Kiam v MGN Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Simon Brown,Lord Justice Waller,Lord Justice Sedley |
| Judgment Date | 28 January 2002 |
| Neutral Citation | [2002] EWCA Civ 43 |
| Docket Number | Case No: 2001/9019/QBENF |
| Court | Court of Appeal (Civil Division) |
| Date | 28 January 2002 |
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 Moore-Bick)
Lord Justice Simon Brown
Lord Justice Waller and
Lord Justice Sedley
Case No: 2001/9019/QBENF
Miss Victoria Sharp QC (instructed by Messrs Olswang for the Appellant)
Desmond Browne Esq, QC & Miss Lucy Moorman
(instructed by Messrs Peter Carter-Ruck & Partners for the Respondent)
Introduction
On 10 March 2000, at the end of a five day libel trial before Moore-Bick J and a jury, judgment was entered for the claimant, Mr Victor Kiam II, for £105,000 damages. Although Mr Kiam died on 27 May 2001 it is not suggested that his death affects the outcome of this appeal and I shall call him simply the respondent. The jury made plain that their award was for aggravated compensatory damages. MGN Ltd (the appellants), the publishers of the libel, now appeal against the quantum of the award by leave of this court granted on 11 October 2000. Although other grounds were earlier canvassed, the sole question remaining for decision is whether the award of £105,000 was excessive and, if so, what is the proper sum to substitute for it.
The libel
The libel sued upon was the lead article published prominently in colour in the "City Slickers" column of the Mirror on 6 January 1999. The author was Mr Hipwell. Under the banner headline "MY COMPANY HAS BOUGHT IT" and alongside a large photograph of the respondent, the text read:
" Victor's profits go up in smoke
He liked the Remington shaver so much that he bought the company.
But unfortunately for 72-year-old American entrepreneur Victor Kiam, he also liked the cigarette lighter company so much, he bought that too.
And according to sources at the Crawley-based company, he could put it into receivership "any time now".
Kiam, who runs the business from his sun-drenched Florida home as executive chairman, is so fed up with the firm into which he has ploughed more than £10 million, that he is thinking of closing it down.
Debt
After a succession of dismal trading results, bad debt provisions, escalating losses and a share price that has fallen off a cliff during the past year, Kiam has finally had enough.
Company sources confirm he could easily put the shutters up on Ronson within the next few weeks.
The latest problem centres on the departure of finance director Laurie Todd, who bailed out just before Christmas.
Todd appeared to leave the company on amicable terms to join a bigger firm Staveley Industries, but friends say he had faced some major problems with Ronson's £8 million refinancing programme, put together by Kiam.
Shares in the cigarette lighter maker first arrived on the stock market in the mid 1980s at 60p. But they were suspended last June at 4.5p and resumed trading in September at just 1.5p.
Yesterday Kiam, who also invented the Cross Your Heart bra in the 1950s, must have watched in horror as he saw another 10 per cent wiped off the value of his substantial shareholding.
Critics of the company say that Kiam has failed to unlock the value of the Ronson brand.
One advertising industry expert told Slicker: "Ronson lighters and pens are very upmarket and have a whiff of James Bond about them, but Kiam hasn't managed to capitalise on this at all. This is puzzling as he's a charismatic guy who clearly understands brand marketing."
Slicker says: Never mind, Vic. Your place in history is secure thanks to that great "I bought the company" catchphrase. Perhaps now is the time to hang up your boots and concentrate on getting a tan."
A further caption next to the photograph read:
"BLAZING AWAY: Victor Kiam has finally lost patience with the cigarette maker Ronson, into which he has poured £10 million."
The defamatory meanings
The respondent relied on both the natural and ordinary meaning of the words and also an innuendo. The article suggested, he contended, first, that his entrepreneurial ability, on which he had based his business success and reputation in the past, had wholly deserted him so that he was now fit only for retirement; secondly, that he was prepared to give up on Ronson and close it down with obviously devastating consequences for staff who would lose their jobs, shareholders their money and customers their contracts; and thirdly, that Ronson's imminent financial collapse was attributable to his own professional failures, first in having put together a refinancing programme so flawed that it caused Ronson's finance director (Mr Todd) to resign, and secondly in failing to exploit the value of the Ronson brand name, the so-called "whiff of James Bond", thereby indicating that he had lost his marketing and entrepreneurial ability.
