1993 PLP 1380 (SCMR)

In South Hetton Coal Co. Ltd v. North‑Eastern News Association Ltd. (1894) 1 QB 133, (1891‑4) All ER Rep. 548 a newspaper had published an article alleging that the houses in which the company accommodated its colliers were in a highly insanitary state. The Court of Appeal held that the company was entitled to maintain an action for libel without proof of special damage, in respect that the libel was calculated to injure the company's reputation in the way of its business. Lord Esher MR said (1894) 1 QB 133 at 138, (1891‑4) All ER Rep. 548 at 550): "I have considered the case, and I have come to the conclusion that the law of libel is one and the same as to all plaintiffs; and that, in every action of libel, whether the statement complained of is, or is not, a libel, depends on the same question ‑‑‑viz. whether the jury are of opinion that what has been published with regard to the plaintiff would tend in the minds of people of ordinary sense to bring the plaintiff into contempt, hatred, or ridicule, or to injure his character. The question is really the same by whomsoever the action is brought‑‑‑‑whether by a person, firm, or a company. But though the law is the same, the application of it is, no doubt, different with regard to different kinds of plaintiffs. There are statements which, with regard to some plaintiffs, would undoubtedly constitute a libel, but which, if published of another kind of plaintiffs, would not have the same effect." He went on to say that certain statements might have the same effect whether made with regard to a person, or a firm, or a company, for example statements with regard to conduct of a business, and having elaborated on the question whether or .not a particular statement might reflect on the manner of conduct of a business, he continued (1894) 1 QB 133 at 139, (1891‑4) All ER Rep 548 at 551). "With regard to a firm or a company, it is impossible to lay down an exhaustive rule at to what would be a libel on them. But the same rule is applicable to a statement made with regard to them. Statements may be made with regard to their mode of carrying on business, such as to lead people of ordinary sense to the opinion that they conduct their business badly and inefficiently, if so, the law will be the same in their case as in that of an individual, and the statement will be libellous. Then, if the case be one of libel‑‑‑whether on a person, a firm, or a company‑‑‑the law is that the damages are at large, it is not necessary to prove any particular damage; and jury may give such damages as they think fit, having regard to the conduct of the parties respectively, and all the circumstances of the case: In National Union of General and Municipal Workers v. Gillian (1945) 2 Ail ER 593, (1946) KB 81 the Court of Appeal held that a trade union could, in general, maintain an action in tort, and that an action for libel was no exception to that rule. No detailed consideration was given to the nature of the statements in respect of which the action might lie, though Scott LJ referred to the disintegration of a trade union which might result from a libel (see (1945) 2 All ER 593 at 604, (1946) KB 81 at 87), and Uthwatt J said that he saw no reason why a non‑trading corporation should not have the same rights as a trading corporation as respects imputations on the conduct by it of its activities (see (1945) 2 All ER 593 at 605, (1946) KB 81 at 88). The second case involving proceedings by a local authority is Begnor Regis UDC v. Campion (1972) 2 All ER 61, (1972) 2 QB 169, a decision of Browne J. Mr. Campion had distributed at a meeting of a ratepayers' association a leaflet savagely attacking the council, which sued him for libel. At the trial Mr. Campion conducted his own case without the assistance of solicitors or counsel. Browne J. found in favour of the council and awarded it damages of Pound 2,

000. He stated his intention to apply a principle to be found in National Union of General and Municipal Workers v. Gillian, from which he quoted extensively. He continued (1972) 2 All ER 61 at 66, (1972) 2 QB 169 at 175): `Just as a trading company has a trading reputation which it is entitled to protect by bringing an action for defamation, so in my view the council, as a local government corporation, have a "governing" reputiation which it is equally entitled to protect in the same way‑‑‑of course, bearing in mind the vital distinction between defamation of the corporation as such and defamation of its individual officers or members. I entirely accept the statement made in Gatley on Libel and Slandar (6th edn, 1967) P. 409, para 890): "A corporation or company cannot maintain an action of libel or slander for any words which reflect, not upon itself, but solely upon it individual officers or members." Then there is a quotation:" To merely attack or challenge the rectitude of the officers or members of a corporation, and hold them or either of them up to scorn, hatred, contempt, or obloquy