for the first Sunday Express article.

Solicitors acting on the instructions of EN and Watts asserted in a letter dated 3 March 2003 that their clients did not accept that Watts had been present outside the synagogue at 11.29am on 16 February 2002 and that the calls made at 11:29 am that day did not relate to the articles complained of. In his witness statement Watts claimed that he reached the Sunday Express office soon after 11am on 16 February 2002 and from there made two brief calls at 11:29am. He said that he had not been able to determine to whom the first call was made; he recollected that the call was returning a “missed call” on his mobile. He said that he had now realised that the second call had been made to Bell, the photographer, and he thought he made that call to ask him whether his pictures were with the picture desk yet.

BP contended that each of these statements was false and dishonest. So too was the reason given by Watts for his admitted use of a phone box, namely that his mobile phone battery was “down”. BP’s case was that the true reason for using a phone box was to ensure that there would be no record of his calls. Mr James Murray, News Editor of the Sunday Express, made a witness statement corroborating Watts’s story. He stated that Watts had arrived at the office on 16 February 2002 somewhere between 11 and 11:30 am. According to BP, this statement was also false.

Shortly before the date when the trial of BP’s libel claim was due to start (7 July 2003), BP applied (i) for permission to re-amend his Particulars of Claim to include a claim for exemplary damages and (ii) for an order for inspection of the redacted parts of the documents disclosed by EN and Watts pursuant to CPR Part 31.19(5), namely an Orange telephone bill; the emails dated 6 and 8 February 2002 and other documents listed in Schedule 2 to the Defendants’ first List of Documents.

EN and Watts opposed both applications. They relied on a statement made on 26 June 2003 by their solicitor who stated that she had been informed by Watts of the importance of protecting his confidential sources as a journalist and that this was the reason why he wanted the redactions to stand. She further said that Watts had told her that he did not recognise either of the numbers dialled at 11:29 am on 16 February 2002 but was concerned that either or both of those numbers belonged to confidential sources. The Orange telephone bill was redacted for the same reason.

Watts made a supplemental witness statement in which he said he had rung the number of the first telephone call made at 11:29 am shown on his Orange telephone bill several times but that no-one had answered and the calls had not been diverted to voice mail. Watts said he remained concerned that the number might be that of a confidential source. BP’s case is that Watts knew that it was Cahill’s number which he had called on both 6 and 16 February 2002 and that calls to Cahill’s number did divert to voice mail if not answered. Watts had no reason to be concerned that Cahill’s number might be the number of a confidential source and there was no reason to make redactions to the Orange telephone bill.

The case advanced on behalf of BP at the hearing before Eady J of his applications for permission to amend to claim exemplary damages and for specific disclosure was that neither Cahill nor Jones was a confidential source. Accordingly none of the redactions should have been made. BP contended that the redactions were improperly made in order to avoid EN and Watts having to admit that it was Mappin and Jones, through the instrument of Cahill, who had supplied the film clip to Watts. Any such admission would have seriously compromised the defence of EN and Watts to the libel claim.

The hearing of BP’s applications commenced on 27 June 2003 and lasted three days. On 1 July 2003 Eady J refused the application for specific disclosure on the ground that he was satisfied that there were no circumstances which would justify him going behind the assurances given by EN and Watts through leading counsel and his instructing solicitor. Eady J declined to proceed on the basis they had not conscientiously applied the appropriate principles.

On the same day Eady J gave judgment refusing the application of BP to add a claim for exemplary damages. After a detailed review of the issues raised in the existing pleadings, the judge questioned why the application had not been made at an earlier stage of the proceedings. Eady J did not, however, regard delay as being ultimately critical to his decision. After referring to the doubt expressed by the House of Lords in Kuddus v The Chief Constable of Leicestershire [2002] 2 AC 122 as to the continued availability of awards of exemplary damages against an employer on the basis of vicarious liability, the judge posed the question why it was necessary or proportionate, four or five days before trial, to add a claim for exemplary damages. Having considered a number of other authorities, Eady J concluded that justice could be done between the parties without the need to introduce what he described as a last-minute and difficult claim for exemplary damages.

In relation to the costs of preparing the application for specific disclosure, Eady J directed costs in the case. However, he ordered that the costs of the hearing of the disclosure application were to be paid by BP to EN and Watts in any event. Eady J ordered BP to pay the costs of the unsuccessful application to re-amend to claim exemplary damages.

On 3 July 2003, shortly after the conclusion of the hearing of the applications before Eady J, BP learned for the first time that both of the calls made at 11.29am on 16 February 2002 had been made from a location near Brent Street, London NW4, which is close to BP’s synagogue. BP through his solicitors forwarded this information to the solicitors acting for EN and Watts.

