Full case report

Cartus Corporation v Siddell

Reference [2014] EWHC 2266 (QB)
Court High Court (Queen's Bench Division)

Judge Nicol J

Date of Judgment 16 Jul 2014


Summary

Libel – interim injunction – Defamation Act 2013 – Meaning – Truth – Qualified privilege


Facts

The 1st Claimant (C1) was a Delaware Corporation, the 2nd Claimant (C2) was its UK subsidiary. C2 had some 400 employees within the jurisdiction. The Cs provided services to clients whose employees were moving from one place to another. D1 and D2 were the directors of a company, Atlantic Corporate Relocation Ltd (‘ACRL’), which had been used as a sub-contractor by the Cs to move freight. Having provided services to the Cs between 2003 and 2012, ACRL was suspended from its partnership with them following an audit in 2012. In 2014 ACRL went into voluntary liquidation.

There was an intimate relationship between an employee of C1 and an employee of the Ds. The Ds alleged that this individual had put pressure on ACRL to enter unreasonably low bids for work. Following a large number of audits by ACRL, and the departure of the Ds’ employee, there was a suspension of arrangements between the companies. The aggrieved Ds wrote a document entitled “The Ugly Truth” and sent a copy to the Cs in February 2013.

The leaflet was not published and negotiations took place between the parties’ lawyers. However, on 17 March 2014 D1 sent C1 an email which said that due to the Cs’ non-responsiveness a “covering letter” would be sent to each and every client of the Cs by close of business on the following day. The letter said “The Ugly Truth” was attached. The email continued “You do the maths”.

Discussions between the lawyers continued, but an attorney for the Ds refused on Thursday 20 March 2014 to provide a written undertaking not to publish “The Ugly Truth”.  On that day Supperstone J granted an interim injunction to restrain the document’s publication on the Cs’ without notice application.

The hearing on notice for continuation of the injunction was due to take place 7 days later. It was postponed and the Cs issued a further application notice. The Ds had served a Defence which pleaded Truth and Qualified Privilege. In their application the Cs asked the Court to rule on the meanings of “The Ugly Truth” and its covering letter, to strike out the defences of Truth and Qualified Privilege, and to grant a final injunction in an amended form.

The Defence said the Ds no longer intended to publish “The Ugly Truth” or the same or similar words. They served a proposed Amended Defence which recast the meanings of “The Ugly Truth” and the covering letter which the Defendants were prepared to defend as true and repeated that any such publication would be covered by qualified privilege.


Issue

(1) What were the meanings of “The Ugly Truth” and the covering letter?

(2) Were the defences of Truth and Qualified Privilege to be struck out?

(3) Should a final injunction be granted?

(4) Should the without notice injunction ever have been granted?


Held

Dismissing the applications

(1) Notwithstanding Supperstone J’s assessment on 20 March of whether or not there was sufficient evidence of an intention to publish “The Ugly Truth” and a covering letter, by the time of the instant hearing, things had moved on. The Amended Defence made the position much clearer. There was therefore no point in deciding the meanings to be attributed to the words they contained. In contrast to a normal libel action, where a decision on meaning is unavoidable because publication has already taken place, the position is different where the words complained of have not in fact been published.

(2) For the same reason, a decision on the defences of truth or qualified privilege would be a barren exercise. Potential defences are immaterial absent publication or proof of intended publication.

(3) While renouncing the previously threatened publications, the Ds had set out in their Amended Defence the meaning of more limited allegations which they were considering publishing. However, the Ds had not set out the words which they say would incorporate those meanings or even indicated with reasonable certainty what they might be. The Cs were hampered because the Ds had chosen not to say more about their intentions. The Cs were therefore not entitled to an injunction.

(4) The Ds made criticisms of the Cs’ conduct in obtaining the injunction. These included that the Cs had: misstated the appropriate test for deciding whether the application for an injunction in restraint of freedom of expression could be made ex parte; extended the injunction to the whole of “The Ugly Truth” and not only its defamatory parts; not addressed s1(2) of the Defamation Act 2013 (the test for harm to the reputation of a body that trades for profit); and that the Cs had obtained an order which was silent as to territorial extent. While these had some force, the Judge was satisfied that Supperstone J would still have granted the injunction.


Comment

Obtaining a libel injunction at the interim stage is highly unusual. One distinction between the Ds here and in, for example, an application against a media defendant, was that the threatened publication had been sent to the Cs in its entirety in anticipation of publication. However, the Ds here resiled from the publication in the form originally sent to the Cs when represented by counsel on the return date. The Cs then faced the problem typically confronted by a party seeking a libel injunction, that in the absence of reasonable certainty about the what the words the Ds would in fact publish would be, the injunction could not be continued.

It is also notable that, in spite of the Cs’ failure to address s1(2) of the Defamation Act 2013 on their ex parte application, the Judge felt able to decide that they would have got over this hurdle had Supperstone J’s attention been drawn to it. He did, however, underline the need for the Claimant to state facts as to how the publication had caused or would be likely to cause serious financial loss as part of their cause of action.


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Instructing Solicitors

Howard Kennedy Fsi LLP for the Cs; Metis Law for the Ds