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England and Wales High Court (Queen's Bench Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> Wright v Granath  EWHC 51 (QB) (16 January 2020)
Cite as:  WLR(D) 29,  4 WLR 28,  EWHC 51 (QB),  3 All ER 416,  EMLR 11,  ILPr 21
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QUEEN'S BENCH DIVISION
MEDIA AND COMMUNICATIONS LIST
Strand, London, WC2A 2LL
B e f o r e :
| CRAIG WRIGHT
|- and –
Hugh Tomlinson QC and Darryl Hutcheon (instructed by Atkins Thomson Ltd) for the Defendant
Hearing date: 12th December 2019
Crown Copyright ©
MR JUSTICE JAY:
"The forensics to CSW's first attempt to fraudulently 'prove' he is Satoshi. Enabled by @gavinandresen. Never forget. @CraigWrightIsAFraud."
"… [Dr Wright] had fraudulently claimed to be Satoshi Nakamoto, that is to say the person, or one of the group of people, who developed the crypto currency Bitcoin."
(1) do both sets of proceedings involve the same cause of action ("le même objet et la même cause")?
(2) if so, does Dr Wright enjoy a substantive right as a victim of defamation to sue in the UK, being a right which cannot by its very nature be displaced by Article 27?
The Pleadings in the Two Sets of Proceedings
"In order that Wright shall have a claim for damages from Granath's allegations on Twitter, the allegation must be made negligently, and they must be libellous and unlawful, see Damage Compensation Act (Damages Act), section 3-6a.
Granath believes he can substantiate that Wright is not Satoshi Nakamoto and that Granath's allegations are correct. Therefore, they are not libellous. Neither has Granath acted negligently in relation to the statements. In any case, Granath had honourable reasons to put forward the allegations. Freedom of expression is a key human right under both the Constitution of Norway, Article 100, and the ECHR, Article 10. Granath's statements are within the wide framework of freedom of expression that these rules establish. This means that the statements are not unlawful, regardless of whether they are accessible in Norway, the EU or other countries.
In the alternative, we will argue that even if the statements are libellous, Craig Wright has not suffered any loss, and there is no basis on which to award him restitution for non-economic loss. His reputation was long damaged even before Granath put forward the allegations on Twitter.
Accordingly, we ask the Court to find in favour of Granath regarding the claims by Wright. We will also ask for a declaratory judgment that Granath's statements on Twitter about Wright are lawful."
Relevant Provisions of the Lugano Convention 2007
A person domiciled in a State bound by this Convention may, in another State bound by this Convention, be sued:
3. in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur;
Lis pendens — related actions
1. Where proceedings involving the same cause of action and between the same parties are brought in the courts of different States bound by this Convention, any court other than the court first seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established.
2. Where the jurisdiction of the court first seised is established, any court other than the court first seised shall decline jurisdiction in favour of that court.
1. Where related actions are pending in the courts of different States bound by this Convention, any court other than the court first seised may stay its proceedings.
2. Where these actions are pending at first instance, any court other than the court first seised may also, on the application of one of the parties, decline jurisdiction if the court first seised has jurisdiction over the actions in question and its law permits the consolidation thereof.
3. For the purposes of this Article, actions are deemed to be related where they are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings."
Jurisprudence Relevant to the First Issue
"In particular, in a case such as this, involving an international sale of tangible property, it is apparent that the action to enforce the contract is aimed at giving effect to it, and that the action for its rescission or discharge is aimed precisely at depriving it of any effect. The question is whether the contract was binding therefore lies at the heart of the two actions. If it is in the action for rescission or discharge of the contract that is brought subsequently, it may even be regarded as simply a defence against the first action, brought in the form of independent proceedings before a court in another contracting state."
In these circumstances, the subject-matter of the two claims was the same (para 17), and the risk that a judgment in one Contracting State would not be recognised in another was obviated (para 18).
(1) in a case involving the application of the concept of lis pendens, the Court must seek to identify whether there is a common question which lies at the heart of the two actions. On the facts of Gubisch, that question was whether the contract was binding.
(2) the foregoing exercise requires some analysis of the essential basis of the claims brought in each jurisdiction, although that analysis could not be conducted with reference to the principles, rules and provisions of domestic law, as to which there was no evidence.
(3) it was clear that the second claim was the mirror image of the first. The basis of the Italian claim was that the contract was not binding; the basis of the German claim was that the contract was binding.
(4) in that particular sense, it could be said that the second claim was "simply a defence against the first action".
"37. The national court's fifth question is essentially whether, on a proper construction of Article 21 of the Convention, an action seeking to have the defendant held liable for causing loss and ordered to pay damages has the same cause of action and the same object as earlier proceedings brought by that defendant seeking a declaration that he is not liable for that loss.
