Bryanston Finance Ltd v de Vries
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD DIPLOCK,LORD JUSTICE LAWTON |
| Judgment Date | 14 February 1975 |
| Judgment citation (vLex) | [1975] EWCA Civ J0214-2 |
| Date | 14 February 1975 |
| Court | Court of Appeal (Civil Division) |
[1975] EWCA Civ J0214-2
The Master of The Rolls (Lord Denning),
Lord Diplock and
Lord Justice Lawton
In The Supreme Court of Judicature
Court of Appeal
Appeal of Mr. de Vries, First Defendant, from judgment of Mr. Justice O'Connor on 14th March 1974.
The Appellant, Mr. de Vries, appeared in person.
Mr. ELLIS MEYER (instructed by Messrs. Peter Mallack & Co.) appeared on behalf of the Respondents.
1 THE FACTS
This case reads like a play. It has many acts and scenes. On the stage now the principal characters are Mr. Alfred Teddy Smith, a financier in London, and Mr. Juda de Vries, a diamond tool manufacturer. In previous scenes there appeared Lord Carbery, the 11th Baron. He was jointly concerned with Mr. de Vries in much that took place, but he has now dropped out. The other two principal characters are limited companies with which Mr. Smith is closely concerned. He is the Chairman of each of them. One of them is the National Union Bank Limited. You might think, by its name, it was an old and respectable bank in the City of London. In point of fact, it is a finance company registered in the Bahamas. It conducts its business in London. It lends money. Before 1968 it might have been caught by the Moneylenders Acts, just as the United Dominions Trust nearly was - the United Dominions Trust v. Kirkwood (1966) 2 Q. B. 431. But on 1st January 1968, it took advantage of the new provisions in the Companies Act 1967. It obtained a certificate from the Board of Trade that it could properly betreated as a banker. All its shares are owned by Bryanston Finance Limited. That is a public company registered in England, and its shares are quoted on the London Stock Exchange. Mr. Smith is a principal shareholder.
In 1967 and 1968, Mr. de Vries and Lord Carbery (then Mr. Evans-Freke) had had many dealings with Mr. Smith and the National Union Bank. They eventually became very dissatisfied and took active steps. On 21st January 1969, Mr. de Vries complained to the Board of Trade about the banking certificate which had been granted to the National Union Bank. He said that the Bank had been guilty of malpractices and that its certificate ought to be rescinded. On 2nd May 1969, Mr. de Vries issued a circular to the shareholders of Bryanston Financealleging serious irregularities in the management of the company and its subsidiaries. On 14th May 1969, Mr. Smith issued a circular to them answering the allegations. About the same time Mr. do Vries and Lord Carbery (then Mr. Evans-Freke) issued a writ against the National Union Bank and Mr. Smith charging thorn with conspiracy and claiming damages from them.
This action for conspiracy was likely to be long and expensive. To put an end to it, on 5th February 1971, Mr. de Vries and Lord Carbery together made a plan which was very improper. They determined to bring pressure to bear on Mr. Smith so as to make him settle their claims on "an equitable basis". They prepared a whole set of documents, in which they accused him of serious misdemeanours; and they threatened to despatch these documents unless he settled their claims. The documents were:
(i) a circular to the shareholders of Bryanston Finance Limited. in which they accused Mr. A. T. Smith of defalcation and falsification of books; of using the National Union Bank to ruin small traders; and of running the business of Bryanston Finance for his own benefit;
(ii) a letter to the Department of Trade and Industry asking them investigate the activities of the National Union Bank and to rescind its banking certificate;
(iii) a letter to the Stock exchange asking the Committee to suspend dealings in the shares of Bryanston Finance Ltd.
Having prepared those documents, ready for despatch, Mr. de Vries and Lord Carbery prepared a covering letter which they proposed to send to Mr. Smith, together with those documents. In it they said:
"We are not by nature vindictive men, and before proceeding any further, we have decided to give you one last chance to settle our claims on an equitable basis.
We are giving you the opportunity of showing you a circular which has been prepared and addressed to all your shareholders. They have been taken abroad where they will be posted tomorrow. At the same time copies will be deliveredby ahdn to the Stock Exchange, the Department of Trade and Industry, the Registrar of Companies, the National Westminster Bank and the National Press…………….
