Full case report

Ratiu & Others v Conway (CA)

Reference [2005] EWCA Civ 1302; [2006] 1 All ER 571; The Times, 29 November 2005
Court Court of Appeal (Civil Division)

Judge Auld, Laws and Sedley LJJ

Date of Judgment 8 Nov 2005


Summary

Defamation – Malicious falsehood – Justification – Malice – Misdirection – Withdrawing malice from jury – Damages – Fiduciary duty – Breach of confidence


Facts

The Claimant, C, was a solicitor. He sued the Appellants (“R”) for libel and malicious falsehood in a letter of complaint about C sent by R to the agent for the Trustees of the Eyre Estate (“E”). C had been instructed by R, through a nominee, to act in connection with the development of a site in St John’s Wood. E were the vendors of another, nearby and closely related site for which R bid. R complained that C had, in his personal capacity, put in a rival bid for E’s site. In particular, R alleged that C had misused confidential information by seeking to re-open bidding after R told him that E had accepted R’s offer. At that time, it had been contemplated that C might act for R on the acquisition of the site or enter into a deal with R for such acquisition. At trial the judge ruled the occasion to be one of qualified privilege but left the issues of justification and malice to the jury, which found for C and awarded him damages of £96,000.


Issue

(1) Whether the Judge had erred in law and fact in his directions to the jury on the duties of trust, loyalty and confidence owed by C to R, crucial to the findings on justification and malice;
(2) Whether the Judge should have withdrawn the issue of malice from the jury;
(3) Whether the Judge properly directed the jury on the issue of damages.


Held

Allowing the appeal, and entering judgment for R:-
(1) The Judge’s directions on informed consent and breach of confidence were correct, and criticisms of his directions on meaning were not alone sufficient to warrant overturning the decision. However, he misdirected the jury in other respects. A solicitor’s fiduciary duty to his client is distinct from his contractual obligations. The Judge’s direction to the jury that, in law, C owed no duty of loyalty to R because C’s only client was R’s nominee was a serious error on a crucial issue. The Judge also erred in his direction that there could only be a conflict of interest if C was acting for R in relation to the very same matter.
(2) The Judge should have withdrawn malice from the jury. He also failed adequately to distinguish between the objective test of meaning for justification and the subjective test for malice.
(3) The Judge did not misdirect the jury as to damages.


Comment

Auld LJ sympathised with the Judge and jury in respect of the unhappy divide of responsibility between them on supposedly self-contained issues of law and fact. The crucial issues here were in truth mixed law and fact: “It is, in my view, no advertisement for our system of jury trial in civil cases – where it applies – for such complex issues to be tried in this way. A Martian, on learning of it, would be amazed, as would the ordinary person in the street.” Whilst the court did not have to decide whether the damages were excessive, all three members of the court were concerned by the sum awarded. James Price QC and David Sherborne of 5RB represented R at the jury trial.


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Instructing Solicitors

David Conway & Co for C; Clifford Chance for R