Holley v Smyth
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE STAUGHTON,LORD JUSTICE AULD,SIR CHRISTOPHER SLADE |
| Judgment Date | 04 December 1997 |
| Judgment citation (vLex) | [1997] EWCA Civ J1204-19 |
| Docket Number | QBENI 97/0921/E |
| Court | Court of Appeal (Civil Division) |
| Date | 04 December 1997 |
[1997] EWCA Civ J1204-19
Lord Justice Staughton
Lord Justice Auld
Sir Christopher Slade
QBENI 97/0921/E
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH DIVISION
(Mr Justice Ian Kennedy)
Royal Courts of Justice
The Strand
London WC2
MISS P BAXENDALE QC and MR G CLARKE (Instructed by Messrs Lupton Alsop, London WC4R 2SS) appeared on behalf of the Respondents
MR W BENNETT (Instructed by Messrs Wright Hassall & Co., Leamington Spa CV32 5QP) appeared on behalf of the Appellant
Thursday 4th December, 1997
For the reasons which have been handed down this appeal will be allowed. If the defendant is prepared to give the undertaking offered the injunction will be discharged.
Mr Smyth appeals by leave of the judge from an order of Kennedy J. granting an interlocutory injunction against him. According to an affidavit of the plaintiffs' solicitors, the first plaintiff (Mr Holley) is a director of the second plaintiffs, SD & R Trading Limited, a Jersey company; the third plaintiffs, Henry Ansbacher & Co Ltd, are a well-known merchant bank; the fourth plaintiffs, Ansbacher (Jersey) Ltd, are a Jersey trust company and merchant bank of which Mr Holley is the company secretary.
On 8th May 1997 Mr Smyth wrote a letter to the plaintiffs' solicitors and sent it by fax. Attached were two draft press releases, for practical purposes in identical terms. They accused Mr Holley of disreputable conduct in a financial transaction, and the Ansbacher companies of trying to distance themselves from his conduct and to disclaim responsibility. I do not set out any further details, since the very object of these proceedings and of the judge's order was to restrain publication of Mr Smyth's allegations until they have been investigated by a jury.
Mr Smyth protests that he intends to justify his assertions, if he is allowed to publish them and is subsequently sued for defamation. That at once introduces the doctrine in Bonnard v. Perryman (1891) 2 Ch 269. Lord Coleridge CJ, in a judgment with which Lord Esher MR and Lindley, Bowen and Lopes L.JJ agreed, said this (at p.284):
"But it is obvious that the subject-matter of an action for defamation is so special as to require exceptional caution in exercising the jurisdiction to interfere by injunction before the trial of an action to prevent an anticipated wrong. The right of free speech is one which it is for the public interest that individuals should possess, and, indeed, that they should exercise without impediment, so long as no wrongful act is done; and, unless an alleged libel is untrue, there is no wrong committed; but, on the contrary, often a very wholesome act is performed in the publication and repetition of an alleged libel. Until it is clear that an alleged libel is untrue, it is not clear that any right at all has been infringed; and the importance of leaving free speech unfettered is a strong reason in cases of libel for dealing most cautiously and warily with the granting of interim injunctions. We entirely approve of, and desire to adopt as our own, the language of Lord Esher, M.R., in Coulson v. Coulson—"To justify the Court in granting an interim injunction it must come to a decision upon the question of libel or no libel, before the jury have decided whether it was a libel or not. Therefore the jurisdiction was of a delicate nature. It ought only to be exercised in the clearest cases, where any jury would say that the matter complained of was libellous, and where, if the jury did not so find, the Court would set aside the verdict as unreasonable." In the particular case before us, indeed, the libellous character of the publication is beyond dispute, but the effect of it upon the Defendant can be finally disposed of only by a jury, and we cannot feel sure that the defence of justification is one which, on the facts which may be before them, the jury may find to be wholly unfounded; nor can we tell what may be the damages recoverable."
And at p.285:
"Upon the whole we think with great deference to Mr Justice North, that it is wiser in this case, as it generally and in all but exceptional cases must be, to abstain from interference until the trial and determination of the plea of justification."
