Raja v Khan [2005] EWHC 3138 (QB)

Case No HQ05X00453

[2005] EWHC 3138 (QB)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

Venue The Royal Courts of Justice

Date Thursday 15th December 2005

The Strand

London WC2A 2LL

B e f o r e :

MR JUSTICE TUGENDHAT

Neutral Citation Number:

Between

MOHAMMED M RAJAClaimant

MOHAMMED A KHANDefendant

(Tape Transcription by John Larking Verbatim Reporters

Suite 91 Temple Chambers, 3 - 7 Temple Avenue, London EC4Y OHP

Telephone 020 7404 7464 Fax 020 7404 7443)

The Claimant appeared in person for in person

MR SAHOTA (a solicitor-advocate from Sahota Solicitors, 111 Fleet Street, London EC4A 2AB) appeared for Defendant

JUDGMENT

Thursday 15th December 2005

[1]MR JUSTICE TUGENDHAT: This is the hearing of an application notice in relation to a libel action. The words complained of are set out in a letter dated 22nd February 2004 addressed to the claimant, signed by the defendant. Copies were sent to a number of other individuals, some of whom were shareholders in a business which the claimant and the defendant were both concerned in. The letter relates to matters between 1993 and 1998.

[2]The application notice is dated 2nd September 2005 and it is issued on behalf of the defendant. It seeks an order pursuant to the Civil Procedure Rules 3.4(2)(a) and (b) and/or CPR24.2(a)(i) and (b) that there be a ruling that the words complained of were published on an occasion of qualified privilege. That is the most substantive issue before me. In addition it seeks two other orders. The second order sought is that certain passages of the reply be struck out and the third order sought is for a split trial.

[3]I have heard argument on the qualified privilege issue first. The words complained of in the letter dated 22nd September 2004 are purportedly in response to a letter dated 23rd April 1998 which I have not seen. In outline, the letter contains a number of allegations to the effect that the claimant has defrauded the defendant in relation to the nursing home business in which they were involved together and that the claimant has committed various acts of embezzlement and fraud in relation to that business. In addition the words complained of include allegations relating to other matters which do not concern the nursing home business. The letter alleges that the claimant committed fraud on the Inland Revenue, fraud on motor insurance companies, and unlawfully evicted tenants and burning their possessions.

[4]The claim form was issued on 16th February 2005 followed shortly afterwards by particulars of claim on 1st March 2005. The particulars of claim plead that the claimant is a managing director of Greenswan Consultants Ltd trading as Nightingale Nursing Home and that he is an elected committee member of the Nursing and Residential Care Homes Association of Hertfordshire. It states that the defendant was a director and shareholder of the company from about August 1994 until the end of February 1998 when he resigned his directorship and sold all his shares in the company. It then sets out the names of ten people to whom it is alleged that the words complained of were published. Eight of those are not in dispute. Five are individuals. The sixth is the firm of solicitors who I am told acted then and act now for the nursing home company. The seventh is the accountants who have likewise represented the company and the eighth is their bank, the Bank of Scotland. There is no dispute that the first five were all shareholders, four of them ceasing to be such in 1998 and the fifth in 1999. The particulars of claim follow the conventional form of setting out the words complained of and the meanings which it is alleged they bear. In general terms the meanings are dishonesty, embezzlement and fraud, as I have already outlined.

[5]The defence was served on 27th April 2005. It includes a substantial plea of justification running to a large number of pages, about 15 in total. There then follows a plea of fair comment to which I shall return after hearing further argument. In paragraph 13 of the defence is the plea of qualified privilege of which the following particulars are given:

"(a) The Claimant was the senior and managing director of a company with assets over £1 million pounds; (b) The Claimant had sole and effective control over the financial affairs of the company and more specifically over large sums of cash receipts; (c) The Claimant’s financial management, honesty and relevant conduct was of direct concern and interest to those to whom the letter was circulated; (d) The company's solicitors, accountants, bankers, directors and investors, both current and former during relevant periods, Mr Abdullah Khan (the Defendant's brother in law and a friend of the Claimant for 20 years) who had brokered the original arrangement between the Claimant and the Defendant, plus the National Care Standards Commission, all individually and collectively had both a duty and an interest to receive this letter relating to the running of the nursing home and the conduct and integrity of its sole and effective manager and controller, i.e., the Claimant; (e) the Defendant as a former director and former major shareholder of the company, had a duty and interest, to inform both current and past directors and other associated with the Claimant and the nursing home about the wrong and fraudulent conduct by the Claimant; (f) in the circumstances, the Defendant was under a duty and/or interest to communicate to those to whom he did and all those to whom the letter was published had a corresponding and legitimate interest in receiving such communication."

Thereafter, the pleading passes to matters of damage.

[6]There was on 5th July 2005 a case management conference. At that time no reply had been served and time for service was extended. Provision was made for a further case management conference on 15th November. It appears that there has been some, but limited, compliance with the directions made in July. On 7th September the claimant did give standard disclosure of documents but, as I understand it, the defendant has not yet done so. There was provision for exchange of statements of witnesses of fact by 4th November which has not happened either.