On the same day BP accepted a Part 36 offer by EN and Watts to pay £125,000 by way of damages together with his legal costs (excluding the costs orders made by Eady J on 1 July 2003 referred to at paragraph 31 above).

On 4 March 2004 BP through his solicitors told the solicitors acting for EN and Watts of certain additional information which had been obtained in mid July 2003 and late 2003, namely

Despite his discovery of the matters referred to in paragraph 35 above, BP did not make (and has not since made) any attempt to set aside the settlement arising from his acceptance of the Part 36 offer. Instead he applied to the Court of Appeal on 30 June 2004 for permission to appeal out of time against the order made by Eady J on 1 July 2003. The relief sought on behalf of BP at this stage was confined to seeking a variation of the costs orders made in relation to the issues of exemplary damages and specific disclosure. BP made no application to add a claim for damage for distress or for any other financial relief; nor was there any application for permission to reinstate the claim for exemplary damages.

At the hearing of BP’s application on 8 October 2004 Mr Geoffrey Shaw QC, then appearing for EN and Watts, accepted that the telephone number called by Watts at 11.29am on 16 February 2002 should not have been redacted. Mr Shaw maintained his clients’ entitlement to confidentiality in relation to the sources of the articles complained of.

Giving judgment on 28 January 2005 refusing permission to appeal, Rix LJ observed:

“What is particularly extraordinary about this case is that Mr Pell’s application involves this revisiting of the entrails of a settled action not in order to set aside the settlement as having been procured by fraud, but merely to reverse an interlocutory costs order”.

The Court of Appeal did not accept that BP had shown a real prospect of success on appeal. Rix LJ said that, if BP considered that he had been defrauded by Watts or EN, then he would be able to start a fresh action on the ground of such fraud. Rix LJ further indicated that BP should be required to proceed by way of fresh action and not by way of appeal because, amongst other things, the fraud alleged by him was hotly disputed and the appeal process would be an unsatisfactory basis for the analysis of an untried allegation of fraud. The Court of Appeal directed that BP pay to EN and Watts the sum of £35,000 on account of costs. BP agreed to an order in these terms.

Despite the observations of Rix LJ, BP still did not commence an action for fraud. Instead, after a lengthy interval which may be explicable in part at least by BP’s “dire financial straits”, an application was made on his behalf pursuant to CPR 52.17 to reopen his appeal against the costs order made by Eady J.

By the time of the second application to the Court of Appeal BP was represented by new leading counsel, Mr Mark Warby QC. The application was confined to the specific disclosure application. It was not said on behalf of BP that the disclosure made was dishonest but rather that it was “wrong in crucial respects”.

The application failed. Refusing permission on paper on 6 November 2006 Rix LJ referred to the “fundamental shift of ground” in the application, which was no longer based on fraud but rather on the defendants’ solicitors’ error in claiming privilege from disclosure on the footing that there were confidential sources whose identities required to be withheld. Rix LJ said that the error of non-disclosure had nowhere near the significance for the case which it was now alleged to have. He added that the consequences for BP in terms of costs had been significantly overstated. Rix LJ concluded that the parties must not after settlement be encouraged to enter on a new round of litigation on the basis that detective work might establish that some error had occurred, although it might be different where the settlement was procured by fraud and its continued validity was challenged; but that residual jurisdiction was not in play.

EN and Watts were not provided with copies of the skeleton argument submitted to the Court of Appeal on behalf of BP in support of BP’s unsuccessful application for permission to appeal until 9 October 2008, shortly before the present hearing. Paragraph 25.5 of the Practice Direction to CPR Part 52 requires that “A copy of the application for permission must not be served on any other party to the original appeal unless the Court so directs”.

The claim form in the present action issued on 21 December 2007 sought an order setting aside the orders made by Eady J on 1 July 2003 on the ground that they had been obtained by fraudulent misrepresentation. The claim was brought against EN only and not against Watts. The particulars of claim, served on 31 January 2008, gave details of the fraud allegedly committed by EN and their misleading of the court. Since those particulars have been overtaken by subsequent events, it is not necessary to dwell on them save to say that fraud was alleged not only against Watts and EN but also against their solicitors and leading counsel in making improper redactions to disclosed documents. The special damage alleged consisted in BP’s costs of the June/July 2003 application to Eady J and the two applications to the Court of Appeal.

EN through solicitors notified BP’s solicitors that an application would be served to strike out the Particulars of Claim or for summary judgment.

Five days before that application was due to be heard, Amended Particulars of Claim were served on behalf of BP. They were settled by fresh counsel, namely Mr Rushbrooke.

