Appeal - Libel - Plea of qualified privilege - Whether occasion privileged - Presumption of no malice - Express malice - Bur- den of proof - Whether defen- dants believed in truth of communication - Repetition in letters between parties' legal repre- sentatives - Whether repetition gave rise to separate cause of action.

The Supreme Court (before Mr Justice Murphy, Mr Justice Lynch and Mr Justice Barron); judgement delivered 12 June 1997.

WHERE a defendant establishes that a publication occurred on an occasion of qualified privilege a presumption of no malice in relation to the publication is raised. The burden of proving malice shifts to the plaintiff. The plaintiff must then prove express malice to negative the presumption if the plaintiff is to succeed. Where a plaintiff fails to establish express malice in the narrow sense, namely spite or ill will, or in the wider sense of using an occasion of qualified privilege for an indirect or improper motive, then that burden is not discharged and the presumption is not negatived.

Pre-trial communications between solicitors cannot be relied upon to ground separate causes of action. The Supreme Court so held in upholding the ruling of the trial judge who withdrew the case from the jury and dismissed the action on the grounds that the words complained of were published on an occasion of qualified privilege and there was no evidence upon which the jury could reasonably find that the publication by the defendants was malicious.

John Gordon SC, Sean Ryan SC and Justin Dillon BL for the appellant; Peter Charleton SC and Mel Christle BL for the defendants/respondents.

MR JUSTICE LYNCH, delivering the unanimous judgement of the court, said that the plaintiff appealed against the decision of the trial judge, Mr Justice Kinlen, to withdraw the case from the jury and dismiss the plaintiff's libel action. The learned trial judge had found that the words complained of were published on an occasion of qualified privilege and there was no evidence upon which the jury could reasonably find that their publication by the defendants was malicious.

Mr Justice Lynch outlined the circumstances of the case. The plaintiff had been general manager of the first defendant at its Dublin office since 1988 and had been appointed managing director in 1989. In February 1992 the plaintiff was informed that his services were no longer required and the plaintiff ceased working for the first defendant in or about April 1992. The first defendantwas a well known company which sold recordings of music by various artistes and remitted royalty payments to the various artistes from the proceeds of the sales of the recordings. Pal Productions collected the royalties for the artistes.

The system established by the first defendant was to send all the information necessary for the calcuation of these royalty payments and all records thereof to the London office from the Dublin office where the necessary calculations were made and the royalties were paid over to Pal either quarterly or half yearly. The financial year ran from 1 July to 30 June for the first defendant company. Prior to 1 July 1991 this system operated smoothly. From 1 July 1991 the Plaintiff kept a record of all royalty payments on his own personal computer using a system known as musicale. The idea was to give the Dublin office more autonomy. Unfortunately both thought the other office was dealing with the calculation of the royalty payments. There was no communication between the offices in relation to the royalty payments whatsoever throughout that year. When the plaintiff was leaving the employment of the first defendant he took his own computer with him, did not transfer the information in relation to the royalty payments to another computer or computer disc but did furnish the first defendant with a print-out of the information accumulated by him concerning the royalties. As both sides thought the other office was dealing with the issue, the royalty payments for the quarters ending 30 September 1991 and 31 December 1991 were not paid until 18 June 1992. The payments were duly made to Pal Productions. However by letter dated 18 November 1992 the first defendant received a demand from Pal Productions for payment of interest in the sum of£436.05 because of the delay in making the payments. Ms Browne, the new manager of the Dublin office who received the letter, replied saying that another employee, Ms McDonnell, the second named defendant, was away on maternity leave and on her return the matter would be dealt with. However Pal Productions persisted and the manager of the Dublin office consulted Mr Pat Broderick in the UK seeking advice. Mr Broderick dictated a letter to the second named defendant who then typed it and sent it off to Pal Productions. The plaintiff subsequently issued proceedings claiming that the content of that letter libelled him.

Mr Justice Lynch set out the content of the letter. It explained the reason for the delay in the payment of the royalties saying that it was due to the departure of the managing director of the Dublin office (the plaintiff) from the first defendant along with all the first defendant's royalty files. The letter went on to say that the first defendant then had to redo all the royalty files and the letter finished with the hope that the recipient would understand and treat the matter as closed. The letter was signed by the second named defendant. Mr Justice Lynch proceeded to examine the issue of qualified privilege. He concluded that on the undisputed facts the defendants were denying liability for the sum of £436.05 which Pal Productions was claiming in interest and the defendants were contending in all the circumstances that the claim by Pal Productions was unreasonable. Therefore, Mr Justice Lynch said, the first defendants had a right and/or duty and/or interest to communicate their contentions regarding the claim for interest to Pal Productions who had a corresponding right and/or duty and/or interest to receive the communications.

