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Citation Plc v Ellis Whittam Ltd [2013] EWCA Civ 155

Case date: 08/03/2013
Court: Court of Appeal
Area/s of law: Defamation
Barrister/s: Richard Rampton QC | Jane Phillips

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Citation Plc v Ellis Whittam Ltd [2013] EWCA Civ 155

Facts

The parties are business competitors. The Claimant (‘Citation’) brought an action for slander and malicious falsehood in respect of words allegedly spoken by an employee of the Defendant (‘Ellis’) to a prospective client, who nevertheless went on to enter into a contract with Citation. Citation accepted that it had not suffered, and was not likely to suffer, any loss from this publication, but invited an inference that the Ellis employee had made other similar publications. In pre-action correspondence Ellis offered undertakings but Citation was dissatisfied with the proposed wording and issued proceedings, stating that an injunction, rather than damages, was the main purpose of the action. It later transpired that, upon receipt of the letter of claim in May 2011, Ellis’s commercial director had issued an instruction to its entire sales force not to repeat the allegations complained of or other statements which might be untrue or defamatory of Citation and other competitors.

In March 2012, on an application by Ellis, Tugendhat J struck out the claim as an abuse of process of the variety recognised in Jameel v Dow Jones [2005] QB 946 and ordered Citation to pay Ellis’s costs from service of the Claim Form onwards.  Citation appealed.

Outcome

The Court of Appeal upheld the decision to strike out the claim as an abuse of process.

Reasoning

Giving judgment for the court, Tomlinson LJ held that it was unnecessary to decide whether Tugendhat J had been correct to hold that there was an arguable case for inferring that the Ellis employee had spoken similar words to other clients or potential clients of Citation: [16]-[17]. The critical question was whether there was a real risk of repetition, requiring an injunction, and there was no material before the court from which it was possible to derive the inference that there had been any further publication since Ellis had instructed its sales force not to repeat the allegations, or that there will be such further publication in the future. He reached this conclusion from the inter partes correspondence (observing that the wording of the undertaking proferred by Ellis was “a pragmatic compromise, not of itself indicative of bad faith or Machiavellian intention”) but added that the instruction to the sales force put the matter beyond doubt: [26]-[29]. The court must proceed on the basis of the material before it, and so was unpersuaded by Citation’s submission that, on disclosure, there may be further evidence bearing on the risk of repetition (Proctor v Bayley (1889) 422 Ch D 390 followed).

On the issue of damages, Tomlinson LJ agreed with Tugendhat J’s analysis: damages, if awarded, would be more than a nominal sum, but Citation had no evidence of actual damage, could not claim damages for distress, had stated that it had not brought the proceedings in order to recover damages, and was unlikely to achieve, through an award of damages at trial, any vindication more valuable than that which it had already gained from Ellis’s acceptance that it must not repeat the words complained of. In those circumstances the tort alleged by Citation had neither reality nor substance and it was not proportionate to permit it to proceed to trial: [31]-[34]

Tomlinson LJ held that Citation’s position was not improved by reliance on ECHR Article 6: it had already achieved public vindication of its rights through the medium of the court: [35]

He also held that Tugendhat J’s exercise of his discretion as to costs could not be impugned. In particular, there was no basis upon which he could have ordered Ellis to pay the costs of the pre-action correspondence, in circumstances where liability had been neither found nor admitted: [36]

Richard Rampton QC and Jane Phillips instructed by Robin Simon LLP, appeared for the Defendant.

The judgment is available here.

2018-04-26T11:57:17+00:00March 8th, 2013|