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OUTER HOUSE, COURT OF SESSION
[2007] CSOH 24
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A613/05
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OPINION OF LADY
PATON
in the cause
CRAIG MOORE
Pursuer;
against
THE SCOTTISH DAILY
RECORD AND SUNDAY MAIL LIMITED
Defenders:
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Pursuer:
A. Smith, Q.C., Clark; Harper
Macleod, LLP
Defenders: Jones, Q.C., R.W. Dunlop; Balfour & Manson
(for Levy & McRae, Solicitors,
Glasgow)
7 February 2007
Inaccurate press report about professional
footballer
[1] The
pursuer is a well-known professional footballer. The defenders are proprietors of the Scottish
Daily Record and the Sunday Mail newspapers.
On 4 January 2005, the defenders published an
article in the Scottish Daily Record, describing how the pursuer had allegedly
racially abused a taxi driver. It was in
fact a case of mistaken identity: the
pursuer was not involved in any such incident.
The defenders accepted that they had made a mistake, and ultimately
accepted that the article was defamatory of the pursuer.
Defenders' offer of amends
[2] The
defenders adopted the "Offer to make amends" procedure contained in sections 2
to 4 of the Defamation Act 1996 (made applicable to Scotland, with the exception of
section 3(8), by section 18 of the Act).
Thus on 7 June 2005, the defenders made an
unqualified offer of amends in terms of section 2. Section 2 defines such an offer as an offer
in writing "(a) to make a suitable correction of the statement complained of
and a sufficient apology to the aggrieved party; (b) to publish the correction and apology in
a manner that is reasonable and practicable in the circumstances; and (c) to pay to the aggrieved party such
compensation (if any), and such costs, as may be agreed or determined to be
payable". Section 3(3) provides that, if
parties agree on the steps to be taken in fulfilment of the offer, the
aggrieved party may apply to the court for an order that the other party fulfil
his offer by taking the steps agreed.
Section 3(4) provides that, if parties cannot agree on the steps to be
taken by way of correction, apology, and publication, the party who made the
offer may take such steps as he thinks appropriate, and may in particular (a)
make the correction and apology by a statement in open court in terms approved
by the court, and (b) give an undertaking to the court as to the manner of
their publication. In terms of section
3(5), if parties cannot agree on the amount of compensation, the court
determines the compensation "on the same principles as damages in defamation
proceedings". Similarly in terms of
section 3(6), if parties cannot agree on expenses, the court decides that
matter. Section 3(10) provides that all
such proceedings are to take place without a jury.
[3] In terms
of section 4, an offer of amends provides the defenders with a complete defence
to defamation proceedings, provided that the defenders did not publish the
article knowing or having reason to believe that the article was both false and
defamatory of the pursuer (section 4(3)).
Section 4 provides:
"Failure to accept offer to make amends
4. - (1) If an offer to make
amends under section 2, duly made and not withdrawn, is not accepted by the
aggrieved party, the following provisions apply.
(2) The fact that the offer was made is a defence (subject to
subsection (3)) to defamation proceedings in respect of the publication in
question by that party against the person making the offer.
A qualified
offer is only a defence in respect of the meaning to which the offer related.
(3) There is no such defence if the person by whom the offer was
made knew or had reason to believe that the statement complained of -
(a) referred to the aggrieved party or was likely to be understood
as referring to him, and
(b) was both false and defamatory of that party;
but it shall be presumed
until the contrary is shown that he did not know and had no reason to believe
that was the case.
(4) The person who made the offer need not rely on it by way of
defence, but if he does he may not rely on any other defence.
If the offer was
a qualified offer, this applies only in respect of the meaning to which the
offer related.
(5) The offer may be relied on in mitigation of damages whether or
not it was relied on as a defence."
[4] Chapter
54 of the Rules of the Court of Session provides machinery for applications
made in terms of the Defamation Act 1996 as follows:
"Form of application to court where proceedings have been
taken
54.1 - (1) An application to the court under section 3 of the Defamation
Act 1996 (which relates to offers to make amends) where proceedings for
defamation have been taken shall be by minute lodged in the process of those
proceedings.
(2) A minute lodged under paragraph (1) shall set out -
(a) the questions to be determined by the court; and
(b) the contentions of the minuter,
and shall have appended to
it a copy of the offer to make amends.
Form of application to court where proceedings have not been
taken
54.2 An application to the court under the said section 3
where proceedings for defamation have not been taken shall be by petition
presented in the Outer House."
Pursuer's response to the defenders' offer of
amends
[5] The
pursuer responded to the defenders' offer of amends by serving a defamation
summons on 7 October 2005. In that summons, the pursuer sought damages
of г75,000, narrating the terms of the defamatory article, and the accepted
fact that he had not been involved in the incident described. He averred that he had suffered injury to his
feelings, standing and professional reputation as a result of the false and
calumnious publication. He referred to
the distress caused and the adverse comment made by colleagues and members of
the public. The summons made no mention
of the offer of amends.
[6] The
summons was lodged for calling on 1 November
2005. The defenders then had seven days within
which to lodge defences in terms of Rule of Court 18.1(2). Moreover they had an important decision to
make, as section 4(4) of the 1996 Act provides:
"The person who made the
offer [to make amends] need not rely on it by way of defence, but if he does he may not rely on any other
defence [italics added]."
Accordingly the defenders had to decide whether to
base their defence on their offer of amends, or whether to plead a substantive
defence such as fair comment. The
defenders chose to rely upon their offer of amends. Their pleadings referred to the offer, which
was produced and its terms incorporated.
The defenders further narrated the pursuer's response, including inter alia the service of the summons
and the lodging of the summons for calling.
The defenders finally averred that "the pursuer has rejected the offer
of amends".