[7]On 3rd August 2005 a reply was served. It contains a substantial plea of express malice with which I am not concerned today directly. It is a very long document and on page 26 of the document in relation to qualified privilege there appears the following:

"(a) The Claimant was the Managing Director for the purposes of day to day management on operational matters only; (b) The Claimant did not have sole and effective control over the financial affairs of the company and the Defendant exerted a lot of influence over decisions pertaining to the drawing element of the financial affairs of the Company; (c) The Claimant's dealing with the institution was never compromised under any circumstances; (d) The allegation as contained in the letter of 22 February 2004 were false and made 6 1/2 years after the Defendant's resignation as a Director of the Company and the allegations were not made from a sense of duty or with a view to redress but with intent to unjustly defame the Claimant."

The document is signed by the claimant, Mr Raja, acting in person.

[8]On 2nd September there was issued the application notice to which I have already referred. On the same date Mr Sahota, a solicitor/advocate representing the defendant, made a witness statement. He has represented the defendant before me. The statement is in support of the relief sought in the application notice.

[9]The defendant himself made a witness statement on 18th October 2005 and it is sufficient now to refer to that. After setting out his account of the business relationship between him and the claimant, from August 1993 until he sold the shares in March 1998, during which time there were substantial financial transactions referred to he says this in paragraph 6 to 8:

"6. I wanted to tell everyone involved or who knew the Claimant about how deceitful he was and that he should not be trusted to be in business with. However my health and depleted mental condition made me feel that I just could not take on the backlash from the Claimant if I exposed him for what he was and how he was dishonest and manipulative. I had renal failure in September 2000 and I was on peritoneal dialysis for almost 3 years, self- managing 9 hours on dialysis machine every night. In July 2003 I had a kidney transplant (kidney was donated by my wife) and it took me eight months to recover some of my strength after the transplant. 7. I knew from my experience of the Claimant that he would “fight dirty” and that if I wanted to complain about him and set the record straight with the people he had deceived or whose trust he had betrayed, I knew that I needed to be physically and mentally ready and prepared. I felt ready and strong enough to tell the truth and wrote my letter of 22nd February 2004 over which the Claimant now sues for libel. 8. All the people I copied the letter to were in my mind people who had a right to know what had gone on, the fraudulent and deceptive activities that had gone on at the expense of those who had had the misfortune to have had any dealings with the Claimant."

He then deals with each of the individuals concerned, most of the shareholders also being relations of one kind or another. He then states that he did not in fact send the letter to two of the individuals identified as publishees in the particulars of claim but he did send it to the National Care Standards Commission who were not identified in the particulars of claim.

[10]The witness statement then continues:

"10. All the people to whom the letter had been sent to had been deceived, personally or professionally, by the claimant and I felt it was my duty to set the record straight and tell them the truth about the kind of man the Claimant was and how he had run the nursing home, which I did when my health improved and I was fit enough to do so."

I pause there to say that that is the sum of the evidence before me on what the interest was of the individuals to whom the letter was sent.

[11]On 10th December 2005 the claimant made a witness statement in response. He says this in relation to qualified privilege:

"B The allegations are couched in language of facts and stated as truth that can be established and substantiated and are of a very serious nature of fraud and embezzlement. There is ample proof even by the Defendant's own admission that he was able and capable to take action then why were these crimes not reported and how is the Defendant now assuming that he is putting the Claimant on trial whilst seeking qualified privileges protection and not forthcoming to provide evidence of the claimant's wrong doing. C The claimant would draw the courts attention that in making these allegations the Defendant a group of people in discredit who otherwise have nothing to do with the Defendant's personal vendetta against the Claimant; D The defamatory matters complained are divisible in parts in that there are areas, which relate to the early period and then directly go to the later periods and have no bearing to the real connection in the allegations; E The publication deals with the matters that are not in any reasonable sense germane to the subject matter of the occasion. Where the occasion may otherwise attract privileges, does not reach communication upon totally unconnected matters. The exercise of privileges on one-matter gives no protection to irrelevant libels introduced into the same communication nor does it offer blank protection."

[12]The provision of the Civil Procedure Rules which is in point is 24.2. That provides:

"The court may give summary judgment against a claimant or defendant on the whole of a claim or on a particular issue if:- (a) it considers that- (i) that claimant has no real prospect of succeeding on the claim or issue; or (iii) that defendant has no real prospect of successfully defending the claim or issue; and (b) there is no other compelling reason why the case or issue should be disposed of at a trial."

