Existence of rumour could justify slander

LAW REPORT v 20 July 1995

Aspro Travel Ltd and others v Owners Abroad Group plc; Court of Appeal (Lord Justice Stuart-Smith, Lord Justice Waite and Lord Justice Schiemann) 7 July 1995

Hearsay and rumour could not constitute justification in a defamation action for an assertion of fact that the rumour was well founded; but there could be circumstances in which the existence of a rumour entitled a person to repeat that rumour even before he satisfied himself that the rumour was true and in such circumstances it was possible to plead in justification that there were in truth such rumours.

The Court of Appeal unanimously dismissed an appeal against the refusal of Sir Michael Davies, sitting as a judge of the Queen's Bench Division on 19 May 1993, to strike out a plea of justification by the defendants, Owners Abroad Group plc, Owners Abroad Tour Operators Ltd and Owners Abroad Holidays Ltd, in their defence to a defamation action brought by the plaintiffs.

The appeal was brought by the third to sixth plaintiffs, George Michael Asprou, Dimitri Michael Konstantine Asprou, Christopher Michael Asprou and their father, Michael George Asprou, all of whom were directors and shareholders of the first plaintiff, Aspro Travel Ltd, and its wholly owned subsidiary, Inter European Airways Ltd.

Thomas Shields QC and Stephen Suttle (Watson Farley & Williams) for the plaintiffs; David Eady QC (Herbert Smith) for the defendants.

Lord Justice Schiemann said the plaintiffs alleged that in about June 1992 representatives of the defendants made statements to hoteliers and travel agents in Cyprus, and in other countries where the plaintiffs operated in the package holiday trade, in which they suggested that the plaintiff companies were "going bust" or would be "bankrupt in a few days", or that there were reliable rumours to this effect. These statements were allegedly made as a prelude to the defendants, who were rival package holiday operators, offering to take over the plaintiffs' bookings.

The defendants denied that such words, if used, were defamatory; but the judge held, and the appeal court agreed, that they were at least capable of being defamatory, in that they were capable of meaning that the companies were insolvent and that the appellant directors, whilst knowing this, nevertheless permitted the companies to continue trading. Whether they were in fact defamatory was a question for the jury to decide at trial.

To the extent that the words might be defamatory, the defendants then sought to justify them to a degree. They did not seek to assert that in fact the plaintiff companies were insolvent; they merely asserted that there were reasonable grounds to suspect the companies' financial viability.

The plaintiffs correctly submitted that some of the particulars of justification were hearsay and rumour. It was manifestly dangerous to publish hearsay and rumour because in some circumstances the jury would accept that the true meaning of what was said was that the rumour was well founded.

The defendants accepted that hearsay and rumour could not constitute justification for an assertion of fact that the rumour was well founded; but they submitted that there could be circumstances in which the existence of a rumour entitled a person to repeat that rumour even before he satisfied himself that the rumour was true and in such circumstances it was possible to plead in justification that there were in truth such rumours.

His Lordship agreed in the abstract and did not regard it as appropriate to strike out the plea of justification on this basis. Striking out should only be done in clear and obvious cases. The test was whether the facts alleged in the pleading sought to be struck out were arguably capable of supporting the plea.

Here the defendants' plea of justification was followed by 13 paragraphs of particulars which, the plaintiffs contended, even if proved cumulatively were manifestly not capable of showing the truth of the statement that there were reasonable grounds for the defendants to suspect the viability of the plaintiff companies. His Lordship did not accept that submission.

The judge below and Mr Justice Bell, who gave leave to amend the defence, were both right and entitled in the exercise of their discretion not to strike out the plea.

Lord Justice Stuart-Smith and Lord Justice Waite concurred.

Paul Magrath, Barrister