[7] In
adjustments to the pleadings, the pursuer adopted the position that the defenders
had impliedly withdrawn their offer of amends, and in any event, that the
publication of the article was reckless within the terms of section 4(3) such
that the defenders could not rely upon their offer of amends as a defence.
Pursuer's amendment of pleadings, lodging of
Minute in terms of Rule 54.1, and withdrawal of section 4(3) argument, on eve
of debate
[8] The
pursuer's third plea-in-law is in the following terms:
"3. The defences being irrelevant et separatim being lacking in specification, they should be
repelled and proof restricted to quantum."
The defenders' pleas-in-law include the following:
"1. The pursuer's averments being irrelevant et separatim lacking in specification, the action should be
dismissed.
2. The
pursuer's averments anent withdrawal of the offer of amends, being irrelevant et separatim lacking in specification,
should not be admitted to probation.
3. The
pursuer's averments in support of s.4(3) of the Defamation Act 1996, being
irrelevant et separatim lacking in
specification, should not be admitted to probation ..."
[9] On 11 May 2006 the case was sent to procedure roll to debate those
preliminary pleas. A diet was fixed for 8 December 2006.
[10] By
Minute of Amendment lodged on 6 December 2006, the pursuer deleted the
averments that the offer had been impliedly withdrawn, and substituted the
following averments in Article 4 of Condescendence after the words "Quoad ultra denied.":
"Explained and averred that
the pursuer intends to accept the offer to make amends. A Minute for the pursuer in terms of which he
accepts the said offer will be lodged in process."
[11] At 1600
hours on 7 December 2006, the pursuer lodged in process a Minute "in terms of
s.3 of the Defamation Act 1996 and Rule of Court 54.1" craving the court:
"1. To ordain the defenders to make a suitable correction of the
defamatory statements referred to in the Closed Record, and a sufficient
apology to the pursuer, by publishing the said correction and apology in The Daily Record and giving them equal
prominence to the articles complained of by the pursuer.
2. To
order the defenders to make payment to the pursuer of the sum of SEVENTY FIVE
THOUSAND POUNDS (г75,000) STERLING together with interest thereon at the rate
of eight per cent a year from 4 January 2005 until payment.
3. To find the defenders liable to the pursuer in the expenses
of process."
[12] The
Statement of Facts in the Minute referred to the defenders' offer of amends
(which had not been withdrawn); accepted that offer; and defined the questions to be determined by
the court as (i) the steps to be taken by way of correction, apology and
publication; (ii) the amount to be paid
by way of compensation; and (iii)
liability for expenses.
[13] Late on
7 December 2006, counsel for the pursuer advised counsel for the defenders that
the pursuer would not be insisting upon the argument based on section 4(3)
(namely the argument that the publication of the article had been reckless, and
that as a result the defenders could not rely upon the offer of amends as a
defence to the defamation action).
[14] At
debate on 8 December 2006, counsel for the defenders
invited the court to sustain the defenders' first plea-in-law, and to dismiss
the action. Counsel for the pursuer
invited the court to refuse that motion;
to allow the defenders four weeks within which to lodge answers to the
pursuer's Minute, if so advised; and
meantime to make no other order in the defamation action.
Submissions on behalf of the defenders
[15] Junior
counsel for the defenders contended that the sequence of events pled on record
established the statutory defence in terms of section 4(2) of the 1996
Act. Accordingly the defenders' first
plea-in-law should be sustained, and the action dismissed.
[16] There
was no dispute that the defenders had made an unqualified offer of amends in
terms of section 2 of the 1996 Act. Such
an offer could be made before any litigation commenced (as in the present
case), or after a summons had been served but before defences were lodged: section 2(5). Following upon acceptance of an offer of
amends, an aggrieved party was barred from bringing or continuing defamation
proceedings: section 3(2). He was no longer entitled to a jury
trial: section 3(10). However he was entitled to enforce the offer
in the way set out in the statute and Chapter 54 of the Rules of the Court of
Session.
[17] By
Wednesday 6 December or Thursday 7 December 2006, the pursuer had decided to
accept the offer. But to suggest that it
was open to him to do so at that stage was wholly inconsistent with the
provisions of the 1996 Act. The pursuer
had raised an action for defamation, making no mention of the offer of amends
or the 1996 Act. The only inference
which could be drawn from the sequence of events - namely having the summons
drafted, pass the signet, served upon the defenders, and lodged for calling
(triggering the obligation to lodge defences) was that the pursuer was not
accepting the offer of amends. He was
rejecting that offer. He was of course
entitled to do so, but the consequence was that he could only succeed in his
action of damages for defamation if he could satisfy the conditions in section
4(3).
[18] Counsel
submitted that the conditions set out in section 4(1) had been satisfied,
namely an offer of amends under section 2 had been duly made and not withdrawn,
and the pursuer had not accepted it.
Accordingly subsections (2) to (5) of that section
applied. The pursuer was no longer
insisting upon the exception provided by section 4(3) namely, reckless publication. Thus in terms of section 4(2), the offer
provided a complete defence.
[19] The
issue in dispute was therefore whether it was now open to the pursuer to accept
the offer of amends. If it was not open
to him to accept, section 4(2) made it clear that the pursuer's action must
fail.
[20] Counsel
submitted that in the circumstances detailed in paragraphs [5] to [7] above, it
was not now open to the pursuer to accept the offer. By acting as he did, he had rejected the
offer. It was well-settled that an
offer, once rejected, could not be accepted.
Lodging the summons for calling, and continuing with the action,
amounted to rejection of the offer.
Reference was made to Gloag,
Contract (2nd ed.) page 37;
McBryde, Contract (2nd
ed.) paras.6-39 and 6-40; and Lawrence v Knight, 1972 S.C.
