Unsuccessful libel action against firm of estate agents, surveyors and valuers — Claim by plaintiff, who had instructed the defendants in connection with the compulsory acquisition of his shop and residential premises, that a letter written by them to the local authority’s estates surveyor was libellous — The letter, written in the hope of obtaining compensation for the plaintiff on the basis of total extinguishment of his business, indicated that the plaintiff’s trade had suffered from increasing competition and that he was not prepared to move to premises with higher overheads or involving capital expenditure — Plaintiff sought to establish that the letter meant that he was a dishonest person, falsely pretending that his business was viable whereas it was in decline — Held that the words used were not defamatory either in their natural and ordinary meaning or by way of innuendo — The letter was written on behalf of the plaintiff in good faith with the object of inducing the authority to make a favourable settlement — The judge discussed certain defences put forward by the defendants which it was not, however, strictly necessary to consider, as the words had been held not to be defamatory
In this action
the plaintiff, Neville Stephenson, claimed damages from Donaldson & Sons,
estate agents, surveyors and valuers, of 90 Dalston Lane, Hackney, London E8,
for an alleged libel contained in a letter written to the estates surveyor of
the London Borough of Waltham Forest. The defendants were acting for the plaintiff
in connection with the compulsory acquisition of premises occupied by him under
a lease at 198 Crownfield Road, London E15.
The plaintiff
appeared in person; J R K Price (instructed by Barlow Lyde & Gilbert)
represented the defendants.
Giving
judgment, JUDGE HAWSER said: This is an action in which the plaintiff claims
damages for what he alleges to be a libel in a letter written on April 15 1980
by the defendants to Mr White, the estates surveyor and valuer of the local
council.
The
circumstances and background are these. There was a compulsory purchase order
which included the premises, at that time
lease which expired on June 24 1979. The shop and residential premises were
leased to him at a rental of £920 a year (exclusive). It was evident that the
new rent for the premises, had the position remained as previously, would have
been in excess of £920, and I find as a fact that it probably would have been
£1,500 a year (exclusive).
The plaintiff
employed Donaldson & Sons, who are estate agents and valuers, to act for
him in connection with the compulsory purchase order and to claim compensation
for his removal from the premises. Compensation is based on two alternative
situations. The first is where the council is able to find, or perhaps the
client himself is able to find, alternative accommodation; then the
compensation is limited to the costs of and occasioned by the disturbance of
the business. If, however, suitable alternative accommodation is not available,
then the client would be entitled to compensation on the basis of the
extinguishment of the business, and usually that is a higher figure.
On May 15
1979, Donaldsons wrote to the estates surveyor and valuer of the London Borough
of Waltham Forest and enclosed copies of the revenue accounts for the
plaintiff’s business in respect of the years ended December 31 1976, 1977 and
1978. These showed profits of £2,869 for 1976, £3,162 for 1977 and £3,498 for
1978. During this period the rent and rates had remained more or less static;
there had been some increase in sales and (as one observes) some increase in
profit, but the rate of gross profit had gone down from about 27 per cent in
1976 to about 24.7 per cent in 1977 and about 23.5 per cent in 1978. In
addition there was the fact that there would have been an increase in rent as
of June 1979 of the order of £580-£600 which would have diminished the profit.
In real terms, having regard to inflation, the business was tending to decline
during this period.
On July 16
1979, Donaldsons wrote to the estates surveyor and valuer of London Borough of
Waltham Forest and stated:
We . . .
would advise you that we will be prepared to recommend our client to accept
£6,000 as compensation for this item. As you will note from the accounts, our
client’s profit has increased for each of the last three years.
On August 14
1979, the London Borough of Waltham Forest offered the plaintiff a lease on 76
High Road, London E15, on certain terms to the details of which I do not need
to refer. Shortly afterwards this offer was turned down by the defendants on
behalf of the plaintiff; details of the reasons are set out in a letter dated
September 19 1979. The council indicated that they were prepared to consider
negotiating on the terms. In due course the council offered other premises
which were not suitable to the plaintiff: on December 12 1979 they again
offered to grant the plaintiff a lease of shop premises at 76 High Road, E15,
and indicated willingness to negotiate.
On December 17
1979, Mr Ledgett, acting on behalf of Donaldsons, wrote to the plaintiff and
said:
. . . As you
will see from the Council’s letter, they have now offered revised terms for 76
High Road, E15 and I will be grateful if you would have another look at these
premises and let me know whether you are prepared to agree. Quite frankly, I
hold out little hope of you being able to find a lock-up shop only in
reasonable condition and on the terms that you require and it would seem that
the Council’s proposal in the circumstances is reasonable.
