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Cite as: [2015] EWHC 839 (QB)

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Neutral Citation Number: [2015] EWHC 839 (QB)
Case No: HQ14D01706

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

Royal Courts of Justice
Strand, London, WC2A 2LL
27/03/2015

B e f o r e :

THE HONOURABLE MR JUSTICE DINGEMANS
____________________

Between:
STEPHEN TREVOR OWENS
ABIGAIL DIANA OWENS
Claimant
- and -

STEVEN GROSE
VIRGINIA GROSE
Defendant

____________________

Paul Considine (instructed by Innsley & Partners, solicitors) for the Claimants
Ian Helme (instructed by Clarke Willmott LLP, solicitors) for the Defendants
Hearing dates: 23rd March 2015

____________________

HTML VERSION OF JUDGMENT
____________________

Crown Copyright ©

    Mr Justice Dingemans:

  1. This is an appeal from the judgment of Master Kay QC dated 10 December 2014. Master Kay dismissed applications to strike out, or grant reverse summary judgment in respect of, the claim made by the Claimants Steven Trevor Owens and Abigail Diana Owens ("Mr and Mrs Owens"). The claim is for damages, including aggravated damages, for defamation in respect of statements made in a letter dated 21 September 2013 and an injunction against the Defendants Steven Grose and Virginia Grose ("Mr and Mrs Grose").
  2. Mr and Mrs Grose appeal contending that the claim should have been struck out or dismissed. Mr and Mrs Owens appeal contending that they should have had their costs, which were ordered to be in case.
  3. The letting of the house

  4. Mr and Mrs Grose let a house at 2 Beechwood, Fordingbridge, Hampshire ("the property") to Mr and Mrs Owens on a 6 month tenancy from 20 February 2013. Goadsby & Harding (Residential) Limited ("Goadsby") acted on behalf of Mr and Mrs Grose as letting agents. Mr and Mrs Owens paid a deposit of £1,575.
  5. Under the terms of the tenancy agreement Goadsby were also appointed the stakeholder to hold the deposit. The deposit was security for performance of the tenants' obligations including breaches on the part of the tenants of their agreements and obligations.
  6. Provision was made in the tenancy agreement for the deposit to be safeguarded by the Tenancy Deposit Scheme. The tenancy agreement provided for a dispute resolution service by Dispute Service Limited ("DSL") in which DSL offered to resolve disputes about deposits by final and binding adjudication using an Independent Case Examiner ("ICE"), see paragraphs 2.24 to 2.35 of the tenancy agreement.
  7. There were special conditions of the tenancy to the effect that Mr and Mrs Owens could keep a cat and 2 dogs at the property but that they would have the property, carpets and soft furnishings professionally cleaned at the conclusion of the tenancy. It was also agreed that Mr and Mrs Owens only had access to the garage nearest the front door of the property.
  8. The dispute about cleaning, damage and the deposit