26 (where the calling of a summons and the continuation of an action were held
to amount to rejection of an offer in settlement of a claim). The circumstances in the present case were
similar to those in Lawrence, but were a fortiori, because in the present case
the offer had been made before any
litigation had commenced (rather than during the period between signetting and
lodging the summons for calling).
Further confirmation of the observations in Gloag, and of Lord Robertson's position in Lawrence, could be found in Tenbey
v Stolt Comex Seaway Ltd, 2001
S.L.T. 418, particularly at pages 421K
to 422D (where it was held that a pursuer's offer, once refused, was no longer
open for acceptance).
[21] The
Defamation Act 1996 applied to England and Wales. There should be no difference in the
construction of the statute in Scotland as compared with England and Wales. An authoritative English contract law
textbook, namely Chitty, Contracts (29th
ed.), noted at para.2-090: "A rejection
terminates an offer, so that it can no longer be accepted."
[22] The
1996 Act used the terms "offer" and "acceptance". Applying the rules of statutory
interpretation, the ordinary rules of construction relating to offer and
acceptance should be applied: cf. Bennion, Statutory Interpretation, page
887. Existing principles of common law,
so far as not altered by the Act, operated for the purposes of the Act as if
written into it. Thus "offer" and
"acceptance" in the context of the 1996 Act had the normal accepted meanings in
the common law of offer and acceptance.
Bennion further stated at page 915 that "Unless the contrary intention
appears, an enactment by implication imports any principle or rule of contract
law ... which prevails in the territory to which the enactment extends and is
relevant to the operation of the enactment in that territory."
[23] Counsel
therefore submitted that the Act should not be construed in such a way that an
offer of amends could endure for 18 months, in the face of litigation entirely
inconsistent with acceptance of the offer.
If the Act envisaged something other than an ordinary offer and
acceptance, that should be clearly stated.
[24] There
was little authority on the point at issue.
One leading decision by Eady J., namely Milne v Express Newspapers [2003]
1 W.L.R. 927, dealt with the reckless publication exception in section
4(3). But there had been no debate in
that case about the meaning of the words "offer" and "acceptance" where they
appeared in sections 2 to 4 of the 1996 Act.
Counsel referred to the head-note of Milne,
and to paragraphs 1 to 2, 9, 11, 14 to 17, 35 to 41 and 43 of the judgement. The Court of Appeal had subsequently affirmed
the decision at first instance.
[25] Counsel
submitted that the pursuer's contention in effect rendered the whole section 4
defence nugatory. It was too late for
the pursuer to come back and accept the offer.
The section 4(2) defence emerged clearly from the averments on
record. The defenders' first
plea-in-law, challenging the relevancy and specification of the pursuer's case,
should be sustained, and the action dismissed.
The court might even consider that the averments were so clear that the
defenders should be assoilzied.
[26] Senior
counsel for the defenders adopted junior counsel's submissions, and renewed the
motion that the action be dismissed. The
purpose of the legislation was "to provide an exit route for journalists who
have made a mistake and are willing to put their hands up and make amends. In the absence of agreement, the offer of
amends also signifies a willingness to place oneself in the hands of the court
for assessing the appropriate steps to be taken by way of vindication and
compensation": Eady J. in Milne v Express Newspapers
[2003] 1 W.L.R. 927, at paragraph 41.
The pursuer's argument meant that the exit route became a second horse
for the pursuer to ride. A pursuer could
seek a judicial declaration from a jury, with damages assessed by a jury: but if that failed, he could accept the offer
to make amends. Such a construction
meant that, far from being an exit route for journalists, the offer of amends
became a rod with which to beat journalists.
It became a second form of action available to an aggrieved party, a
"bolt-on" to an action of defamation.
[27] The
1996 Act should be read as creating two distinct routes in defamation
proceedings. Section 3 envisaged an
offer made and accepted in an action of defamation. Section 4 envisaged an offer made, not
withdrawn and not accepted. There was no
"third way", being an offer made, not accepted, but not rejected: yet the pursuer claimed that there was such a
third way, with the offer being neither accepted nor rejected. The defenders' position was that the offer
had been made, not withdrawn, and not accepted:
accordingly the offer could not now be accepted. Taking sections 3 and 4 together, the
statutory scheme provided the pursuer with a choice. A defender had done all that he could do when
he made the offer of amends. The choice
was then for the pursuer to exercise as he saw fit.
[28] The
case of Rigg v Associated Newspapers Ltd. [2004] E.M.L.R. 52 (referred to by the
pursuer) was distinguishable from the present case. In Rigg,
the action had been raised before the offer was made. Discovery procedures were invoked simply to
permit the claimant to make an informed choice in relation to the offer. But if no proceedings had been commenced, the
statutory scheme did not envisage the raising of an action of defamation simply
to discover information to assist the pursuer in making an informed decision
about an offer of amends. In the present
case, the pursuer had the full triennium within
which to raise an action. If the
pursuer, faced with an offer of amends, found it necessary to obtain
information, he could resort to section 1 of the Administration of Justice (Scotland) Act 1972.
[29] Reverting
to the two choices open to a pursuer, senior counsel submitted that in terms of
section 3, if the pursuer accepted the offer, he was disabled from bringing an
action of defamation. If parties
subsequently agreed on the form of apology, the manner of publication of the
apology, and the amount of compensation, there was no need for any judicial
determination. If of course parties
disagreed on any of those matters, they could put themselves in the hands of
the court to determine those issues. The
appropriate procedure was set out in rule 54.2 of the Rules of the Court of
Session.
[30] Thus
under section 3 procedure, there would be no judicial determination that the
pursuer had been "defamed". There would
be no pronouncement by a judge, no verdict by a jury. Assessment of damages would be made by a
judge, not by a jury. But in the present
case, far from saying that he accepted the offer of amends, the pursuer had
served a summons on the defenders. The
offer was not mentioned in the summons:
thus the summons was not a writ served under the section 3 procedure,
but rather a full-blown action of defamation.
