Derbyshire County Council v Times Newspapers Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE BALCOMBE,LORD JUSTICE RALPH GIBSON,LORD JUSTICE BUTLER-SLOSS |
| Judgment Date | 19 February 1992 |
| Judgment citation (vLex) | [1992] EWCA Civ J0219-8 |
| Docket Number | 92/0130 |
| Court | Court of Appeal (Civil Division) |
| Date | 19 February 1992 |
[1992] EWCA Civ J0219-8
Lord Justice Balcombe
Lord Justice Ralph Gibson
Lord Justice Butler-Sloss
92/0130
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(MR. JUSTICE MORLAND)
Royal Courts of Justice
MR. A. P. LESTER Q.C. and MR. D. J. M. BROWNE Q.C. (instructed by Messrs. Biddle & Co.) appeared for the Appellants (Defendants).
MR. A. R. H. NEWMAN Q.C. and MR. A. D. L. WHITE (instructed by Messrs. Kingsford Stacey) appeared for the Respondents (Plaintiffs).
This appeal, with leave of the judge, fro a judgment of Morland J. given on 15th March 1991 (reported [1991] 4 All E.R. 795), raises for the first time in the Court of Appeal the question whether a local authority which is a body corporate can sue for libel under the law of England and Wales. That puts the matter in its widest terms: the precise terms of the preliminary point of law upon which the judge made his ruling were:
"…whether the Plaintiffs [Derbyshire County Council] can maintain an action for libel for any words which reflects (sic) upon the said Plaintiff as County Council for Derbyshire in relation to its governmental and administrative functions in Derbyshire, including its statutory responsibility for the investment and control of the Superannuation Fund,"
The preliminary point continues:
"…and whether, if not, the Statement of Claim…discloses a cause of action."
The judge treated this as a separate question concerned with the ambit of section 221(1) of the Local Government Act 1972; we followed the same course, even though this would seem to require that the question be phrased
"…and whether, if so, the Statement of Claim discloses…"
The facts in the case are fortunately refreshingly simple. In two issues of the Sunday Times newspaper on 17th and 24th September 1989 there appeared articles concerning share deals involving the superannuation fund of the Derbyshire County Council. The articles in the issue of 17th September 1989 were headed "REVEALED: SOCIALIST TYCOON'S DEALS WITH A LABOUR CHIEF" and "BIZZARE DEALS OF A COUNCIL LEADER AND MEDIA TYCOON": that in the issue of 24th September 1989 was headed "COUNCIL SHARE DEALS UNDER SCRUTINY". The Council leader was Mr. David Melvyn Bookbinder; the "media tycoon" was Mr. Owen Oyston. It is unnecessary for the purposes of this judgment to set out in any detail the content of these articles: it is sufficient to say that they question the propriety of certain investments made by the Council of monies 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. at p. 789) to which those interested may refer. The Council is the "administering authority" of its superannuation fund under the Superannuation Act 1972 and the regulations made thereunder.
In due course the Council, Mr. Bookbinder and Mr. Oyston all brought actions for defamation in respect of those articles. We were told that Mr. Oyston's action was settled on 7th October 1991 following a statement in open court, by an apology made to Mr. Oyston and the payment of damages and costs. The actions by the Council and Mr. Bookbinder (which are to be tried one immediately after the other, or concurrently, before the same tribunal) are stayed pending the outcome of this appeal. The statements of claim in the actions by the Council and Mr. Bookbinder are in terms which are, as near as may be, identical. The defendants are in each case Times Newspapers Limited (the publisher and proprietor of the Sunday Times), the editor of the Sunday Times, and the two journalists who wrote the articles of which complaint is made. Paragraph 6 of the Council's statement of claim asserts that in the issue of the Sunday Times for 17th September 1989 the third and fourth defendants wrote, and the first and second defendants 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 following words:—"
and then follow the words of which complaint is made. Paragraph 8 of the Council's statement of claim makes a similar assertion in relation to the article of 24th September 1989. Then the second paragraph 9 of the Council's statement of claim is in these terms:—
"By reason of the words published on the 17th September 1989 and the words and graph published on the 24th 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."
It will be noted that no special damage is pleaded. An application by the Council to amend its statement of claim so as to plead special damage was refused by French J. on 31st July 1991.
The argument before the judge on the first question, whether a local authority can sue for libel in respect of its governing or administrative reputation when no actual financial loss is alleged, proceeded under two main heads:
(1) Whether, apart from arguments based on the right to freedom of expression, a non-trading corporation has a sufficient reputation to sustain an action for libel even though it can establish no actual financial loss. The judge answered this question unequivocally in the affirmative sense.
(2) Whether the right to free speech, whether as a right at common law, or under Article 10 of the European Convention on Human Rights, led to a different result in the case of a non-trading corporation which was also a public authority. The European Convention was ratified by the U.K. on 8th March 1951; Article 19 of the U.n. covenant on Civil and Political Rights, which was ratified by the U.K. with effect from 20th August 1976, is to the like effect. The judge gave short shrift to an argument based on the right to free speech, and held that it did not affect his primary conclusion as stated above. He answered the second question, which he considered as turning on the effect of section 222(1) of the Local Government Act 1972, by concluding that the Council had a cause of action in libel against the defendants on the basis of the pleaded statement of claim.
From this judgment the Council has appealed.
The arguments before us ranged far and wide, as they did before the judge, but in the end they resolved into the following issues which I propose to consider seriatim.
(1) Can a non-trading corporation sue for libel in respect of its governing or administrative reputation when no actual financial loss is pleaded or established?
(2) Does the right to freedom of expression affect the position where the non-trading corporation is also a public authority?
(3) Does the operation of section 222(1) of the Local Government Act 1972, or any other matter contained in or omitted from the Council's statement of claim, preclude the Council from continuing with this action?
(1) The right of a non-trading corporation to sue for libel.
I start, as did the judge, with the proposition that the raison d'etre of the tort of defamation is the protection of the reputation of a person. Where the person is a living human person no particular problem arises, but sometimes the personality is a legal fiction, as in the case of a corporation. Does such a fictitious person have a reputation which it can protect by the law of defamation?
It seems never to have been doubted that a corporation created by Royal charter can sue for libel. Thus in the Metropolitan Saloon Omnibus Company v. Hawkins [1859] 4 H.&N. 87, Pollock C.B. said (at p. 90):
"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."
The Metropolitan Saloon Omnibus case concerned the right of a trading company incorporated under the Joint Stock Companies Act 1856 to sue for libel. The court was unanimous in holding that it had such a right. The argument of counsel to the contrary effect and, indeed some of the judgment—e.g. the reference by Pollock C.B. to the plaintiff as a "quasi corporation"—seem to reflect a confusion of thought about identifying the company with its members that was not finally laid to rest until the decision of the House of Lords in Saloman v. Saloman & Co. [1897] A.C. 22. Nevertheless each member of the court held that the company could sue to protect its trading reputation. Thus Pollock C.B. said (at p. 90):—
"But in order to carry on business it is necessary that the reputation of such a corporation should be protected, and therefore in the case of libel or slander it must have a remedy by action."
Martin B. said (at p. 92):
"As my Lord said, there may be particular kinds of libel which cannot affect a corporation, but...
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