Beach Developments Ltd v Foskett

Having held a Pre Trial Review in this libel action on 4 February, I now have to make an order for costs. Since very large sums have been incurred by the parties, I decided to reserve this judgment.

The case is listed for a trial by judge alone to start in about 5 weeks, on 14 March, with an estimate of 15 days. In the course of the PTR I gave two ex tempore judgments. On the Claimant’s application I decided what the words complained of actually mean. And on an application by the Defendant, I declined to strike the proceedings out. The Defendant had submitted that for the Claimant to pursue the action to trial is an abuse of the process of the court (Jameel (Yousef) v Dow Jones [2005] QB 946).

The Claimant is a building contractor based in Fleet, Hampshire. It is managed by Mr Steven Beach, whose father Mr Brian Beach has also been a director. Although both were named as Claimants in the Claim Form, it is only the company that has pursued this action, and is referred to as the Claimant.

The Defendant engaged the Claimant to carry out extensive works on his house. Negotiations started in September 2004 and the contract was entered into in about November 2004. A dispute arose in respect of that contract. The Defendant evicted the Claimant from the site in July 2006. An adjudication took place, followed by an arbitration. The parties then settled their differences with an agreed payment by the Defendant to the Claimant. But the Defendant did not let the matter rest there. After the settlement the Defendant published material about the Claimant on two websites between 19 October 2006 and August 2007.

The Claimant contends that this material is defamatory and made this claim in respect of four publications. One of them was on a forum in the Fleet locality, where the Claimant and the Defendant both reside. Publication was between 1 and 13 November, when it was taken down. The other publications were three on the Windows Live Site, which was modified after 13 November 2006. Proceedings were issued on 9 August 2007. There is no real dispute that there were some readers of the local forum. But there is a real issue in respect of that as to how many readers there were. There is a real issue as to whether the Claimant can prove publication to any reader of the Windows Live Site.

The words complained of in the local forum are under the heading “Rogue Builders – any experience – I have”, and there are links to the Windows Live Sites. It is sufficient to set out from the local forum publication complained of no more than the following words, which appear in the three lines of text as in the printout:

“Just over a year ago I contracted a builder [the Claimant] to renovate my house – quite a lot of work (over six months). They were a nightmare. They are nasty people. Their overcharging has been deemed by my solicitor as fraud. We’ve just finished civil proceedings; now starts the criminal investigation…”

The first and third publications on the Windows Live Site include the following, with the paragraph numbers from the Re-Amended Particulars of Claim:

“3.1.1

… I was ripped off by a cowboy builder…

3.1.3

During these negotiations Steven beach bought along Brian Beach, who Steve said was a Construction Contract lawyer (lie – you’ll see this word appear often throughout my report)
3.1.4 Brian bought along a JCT Minor Works Contract for me to sign, saying ‘it’s a standard builders contract’ which is correct, apart from the fact that they had amended the document …
3.1.5 Remember this ended in a fraudulent claim by [the Claimant] for an additional £284,000 + VAT for works that were not carried out”.

The remaining publication complained of, with the paragraph numbers from of the Re-Amended Particulars of Claim, included:

“3.2.1

Brian and Steve Beach – NASTY PEOPLE…

3.2.3

Beach inflated his prices once he got the contract and there was basically nothing I could do about it. In the end I had them removed from site”.

The Claimant pleaded its meanings in one paragraph (para 6) for all four publications together. There are three sub-paras (a), (b) and (c). Each of these includes a meaning alleging dishonesty (using the words ‘crooked cowboy builder’, ‘dishonest’, ‘fraudulent’, ‘lie’ and ‘fraud’). And each of these sub-paragraphs also includes a meaning alleging that Messrs Beach were “thoroughly unpleasant to deal with”. I shall refer to these as the ‘fraud allegation’ and the ‘unpleasantness allegation’.

The Defendant in his Re-Amended Defence does not admit that any of the publications bears any defamatory meaning. But in the alternative he advances Lucas Box meanings. In his Defence at para 8 the Defendant pleads, in relation to the publications on the Windows Live Site, that:

“… the Claimant conducts its business as a cowboy builder which repeatedly attempted to and did rip off the Defendant… such as to give rise to grounds for an inquiry as to whether, alternatively reasonable grounds to suspect that, the Claimant had committed the criminal offence of attempting to obtain money by deception”.

This is a pleading clearly directed to Chase Level 3 or 2 (Chase v News Group Newspapers Ltd [2003] EMLR 218). There are similar Chase Level 3 or 2 meanings pleaded in the Defence at paras 9 and 10 (which is in relation to the publication on the local forum). The same Particulars of Justification are relied on throughout.

