McDonalds Corporation & Anor v Steel & Anor

A plea of justification in defamation should not be pleaded lightly, but the defendant need not possess clear and sufficient evidence before pleading it. Normally, the defendant must believe the words to be true, intend to support the plea at trial, and have reasonable evidence or reasonable grounds for expecting sufficient evidence to become available. Fair comment is approached similarly. At an interlocutory stage, a plea may be struck out for abuse only where it is incurably bad and incapable of proof. Mere weakness on the evidence then available is insufficient. The court should recognise that proof may emerge from discovery, interrogatories, documents or cross-examination. The draconian strike-out power is reserved for clear cases; otherwise the issue should be left to trial.

McDonald's sued Steel and Morris in defamation over allegations in a leaflet concerning environmental destruction and employment practices. The defendants pleaded justification and fair comment. Bell J struck out all passages concerning environmental destruction and most passages concerning employment practices, while making other strike-outs conditional on the service of supporting witness statements.

The defendants appealed against the legal basis of that order. The central issue was whether a defence could be struck out before trial because the evidence then disclosed did not satisfy a requirement of clear and sufficient evidence, particularly before full discovery had been completed.

Appeal allowed unanimously. Neill LJ delivered the judgment, with which Steyn LJ and Peter Gibson LJ agreed. The Court of Appeal held that Bell J had adopted an incorrect approach to the interlocutory strike-out application.

1. Pleading justification and fair comment. The suggested requirement for clear and sufficient evidence before a plea could be placed on the record was rejected. The approach in Mangena v Edward Lloyd Ltd (1908) 98 LT 640 was understood in its proper context, and the statement in Associated Leisure Ltd v Associated Newspapers Ltd [1970] 2 QB 450 was treated as a dictum rather than part of that decision's ratio. Normally, a defendant should believe the words complained of to be true, intend to support the defence at trial, and have reasonable evidence or reasonable grounds for believing that sufficient evidence will be available. The same approach applies to facts relied on for fair comment.
2. Interlocutory strike-out. Under Rules of the Supreme Court Order 18 r.19(1)(d), and under the inherent jurisdiction, evidence may be considered on an application alleging abuse of process. The passage in Steamship Mutual Underwriting Association Ltd v Trollope & Colls (City) Ltd (1986) 33 BLR 77 was instructive. A pleading may be struck out where it is incapable of proof, but the power is draconian and reserved for clear and obvious cases.
3. The relevant question at an interlocutory stage is whether the particular allegation is incurably bad. The court must consider the range of evidence potentially available, including discovery, interrogatories, documents, witness evidence and cross-examination. The exchange of witness statements under Rules of the Supreme Court Order 38 r.2A does not justify testing the strength of a case prematurely.
4. At trial, unsupported matters may sometimes be removed at the outset, and allegations unsupported by any evidence may be removed at the close of the evidence. In the present case, however, many passages which appeared weak might have been improved or transformed by the trial process. The matter was remitted to Bell J for further consideration. The other parts of the order made on different grounds were unaffected. Costs in the Court of Appeal were allowed, with costs below to be determined by the judge; leave to appeal to the House of Lords was refused.

• Court of Appeal (Civil Division) — On 25 March 1994, allowed the defendants' appeal and remitted the matter to Bell J for further consideration. Other strike-out grounds were unaffected. Costs directions were made and leave to appeal to the House of Lords was refused. The decision is reported at [1994] EWCA Civ 41.
• High Court, Bell J — By order dated 15 November 1993, struck out all passages under the environmental heading and most passages under the employment-practices heading, with further conditional strike-outs unless supporting witness statements were served.