Mr Justice Eady :
- In this libel action the Claimant is a company called Creative Resins International Limited. There were originally three Defendants, the first being Glasslam Europe Limited, the second Donne Mileham & Haddock, a firm of solicitors, and the third Mr Stephen Howes. The Second Defendant went out of the litigation some time ago and the First Defendant has at the eleventh hour settled the action this morning, so far as the cause of action against it is concerned, on the basis of a statement in open Court and a Tomlin order. That leaves now remaining only the Third Defendant, Mr Stephen Howes.
- Mr Howes's attitude is that he wishes to take no part in the proceedings. He lives in the United States and has apparently done so for some time. The claim against him has therefore proceeded in his absence. He has, for good measure, sent a letter, dated 21 st November, to the solicitor for the Claimants in rather insulting terms not only to the people behind Creative Resins (and one person in particular) but also insulting to the solicitor. The letter offers the challenge :-
"If you want to bring it on in the USA, I look forward to you taking me on. Or will you hide?"
So that is the approach which he adopts.
- There are quite a number of residents in the United States who strongly disagree with the approach which English Courts take in relation to defamation, but my responsibility, of course, as a Judge operating in this jurisdiction, is to apply English law as it stands. There is no doubt that the Third Defendant knows of these proceedings and that it is his choice not to participate.
- Against that background, therefore, I have heard brief evidence from two of the Claimant's witnesses and I have given permission for the other evidence, which has been served by them, to be relied upon without the need for calling the witnesses and on the basis of their witness statements only. That is in accordance with the CPR. The object behind that is, of course, to save time and money and to ensure, so far as possible, that the time and money spent on the case are proportionate.
- The Claimant company produces manufacturing equipment, processes and raw materials used for the purpose of producing glass resin bevels and other decorative glass panels. The First Defendant, to whom I have already referred, is in a broad sense a competitor of the Claimant company. Mr Howes, the Third Defendant, has a significant shareholding in the First Defendant. He is also the Chief Executive Officer of an associated company, Glasslam NGI Inc. in the United States.
- It was explained in the course of the evidence that there has been a history over some years of aggressive and threatening behaviour by the Defendants towards the Claimant company and to some of its officers. It is submitted by Mr Rushbrooke on behalf of the Claimant that the libels complained of in these proceedings form part of that campaign. The evidence would certainly appear to bear that out.
- The proceedings were commenced on 5th November 2004. Originally, two publications were sued upon. One related to a letter published on 7th September 2004 by the firm of solicitors who were originally the Second Defendants on behalf of the First Defendant to one of the Claimant's customers. The Third Defendant, I should make clear, is not sued in relation to that publication. The article in respect of which he is sued appeared from about the beginning of February 2003 on a website and also in a magazine called US Glass, which has a large circulation among people particularly interested in the glass industry and involved in it throughout the world. It is right that I emphasise that the present claim is confined to publication of the words complained of in this jurisdiction, that is to say to publications by means of the website and through the hard copies of the magazine itself. The headline of the article was "Creative Resins Served by Glasslam".
- I turn now to the words complained of from the article, which are in these terms, underneath the heading which I have already read:-
' During the recent Glasstec 2002 [exhibition] in Dusseldorf Germany, Glasslam Europe Ltd. served U.K.-based Creative Resins International Ltd. with a writ claiming copyright infringement, theft of intellectual property and unfair business practices ... Certain items in Creative Resins' stand imitated products already offered by Glasslam and its licensees. A German Court supported documentary evidence and legal documents were issued. Glasslam Europe is claiming 500,000 EURO in damages.
'Patrick Sumner, managing director of Creative Resins International, was served with a writ by a court bailiff during the trade show. All products and materials in violation of the court order had to be removed from the stand.
'"We and our licensees have spent many years establishing our products and designs to be the best in the world and the market leader in its field," said Stephen Howes, chief executive officer, for Glasslam NGI Inc. (USA), sister company of Glasslam Europe.
'"We will not allow such flagrant acts of copyright infringement to undermine the confidence the industry has in our tried and tested brand."