The Re-Amended Defence paras 8(a) and (b) includes allegations of actual misrepresentation (and so justification) in relation to the two instances of alleged misrepresentation in the Particulars of Claim paras 3.1.4 and 3.1.3. I understood Mr Barnes to submit that these two were at Chase Level 1.

The Defendant also pleaded a defence of honest comment (Re-Amended Defence paras 11 to 13) and a defence of Reynolds privilege. He abandoned the Reynolds defence just before this hearing. In response to the defence of honest comment the Claimant has pleaded malice.

The Defendant’s particulars, both of justification, and in support of the defence of comment, are all in one paragraph, para 8 of the Re-Amended Defence. That paragraph does not distinguish between the separate publications, or the separate allegations or any separate imputations. However, by his pleaded defence of honest comment the Defendant does make clear that he is treating the words complained of as containing separate imputations. There is, for example, in paragraph 8.14 of the Re-Amended Defence a list of instances of alleged rudeness or other objectionable behaviour alleged to have been shown by the two Messrs Beach towards the Defendant and his family, which have little or nothing to do with dishonesty or overcharging.

In libel there is a rule that the judge or jury must find one single meaning for an imputation complained of, even though in life individual readers may understand a publication in different ways. But that does not mean that a publication can only contain one imputation. It means that for each imputation there must be a single meaning. In an example given by Duncan & Neill on Defamation 3^rd ed para 5.11, a newspaper publication may include in an article the words:

“AB was seen last night setting fire to a factory owned by his company in X Street. It was insured for £2 million, and it is understood that he has already telephoned the insurance company to make a claim”.

In this example the allegations of arson and fraud are separate imputations in one sentence. And if AB sued the newspaper, the newspaper might seek to justify one or other or both imputations. Quite separately the newspaper might argue that the publication did not allege actual guilt, but only that there were reasonable grounds to suspect guilt of one or other or both offences.

In the judgment I delivered on what the words actually mean in each of the four publications complained of, the main issue I addressed was the level of meaning: whether each publication complained of meant actual guilt of dishonesty, or some lesser Chase Level meaning.

In respect of the publication on the local forum, and in respect of two of the publications on the Windows Live site, I held that they were all allegations of actual guilt of dishonesty, Chase Level 1, and of no lesser Chase Level. I held that the publication pleaded at para 3.2 of the Re-Amended Particulars of Claim did not allege dishonesty, but only overcharging and unpleasantness.

There then followed the midday adjournment. Before rising I indicated that my preliminary view was that the only issues left in the case was the defence of justification in respect of the two allegations in respect of which the Defendant had pleaded what I took to be Chase Level 1 pleas of justification. But I said I would hear further submissions on the point.

After the adjournment Mr Sheriff stated that the Claimant submitted that the position was as I had indicated. In any event the Claimant was not pursuing any complaint in this action other than the dishonesty allegation.

Mr Barnes for the Defendant was not content with that. Mr Barnes submits that “cowboy builder” and “nasty” are imputations separate from the dishonesty allegation, and that the Defendant is entitled to defend them as such. And if the Claimant chooses to withdraw his claims in respect of those two separate imputations, then he ought to pay to the Defendant the costs incurred in respect of them.

Mr Sheriff submitted that “cowboy builder” could not be disassociated from the word “crooked” in the phrase “crooked cowboy builder”, and that those three words expressed no separate imputation. They are a different way of expressing the imputation of dishonesty which I had held the Defendant had made in terms of actual guilt. I uphold that submission.

Mr Sheriff further submitted that “nasty” is also part of the same imputation.

This is a little more complicated, because in respect of one of the Windows Live publications, I held that there was no meaning of dishonesty. The only meaning was that the Claimant had overcharged and its directors were “nasty”. And there is the further complication that it is not clear to me on the papers (and so there remains to be decided at trial) whether this publication is one that a reader could access without reading either of the other two Windows Live publications, or whether at a trial it would be found that it was just a part of one or other of the other two Windows Live publications.

When Mr Sheriff said that the Claimant did not wish to pursue the unpleasantness allegation as a separate imputation, I indicated that I thought that he was giving little away by taking that course. If the Claimant succeeds in relation to dishonesty, success on this imputation (if separate) would add little. If the Claimant fails in relation to dishonesty, it cannot in reality succeed on the unpleasantness allegation. As Mr Sheriff submitted, dishonest people are nasty. Further, if the unpleasantness allegation is a separate imputation, then honest comment is in principle available as a defence, and malice is available to defeat that defence. Honest comment and malice are two issues that cannot arise in respect of the imputation of dishonesty. Subject to proof of publication (which is a real issue in relation to the Windows Live publications), the only defence available to these imputations of dishonesty is justification.

