Wasserman v Freilich

This is an application by the Claimant in a libel action to strike out certain parts of the defence under CPR 3.4(2) on the basis that they do not disclose any reasonable grounds for defending the claim; or that they are an abuse of process or otherwise likely to obstruct the just disposal of the proceedings; and/or that there has been a failure to comply with rules of the court. There was also to have been an application for summary judgment, but when the Defendant sought to introduce a plea of qualified privilege, it was recognised that it was at least potentially viable as a pleading. (That is not to say that the Claimant accepts that any particular occasion was protected by privilege, but that will be a matter for argument later.)

Although there have been various drafts of the defence put forward, I was asked to focus on the most recent, namely that dated 29 January 2016 (i.e. two working days before the hearing). There seems to be no dispute as to publication; it is accepted that the Defendant published the words complained of in various emails to the persons alleged, and that they referred to the Claimant. Now, the main issue turns upon whether the Defendant should be allowed to rely upon a defence of honest opinion under s.3 of the Defamation Act 2013 (corresponding in many respects to the common law defence of fair comment). There is no plea of truth under s.2.

I must shortly turn to the words complained of and the defamatory meanings they are said to bear. First, however, it is necessary to set the scene. The Claimant is the owner of Flat 4, Brinsdale Park, Brinsdale Road, London NW4 1TB. The flats in the block are managed by a company called Moreland Estate Management, which is operated by the Defendant. There is some disagreement between the parties as to what took place over the relevant period in February and March of last year, but what matters for present purposes is the broad outline.

Unusually, the Claimant’s version is set out at some length by way of introductory averments in the particulars of claim. On or about 16 February, she says that Ms Holli Hunter discovered a leak of water into Flat 1, which she occupied, and she left a note for the Defendant who happened to be away on holiday at the time. The Claimant was notified next day by a Moreland employee, who told her that it was believed that the source of the leak was in her flat. She arranged for a plumber to attend within an hour of being so informed, and she met the Moreland employee on her premises the same day. She also notified her insurance broker, Mr Ashley Rogoff, and asked him to notify her insurer, Aviva Insurance Plc, so as to arrange a view. She says that at that stage she was merely complying with her obligation to notify under the policy. She was not yet making a claim.

On 17 February, the plumber repaired a leak in her en suite bathroom, but unfortunately this did not stop the primary leak into Ms Hunter’s flat. The Defendant, therefore, arranged for a workman to attend on 18 February to attempt to trace and repair the true source of the leak. According to the Claimant, the workman proposed to break into the tiles in her bathroom and also into the ceiling in her service cupboard in the hope of finding the leak. She naturally became concerned at the potential cost of repairing the damage and checked whether he was qualified. When she discovered that he was not, she asked that at least there should be a qualified plumber in attendance. According to her account, the unqualified plumber’s employer, Mr Ralph Sternlight, came later the same day and apologised to her. He undertook to ensure that a qualified employee would attend as soon as possible (which would be the next day).

Meanwhile, Ms Hunter’s landlord, Mr Jacob Ebrahimoff, seems to have formed the impression that the Claimant was being unco-operative about finding the source of the leak. He decided to send an email to the occupiers of the other flats in the block on 18 February, stating that she would not permit Moreland to deal with the urgent flooding problem. The next day, Moreland’s solicitors sent her a letter by hand making the same assertion and threatening legal action. The Claimant says, however, that by the time it arrived the workmen had already started work in her flat so as to identify and repair the leak, as Mr Sternlight had promised. As soon as he became aware of the true situation, Mr Ebrahimoff sent another email withdrawing his earlier allegation against the Claimant (this email was timed at 23.32 on 19 February). Her case is simply that at all times between 17 February and 4 March 2015 she allowed the Defendant’s workmen access to her flat to do whatever was necessary, provided that they were qualified or under the supervision of a qualified person.

