Lonzim Plc & Ors v Sprague

Defamation proceedings may be struck out as an abuse of process where the publication within the jurisdiction is absent or minimal, the likely damages and vindication are negligible, and the expenditure of court resources would be disproportionate. A claimant must prove internet publication within the jurisdiction; there is no legal presumption of publication. Publication may be inferred where the inference is properly open on the evidence, but speculation is insufficient. Company shareholders and participants must be able to express views at company meetings without disproportionate exposure to defamation proceedings. The court must protect freedom of expression and ensure that defamation proceedings serve their legitimate purpose of protecting reputation.

The claimants brought slander and libel proceedings against a South African-resident non-executive director arising from statements made at a LonZim shareholders’ meeting in London and quotations published in the online edition of the South African magazine Financial Mail. They also sought permission to amend the claim to add a later online publication.

The defendant applied for summary judgment under CPR r24 and strike-out under CPR r3.4, contending that there was no real prospect of proving substantial publication within England and Wales and that the proceedings were an abuse of process. The claimants applied for permission to amend. The central issues were whether there had been substantial publication within the jurisdiction and whether continuation of the proceedings would serve the legitimate purpose of protecting reputation.

1. The AGM slander claim was an abuse of process and vexatious. Only about five to seven people were alleged to have heard some or all of the words. At least some were professional representatives connected with the claimants, and the alleged meanings concerned professional judgment rather than personal reputation. Any damages or injunction would have been negligible and wholly disproportionate to the costs and court resources required.

2. Applying Jameel v Dow Jones [2005] QB 946, the court held that it must stop defamation proceedings which do not serve the legitimate purpose of protecting reputation. The prospect of shareholders being sued for expressing views at a company meeting would inhibit free expression and was contrary to the public interest.

3. The claimants bore the burden of proving publication within England and Wales in relation to the online articles. Under Al Amoudi v Brisard [2007] 1 WLR 113, publication could be established by inference where properly open to a jury, but juries must not speculate. The evidence showed, at its highest, minimal publication and no substantial tort. The evidence relating to general website traffic did not establish readership of the particular articles within the jurisdiction.

4. The later proposed amendment suffered from the same defects. Permission to amend was refused. The action was struck out, and the court recorded under CPR r3.4(6) that the claims were totally without merit.