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||Neutral Citation Number:  EWHC 773 (QB)
||Case No: HQ11DO2758
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
||Royal Courts of Justice
Strand, London, WC2A 2LL
B e f o r e :
THE HONOURABLE MR JUSTICE TUGENDHAT
|| Jeeg Global Limited
||- and -
Paul Downes QC and Steven Reed (instructed by Wragge &Co) for the Claimant
Hugh Tomlinson QC and Richard Munden (instructed by Clintons) for the Defendant
Hearing dates: 20 March 2012
HTML VERSION OF JUDGMENT
Crown Copyright ©
Mr Justice Tugendhat :
- On Sunday 3 July 2011 at about 7 pm Vos J heard the Claimant's application (made without notice) for an injunction against the Defendant ("Mr Hare") to restrain him from stating that the Claimant's business is in administration or other form of insolvency, or was going into the same or was likely to do so. He granted an injunction in those terms and ordered Mr Hare to swear an affidavit giving full details of all those persons and parties to whom he had made statements to the effect that the Claimant was in administration or other form of insolvency or was likely to go into the same.
- Mr Hare now applies to me for an order that the claim be struck out as abuse of the process of the court. The Application Notice was issued on 3 August 2011. As originally issued it sought an order that the claim be struck out on a number of grounds, but only one ground is now relied on. Other grounds have been addressed by the Claimant in a draft Re-Amended Particulars of Claim dated in January 2012. The sole ground now relied on for the application is:
"because … (4) the single publication complained of has caused the Claimant no damage such that the claim is not one in respect of a real and substantial tort and/or the pursuit of such a claim would be a disproportionate exercise, such that the proceedings are an abuse of process".
- The Claimant is in business purchasing gold jewellery and other precious metals, primarily from trade sellers in the jewellery trade in the UK. Its business requires a high degree of trust from its customers, because it receives the jewellery as bailee and carries out analyses of the metals on the basis of which the price is then agreed. Only then does it become the owner of the metals. Mr Hare is the Managing Director of Rapide Security Plc ("Rapide"). This firm is in business providing security services to jewellers and others. Mr Chatwin is a jeweller.
- On 30 June 2011 Notice was given of the appointment of an Administrator of RDM Security Systems Limited ("RDM"). Later that day there took place the conversation between Mr Hare and Mr Chatwin at which it is alleged Mr Hare spoke the words complained of.
- On Friday 1 July 2011 the Claimant's solicitor sent an e-mail to Clintons, who were subsequently instructed by Mr Hare. It is headed "Jeeg Global Ltd v John Hare". They said they were instructed to issue proceedings against Mr Hare and were seeking an urgent injunction. They asked Clintons if they were instructed by Mr Hare, and said that if they were not they would serve papers directly upon Mr Hare. But in fact they did not give Mr Hare notice of the application they were to make to Vos J on the Sunday.
- Vos J stated that he was satisfied that the Claimant was not insolvent and was not likely to be going into administration. There is no dispute that that is indeed the case: the Claimant is not insolvent and is not likely to be going into administration, and was not on 3 July.
- Vos J also considered that it was likely that Mr Hare might repeat the allegation complained of. The evidence before him, upon which he accepted that there was that likelihood, included the following. Mr Hare had been engaged in litigation with a number of companies linked to the Claimant by there being a common investor, Mr Gaughan. One of those companies was RDM against which Rapide was making a claim for breach of confidence. This claim arose out of the fact that former employees of Rapide had gone to work for RDM.
- Vos J stated in his judgment that "what is said is that Mr Hare was irrationally upset with Mr Gaughan and Mr Hare is therefore likely to repeat the allegation concerning [the Claimant]". The witness statement before Vos J had been made for the Claimant by Mr Gordon, its solicitor, who was also the advocate on the application. The witness statement included:
"9. During the litigation between Rapide and RDM, RDM has repeatedly sought my advice concerning the abusive and threatening conduct of Mr Hare. He has used obscene language and has made threats against officers and employees of RDM. On more than one occasion in the last 6 months former or current customers of Rapide Security Plc have also suffered from intimidation by Mr Hare. …
10…. Rather than take civil action my firm has been liaising with the police who are keeping a dossier upon Mr Hare's conduct."