The new case advanced in the greatly expanded Amended Particulars of Claim can be summarised as follows: it is contended that EN is vicariously liable for Watts’ deception of BP and the Court in the original libel action in relation to the following matters:

As to the relief claimed in the amended particulars, a new claim for general damages, including damages for mental distress and anxiety, is introduced. A claim for exemplary damages is added in reliance on “the totality of the misconduct pleaded above.”

As indicated at the outset of this judgment, the questions which arise for decision are

In these circumstances the approach to the applications which it is convenient for me to adopt is to consider first whether and, if so, to what extent BP’s claim for damages for fraud has a real prospect of success at trial or, in the alternative, whether there is some compelling reason why the claim should be disposed of at a trial: see CPR Part 24.2(b).

Mr Rushbrooke rightly reminds me of the well-known principles which govern applications for leave to amend, namely:

So far as any prejudice is concerned, Mr Rushbrooke suggests that it is limited to the relatively modest sum in costs which could be said to have been thrown away as a result of the adjournment of the last hearing.

To the extent that EN is seeking summary judgment pursuant to Part 24, Mr Rushbrooke relies on Three Rivers DC v Bank of England (No 3) [2003] 2 AC 1 and in particular on the speech of Lord Hope of Craighead (with whom the majority agreed) at paragraphs 94-100. Lord Hope there warned of the undesirability of embarking on prolonged and serious arguments on applications under Part 24 and the risk of pre-judging a case before the evidence has been heard.

Mr Rushbrooke also reminded me of a number of recent authorities where the court either declined to strike out claims for exemplary damages or allowed belated applications to add such claims: see Douglas and ors v Hello Magazine [2003] EMLR 29; Port v MGN [2003] EWHC 1378; Kuddus (op cit) and Stallwood v Smith (Tugendhat J, 1.7.03, unreported).

Mr Rushbrooke emphasises the significance of the conduct of Watts in relation to the first telephone call on 16 February 2002 (see paragraph 21 above). He says that the concealment of the fact that this call was made to Cahill unlocks many other lies on the part of Watts for whose conduct EN are vicariously liable. He contends that the claim to be entitled to redact the telephone bill was illegitimate and was made dishonestly by Watts and the claim that Mappin and Jones were confidential sources is misconceived: see Interbrew SA v. Financial Times and others [2002] 1 Lloyds Rep 542 at paragraph 36.

Mr Rushbrooke contends that, if Eady J had known the true position at the time of the application made to him for permission to amend to plead a claim for exemplary damages, he would not have refused to allow the amendment, late though it was. The gravity of the Defendants’ conduct should not be minimised: see Douglas and others v Hello and others [2003] EMLR 601 at paragraph 94. Mr Rushbrooke further submits that it is clear that both the Defence and the witness statements served on behalf of the Defendants contained numerous false denials, which inevitably had the effect of deterring BP from applying at an earlier stage to plead his claim for exemplary damages.

In relation to BP’s claim to be entitled to recover costs he incurred on his application to the Court of Appeal for permission to appeal, Mr Rushbrooke invites the court to bear in mind what he described as the obfuscation in which EN and Watts engaged in the period leading up to the launching of the application. If one adopts the approach to the assessment of damages in actions for deceit which has been approved by the House of Lords in Smith New Court Securities v Scrimgeour Vickers [1997] AC 254, it is at least arguable that the costs of the application to the Court of Appeal are recoverable. No-one will be permitted by any court to keep an advantage obtained by fraud: Lazarus Estates Limited v Beasley [1956] 1 QB 702 per Lord Denning at 713. It was proportionate, pragmatic and reasonable for BP to apply to the Court of Appeal rather than bring a fresh action: see Couwenbergh v Valkova [2004] EWCA Civ 676 at paragraphs 38 and 47.

Mr Rushbrooke contends that aggravated and exemplary damages are available in actions for deceit: see McGregor on Damages at paragraphs 41-037 and 038 and Kuddus v. Chief Constable of Leicestershire [2002] 2 AC 122. By parity of reasoning such damages should be recoverable also in an action to set aside an order on the grounds that it was obtained by fraud.

As to EN’s contentions that the action should be stayed either on the ground that BP is bound by his election to abandon any claim in fraud or on the alternative ground that BP’s action amounts to an abuse of process, Mr Rushbrooke submits, firstly, that BP’s application to the Court of Appeal pursuant to CPR 52.17 does not amount to an abandonment of his claim in fraud. No concession to that effect can or should be read into the submissions of Mr Warby QC (see paragraph 41 above). Nor can BP’s action be characterised as an abuse of process: see Koshy v DEG-Deutsche Investitions-unt-Entwicklungsgesellschaft MBH and another [2008] EWCA Civ 27 at paragraphs 55, 56 and 59; Johnson v Gore-Wood [2002] 1 AC 1 at 31 and Stuart v Goldberg Linde and ors [2008] 1 WLR 823. BP’s right of access to the court under Article 6 of the ECHR should not be violated.