[13]I have had the benefit of a skeleton argument prepared by Mr Sahota and of reading correspondence and hearing submissions from Mr Raja. It seems to me that there are really three main issues in relation to qualified privilege. The first is whether the duty and interest which is pleaded in the defence was a duty and interest that still subsisted in February 2004 (assuming that it had subsisted between 1994 and 1998). Second is the question of the inclusion of allegedly irrelevant matters such as the allegation about burning the tenants' possessions and fraud on third parties such as the Inland Revenue and motor insurance companies. Third is the position of each publishee. The third to some extent is overlapping with the other two in that, for example, it might be that the duty and interest relationship would subsist in relation to one publishee but not in relation to another.

[14]The argument on behalf of the defendant is succinctly and pertinently set out in his careful skeleton argument. He draws my attention to the whole of the letter. He submits that the circumstances of publication are a classic text book exposition of the common duty and interest qualified privilege which is discussed principally in the cases of Toogood v Spyring [1834] 1 CM & R181, Adam v Ward

[1917] AC 309

at 334, Watt v Longsdon

[1930] 1KB130

, Beach v Freeson

[1972] 1 QB 14

and Horrocks v Lowe

[1975] AC 135

. I agree with Mr Sahota that the classic formulation of this test is in the speech of Lord Atkinson in Adam v Ward at page 334. It includes the following:

"It was not disputed, in this case on either side, that a privileged occasion is, in reference to qualified privilege, an occasion where the person who makes a communication has an interest or a duty, legal, social, or moral, to make it to the person to whom it is made, and the person to whom it is so made has a corresponding interest or duty to receive it. This reciprocity is essential."

[15]He submits that since there is no dispute that the eight admitted publishees included five who were shareholders up until 1998 or in one case 1999, and that the other three continued to be in business or a professional relationship with the company of which the claimant is a director, that all have a reciprocal duty or interest or relationship with the defendant with regard to his communication of the letter. His duty and interest, it is submitted, arises out of his position as a former co-director and shareholder in the business. He draws attention to the passage in the letter which reads that its purpose was "to set the record straight with the facts, which would be substantiated at the right time and I want the relevant individuals and institution that have had the misfortune like the writer to deal with you in the past and possibly are still being misled by your lies." Mr Sahota submits that insofar as any extraneous matters are included in the letter then those are not such as to defeat the defence of qualified privilege but are relevant, if it all, to malice. He cites the passage in Horrocks v Lowe to this effect in the speech of Lord Diplock at page 151.

[16]Further, he submits that any delay between the events the subject of the letter and the date of the letter itself goes to the issue of malice and does not negate the occasion itself being privileged. In his submission, the duty or interest test still subsisted at the time of publication. The defendant, he submits, had an interest in setting the record straight. The claimant, it is common ground, is still running the same business. It is said that the solicitors, accountants and bankers and, for that matter, the Association, all had an interest in learning about the claimant's dishonest activities from a source with personal knowledge and it is said that the former shareholders and relatives all had an interest in knowing that they had been duped and that their trust had been breached. The passage of time did not reduce the duty interest test. On the contrary, it is submitted that the more time that passed the greater the emphasis to reveal all because the greater the potential, if true, of continuing damage being done. Those, in substance, are the submissions for the defendant.

[17]For the claimant, the submissions were broader and included matters which go to the merits. I have not overlooked what the claimant has told me about the factual background of the case but for the purposes of today's application with which I am dealing now I must focus on the matters which are in the documents to which I have already referred. This is not the trial of a preliminary issue. There has been no evidence or cross-examination. The main point, it seems to me, to be made on behalf of the claimant is the point arising out of the lapse of time, of over six years between the last event referred to in the words complained of in 1998 and the writing of the letter in February 2004. There is no detailed or specific explanation given as to what the publishees might have been expected to do with this information or how in practical terms it was something of interest to them. The point is made that these are such serious allegations that it might have been expected that if there really was a duty and interest of the kind relied on, the duty would have been fulfilled on the part of the defendant long ago and if it had been then there are investigations and other steps which the publishees might have had available to them. It is submitted that it is hard to see now why the duty and interest is said to subsist in February 2004.

[18]Mr Sahota has done some research on this matter for which I am indebted to him. The upshot of his research, which corresponds to my recollection, is that amongst the large amount of case law on the defence of qualified privilege there is not to be found a case which specifically addresses the possibility of a duty and interest relationship having existed in the past but no longer subsisting at the time of the publication complained of. What is clear, however, from the cases, including from the passage in the speech of Lord Atkinson which I have cited above, is that the test is expressed in the present tense, "has an interest or duty, has a corresponding interest or duty," not "has had."

[19]I recall that this is an application for summary determination without there having been a trial of this issue, without there having been a disclosure of documents by the defendant, still less evidence given orally subject to cross-examination. It seems to me that on the issue of whether there was still subsisting a relationship of duty of interest, there is clearly a prospect of the claimant succeeding in a submission that this is not a case where the occasion was one of qualified privilege at the time of the publication.

[20]Having reached that conclusion, it doesn't assist for me to say more. This issue and other issues will have to be resolved at a trial when the facts can be established and the subsisting duty and interest, if any, identified. Accordingly, on this part of the application the defendant applicant fails. ---ooo000ooo---