37. It should be noted at the outset that the English version of Article 21 does not expressly distinguish between the concepts of "object" and "cause" of action. That language version must however be construed in the same manner as the majority of the other language versions in which that distinction is made (see the judgment in Gubisch Maschinenfabrik v Palumbo, cited above, paragraph 14).
38. For the purposes of Article 21 of the Convention, the "cause of action" comprises the facts and the rule of law relied on as the basis of the action.
39. Consequently, an action for a declaration of non-liability, such as that brought in the main proceedings in this case by the shipowners, and another action, such as that brought subsequently by the cargo owners on the basis of shipping contracts which are separate but in identical terms, concerning the same cargo transported in bulk and damaged in the same circumstances, have the same cause of action.
40. The "object of the action" for the purposes of Article 21 means the end the action has in view.
41. The question accordingly arises whether two actions have the same object when the first seeks a declaration that the plaintiff is not liable for damage as claimed by the defendants, while the second, commenced subsequently by those defendants, seeks on the contrary to have the plaintiff in the first action held liable for causing loss and ordered to pay damages.
42. As to liability, the second action has the same object as the first, since the issue of liability is central to both actions. The fact that the plaintiff' s pleadings are couched in negative terms in the first action whereas in the second action they are couched in positive terms by the defendant, who has become plaintiff, does not make the object of the dispute different.
43. As to damages, the pleas in the second action are the natural consequence of those relating to the finding of liability and thus do not alter the principal object of the action. Furthermore, the fact that a party seeks a declaration that he is not liable for loss implies that he disputes any obligation to pay damages.
45. In those circumstances, the answer to the fifth question is that, on a proper construction of Article 21 of the Convention, an action seeking to have the defendant held liable for causing loss and ordered to pay damages has the same cause of action and the same object as earlier proceedings brought by that defendant seeking a declaration that he is not liable for that loss."
"… even if it be assumed that the facts underlying the two sets of proceedings are identical, the legal rule which forms the basis of each of those applications is different. … The action for damages is based on the law governing non-contractual liability, whereas the application for the establishment of a liability limitation fund is based on the 1957 Convention and the Netherlands legislation which gives effect to it."
"45. Fundamentally, it is the rights and obligations of the parties in relation to the same facts which, in my judgment, matters here. Each court will be concerned with the respective rights and obligations of the parties, however those are classified and determined by the national courts of each country. …
47. … The way the claim is framed and the arguments in support of it may fall to be taken into account, but ultimately, the question must be seen broadly in terms of the judgment sought and not in terms of the issues raised on the way."
(1) identity of "cause" means that the facts and the rules of law relied upon as the basis for both actions must be the same.
(2) identity of "objet" means that the both proceedings must have the same end in view.
(3) Cooke J's judgment in the J.P. Morgan case was approved.
(4) for the purposes of the assessment, only the claims in each action may be considered, not any defences.
(5) the existence of a discretionary power to stay proceedings under what is Article 28 of the Lugano Convention (the Supreme Court was considering an analogous provision elsewhere) means that there is no need to strain to fit a case within Article 27: this provision is reserved for relatively straightforward situations.
(6) "the essential question is whether the claims in England and Greece are mirror images of the other, and thus legally irreconcilable …" (para 30).
"If the claims in the English and Cypriot proceedings are examined, without regard to any possible defences, it is apparent that the claimant's consent to the defendants' use of the marks, or lack of such consent, is an essential element of both claims. While the Cypriot proceedings are more extensive in the relief sought that the English proceedings, so that there is not a complete overlap between the proceedings, the essential question is whether the "cause" in the English proceedings is mirrored in the Cypriot proceedings. It is, in my judgment, as regards the issue of consent."
"While the scope of the dispute in the Cypriot proceedings may be narrower than in the English proceedings, that which is not disputed in the Cypriot proceedings is in effect assumed in the claimant's favour, narrowing the case to the single issue of consent. Fundamentally, the "cause" and, as is common ground, the "objet" of the two sets of proceedings are the same."
This reasoning proceeds on the basis that Counsel's undertaking in the English proceedings as to what would be placed in issue in the Cypriot proceedings was binding.
The Parties' Submissions on the First Issue
"The correctness of this position can be tested by referring back to the risk of irreconcilable judgments. The Court in the Norwegian proceedings is going to decide whether the Tweet is libellous. The English Court, if Dr Wright is allowed to proceed, would then have to decide the same thing. Opposite conclusions may be reached in the two sets of proceedings."
"… while an NDR claim that sought negative declarations on the basis of all the positive elements of a cause of action might be a 'mirror image', an NDR claim that merely asserted that the tortfeasor was not liable because of a watertight defence to the cause of action would not have commenced a mirror image of the claim, he would have commenced a mirror image of the defence to that claim (which upon the authority of the CJEU Gantner cannot be considered)."
(1) no point is taken in the Norwegian proceedings as to the meaning, including the innuendo meaning, of the words complained of. Indeed, it is not pleaded in those proceedings that, but for the defences of truth etc., the tweet would not be defamatory in any event.