  9. At the conclusion of the tenancy a dispute arose between Mr and Mrs Grose and Mr and Mrs Owens about whether some or all of the deposit should be repaid. A check out inventory was performed in late August 2013 and by email dated 27 August 2013 Mrs Grose complained to Goadsby "deposit queries" by an email, copied to Simon Whitlock who was the person at Goadsby with whom Mr and Mrs Grose had had most contact, complaining that there were dog scratches on the door which had not been there before, and that it did not look like the property had not been professionally cleaned and asking to see any invoice. By email dated 30 August 2013 Charlotte Old, property administrator at Goadsby, forwarded the email to Mr and Mrs Owens.
  10. On 5 September 2013 Janine O'Hara, a senior supervisor at Goadsby, emailed Mr and Mrs Grose noting that the price of a new door would be £100, and recording that there had been no reply about the cleaning invoice.
  11. By letter dated 10 September 2013, emailed to Charlotte Old, Mr and Mrs Owens replied. An invoice for cleaning the carpet in the lounge was enclosed, but it was reported that the "carpet cleaner deemed that the other carpets were too clean to need cleaning and we left them in abeyance". Complaints were made about the condition of the property at the beginning of the tenancy. Mr and Mrs Owens also complained that there had been "illegal use of the parking bays" and blocking of access to the garage, for which a sum of £500 was demanded. It was contended that the landlord was not allowed to use the garage. Complaint was made about the state of the bathroom and the need to use a jug in the bathroom. It was said that to allege that the property was in a worse condition than before was "blatantly untrue". Photographs of the oven were attached. The letter concluded noting that if the deposit was not received Mr and Mrs Owens were more than happy to proceed to Court and suggesting that Goadsby should inform Mr and Mrs Grose about the rules and regulations relating to landlords.
  12. By letter dated 12 September 2013 Louise Rankin, a manager at Goadsby, wrote to Mr and Mrs Owens proposing a deduction of £100 and VAT for the door and asking again for an invoice from the cleaning company. By letter dated 16 September 2013 Ms Rankin wrote to Mr and Mrs Grose enclosing the letter dated 10 September 2013 and asking "how you wish us to respond".
  13. By letter dated 21 September 2013 Mr and Mrs Grose wrote a letter to Goadsby. This is the letter in respect of which the claim for defamation is brought. The letter responded to the letter dated 10 September 2013. It started "to address the Owens letter in the first instance … who are the carpet cleaning company to decide the carpets did not need cleaning" reporting the finding of white dog hairs. Reference was made to the photographic record and the fact that the Owens' dog had left large scratches on the door. Mr and Mrs Grose raised other complaints about the behaviour of Mr and Mrs Owens' dog and cat (faeces in the garden and fights between cats). There was a discussion about the claim for £500 being a diversionary tactic, and the fact that Mr and Mrs Owens had parked in front of the garage which had been excluded from the tenancy, and failed to permit anyone to view the property until 20th August, which was in breach of express conditions in the contract.
  14. In relation to the points about the shower and jug comments were made about the bathroom suite. Mr and Mrs Grose wrote that they had offered Mr Owens to have a power shower fitted "but he said he would get a plumber who worked for his company Owens and Porters to come and fit a shower on the company account". Mr Grose reported that he had offered to pay for the capital cost but that had not been accepted. The letter continued noting "this does raise the question though regarding Mr Owens using his company resources" noting that it would not be permissible in a private home, and that Mr Grose's sister, who was an accountant, said that would be illegal. Reference was made to other work being charged to Mr Owens' company and the dim view HMRC might take. The letter went on pointing out that Mr and Mrs Grose had not wanted Mr and Mrs Owens as tenants because of the animals, and commenting again on the lack of cleaning. Mr and Mrs Grose wrote stating "we too would be more than happy to proceed to court for the sum of £3700 based on their instigating after the fact charges, plus the outstanding amount incurred for the damaged door and the caveat of the cleaning of the house after the pets. Indeed we would welcome the chance to bring these facts … to a wider audience …".
  15. It appears that in November 2013 Goadsby, as letting agents for Mr and Mrs Grose, initiated a dispute resolution procedure with DSL. DSL is a body authorised to resolve such disputes pursuant to section 212 of the Housing Act 2014. The letter dated 21 September 2013 was sent to DSL. There is an issue about whether it was sent by Mr and Mrs Grose, or whether if sent by Goadsby, Mr and Mrs Grose are liable for its further publication to DSL.
  16. The proceedings and the application

