Associated Leisure Ltd (Phonographic Equipment Company Ltd) v Associated Newspapers Ltd

CourtCourt of Appeal
JudgeTHE MASTER OF THE ROLLS, LORD JUSTICE EDMUND DAVIES, LORD JUSTICE MEGAW
Judgment Date28 May 1970
JurisdictionEngland & Wales
Neutral Citation[1970] EWCA Civ J0528-2

[1970] EWCA Civ J0528-2

In The Supreme Court of Judicature

Court of Appeal

From: Mr Justice Cooke (In Chambers)

Before:-

The Master of the Rolls

(Lord Denning),

Lord Justice Edmund Davies and

Lord Justice Megaw.

Associated Leisure Limited (Phonographic Equipment Company Limited), Max Fine, Cyril Charles Shack, Gordon Phillip Montague Marks, William Robert Ruffler, Ralph Mandell, John Michael Tennent, Frederick Gordon Walker, Michael John Geber
Respondents (Plaintiffs)
and
Associated Newspapers Limited
Appellants (Defendants)

SIR PETER RAWLINSON, Q.C. and MR BRYAN ANNS (instructed by Messrs. Swepstone Walsh & Sons, E.C.4) appeared on behalf of the Appellants (Defendants).

MR DAVID HIRST, Q.C. and MR A.T. HOOLAHAN (instructed by Messrs. Simmons & Simmons, E.C.2) appeared on behalf of the Respondents (Plaintiffs).

THE MASTER OF THE ROLLS
1

On 5th December, 1968, the Daily Mail came out with an article headed "West End Mafia faces attack by Sir Rasher", followed by the sentences: "American gangsters could wind up owning London… Already it is thought the Mafia has quietly acquired interests in several London casinos and is working closely with others". The articledescribed an interview with Sir Ranulph Bacon, one of the Gaming Board. Then there came sentence which is said to be a libel: "It's only few weeks ago that a Mafia takeover bid to get hold of one of our big entertainment companies made the front-page headlines. Except that only few people knew about the Mafia part of it".

2

A company called Phonographic Equipment Company Limited and its directors thought that that sentence referred to them. They were a company which dealt with gaming machines. They had, a few weeks before, bought to a acquire a controlling interest in Butlins Limited, which is, of course, one of our big entertainment companies. Their proposal had been noticed prominently in some of the newspapers.

3

Accordingly, on the day after the article was published, on 6th December, 1968, Phonographic Equipment Company Limited, with eight of its Director, including in particular Mr Fine, the Chairman; & Mr Shack and Mr Marks, the Joint Managing Directors, brought an action for libel against Associated Newspapers Limited for publishing that article.

4

The Statement of Claim set out the sentence as a libel. No innuendo was pleaded. The Plaintiffs relied on the natural and ordinary meaning of the words. They assumed that everyone knows what the "Mafia" is. I suppose most people do. The Mafia, we are told, used to be the name of a Sicillian secret society, but it has now come to designate a gang of American criminals, some of whom are of Italian origin.

5

The Defence was delivered promptly on 14 January, 1969. It simply denied that the words were printed and published of the Plaintiffs, or were defamatory of the Plaintiffs. It is doubtful whether the Defence would get very far. The Plaintiffs soon took out a Summons for Directions. An Order was made for trial by Jury. The case was set for trial. It was due to come on last Term, but by agreement it was kept out of that Term. It is now due to come on next month when the Jury List is taken.

6

Meanwhile, an important thing has happened. In March last the Defendants sought to amend their Defence. They wished to plead justification, so as to say that the words were true in substance and in fact. They drafted an amendment with many pages of particulars. They summarised it at the end by saying that the "attempted takeover was for the purpose of gaining for the Mafia a substantial interest in the gaming and leisure industry of the United Kingdom". This was, of course, a most serious allegation. The Plaintiff Company is an important public company. (It has since changed its name to Associated Leisure Limited). It is very serious to say it is controlled by, or associated with, the Mafia.

7

The Plaintiff resisted the amendment. They have applied to the Gaming Board for a certificate to enable them to sell and supply gaming machines, such as fruit machines, one-armed bandits, and the like. This application is necessary under the Gaming Act, 1968. In determining whether to issue a certificate, the Gaming Board will have to have regard, and have regard only, to the question whether they are fit and proper persons to perform the functions is due to be heard by October of this year. The Plaintiff Company wish to clear their character before the application is heard.

8

The application to mend came before the Master and the Judge. Both refused to allow it. It was made, they thought, too late. It came at the eleventh hour. If allowed, it would mean a very considerable delay. The case would not come on for trial, at the earliest, before the end of this year, or the beginning of next. It was, they thought in these circumstances, unjust to allow the amendment.

9

I start with the principle, well settled, that an amendment ought to be allowed, even if it comes late, if it is necessary to do justice between the parties, so long as any hardship done thereby can be compensated in money. Thatprinciple applies here. I think that justice requires that the matters alleged in this amendment should be investigated in a Court of Law. It would, I think, be very strange if this libel action were to be tried next month and damages awarded on the basis that there was nothing whatsoever to be said against the Plaintiffs: and yet, in October, the Gaming Board were to refuse them a certificate on the ground that they were not fit and proper persons to supply and sell gaming machines. It is in the interests of consistency and justice that the reputation and character of the Plaintiffs should be properly considered in this action, provided always, as I have said, that any hardship to the Plaintiffs can be compensated for in money. I think it can so be compensated. The Defendants, in putting this plea of justification of the record, run very grave risk. If it fails, the damages, which might otherwise have been modest, would now be colossal.

10

Mr Hirst says, quite properly, that the pleading ought to be scrutinised closely. The Defendants ought to give proper Particulars. They ought not to be allowed to put in a loose, ineffective pleading at the last hour. I agree to this extent: there are two paragraphs (sub-paragraphs 11 and 12 of paragraph 7) which are not well pleaded. They go, so far as I can see, to credit, not to justification. They must come out. The remaining paragraphs are not yet as complete in particulars as they might be: but not so deficient as to require them to be struck out. Any deficiencies can be made good by an application for further particulars.

11

Mr Hirst criticised the plea of fair comment. He said, with some force, that the statements complained of were...

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