(2) the only contention made in those proceedings which falls under the rubric of "no cause of action" as opposed to "defence" is that the tweet was not made negligently.
(3) the issues of serious harm and dishonesty do not arise in the Norwegian proceedings. This second aspect is particularly important because it would be open to the English court to find that Dr Wright was not Satoshi Nakamoto but honestly believed that he was: for example, if it concluded that Dr Wright was a member of a team of people that created Bitcoin and he honestly believed that he was the principal creator, but in fact some other person had a stronger claim to be so and was therefore properly to be described as Satoshi Nakamoto.
(4) the Norwegian proceedings cover not just one tweet but several.
(5) Dr Wright in the English proceedings is claiming damages and an injunction which forms of relief could only, if at all, be counterclaimed in Norway.
(6) overall, there are no features of Dr Wright's claim in respect of which Mr Granath is seeking NDR in Norway. The entire basis of the NDR claim is that Mr Granath has a sound defence.
Analysis and Conclusions on the First Issue
"… The expression 'legal rule' or 'rule of law' appears to mean the juridical basis upon which arguments as to the facts will take place so that, in investigating 'cause' the court looks to the basic facts (whether in dispute or not) and the basic claimed rights and obligations of the parties to see if there is co-incidence between them …[strictly speaking, this was Cooke J's summary of counsel's submission, but it is clear that he endorsed it]
… The way the claim is framed and the arguments in support of it may fall to be taken into account, but ultimately, the question must be seen broadly in terms of the judgment sought and not in terms of the issues raised on the way."
(1) how broadly must the question(s) be framed?
(2) what is meant by the phrase in parenthesis, "whether in dispute or not"?
(3) is the fact that Mr Granath appears to be relying in Norway on what in this jurisdiction would be statutory defences to a defamation claim critical?
The Second Issue
(1) the State of the defendant's domicile, under Article 2 of the Lugano Convention (general jurisdiction), for global damages and/or non-pecuniary relief; or
(2) the State of the claimant's "centre of interests" under Article 5(3) of the Lugano Convention (special jurisdiction – centre of interests), for global damages and/or non-pecuniary relief; or
(3) each State in which there has been publication under Article 5(3) of the Lugano Convention (special jurisdiction – "mosaic" approach), but only for damages; and limited to the damages suffered by publication in that Member State.
"So far as the question of irreconcilable judgments is concerned, I wish to reserve my opinion for a case in which it matters. I simply make the following observations. Judgment in The Tatry was given on 6 December 1994. Shevill was argued before the Grand Chamber on 10 January 1995; and judgment was delivered on 7 March 1995. Of the 11 judges who sat in Shevill, 6 had also sat in The Tatry. Neither Advocate General Léger nor the court referred to The Tatry, which had been decided in the previous month. In Shevill both Advocates-General drew a distinction between "conflicting judgments" on the one hand, and "irreconcilable judgments" on the other. That does not appear to be the case in The Tatry, in which the court referred only to "conflicting judgments". The court in Shevill did not cast doubt on the Advocates General's distinction; and its answer to question 6 might be thought to recognise implicitly that the existence of another possible jurisdiction did not deprive the claimant of his right to sue. How Shevill and The Tatry are to be reconciled is not, in my judgment, a straightforward question. On one view, Shevill (and after it eDate) give a claimant the substantive right to sue in each member state where the libel has been published, with the consequence that that right is not to be taken away by procedural means. On another view, the mere fact that there is a right to begin proceedings in a particular member state does not entail the consequence that the claimant is entitled to prosecute those proceedings all the way to trial. There is something to be said for each point of view. So I would prefer not to decide between them in a case in which it makes no difference to the outcome of the appeal."
"59. I accept the submission of Mr McCormick that the judgment of the Grand Chamber of the ECJ in Shevill is an authority about the right of a claimant to issue claims in each jurisdiction pursuant to RBR Article 7(2) [the equivalent to Article 5(3) of the Lugano Convention], not about whether the "related actions" provisions of Article 30 can then be applied to such claims. The proposition for which Ms Page contends seems rather extreme. Suppose that someone is found stabbed to death and the defendant publishes an article, which is circulated throughout Europe, alleging that the deceased was murdered by the claimant. If Ms Page is right, the claimant, assuming he can afford it, has an absolute right to bring 27 separate libel claims against the defendant and (subject to any local case management decisions) to push each of them along towards a trial and judgment in whichever order he, the claimant, chooses. No stay can be granted, still less jurisdiction declined, under Article 30; and if in the first trial it is found that the claimant did in fact murder the deceased then, no matter: he can try again in another Member State because there is no risk of "irreconcilable" judgments, only of "conflicting" ones. This does not seem to me to accord with common sense. It also enables a claimant with deep pockets to oppress a defendant by suing him in 27 jurisdictions."