Mr Caldecott accepts, in the light of Three Rivers, that the test to be applied on an application to amend a statement of case is whether the pleaded case is “properly arguable”. He submits, however, that special considerations arise where claims are brought in deceit or for misrepresentation: see The Ampthill Peerage Case [1977] AC 547 at 571; Three Rivers at paragraphs 51-52 and CPR 16.4.1 and 16 PD 8.2(1). It is incumbent on a claimant to show facts which show the reasonable probability of fraud before an entitlement to disclosure from the opposite party can arise: see Ampthill Peerage at 591 per Lord Simon.

In relation to the e-mail redactions, Mr Caldecott contends that BP’s claim is hopeless and based on a fundamental misunderstanding of how section 10 of the Contempt of Court Act, 1981 operates. He points out that no application was made to the court on behalf of BP to compel disclosure of the redacted passages and, if such an application had been made, it would have failed. There is no basis for a finding that the redactions to the e-mails were made dishonestly.

As to the redactions to the Orange telephone bill, Mr Caldecott submits that the significance of the telephone bill has been exaggerated not least in light of the fact that Watts admitted that he spoke to Cahill on 6 February 2002. Moreover Mr Shaw QC accepted on behalf of EN and Watts in October 2004 that neither call to Cahill should have been redacted.

The position of EN in relation to the telephone bill is that, whilst there may be a triable issue in relation to it, this part of BP’s claim should nevertheless be stayed pursuant to CPR 3.1(2)(f). Any damages recoverable by BP in respect of his application for specific disclosure will clearly be less than the sums owing to EN pursuant to the costs order made by the Court of Appeal (see paragraph 39 above) and those costs would fall to be set off against any damages that BP might recover. On behalf of EN Mr Caldecott offered an undertaking not to enforce the existing costs order in their favour.

Various reasons are adduced in support of EN’s contention that this part of BP’s claim should be stayed, including the fact that the dishonesty in relation to the telephone bill is alleged against Watts who is not a party to this action; the fact that it was formerly accepted on behalf of BP that the telephone redaction was an error and not dishonest, whereas now fraud is alleged against EN and Watts (but no longer against the Defendants’ legal advisers) and finally the fact that BP has already achieved vindication and substantial damages by virtue of the settlement of his claim.

BP’s claim for exemplary damages is said by Mr Caldecott to be misconceived. The reasons given by Eady J for disallowing BP’s application for permission to amend to plead exemplary damages had nothing to do with any dishonesty or impropriety on the part of EN or Watts.

As to BP’s claim to be entitled to recover from EN the costs which BP was ordered by the Court of Appeal to pay to EN in relation to BP’s failed application for permission to appeal, EN’s case is that this part of BP’s claim is an abuse of process. Mr Caldecott points out, firstly, that BP agreed to the specific order made by the Court of Appeal that he should pay £35,000 on account of EN’s costs. There is no basis upon which it would be open to a first instance judge to disapply a costs order made by the Court of Appeal in relation to a hearing before it.

Even if BP can show that his reformulated claim is, in whole or in part, properly arguable, Mr Caldecott contends that BP, having elected to apply to the Court of Appeal under CPR 57.12 and having abandoned any claim in fraud, it is not now open to him to adopt the inconsistent course of action of bringing an action for damages for deceit: see The Kanchenjunga [1990] 1 Lloyds Rep 391 per Lord Goff at 397-9. If his argument on election fails Mr Caldecott adopts as a fall-back position the contention that BP’s reformulated claim amounts to an abuse of the process.

Before I address the issues which arise on these applications, there are a number of comments which need to be made. Firstly, it is clear that BP took the greatest exception to the articles about him which were published in the Sunday Express. He was entirely justified in doing so: the libels upon him were as grave as they were offensive. The defamatory imputations were wholly unjustified. As I have described in paragraphs 7 to 11 above, the articles were published pursuant to a plan to discredit BP for the improper purpose of inducing him to abandon the claim for damages which was shortly to be heard in BP’s action against Mappin. The participants in the implementation of that plan included Watts, who at that time worked regularly as a journalist for EN. He no longer works for EN and he was not represented at the hearing before me. It appears to me to be beyond argument that he went to considerable lengths to conceal his own discreditable conduct.