As to the innuendo, a number of those reading the article would have read too the respondent's interview in the July/August 1998 edition of "Brands", a magazine for retailers, expressing his confidence in Ronson's survival and making a 5 year commitment to the company, and/or his circular letter dated 18 September 1998 to Ronson's customers reassuring them about the company's financial stability and future. The article would have suggested by way of innuendo that the respondent had lied or misled the public about his commitment to Ronson and the company's financial viability.
Given the narrow basis of this appeal, the jury must be assumed to have accepted the respondent's contention that the article bore all those meanings. Similarly they must be assumed to have accepted the respondent's case on all the many aggravating features of the case upon which the respondent relied and which the judge left for their consideration. These I must now summarise.
The aggravating facts
The article was untrue in every material respect and had been published maliciously. The respondent had become Executive Chairman and Chief Marketing Officer of Ronson in July 1998, a month after the London Stock Exchange suspended its share listing. He had invested not £10 million but £1 million. He was intent on saving the company and had committed himself wholeheartedly to doing so, remaining in England and away from his family for the purpose. There was no question of him having "had enough" and "thinking of closing it down". The refinancing programme had been a complete success and, when the article was published, the company's losses were no longer "escalating" but rather were diminishing. Mr Todd left Ronson solely because he had been head hunted by a bigger company. The story could easily have been checked with Ronson, Mr Todd, or the respondent himself. None of them, however, had been contacted. Although, moreover, the reader was led to believe that the story was based on numerous sources, disclosure of Mr Hipwell's notebook indicated a single unidentified source who in any event had suggested that Mr Hipwell speak to Mr Todd (which, of course, he did not do). Discovery further revealed that Mr Hipwell had made use of a Sunday Telegraph article of 1 March 1998 (before the respondent joined Ronson) which itself had referred to "bad debt provisions, escalating losses, a share price that has fallen off a cliff over the last two years". Mr Hipwell could therefore be seen to have applied to Ronson's position in January 1999 the Sunday Telegraph description of its position some ten months earlier before the refinancing of the company under Mr Kiam's leadership. Other earlier statements had been similarly distorted. In short, Mr. Hipwell's complete indifference to the truth was amply demonstrated. By the time of trial he had been dismissed for (unrelated) gross misconduct. He was not in those circumstances called as a witness to explain his conduct. Neither did Mr Piers Morgan, the editor, give evidence.
When invited by the respondents' solicitors on 8 January 1999 to publish an article correcting the errors and apologising to Mr Kiam, the editor denied that the article was materially inaccurate save only as to the extent of the respondent's investment in the company. That alone he offered to correct and he refused to apologise. Even after June 1999 when the appellants served their defence pleading neither justification nor fair comment, no apology was made. The absence of apology was the more serious since the respondent had told his acquaintances that he would shortly be getting one. He had, indeed, attached his solicitor's letter of 8 January to a circular letter sent on 12 January 1999 to his many friends and customers with a view to reassuring them as to the true position.
Shortly before trial the appellants published in the City Slickers column three further short articles about the respondent and Ronson respectively on 7 December 1999, 13 January 2000, and 14 January 2000. Put briefly, these suggested that the respondent was deceiving the stock market by concealing plans to merge Ronson with an Internet company; they said that Ronson's shares were "ready to roll big time". The respondent was naturally concerned, fearing that readers would be drawn into a false market in the shares and then blame him for their predicament. Again, no one checked the truth of those articles with the respondent or anyone else at Ronson and again they were accepted at trial to be factually incorrect.
Another major aggravating feature of the case was the appellants' conduct at trial and not least suggestions made in counsel's closing speech to the jury that "Mr Kiam is simply impossible to satisfy", that "no amount of money will satisfy Mr Kiam", and that in both this case and an earlier case...
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