On 24 February, the Defendant insisted that procedures be carried out at her flat which she described as “invasive and destructive”. This was despite the fact that no one yet had been able to track the source of the leak. Next day, at 9.30 a.m., his workmen discovered a burst pipe beneath the concrete screed in her service cupboard. Meanwhile, she had instructed another firm who believed that they could track the leak without causing damage in her flat. Nevertheless, she did not in any way obstruct access by the Defendant’s workmen. It is important to note that at some point on 25 February he was sent a video from Mr Sternlight which showed the source of the leak as being under the concrete screed.

It was on 25 February that the Defendant’s offending chain of emails began. At 12.35 he sent an email to Mr Sternlight (copying in the insurance brokers and all other residents or owners in the block) which stated that he believed the cause of the problem had been the Claimant’s water tank. Much later, on 23 March, the Defendant chose to forward that email to a loss assessor appointed by the Claimant on 18 March, Mr John Standen, and copying in her insurers, despite the fact that he had known the true facts since 25 February. It is the Claimant’s case that he set out deliberately (and maliciously) to mis-state the facts.

On 11 March 2015, the Defendant sent an email to Marc Rogoff, the Claimant’s broker. He had apparently sent it in response to one from Mr Rogoff, in which he had made reference to the Claimant having written to Aviva notifying them of the damage in her flat. He chose also to send it to Aviva and to attach the whole thread of emails. He stated that “… this is total rubbish and I am more than happy to testify in a court of law that this is now edging on fraud – and yes I have put this in writing … I believe that it is clear from the attached emails and trail that there is an element of potential exaggeration/attempted fraud and it is my belief that Aviva need to be notified of this and sent a copy of this clear communication”. This email is the first complained of in these proceedings a defamatory publication.

On 23 March, the Defendant sent an email to Mr Standen, her loss assessor, and copied it to the brokers, in which she claims that he misrepresented the position by stating that she was 100% liable for the excess under the policy (by reason of the terms of the lease and a decision taken at a shareholders’ meeting in 2012). Again, she suggests that this account was not only false but also malicious.

On 24 March, at 15.15, the Defendant emailed Mr Standen and Aviva, copying it to the brokers. He included the following words: “… the leak was caused solely from the water tank serving Ms Wasserman’s flat exclusively and therefore in accordance with the terms of the lease, Ms Wasserman is lawfully responsible for the damage caused and excess …” That is the second publication relied upon.

In a later email on the same day, at 17.50, and addressed to the same people, as well as to Jane Sturt, the Defendant wrote: “… your client refused to provide access unless a retraction was made [i.e. by Mr Ebrahimoff] – this was simply made under duress”. This too is complained of.

A further passage in the same email is separately pleaded as containing the following defamatory allegation: “Should this matter be brought to court, for fraud charges, my client and the leaseholders at the property will testify that Ms Wasserman’s conduct was simply unacceptable and manipulative and the residents within the block live in fear of Ms Wasserman and the antics she has caused within the block”.

The fourth communication sued upon was the sending of the 11 March email, later, to Aviva and the brokers. (As explained above, it had originally been sent to Mr Standen.) It contained the words “… an element of potential exaggeration/ attempted fraud”.

The fifth publication relied upon was dated 24 March, at 17.47, and was again addressed to Mr Standen but copied to Aviva and the brokers. It included the words: “It would be interesting to see photographs of the alleged damage in order that we can ascertain whether this is ‘new damage’ caused by this incident or whether this is historic damage/lack of maintenance which (sic) your client is attempting to engineer a claim”.

The common sting in the various natural and ordinary meanings, pleaded in paragraph 27 of the particulars of claim, is that the Claimant was dishonest. That has generally been regarded as a factual allegation. It has long been recognised that “the state of a man’s mind is as much a fact as the state of his digestion”: Edgington v Fitzmaurice (1885) 29 Ch D 459. Juries are deciding on every day of the week, as a matter of fact, whether a particular defendant was, or was not, dishonest. Accordingly, it is an allegation which in the context of libel is readily understood as being susceptible to a plea of truth under s.2 of the 2013 Act (as was the case with justification). It is not thought to be a matter of opinion: nor can one convert an allegation of dishonesty (or, for that matter, of murder or rape) into a matter of opinion by merely inserting in front of it a formula such as “I believe …” or “she thinks …”: see e.g. Hamilton v Clifford [2004] EWHC 1542.