'According to Howes, Creative Resins is refusing to respond to the German court's order. Glasslam has thus objected very strongly to Creative Resins ever again exhibiting at Glasstec
…'
- The natural and ordinary meanings pleaded in the Particulars of Claim are:-
"(1) The Claimant has been guilty of flagrant acts of copyright infringement in relation to the First Defendant's products, forcing the First Defendant to mount a €500,000 damages claim in Germany.
"(2) The Claimant has deliberately ignored an order of the German court."
- I have no difficulty in holding that the words complained of do indeed bear those meanings, and those meanings are plainly defamatory of the Claimant company, and seriously so. They are calculated to undermine its commercial reputation and no doubt also to discourage people from dealing with it in commercial transactions.
- The extent of publication in this jurisdiction of the words complained of cannot be determined accurately or even approximately. All I need to say is that, in the light of the evidence, I am satisfied that this is not one of those cases where the publication can be regarded as purely technical in character: cf Jameel (Yousef) v Dow Jones, recently considered by the Court of Appeal. Here, the likelihood is that there have been a significant number of readers of the words complained of both in the hard copy in the magazine and on the website, significant in the sense not only numerically but also that they are likely to be people in whose eyes the Claimant's reputation is of some importance. I say that for the reason which is obvious, that the words will have been read primarily by people involved in and interested in the glass industry and, in particular, people who might be likely in the ordinary course of business to have dealings with the Claimant.
- I heard evidence this morning from two witnesses, as I have said, namely Mr Patrick Sumner and Mr Trevor Cox. They have set out at some length in their witness statements the background to this matter not only in relation to the campaign, as I described it earlier, by the First and Third Defendants, but also in relation to the background of the specific publication complained of in this case and what took place in Germany in 2002 in particular.
- It is manifest that there is no truth in the allegations which have been published and persisted in for some time. It appears that the words remained accessible on the website between February 2003 and November 2004. Attention was apparently drawn to it from time to time by various officers of the Defendant company. In particular, I can illustrate the inaccuracy of the allegations by making these points, which emerge clearly from the evidence.
- All that was ever "served" on the Claimant company was a letter before action. That letter was served upon them in accordance with German procedure. No proceedings have ever been brought against the Claimant company in respect of any of the alleged infringements in Germany, whether by the First Defendant or by any individual or associated company. That was true in February 2003 and it remains true today.
- It is also untrue to suggest that any evidence was supported in any sense by a German Court. There was never, it must follow, any Court order for the Claimant to obey or disobey. Nor did the Claimant behave in any way at all in violation of a Court order. Obviously, in the light of the brief summary of the facts I have just given, that simply could not be true. Likewise, it cannot be true to say that Creative Resins failed or refused to respond to an order of the German Court.
- As the evidence makes clear, all that happened was that, confronted with a legal document in a foreign language, Mr Sumner of the Claimant company did agree, as he put it at the time in a letter:-
"to minimise immediate problems and without prejudice to any legal rights I may have, I am removing the products complained of from my stand."
- It is important to emphasise that Mr Sumner has never admitted that there was anything in the claims put forward in that letter. He said at the time that his removal of the products was without prejudice to his legal rights, and there is no reason to suppose that his position is any weaker today than it was then in terms of his legal rights. There has never been a claim and, therefore, never any finding of any kind which would go to support the defamatory allegations which I have read out.
- The Third Defendant put in a Defence in these proceedings in which he relied upon qualified privilege. There was no defence of justification, nor, in the light of what I have said, could there possibly have been one. The plea of qualified privilege is based on a number of subparagraphs which are pleaded, which I need not read out. It is perhaps fair to say that the nub of the basis of the plea is to be found in paragraph 6.9 in these terms:-
"In publishing the press release and comments, the Third Defendant was concerned to assert his rights in the Glasslam Resin Bevel Process and the Glasslam companies' determination to protect those rights, and associated rights of its licensees."
In his absence, of course, that Defence has not been argued, but it was necessary for me to address it in any event.