In that action, the pursuer asked for a judicial determination of the
question whether he had been defamed, and was entitled to a trial by jury. Given that the pursuer had a choice between
two routes when the offer of amends was made, service of the defamation summons
was the clearest possible indication of his choice - namely, rejection of the
section 3 route, and selection of the alternative route (a defamation action,
with a jury). Had the pursuer written a
letter stating that he was not adopting the section 3 offer of amends route,
but wanted an action of defamation and jury damages, he could not have
transmitted his message more eloquently.
[31] If a
pursuer, who had exercised an informed choice in the face of an offer of
amends, did not succeed before a judge or jury, that was a consequence of the
choice which he had made. If the pursuer
felt that he was about to fail before a judge in the present debate (because he
could not make out a relevant case of the section 4(3) exception), then he had
to accept the consequences of having made a bad choice. He could not now say that he wished to make
the alternative choice.
[32] In the
present case, the summons served was a summons for defamation. The pursuer had adjusted his pleadings on 25 January 2006, but only to claim that the section 4(3) exception
applied, and that in any event the offer of amends had been withdrawn. The pursuer did not aver that he needed to
find out more information to be able to assess whether the section 4(3)
exception applied and thus to put himself into a position to make an informed
choice about the offer. The message in
the summons was not that the pursuer was considering the offer, but rather that
it was the pursuer's intention to follow the alternative route of a full action
of damages for defamation with the right to a jury and some form of judicial
declaration.
[33] Senior
counsel confirmed that the defenders did not maintain as a proposition in law that once litigation followed an offer of
amends, that was necessarily the end of the section 3 procedure. The issue had to be judged in the
circumstances of every case. For
example, the end of the triennium might
be approaching; a pursuer might be
entitled to raise defamation proceedings simply to preserve his position, but
meantime making it clear to the defenders (either by the averments in the writ
or by appropriate correspondence) that the writ was not to be regarded as a
rejection of the offer of amends, rather that the pursuer required some further
information before making an informed decision on the offer. No such circumstances arose in the present
case. On the contrary, the circumstances
pointed to an outright rejection of the offer of amends.
[34] It was
appropriate to look at the ultimate outcome on the pursuer's contention. The pursuer's contention meant that,
notwithstanding the raising of a defamation action, unless the pursuer said
that the offer of amends was not accepted, then the offer remained open until
the end of time. The pursuer purported
to argue, on the eve of a debate such as the present one, that he was entitled
to put aside all that had happened hitherto, and to accept the offer. On the pursuer's construction, the offer was
not time-limited. It had not been rejected. It could be accepted at any time - for
example, while the case was at avizandum
with an unsympathetic judge, or when the jury were out and the pursuer felt
that his case had not gone well. There
was no statutory scheme regulating acceptance.
If the pursuer was right about being able to accept the offer now, it
followed that a pursuer could also accept the offer after a judicial
determination (for example, absolvitor). Assuming that an offer was not withdrawn, the
defenders' contention was that the offer fell when it was rejected; the pursuer's position was that the offer
remained open for acceptance even after it had been rejected at an earlier
stage, and even after the defenders had been granted decree of absolvitor.
[35] In
paragraphs 21 to 26 of Loughton Contracts
plc v Dun & Bradstreet Limited [2006] EWHC 1224 (QB), Gray J. favoured the defenders' approach, and considered that
it was correct to have regard to the principles of contract law when assessing
offers, acceptances, and counter-offers made in terms of the Defamation Act
1996. In the course of his judgement, he
referred to a passage from the 19th edition of Clerk & Lindsell (which had as its source Price on
Defamation). In that passage, the
authors contemplated an offer in the course of litigation. A late acceptance of such an offer, if
permitted, might be penalised by an award of expenses. While a late acceptance was permitted in Loughton (namely an acceptance in the
course of the submissions before Gray J.), the circumstances of that case were
very far removed from those in the present case. In the present case, the offer had not been
made in the course of litigation, but had been made before litigation
began. Once the summons in the
defamation action had been served, it was no longer possible for the pursuer to
accept the offer. There had been no intimation
from the pursuer that he wished in principle to accept the offer of
amends. There had been no indication,
prior to service of the summons, that the offer was not being rejected but that
an action was being proceeded with because, for example, the pursuer's position
had to be preserved in the face of an approaching timebar, or because the
pursuer required to recover information so as to be able to make an informed
decision.
[36] As a
final point, senior counsel refuted any implied suggestion that the court could
not decide the issues without a proof concerning the question of the
non-acceptance of the offer. Counsel for
the pursuer had not pointed to any averments, proof of which would advance
matters. On the pleadings, the
defenders' offer of amends was rejected by the pursuer's choice of the route of
a full defamation action. It was not
clear what any proof would achieve.
Submissions on behalf of the pursuer
[37] Junior
counsel for the pursuer submitted that the defenders' motion should be refused. The court should allow the defenders four
weeks within which to lodge answers to the pursuer's Chapter 54 Minute (if so
advised). Meantime no further order
should be made in the defamation action.
[38] The
defenders had not sought to argue that the offer must be taken to have been
rejected because of the passage of time.
The defenders' contention was that the "only inference" which could be
taken from the act of raising proceedings was a rejection of the offer. However parties were at the stage of debate. Before the action could be dismissed, the
defenders must satisfy the high test that the pursuer would be "bound to fail"
in his action. In other words, that the
pursuer was incapable of establishing, after proof, that the offer remained
open for acceptance. Counsel submitted
that the court should not be so satisfied at the stage of debate. The pursuer's contention went a stage further
(a stage possibly unnecessary for the purposes of the procedure roll): and that was that the defenders' offer remained
open and had been accepted.