- On 21 July Mr Hare made a lengthy witness statement. He recounts a number of disputes that arise out of relationships between himself and Rapide, on the one hand, and companies associated with Mr Gaughan, on the other. A number of customers who had formerly been in contractual relations with Rapide had terminated those arrangements and sought to employ RDM. One of them was a firm owned by Mr Chatwin.
- There is no dispute that Mr Hare did speak to Mr Chatwin on 30 June about the cancellation of the contract with Rapide. There was more than one conversation. As to the second conversation Mr Hare states:
"20… I nevertheless continued to attempt to speak to Mike Chatwin on the telephone and eventually spoke to him at between 6pm and 6.30 pm that evening. By that time I was aware of RDM having been put into administration. When I spoke to Mr Chatwin he told me that he was cancelling the contract and was taking a fresh contract with RDM. I told him that RDM had been put into administration and that an administrator had been appointed. I also said that this appears to have been done to enable the shareholders in RDM to protect their investment. Mr Chatwin swore at me and told me I was lying, and that he was moving all of his accounts to RDM. We did not discuss the Claimant company at all.…
23. At no time did I say during the course of my telephone conversation with Mr Chatwin or at any other time that the Claimant company, as opposed to RDM, was in administration or other form of insolvency or going into the same or likely to go into the same, nor did I use, as Mr Gordon puts it in his statement at paragraph 15 'words to the effect that' that was the case. I had and have no reason to believe that is the case and certainly no intention of suggesting it to anyone.
9-10. As to paragraphs 9 and 10 of Mr Gordon's statement in the absence of any details, I cannot comment save to say that I have not heard from the police in relation to any conversations I have had with officers and employees of RDM. I have been interviewed by the police in relation to a conversation I had with a former customer of Rapide who moved to RDM and who then refused to pay Rapide. After explaining the background to the matter, I have not heard further from the police….
17. There is no need to restrain me from making statements that I have never made and have no intention of making…
30. I believe that these proceedings are nothing more than an attempt to deflect Rapide from the proceedings it has commenced against Mr Gaughan's other companies RDM, the Bullion Room and Rex Johnson Online Ltd".
- A claim form was issued and particulars of the claim were served, followed by amended Particulars of Claim.
- The Particulars of Claim in each of its versions have included a prayer with a claim for an injunction restraining Mr Hare from making maliciously false statements about the Claimant, including, but not limited, to the effect that it is in or is going into any form of insolvent arrangement. To this day there is absent from the Particulars of Claim an allegation that unless restrained by an order of the court Mr Hare will, or threatens to, publish the words complained of. That is one of a number of points on the statement of case raised by Mr Hare, some of which have now been rectified to Mr Hare's satisfaction. However, if there is evidence to support the risk or threat of the publication of the words complained of by Mr Hare the omission to plead that can, of course, also be rectified by a further amendment.
- The Particulars of Claim have at all times included paragraph 7:
"Throughout the duration of the litigation between Rapide and RDM [the Defendant] has used threatening, abusive and aggressive language and behaviour both towards RDM's officers and employees but also against customers and former customers of Rapide. Several such incidents have been reported to the police who are keeping a file on the conduct of Mr Hare".
- On 7 July Norris J had adjourned the Claimant's application for continuation of the injunction. Vos J and Norris J both sat in the Chancery Division. Because the Particulars of Claim include a claim in slander, Norris J transferred it to the Queen's Bench Division, gave directions for service of evidence and the service of any Amended Particulars of Claim, and ordered that "the parties shall forthwith apply for a listing of the Claimant's application for the first open dated after 25 July 2011 with a time estimate of 2.5 hours". Amended Particulars of Claim were served, but the parties have not applied for a listing of the Claimant's application to continue the injunction. Mr Hare gave an interim undertaking to the Court and that interim undertaking continues in force until the conclusion of the Claimant's application. The form of the undertaking is that he will not
"directly or indirectly or howsoever (i) make false statements concerning the Claimant's business and/or trading position; and/or (ii) without prejudice to the foregoing to [sic] make statements to the effect that the Claimant is in administration or other form of insolvency or is going into the same or is likely to do so when that is not true".
- The parties exchanged correspondence with a view to attempting a settlement. It is not necessary for me to refer to that in detail.
- The Application Notice of 3 August now before me was placed in the Warned List for the week commencing 10 October.