There was no substantive defence available to EN (or to Watts), as is evident from the fact that an offer of amends was made by them to BP. That meant that, in order to prevent EN taking advantage of their offer of amends, BP had to prove that EN, whether through Watts or otherwise, knew or had reason to believe that the articles were both false and defamatory of him. This provided Watts with the opportunity to engage in the various deceptions to which I have referred at paragraph 19 onwards of this judgment. The enormous costs involved in this litigation must have been and continue to be the source of great anxiety for an individual in the position of BP.

It is important, however, not to lose sight of the fact that as long ago as July 2003 BP agreed to accept a substantial sum in damages offered to him by EN. True it is that BP was ordered by Eady J to pay a significant portion of the costs of the hearing before him just before the settlement was arrived at. I note, however, that BP has still not paid the £35,000 which he was ordered to pay to EN on account of costs incurred in the Court of Appeal in connection with the hearing on 8 October 2004..

It is, to say the least, regrettable that the parties should find themselves still engaged in this litigation nearly seven years after the publication of the Sunday Express articles and more than five years after BP’s libel claims were settled. Over that period substantial further costs have been incurred. The hearing of the present applications before me took three full days.

After that preamble I return to the issues which have to be decided on these applications. It is convenient to take first the application by BP for permission to amend his particulars of claim. The amendments came very late in the day but Mr Caldecott, in my view rightly, does not suggest that as a reason for disallowing them.

There is little dispute between the parties as to the principles governing applications for permission to amend. I shall take as the overall test whether the claims now sought to be made are properly arguable. That test has to be applied of course individually to the various heads of claim.

I start with the claim in relation to the redactions made to emails sent by Cahill to the MP on 6 and 8 February. The redactions to the former email were made, according to EN’s case, to conceal the identities of the sources for the Sunday Express articles, who, as EN accept, clearly appear to have been Mappin and Jones.

It appears to me that the question whether this part of BP’s claim is properly arguable depends on whether Mr Rushbrooke is right when he says that it is at least arguable that Mappin and Jones could not properly be treated as confidential sources for the Sunday Express articles. The evidence is that the redactions were made by the solicitors for EN and Watts in conjunction with junior counsel. Moreover the solicitors clearly indicated to BP’s solicitors in correspondence that they were not asserting that Mappin and Jones were not confidential sources and that BP must not assume this to be the case. It was the evidence of Watts that he made a promise of confidentiality to the person who supplied the tape.

Section 10 of the Contempt of Court Act 1981 is in the following terms:

“No court may require a person to disclose, nor is any person guilty of contempt of court for refusing to disclose, the source of information contained in a publication for which he is responsible unless it is established to the satisfaction of the court that it is necessary in the interests of justice or national security or for the prevention of disorder or crime.”

I was referred by Mr Caldecott to a large number of authorities as to the proper construction of Section 10. It is not necessary for me to refer to all of them in this judgment. It will suffice if I summarise the principles derived from Ashworth Hospital Authority v MGN Limited [2002] 1WLR 2033, which are these:

The facts relied on by Mr Rushbrooke in support of his contention that EN was not entitled to redact the identities of the sources are these: Watts never claimed journalistic confidentiality in respect of the information contained in the film footage or comments made by Mappin and Jones. EN and Watts had already disclosed that the source for the Sunday Express articles was the film footage depicting BP speaking and acting as reported. Insofar as the film-makers were “sources” of this information, it was qua makers of the film and not as suppliers of a copy of it to Watts. The identity of the person(s) who supplied the film footage to Watts was plainly not “information contained in a publication for which [Watts] was responsible” so as to entitle EN and Watts to keep it confidential. Accordingly it is submitted that the attempt to evoke Section 10 was improper, misconceived and utterly unjustifiable.

I am not persuaded that it is arguable that the facts on which BP relies constitute, whether individually or collectively, a valid reason why Mappin and Jones should not be treated as confidential sources within the meaning of Section 10. The evidence is that a source provided the tape to Watts and that the source was promised that his identity would be kept confidential. Some of the information in the Sunday Express articles is accepted to have derived from the tape. I accept that it was widely known that Mappin and Jones were the film-makers. That does not appear to me to be a good reason for requiring disclosure of the identity of the person who provided the tape to Watts, who might or might not have been Mappin or Jones. As I have pointed out, EN’s solicitors made clear to BP’s solicitors in correspondence that the source might be Mappin and/or Jones.

