Pell v Express Newspapers

On an application to amend, the pleaded case must be properly arguable, assessed separately for each head of claim. A claim that journalistic-source redactions were fraudulent is not properly arguable merely because the claimant knew, or believed he knew, the source’s identity. Under section 10 of the Contempt of Court Act 1981, necessity for disclosure must be convincingly established, and the court retains a residual discretion. A party who makes an informed and final election to pursue an appeal on a basis inconsistent with fraud cannot later revive a fraud action. The court may also stay proceedings as an abuse of process where settlement, delay, prior litigation, inconsistent positions and the need for finality make continuation unfair.

Benjamin Pell brought a fresh action against Express Newspapers seeking to set aside costs orders made by Eady J in earlier libel proceedings and to recover further damages. He alleged that Express and its journalist had fraudulently misled the court by denying or concealing the origins of articles and by redacting telephone and email records.

The applications concerned permission to amend the claim and, alternatively, summary judgment, strike-out or a stay. The central issues were whether the proposed allegations were properly arguable, whether the email and telephone redactions could found a deceit claim, and whether Mr Pell’s later application under CPR 52.17 amounted to a final election or made the proceedings abusive.

1. Properly arguable test. The court applied the test that each proposed head of claim must be properly arguable. The lateness of the amendments was not, by itself, decisive, but the factual and legal merits had to be considered separately.
2. Email redactions. The claim based on the redaction of emails was not properly arguable. Section 10 of the Contempt of Court Act 1981 protects journalistic sources unless disclosure is convincingly shown to be necessary in the interests of justice, national security, or the prevention of disorder or crime. The burden lies on the party seeking disclosure. The fact that the claimant believed he knew the source did not prevent reliance on section 10. There was no sufficient basis for alleging that the redactions or reliance on section 10 were dishonest. Permission to amend was refused on this issue.
3. Exemplary damages. The proposed claim to recover the costs of the earlier application to plead exemplary damages was refused. Eady J’s refusal had been a case-management decision based on the imminence of trial and several difficulties with the proposed claim, including the uncertainty concerning vicarious liability and the sufficiency of compensatory damages. The alleged deceit was not shown to have caused that loss.
4. Court of Appeal costs. The claim for the costs of the unsuccessful application for permission to appeal was unarguable and abusive. A first-instance judge could not disapply a costs order made by the Court of Appeal, particularly where Mr Pell had agreed to it and had not sought to set it aside.
5. Election and abuse. By pursuing the CPR 52.17 application on the basis that the problem arose from error rather than fraud, Mr Pell made an informed election between inconsistent remedies. The election was final, so the fraud claim concerning the telephone bill was stayed. Independently, continuation of the proceedings would have been an abuse of process, having regard to the settled libel action, delay, inconsistent positions, fairness and the need for finality.

The judgment records earlier proceedings before Eady J and two applications to the Court of Appeal, including a refusal of permission to appeal on 28 January 2005 and refusal of the CPR 52.17 application on 6 November 2006. The present court treated the earlier appellate costs orders as binding and stayed the remaining claim.