We regret that we are unable to give you more time to consider this matter, but for technical reasons it is impossible for us to contact our man on the Continent after 12.00 a.m. tonight, and we must therefore hear from you by 11.00 p.m. to give us an hour to dear matters up…
(Signed)
J. de Vries Carbery".
I pause here to say that that looks as if it were a piece of blackmail. But I do not think it should be regarded as proved. In our land every man is presumed to be innocent until he is proved guilty. Both Lord Carbery and Mr. de Vries felt very strongly that Mr. Smith had been guilty of misdemeanours: and at present it should be assumed, in their favour, that they made their demand in the belief that they had reasonable ground for making it, see Section 21(1)(a) of the Theft Act 1968.
You will see in that letter they said that the circulars had been taken abroad where they would be posted. That seems to have been a piece of bluff. Nothing of the kind had been done.
I must pause here to describe how the letter and enclosures were prepared. Mr. de Vries and Lord Carbery drafted them together. They dictated them to a shorthand-typist, Miss. Burrell. She typed them out. They had in the office a machine for making copies by photography. Miss. Burrell handed the typescript of the circular to another servant, a lad named Prest, and he made a printed version of it ready for making copies. Neither Miss. Burrell nor Mr. Prest took much notice of what was in them. Then Miss. Burrell brought back to Mr. de Vries and Lord Carbery the letter and enclosures. They both signed the letter and put it, with the enclosures, in a sealed envelope addressed to Mr. Smith.
The story then unfolds. On Saturday evening, 6th February 1971,a messenger took the sealed envelope by hand to Mr. Smith' private address, 6 Bryanston Court, George Street, W.1. It was delivered at about 9 p.m. Mr. Smith opened it himself and took out the letter and the enclosures. At once Mr. Smith rang up his solicitors, who in turn rang up leading Counsel. They went round to Mr. Smith' flat. They read the documents. They called a police officer. There were telephone calls. In consequence, Mr. Smith and his solicitor went round to Mr. de Vries' address. They found there Mr. de Vries and Lord Carbery Those two produced a form of agreement which they wanted Mr. Smith to sign. The solicitor said that Mr. Smith could not sign it, but it must be referred to the Board. So Mr. de Vries and Lord Carbery got nowhere. But Mr. Smith and his solicitor acted quickly. On the Sunday morning their Counsel went to Mr. Justice Ackner at his private address. Counsel applied for an interim injunction to restrain Mr. de Vries and Lord Carbery from carrying out their threat to distribute the circulars, and so forth. There had been no time to issue a writ, but Counsel undertook that it would be issued. Thereupon Mr. Justice Ackner granted the interim injunction. On Monday morning, the writ was issued. It was by Bryanston Finance, the National Union Bank and Mr. Smith against Mr. de Vries and Lord Carbery claiming damages for libel and an injunction. It is this libel action which is now before us.
A little later, in 1971, the National Union Bank took proceedings against Lord Carbery and his trustees. It appears that the Bank had lent over £150,000 to Lord Carbery and he had charged his settled estates in repayment of the loan, By this action in 1971, the National Union Bank sought to foreclose and take the settled estates.
Turning back to the libel action. On the 20th April 1971, a statement of claim was delivered claiming damages for libel, slander and an injunction. On 17th July 1971, defences were delivered relyingon qualified privilege, but not containing any plea of justification. On 28th July 1971, there were replies alleging express malice. On 19th January 1973, each defendant paid in £10 with a notice saying that it was in satisfaction of the claim for damages.
On Tuesday, 2nd October, 1973, two actions came for trial: (i) the case in which Mr. de Vries and Lord Carbery claimed damages for conspiracy against the National Union Bank and Mr. Smith; (ii) the case in which the National Union Bank sought to foreclose on Lord Carbery' settled estates. The libel action was not in the list for trial on that occasion.
The two actions were tried by Mr. Justice Cusack. Mr. Balcombe, Q. C. for Mr. de Vries and Lord Carbery opened the conspiracy action for four days from Tuesday, 2nd to Friday, 5th October, 1973. But then on the Friday, 5th October, Lord Carbery came to terms of settlement with Mr. Smith and his companies. Lord Carbery did it on his own without Mr. de Vries. It is important to note the terms on which Lord Carbery settled the actions, "to have not the full terms, but from the documents they seem to have been this:
(a) The conspiracy action: Lord Carbery discontinued the action for conspiracy and agreed to pay £10,000 towards the defendants' costs. He also undertook not to repeat any of the allegations critical of Mr. Smith or any of his companies.
(b) The foreclosure action: Lord Carbery submitted to judgment for £150,000 and £12,500 costs: and...
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