As I noted earlier, in this case the Defendant does not plead a defence under s.2. He does not seek to prove that the Claimant was dishonest – or even that there were reasonable grounds to suspect her of dishonesty. Such a plea is sometimes referred to, in the jargon, as “a Chase level two defence”: see Chase v News Group Newspapers [2002] EWCA Civ 1772 and Gatley on Libel & Slander (12^th edn) at 3.28. It is nonetheless a plea of truth. On the other hand, the Defendant does seek to add a plea of honest opinion under s.3 of the Act, specifically relating to dishonesty. So far, no other defamatory meaning has been identified in accordance with the requirement set out in Control Risks v New English Library [1990] 1 WLR 183.

This principle has not in any way changed following the enactment of this new statutory defence. Indeed, in the Practice Direction 53PD, it is expressly provided that a defendant must specify the defamatory meaning he seeks to defend as honest opinion. Here, it is difficult to understand what the defamatory opinion or comment he wishes to defend could possibly be. In the draft before me, paragraph 19A puts it this way: “… the Defendant avers that, if and insofar as it is held that the words bear the alleged meaning that the Claimant was dishonest and/or making a fraudulent claim upon an insurance company, they were statements of opinion”. That is simply unacceptable.

The first condition to be fulfilled under s.3(2), unsurprisingly, is that the relevant statement must be one of opinion. If a statement is one of fact, therefore, this defence is not appropriate. If a statement can be proved to be substantially true, then a defendant has available the defence now provided for in s.2 (just as the common law defence of justification was available in the past). The question is bound to arise sometimes, however, whether a particular statement is in its context one of fact or opinion. This is naturally so, given the complexity and subtlety of language, and the issue was considered on a number of occasions in accordance with principles of the pre-existing common law.

It is true that sometimes a defendant is able to rely on a s.3 defence in respect of an inference; for example, where it is clear that he or she is not in a position to know, or to establish definitively, that it represents the true position: see e.g. Branson v Bower [2002] QB 737. There, the author was permitted to rely on a defence of fair comment in relation to inferences he had drawn as to the dominant motives of the claimant when making a bid to run the national lottery. Readers would know from the context of the newspaper article, if they thought about it, that the journalist was speculating, indeed could only be speculating, and expressing an opinion rather than (say) revealing a fact which he had discovered in his research.

There has been some debate as to whether the appropriate dividing line between statements of fact and statements of opinion depends on whether the relevant defamatory allegation is verifiable or not: see e.g. the discussion in Gatley on Libel & Slander, cited above, at 12.10. It is surely a matter of plain English. The word “verifiable” means “capable of being proved to be true”. If a statement is capable of being proved to be true, then a defendant would now be able to rely on a s.2 defence (if the evidence is available). If, on the other hand, it is not capable of being proved to be true, it would follow that neither he nor anyone else could do so. In such circumstances, however, a defendant might well be able to take advantage of s.3: it is likely that the statement will be recognised by readers (and ultimately the court) as the expression of an opinion.

In the present case, these refinements do not need to be considered: the question is relatively straightforward to resolve. An allegation of dishonesty, fraud or attempted fraud will usually fall fairly and squarely on the side of fact rather than opinion. The same is true also, as I have already mentioned, where the allegation is of “reasonable grounds to suspect”. Accordingly, I cannot allow a pleading to go forward in the form of paragraph 19A. It must be struck out.

A further requirement, if honest comment were to be legitimately raised would be for the pleader to set out the facts upon which the opinion was based, or on the basis of which an honest person could have held that opinion. That too is now an express stipulation in the Part 53 Practice Direction. That has not been done so far, but it is immaterial since the defence fails at the first hurdle for the reasons I have given.

As for qualified privilege, such a plea may seem to be somewhat unrealistic where allegations of dishonesty have been in effect circulated, but that is for another day. Meanwhile, the Defendant should certainly give, in relation to each of the individual recipients of the emails, details of the facts relied upon as giving rise to the relevant duty or common interest. That obligation is now embodied in CPR 53PD 17.