The council
having written to say that they would negotiate on the terms, on January 7 1980
Mr Ledgett wrote to the plaintiff as follows:
. . . As I
mentioned in my letter of December 17 1979, I consider that their offer of a
lease on 76 High Road, together with rehousing, is reasonable, especially as Mr
White mentions that he will be prepared to negotiate on the terms already
quoted.
The only way
that I can see to convince the Council that total extinguishment should be paid
is to say that further trading in carpets on a small scale such as yours is no
longer viable due to the increasing competition from multiple shops which hold
a much larger stock. If this is accepted, the compensation payable will obviously
be higher than their suggested method on the basis of hypothetical removals.
In reply on
January 9 1980 to that letter the plaintiff stated:
. . . Firstly
I say without prejudice or malice I would prefer you take instructions rather
than express opinions which would appear slanted towards bias or self-interest.
No 76 High Road, E15 has been rejected by me on three separate occasions as
being unacceptable and adequate [sic]. It is wrong to assume that what is
reasonable is also adequate.
He then dealt
with the question of relocation and went on to say:
On the
question of compensation I suggest that my claim be reappraised and reiterated.
I suggest a figure of £9,000. I cannot accept your suggestion on approach, it
is my view too removed from the truth. I have indicated viable reasons supra.
That seems to
me to be a reference to the last paragraph of the letter of January 7 1980 in
which Donaldsons had put forward their suggestion that ‘increasing competition
from multiple shops which hold a much larger stock’ was an important factor.
On January 18
1980, Mr White (who had come into the picture some months before) said, in a
letter written to Donaldsons on behalf of the borough:
In my view
you have not put forward any valid reason as to why my offer of 76 High Road
plus rehousing is unacceptable. I take the view therefore that he is not
fulfilling his requirement to mitigate his loss and accordingly I can only
offer compensation for business disturbance on the basis of hypothetical
removal to 76 High Road.
On March 24
1980, in pursuance of that, the borough offered £1,000 ‘In full and final
settlement of your client’s claim for compensation for his leasehold interest
in the above property, and compensation for business disturbance,’ and said
that if that figure was not acceptable there would be further negotiations.
On March 31
1980 Mr Ledgett, on behalf of Donaldsons, wrote back and said:
. . . Our client
is not prepared to accept the compensation offered of £1,000 and will not
settle for anything less than total extinguishment. Accordingly, on behalf of
our client, we request any advance payment under section 52 of the Land
Compensation Act 1973 pending further negotiations.
On April 8
1980, the London Borough of Waltham Forest wrote to Donaldsons and said:
I should be
pleased to hear your client’s views as to why he considers his business could
not be relocated even to High Road, E15, bearing in mind that in the vast
majority of cases any shop keeper taking on new premises would expect to have
to carry out some alterations/adaptations/decorations etc in order to make the
premises suitable for his particular use, and that compensation law requires
him to make serious efforts to mitigate his loss.
On April 10
1980, Donaldsons wrote to Mr Stephenson, enclosing a copy of the council’s
letter of March 24. On April 14 Mr Stephenson wrote to Mr Ledgett of Donaldsons
saying that he (Mr Ledgett) was free to make a claim for compensation under
section 52.
I come now to
the letter which contains the paragraph in which it is alleged that the libel
occurred. The letter is dated April 15 1980. Mr Ledgett says that he had a
telephone conversation with Mr White the day before the letter was written. He
says that Mr White told him that he had received the accounts and had formed
the impression that the business was not really viable in view of the profits
and the increase in rent, and ‘I therefore wrote to the council in the terms
which I did’. Mr White had no specific recollection of that telephone call. I
am satisfied that it was made and did occur in the form given by Mr Ledgett. Mr
White told me that before the letter of April 15 1980 was written he had
decided that he could not accept a claim for compensation based on total
extinguishment: he said that had been decided in January. He had a talk with Mr
Stephenson and his attitude towards relocation. His mind was already made up as
a result of the accounts and the general circumstances. The letter of April 15
1980 did not affect his views on compensation.
I should read
the letter fairly fully and refer in particular to the paragraph complained of.
It is from Mr Ledgett to Mr White and refers to premises in the previous offer
(198 Crownfield Road):
. . . Our
client realises that he has a duty to mitigate his losses but, as has already
been pointed out to you, he is not in the financial position which
enables him to finance the repairs that you have required, albeit that these
were negotiable.
I come now to
the paragraph which Mr Stephenson complains of:
Our client’s
trade is such that it has suffered over the last few years from increasing
competition and he is, therefore, obviously not prepared to consider moving to
premises which have higher overheads than his existing property, or where some
capital expenditure is necessary to render the premises fit for trading.
