London Association for Protection of Trade v Greenlands Ltd

APPEAL from a decision of the Court of Appeal.^F1

The facts are fully stated in the judgment of the Lord Chancellor and in the report of the case before the Court of Appeal, but the following summary may be useful.

The appellants the London Association for Protection of Trade were an unincorporated mutual association of traders established in 1842 and consisting at the present time of some 6000 members. The only qualification for membership was the payment of an annual subscription of 1l. 1s. for town members, 1l. 5s. for country members, and 1l. 10s. for foreign members. One of the objects of the association was the making of private inquiries as to the means, respectability, and trustworthiness of individuals and firms. Every member of the association was annually supplied with ten inquiry forms, each of which upon being filled up by him entitled him to receive information from the association as to any particular individual, firm, or company in the United Kingdom. If a member required more than ten inquiries in the course of the year he paid for them at the rate of 1s. each. The form of application for membership contained the following condition: “Every member undertakes to treat the information supplied by the association in strict confidence, and as for his exclusive use, and not to divulge it to any person upon any pretext whatever.” The inquiry forms contained a similar condition. The association published a weekly gazette, and subscribers to the gazette were at liberty to make use of the inquiry department on payment of 1s. 6d. for single inquiries or 10s. 6d. for a book of ten prepaid inquiry forms. The association did not carry on business for profit. The appellant Hadwen was the secretary of the association.

The respondents were a limited company carrying on business as drapers and house furnishers in Hereford.

In March, 1910, Shand Kydd, who carried on business as a manufacturer and designer of wall-paper decorations in Kentish Town, and who was a member of the association, sent a request to the association on one of the inquiry forms for information as to the credit of the respondents, to whom he had sold goods for 2l. 5s. The appellant Hadwen applied for information to one Wilmshurst, a commercial agent and debt collector of Hereford, who was in the habit of answering inquiries for the association at 6d. apiece. The request for information contained the prohibition against divulging the information to be acquired. In answer to this inquiry Wilmshurst supplied information which falsely reflected on the respondents' credit by misstating the nature and effect of the debentures to which the respondents' business was subject. This information was edited and slightly altered by the appellant Hadwen and on April 2, 1910, was handed on by him in good faith to Kydd.

The respondents thereafter commenced an action against Wilmshurst and the appellants for libel in respect of the report communicated to Kydd. The appellants by their defence pleaded that the libel was published on a privileged occasion and without malice. The action was tried before Lord Alverstone C.J. and a special jury. The jury returned a verdict of 750l. against Wilmshurst, against whom they found express malice, and 1000l. against the appellants, and judgment was entered accordingly. The appellants applied to the Court of Appeal for judgment on the ground that the libel was published on a privileged occasion and without express malice, or, alternatively, for a new trial on the ground of excessive damages. Wilmshurst did not appeal. The Court of Appeal (Vaughan Williams L.J. and Hamilton L.J., Bray J. dissenting) refused to enter judgment for the appellants, but granted a new trial.

The appellants now applied to this House to alter the order of the Court of Appeal by directing judgment to be entered in their favour.

In the course of the argument before the House the respondents, upon an intimation from their Lordships that in the circumstances the action could not be maintained against an unincorporated association, consented, for the purpose of facilitating the determination of the question of privilege, to have the judgment obtained by them against the association set aside.