There is no requirement on a publisher who wishes to invoke Section 10 to establish his good faith; nor is there any allegation by BP of bad faith in this regard. Given that the redactions were made, as I have said, by EN’s solicitors in conjunction with junior counsel and the further fact that the claim to confidentiality under Section 10 was repeated in court by Leading Counsel for EN, it would be highly unlikely that bad faith on the part of EN could be established. I did not understand Mr Rushbrooke to be persisting in the argument advanced on behalf of BP in the Court of Appeal that Section 10 cannot be invoked where the Claimant knows the identity of the journalist’s informant. That argument appears to me to be misconceived.

For the above reasons I would refuse the application for permission to amend the Particulars of Claim to include the allegation that the redactions to the emails were, even arguably, improper. Still less is it arguable in my judgment that EN’s reliance on Section 10 was a dishonest sham on its part designed to hide the true agenda of Mappin and Jones. From this conclusion it must follow that permission to amend this part of BP’s claim must be refused.

I will return later to the question whether permission to amend should be granted to allege that the redactions made to the Orange phone bill were improperly made. As I have said, Mr Caldecott conceded that this part of the claim was arguable.

As I have described at paragraph 30 above, Eady J on 1 July 2003 refused the application of BP to add a claim for exemplary damages. The judge questioned at paragraph 35 of his judgment “why, if it was possible to plead the reply with its allegation of bad faith as long ago as 23 December 2002, it was not equally possible to enter the plea for exemplary damages”. He rejected the contention on behalf of BP that EN’s advisers had acted in bad faith. Having posed the question at paragraph 42 of his judgment whether it was necessary or proportionate, especially four or five days before the fixed trial date, to saddle the parties with a visit to the House of Lords which might otherwise easily be avoided, Eady J concluded at paragraph 49:

“I am quite satisfied that justice can be done between the parties without the need to introduce this last-minute and difficult claim, purely in the hope of adding what [counsel for BP] described, in her submissions yesterday, as ‘a bit on top’. In particular, if Mr Pell is right about the meaning of the articles and of the slander, there is no reason to suppose that the award or awards of compensatory damages would be inadequate to punish the Defendants. That is the whole purpose of introducing the proposed paragraph 13, and the premise on which it is based.”

The question which I have to decide is whether, if Eady J had been aware at the time of the hearing in July 2003 of the matters which are now relied on in support of the claim in deceit, he would still have refused leave to BP to amend to plead a claim for exemplary damages.

In answering that question it is in my opinion necessary to bear in mind the position which had been arrived at by the time the application for permission to amend came before Eady J in July 2003. The trial was imminent. There was already on the record a claim for aggravated damages which was based amongst other things on the allegation that the Defendants had been aware, at the time of the publication of the articles complained of, of the falsity of what was published and that the Defendants had been guilty of bad faith.

There were, as Eady J pointed out, several difficulties about the claim for exemplary damages, including doubts about the appropriateness of such an award against an employer on the basis that he was vicariously liable for the torts of his employees; see Kuddus (op cit). Furthermore the evidence of Watts was that he was not responsible for the headlines of the two articles complained of (see paragraph 14 above). If so, that gave rise to the difficulty that any award of exemplary damages had to be calculated by reference to the conduct of the least guilty defendant. Furthermore there was every reason to doubt that BP could have demonstrated, as it would have been incumbent on him to do in order to be entitled to exemplary damages, that an award of compensatory damages, including aggravated damages, would not have been a sufficient deterrent.

It is abundantly clear, not least from the terms of paragraphs 42 and 49 of his judgment, that the refusal of Eady J to permit the amendment was an exercise by the judge of his case management powers. That was the view taken by the Court of Appeal, when refusing on 28 January 2005 the application of BP to appeal the refusal of Eady J to allow the claim for exemplary damages to be added. Rix LJ said at paragraph 46 of the judgment:

“As for the judge’s decision not to allow the re-amendment to plead a case in exemplary damages, that decision, which was ultimately in the judge’s discretion as a matter of his case management on the eve of trial, was taken by him on a far wider basis than Mr Pell has sought even to dispute. The allegation of a dishonest conspiracy with respect to the film project action, which assumes on this application so dominant a role, was but part of a broader canvas before Eady J”.

In the light of that observation, it is difficult to see how it can be said that it was the deceit of EN or Watts which occasioned the loss to BP of the opportunity to make a claim for exemplary damages. No such claim was pursued on behalf of BP on the application subsequently made to the Court of Appeal pursuant to CPR 52.17.

I therefore decline to permit BP to advance the claim to be entitled to recover now from EN the costs incurred by him in relation to his successful application to plead exemplary damages.