  17. By a claim form dated 23 April 2014 Mr and Mrs Owens commenced their claim for libel. The Particulars of Claim were attached. The publications of the letter dated 21 September 2013 to both Goadsby and to DSL were complained of. The defamatory meanings were pleaded to be that: (a) the Claimants were bad tenants; (b) the Claimants had fabricated dishonest objections to the Defendants' dilapidations claim with the intention of avoiding liability; (c) the Claimants failed to care for their pets; (d) the First Claimant had illegally used the sources of his company to pay for personal expenses; and (e) the First Claimant, as a prominent local managing agents, was a hypocrite because he did not comply with standards of good behaviour by tenants.
  18. There were issues over service and an application for judgment in default was made, which was withdrawn. In supporting witness statements in respect of that application Mrs Owens made it clear that she was very upset by the allegation that she had not cared properly for her pets, and Mr Owens said that the letter was an obvious assault on his reputation for honesty and in professional and personal dealings and was a significant threat to his financial future and the goodwill in his business. He noted that in respect of some blocks of flats Goadsby would be representing persons with other interests to those represented by Mr Owens and he exhibited letters written to tenants represented by Goadsby.
  19. By an application dated 9 September 2014 Mr and Mrs Grose applied for the claim to be struck out or for reverse summary judgment on the bases: (1) Mr and Mrs Grose were not responsible for the publication to DSL; (2) the publications were on the occasion of qualified privilege; and (3) the claim was a Jameel abuse of process.
  20. Mr Grose made a witness statement in support of the application. He accepted that his frustration had come over in the letter of 21 September, but contended that it contained material which he honestly believed to be true and correct. The letter dated 21 September 2013 had been sent to Louise Rankin, who was dealing with the issue over the deposit, and Simon Whitlock who had the ongoing relationship with Mr and Mrs Grose. He said he was not aware that Goadsby would send their letter to DSL, and he did not impliedly authorise them to do so.
  21. Mr Owens put in a witness statement suggesting that the Grose's applications were out of time, making comments about the applications, and stating that he wanted the matter tried without delay. Mrs Owens put in a further witness statement referring to the highly damaging and wounding claims made in the letter dated 21 September 2013.
  22. The judgment below

  23. The hearing before Master Kay QC took place on 10th December 2014. He dismissed the applications. He gave short oral reasons at the time which were later expanded into a written judgment. Master Kay QC summarised the relevant law, including the law relating to Easyair Limited V Opal Telecom [2009] EWHC 339 on the test to be applied when considering applications for summary judgment, and the respective cases. Master Kay QC concluded that the applications were within time. He noted that there appeared to be valid claims for breach of contract to clean the carpets and for the damage done by Mr and Mrs Owens' dogs. He considered the claim made by Mr and Mrs Owens for £500 for car parking to be at first sign "an unjustifiable attempt to reduce any liability which the tenants might have". He concluded that Mr Grose had become frustrated with the stance taken by Mr and Mrs Owens noting "some of the points made were undoubtedly justified and would be subject to qualified privilege however, unfortunately, the tenor of the letter was somewhat heated and included aspersions upon the First Claimant's financial dealings and professional probity".
  24. In his conclusions on the legal issues engaged Master Kay QC found that: (1) the letter contained material which impugned the probity of Mr Owens; (2) the extent of publication was a matter for trial; (3) much of the letter to Goadsby was subject to qualified privilege however whether qualified privilege would be a defence to the imputations of lack of probity was "a matter of mixed fact and law which needs to be decided"; (4) malice "is also a matter which should be decided at trial"; (5) having regard to issues about real and fanciful prospects, the matter should be determined at trial; (6) in relation to Jameel the references to Mr Grose's probity were sufficient to warrant this being considered a substantive tort which might have a deleterious effect on his professional reputation. There were doubts about the other matters but that would be for the trial judge; and (7) therefore the applications should be dismissed.
  25. Issues on the appeal

  26. I am very grateful to Mr Helme and Mr Considine for their helpful written and oral submissions. It appears that the following matters are in issue on the appeal: (1) whether the publications (to Goadsby and DSL) should have been found to be on an occasion of qualified privilege; (2) if so, whether there should have been a finding that there was no prospect of adducing evidence of malice which would justify a trial; (3) if not, whether the publications should have been found to be a Jameel abuse of process; (4) whether the issue about liability for the publication to DSL should have been left to trial; and (5) whether Mrs Owens' claim ought in any event to be struck out.
  27. There were issues about the admissibility of two witness statements prepared for the purposes of the appeal. The first was a further witness statement from Mr Grose and gave further details about publication to DSL. This showed that Goadsby had uploaded some materials to the DSL forum, and that some had been uploaded by Mr Grose. Mr Grose contended that this showed that he had not uploaded the letter dated 21 September 2013 to DSL.
  28. The second was a further witness statement from Mr Owens. This was produced in the course of the hearing following questions about the case on malice, and related to that part of the letter dated 21 September 2013 which related to the shower. In the course of submissions Mr Considine had stated that it was not only alleged that part of the letter dated 21 September 2013 was wrong, but that the conversation about the shower and the use of a plumber had never even taken place. Mr Considine said that he had only just become aware of this feature of the case in the course of the hearing, and sought permission to rely on the statement. The statement was potentially relevant to the issue of malice, because the authorities recognise that there is a distinction between saying something which is false, and inventing a conversation which is the basis for the defamatory statement. In the further witness statement Mr Owens stated in relation to the conversation referred to in the letter dated 21 September 2013 that "I recall a conversation with Mr Grose re the shower but I did not state that I would get a plumber working for my company to fit a shower on my company account. Mr Grose is being dishonest when he claims that part of the conversation took place. The only conversation that took place was about a shower curtain rail and the performance of the existing tap hose".
  29. Mr and Mrs Owens objected to the further witness statement of Mr Grose, and Mr and Mrs Grose objected to the further witness statement of Mr Owens. It was agreed that I should look at the respective statements for the purposes of the hearing and reserve my decision as to admissibility of the statements to this judgment.
  30. I should record that issues about whether there was (a) an absolute privilege in respect of the publication to DSL; (b) a qualified privilege because Mr and Mrs Grose were responding to attacks being made on them by Mr and Mrs Owens; and (c) the actual meaning of the words; were not the subject of the application or appeal. If the action progresses to trial those matters will become issues in the action.
  31. Relevant legal principles