- In a letter dated 6 September 2011 Mr Hare gave an undertaking that he "will not make the comments that he is alleged to have made already, or any similar allegation about" the Claimant. That must be understood to be a contractual undertaking, because at the same time Mr Hare invited the Claimant to discontinue the action. If the action were discontinued, as opposed to stayed, the undertaking to the court would lapse. The solicitors complained that the Claimant had not followed the Pre-Action Protocol for Defamation. On 29 September Mr Hare's solicitors wrote offering to accept 75% of his assessed costs.
- On 5 October the Claimant's solicitors wrote explaining why they said that an injunction is required in this case, citing para  of Jameel (see para 24 below). They referred to what they stated to be the personal vendetta that Mr Hare appeared to have against Mr Gaughan, and to a history of irrational and aggressive behaviour (these being the matters pleaded in the Particulars of Claim para 7, and referred to in the first witness statement of Mr Gordon, paras 9 and 10). They wrote that the risk of wider publication justified the pursuit of the proceedings. On 19 October 2011 solicitors for Mr Hare maintained their stance that this was a case of Jameel abuse in a 4 page letter. It ended with an invitation to the Claimant to discontinue and pay 75% of Mr Hare's costs.
- On 27 October 2011 the Claimant's solicitors wrote suggesting directions be given for the progress of the action, and that there be a one day hearing listed for the determination of the issue as to whether or not Mr Hare made the statement complained of. They said that this was the primary issue in the case.
- The Claimant served three further witness statements, all dated 2 November, from Mr Chatwin (the alleged publishee), Mr Gordon (his second statement) and Mr Gaughan. Mr Chatwin states that the Defendant said that "RDM had gone into administration and that Jeeg Global was following and was going into administration". Mr Gordon sets out in para 24(a) to (t) particulars of Mr Hare's threatening and abusive behaviour, such as is also referred to in para 7 of the Particulars of Claim. He states that he had become aware of these matters as a result of having been instructed on behalf of RDM in the proceedings brought against it by Rapide. Mr Downes read to me a number of the documents referred to by Mr Gordon.
- On 10 November 2011 Mr Hare made his third witness statement. In para 21 (b) he included the following:
"If, which I deny I am a 'loose canon who bore malice' to Jeeg and as such they believe (although they do not say as much) that I will not keep to the undertaking I have already given and that this is a supposed reason for taking the matter to Trial, I am perfectly happy to provide an undertaking to the Court".
- On 16 November the application came before the court, but unfortunately there was insufficient time left in the day, and it was adjourned, coming on again on 20 March.
- There is no claim for damages because Mr Chatwin did not believe what he states that Mr Hare said about the Claimant, and no other publication is alleged to have occurred.
- The applicable law on abuse of process of the kind relied on this case is not in dispute. In Jameel v Dow Jones & Co Inc  QB 946 Lord Phillips of Worth Matravers MR said:
"55. … Section 6 [of the Human Rights Act] requires a court, as a public authority, to administer the law in a manner which is compatible with Convention rights, insofar as it is possible to do so. Keeping a proper balance between the Article 10 right of freedom of expression and the protection of individual reputation must, so it seems to us, require the court to bring to a stop as an abuse of process defamation proceedings that are not serving the legitimate purpose of protecting the Claimant's reputation, which includes compensating the Claimant only if that reputation has been unlawfully damaged…
74. Where a defamatory statement has received insignificant publication in this jurisdiction, but there is a threat or a real risk of wider publication, there may well be justification for pursuing proceedings in order to obtain an injunction against republication of the libel. We are not persuaded that such justification exists in the present case.
75. There seems no likelihood that Dow Jones will repeat their article in the form in which it was originally published. It has been removed from the web site and from the archive…
76. In these circumstances, if this litigation were to proceed and to culminate in judgment for the Claimant, it seems to us unlikely that the court would be able, or prepared, to formulate and impose an injunction against repetition of the defamation in terms that would be of value to the Claimant. We do not believe that a desire for this remedy has been what this action has been about, or that the possibility of obtaining an injunction justifies permitting this action to proceed."
- In Lait v Evening Standard Limited  EWCA Civ 859 Laws LJ said :
"41… Jameel was also applied by this court in Khader v Aziz  EWCA Civ 716 where it was held (paragraph 32) that the appellant 'would at best recover minimal damages at huge expense to the parties and of court time'.