for acts done in their official capacity, or which would render them liable to criminal prosecution, does not give the corporation a right of action for libel." I stress the words "solely" and "merely" in those passages. The quotation given in Gatley there is from a United States case (Warner v. Ingersoll (1907) 157 F 311). Browne J then proceeded to consider Manchester Corp v. Williams, and after quoting from the judgment of Day J (63 LT 805 at 806) said (1972) 2 All ER 61 at 68, (1972) 2 QB 169 at 177): "Day J seems to put. his judgment on two grounds; first, that a corporation may sue for a libel affecting property and not for one merely affecting personal reputation. If this was ever right, it has in my view been overruled by the South Hetton case (1894) 1 QB 133, (1891 4) All ER Rep 548 (where substantially this argument was used by the defendants (see (1894) 1 QB 133 at 134‑135) and by National Union of General and Municipal Warkers v. Gillian (1945) 2 All ER 593 at 601 (where the Manchester case (1891) 1 QB 94 was cited). The other ground se‑‑ms to have been that a corporation cannot be guilty of corruption and therefore it cannot be defamatory to say or write that it has been guilty of corruption. This was based on the obiter dictum of Pollock CB in the Metropolitan Saloon Omnibus case (1859) 4 H & N 87, (1843‑60) All ER Rep 430 and was repeated later by Lopes LJ in the South Hetton case (1894) 1 QB 133 at 141, (1891‑4) All ER Rep 548 at

552. The Manchester case is severely criticised in Spencer on Bower on Actionable Defamation 2nd edn., 1923) pp. 245‑246, in Fraser on Libel and Slander (7th edn,1936) pp. 89‑90, and by Oliver J. in Wills v. Brooks (1947) 1 All ER 191 at 192 (another trade union case) where he said after reading the National Union of General and Municipal Workers case that he agreed with the editors of Fraser, who say (P.90): "It is respectfully submitted that the above statement of the law by Mr. Justice Day ...is unsound in principle and would not be upheld in the Court of Appeal." Oliver J. in Willis v. Brooks (1947) 1 All ER 191 at 192 said: "Counsel for the defendants (who incidentally were Sir Valentine Holmes KC and Mr. H.P.J. Milmo (as he then was) did not seriously contend that an action for libel imputing something very like corruption, as in this case, would not lie in any circumstances at the suit of a trade union." and he awarded the plaintiffs Pound 500 damages. As I have said, the Manchester case was cited in the General and Municipal Workers case and the libel in that case seems to have imputed among other things something very like corruption." Finally, he said (1972) 2 All ER 61 at 69, (1972) 2 QB 169 at 178): "The actual decision in the Manchester case can perhaps be supported, as counsel for the council suggested, on the argument that the libel there was not capable of referring to a corporation consisting (as the plaintiffs did) of the mayor, aldermen and citizens, and not, as here, of the chairman and councillors. I think that that case is distinguishable from this on that ground, and also on the ground that in may view none of the statements in the leaflet in this case actually impute corruption. But I hope that the Court of Appeal will soon have occasion to consider the Manchester, case:" (Browne J's emphasis.) It is to be observed that Browne J did not give any consideration to the question whether a local authority, or any other body exercising government functions, might not be in a special position as regards the right to take proceedings for defamation. The authorities cited above clearly establish that a trading corporation is entitled to sue in respect of defamatory matters which can be seen as having a tendency to damage it in the way of its business. Examples are those that go to credit such as might deter banks from lending to it, or to the conditions experienced by its employees, which might impede the recruitment of the best qualified workers, or make people reluctant to' deal with it. The South Hetton Coal Co. case would appear to be an instance of the latter kind, and not, as suggested by Browne J, an authority for the view that a trading corporation can sue for something that does not affect it adversely in the way of its business. The trade union cases are understandable upon the view that defamatory matter may adversely affect the union's ability to keep its members or attract new ones or to maintain a convincing attitude towards employers. Likewise in the case of a charitable organisation the effect may be to discourage subscribers or otherwise impair its ability to carry on its charitable objects. Similar considerations can no doubt be advanced in connection with the position of a local authority. Defamatory statements might make it more difficult to borrow or to attract suitable staff and thus affect adversely the efficient carrying out of its, functions. There are, however, features of a local authority which may be regarded as distinguishing it from other types