Derbyshire County Council v Times Newspapers Ltd

JurisdictionEngland & Wales
CourtHouse of Lords
JudgeLord Keith of Kinkel,Lord Griffiths,Lord Goff of Chieveley,Lord Browne-Wilkinson,Lord Woolf
Judgment Date18 February 1993
Judgment citation (vLex)[1993] UKHL J0218-2

[1993] UKHL J0218-2

House of Lords

Lord Keith

Lord Griffiths

Lord Goff of Chieveley

Lord Browne-Wilkinson

Lord Woolf

Derbyshire County Council
(Appellants)
and
Times Newspapers Limited and Others
(Respondents)
Lord Keith of Kinkel

My Lords,

1

This appeal raises, as a preliminary issue in an action of damages for libel, the question whether a local authority is entitled to maintain an action in libel for words which reflect on it in its governmental and administrative functions. That is the way the preliminary point of law was expressed in the order of the Master, but it has opened out into an investigation of whether a local authority can sue for libel at all.

2

Balcombe L.J., giving the leading judgment in the Court of Appeal, summarised the facts thus:

"The facts in the case are fortunately refreshingly simple. In two issues of 'The Sunday Times' newspaper on 17 and 24 September 1989 there appeared articles concerning share deals involving the superannuation fund of the Derbyshire County Council. The articles in the issue of 17 September were headed 'Revealed: Socialist tycoons's deals with a Labour chief' and 'Bizarre deals of a council leader and the media tycoon': that in the issue of 24 September was headed 'Council share deals under scrutiny'. The council leader was Mr. David Melvyn Bookbinder; the 'media tycoon' was Mr. Owen Oyston. It is unnessary for the purposes of this judgment to set in any detail the contents of these articles: it is sufficient to say they question the propriety of certain investments made by the council of moneys in its superannuation fund, with Mr. Bookbinder as the prime mover, in three deals with Mr. Oyston or companies controlled by him. Excerpts from the articles giving the flavour of the allegations made will be found in the judgment at first instance [1991] 4 All E.R. 795 to which those interested may refer. The council is the 'administering authority' of its superannuation fund under the Superannuation Act 1972 and the Local Government Superannuation Regulations 1986 ( S.I. 1986 No. 24) made thereunder".

3

Following the publication actions of damages for libel were brought against the publishers of The Sunday Times, its editor and the two journalists who wrote the articles by Derbyshire County Council ("the appellants"), Mr. Bookbinder and Mr. Oyston. Mr. Oyston's action was settled by an apology and payment of damage and costs. The statements of claim in this action by the appellants and in that by Mr. Bookbinder are for all practical purposes in identical terms. That of the appellants asserts in paragraph 6 that there were written and published "of and concerning the council and of and concerning the council in the way of its discharge of its responsibility for the investment and control of the superannuation fund" the words contained in the article of 17 September, and paragraph 8 makes a similar assertion in relation to the article of 24 September. Paragraph 9 states:

"By reason of the words published on 17 September 1989 and the words and graph published on 24 September 1989 the plaintiff council has been injured in its credit and reputation and has been brought into public scandal, odium and contempt, and has suffered loss and damage."

4

No special damage is pleaded. On 31 July 1991 French J. refused an application by the appellants to amend the statement of claim so as to plead a certain specific item of special damage.

5

The preliminary point of law was tried at first instance before Morland J. who on 15 March 1991 decided it in favour of the appellants ( 1991 4 All E.R. 795). However, on appeal by the present respondents his judgment was reversed by the Court of Appeal (Balcombe, Ralph Gibson and Butler-Sloss L.JJ.) on 19 February 1992 [1992] Q.B. 770. The appellants now appeal, with leave given in the Court of Appeal, to your Lordships' House.

6

There are only two reported cases in which an English local authority has sued for libel. The first is Manchester Corporation v. Williams [1891] 1 Q.B. 94: 63 L.T. 805. The defendant had written a letter to a newspaper alleging that "in the case of two if not three departments of our Manchester city council, bribery and corruption have existed and done their nefarious work." A Divisional Court consisting of Day J. and Lawrance J. held that the statement of claim disclosed no cause of action. The judgment of Day J. at p. 96 of the Queen's Bench report is in these terms:

"This is an action brought by a municipal corporation to recover damage for what is alleged to be a libel on the corporation itself, as distinguished from its individual members or officials. The libel complained of consists of a charge of bribery and corruption. The question is whether such an action will lie. I think it will not. It is altogether unprecedented, and there is no principle on which it can be founded. The limits of a corporation's right of action for libel are those suggested by Pollock C.B. in the case which has been referred to. A corporation may sue for a libel affecting property, not for one merely affecting personal reputation. The present case falls within the latter class. There must, therefore, be judgment for the defendant."

