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(1) Tesla Motors Ltd (2) Tesla Motors Inc v BBC [2013] EWCA Civ 152

Case date: 05/03/2013
Court: Court of Appeal
Area/s of law: Defamation | Malicious Falsehood
Barrister/s: Andrew Caldecott QC | Catrin Evans

Full List of Cases

(1) Tesla Motors Ltd (2) Tesla Motors Inc v BBC [2013] EWCA Civ 152

Facts

The Claimants produce electric cars, including ‘the Roadster’. In 2008 two Roadsters were made available for review by BBC’s Top Gear programme, and were put through various tests on the Top Gear track. The review was broadcast on 14 December 2008, which although partly favourable, included some passages about which the Claimants complained.

In March 2011, proceedings were issued by Tesla for libel and malicious falsehood based on publications of the 14 December 2008 Top Gear programme during the preceding 12 months only. The claim, for damages and an injunction, was framed as follows (taken from the summary by Moore-Bick LJ):

[6] … In paragraph 5 of its particulars of claim served together with the claim form it alleged that the words
“although Tesla say it will do 200 miles, we worked out that on our track it would run out after just 55 miles” were defamatory because they meant that Tesla had intentionally or recklessly grossly misled potential purchasers of the Roadster by claiming that it had a range of about 200 miles when in fact its true range was in the order of 55 miles.

[7] In paragraph 7 of its particulars of claim Tesla also alleged that the film was false in the following respects:

1. The first Roadster shown (which was silver in colour) did not run out of charge;

2. The first Roadster did not have to be pushed back into the hangar as a result of running out of charge;

3. At no point were the brakes of the first Roadster broken;

4. The second Roadster (which was grey in colour ) did not become immobile as a result of overheating.

5. There was no time at which neither Roadster was available for driving.

[8] No specific allegation was made, however, that false statements had been made about the Roadster’s range. Tesla alleged that each of the false statements mentioned above had been published by the BBC maliciously and was calculated to cause it pecuniary damage in respect of its business.

The BBC applied to strike out and/or for summary judgment of the whole claim, which was granted by Tugendhat J in October 2011, although he gave the Claimants an opportunity to try to better particularise the section 3 claim in the malicious falsehood. That further application to amend section 3, as well as applications to add in a new special damage claim and reinstate the libel, were dismissed on 23 Feb 2012.

The Claimants appealed.

Outcome

Appeal dismissed.

Reasoning

(A) Libel claim

(i) The original meaning

The programme was incapable of bearing the primary meaning advanced by the Claimants (“intentionally grossly misled potential purchasers about the Roadster’s range”) or any other meanings previously suggested in the October 2011 hearing. The statement about the mileage achieved by the car “on our [Top Gear] track” could not reasonably be understood to provide a reliable indication of the true range of the car under normal driving conditions. What the viewer saw on the programme was the car being put through a series of tests (including violent acceleration, high-speed driving and heavy cornering) that bore no relation to the kind of driving on public roads on which a manufacturer could base an estimate of range.

Moreover, the discrepancy between Tesla’s claimed 200 mile range of the car and the stated 55 miles on the Top Gear track was so great that the statement could only mean the Claimants were dishonest (and not that they intentionally or recklessly misrepresented its mileage short of dishonesty). Dishonesty was not a meaning capable of being borne by the programme. [23]

(ii) The proposed amendment

The proposed amendment still depended on a reasonable reader thinking there was a meaningful comparison to be drawn between testing on the Top Gear track and ordinary driving on public roads. For the reasons above, the court did not think a reasonable reader could so think, and the judge was therefore right to hold the words complained of were incapable of bearing of proposed meaning. [26]

(B) Malicious Falsehood claim

(a) General damages – proposed amendment to section 3

There was no appeal against the judge’s decision that Tesla should be required to set out the nature of the section 3 plea in detail. Rather the appeal related to the decision of the judge not to give Tesla permission to amend to include the new particulars they wished to rely on [27].

Two issues arose: firstly whether the proposed amendment set out the case with sufficient particularity and secondly whether it had a real prospect of success at trial. Only if these were satisfied would it be necessary to consider what the effect on the proceedings of allowing amendment at this stage would be [30].

Paragraph 9(1) – (4) of the draft set out the nature of the damage which it was said each of the broadcasts was likely to cause and the reasons why Tesla was more likely than not to suffer damage of that kind [29]. These, standing alone, sufficiently set out the nature of the case Tesla sought to make. Since the claim was for general damages the Claimant did not need to identify the amount of pecuniary loss which it said the falsehoods were calculated to cause, all they had to do was identify the nature of the loss and the mechanism by which it was likely to be sustained. [37]

However, this was a case in which there were grave difficulties in identifying any pecuniary loss that the actionable false statements were calculated to cause. As a result the court was not persuaded that the case Tesla sought to make by way of the proposed amendment had a sufficient prospect of success, or if successful, would be likely to yield any benefit to Tesla that could justify the devotion of substantial resources in terms of costs and the use of court time. Further, an injunction was not at all likely.

In reaching this conclusion Moore-Bick LJ (with whom the other members of the Court agreed) stated that: “For my own part I would hesitate to describe the present proceedings as an abuse of process in the ordinary sense”, but nevertheless applied the “game is not worth the candle” principle from Jameel v Dow Jones. The judge was right to refuse permission to amend.[49]

Although this decision removed the need to consider what the effect on the proceedings of allowing the amendment would be, the court noted that the stage the amendment was introduced was not a late one. It was prior to disclosure and witness statements and there were no grounds for thinking the amendment would be likely to have a disruptive effect on the progress of the proceedings [50]

(b) Special damages – proposed amendment

At 9(5) of the draft the Claimants relied on lengthy particulars of what were alleged to have been the actual effects of the broadcasts, including reduced sales figures and adverse comments online and by potential consumers. The case pleaded was “to say the least, very thin on its own terms,” but it also suffered the more fundamental difficulty of showing the extent to which any loss that could be established was caused by actionable statements rather than statements that for one reason or another were not actionable. This was particularly acute given the number of times the film was broadcast before the beginning of the limitation period. [45]

The material before the court did not demonstrate any real prospect of Tesla being able to demonstrate at trial that it had suffered any quantifiable loss by reason of any of the actionable statements. Tesla’s case was also undermined by various public statements it made in the period following the first broadcast (in which it insisted that it had not suffered any harm as a result) and by its failure to include a claim for special damages in the original particulars of claim. If it had suffered a loss of almost $4m it would surely have realised this, investigated it, and pleaded this case from the outset. The judge was right to refuse permission to amend to include the special damages plea.

Andrew Caldecott QC and Catrin Evans, instructed by Liz Grace of the BBC Litigation Department, appeared on behalf of the Defendant.

The judgment is available here.

2018-04-26T12:17:55+00:00March 5th, 2013|