That is the
end of the alleged libel. The letter goes on to say:
Finally, we
must say that we have dealt with other local councils where total
extinguishment has been granted to traders of a similar age, because relocation
would probably not be feasible due to increasing competition over the years. It
is, of course, often the case that an established business can survive in a
competitive market, but any potential is lost if the business has to relocate.
I am satisfied
that Mr Stephenson was not prepared to accept the council’s offers, and in
particular of 76 High Road, either because of higher overheads or because of
capital expenditure and that, in fact, he turned down all the offers which had
been made by the council.
The response
to that letter was dated April 21 1980, written by Mr White. He suggests that
Mr Stephenson was unreasonable in refusing to move to 76 High Road and also
refers to the increased rent which would have applied to the existing premises
had the compulsory purchase order not come into operation. He says:
4. You
emphasise in your letter that your Client’s trade had suffered in the last few
years because of increasing competition. This raises the distinct possibility
that the business would have been forced to close irrespective of the CPO, and
one cannot help thinking that this may well have been the reason he did not
wish to relocate rather than the unsuitability of other premises.
5. I am not
sure what you mean by saying that an established business can survive in a
competitive market. Established businesses often do not survive in the face of
increasing competition, particularly where that business is a small one. In any
event it is hard to regard the removal of the business to premises close by as
‘disestablishing’ it.
6. I find it
difficult to accept that the business had any potential, particularly in the
face of your information regarding the decline of the business. But if there
had been any, it would in my opinion have been better served by moving to 76
High Road in view of the latter’s better trading possibilities. In conclusion I
regret that I am unable to change my view of the proper basis of compensation.
On May 6 1980
Mr Ledgett sent a copy of the letter of April 15 and of the reply to Mr
Stephenson and said that the only alternative was to apply to the Lands
Tribunal but he thought that was a waste of time and money.
On May 12
1980, Mr Stephenson wrote to Donaldsons:
. . . Your
letter of April 15 has taken me by surprise, both as to its contents and
purpose. You will recall a telephone conversation on or about January 7 in
which you were orally forbidden to write in that strain, and in my letter dated
January 9 you were expressly forbidden to do so.
You must now
realise that I have suffered damage from your actions. I look forward to
receiving your account of the purpose and motive for writing this letter.
Donaldsons
replied on May 15 1980:
I am surprised
that you objected to my letter of April 15 1980 as, presumably, it is the
fourth paragraph thereof which gives rise to your concern. Although I was aware
of the contents of your letter of January 9, I understand that you had already
said exactly the same thing to Mr White when he visited you and, indeed, it was
he who brought this matter to my attention and caused me to write the letter.
In the circumstances, therefore, I do not consider that you have suffered any
damage from our actions, as the Council already knew this detail. . . .
Despite your
comments in past correspondence, I am still satisfied that you have been
offered suitable alternative premises and feel that I am fighting something of
a lost cause. However, I have spoken again to Mr White, who will be letting me
have the Council’s final offer during the next few days.
Mr Stephenson
cancelled Donaldsons’ instructions. A number of letters passed subsequently in
which Mr Stephenson was asked whether he would negotiate through fresh agents
or himself, but he did not negotiate any further with the council and he has
not applied to the Lands Tribunal.
The plaintiff
says in his statement of claim:
5. The
defendant meant and was understood to mean
by the words
that the
plaintiff was a dishonest and fraudulent person who was claiming money from the
. . . Council by way of compensation under a Compulsory Purchase Order . . . by
falsely pretending that the said business was viable and his [sic] rising
expectations, whereas the observe was true — the business suffered from
diminishing returns and was in decline and would in the foreseeable future be
forced to close irrespective of the Compulsory Purchase Order. In consequence
of the alleged decline of the business the plaintiff obviously has no money to
carry out even the minimum of repairs to render premises fit for trading.
A number of
matters are set out as particulars of the meanings to be attached to the words.
In ‘(vi)’ of those particulars it is said:
The Council
understood the statement to mean the plaintiff was dishonest in his claim to
compensation and, in view of the statement, and because of the decline, the
business had no potential.
The defence as
amended claims that the words were not capable of bearing any of the meanings
pleaded in the statement of claim or any meaning defamatory of the plaintiff. I
think that that is correct. On the face of it, plainly the words do not, in
their ordinary and natural meaning, constitute any statement defamatory of the
plaintiff. They say that the plaintiff had suffered as a result of increased
competition. Whether that is true of not, it is not in my view any attribution
to the plaintiff of any kind of misconduct or impropriety in his business
activities. It is simply suggesting that the business had tended to decline by
reason of increased competition which may well be regarded as a misfortune or a
difficulty with which many businesses have to contend in these days. Plainly,
the plaintiff was not prepared to consider moving to premises which had higher
overheads than his existing property or where capital expenditure was necessary
to render the premises fit for trading. Those two matters are alleged as being
caused by the increasing competition from which the plaintiff had — allegedly,
at any rate — been suffering during the last few years.