- I see no basis for publication on the widespread scale which took place which could fall within any doctrine of qualified privilege. There was no duty and no legitimate interest which would justify publishing these words on that scale.
- In any event, the Claimant has sought to meet the plea with an allegation of malice. If, contrary to my ruling, there was an occasion of qualified privilege, I have no doubt that it would be defeated by malice, because the evidence discloses quite clearly, as I have already said, that the allegations contained in the publication were totally false. It is inconceivable that the Third Defendant was unaware of the falsity and the publication of those words, therefore, took place cynically and dishonestly.
- There has been no attempt to make amends or to apologise for that publication, notwithstanding the change of heart at the last minute on the part of the First Defendant. In those circumstances, there being a defamatory publication on a wide scale, over a considerable period of time, to which there is no defence, the Claimant is entitled to damages.
- It must be said straightaway that the damages must be confined to publication within this jurisdiction and I must bear in mind, as Mr Rushbrooke has readily acknowledged, that the only Claimant in these proceedings is a corporate entity. Therefore, there are no injured feelings to be compensated. There is no claim for punitive damages and there is no claim for special damages either. Accordingly, the exercise upon which I am embarked is purely that of fixing proportionate and fair general damages for a corporate entity in the light of this publication.
- The important purpose of libel damages in that limited context is to compensate for injured reputation and, in particular, to vindicate the reputation of the Claimant company. That is to say, to make clear to any interested onlookers that the defamatory allegations were without foundation. Malice is not, in my judgment, directly relevant to this exercise because, as I have already said and as is obvious, the corporate entity does not have feelings to hurt and, therefore, considerations of aggravation which might be relevant in a malice context where the Claimant was an individual do not apply. Nevertheless, because the allegation has been repeated over a considerable period of time, because it has never been withdrawn and because from time to time it has been drawn to the attention of people in the glass industry, who, like any other human beings, may be inclined to say "There is no smoke without fire", I have to bear in mind those considerations when going about the task of vindicating the Claimant.
- The damages should clearly not be nominal for this purpose, but I bear in mind, as was said many years ago in the House of Lords, that a company can only be hit in its pocket. There is no evidence of actual financial loss, although one can readily infer that people may well have been put off entering into commercial transactions with this Claimant as a result of the publication.
- Mr Rushbrooke has reminded me also that it is not appropriate for me to discount damages for the purpose of vindicating the Claimant by reason only of the fact that I am giving now what is a reasoned judgment, justifying the Claimant's success on liability. I should approach damages in the same way as would a jury giving simply a verdict without a reasoned judgment. It is an artificial exercise. The important point is to make it clear that the Claimant is entitled to vindication. The damages are inevitably modest, compared to the gravity of the allegations, for the reason that I am concerned solely with a corporate entity.
- In all the circumstances, it seems to me to be right to award the sum of £15,000 by way of general damages, and that ought to leave no doubt in the minds of anyone who has read the article in question that the allegations are demonstrably false and that the Claimant has fought determinedly, and with justification for so doing, to vindicate its reputation and it is so entitled.
MR JUSTICE EADY: I think that disposes of all the issues which were raised.
MR RUSHBROOKE: I am obliged, my Lord. I, therefore, ask for judgment in the sum of £15,000.
MR JUSTICE EADY: Yes, and you ask also for costs on the indemnity basis?
MR RUSHBROOKE: I do, my Lord.
MR JUSTICE EADY: It seems to me that, in the light of the attitude which has been displayed by the Third Defendant in these proceedings and the obstructive nature of the responses and, as I indicated, recently even insulting responses, it is appropriate for the Court to mark its disapproval of the approach which has been adopted by awarding costs on the indemnity basis.
MR RUSHBROOKE: I am very much obliged, my Lord. It is a rare case where I don't need
to refer to without prejudice save as to costs correspondence, but I can tell your Lordship that an offer was made at an early stage of, I think, £5,000 and that was not taken.
MR JUSTICE EADY: Yes.
