Hughes v Alan Dick Company Ltd

Permission to appeal from an interlocutory order should be refused where the proposed grounds seek final determination of legal and factual issues that remain for trial. A realistic prospect that a defence may succeed is enough when setting aside a default judgment; the court should not decide the merits finally.

Costs orders are matters of judicial discretion, and the Court of Appeal will intervene only sparingly. In defamation, malice requires investigation of the defendant’s state of mind. Honest belief in the truth of the words prevents malice being established merely because the words were untrue.

The applicant sued his former employer in slander over allegations said to have been made by an employee to an immigration officer and later to a police officer. Judgment in default was entered after the claim documents were served without a response pack.

Eady J set aside the default judgment under CPR 13.3(1), finding a real prospect of a defence based on privilege and/or justification, and a further good reason because the response pack had not been served. He ordered the applicant to pay the costs of the hearing. The renewed application challenged that costs order and sought permission to appeal on issues concerning privilege, malice and dishonesty.

1. Application refused. There was no realistic prospect of a successful appeal.
2. Costs are pre-eminently a matter for the judge’s discretion, and an appellate court will be slow to interfere. The principal issue before Eady J was the application to set aside judgment in default, which the applicant had resisted and lost. The unsuccessful strike-out and summary-disposal applications were ancillary and could properly be treated as cancelling each other out.
3. Eady J was assessing only whether the proposed defences had realistic potential. The issues concerning absolute privilege, qualified privilege, malice, justification and publication to an immigration officer had not received final determination. They required investigation at trial and were not suitable for appellate determination as though Eady J had delivered a final judgment.
4. Lord Justice Keene explained that Eady J’s reference to the applicant having to establish, in effect, dishonesty was shorthand for the established exposition of malice in Horrocks v Lowe [1975] AC 135. If the employee honestly believed what he said, the plea of malice could not succeed even if the allegation was untrue. Authorities concerning dishonesty in other areas of law could not simply be transferred to malice in defamation.

The application was refused.

• Court of Appeal (Civil Division): renewed application for permission to appeal refused. Permission had previously been refused on the papers by Sir Richard Buxton.
• High Court, Queen’s Bench Division: Eady J set aside the judgment in default under CPR 13.3(1), relying on a realistic prospect of a successful defence and the absence of a response pack. The applicant was ordered to pay the costs of the hearing.