of corporation, whether trading or non‑trading. The most important of these features is that it is a governmental body. Further, it is a demorcratically elected body, the electoral process nowadays being conducted almost exclusively on party political lines. it is of the highest public importance that a democratically elected governmental body, or indeed any governmental body, should be open to uninhibited public criticism. The threat of a civil action for defamation must inevitably have an inhibiting effect on freedom of speech. In City of Chicago v. Tribune Co. (1923) 307 III. 595 the Supreme Court of Illinois held that the city could not maintain an action of damages for libel 'Thompson CJ said (at 6()(‑607): "The fundamental right of freedom of speech is involved in this litigation and not merely the right of liberty of the press. If this action can be maintained against a newspaper it can be maintained against every private citizen who ventures to criticise the ministers who are temporarily conducting the affairs of his government. Where any person by speech or writing seeks to persuade others to violate existing law or to overthrow by force or other unlawful means the existing government he may be punished ...but all other utterances or publications against the government must be considered absolutely privileged. While in the early history of the struggle for freedom of speech the restrictions were enforced by criminal prosecutions, it is clear that a civil action is as great, if not a greater, restriction than a criminal prosecution. If the right to criticise the Government is a privilege which, with the exceptions above enumerated, cannot be restricted, then all civil as well as criminal actions are forbidden. A despotic or corrupt Government can more easily stifle opposition by a series of civil actions than by criminal prosecutions... After giving a number of reasons for this, he said (at, 607‑608): "It follows, therefore, that every citizen has a right to criticise an inefficient or corrupt Government without fear of civil as well as criminal prosecution. This absolute privilege is founded on the principle that it is advantageous for the public interest that the citizen should not be in any way fettered in his statements, and where the public service or due administration of justice is involved he shall have the right to speak his mind freely." These propositions were indorsed by the Supreme Court of the United States in New Your Times Co. v. Sullivan (1964) 376 US 254 at

277. While these decisions were related most directly to the provisions of the American Constitution concerned with securing freedom of speech, the public interest considerations which under laid them are no less valid in this country. What has been described as the chilling effect induced by the threat of civil actions for libel is very important. Quite often the facts which would justify a defamatory publication arc known to be true, but admissible evidence capable of proving those facts is not available. This may prevent the publication of matters; which it is very desirable to make public. In Hector v A‑G of Antigua and Barbuda (1990) 2 All ER 103, (1990) 2 AC 312 the Judicial Committee of the Privy Council held that a statutory provision which made the printing or distribution of any false statement likely to undermine public confidence in the conduct of public affairs a criminal offence contravened the provisions of the Constitution protecting freedom of speech. Lord Bridge of Harwich said (1990) 2 All ER 103 at 106, (1990) 2 AC 312 at 318): "In a free democratic society it is almost too obvious to need stating that those who hold office in government and who are responsible for public administration must always be open to critisim. Any attempt to stifle or fetter such criticism amounts to political censorship of the most insidious and objectionable kind. At the same time it is no less obvious that the very purpose of criticism levelled at those who have the conduct of public affairs by their political opponents is to undermine public confidence in their stewardship and to persuade the electorate that the opponents would make a better job of it than those presently holding office. In the light of these considerations their Lordship cannot help viewing a statutory provision which criminalises statements likely to undermine public confidence in the conduct of public affairs with the utmost suspicion." It is of some significance to observe that a number of departments of Central Government in the United Kingdom are statutorily created corporations, including the Secretaries of State for Defence, Education and Science, Energy, Environment and Social Services. If a local authority can sue for libel there would appear to be no reason in logic for holding that any of these departments (apart from two which are made corporations only for the purpose of holding land) were not Also entitled to sue. But as is shown by the decision in A‑G v Guardian