MR RUSHBROOKE: Would your Lordship just give me one moment just on the subject of costs, because I anticipate instructions to ask for an interim award.
MR JUSTICE EADY: Yes. Well, that would certainly be appropriate, yes. (Pause while Mr Rushbrooke took instructions) MR RUSHBROOKE: My Lord, it is a very difficult exercise without Mr Jennings having tried to reproduce the exercise that he did with the First Defendant for no necessarily obviously rewarding purpose, but can I simply try and grasp the nettle in a very impressionistic way?
MR JUSTICE EADY: Yes.
MR RUSHBROOKE: As I have said, a very goodly proportion of the costs incurred on the Claimant's side have been directed at both Defendants. I leave out of account the Second Defendant. For the sake of erring on the side of caution, if I could speak in terms of a round sum of £100,000.
MR JUSTICE EADY: As being the costs ultimately to be recovered?
MR RUSHBROOKE: And simply ask your Lordship for a 50% interim award of £50,000?
MR JUSTICE EADY: Yes, I will say that there should be a sum of £45,000 to be paid within?
MR RUSHBROO
MRKE: I think 21 days, my Lord.
MR JUSTICE EADY: To be paid within 21 days, on account of costs, there having to be a detailed assessment in due course on the indemnity basis. I take note about what you said about the offer to settle for £5,000. The CPR would have entitled you, I think, to costs on the indemnity basis from the date when that offer could have been accepted in any event, but 1 merely make that as a passing observation, because it seems to me appropriate that there should be indemnity costs throughout.
MR RUSHBROOKE: I am obliged.
MR JUSTICE EADY: Because the publication was dishonest and was persisted in dishonestly over a number of years in respect of which there is no respectable argument. Does that dispose of all the matters?
MR RUSHBROOKE: It does, my Lord, apart from the injunction, which I was proposing to draft in conventional terms and put it as part of a draft minute of order for your Lordship's approval.
MR JUSTICE EADY: Yes, bearing in mind the jurisdiction limitations, of course.
MR RUSHBROOKE: My Lord, yes. I hesitate, keeping an eye on the clock, but I was going to ask your Lordship to grant an injunction in undifferentiating terms.
MR JUSTICE EADY: All right. Well, if you submit a draft, I will deal with it in the usual way. If I anticipate any problems with it, I will ask for a further hearing and you can address me on paper.
MR RUSHBROOKE: My Lord, yes.
MR JUSTICE EADY: I don't anticipate any problems because you are very experienced at drafting such orders, but, if you let me have a draft in due course, I will look at it.
MR RUSHBROOKE: My Lord, yes. My thinking was, for the avoidance of doubt, that if it was drafted, as I say, in an undifferentiated way, without discriminating between jurisdictions, it would not render it any the less enforceable over here.
MR JUSTICE EADY: No. He is a party to the litigation.
MR RUSHBROOKE: Yes.
MR JUSTICE EADY: And he is within the Court's jurisdiction for that reason.
MR RUSHBROOKE: Yes.
MR JUSTICE EADY: Yes.
MR RUSHBROOKE: It may be that it gives us problems if we were seek to enforce in the US, but that is at our peril.
MR JUSTICE EADY: Yes, I understand. Thank you very much.
ORDER
Claim No HQ04X03580
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
BETWEEN:-
| |
CREATIVE RESINS INTERNATIONAL LIMITED |
Claimant |
| |
-and- |
|
| |
(1) GLASSLAM EUROPE LIMITED
(2) DONNE MILEHAM & HADDOCK (A firm)
(3) STEPHEN HOWES |
Defendants |
TOMLIN ORDER
UPON hearing Counsel for the Claimant and Counsel for the First Defendant
AND UPON the Claimant and the First Defendant having agreed to the terms of settlement set out in the schedule attached as Schedule A hereto
IT IS ORDERED that:
- The First Defendant be and is hereby restrained whether by its directors, officers, servants or agents or otherwise howsoever from publishing or causing or permitted to be published the following words defamatory of the Claimant:
(a) that there is a defect in the manufacturing process used by the Claimant which causes the laminate to crack after a period of time; and
(b) that the First Defendant and/or its parent company has had to obtain an injunction against the Claimant on a previous occasion in Germany in 2002 arising from an infringement of the First Defendant's intellectual property rights and therefore that the Claimant has a history of infringing activity or any defamatory words to similar effect, save as may be required in the legal proceedings under Claim Number PAT05033, with liberty to apply
AND BY CONSENT IT IS ORDERED AND DIRECTED that:
- All further proceedings in this action be stayed except for the purpose of carrying the said terms into effect, and that the Claimant and the First Defendant have permission to apply for the purpose of carrying the said terms into effect.