42. The principle identified in Jameel consists in the need to put a stop to defamation proceedings that do not serve the legitimate purpose of protecting the Claimant's reputation. Such proceedings are an abuse of the process. The focus in the cases has been on the value of the claim to the Claimant; but the principle is not, in my judgment, to be categorised merely as a variety of the de minimis rule tailored for defamation actions. Its engine is not only the overriding objective of the Civil Procedure Rules but also in Lord Phillips' words, ' a need to keep a proper balance…reputation between the Article 10 right of freedom of expression and the protection of individual reputation'….".
- In Citation Plc v Ellis Whittam Ltd  EWHC 549 (QB), handed down only a week before this hearing I considered and reviewed the law applicable to a case with a number of similarities to this one. In addition to Jameel I considered the cases on when a final injunction may be granted at trial. The test is correctly stated in the text books. Of particular relevance to the present case are the words of Fry LJ in Proctor v Bayley (1889) 42 Ch D 390:
"Now an injunction is granted for prevention, and where there is no ground for apprehending the repetition of a wrongful act there is no ground for an injunction. It was pressed on us that Mr Hares insisted on their having a right to do what they had done, but, looking at all the circumstances of the case, this foolish attempt to justify a past act does not raise any presumption that they intend to repeat it. The injunction therefore falls…"
- Mr Tomlinson submits that since there is no claim for damages, and since Mr Hare gave the undertaking that he did in the letter of 6 September 2011, the claim is now only about costs, and is an abuse of process. The fact that the publication alleged is to a single publishee, who did not believe the words, means there is no need for any further vindication. A hearing on the issue of whether the words complained of were spoken at all is unnecessary, because whether they were or not, the action remains an abuse of process. If Vos J had been told that the Claimant had sent the e-mail of 1 July referred to above, and that there had been no evidence of him speaking the words complained of to anyone other than Mr Chatwin, he would not have accepted that there was a risk of further publication sufficient to justify the making of an injunction. In any event, there is now the further evidence in the form of the contractual undertaking of 6 September.
- Mr Downes submits that for the purposes of the present application I must assume that the Claimant will prove at trial that the words complained of were spoken to Mr Chatwin. That I must make that assumption for present purposes is not in dispute. This is an interim application, so nothing that I say in this judgment is a finding of fact. While publication is denied, it is not submitted for Mr Hare that there is no arguable case on publication fit to go trial.
- Mr Downes submits that there was a sufficient risk of publication to justify the order sought and made by Vos J and the undertaking to the court recorded in the order of Norris J. The undertaking of 6 September, which would be contractual if the Claimant accepted it, is not sufficient to meet that risk. These matters are set out in para 7 of the Particulars of Claim and there remains a triable issue as to whether there is a risk of Mr Hare repeating the words complained of. If the court were to find that he had spoken the words complained, and was lying when he denied it, that would support the need for an injunction.
- If the Claimant fails to prove that the words complained of were spoken, there is no prospect of an injunction being granted. But if the Claimant does prove that Mr Hare spoke them, it does not follow that an injunction will be granted as a matter of course. So I do not accept that the primary issue in the case is simply whether the words complained of were spoken. It is whether there are objective grounds for apprehending that there is a real risk, against which an injunction would be a necessary and proportionate preventative measure. Whether the words complained of were spoken is only one of a number of matters upon which the Claimant relied before me (and intends to rely on at trial) to prove that risk.
- There were a number of Jameel abuse cases cited to me, but they each turn on their facts. The principle is set out in Jameel itself. But the feature of the present case which makes it distinguishable from Citation, and other cases, is the alleged background of a vendetta against Mr Gaughan, and the alleged aggressive and threatening behaviour on the part of Mr Hare. The Defendant does not submit that there is no arguable case to go to trial on whether there was such conduct. Mr Tomlinson submits that the particulars so far given in Mr Gordon's second witness statement, even if true (which is in issue), do not include threats of slander, so the alleged threats are of little relevance.
- On this basis the question I have to decide is whether, assuming that the Claimant proves that the words complained of were spoken, and that Mr Hare has behaved in the past in the manner alleged, there is a real and substantial prospect of a trial court granting a final injunction. If there is, then the action is not an abuse of the process of the court.