That wholesome doctrine has often been acted on. The last occasion that I can recall was in Maxwell Communications Corporation plc v. Newspaper Publishing plc, 1st August 1991, when it was sought to restrain publication of allegations about the financial state of the Maxwell empire. The appeal failed.
But in this case there is a new factor to be considered. Mr Smyth at and before his letter of 8th May 1997 made it clear that what he wanted was not to publish truth, but to extract money from the plaintiffs as the price of not doing so. He wrote in the letter:
"I am disappointed that you seek to distance your client from the transactions in 1991. Your client's position is akin to that taken by Rothchilds in 1994 when they also tried to avoid their obligations by adopting a similar stance, only to pay out in 1995 after public humiliation in the Press and T.V. The matter was never litigated.
For many years I was Chairman of a significant full-services Advertising Agency in Charlotte Street and I have therefore applied my expertise to drafting the enclosed Press Release on this affair. As you will note it is embargoed until May 30th so that your client can reflect again upon their position in this affair vis a vis the role of their Company Secretary.
I would state again my willingness to enter into a negotiated full and final settlement with your client in the matter of the £200,000 paid to SD&R Trading Limited in 1991 which was made mainly upon the basis of Mr Holley's assurances as to the probity of the deal.
In my view your client would be well advised to settle this matter quietly rather than face a protracted and potentially embarrassing enquiry by the fraud squad. There is also the pending High Court action which will further expose this matter to public view."
The same theme is to be found in earlier correspondence. On 12th March 1997 Mr Smyth wrote to Mr Holley:
"Under the circumstances I would appreciate any proposals you may have to quietly set the matter straight by a full repayment of the monies paid by the Trust, with interest at judgment rates from the date of purchase.
… Your response within seven days is required. Should you not make constructive proposals by this date I would add this matter as a further formal complaint to those already with Detective Chief Inspector Varriale of the Special Investigations Unit of the Warwickshire CID …"
A further letter of 2 nd April 1997 included these passages:
"As you will see I have a wealth of correspondence and documentation which links you and your Company to a series of dubious transactions. My interest is to recover what I can from those who have misled or defrauded the Trust although I do not regard litigation as the route I will necessarily use.
……..
Would you please consider the information provided and let me know how your organisation proposes to deal with this matter bearing in mind the substantial amounts of money that have been lost.
A response within seven days is required with some firm proposals otherwise the matter will be passed to the appropriate authorities. If you feel a meeting would be of assistance in determining the way forward then please contact me."
Again on 8th April 1997 there was these passages in a letter to the chairman of Henry Ansbacher (Holdings) Ltd:
"I have been investigating these matters for over three years and have untangled a web of deceit and fraud which would be a media delight. In fact, some of my investigations have led to eight formal complaints being made to the City of London Police. The Fraud Investigation Department, Wood Street Police Office, only await my completed Statement to launch a major investigation covering professionals, banks and others.
I would ask that you review the correspondence which I have sent to Jersey and ensure that some substantial proposals to settle this matter are made as quickly as possible."
Is this nevertheless a case to which the rule in Bonnard v. Perryman applies, despite the manifest intention of Mr Smyth to use the threat of publication as a means of extracting money from the plaintiffs? Kennedy J. thought not. He said this:
" Bonnard v. Perryman is, to my mind, founded upon the fundamental right of free speech. Until the words have been proved to a jury to be incapable of justification that right is not lightly to be curtailed. Further, there is an important public interest in wrongdoing being brought to light.
In my judgment, it is a quite different case where a person, as did the defendant here, makes a claim for money on terms, which I am quite certain his letter involves, that if he is satisfied in respect of his claim he will remain silent about the alleged wrongdoing. That person is not the assumed guardian of the truth that is he who speaks out asserting the right of free speech, as contemplated by Lord Coleridge. To be paid to be silent is not of the same currency as free speech. The public interest which encourages those who speak out about wrongdoing is not served by giving the like protection to those who propose to speak out only because they have not been paid to remain silent. To accord that same protection would positively be a disservice to the revealing of wrongdoing."
Accordingly Kennedy J. granted an injunction. But he...
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