The question which I next have to decide on this part of the case is whether it is properly arguable that BP is entitled to recover in his deceit action damages in the amount of the costs incurred by him on his unsuccessful application for permission to appeal. Mr Caldecott contends that such a claim is hopeless. Mr Rushbrooke concedes that this contention has “a superficial attraction”. In my judgment the attraction is not just superficial. Mr Rushbrooke suggests that it was “a proportionate, pragmatic and eminently reasonable (or at least an arguably reasonable) course for BP to take to go to the Court of Appeal”; again I disagree.

I accept the submission on behalf of EN that this part of BP’s claim is unarguable and an abuse of the process. The material background is that Eady J had rejected BP’s applications for permission to amend and for specific disclosure. BP had then decided to accept the Part 36 offer which had been made by the Defendants (see paragraph 35 above). The other material on which BP sought to rely on his application to the Court of Appeal, which was filed in June 2004, had been known to him as long ago as December 2003. The application failed (see paragraph 40 above) and BP agreed to pay to the Defendants £35,000 on account of their costs.

It appears to me to be clear that in those circumstances it is not open to BP to assert now that he is entitled to recover from EN the costs he incurred in making that unsuccessful application to the Court of Appeal or to recover from EN the sum of £35,000 which the Court of Appeal directed him to pay within 28 days. The Court of Appeal took the view that the application of BP was misconceived, since the course he ought to have taken was to apply to set aside the judgment as having been procured by fraud. The order for costs which the Court of Appeal determined was appropriate was that BP should bear the costs. It would not be open to me, sitting as a first instance judge, to disapply after the event a costs order made by an appellate court. Moreover BP agreed to the costs order made against him and he has made no application to the Court of Appeal for that order to be set aside. In those circumstances I am satisfied that this part of BP’s claim should not be permitted to go forward.

The facts which are material to EN’s application for a stay of these proceedings are these: following the refusal by the Court of Appeal of BP’s application for permission to appeal the orders made by Eady J and notwithstanding the clear indication given by Rix LJ that the appropriate course for BP to adopt, if he considered he had been defrauded by EN or Watts, was to start a fresh action for fraud (see paragraph 38 above), BP did not take that course. Rather he made application pursuant to CPR 52.17 inviting the Court of Appeal to reopen its previous determination of BP’s appeal on the ground that BP had no alternative effective remedy: see Taylor v Lawrence [2002] EWCA Civ 90.

The contention advanced on behalf of EN is that, by making that application to the Court of Appeal by notice dated 31 May 2006 (that is, 16 months after the earlier judgment of the Court of Appeal), BP abandoned reliance on the fraud previously alleged and elected instead to follow the alternative and inconsistent route of seeking to reopen the application for permission to appeal against the order made by Eady J. The alternative or fall-back position adopted on behalf of EN is that it would now be an abuse of process for BP to be held to be entitled to reopen the claim in fraud.

In order to adjudicate on those contentions it is first of all necessary to examine the sequence of events. The Court of Appeal decided on 28 January 2005 that BP had not established that his appeal against the orders made by Eady J in July 2003 had a real prospect of success and gave the indication to BP and his legal advisers which I have summarised above, namely that he should start a fresh action for fraud.

By May 2006 Mr Anthony Scrivener QC, who had previously represented BP, had been replaced by Mr Warby QC. The lengthy grounds in support of BP’s application under CPR 52.17 were drafted by Mr Warby and his junior, Mr John Samson. Those grounds included the following assertions:

In relation to the question whether BP is to be taken to have elected to abandon his case in fraud, it is instructive to look also at the reasons given in writing by Rix LJ for refusing BP’s application under CPR 52.17 (see paragraph 42 above). After referring to the fundamental shift of ground on the part of BP, Rix LJ said in his third paragraph:

“It is now submitted, however, that the Court of Appeal misled itself in refusing permission to appeal because it failed to understand that [BP’s] application was not based on the defendant’s fraud, or at any rate need not have been, but was or could have been based on their solicitors’ error in claiming privilege from disclosure on the ground of protection of confidential sources…”

Later in his fifth paragraph at (c) Rix LJ referred to BP’s allegations of fraudulent concealment being “currently abandoned”. Rix LJ then referred at (f) to the claim in fraud having been “dropped”. At the very end of his reasons Rix LJ said: “…nothing is any longer put on the basis of fraud”.

I cannot accept the submission of Mr Rushbrooke that Mr Warby’s skeleton argument does not amount to an unconditional abandonment of BP’s claim in fraud. I think that on a fair reading of Mr Warby’s written submissions they are consistent only with an abandonment for all time of any cause of action in fraud. I accept that there are certain passages, including those summarised at paragraph 94(4)(5) and (7) above, which, if taken alone, might convey to the reader that the right to institute the proceedings based on fraud was being reserved. But such phrases as “for present purposes” and “not now” are at best equivocal and, when read in conjunction with the other passages which I have quoted above, can only be read as meaning it was indeed impossible for BP to pursue a claim in fraud or deceit; that claim had (as Rix LJ put it) been “dropped” and dropped for all time.

