McGrath & Anor v Bedford & Anor [2016]

In McGrath & Anor v Bedford & Anor [2016] EWHC 174 (QB) (03 February 2016) the matter before Sir David Eady concerned the Claimants’ application to be allowed to amend their Particulars of Claim after a judgment made by HHJ Maloney on the 30th July 2015 regarding a claim based upon allegations of defamation and malicious falsehood . The application was originally granted ex parte by Master Eastman on the 16th October 2015. The parties agreed this be set aside with the application and decided at an inter partes hearing. Sir David Eady confirmed that he set aside the Masters Order by consent on the 15th January 2016 and laid out his conclusions in a reserved judgment.

Defendants’ Counsel raised many objections about the claim form and particulars, his main argument being that the Claimants must bear the burden of showing “that their case, as amended, is arguable but also that it will have a realistic prospect of succeeding”. Sir David Eady observed that in this case that would not be sufficient as the criteria is similar to an application for summary judgment under CPR Part 24.

Defendants’ counsel referred to the case of Collier v P & MJ Wright (Holdings) Ltd 2007 and particularly where Lady Justice Arden had said:

“…There has to be something to suggest that the assertion is sustainable. The best evidence would be incontrovertible evidence to support the applicant’s case, but this is rarely available. It would in general be enough if there were some evidence to support the applicant’s version of the facts, such as a witness statement or a document, although it would be open to the court to reject that evidence if it was inherently implausible or if it was contradicted, or was not supported, by contemporaneous documentation … But a mere assertion by the applicant that something had been said or happened would not generally be enough if those words or events were in dispute and material to the issue between the parties.”

Defendant’s counsel also drew Sir David Eady’s attention to the White Book at 17.3.6, a party cannot raise by amendment an allegation which has not been supported by evidence. As Sir David Eady observed, the court should examine areas where the parties have narrowed their views or where there has been any admission made in pre-action correspondence. He referred to the changes since s.1. of the Defamation Act 2013 and the specific requirement that the Claimant must demonstrate that serious harm to his reputation had occurred or was likely to. He noted that this was a key part of any claim for libel or slander and without this, a claim cannot proceed. A Defendant should be aware of the possibility that a Claimant may not be able to demonstrate this then, they could raise that issue via preliminary objection before serving a defence.

He considered this should be understood early on to avoid wasting time and costs. The Claimant should show their case for “serious harm” before a defence is served and be able to demonstrate their claim has more than a realistic chance to succeed. If challenged, the Claimant must produce evidence in support, he cannot merely assert that he has suffered serious harm.

He considered it appropriate, in some matters, to decide the “serious harm” issue at a full hearing with early disclosure, evidence and cross-examination where the court usually, before making a decision, rules upon the issues of meaning. He observed that the overriding objective is not always for a full preliminary hearing which can increase the costs of litigation, Theedom v Nourish (2015).

He noted this case may well be a “serious harm” matter to be examined at a preliminary hearing which was not his decision to make. He observed,

“The publication appears to be very limited in scope and the defamatory meanings, which depend upon establishing an innuendo, are by no means obvious at a first reading”.

The Claimants would need to produce to the Defendants full information on their plea of serious harm which is separate from their right for the case to be pleaded on other matters of publication and meaning.

He noted both the Claimants and Defendants supply systems for water purification. The First Claimant, is the Managing Director of the Second Claimant and the First Defendant, director and business development manager of the Second Defendant.

The case involved the tender for a water purification system at a Hospital where the Second Defendant had put in a bid with a lower bid later by the Second Claimant. The First Defendant sent an email to the leader of the bid process that the Second Claimants were not on “the Article 95 List” and, as he understood it, they would not be able to supply silver after 1st September 2015. That email formed the first of the alleged defamatory publications.

The use of silver and copper in the process “are governed by Article 95 of EU Regulation 528/2012 (as amended by Regulation 334/2014), which is known as “the Biocide Regulation”. There is some disagreement between the parties as to the factual position, but it can be said that at some point it will become necessary only to use silver in such products which has been obtained from a supplier appearing on an approved list (“the Article 95 List”).

A further email to the leader of the bidding process by the First Defendant, the second alleged defamatory publication complained of. The email discussed that the Second Claimant could supply silver after the Article 95 List came into being so long as the silver was supplied by someone on the list. He contended that neither of the companies on the List, the Second Defendant and another company, would sell silver to the Second Claimant.

Sir David Eady noted that it appeared the other company on the List would sell silver to the Second Claimant which surprised the Defendants. The Second Claimant won the hospital tender and had a number of other NHS contracts. There was no suggestion that the Second Claimant had suffered any financial loss resulting from the alleged defamatory publications.

He noted, against this background, that Defendants counsel challenged the draft pleading. He made reference to Lady Justice Arden’s judgment and the requirement to narrow the issues from the start and examine in detail “a plea of “serious harm” or, in the case of a corporate claimant, a plea of financial loss, just as much as one would wish to do so in relation to any other basic ingredient, such as (say) meaning or publication:”. Sir David Eady noted Counsel for the Defendants,

“Mr Helme attacks paragraph 9, which alleges that Mark Kelso republished “the words complained of” when the slanders are not alleged to have been published to him in the first place. How, therefore, could he republish them? This was referred to as the “missing link point”. It is capable of cure, no doubt, but there has to be some clarification”.

He noted that Claimants counsel wanted to plead that it was inferred someone had republished the defamatory part of the telephone conversations to the leader of the tender process due to their close working relationship in respect of the hospital bid. Defendants’ counsel complained that there was no evidence that the leader of the tender process republished the two emails to anyone else. Sir David Eady observed, it will be up to counsel for the Claimants to plead what he believes to be applicable in a future draft which he considered to be a “bare assertion”.

He noted there was a recent plea relating to special damage which had not been before Judge Maloney and which he was at a loss to understand, which Claimants’ counsel could not add to further. The proposed plea effectively said “the Claimants” (not merely the corporate Claimant) were “forced” by the Defendants’ allegations to purchase a letter of access from Tarn-Pure at a cost of 200,000 Euros in order to place Necon on the Article 95 List”.

Sir David Eady noted that he had understood that it was not a requirement for the Claimants to be on the List and he could not see how they were “forced” to make a payment because of anything the Defendants had said or done. He continued that if they had chosen to make that payment then they probably saw it as a benefit to their business. He considered it difficult to see if they had suffered “loss” of any kind”.

He considered that the plea lacked understanding and could not be sustained. He observed that the “loss” had not yet crystallised which confused the matter as it had most likely been incurred. He considered at some point the claim may resurface but he could not allow any amendment to the form and refused permission to amend the relevant paragraphs.

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