Again, in the
next paragraph of the letter of April 15 1980 (which I think one should read in
conjunction with the previous paragraph) the point is made that an established
business can survive in a competitive market and that potential is lost if the
business is to relocate. I think that in this letter Donaldsons were making an
attempt (even if, perhaps, a somewhat clumsy attempt) to try to induce the
council to take a view of the facts and the circumstances which would result in
an offer of compensation to Mr Stephenson on the basis of the extinguishment of
his business. The council clearly had made up its mind prior to the letter of
April 15 1980 that they would not grant compensation on the basis of
extinguishment, and, unfortunately, the letter did not have the effect which it
was perhaps hoped it might have, of persuading the council that they ought to
change their mind.
Mr Stephenson
has alleged an innuendo the effect of which is that the paragraph in the
letter, in the circumstances, meant that he was being a dishonest and
fraudulent person. I do not think that this innuendo can possibly be inferred
from the words used or, indeed, from any other facts or circumstances — though
it is correct to point out that no other facts or circumstances were relied
upon.
It is
suggested by Mr Stephenson that the defendants, in writing this letter,
intended to discredit him and intended to create in the minds of the council
some sort of feeling that he was not to be relied upon: that he was in some way
a dishonest and fraudulent person. Having heard Mr Ledgett, I am quite
satisfied that the letter was written in good faith, and written purely and
simply with the intention of trying to induce the council to adopt a more
favourable attitude. In the event, unfortunately it failed to do so.
I have
therefore come to the conclusion that the paragraph in question was not
defamatory of the plaintiff in its natural and ordinary meaning and was not
capable of bearing the meanings
claim.
There are a
number of other defences which have been put forward on behalf of the
defendants. They allege that the words complained of were written in pursuance
of the authority which was given to them and the publication was authorised by
the plaintiff. I doubt, in the light of the letter of January 9 1980 from Mr
Stephenson, that that allegation is justified. I think that Mr Ledgett probably
went beyond any authority which he may have had, in putting forward the
particular suggestion — though I have no doubt that he did so in good faith and
with the best of intentions.
Whether the
defendants, in the circumstances, could rely upon the plea of qualified
privilege is a matter of some doubt having regard to the authorities, because
one has the rather peculiar position that if there was any defamation the
defendants would have to plead that they were under a duty to publish the words
and the estates surveyor and valuer had a like duty or interest to receive
them. It does not seem to me that — speaking generally, at any rate —
Donaldsons would have been under a duty, in pursuance of agency, contract and
authority, to publish words of the plaintiff which were defamatory, even though
they did act in good faith. However, this point does not really arise having
regard to my finding on the original letter.
The defendants
have also pleaded that the words were true in substance and in fact. I need not
say very much about this. The true picture, as is stated in paragraphs 3 and 4
of the defence, is that, over the years, the plaintiff’s business was declining
in real terms, he was not prepared to consider moving to premises which had
higher overheads than his existing property or where significant capital
expenditure was necessary to render the premises fit for trading. I find that
if there were any libel or defamatory statement contained in the letter, it was
limited to a statement that the business was declining, and I find that that
was in fact true.
Finally, the
defence pleads that the plaintiff has suffered no loss whatsoever as the result
of the inclusion of this paragraph in the letter of April 15 1980 even assuming
that it was defamatory. I am not sure whether this is a good defence, since no
special damage has to be proved assuming that there was a libel of the
plaintiff having regard to his business reputation. But I accept the
proposition that the letter had no effect whatsoever upon the council — as
indeed Mr White made quite plain — and that in no way, as far as the council
were concerned, were Mr Stephenson’s chances jeopardised by sending the letter.
He is, of course, free to pursue his claim to the Lands Tribunal if he wishes.
I am satisfied that this letter will have no effect whatsoever upon the Lands
Tribunal or any further effect upon the plaintiff. Accordingly, I would have
held, had I been in the plaintiff’s favour, that the damage which he had
suffered as a result of the libel was minimal damage and no more.
In the result,
I have found that the statement in the letter of April 15 1980 was not
defamatory in either its natural or ordinary meaning and was not capable of
bearing any of the other meanings put upon it by the plaintiff. Therefore this
action must fail.
Judgment was
given for the defendants, with costs.
