Defamation appeal: Court of Appeal rules that qualified privilege applies in respect of letter to regulator Mahon and Another v Rahn and Others
| Published date | 01 January 2001 |
| DOI | https://doi.org/10.1108/eb025065 |
| Pages | 91-95 |
| Date | 01 January 2001 |
| Author | Brooke LJ,Mantell LJ,Laws LJ |
| Subject Matter | Accounting & finance |
Journal of Financial Regulation and Compliance Volume 9 Number 1
Regulatory and legal commentary
Defamation appeal: Court of Appeal rules
that qualified privilege applies in respect of
letter to regulator
Mahon and Another v Rahn and Others
Court of Appeal, Civil Division: Brooke LJ, Mantell LJ, Laws LJ
Date of Judgment: 8th June, 2000
FACTS
The factual background to this appeal was
given in Vol.8, No.l Journal of Financial
Regulation and Compliance when the judg-
ment at first instance, from which this
appeal by the Defendants was brought, was
considered and analysed.
The claimants at first instance (and the
respondents to this appeal) were a Mr
Patrick Mahon and a Mr Andrew Kent
who were, respectively, at the time these
proceedings took place, managing director
and corporate development manager of
TC Coombs, a London stockbroker which
at the time was authorised to carry on
investment business under the Financial
Services Act 1986 by virtue of its member-
ship of the Securities Association (TSA),
one of the predecessor bodies to the Securi-
ties and Futures Authority.
The first four Defendants in this action
were partners in the fifth Defendant Rahn
& Bodmer, a private Swiss bank. One of
TC Coombs' clients, a Mr Johnson, was
under investigation by the Serious Fraud
Office (SFO) in early 1990. TC Coombs
was owed a great deal of money by John-
son in 1988 and faced requests for extra
capital and an (unsuccessful) challenge to
compliance with capital adequacy standards
from the London Stock Exchange and
TSA respectively. Mr Johnson had been
involved in a complex transaction invol-
ving shares in a Canadian company, Coast-
line,
during the course of which he dealt
with and through TC Coombs and one of
the partners of the Swiss bank, Mr Kaiser,
also dealt in Coastline shares on behalf of
the bank through TC Coombs. That part-
ner subsequently resigned when these
events came to light.
The bank and the Defendants (Appel-
lants in this appeal) contended that the true
consideration for the sale was $3m for the
Coastline shares but Mr Kaiser had agreed
a price of $5m in response to pressure from
Mr Kent to document a sale at a higher
price against a promise to subsequently
repay the bank the $2m balance.
In 1991 Mr Mahon and Mr Kent were
prosecuted by SFO with conspiracy to
defraud TSA by dishonestly representing
that the $5m debit expressed as payable
from the bank to TC Coombs was a true
debt. The judge ruled that there was no
case to answer in this prosecution and the
respondents then began defamation pro-
ceedings, to which was later added a claim
Journal of Financial Regulation
and Compliance, Vol. 9, No. 1,
2001,
pp.
91-95
© Henry Stewart Publications,
1358-1988
Page 91
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