The case of Hynes-O'Sullivan v O'Driscoll [1988] IR 436 established that a defendant could not create an occasion of qualified privilege by communicating with another person whom he believes has a duty and/or interest to receive the communication where no such duty and/or interest exists. However, that was not the issue in the present case. Clearly it was an occasion of qualified privilege and Mr Justice Lynch held that the learned trial judge was correct in so ruling. Mr Justice Lynch said that once it was established that the words complained were published on an occasion of qualified privilege, the burden of proving malice or express malice lay with the plaintiff. It was not enough to show that the circumstances could be construed as showing malice if the same circumstances could also be construed as not showing malice. The presumption of no malice which arises in circumstances of qualified privilege must be clearly negatived if a plaintiff is to succeed. Mr Justice Lynch considered the facts of the case. It was agreed that Ms Browne had received many calls from Pal Productions and it was her evidence that she "had to tell these people something". The plaintiff contended that this indicated an intention to tell them anything, true or false, to persuade Pal to drop their claim for interest. Mr Justice Lynch was of the view that the more likely interpretation was that the defendants desired to give Pal solid and truthful reasons for the delay in paying the royalties. Mr Broderick who dictated the letter said that in hindsight, the only amendment he would make to the letter would be to insert the word "computerised" before "royalty files". It would be perverse for a jury to find otherwise than that Mr Broderick believed in the truth of the content of the letter at the time. That evidence was more consistent with the absence of malice than with express malice.

Mr Justice Lynch rejected the submission that as nobody in the Dublin office believed in the precise terminology contained in the letter complained of, that fact established express malice. The matter was raised due to the fact that the Dublin office knew that it was only the computerised royalty files that had been taken and not all the royalty files. In answer to that, Mr Justice Lynch said that commonsense had to prevail and it was clear that the man who dictated the letter, Mr Broderick, believed at the time that the essential royalty files had been taken and this was the cause of the delay in the payment of the royalties. Qualified privilege, he said, covered statements made bona fide even thought they may subsequently be shown to be false and defamatory. The plaintiff submitted that the second named defendant had no belief in its truth when she transcribed and signed the letter and hence was liable for its defamatory content. Her absence of belief was relied upon to indicate express malice. This submission was rejected by the court on the grounds that it was contrary to ordinary commonsense to say that a secretary could not claim qualified privilege for typing and sending a letter because he/she had no belief in the accuracy of its contents when a principal can because he/she honestly believes in the accuracy of the contents of the letter. The plaintiff further submitted that the defendants did not attempt to challenge Pal's claims for interest on the grounds that the contract with Pal made no provision for the payment of interest in the event of late payments. To do so it was submitted would have been a commercially damaging line to adopt. However, Mr Justice Lynch took the view that for the defendants to attempt to deal with Pal's claims in that manner would amount to a failure to deal with the claim on the basis on which it had arisen which was thealleged inexcusable delay of the first defendant in remitting the royalties to Pal. Failing to rely on the absence of provisions in relation to interest in the contract was not evidence of express malice on the part of the defendants. Mr Justice Lynch said that the plaintiff relied on the allegation that the letter of 18 November 1992 contained an innuendo of theft against the plaintiff and that the second defendant emphatically stated she never believed the plaintiff had committed theft. This, the plaintiff contented, was evidence of express malice since the second named defendant did not believe what it was alleged the letter meant. This contention was rejected by the court on the grounds that the inneundo was far fetched and did not negative the qualified privilege by establishing express malice. Mr Justice Lynch considered the evidence of the plaintiff in relation to the very good relationship he enjoyed with Mr Broderick. There was no evidence of express malice namely spite or ill will. There was no evidence that the communications between Pal and the defendants were other than genuine attempts to explain the delay and resist Pal's claim for interest and hence, the court concluded, there was no evidence of malice in the wider sense of the term, namely the use of the occasion of qualified privilege for an indirect or improper motive or purpose. Mr Justice Lynch agreed with the finding of the learned trial judge that there was no evidence on which a jury would be entitled to find express malice.

However, he went on to consider one further matter. The plaintiff relied on an explanatory letter sent by the defendants' solicitors replying to a letter of the plaintiff's solicitors, saying it gave rise to a seperate cause of action for defamation. Mr Justice Lynch took the view that if this letter could be deemed to have givenrise to a seperate cause of action then all preliminary correspondence in defamation cases would have to be abandoned. This letter was written on an occasion of qualified privilege and there was no evidence of express malice in the writing and publication of the letter. The tone of the letter only served to corroborate the defendants' contention of bona fides. The plaintiff's appeal was dismissed and the order of the High Court affirmed.

Solicitors: Gleeson, McGrath Baldwin (Dublin) for the plaintiff/ appellant; Arthur Cox & Co (Dublin) for the defendants/ respondents.

Miriam Reilly

Barrister