[39] Counsel
submitted that the raising of proceedings should not automatically be deemed to
amount to a rejection of an offer of amends.
A pursuer might have grounds for believing that the defenders had
published recklessly (the section 4(3) argument): yet he might not have full information; he might be experiencing difficulty in making
his pleadings more specific; he might
require to recover documents - and for all or any of those reasons, might
require to raise proceedings before deciding whether to accept or reject the
offer of amends. Similarly a pursuer
might have chosen to raise a defamation action, but in the course of
proceedings he might decide that he would prefer to accept the offer (possibly
for reasons related to cost, or to the time which proceedings were
taking).
[40] Section
2(6) of the Act provided that:
"An offer to make amends
under this section may be withdrawn before it is accepted; and a renewal of an offer which has been
withdrawn shall be treated as a new offer."
Counsel submitted that the wording of section 2(6)
supported the view that withdrawal of the offer was required to take the offer
out of existence. If withdrawal had not
occurred, acceptance could still take place.
There was no suggestion in the statute that the right to accept might be
lost because of certain circumstances (such as those arising in the present
case).
[41] Referring
to section 3(1) and (2), counsel argued that a bar to bringing or continuing
proceedings arose only when the offer was accepted. The Act did not say that there was a bar to
bringing or continuing proceedings when an offer was not accepted (or was
neither accepted or rejected). It was of
significance that the concept of "rejection" did not feature in the Act.
[42] There
was nothing in the legislation suggesting that there was a time-limit for
acceptance, or that an aggrieved party had to accept within a reasonable
time. Nor was there any suggestion in
the present case that the defenders had imposed a time-limit. The annotator in Current Law Statutes at page 31-6 made the point that there was no
time-limit: late acceptance could be
regulated by an appropriate award of expenses.
[43] The
pursuer sought to employ rule 54.1 of the Rules of the Court of Session. That rule provided no support for the
defenders. Rule 54.1 permitted
acceptance of the offer of amends where proceedings had been raised after an offer had been made. The rule certainly did not prohibit
acceptance of an offer of amends made before proceedings were raised. The pursuer's position prior to the recent
amendment was that the defenders' offer had been impliedly withdrawn. It could not be said that a pursuer who
adopted that position was "rejecting" the offer.
[44] Counsel
questioned whether it was appropriate to rely upon the common law in a
specialised statutory scheme such as that contained in sections 2 to 4 of the
1996 Act. The court should treat such a
proposition with some caution. The
statute and its provisions were the primary source of law. The defenders had been driven to the common
law because the statute gave no support to their position.
[45] However
if one did refer to the common law, the same kind of legal test should be
applied to an implied acceptance as to an implied rejection. Counsel for the defenders had contended that
the "only inference" which could be drawn from the sequence of events was
rejection of the offer: in other words,
an inference that the pursuer had unequivocally abandoned his right to accept the
offer. However counsel for the pursuer
submitted that the "only inference" test had not been met. Reference was made to Wolf and Wolf v Forfar Potato
Co., 1984 S.L.T. 100; "The Aramis" [1989] 1 Lloyd's Rep. 213,
at page 224; Price, Defamation Law, Procedure & Practice (3rd ed)
paragraph 16-05 and 16-20; Armia Ltd. v Daejan Developments Ltd., 1979 SC (HL) 56, Lord Keith at page
72. Counsel for the defenders had
suggested that the pursuer could not succeed in establishing at a proof that
the offer remained open for acceptance.
But a court would not normally reach a concluded view on such a matter
(involving as it did questions of fact, the conduct of the parties, and
inferences which could be drawn) without hearing evidence at a proof.
[46] Two English
authorities were consistent with the pursuer's position. In Rigg
v Associated Newspapers Ltd. [2004]
E.M.L.R. 52, a well-known actress sued the Daily Mail. An offer of amends was made in the course of
the litigation. The claimant sought
disclosure of the defendant's documents in order to decide whether or not to
accept the offer. There was no
suggestion that by continuing the proceedings, the claimant was rejecting the
offer. In Loughton Contracts plc v Dun
& Bradstreet Limited [2006] EWHC 1224 (QB) the court held that the
defendant's offer of amends had been refused by a letter of qualified
acceptance (which in effect amounted to a counter-offer). An application for summary judgement was
therefore refused. In the course of the
proceedings in court, the claimant's senior counsel sought to accept the offer
there and then. Gray J. held that he was
entitled to do so, commenting in paragraph 28:
"I think I am entitled to
bear in mind also the consequences of my deciding that it is no longer open to
the claimant to accept the offer: almost
certainly the claimant could face an irresistible section 4 defence with the
result that no damages would be recovered.
That outcome strikes me as unjust."
Counsel for the pursuer adopted those dicta, and submitted that if Parliament
had intended to deprive a pursuer of his claim, one would expect that to be
stated clearly in the legislation. Loughton Contracts plc was therefore an
example of a belated acceptance in the course of submissions, in a continuing
litigation, in a situation where a counter-offer had been held not to amount to
acceptance of the offer (and indeed in a situation where, at common law, the
counter-offer would have resulted in the lapse of the offer).
[47] The
case of Lawrence v Knight, 1972 S.C.
26, was distinguishable from the present case.
The offer had not been made in the context of the special statutory
procedure provided by the 1996 Act. The
Lord Ordinary also focused on the passage of time (which was not part of the
defenders' argument in the present case) and on certain changes in
circumstances which had occurred.
Moreover in the present case, the defenders expressly averred that their
offer had never been withdrawn. The court should be cautious about accepting a
general proposition that the raising of an action after an offer had been made
meant the rejection of the offer. That
proposition was too broad.