7

Lawrance J. said that he was of the same opinion.

8

The Law Times report contains a somewhat longer judgment of Day J. in these terms:

"This action is brought by the mayor, aldermen, and citizens of the city of Manchester to recover damages from the defendant in respect of that which is alleged by them to be a libel on the corporation. The alleged libel is contained in a letter written by the defendant to the editor of the 'Manchester Examiner and Times', which charged, as alleged by the statement of claim, that bribery and corruption existed or had existed in three departments of the Manchester City Council, and that the plaintiffs were either parties thereto or culpably ignorant thereof, and that the said bribery and corruption prevailed to such an extent as to render necessary an inquiry by a parliamentary commission. Now it is for us to determine whether a corporation can bring such an action, and I must say that, to my mind, to allow such a thing would be wholly unprecedented and contrary to principle. A corporation may sue for a libel affecting property, not for one merely affecting personal reputation. This does not fall within the class of case in respect of which a corporation can maintain an action, but does fall within the second class commented on by Pollock C.B. in his judgment in the case of the Metropolitan Saloon Omnibus Co. Ltd. v. Hawkins, 4 H. & N. 87, with which I fully agree [a quotation follows] The charge in the present case is one of bribery and corruption, of which a corporation cannot possibly be guilty, and therefore, in my opinion, this action will not lie."

9

It is likely that the Law Reports version of his judgment was one revised by Day J., in which he omitted the sentence which ends the Law Times report, so that the true and only ratio of the decision is that a corporation may sue for a libel affecting property, but not for one merely affecting personal reputation.

10

Metropolitan Saloon Omnibus Co. Ltd. v. Hawkins (1859) 4 H. & N. 87 was an action by a company incorporated under the Joint Stock Companies Act 1856 in respect of a libel imputing to it insolvency, mismanagement and dishonest carrying on of its affairs. The Court of the Exchequer held the action to be maintainable. Pollock C.B. said at p. 770, in the passage referred to by Day J.:

"That a corporation at common law can sue in respect of a libel there is no doubt. It would be monstrous if a corporation could maintain no action for slander of title through which they lost a great deal of money. It could not sue in respect of an imputation of murder, or incest, or adultery, because it could not commit those crimes. Nor could it sue in respect of a charge of corruption, for a corporation cannot be guilty of corruption, although the individuals composing it may. But it would be very odd if a corporation had no means of protecting itself against wrong; and if its property is injured by slander it has no means of redress except by action. Therefore it appears to me clear that a corporation at common law may maintain an action for a libel by which its property is injured."

11

In South Hetton Coal Co. Ltd. v. North-Eastern News Association Ltd. [1894] 1 Q.B. 133 a newspaper had published an article alleging that the houses in which the company accommodated its colliers were in a highly insanitary state. The Court of Appeal held that the company was entitled to maintain an action for libel without proof of special damage, in respect that the libel was calculated to injure the company's reputation in the way of its business. Lord Esher M.R. said at p. 138:

"I have considered the case, and I have come to the conclusion that the law of libel is one and the same as to all plaintiffs; and that, in every action of libel, whether the statement complained of is, or is not, a libel, depends on the same question — viz., whether the jury are of opinion that what has been published with regard to the plaintiff would tend in the minds of people of ordinary sense to bring the plaintiff into contempt, hatred, or ridicule, or to injure his character. The question is really the same by whomsoever the action is brought — whether by a person, a firm, or a company. But though the law is the same, the application of it is, no doubt, different with regard to different kinds of plaintiffs. There are statements which, with regard to some plaintiffs, would undoubtedly constitute a libel, but which, if published of another kind of plaintiffs, would not have the same effect."

12

He went on to say that certain statements might have the same effect, whether made with regard to a person, or a firm, or a company, for example statements with regard to conduct...

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