  32. I have summarised below relevant legal principles relating to: Jameel abuse of process; qualified privilege and malice.
  33. It is established that in order to deal with cases justly, proportionately and to maintain a proper balance between the Convention right to freedom of expression and the protection of other rights, the Court is required to stop as an abuse of process defamation proceedings which serve no legitimate purpose, see Jameel v Dow Jones [2005] EWCA Civ 75; [2005] QB 946 at paragraph 55. The test proposed in that case and accepted by the Court was whether "a real and substantial tort" had been committed in the jurisdiction, see paragraph 50 of Jameel.
  34. The test has been expressed in a number of different ways, namely whether "the game is worth the candle", see paragraph 69 of Jameel, or whether there is any prospect of a trial yielding "any tangible or legitimate advantage such as to outweigh the disadvantages for the parties in terms of expense, and the wider public in terms of court resources", see Schellenberg v BBC [2000] EMLR 296.
  35. In some cases it can be shown that the proceedings would not achieve anything of practical utility for the Claimant, see Cammish v Hughes [2012] EWCA Civ 1655; [2013] EMLR 13 at paragraph 60 and Euromoney Institutional Investor Plc v Aviation News Limited and another [2013] EWHC 15050 (QB) at paragraphs 142-144.
  36. Vindication is an important point of defamation proceedings, and vindication, and consequential injunctions, may eliminate or reduce the risk of republication, see McLaughlin v London Borough of Lambeth [2010] EWHC 2726 (QB); [2011] EMLR 8 at paragraph 112.
  37. It needs to be remembered that dismissing an action for an abuse of process is a draconian power vested in the Court which should only be exercised in an exceptional case, see Haji-Ioannou v Dixon and others [2009] EWHC 178 (QB) at paragraph 30. Applications of this type are not a "numbers game" so far as evidence about publication is concerned. This is because cases have shown that a slander published to only one person can cause immense damage, and everything will be specific to the relevant case.
  38. The fact that costs are likely to be high does not mean that an action should be struck out as an abuse, Haji-Ioannou at paragraph 43. This is particularly so given the increased power available to Courts to control the expenditure of disproportionate costs following the recent reforms to the Civil Procedure Rules.
  39. It is common ground that a publication to a person who has a duty or interest in receiving it will be a publication on an occasion of qualified privilege, see Gatley on Libel and Slander, Twelfth Edition, at 14.1.
  40. It is also common ground that any matter which "is in any way relevant to or connected with the subject matter which is protected by the privilege" will be covered by the privilege, although the inclusion of material of marginal relevance may be evidence of malice, see Duncan & Neill on Defamation, 4th Edition, at 19.10(a) and (b).
  41. In Horrocks v Lowe [1975] AC 135 at 151 Lord Diplock cautioned about taking too restrictive an approach to what was covered by the privilege noting that "as everyone knows, ordinary human beings vary in their ability to distinguish between that which is logically relevant and that which is not … As regards irrelevant matter the test is not whether it is logically relevant but whether, in the circumstances, it can be inferred that the defendant either did not believe it to be true or, though believing it to be true, realised it had nothing to do with the particular duty or interest on which the privilege was based, but nevertheless seized the opportunity to drag in irrelevant defamatory matter to vent his spite, or for some other improper motive".
  42. Occasion of qualified privilege