[48] Tenbey v Stolt Comex Seaway Ltd., 2002 S.L.T. 418 involved an express
rejection, which was not the position in the present case. In Milne
v Express Newspapers [2003] 1
W.L.R. 927, Eady J. in paragraph 36 referred to an offer which had been "turned
down". The language was very much that
of express rejection.
[49] The
thrust of the defenders' argument was that the statutory scheme, read with the
common law, meant that the raising of proceedings following the making of an
offer amounted to an implied rejection.
But the statutory scheme did not say so in terms, nor did the statute
support such a proposition. The statute
did not state that if an aggrieved party decided to sue after receiving an
offer of amends, the raising of proceedings would be taken as a rejection of
the offer. If that were Parliament's
intention, one would have expected additional words in section 2 of the 1996
Act, to the effect that service of a summons after receipt of an offer of
amends would be deemed to be a rejection of the offer.
[50] Counsel
submitted that the court should be slow to conclude, on the basis of the
pleadings alone, that the only inference which could be drawn was the rejection
of the offer. In cases such as Rigg and the present case, where a
pursuer had a prospect of a jury trial and a section 4(3) argument, the effect
of the defenders' submission was that the pursuer had to make an uninformed
gamble and either accept the offer (thus losing his right to a jury trial) or
refuse the offer (expressly or impliedly) and continue with the action to see
what could be made of the section 4(3) argument. A defender knew, or should know, his position
in relation to section 4(3) matters and any other defence: but a pursuer did not necessarily have the
requisite information.
[51] The
defenders were in effect asking the court to accept that the policy of the law
was to deny the pursuer any remedy. The
court was invited not to reach such a view.
Junior counsel then renewed the motion to allow the defenders, if so
advised, to answer the pursuer's Chapter 54 Minute, and meantime to make no
further order in the defamation action.
[52] Senior
counsel adopted junior counsel's submissions.
The pursuer did not seek a proof:
the only order sought was an order for answers to the Chapter 54
Minute. Until answers to the Minute had
been lodged, no decision could be made about further procedure.
[53] If the
defenders sought to maintain, as a proposition in law, that once defamation
proceedings were raised, an aggrieved party could not accept an offer of
amends, that proposition was destroyed by the case of Loughton Contracts plc v Dun
& Bradstreet Limited, cit. sup.
[54] If the
defenders contended that there might be circumstances in which a person, by the
very action of raising proceedings, thereby indicated that he was rejecting the
offer of amends, the question arose, what were those circumstances. In the present case, no point was taken that
the offer had to be accepted within a reasonable time. Furthermore, the defenders accepted that it
might be necessary for a pursuer to raise proceedings in order to recover documents
or information. Accordingly it was far
from clear from the pleadings what circumstances were relied upon which had the
result that the pursuer was debarred from accepting the offer.
[55] The
pursuer had been defamed. From the
information available to him, it had appeared to the pursuer that the defenders
had acted in bad faith. An action had
been raised, and in the course of adjustment of the pleadings, certain
information had been forthcoming from the defenders. If the issue was now an accusation of
"unreasonable litigation", that matter was very much one for proof. A pursuer was entitled to discover as much
information as he could, and any suggestion that he must resort to section 1 of
the Administration of Justice (Scotland) Act 1972 in order to ascertain whether
there was a section 4(3) argument was unfounded and also hardly conducive to
the speedy determination of the dispute at low cost. A pursuer was entitled to make a reasonably
informed decision. The question of bad
faith and related issues were matters peculiarly within the defenders' own
knowledge.
[56] The
defenders' contention was that the offer had never been withdrawn, but that the
pursuer, who was trying to accept it, could not do so. In other words, the pursuer, who had suffered
a serious attack on his character and reputation, should receive no
damages. That was not what Parliament
had intended. The decision in Loughton Contracts plc, cit. sup., supported
the pursuer's position: the pursuer, by
lodging his Chapter 54 Minute, was trying to do what had been done in the case
of Loughton Contracts plc.
[57] While
accepting that it was legitimate to look at the common law, senior counsel
submitted that the court should be cautious in so doing. The statute was a United Kingdom statute, but the law of
contract, and practice and procedure, were not necessarily the same in Scotland and England. Different results could ensue.
[58] The
case of Lawrence v Knight, 1972 S.C.
26, was distinguishable. A change of
circumstances had occurred between the time of the offer and the time when the
party tried to accept it. In the present
case, no such change of circumstances had occurred.
[59] The
appropriate order in the present case was to refuse the defenders' motion for
dismissal of the action, and to allow the defenders time to lodge answers if so
advised. If the defenders wished to
raise the question of unreasonable litigation, the pursuer could respond by
explaining inter alia that such steps
were necessary in order to discover whether the defenders had acted in good or
bad faith. To be entitled to dismissal,
the defenders had to satisfy a high test, namely that the pursuer was not
capable of succeeding in the present action.
The defenders had not satisfied that test.
Discussion
[60] Sections
2 to 4 of the Defamation Act 1996 set out a statutory scheme relating to offers
of amends. The effect of the scheme
depends upon a proper construction of the statute. Such a construction may not necessarily lead
to the same results as would the application of the common law of contract: cf. Lord Hope in Wisely v John Fulton
(Plumbers) Ltd, Wadey v Surrey County
Council, 2000 SC (HL) 95 at page 98B, [2000] 2 All ER 545 at page 548.
"It may be found on an
examination of the statute that Parliament has decided not to follow the common
law. In that situation the common law
must give way to the provisions of the statute."
Bennion, Statutory
Interpretation, makes a similar point at page 915:
"Unless the contrary intention appears [italics added], an enactment
by implication imports any principle or rule of contract law ... which prevails
in the territory to which the enactment extends and is relevant to the
operation of the enactment in that territory."