- In my judgment, given those assumptions, there is such a real and substantial prospect. If those facts are proved, the court could well take the view that a contractual undertaking is insufficient to protect the rights of the Claimant. Since this is an interlocutory judgment, which therefore contains no findings of fact, it is not appropriate that I should set out the details of the evidence relied on by the Claimant, and which has led me to reach this conclusion.
- The offer made by Mr Hare in para 21(b) of his third statement, that is the offer of an undertaking to the Court, cannot be reconciled with the application to strike out the proceedings. An undertaking to the court is embodied in a court order. The court can stay proceedings on terms that include the making of an undertaking to the court. But it cannot accept an undertaking in proceedings which it is striking out. If Mr Hare remains willing to give to the Court a permanent undertaking in the terms set out in the interim order of Norris J, it may well be that the action can be stayed on that basis.
- During argument a number of points were made as to the alleged failure by the Claimant to comply with the Pre-Action Protocol, CPR Part 25.3(3), Practice Direction 25A para 4.3(3) and the HRA s.12(2) and (3). These set out requirements that notice be given to an intended respondent, or evidence be adduced of compelling reasons why notice should not have been given. No such evidence was put before Vos J. They also set out the high standard to which the court must be satisfied before it grants an injunction which might affect the right of freedom of expression, namely that the claimant is likely to establish at trial that publication ought not to be allowed.
- Mr Downes submits that even if there is substance in these points, if the action is not otherwise an abuse of process, these matters cannot make this case an abuse of the process of the court. At most they might have provided grounds for refusing the Claimant's application to continue the injunction at the hearing for which Norris J gave directions (but which has not taken place). I did not understand Mr Tomlinson to dispute that these points by themselves would not justify the court in striking out this action as an abuse of process.
- However judges, including myself, have repeatedly stressed the importance of applicants complying with the CPR, the Practice Direction and HRA s.12 (where it applies). See Sir David Bean on Injunctions, 10th edn, para 3.39 and most recently O'Farrell v O'Farrell  EWHC 123 (QB) paras 61 to 67. In National Commercial Bank of Jamaica Ltd v Olint Corpn Ltd  UKPC 16;  1 WLR 1405 para  Lord Hoffmann said:
"… there appears to have been no reason why the application for an injunction should have been made ex parte, or at any rate, without some notice to the bank. Although the matter is in the end one for the discretion of the judge, audi alterem partem is a salutary and important principle. Their Lordships therefore consider that a judge should not entertain an application of which no notice has been given unless either giving notice would enable the defendant to take steps to defeat the purpose of the injunction (as in the case of a Mareva or Anton Piller order) or there has been literally no time to give notice before the injunction is required to prevent the threatened wrongful act. These two alternative conditions are reflected in rule 17.4(4) of the Supreme Court of Jamaica Civil Procedure Rules 2002. Their Lordships would expect cases in the latter category to be rare, because even in cases in which there was no time to give the period of notice required by the rules, there will usually be no reason why the applicant should not have given shorter notice or even made a telephone call. Any notice is better than none."
- A failure to give notice is a denial of the fundament right of all litigants to be heard before an order is made against them. And at the very least it is likely to result in the applicant incurring unnecessary costs, and causing the intended respondent to incur unnecessary costs.
- Since 2009 the use of mobile devices for e-mails has become almost as common as mobile phones. There is now most unlikely ever to be a practical reason why an applicant should not give short notice to a respondent, or at least the contact details of the respondent, so that the judge can call, as judges sitting out of hours commonly do. It is to be noted that the Privy Council said that unless the requirements of the rules are complied with,
"a judge should not entertain an application of which no notice has been given".
- Given that the submissions made to me were directed only whether the claim is an abuse of process, I say no more about that aspect of the matter in this judgment.
- It is also to be noted that while the Claimant's advocate submitted (incorrectly) to Vos J that the applicable legal test was the usual Cyanamid test (good arguable case and balance of convenience), Vos J in fact expressed himself to be "satisfied that the Claimant is not in administration or likely to go into any form of administration". That form of words is consistent with the test under HRA s.12, to which the Judge adverted in the course of submissions.
- Once a court is satisfied that words complained of are false in such circumstances, there is little risk of an interference with the Art 10 rights of a defendant if the defendant is prohibited from speaking them. The fact that it is common ground that the words complained of are false means that the trial court will not be concerned that a final injunction (if it comes to consider one) might be an interference with the right of freedom of expression.
- For these reasons the application to strike out the claim as an abuse of process is refused.
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