  43. It was common ground that the publication to Goadsby, who were letting agents and stakeholders for the deposit, was on an occasion of qualified privilege, but Mr Considine submitted that the defamatory imputations pleaded to the effect that: Mr Grose had illegally used the sources of his company to pay for personal expenses; and that Mr Grose, as a prominent local managing agent, was a hypocrite because he did not comply with standards of good behaviour by tenants; were not in any way connected to or relevant to the report to Goadsby, and so were outside the scope of the qualified privilege. I reject that submission. It is apparent that the letter dated 21 September 2013 was a response to Mr and Mrs Owens' letter rejecting the deposit claim. Mr and Mrs Owens had made comments about the shower and its state and their actions as tenants, and Mr and Mrs Grose had responded setting out what they say had occurred, before going on to raise the issue about using company resources for his private residence. The whole of the letter was "in any way related to or connected with" the dispute about the deposit because it was a response to a letter contesting the claim for retention of the deposit. Goadsby acting as letting agents for Mr and Mrs Grose, and stakeholders for the deposit, had an interest and duty in receiving the material.
  44. Mr Considine submitted that the publication of the letter to DSL was not on an occasion of qualified privilege because the dispute which had been referred to DSL was limited to the costs of cleaning the carpets and repairing the door, a total of £342. Mr Considine noted that DSL asked not to be sent volumes of correspondence in their instructions. In my judgment DSL had a duty or interest in receiving the whole of the letter dated 21 September 2013 because DSL were providing a dispute resolution service relating to the deposit. The letter dated 21 September 2013 was a response to a letter denying that sums from the deposit should be retained. The whole of the letter was "in any way related to or connected with" the dispute about the deposit because it was a response to a letter contesting the claim for retention of the deposit.
  45. Even though the whole of the letter was "in any way related to or connected with" the dispute about the deposit I have to consider whether parts of the letter were of such marginal relevance that they might amount to evidence of malice.
  46. No prospect of showing malice at trial

  47. It was perfectly apparent from the whole of the correspondence before me that the dispute about the deposit had generated a considerable amount of heat on the part of Mr and Mrs Owens on the one hand and Mr and Mrs Grose on the other hand. In the correspondence neither side had been strictly logical, in the way that a Court determining a dispute attempts to be. For example Mr and Mrs Owens failed to deal with the breach of an express covenant to have the property professionally cleaned, and had become fixated on the condition of the property when they had taken it over. It might also be noted that the phrase "illegal use of the parking bays" and demand for £500 in Mr and Mrs Owens' letter dated 10 September 2013 was not likely to take the heat out of the dispute. For their part Mr and Mrs Grose had, at the least, interpreted the conversation about the shower by making an illogical leap to a conclusion that there was evidence of some form of wrongful use of company resources without proper declaration to HMRC. I should, as a matter of fairness to Mr Owens record in this judgment that no one in this action has alleged, and there is no evidence before me to support the proposition, that Mr Owens either misused company property or was guilty of failing to declare a benefit from his company.
  48. However the fact that the claims were false is no evidence that they were made maliciously. The circumstances of a heated dispute about the return of a deposit might be thought to be classic territory for the making on both sides of illogical, false, but honestly intended claims and statements to persons who had a duty or interest in receiving them. The fact that Mr Grose had spoken to his sister about the legality of company payments is not evidence of anything other than a genuine, but completely mistaken, belief in the honesty of the charge being made against Mr Owens.
  49. As noted above, in the course of submissions Mr Considine had stated that it was not only alleged that part of the letter dated 21 September 2013 was wrong, but that the conversation about the shower and the use of a plumber had never even taken place. Mr Considine said that he had only just become aware of this feature of the case in the course of the hearing. In the statement which was produced in the course of the hearing Mr Owens stated that he recalled a conversation with Mr Grose about the shower, but disputed that he said he said he would get a plumber working for his company to fit a shower, and alleged dishonesty on the part of Mr Grose. However it should be noted that in Mr and Mrs Owens' solicitors' letter dated 11th November 2013 to Mr and Mrs Grose it was recorded "… our client told you that a plumber who often did work for his company would be prepared to fit the shower rail for which you produced some brackets, and not charge for doing so …" before noting that was an entirely different matter from what Mr Grose had suggested.
  50. It is therefore common ground that there was a conversation about a plumber, that it was said that the plumber often worked for the company, and that no charge for fitting would be made. Mr and Mrs Owens' solicitors were quite right to point out that such material never justified the conclusion which Mr and Mrs Grose had purported to draw, but that is a very long way from saying that Mr and Mrs Grose were knowingly dishonest in making the unjustifiable deduction from the conversation that they had.
  51. There is nothing in the materials or submissions before me to show that Mr and Mrs Owens have any prospect of showing that Mr and Mrs Grose: made defamatory statements which they knew to be untrue; dragged in irrelevant defamatory matter to vent their spite; or acted for any improper purpose. For these reasons in my judgment there is no evidence fit to be considered at trial on the issue of malice. In these circumstances the defence of qualified privilege must succeed. It therefore follows that, in my judgment, Master Kay QC was wrong not to grant reverse summary judgment on this point and I allow the appeal, but it is fair to note that I appear to have had the benefit of fuller argument on this point. I have also had the opportunity to see a further witness statement showing exactly what Mr Owens would have said at trial on this point.
  52. In that last respect I propose to admit the statement from Mr Owens produced in the course of the hearing. It is right to record that it was made very late, and could have been put before Master Kay QC. However it is also right to note that although this hearing involved an appeal, it did relate to the future of the action. The statement does not provide evidence of malice for the reasons set out above, but admitting the statement enables Mr and Mrs Owens know that even if it had been adduced earlier, it would not have made any difference to the result.
  53. Jameel abuse

