Morgan v Associated Newspapers Ltd

Reference: [2018] EWHC 3960(QB)

Court: High Court, Queen's Bench Division

Judge: Nicklin J

Date of judgment: 7 Dec 2018

Summary: Defamation – strike out – amendment – summary judgment – pleading – honest opinion – section 3 Defamation Act 2013

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Appearances: Justin Rushbrooke QC - Leading Counsel (Claimant)  Felicity McMahon (Claimant) 

Instructing Solicitors: Himsworth Legal for the Claimant, Wiggin LLP for the Defendant

Facts

The Claimant, founder and Chairman of Redrow Homes, brought a libel action against Associated Newspapers over an article in the Daily Mail and on MailOnline which in an earlier judgment the judge had found meant:

a) the Claimant was able to take advantage of an opportunity to purchase six houses built by his company that were intended to be sold for less-well off buyers as affordable homes – but which had failed to sell – after his company had been successful in getting local authority planning rules changed;

(b) he purchased the six properties at a substantial discount, £860,000 against a market value of £2.1m and, as a result, stood to make a very large personal gain; and

(c) in consequence, the Claimant had exploited his position to line his own pockets in a greedy, unethical and morally unacceptable way.

Nicklin J found that meanings (a) and (b) were factual and not themselves defamatory, and that (c) was an opinion based on the conduct of the Claimant in (a) and (b), and was defamatory. In a second judgment the judge found that the meaning did give rise to an inference of serious harm, such that the threshold at section 1(1) Defamation Act 2013 was overcome.

In addition to seeking a determination on meaning and fact/opinion, the Claimant had also applied to strike out paragraphs of the Defendant’s defence and for summary judgment on the claim, arguing that in not advancing any case that he had bought the properties at a substantial discount to their market value, and not setting out with clarity how the Claimant was alleged to have improperly benefitted, the defence was fatally flawed.

Following the meaning judgment, the Defendant applied for permission to amend its defence.

Issue

1.Should the Defendant’s honest opinion defence be struck out and/or should summary judgment be entered for the Claimant;

2. Should the Defendant be permitted to amend its defence in the form proposed.

Held

The paragraphs of the Defence setting out the particulars of honest opinion should be struck out, and permission for the amendments refused.

On strike out, the principles to be applied were those in Higginbotham v Leech [1842] 10 M&W 361, which apply equally to a plea of honest opinion as to one of truth: Ashcroft v Foley [2012] EMLR 25. Particulars must be set out with clarity and precision. Particulars must be both sufficient and pleaded with proper particularity.

The particulars of the defence of honest opinion were loose and ineffective. The Defendant needed to, and had failed to, set out clearly what the Claimant was alleged to have done. It is possible to rely upon inference but to do so it must be properly pleaded. Similarly the particulars needed to, but did not, clearly state what benefit the Claimant was alleged to have obtained, and how.

Any fact relied upon in support of an honest opinion defence must be a true fact that existed at the time the statement was published. Obiter: The proper construction of section 3 was not that a defence could succeed if, even though every fact set out in the publication was wrong, some other entirely unrelated fact existed upon which the opinion could be based. This would be a radical departure from the previous law. The requirement in section 3(3) that the statement should indicate, whether in general or specific terms, the basis of the opinion is an important safeguard, and means that there must be a nexus between the opinion and the subject upon which it is expressed: Burki v Seventy Thirty Ltd & Ors [2018] EWHC 2151 (QB).

One result of the diffuse nature of the Defendant’s case was that the Claimant had ended up advancing evidence to seek to disprove hypotheses that might be found within the vague pleading – that was to reverse the burden of proof, and was not permissible.

The Defendant’s approach of grafting on some additional particulars after the meaning ruling was inappropriate and had failed. If the Defendant was to plead a defence of honest opinion it was required to return to the drawing board, setting out the facts relied upon to support the case: (1) that the Claimant had exploited his position; and (2) had lined his own pockets. If the repleaded particulars advanced a valuation of the properties, then the application to amend must be supported by proper evidence of that valuation.

The Defendant’s filing of a defence before the Court had determined meaning and fact/opinion had “reverberations” that continued to complicate the case, and led to a situation where substantial costs had been incurred before the close of pleadings.

Whilst it is, in theory, open to a Defendant to seek to rebut an inference of serious harm, in a mass media case this is virtually impossible.

The summary judgment application was refused.

Comment

The judgment makes clear the requirements for pleading an honest opinion defence under section 3 Defamation Act 2013. The need for particulars to be both sufficient and set out with precision as laid down in Ashcroft v Foley continue to apply. The judgment also clarifies the ambit of facts that can be relied upon in support of a defence under section 3. It is also notable for its requirement that on an amendment application the Court must be satisfied that, evidentially, the factual case being advanced has a real prospect of being established at trial.

The judge’s statements to the effect that the preliminary issue of meaning, and also fact/opinion and where appropriate serious harm, should be decided before a Defence is filed will be relevant to all libel practitioners.

NOTE: In February 2019, after this judgment, the case settled with the payment of a sum in damages (donated to charity), an apology and statement in open court.