[61] Section
4 of the 1996 Act provides inter alia:
"(1) If an offer to make amends under section 2, duly made and not
withdrawn, is not accepted by the aggrieved party, the following provisions
apply.
(2) The fact that the offer was made is a defence (subject to
subsection (3)) to defamation proceedings in respect of the publication in
question by that party against the person making the offer.
A qualified
offer is only a defence in respect of the meaning to which the offer related ..."
[62] Neither
in section 4, nor in sections 2 or 3, is any time-limit imposed for
acceptance. The only "end-points" for
the offer mentioned in the statutory scheme are acceptance of the offer
(section 3) or withdrawal of the offer (section 2). Acceptance of an offer imposes certain
restrictions upon a pursuer in terms of section 3(2), namely a bar against bringing
or continuing defamation proceedings in respect of the publication in
question; but no restrictions are placed
upon the pursuer prior to acceptance.
Similarly Chapter 54 of the Rules of the Court of Session contains no
provision preventing the pursuer from accepting the offer at any stage. As for withdrawal of an offer,
section 2(6) provides that an offer of amends may be withdrawn before it
is accepted (and by implication, not after acceptance).
[63] The
lack of any statutory time-limit has been commented on. For example, in Current Law Statutes at page 31-6,
the annotator comments:
" ... There is no time-limit
by which a plaintiff must respond to an offer and it is not clear whether a
defendant can introduce his own time-limit or the court will have power to
impose one. A defendant whose offer is
not accepted must decide whether to leave the offer open and rely on it as a
defence, or to rely on some other defence.
He cannot do both (see s.4(4)).
If the offer is left open, a wealthy plaintiff may be tempted to push on
at least until discovery, when he can assess his chances of showing that the
defendant's offer should fail under section 4(3). The consultation papers and Parliamentary
debates offer no guidance as to what the costs position should be in a case
where the plaintiff finally accepts an offer of amends at the door of the
court. However, payments into court may
be made in the usual way ..."
[64] Similarly
Price on Defamation Law, Procedure and
Practice (3rd ed.) observes at paragraph 16-20:
"There is no concept in the
1996 Act of "rejection" of an offer of amends by the claimant and no time-limit
within which to accept it ...To allow a claimant, who fails to accept an offer
when it is made, to have the option of accepting it at a later stage, would be
contrary to the aim of the defence, which is to encourage speedy disposal. Claimants would proceed in the hope of
finding material on disclosure or later to support their case of
disqualification. If none emerged they
might accept the offer late in the day.
If this were to be permitted, the court should generally make the
claimant pay the costs thrown away by failing to accept the offer when it was
made, on the basis that he will have achieved nothing by proceeding with the
claim."
[65] It will
be seen that, in those passages, neither the Current Law Statutes annotator,
nor Price, suggests that late
acceptance of an offer of amends is impossible, but rather that late acceptance
may result in a liability in expenses.
[66] Gray J.
in Loughton Contracts plc v Dun & Bradstreet Limited, [2006] EWHC 1224 (QB) categorised the aggrieved party's response in that case as a
counter-offer in effect amounting to a rejection of the offer of amends, yet
acknowledged the continuing existence of the offer by permitting the aggrieved
party to accept it in the course of submissions, observing:
"27 ... I agree that it
behoves a claimant who receives an offer of amends to decide promptly whether
or not to accept it. Sometimes that may
be a difficult decision. If there is
genuine uncertainty as to whether special damage has been suffered, the
claimant must without delay investigate the position insofar as he is able to
do. In a suitable case application may
be made for pre-action disclosure. What
I do not think a claimant should do is what was done in the present case: advance a claim for general damages only and
decline to accept an offer of amends until the defendant had disclosed
documents which might (or might not) enable a claim for special damages to be
mounted.
28. Having said that, the
question which I have ultimately to decide is whether the time has come in the
present case where it is no longer open to the claimant to accept the
defendant's offer on its own terms (i.e. general damages only). In answering this question I bear in mind
that the claimant throughout made it clear its wish in principle to accept the
offer. In effect what the claimant
wanted was the ability to make an informed decision. There is no question of any bad faith on the
part of the claimant. I think I am
entitled to bear in mind also the consequences of my deciding that it is no
longer open to the claimant to accept the offer: almost certainly the claimant would face an
irresistible section 4 defence with the result that no damages would be
recovered. That outcome strikes me as
unjust.
29. In these circumstances,
I think Mr. Parkes [counsel for the claimant] was entitled belatedly to accept
the offer of amends on behalf of his client ..."
[67] Against
that background, it is my view that, on a proper construction sections 2 to 4
of the 1996 Act -
(1) A defender wishing to use
the statutory "offer of amends" defence outlined in sections 2 to 4 may do so
only if the offer relied upon has been "duly made and not withdrawn [italics added]".
Thus if an offer has been made, but is then withdrawn, it could not be
relied upon to provide the "offer of amends" defence envisaged, even if the
offer had previously remained open for a prolonged period before finally being
withdrawn.
(2) The 1996 Act focuses upon
the aggrieved party's failure to accept
the offer rather than upon his refusal or rejection of the offer. There is in my view a subtle but significant
difference between the two concepts: the
latter denotes an act of refusal or rejection, which may take many forms - for
example, a letter of refusal; a negative
telephone-call; a fax or e-mail of
refusal; an unproductive meeting; a complete lack of response; or a combination of facts and circumstances
giving rise to a clear inference that the offer has been refused, possibly on
more than one occasion. The former
concept in my opinion denotes a state of affairs which will continue
indefinitely, unless and until the
aggrieved party actually accepts an offer of amends duly made and not
withdrawn. I consider therefore that, on
a proper construction of the statutory provisions, the crucial question is not
whether an offer of amends has at any stage been refused or rejected. The crucial question is whether an offer duly
made and not withdrawn is, at the tempus
inspiciendum, "not accepted". In
other words, on a proper construction of the statute, it is in my view open to
an aggrieved party to accept an offer of amends (duly made and not withdrawn)
at any time: cf. the sequence of events
in Loughton Contracts plc v Dun & Bradstreet Limited, cit. sup.
