Defamatory statements causing pecuniary loss may give rise to an action in tort only. The boundaries set by the tort of defamation are not to be side-stepped by allowing a claim in contract that would not succeed in defamation. A claimant cannot, by an action in conspiracy, recover damages for injury to reputation if the defendants have combined to publish the truth about him. But a claim in conspiracy requires proof of actual pecuniary loss (none being presumed, as they would be in a claim in libel). No such loss had been pleaded.
Dillon LJ said: ‘ A further issue is whether, in the case of Lonrho plc, injury to business reputation can be recovered as a form of injury to property, sc goodwill; that involves considering what is meant by goodwill and – on the way the case has been argued by Mr Beveridge – whether fluctuations in the share price of a company reflect its goodwill and reputation.’ and ‘To prove loss of orders and loss of trade is another matter; that is recognisable pecuniary damage. The claim in respect of the joint venture with Iranian interests referred to in part II of schedule 2 to the particulars of damage could come in under this heading if a link between the loss of the venture and Miss Pollard’s campaign is sufficiently proved. Such loss of orders, for example, would involve injury to the goodwill of a business which may be one of the most important assets of the business. But goodwill in that sense must have the meaning put on that word in Trego v Hunt [1896] AC 7 esp at 17-18, 24, [1895-9] All ER Rep 804 esp at 809-810, 813 per Lord Herschell and Lord Macnaghten. It cannot mean some airy-fairy general reputation in the business or commercial community which is unrelated to the buying and selling or dealing with customers which is the essence of the business of any trading company. Again the well-established right to damages in passing off where deceptive goods have been put on the market and passed off as the plaintiff’s goods has a practical relationship to the plaintiff’s business, which is a long way from the allegations of injury to the business goodwill of Lonrho in the particulars: see Draper v Trist [1939] 3 All ER 513 at 519 per Greene MR and A G Spalding and Bros v A W Gamage Ltd (1918) 35 RPC 101 at 116, where Swinfen Eady LJ cited from the speech of Lord Sumner on the hearing of an earlier stage in that case in the House of Lords; those were straightforward deceptive goods cases which bear no resemblance at all to the elaborate allegation of injury to business goodwill or business reputation in the particulars in the present cas. . . Beyond that, Lonrho’s share price is not an aspect of Lonrho’s goodwill in the sense referred to above. The share price of Lonrho is not an asset of Lonrho at all. That the share price may be affected by the perceptions of stock market analysts, financial commentators and business journalists does not mean that the assets of Lonrho are affected by such perceptions or that Lonrho suffers pecuniary damage if its share price falls as a result of the publication of such perceptions . . Accordingly I would refuse to allow amendment to introduce the proposed sub-head (a) in the proposed particulars of the claim by Lonrho, and the whole of schedule 3 there referred to, and also the repetition of schedule 3 in para 1 of part 1 of schedule 4.’
Stuart-Smith LJ said: ‘I turn to the specific heads of damage in the proposed re-re-amendment. (a) ‘Damages for injury to Lonrho’s right of property in the goodwill of its business the value of which was diminished by each and/or all of the conspiratorial acts identified in part I of Schedule 2 hereto.’ With the exception of the allegations in the Esterhuysen proceedings and the demonstration outside Lonrho’s annual general meeting by Miss Pollard, these are all statements made by Miss Pollard. The manner in which goodwill is said to have been damaged is set out in schedule 3. In my opinion this schedule is nothing more than a complaint of injury to reputation with some wholly unspecified and unquantified injury to goodwill, which ranges from damage to the confidence of customers, the ability to attract employees and backers, the perception of stock market analysts, financial commentators and journalists and the impact on Lonrho’s share price. I would refuse leave to amend to include this paragraph. I reach this conclusion without regret because I consider the claim in para (a) even if it were or could be properly quantifiable as virtually untriable. The number of witnesses on both sides would be likely to be legion and how a judge could determine that it was Miss Pollard’s letters and other effusions, assumed for this purpose to be true, rather than other extraneous factors such as poor service, overborrowing, weak managerial control or the caprice of African ministers that cause a loss of business, if any, or adverse opinions of analysts, journalists, staff and others, I do not know.’
Judges:
Dillon LJ, Stuart-Smith LJ
Citations:
Times 27-Jul-1993, [1993] 1 WLR 1489 (abbreviated), [1994] 1 All ER 188
Jurisdiction:
England and Wales
Citing:
Cited – Trego v Hunt HL 1896
The court defined the meaning of the goodwill of a business: ‘What ‘goodwill’ means must depend on the character and nature of the business to which it is attached. Generally speaking, it means much more than what Lord Eldon took it to mean in the . .
Cited by:
Cited – Malik v Bank of Credit and Commerce International (BCCI); Mahmud v Bank of Credit and Commerce International HL 12-Jun-1997
Allowance of Stigma Damages
The employees claimed damages, saying that the way in which their employer had behaved during their employment had led to continuing losses, ‘stigma damages’ after the termination.
Held: It is an implied term of any contract of employment that . .
Cited – Collins Stewart Ltd and Another v The Financial Times Ltd QBD 20-Oct-2004
The claimants sought damages for defamation. The claimed that the article had caused very substantial losses (andpound;230 million) to them by affecting their market capitalisation value. The defendant sought to strike out that part of the claim. . .
Cited – Hannon and Another v News Group Newspapers Ltd and Another ChD 16-May-2014
The claimants alleged infringement of their privacy, saying that the defendant newspaper had purchased private information from police officers emplyed by the second defendant, and published them. The defendants now applied for the claims to be . .
Cited – Khader v Aziz and Another QBD 31-Jul-2009
The defendant sought to strike out a claim in defamation. Acting on behalf of his client the solicitor defendant was said to have called a journalist and defamed the claimant. The words were denied.
Held: Assuming (which was denied) that the . .
Cited – NT 1 and NT 2 v Google Llc QBD 13-Apr-2018
Right to be Forgotten is not absolute
The two claimants separately had criminal convictions from years before. They objected to the defendant indexing third party web pages which included personal data in the form of information about those convictions, which were now spent. The claims . .
Lists of cited by and citing cases may be incomplete.
Defamation, Contract
Updated: 10 May 2022; Ref: scu.83193