  54. In the light of my conclusion on the issue of qualified privilege I will state my conclusions on the remaining issues shortly. In my judgment Master Kay QC was right to conclude that the allegation in relation to Mr Owens acting illegally in using company resources would have justified a trial. This was a serious allegation. It is true that the publication was limited, and it is true that Mr Owens appeared to be worried about republication by Goadsby to others, but it might be said that also showed that Mr Owens believed that Goadsby would have acted on the basis of what was said in the letter. Such an action, if otherwise viable, would not have amounted to a Jameel abuse of process.
  55. However that can be contrasted with the claim brought by Mrs Owens. I do not doubt Mrs Owens' strength of feeling about the allegations in the letter but those allegations were going to be determined in part in relation to the deposit, there was no proposed plea of justification in this action, and the proceedings would have served no purpose. I note that Master Kay QC did not in his judgment decide that the proceedings in relation to Mrs Owens were not a Jameel abuse, but appeared to leave them extant because the claim involving Mr Owens was still proceeding.
  56. Responsibility for DSL publication

  57. In my judgment there was a case fit to be tried in relation to Mr and Mrs Grose's responsibility for the publication to DSL. This is because the letter dated 21 September 2014 was either sent directly by Mr and Mrs Grose, or it was sent by letting agents acting on behalf of Mr and Mrs Grose to DSL and there were issues about Mr and Mrs Grose's liability for Goadsby's actions. Master Kay QC was right to conclude that this was an issue for trial. The new witness statement from Mr Grose does not conclude the matter one way or the other, but in circumstances where I have admitted the late witness statement from Mr Owens it seems to me to be fair to admit the late witness statement from Mr Grose.
  58. Both claims dismissed

  59. In these circumstances both claims by Mr and Mrs Owens should be dismissed, and it is not necessary to address the claim by Mrs Owens on its own.
  60. Conclusion

  61. For the detailed reasons given above the publications of the letter dated 21 September 2013 to both Goadsby and DSL were on occasions of qualified privilege and Mr and Mrs Owens have no prospect of adducing evidence of malice fit to be tried. In these circumstances reverse summary judgment ought to be granted to Mr and Mrs Grose, the claim should be dismissed, and I allow the appeal to that extent from the order of Master Kay QC.
  62. It is only fair to both Mr and Mrs Owens to conclude by recording that there was no plea of justification advanced in relation to the claims made in the letter dated 21 September 2013.


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