Newspapers Ltd (No 2) (1988) 3 All ER 545, (1990) 1 AC 109, a case concerned with confidentiality, there are rights available to private citizens which institutions of central government are not in a position to exercise unless they can show that it is the public interest to do so. The same applies, in may opinion, to local authorities. In both cases 1 regard it as right for this House to lay down that not only is there no public interest favouring the right of organs of government, whether central or local, to sue for libel, but that it is contrary to the public interest that they should have it. It is contrary to the public interest because to admit such actions would place an undesirable fetter on freedom of speech. In Die Spoorbond v. South African Railways (1946) AD 999 the Supreme Court of South Africa held that the South African Railways and Harbours, a Governmental Department of the Union of South Africa, was not entitled to maintain an action for defamation in respect of a publication alleged to have injured its reputation as the authority responsible for running the railways. Schreiner JA said (at 1012‑1013): "I am prepared to assume, for the purposes of the present arguments, that the Crown may, at least in so far as it takes part in trading in completion with its subjects, enjoy a reputation, damage to which could be calculated in money. On that assumption there is certainly force in the contention that it would be unfair to deny to the Crown the weapon, an action for damages for defamation, which is most feared by calumniators. Nevertheless it seems to me the considerations of fairness and convenience are no balance, distinctly against the recognition of aright in the Crown to sue the subject in a defamation action to protect that reputation. The normal means by which the Crown protects itself against attacks upon its management of the country's affairs is political action and not litigation, and it would, I think, be unfortunate if that practice were altered. At present certain kinds of criticism of those who manage the State's affairs may lead to criminal prosecutions, while if the criticism consists of defamatory utterances against individual servants of the State actions for defamation will lie at their suit. But subject to the risk of these sanctions and to the possible further risk, to which reference will presently be made, of being sued by the Crown for injurious falsehood, any subject is free to express his opinion upon the management of the country's affairs without fear of legal consequences. I have no doubt that it would involve a serious interference with the free expression of opinion hitherto enjoyed in this country if the wealth of the State, derived from the State's subjects, could be used to launch against those subjects actions for defamation because they have, falsely and unfairly it may be, criticised or condemned the management of the country. Such actions could not, I think, be confined to those brought by the Railways Administration for criticism of the running of the railways. Quite a number of Government departments, as appeared in the course of the arguments, indulge indule in some form of trading on a greater or a lesser scale. Moreover, the Government, when it raises loans, is interested in the good or bad reputation that it may enjoy among possible subscribers to such loans. It would be difficult to assign. any limits to the Crown's right to sue for defamation once its right in any case were recognised." These observations, may properly be regarded as no less applicable to a local authority than to a department of central government. In the same case Watermeyer CJ observed that the reputation of the Crown might fairly be regarded as distinct from that of the group of individuals temporarily responsible for ,the management of the Railways on its behalf (at 1009). In the case of a local authority temporarily under the control of one political party or another it is difficult to say that the local authority‑as such has any reputation of its own. Reputation in the eyes of the public is more likely to attach itself to the controlling political party, and with a change in that party the reputation itself will change. A publication attacking the activities of the authority will necessarily be an attack on the body of councillors which represents the controlling party, or on the executives who carry on the day‑to‑day management of its affairs. If the individual reputation of any of these is wrongly impaired by the publication any of these can himself bring proceedings for defamation. Further. it is open to the controlling body to defend itself by public utterances and in debate in the council chamber The conclusion must be, in may opinion, that under the common law of England a local authority does not have the right to maintain an action of damages for defamation. That was the conclusion reached by the Court of Appeal, which did so principally by reference' to Art. 10 of the European Convention on