[68] In effect therefore the statutory scheme obliges a defender to
maintain (i.e. to hold out, and not to withdraw) the offer of amends upon which
he intends to rely for his section 4(2) defence. In order to qualify for the defence provided
by section 4(2), a defender has to be able to point to the existing offer duly
made and not withdrawn, albeit not accepted in one or more of the many ways in
which non-acceptance can be indicated.
It will be seen therefore that I am not persuaded that, on a proper
construction of the statute, it is appropriate to apply the common law rule
that rejection of an offer causes that offer to fall or to cease to exist. On the contrary, the statutory scheme
envisages an offer duly made and not accepted, but not withdrawn and therefore
by clear implication still in existence at the time when the defender (wishing
to rely upon it for a section 4(2) defence) seeks to persuade the court of that
defence. Further it is my view that if a
defender or a court were to seek to impose a time-limit such that the offer of
amends was no longer being held out and was no longer in existence at the time
when the defender sought to rely upon the defence in section 4, then that
defence would not be available to the defender.
In other words, on the view which I have taken, a defender must be able
to direct the court's attention to an existing offer of amends (duly made and
not withdrawn) in order to avail himself of the benefit of a section 4
defence. Finally, I have concluded that
it is not strictly necessary in terms of the statutory scheme for an aggrieved
party to make it clear to the defender that he intends in principle to accept
the offer of amends but meantime must take certain other steps (as was done in Loughton Contracts plc v Dun & Bradstreet Limited, cit. sup.) Nor do
I consider it necessary in terms of the statutory scheme for an aggrieved party
to seek the permission of the court before making a late acceptance of an
existing offer of amends (duly made and not withdrawn).
[69] It follows in my view that authorities such as Gloag, Contract (2nd ed.), McBryde, Contract (2nd ed.), Lawrence v Knight, 1972 S.C. 26, Tenbey v Stolt Comex Seaway Ltd, 2001 S.L.T.
418, and Chitty, Contract (29th
ed.), are of limited assistance in the present context, as they do not touch on
the particular statutory scheme introduced by sections 2 to 4 of the 1996
Act. Furthermore, it should be borne in
mind that the purpose of the offer of amends facility is to "curtail
proceedings": cf. Eady J. in Milne v Express Newspapers [2003] 1 W.L.R. 927 at paragraph 15 (quoting
from the summary of recommendations in appendix A to Sir Brian Neill's
Committee on Practice and Procedure in Defamation); and Gray J. in Loughton Contracts plc v Dun
& Bradstreet Limited [2006] EWHC 1224 (QB) at paragraph 28. I consider that proceedings may be
"curtailed" even where an offer of amends is accepted at a late stage in court
proceedings. The lateness of an
acceptance, or any waste of time or resources, may be reflected in awards of
expenses.
[70] An interesting question was raised by counsel for the
defenders, namely whether an aggrieved party would be entitled to accept an
offer (duly made and not withdrawn) at a stage after the judge or jury had
returned a decision or a verdict, including one of absolvitor. Such a question
does not arise in the present case. Obiter, it seems to me that a judicial
decision or a jury verdict would result in the offer of amends being superseded.
[71] In my opinion, therefore, sections 2 to 4 of the 1996 Act
provide an example of one part of the law of defamation where Parliament has
made special provision: cf. dicta of Lord Hope of Craighead in Wisely v John Fulton (Plumbers) Ltd, Wadey v Surrey County Council, 2000 SC (HL) 95 at page 98B, [2000] 2 All ER 545 at page 548; Bennion,
Statutory Interpretation, page 915;
and Gray J. in Loughton Contracts
plc v Dun & Bradstreet Limited [2006] EWHC 1224 (QB) at paragraphs [21] to [26] - the latter being a case where, as
counsel for the pursuer pointed out, the counter-offer would at common law have
resulted in the lapse of the offer, but Gray J. held that in terms of the
statutory scheme, the claimant could belatedly accept the offer during the
course of argument in court.
[72] In the present case, it is clear from the written pleadings
that the defenders made an unqualified offer of amends on 7 June 2005. They did not
withdraw that offer. The offer was not
accepted until 7 December 2006, when the pursuer lodged in
process his Chapter 54 Minute accepting the defenders' offer, and defining the
questions to be determined by the court.
Thus the period of non-acceptance was indeed a long one, amounting to
some 11/2 years. That may have consequences
in expenses, but I have not been persuaded that it was no longer open to the
pursuer to accept the offer of amends.
Accordingly I consider that there should be further procedure in
relation to the accepted offer of amends, as envisaged in section 3 of the 1996
Act.
Decision
[73] For the
reasons given above, I make no order in
hoc statu in the action of damages for defamation. Indeed in terms of section 3(2) of the 1996
Act, the pursuer, having accepted the offer of amends, is barred from
continuing the defamation action, although he is entitled to enforce the offer
of amends. I shall allow the defenders
four weeks from the issuing of this judgement within which to lodge answers to
the pursuer's Chapter 54 Minute, if so advised.
In the event that answers are lodged, I allow a period of adjustment of
four weeks, commencing on the date of lodging of answers. The case will subsequently be put out By
Order for discussion as to further procedure.
[74] I
reserve meantime the question of the expenses of the debate to enable parties
to address me on that matter.
