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In this post, Charlotte Sanderson, Trainee Solicitor at CMS, previews the decision awaited from the Supreme Court in the case of George v Cannell and Anor. The Supreme Court heard the appeal on 17 and 18 October 2023.
Overview
This case is concerned with what a respondent needs to demonstrate to take advantage of the Defamation Act 1952 (the “1952 Act”), s 3(1), in a claim for malicious falsehood and avoid the need to prove special damage.
Ms Linda Cannell owned a recruitment agency called LCA Jobs Ltd (“LCA”). Ms Fiona George, previously worked as a recruitment consultant at LCA, before leaving in November 2018 to take a new job at a different agency, Fawkes and Reece.
Ms Cannell alleged that in her new role Ms George had undertaken work for a client of LCA, Balgores Property Services. Subsequently, Ms Cannell called Balgores and emailed Ms George and her new employer alleging that she was in breach of restrictive covenants in her contract with LCA which prevented her from approaching LCA’s clients.
Ms George sued Ms Cannell and LCA for libel, slander, and malicious falsehood.
The trial judge dismissed the claim for malicious falsehood as Ms George had not proved special damage as required by the common law, or demonstrated that her case fell within an exception to that requirement contained in the 1952 Act, s 3(1).
The Court of Appeal disagreed, and found in favour of Ms George. The Court of Appeal found that it is enough for a claimant to prove the publication by the defendant of a false and malicious statement of such a nature that, viewed objectively in context at the time of publication, financial loss is an inherently probable consequence.
Ms Cannell and LCA have appealed to the Supreme Court.
Factual Background
On 3 January 2019, Ms George began working at Fawkes and Reece. Ms George then undertook a search for staff for Balgores Property, who had also been a longstanding client of LCA. Upon learning of this information, Ms Cannell sent Ms George an email accusing her of being in breach of the “post-employment obligations under the terms of your employment, not to solicit business from LCA clients and candidates.”
On 19 January 2019, Mr Butler of Balgores Property sent Ms George an email stating that he had spoken with Ms Cannell and that she advised that as part of Ms George’s terms she should not be approaching LCA’s clients. Ms George was asked to pause her search for staff for them, and to not undertake any further work until a resolution with LCA had been reached.
“The Claimant signed a contract with the Defendants by which she agreed not to contact companies for whom the Defendants had worked. By searching for new staff for Balgores she had breached that contract. Therefore, Balgores should stop using the Claimant to find candidates.”
Ms Canell and LCA admitted that there had been a conversation between Ms Cannell and Mr Butler but denied that any such statement had been made.
On 21 January 2019, Ms Cannell then sent an email to Ms George’s new manager, Mr Lingenfelder, explaining that she was in breach of her post employment obligations, and threatened legal action if she did not immediately cease to deal with Balgores Property.
The preliminary issues trial before Richard Spearman QC, sitting as a Deputy Judge of the High Court
At a trial of preliminary issues, the court determined the natural and ordinary meaning of the words used during the call to Mr Butler and the email to Mr Lingenfelder as follows:
“[Ms George], in breach of the restriction contained in her contract of employment with [LCA], and contrary to her express assurances that she would never do this and thus disloyally and contrary to her word, had been approaching [LCA’s] clients to solicit business from them as well as contacting [LCA’s] job applicants.”
The subsequent trial before Saini J
At trial, the Judge held that the statements complained of were false, that the allegation that she had acted in breach of contract was false, and that Ms George and LCA had published that allegation without any honest belief in its truth.
However, the Judge held that the libel and slander claims failed because Ms George had not established that either publication caused serious harm to her reputation as required by the Defamation Act 2013 (the “2013 Act”), s 1(1). The malicious falsehood claims were dismissed on the grounds that Ms George had not proved special damage as required by the common law, nor had she shown that her case fell within the exception to that requirement contained in the 1952 Act, s 3(1).
The Court of Appeal’s Decision
The main issue before the Court of Appeal was what a claimant must prove to take advantage of the 1952 Act, s 3(1).
Lord Justice Warby held that the trial judge had erred in his interpretation of the 1952 Act, s 3 (1). He stated that the aim, purpose, and effect of s 3(1) was to relieve a claimant of the need to plead or prove any actual loss on the balance of probabilities as a matter of historical fact.
The 1952 Act, s 3(1) provides:-
“In an action for slander of goods, slander of title or other malicious falsehood it shall not be necessary to allege or prove special damage
(a) if the words upon which the action is founded are calculated to cause pecuniary damage to the plaintiff and are published in writing or other permanent form; or
(b) if the said words are calculated to cause pecuniary damage to the plaintiff in respect of any office, profession, calling, trade or business held or carried on by him at the time of the publication.”
The trial Judge’s decision was based on various authorities, from Fielding v Variety Inc [1967] 2 QB 841 (CA) to BHX v GRX [2021] EWHC 770 (QB), and the lower court ultimately dismissed the libel and slander claims for want of serious harm. Lord Justice Warby commented that Saini J had not been taken to:
“other interpretative aids which the claimant has cited on this appeal and which I consider significant, including the 1948 report of the Committee on the Law of Defamation (“the Porter Committee”) Cmd. 7536 which led to the introduction of s 3(1); s 2 of the 1952 Act, a comparison with which has been undertaken in the course of this appeal; or the legislative history”.
Therefore, Lord Justice Warby disagreed with Saini J’s interpretation of the exception under the 1952 Act , s 3(1), that to fall under the exception, the loss suffered would need to be a “direct and natural result” of the malicious words. Instead, considering the original 1952 Act, and the Port Committee Report which preceded it, Lord Justice Warby concluded that the statutory test used to interpret the 1952 Act, s 3(1), is forward-looking. This approach asks whether financial loss is an inherently probable consequence of publishing the allegations.
Lord Justice Warby went on to apply the ‘ordinary and natural meaning’ of s 3 to the facts of the case, and concluded that the publication of the words and email satisfied the requirements of the section. Ms Cannell and LCA had put forward allegations to Ms George’s new employer and one of her customers that Ms George had broken her contractual commitments. Such an allegation has a natural tendency to cause financial loss to someone whose income is commission-based.
Therefore, the Court of Appeal’s judgment held that it is enough for a claimant to prove the publication by a defendant of a false and malicious statement of such a nature that, viewed objectively in context at the time of publication, financial loss is an inherently probable consequence. The threshold of 1952 Act, s 3(1) would be met even though no actual financial loss resulted from the malicious words.
Lord Justice Warby allowed the appeal, and restored the Judge’s initial decision to enter judgment for Ms George for damages, including compensation for injured feelings, to be assessed, and the case was remitted for that assessment to be carried out.
Ms Cannell and LCA appealed. Permission to appeal was granted by the Supreme Court in December 2022, and the hearing occurred on 17 and 18 October 2023.