Human Rights (Convention for the Protection of Human Rights and Fundamental Freedoms (Rome, 4 November 1950; TS 71 (1953); Cmd 8969), to which the United Kingdom has adhered but which has not been enacted into domestic law. Article 10 is in these terms: `(1) Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers... (2) The exercise of these freedoms, since it carries with it duties and responsibilities, may be subject to such formalities, conditions, restrictions or penalties as are prescribed by law and are necessary in a democratice society, in the interests of national security, territorial integrity or public safety, for the prevention of disorder or crime, for the protection of health or morals, for the protection of the reputation or rights of others, for preventing the disclosure of information received in confidence, or for maintaining the authority and impartiality of the judiciary.' As regards the words `necessary in a democratice society' in connection with the restrictions on the right to freedom of expression which may properly be prescribed by law, the jurisprudence of the European Court of Human Rights has established that' necessary' requires the existence of a pressing social need, and that the restrictions should be no more than is proportionate to the legitimate aim pursued. The domestic Courts have `a margin of appreciation' based upon local knowledge of the needs of the society to which they belong (see Sunday Times v. UK (1979) 2 EHRR 254, Barthold v. Germany (1985) 7 EHRR 383 and Lingens v. Austria (1986) 8 EHRR 407 at 418). The Court of Appeal approached the matter upon the basis that the law, of England was uncertain upon the issue lying at the heart of the case, having regard in particular to the conflicting decisions in Manchester Corp v. Williams (1891) 1 QB 94, 63 LT 805 and Bognor Regis UDC v. Campion (1972) 2 All ER 61, (197'2) 2 QB 169 and to the absence of any relevant decision in the Court of Appeal or in this House. In that situation it was appropriate to have regard to the convention. Balcombe LJ referred in this connection to Brind v. Secretary of State for the Home Deptt. (1991) 1 All ER 720, (1991) 1 AC 696, A‑G v. Guardian Newspapers Ltd. (1987) 3 All ER 316, (1987) 1 WLR 1248, Re W (a minor) wardship: freedom of publication) (1992) 1 All ER 794 (1992) 1 WLR 100 and A‑G v. Guardian Newspapers Ltd (No.2) (1988) 3 All ER 545, (1990) 1 AC 109.I‑laving examined other authorities he concluded, having carried out the balancing exercise requisite for the purposes of Art 10 of the convention, that there was no pressing social need that a corporate public authority should have the right to sue in defamation for the protection of its reputation. That must certainly be true considering that in the past 100 years there are only two known instances of a defamation action by a local authority. He considered that the right to sue for malicious falsehood gave such a body all the protection which was necessary. Ralph Gibson and Butler‑Sloss LJJ, who observed that the law of criminal libel might be available in suitable cases, to afford additional protection, expressed similar views. All three Lords Justices also alluded to the consideration that the publication of defamatory matter concerning a local authority was likely to reflect also on individual councillors or officers, and that the prospect of actions for libel at their instance also afforded some protection to the local authority. My Lords, I have reached my conclusion upon the common law of England without finding any need to rely upon the European convention. Lord Goff of Chieveley in A‑G v. Guardian Newspapers Ltd. (No.2) (1988) 3 All ER 545 at 660, (1990) 1 AC 109 at 283‑284 expressed the opinion that in the field of freedom of speech there was no difference in principle between English law on the subject and Art. 10 of the convention. I agree, and can only add that I find it satisfactory to be able to conclude that the common law of England is consistent with the obligations assumed by the Crown under the treaty in this particular field. For these reasons I would dismiss the appeal. It follows that Bognor Regis UDC v Campion (1972) 2 All ER 61, (1972) 2 QB 169 was wrongly decided and should be overruled. LORD GRIFFITHS.‑‑My Lords, I have had the advantage of reading in draft the speech prepared by my noble and learned friend Lord Keith of Kinkel and, for the reasons he gives, I too, would dismiss the appeal. LORD GOFF OF CHIVELEY.‑‑My Lords, I have had the advantage of reading in draft the speech prepared by my noble and learned friend Lord Keith of Kinkel and, for the reasons he gives, I too, would dismiss the appeal: LORD BROWNS‑WILKINSON: =My Lords, I, too, would dismiss the appeal for the reasons given in the speech of my noble and learned friend Lord Keith of Kinkel. LORDS WOOLF: ‑My Lords, I, too, would dismiss the appeal for the reasons given in the speech of my noble and learned friend Lord Keith of Kinkel. M.BA./407/FJ Appeal dismissed.