Full case report

Building Register Ltd v Weston

Reference [2014] EWHC 2361 (QB)
Court High Court, Queen's Bench Division

Judge Nicola Davies J

Date of Judgment 17 Jul 2014


Summary

Defamation – libel – res judicata – abuse of process – amendment to defence – justification – honest comment – case management conference


Facts

C was a company providing an online directory and managed data registration service for suppliers and contractors in the construction and cleaning industry who wished to make their details available to potential customers. D1, Mr Weston, was the managing Director D2, a commercial cleaning company. D2 was a dissatisfied customer of C, and the Ds set up a website encouraging users to post complaints about C’s service. C brought a libel claim in respect of words published by Ds on the website. At a previous hearing Dingemans J had found the words to have six meanings, the first and fifth of which were relevant to the present application:

(1)    The Claimant duped the Defendants into placing an order with it online.

(5)   The Claimant mis-sold to the Second Defendant a service which it knew did not deliver the substantial benefits promised.

Following the meaning ruling, the Defendants applied at a Case Management Conference for permission to re-amend their Defence to plead revised defences of justification and honest comment to all the meanings complained of. C opposed parts of the draft re-amended Defence relating to meanings (1) and (5), as well as certain particulars of one of the other meanings.

Prior to the libel action there had been County Court proceedings between C and D2 (at which D1 had represented and acted for D2). In those proceedings C had claimed the second year’s subscription fee (the Ds not having cancelled the contract by the required date), and D2 counterclaimed for the cost of the first year’s subscription, contending that various false promises had been made in order to induce it to enter into the contract. The County Court district judge found in favour of C on both the claim and counterclaim. The decision was not appealed.


Issue

1)    Did the draft particulars relating to alleged “duping” meet the sting of meaning (1)?

2)    Were the proposed particulars of justification and honest comment in respect of meanings (1) and (5) barred by the doctrines of res judicata/issue estoppel and/or Henderson v Henderson  abuse of process?

3)    Should the Defendants be permitted to include draft particulars which contended that the usage statistics supplied by C to D2 were false and had been used dishonestly by C?


Held

Refusing permission for the amendments to which C objected:

1)    Meaning 1 was described by Dingemans J as “a nearly literal use of the words [complained of]”. Those words included “to gain more information I inadvertently clicked on a tab which they the claimed was an electronic signature…I was annoyed that I had been duped like this”. This inadvertent electronic signature claim formed no part of the Ds’ current case. D1 admitted that he had in fact clicked a button to say he accepted the terms and conditions. The Ds’ case was instead founded on more general alleged mis-selling. The Judge found that the words used were clear and that the particulars sought to be relied on did not engage with the particular sting of this specific allegation and could not justify it (Bookbinder v Tebbit [1989] 1 WLR 640 (CA)).

2)    The crux of D2’s case in the County Court proceedings had been described by D1 as follows: “… we were assured [by a representative of C] at least 25 leads/enquiries a month, a promise that was more than misleading as not a single enquiry to date has resulted from the BR website”. After examining the factual background, including the case before the County Court in detail, the Judge ruled that the defence and particulars which the Ds sought to rely on were an embellished version of the case run unsuccessfully in the County Court. It amounted to an attempt to re-litigate the issues raised in the counterclaim before that court. To permit this would be oppressive to C.  Although D1 was not a party to the County Court case, he represented D2 in that litigation, and in reality the two Ds had an identity of interests. Any determination based on this type of abuse of process (Henderson v Henderson (1843) 3 Hare 100; Johnson v Gore Wood & Co [2002] 2 AC 1) must be fact specific. However it was not an exercise of discretion, there could only be one right answer (Aldi Stores Ltd v WSP Group PLC [2008] 1 WLR 748). Ds would still be permitted to continue to defend the case, but the proceedings could only continue on the basis of those matters which in the opinion of the court it was fair to try. Thus the ruling would not deprive Ds of their Article 6 and Article 10 rights.

3)    A number of draft particulars were based on the “usage statistics”, a set of statistics produced by C, but which had been available to Ds throughout D2’s subscription to C’s service, which set out the number of “hits” on different sections of D2’s registered details. Ds’ case rested on the contention that the usage statistics were false. This was no part of D’s case before the County Court, although the usage statistics were before that court, and Ds could have raised an issue in that forum, including through cross-examination, but did not do so. Ds’ assertion was based on the “inherent improbability” of the statistics – i.e. that users of the service would not act in the way the statistics showed, and on drawing upon the usage statistics of four other companies, also dissatisfied customers of C. Given that C had 1,500-2,000 customers, four customers could not provide a sound evidential basis on which to proceed. In the libel claim C had served evidence from one of its technical personnel to show that the statistics were indeed likely to be correct. Ds had put in no evidence. Ds had not come near what was required for the court to be able to infer that the statistics were false.


Comment

This case is of particular interest for the finding that it may be an abuse of process to advance a justification or honest comment defence using as particulars matters which have already been determined, or should have been determined, in previous court proceedings. This Henderson v Henderson abuse of process is related to the doctrines of res judicata and issue estoppel. The determination in each case will be fact specific, and although the Judge referred to the decision of Eady J in Tanner v Filby [2003] All ER (D) 279 in which the justification defence advanced was found not to be an abuse of process, she was not persuaded to reach the same conclusion on the facts of the present case. Nor was she persuaded by Ds’ arguments that to deny a libel defendant elements of a justification (or honest comment) defence would be incompatible with Article 10 ECHR and common law free speech principles. This case may prove useful where a libel case has arisen out of, or as an adjunct to, other legal disputes.


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Instructing Solicitors

Hugh James for C, David Price Solicitors and Advocates for Ds