- The First Defendant do pay the Claimant its costs of the claim against the First Defendant to be assessed on the indemnity basis up to and including 4 October 2006 and on the standard basis thereafter, if not agreed.
- There be payment out to the Claimant's solicitors of the sum of £2,500 paid into Court on 21 December 2004, with interest accrued thereon to be paid to the First Defendant's solicitors.
Dated the 30th day of November 2006
We hereby consent to an Order in the above terms
Counsel for the Claimant
Councel for the First Defendant
SCHEDULE A TO THE ORDER
The following terms have been agreed between the Claimant and the First Defendant in full and final settlement of all of the Claimant's claims against the First Defendant herein.
- The First Defendant agrees to submit to an injunction in the terms set out at paragraph 1 of the Order to which this Schedule is attached.
- The First Defendant agrees to pay to the Claimant the sum of £5,000 by way of damages, with the balance outstanding (after payment out pursuant to paragraph 4 of the said Order of the sum paid into Court) to be paid by 4.00pm on Friday 15 December 2006.
- The First Defendant agrees to pay to the Claimant its costs as set out at paragraph 3 of the said Order.
- The First Defendant agrees to join with the Claimant in the making of a Statement in Court (subject only to the approval of the High Court Judge) in the terms of the Statement signed by the Claimant's and the First Defendant's solicitors and attached as Schedule B hereto.
- The Claimant agrees and undertakes that it will not apply for permission to issue proceedings for contempt of Court, or take any step with a view to securing the bringing of such proceedings, against Mr Philip Popple in respect of any Statement of Truth signed by him in connection with these proceedings.
SCHEDULE B TO THE ORDER
Claim No HQ04X03580
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
BETWEEN:-
| |
CREATIVE RESINS INTERNATIONAL LIMITED |
Claimant |
| |
-and- |
|
| |
(1) GLASSLAM EUROPE LIMITED
(2) DONNE MILEHAM & HADDOCK (A firm)
(3) STEPHEN HOWES |
Defendants |
STATEMENT IN OPEN COURT
Claimant's Counsel
May it please you my Lord, the Claimant in this action is a company which carries on business producing manufacturing equipment and raw materials for the production of decorative glass panels. In a letter dated 7th September 2004 sent by solicitors on behalf of the First Defendant to the Managing Director of Classic Door Panels Limited it was alleged that: -
a. There was a defect in the manufacturing process used by the Claimant which caused the laminate to crack after a period of time;
b. The First Defendant and/or its parent company had had to obtain an injunction against the Claimant on a previous occasion in Germany arising from an infringement of the First Defendant's intellectual property rights and therefore the Claimant had a history of infringing activity.
These allegations were entirely without foundation. The First Defendant now accepts its serious error in publishing these libels to the Managing Director of Classic Door Panels Limited. The First Defendant is here today by its counsel to withdraw the imputation unreservedly and to apologise publicly to the Claimant. The First Defendant has also agreed to pay to the Claimant an appropriate sum by way of damages as well as its legal costs.
First Defendant's Counsel
I wish to associate myself with all that has been said by counsel for the Claimant. The First Defendant now accepts that its statements were unfounded and is happy to make the position clear.
Claimant's Counsel
I ask for leave to withdraw the record.
Counsel for the Claimant
Counsel for the First Defendant