In my judgment, there is only one imputation of which the Claimant complains, which is the dishonesty allegation. As I read the Re-Amended Particulars of Claim, the unpleasantness allegation is not the subject of a separate meaning complained of, nor is overcharging without dishonesty.

But even if that were wrong, it seemed to me that the time and cost involved in adjudicating upon the unpleasantness allegation as a separate imputation would be disproportionate to any benefit that could be achieved. This is a claim by a company, not by the individuals concerned. Damages cannot include injury to feelings. So if the Claimant had wished to pursue the unpleasantness allegation as a separate imputation, he would have been vulnerable to Mr Barnes’s Jameel abuse argument, and the Defendant would have been vulnerable to a counter argument on the same basis in respect of his Defence.

If I had held that the publications complained of did bear a Chase Level 2 or 3 meaning, or overcharging without dishonesty, I would have invited submissions as to whether it was open to the Defendant to litigate in the libel action the same issues as he did raise (or could have raised) in the contract dispute, or whether his attempt to do so was an abuse of the process of the court. I would also have had to consider whether the extent and detail of the particulars of justification in relation to the unpleasantness allegation pleaded by the Defendant could be allowed to go to trial. Because I have not heard argument on this point, I do not take it into account as the basis of the ruling I must make on costs. As I understood the remarks of HHJ Mackie QC, this may have been what concerned him at the hearing in September 2009. He made no ruling because the Defendant was appearing in person and had had no notice of the point.

It is not in accordance with the overriding objective (CPR 1.1) for the court to permit the parties to litigate issues which are not proportionate to the money (or other relief) involved. Large sums of money were at issue in the contract dispute. But since the Claimant is a company, the money involved in this action is unlikely to exceed a low five figure sum. Vindication is what is really at stake, not money.

Although the Defendant does plead, in the one paragraph referred to above, a number of instances of allegedly objectionable conduct on the part of the two individuals concerned, there can be little by way of costs incurred so far associated with that part of the defence. Obviously there are some costs: there are witness statements. But in the context of the rest of the action these costs appear to me to be likely to be of little significance. But the time and costs that would be taken up in a trial of these incidents would be substantial, since they turn largely on contested oral evidence.

What does appear to have already given rise to significant costs is the defence of justification to the Chase Level 2 or 3 meanings, which I have ruled the words complained of do not bear. In support of those meanings the Defendant has pleaded a mass of detailed material relating to the quality of the work done, items of work not done, and the charges which the Claimant sought to recover from the Defendant for the work. Para 8 of the Re-Amended Defence covers fifteen pages with 23 sub-paragraphs. And there is an expert’s report on the works.

It appears to me that the Defendant has in effect attempted to include within this libel action many (if not all) of the grievances which he raised (or could have raised) in the contract dispute which he had settled shortly before publishing the words complained of. To these grievances he has added particulars of justification of the unpleasantness allegation.

The basis of my ruling on costs is that the Defendant has advanced a meaning at Chase Level 2 or 3 which I have held the words complained of do not bear. Any particulars of justification which are relevant only to those meanings are therefore to be struck out of the Defendant’s Defence. The Defendant cannot in any circumstances recover his costs of pleading those matters, or any costs occasioned by those matters. Mr Barnes asked for an order for costs in favour of the Defendant. I refuse that.

The next question is: what order should I make in respect of the Claimant’s costs? The parties now have to consider whether any, and if so which, of the detailed allegations about the quality and charges for the works can remain in the pleading, and what other issues remain to be decided.

One issue in the case now is the Defendant’s allegation that the Claimant is guilty of dishonesty in respect of two matters, if these are pleaded at Chase Level 1.

Whether the Claimant should recover its costs in relation to the Chase Level 2 and 3 meanings I have ruled out, may depend on whether, and if so on what issues, the claim now proceeds. So I shall order that the Claimant’s costs of and occasioned by the parts of the pleading that relate only to the Chase Level 2 and 3 meanings I have ruled out shall be reserved.

I make no separate order for costs in respect of the Defendant’s abandoned Reynolds defence or the instances of personal misconduct alleged by the Defendant against the two Messrs Beach which are not directly related to the formation of the building contract or the charges the Claimant made for work it claimed it had done under that contract. These costs will lie where they have fallen.

The costs of the hearing of the PTR on 5 February will be costs in the case.

The costs of the hearing of the PTR on 5 February will be costs in the case.

The Claimant’s costs in respect of the Defendant’s Chase Level 2 and 3 meanings are reserved. The Defendant shall recover no costs in respect of these.

The costs of each party in respect of the Defendant’s abandoned Reynolds defence and in relation to the instances of personal misconduct alleged by the Defendant against the two Messrs Beach (that is those costs which are not directly related to the formation of the building contract or the charges the Claimant made for work it claimed it had done under that contract) will lie where they have fallen.