Holley v Smyth

An interlocutory injunction will not normally restrain an allegedly defamatory publication where the defendant advances a defence of justification, unless the claimant shows that the allegation is plainly untrue. The jurisdiction remains discretionary, but it must be exercised with great caution.

A defendant’s pecuniary or vindictive motive, the manner of the threatened publication and the potential harm to the claimant do not ordinarily create an exception. A threat to publish unless a disputed claim is paid remains protected by the general rule where its criminality has not been properly raised and supported by evidence. Credibility disputes and arguable factual issues should be determined at trial.

The claimants obtained an interlocutory injunction from Kennedy J restraining Mr Smyth from publishing allegations of fraud and related wrongdoing. Publication to specified regulatory and investigative authorities remained permitted.

Mr Smyth alleged that a trust had lost an investment of £200,000 because of fraudulent misrepresentations. He threatened publicity while seeking repayment and maintained that he could justify the proposed allegations. Kennedy J found that justification was not plainly unsustainable, but treated the demand for payment as an exceptional circumstance outside the rule in Bonnard v Perryman [1891] 2 Ch 269.

Mr Smyth appealed. The claimants cross-appealed through a respondents’ notice, contending that the proposed justification was plainly untrue. The central issue was whether a pecuniary motive for threatening publication justified interlocutory restraint despite an arguable defence of justification.

1. By a majority, the appeal was allowed and the cross-appeal dismissed. Auld LJ delivered the principal majority judgment. Sir Christopher Slade agreed with his reasons. Staughton LJ dissented and would have upheld the injunction as an exceptional exercise of the court’s discretion.

2. Per Auld LJ, the power to restrain an alleged libel before trial is discretionary under section 37(1) of the Supreme Court Act 1981. It must nevertheless be exercised with great caution. Under Bonnard v Perryman [1891] 2 Ch 269, an injunction is not normally just or convenient where justification is advanced unless the claimant proves that the allegation is plainly untrue. The rule protects freedom of expression and avoids usurping the jury’s responsibility for determining libel, justification and privilege.

3. The rule is not confined to the media or to defendants motivated solely by a wish to inform the public. Neither a pecuniary or vindictive motive, the manner in which publication is threatened, nor the likely damage to the claimant normally creates an exception. Prior decisions concerning threats employed to obtain compensation established that such motives do not remove the protection of the general rule.

4. The alleged possibility of blackmail under section 21 of the Theft Act 1968 did not justify restraint. Criminality had not formed part of the claimants’ case below, and the necessary evidence had not been directed to whether the demand was unwarranted. Sir Christopher Slade considered that a properly pleaded and evidenced triable case of blackmail might constitute an exception, but those conditions were absent.

5. The principles of freedom of expression under article 10 of the Convention were consistent with the established rule. Interference required an established exception and compelling justification. The ordinary balance-of-convenience principles governing interim injunctions did not displace the special protection applicable in defamation proceedings.

6. The claimants had not shown that the proposed allegations were plainly untrue. The evidence disclosed triable disputes about the alleged representations, the defendant’s knowledge and the adequacy of the investigations. Questions of credibility and evidential conflict belonged at trial. The injunction was therefore discharged, subject to the undertaking offered by the defendant.

1. Court of Appeal: By a majority, allowed Mr Smyth’s appeal, dismissed the claimants’ cross-appeal and discharged Kennedy J’s interlocutory injunction. Leave to appeal to the House of Lords was refused.
2. Queen’s Bench Division: Kennedy J granted an interlocutory injunction restraining publication except to specified regulatory and investigative authorities, although the proposed defence of justification had not been shown to be plainly untrue.