The proposition that an applicant under CPR 52.17 can reserve his right to resurrect an alternative remedy for deployment at some unspecified future date appears to me to be untenable and inconsistent with the language used in CPR 52.17(1). It would not in my view be legitimate for BP to make such concessions as might be necessary to rescue his appeal and then to withdraw those concessions at a later stage.

I accept the submission of Mr Caldecott that, having abandoned his claim in fraud, BP elected in law to seek instead to appeal on the basis that the costs order made by Eady J had been obtained by error. BP through his legal advisers so elected in full knowledge of what he was doing and he cannot now pursue the alternative and inconsistent course of suing in fraud: see United Australia Limited v Barclays Bank [1941] AC 1 per Lord Atkin at 30; Scarf v Jardine [1882] 7 App Cas 354 per Lord Blackburn at 360 and Koshy [op cit] per Arden LJ at paragraph 38. As Lord Goff explained in The Kanchenunga [1990] 1 Lloyds Reorts 390 at 399, an election must be an informed choice, made with knowledge of the fact giving rise to the right. His election once made is final; it is not dependent on reliance on it by the other party.

My conclusion in relation to the stay issue is that, by applying to the Court of Appeal under CPR 52.17 and making the submissions to the Court of Appeal which are to be found in Mr Warby’s written argument, BP must be taken to have elected to abandon his claim in fraud and instead to seek again to obtain permission to appeal. That is clearly an election between two alternative courses of action which are inconsistent with one another. It is nothing to the point that the fact of the election was not communicated to EN, apparently through the choice of BP and his legal advisers, until long afterwards.

In consequence EN is entitled in my judgment to a stay of the claim in respect of the redactions made to the Orange telephone bill. I have already refused permission to make the other amendments sought by BP. I should make it clear that, if it had been necessary for me to do so, I would further have held by parity of reasoning that EN are also entitled to a stay of BP’s other claims as well.

Such being my conclusions in relation to EN’s application for a stay, it is, strictly speaking, unnecessary for me to deal with Mr Caldecott’s alternative fall-back argument that, even if BP did not abandon his fraud claim and elect instead to pursue and inconsistent course of action, his claim in respect of the redactions to the telephone bill (as well as his other claims) amounts to an abuse of the process and should be stayed on that ground.

Mr Rushbrooke relied strongly in this connection on the decision in Koshy (op cit) where the claimant’s fresh action based on fraud was held to be an abuse of process. What happened in Koshy was that, in the course of the hearing of his application to discharge certain costs orders made by the court below, the Court of Appeal gave counsel for the claimant the choice of continuing with his appeal on a limited basis or having his entire case relisted for trial in the Chancery Division. The claimant decided to proceed on the former basis. Thereafter he started an action in fraud to set aside the costs orders. That action was dismissed as being an abuse of the process. It was held by the Court of Appeal that the claimant had not abandoned his allegation of fraud and that in the circumstances he had not made a true choice between two inconsistent rights. It appears to me that the position in Koshy was materially different from that in the present case: see paragraphs 99 and 100 above.

In the circumstances I will confine myself to saying that I consider that it would be an abuse of process for BP now to be permitted to pursue any of his claims. As is clear from the judgment of Lord Bingham in Johnson v Gore Wood& Co (op cit), the factors which come into play on applications to stay actions as being an abuse are many and various. They include the antecedent history of the proceedings (including in the present case the facts that BP’s libel action was settled and that damages have been paid over to him); delay; fairness; any conduct which may amount to a party approbating and reprobating (as in the case of Express Newspapers v News UK [1990] WLR 1320 at 1329G to H) and the need for finality.

Consideration of all the factors points in my judgment clearly to the conclusion that, even if (contrary to my view) a stay was not justified, the continuance of these proceedings would amount to an abuse.

After this judgment had been prepared in draft I was referred by Mr Rushbrooke to the decision of the Court of Appeal in Stuart v. Goldberg [2008] 1 WLR 823. I accept that it is in general inappropriate for a court considering an application to strike out a second claim as an abuse to weigh the prospects of success in deciding whether the second claim was an abuse. However, nothing said in that case alters my view that in the highly unusual circumstances obtaining here the claim in fraud now sought to be pursued in the proposed Amended Particulars of Claim amounts to an abuse of the process