Full case report

Cruddas v Calvert & Others (No.2)

Reference [2013] EWHC 1427 (QB)
Court Queen's Bench Division

Judge Tugendhat J

Date of Judgment 5 Jun 2013


Summary

Libel – Malicious Falsehood – Single-meaning rule – Determination of meaning for purposes of libel and malicious falsehood claims – justification – striking out

Evidence – admissibility of evidence of the meaning understood by publishes in malicious falsehood actions.


Facts

The Claimant was the former Treasurer of the Conservative Party. On 15 March 2012 he had been made the subject of subterfuge and covert recording by the First and Second Defendants (members of the Insight team of the Sunday Times) who posed as potential donors to the Conservative Party.

The Claimant sued on the articles published on 25 March 2012 by the Defendants. He brought claims for libel and malicious falsehood. The pleaded meanings for both actions were:

(1) In return for cash donations to the Conservative Party, the Claimant corruptly offered for sale the opportunity to influence government policy and gain unfair advantage through secret meetings with the Prime Minister and other senior ministers.

(2) The Claimant made the offer, even though he knew that the money offered for secret meetings was to come, in breach of the ban under UK electoral law, from Middle Eastern investors in a Liechtenstein fund; and

(3) further, in order to circumvent and thereby evade the law, the Claimant was happy that the foreign donors should use deceptive devices, such as creating an artificial UK company to donate the money or using UK employees as conduits, so that the true source of the donation would be concealed.

In relation to the libel claim, the Defendants relied on a defence of justification contending that the articles were true in the meanings:

(1) That what the Claimant said in the course of a meeting on 15 March 2012, as co-Treasurer and Board member of the Conservative Party, in claiming:

(a) that the Conservative Party would accept large donations from persons whose sole purpose in making the donations was to advance their business interests by obtaining direct access to the Prime Minister, by lobbying on policy areas affecting their business and by moving in circles where they would pick up useful intelligence to progress their business strategy;

(b) that in return for six-figure donations, such persons would be able to achieve that purpose in the ways they wanted; and

(c) that in return for donations of £250,000 a year, they would obtain special access to the Prime Minister and senior governments ministers, would get noticed and be taken really seriously, would be able to operate at a higher level within the Party (and, thus, the Government) and would have things open up for them;

was inappropriate, unacceptable and wrong and gave rise to an impression of impropriety.

(2) That the Claimant, when faced with the prospect of donations being made to the Conservative Party from an overseas fund (which was not itself eligible to make donations under the relevant law), was prepared to contemplate ways in which donations from that source could be made to the Party, namely;

(a) Through using a legal loophole that would permit a UK company, carrying on business within the jurisdiction, to make donations from such a source; or

(b) By having individuals on the UK electoral register make donations in their own name;

even though the use of either route would result in the concealment of the true source of the donation, contrary to the spirit of the law which was intended to ensure that the source of any donation over £7,500 would be made public.

In the alternative, the Defendants contended that the words complained were true in substantially the meaning pleaded by the Claimant in (1) above.

In relation to the malicious falsehood claim, the Defendants denied malice, relied upon their justification defence to rebut falsity and contended that the publication was not likely to cause the Claimant pecuniary damage within s.3 Defamation Act 1952.


Issue

This was the Second Pre-Trial Review. After the First PTR, the Defendants consented to variation of mode of trial to Judge alone. The parties then sought the Court’s ruling on meaning for the purposes of the claims in libel and malicious falsehood. In relation to the former, applying the conventional single-meaning rule, the Judge had to determine the single meaning that would have been understood by the hypothetical ordinary reasonable reader. In relation to the latter – and following confirmation by the Court of Appeal in Ajinomoto -v- Asda Stores Ltd (No.2) [2010] EWCA Civ 609; [2011] QB 497 that the single-meaning rule does not apply to malicious falsehood claims – what meanings substantial numbers of readers would have understood the Articles to bear.

A separate issue was whether evidence was admissible, in relation to the malicious falsehood claim, to demonstrate that the words complained of were understood in the meanings relied upon by the Claimant. The Claimant contended that, consistent with the removal of the single-meaning rule in malicious falsehood, the focus moved away from ascertaining the notional meaning attached by the hypothetical reader to the actual meaning understood by real readers (or a substantial number of them). As such, the prohibition on evidence being admitted on the issue of meaning (see e.g. Slim -v- Daily Telegraph [1968] 2 QB 157) ceased to have any relevance or justification and that the Court should therefore admit evidence as to the meaning understood by readers. Evidence of the understanding of words was admissible in passing off (see Clark -v- Associated Newspapers Ltd [1998] 1 WLR 1558). The Defendants contended that evidence as to the meaning of words was not admissible in malicious falsehood actions (The Royal Baking Powder Company -v- Wright, Crossley & Co [1900] RPC 95), alternatively it should not be admitted (Interflora Inc -v- Marks & Spencer plc [2012] EWCA Civ 1501; [2012] FSR 21 [23]-[27]).


Held

(1) For the purposes of the defamation claim, the single meanings of the Articles was as pleaded by the Claimant. Further, in relation to the first meaning, the allegation of corruption was one that connoted conduct which was criminal in England and Wales.

(2) For the purposes of the malicious falsehood claim:

(a) Whilst there might perhaps be cases where the publishees are limited in number, clear evidence of the meaning that they understood the words to bear might be sufficiently relevant and cogent to be admitted, in mass publication cases that would not usually be the case. The Claimant’s evidence should not be admitted on the question of meaning in this case.

(b) The meanings pleaded by the Claimant and the Defendants were all meanings within the range of meanings which a substantial number of reasonable readers would have understood the Articles to bear, including the meaning of criminal corruption.

(c) The Articles were not capable of bearing the Defendants’ meaning that the suggestion attributed to the Claimant that the donation should be funnelled through the journalists was no more than a suggested breach of the spirit of the legislation prohibiting foreign donations. The allegation could only reasonably be understood to mean that the Claimant was suggesting a breach of electoral law, not just a breach of its spirit.

(3) The Defendants’ defence of justification purporting to defend the first of the Claimant’s meanings should be struck out as being incapable of defending that meaning.


Comment

The immediate consequence of the ruling on meaning was that the Defendants’ defence of justification was struck out and judgment was entered for damages to be assessed on the libel claim. The decision was varied on appeal.

The judgment is interesting for its discussion of the practical implications of multiple-meanings being available in malicious falsehood claims and, particularly, whether evidence of the understanding of publishees is admissible and should be admitted. The Judge was clearly concerned with the prospect of substantial costs being incurred to try and ascertain what readers in mass circulation cases thought the publication meant and also sceptical of the value of such evidence. Whilst he did not rule such evidence inadmissible as a matter of law, his remarks practically limit such evidence to limited publication cases where ascertaining the understanding of a discrete number of publishees would have an evidential value and its collection would not risk disproportionate cost.


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Instructing Solicitors

Slater & Gordon for the Claimant; Bates Wells Braithwaite for the Defendants