Tinkler v Ferguson & others

Reference: [2021] EWCA Civ 18

Court: Court of Appeal (Civil Division)

Judge: Peter Jackson & Dingemans LLJ, Sir Richard McCombe

Date of judgment: 1 Feb 2021

Summary: Malicious Falsehood – Abuse of Process – Section 3 Defamation Act 1952

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Appearances: Andrew Caldecott QC - Leading Counsel (Respondent)  Jacob Dean (Respondent)  Kate Wilson (Appellant) 

Instructing Solicitors: Clyde & Co LLP (Appellant); Herbert Smith Freehills (Respondents)

Facts

The Appellant/Claimant was previously an executive director, board member and substantial shareholder of the Stobart Group Limited.  The Respondents/Defendants were also members of the Stobart Group board.  In 2018, a boardroom dispute arose.  Mr Tinkler considered that the First Respondent, Mr Ferguson, then the Chairman, should be replaced.  The other Respondents supported Mr Ferguson.  Ahead of the Stobart Group’s AGM, the company issued a Regulatory News Service (“RNS”) announcement on 25 May 2018 to the London Stock Exchange about the dispute.

On 29 May 2018 the Respondents issued a second announcement via RNS on behalf of Stobart Group (“The Announcement”).

On 8 June 2018 the Appellant issued a claim for libel and malicious falsehood in respect of the Announcement.

On 14 June 2018 Mr Tinkler was dismissed as a director and employee.  The following day Stobart Group commenced proceedings against Mr Tinkler in the Commercial Court (“the Stobart Action”), including for declarations that he had been lawfully dismissed.  Mr Tinkler counter-claimed.

The Stobart Group’s AGM took place on 6 July 2018.  Mr Ferguson was re-elected as chairman.  The Appellant was also re-elected to the Board, but the board subsequently removed him.

The Stobart Action was expedited and tried before HHJ Russen QC in November 2018 with judgment handed down on 15 February 2019 ([2019] EWHC 258 (Comm)) (“the Russen Judgment”).

Mr Tinkler’s defamation and malicious falsehood action was pursued in the QBD, although he discontinued his libel action following rulings on meaning.  The meaning of the Announcement for the purpose of the malicious falsehood claim was that he had “destabilised the Board at a crucial time for the business (Meaning A); and/or he required the Board to deal with challenges [some of which were listed] (Meaning B)”

On 8 June 2020 Nicklin J struck out the malicious falsehood claim on the grounds that (a) it was an abuse amounting to a collateral attack on the Russen Judgment and (b) Mr Tinkler did not have a case that the Announcement was calculated to cause pecuniary damage within s.3 of the Defamation Act 1952.

The Appellant, who had appeared in person before Nicklin J, appealed.

Following the hearing of the appeal, two differently constituted panels handed down judgments in two other appeals concerning collateral attack abuse: Allsop v Banner Jones Ltd [2021] EWCA Civ 7 and PriceWaterhouseCoopers LLP v BTI 2014 LLC [2021] EWCA Civ 9.

Issue

The Grounds of Appeal (see [39]) contended that the Malicious Falsehood Action was not an abuse of process where:

1.  It had been brought first, and was not a collateral attack on key findings in the Stobart Action including whether Mr Tinkler had been lawfully removed.

2.  The overlap between the two proceedings was less than Nicklin J had considered it to be.

3.  Contrary to the Judge’s finding, there had been no breach of the Aldi guidelines.

4.  The Appellant was not attempting to have ‘a second bite of the cherry’ and the risk of inconsistent findings was not abusive.

5.  There was no unfairness to the Respondents in allowing the Malicious Falsehood Action to proceed to trial, nor would it bring the administration of justice into disrepute.

And that the finding on section 3 was wrong where:

6.  The evidence and submissions supported an inference that the publication of the Announcement was more likely than not to cause pecuniary damage to Mr Tinkler.

7.  The Respondents should not have been allowed to amend their application three working days before the hearing before Nicklin J to raise s.3 Defamation Act 1952.

By a Respondent’s Notice, the Respondents sought to uphold the Judge’s order on the additional basis that the Malicious Falsehood Action in relation to Meaning B disclosed no substantial tort, i.e. was Jameel abuse.

In order to support an alternative case on likely pecuniary damage, the Appellant also applied to adduce fresh evidence about the instructions he had had in place with the Stobart Group’s broker to dispose of a substantial number of his shares at the time the Announcement was published and the impact of the Announcement on the company’s share price.

Held

The Judge had erred in relying upon a breach of the Aldi Guidelines to strike out the claim.  There were good reasons why the Malicious Falsehood Action and Stobart Action had progressed separately.

However, the claim was a collateral attack on the Russen Judgment because of the “substantial” overlap between the two sets of proceedings.  The fact that the Malicious Falsehood Action was started first did not preclude a finding of collateral attack abuse and neither did the fact that the Respondents were not parties or privies to the Stobart Action which had been brought by the company.

The Court considered that Nicklin J had not based his decision on the risk of inconsistent findings but rather concern about duplicative proceedings.

The Judge had been correct to find that Mr Tinkler could not satisfy section 3 of the 1952 Act.  Any pecuniary damage suffered by Mr Tinkler was “objectively much more likely” to have been caused by subsequent events including his dismissal and the adverse findings in the Russen Judgment.

The Court refused to allow the fresh evidence application as it did not satisfy Ladd v Marshall, the prevailing company share price never having traded within the parameters in which Mr Tinkler intended to sell them.

Comment

Bearing in mind the unusual factual circumstances of this case, it is of most interest when read together with the Court of Appeal’s two other decisions concerning collateral attack abuse, Allsop v Banner Jones Ltd and PriceWaterhouseCoopers LLP v BTI 2014 LLC which were handed down around the same time.  Each rehearses the key authorities and principles.  They provide a reminder to litigants to consider whether multiple claims should be case-managed together, and to address case management even if, in any particular case, there is good reason to pursue multiple claims separately.  Although there was no breach of Aldi guidelines in the present case, the decision in Tinkler v Ferguson, that a claim issued first in time can become a collateral attack abuse on a later-issued claim, illustrates that such case management considerations need to be kept under review.