Law Report: Pleadings only struck out if incapable of proof: McDonald's Corporation v Steel and another - Court of Appeal (Lord Justice Neill, Lord Justice Steyn and Lord Justice Peter Gibson), 25 March 1994

The power to strike out pleadings was a draconian remedy which was only to be employed in clear and obvious cases. In deciding whether or not to strike out parts of a defence and particulars of justification and fair comment in a libel case, the court's correct approach was not to insist upon 'clear and sufficient evidence' to support the pleadings, but to consider whether those parts of the defendant's case were incapable of proof and incurably bad.

The Court of Appeal allowed an appeal by the defendants, Helen Marie Steel and David Morris, against the decision of Mr Justice Bell, on 15 November 1993, to strike out parts of their defence to a libel action brought by the plaintiffs, McDonald's Corporation and McDonald's Restaurants Ltd.

Patrick Milmo QC and David Sherborne (Richards Butler) for the defendants; Richard Rampton QC and Timothy Atkinson (Barlow Lyde & Gilbert) for McDonald's.

LORD JUSTICE NEILL said the defendants published and distributed a leaflet entitled 'What's wrong with McDonald's?' It contained serious allegations against McDonald's, including the allegations that McDonald's had contributed to the destruction of the environment, and that McDonald's exploited its workforce and deterred employees from joining trade unions.

McDonald's issued libel proceedings in September 1990. The defendants served a defence in November 1990, setting out pleas of justification and fair comment. On 30 September 1993, McDonald's applied to strike out parts of the defence and of the particulars of justification and fair comment served thereunder.

On 15 November 1993, the judge struck out substantial parts of the defendants' pleadings and ordered that other parts would be struck out unless witness statements containing admissible evidence to support the pleadings were served, pursuant to the new Order 38, r 2A of the Rules of the Supreme Court, within a specified time. He held that, in the context of this case, a plea of justification was bad (1) if it lacked sufficient particularity; and (2) if there was not clear and sufficient admissible evidence to support it.

In his Lordship's judgment, however, the test of 'clear and sufficient evidence' imposed an unfair and unrealistic burden on a defendant. The criteria to be satisfied before a plea of justification was included in a defamation defence ought to be that the defendant (a) believed the words complained of to be true; (b) intended to support the defence of justification at the trial; and (c) had reasonable evidence to support the plea or reasonable grounds for supposing sufficient evidence to prove the allegations would be available at the trial. A similar approach should be adopted towards facts relied upon in support of a plea of fair comment.

There was, in principle, no objection to an application being made to the court for a statement of claim or defence to be struck out as an abuse of process, under Order 18, r 19 or the court's inherent jurisdiction, on the ground that, either as disclosed in affidavits filed in support of the application, or following the exchange of witness statements under Order 38, r 2A, the claim or defence was demonstrably incapable of proof.

But in the present case, the judge's approach was incorrect. Many parts of the defence, though very weak in November 1993, might have been greatly improved or even transformed by the date of the trial. The correct approach was to consider whether or not a particular part of the defendant's case was incurably bad.

LORD JUSTICE STEYN AND LORD JUSTICE PETER GIBSON agreed.