RECLAIMING MOTION IN THE CAUSE JAMES BROOKS v. GORDON LIND and EILEEN McAULEY and SCOTTISH AND UNIVERSAL NEWSPAPERS LIMITED
EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
| Lord Caplan Lord Milligan Lord Cowie | 0367/6/93 OPINION OF THE COURT delivered by LORD CAPLAN in RECLAIMING MOTION in the cause JAMES BROOKS Pursuer and Reclaimer; against (FIRST) GORDON LIND, (SECOND) EILEEN McAULEY and (THIRD) SCOTTISH & UNIVERSAL NEWSPAPERS LIMITED Defenders and Respondents: _______ |
Act: Party (Pursuer and Reclaimer)
Alt: Boyd; Haig Scott & Co., W.S. (for Bannatyne, Kirkwood France & Co., Glasgow)
(2nd and 3rd Defenders and Respondents)
16 February 2000
The pursuer and reclaimer, James Brooks, from about 1991 was the leader of the Labour party group of councillors in the Monklands District Council. He continued in that position until some time after the present action was raised. The pursuer claims damages for alleged defamation. The first-named defender was at the relevant time chairman of the Monklands West Conservative and Unionist Association. In the action the pursuer claims that the first defender had defamed him. However, during the course of the proof the pursuer's claim against the first-defender was settled so that this defender is not involved in the present reclaiming motion. The settlement was on the basis of an agreed statement by the pursuer and first-defender which did not amount to an admission of liability. The second-named defender was a journalist. She was employed by the third-named defenders, who are the publishers of the Airdrie and Coatbridge Advertiser newspaper (which newspaper is hereinafter referred to as "the Advertiser"). The Advertiser circulated widely throughout the area of which Monklands District Council had jurisdiction. The foundation of the pursuer's action against the second and third defenders is based on two feature articles published in the Advertiser on 2 April 1993 and 9 April 1993 respectively. The second defender was the author of these articles.
At the time with which this action is concerned the pursuer represented a ward in Coatbridge. He held the positions of Depute Provost and Convenor of the Policy and Resources Committee. Monklands District Council was formed by a merger of the Burghs of Coatbridge and Airdrie. At the time relevant to the present action 17 of the 20 members of the Council were Labour party members and the three remaining councillors were members of the Scottish National party. About May 1992 a group of four Labour councillors representing wards in Airdrie became dissatisfied with the manner in which Monklands District Council was managed. These councillors became known as "the rebels". The leading member of the rebel group was Councillor Logue. The rebel group eventually promoted the view that the Council was controlled by a small group of Coatbridge based councillors and this group included the pursuer. The group of councillors who were particularly opposed by the rebel councillors were alleged to be managing Council affairs to the advantage of Coatbridge and at the expense of Airdrie. The dispute within the Council appears at times to have been very bitter and to have attracted much comment and public concern. The first defender was the author of a number of feature articles and reports concerning the dispute and its ramifications. The material in the Advertiser, which is claimed to be defamatory arose from certain actions which the Monklands District Council took to develop a shopping centre in Coatbridge which became known as the Quadrant. The original proposal for the development of this centre was advanced in the mid 1980s. The Council acquired land under the Comprehensive Development Area Scheme. One million pounds was spent by the Council in acquiring land for the scheme and their agreement with contractors for the development of the scheme was with the objective of recovering their outlay. Unfortunately the developers, Rush & Tompkins went into receivership, after the development had been begun but not completed. This situation, not surprisingly, put the District Council under some pressure. Eventually the Bank of Nova Scotia offered to complete the development along with Monklands District Council. This matter was to be the subject of a Joint Venture Agreement between the Bank of Nova Scotia and Monklands District Council. The persons participating on behalf of the Council in the detailed negotiation between the parties, leading to the Joint Venture Agreement, included various senior Council officials, solicitors advising the Council, and a firm of property consultants. The Council's Director of Planning, Mr. Cooper, and their financial director, Mr. Strang, were among the leading negotiators. A special sub-Committee of the Policy and Resources Committee was set up to handle the proposed Joint Venture. The pursuer was a member of that Committee but the Provost at the time (Councillor Cairns) and Councillors Gilson and Lewis were also on the sub-Committee. The Joint Venture Agreement and a related Loan Agreement were approved by the sub-Committee on 8 May 1991 and by the full Council on 9 May 1991. The Joint Venture Agreement was executed on 15 July 1991.
Councillor Brooks presided over the sub-Committee meeting of 8 May 1991 but Provost Cairns presided over the meeting of the full Council on 9 May. The meeting of the full Council authorised the appropriate officials to conclude the Joint Venture Agreement so that the retail development of Coatbridge town centre could proceed.
Under the Joint Venture Agreement there was established a joint venture company under the name "Quadrant Centre (Coatbridge) Limited" (hereinafter known as "Quadrant"). Quadrant was equally owned by the Council and the Bank of Nova Scotia (or their respective subsidiaries). The pursuer was a director of Quadrant, along with the officials Mr. Strang and Mr. Cooper. There were also two representatives of the Bank of Nova Scotia on the Board. The structure of the Joint Venture Agreement was that each of the two parties to it were to contribute equally to the cost of completing the development. However, there were also provisions to cover cost overruns. Thus clause 11.1 of the Joint Venture Agreement was to the effect that the Joint Venturers undertook to indemnify the Joint Venture and Joint Venture Company in equal shares against any loss incurred by The Joint Venture Company in particular, but without prejudice to the foregoing generality the Joint Venturers undertook and guaranteed to British Nova Scotia Bank as providers of the facility in terms of the loan agreement that to the extent that the Development Costs exceeded the Facility, the Joint Venturers should each be responsible for payment of one half of the shortfall, which sum was to be payable by the Joint Venturers to the British Bank of Nova Scotia within five working days following the ascertainment of the shortfall. In terms of the Agreement the expression "Joint Venture" meant the Joint Venture created by the Agreement, "Joint Venturers" meant Scotia (the Bank's subsidiary) and Monklands District Council together and "the Joint Venture Company" meant the Quadrant Company. Subject to the question of cost-overruns the agreement between the parties to the Joint Venture Agreement was that the costs of completing the development should not exceed £10 m. However, since the Council were not able to provide its share of the development costs immediately, the arrangement was that the Bank of Nova Scotia would make the share otherwise immediately payable by the Council available by way of a loan. It had been hoped that the sales of the completed properties would cover the development outlay and indeed produce a profit.
However, in 1993 adverse market conditions resulted in prospective tenants requiring rent free benefits, or other benefits, under their leases. As a result a shortfall in the parties' budgeting had arisen by January 1993. The Council had received legal advice that under the Joint Venture Agreement they were obliged to pay an equal share of these shortfall costs. The Bank of Nova Scotia offered an arrangement whereunder they would advance the Council's share of these costs. A meeting was held by Quadrant on 9 March 1993. The pursuer did not attend that meeting but the Council were represented at it by Mr. Cooper and Mr. Strang. The minute of the meeting records that those present formulated proposals to put to the Bank of Nova Scotia and to Monklands District Council for their respective consideration. The proposals suggested by Quadrant were that the main loan would be finalised at the sum of £10.5 m. An additional loan would be provided for cost overruns being £1 m. from the Bank and £1 m. lent by the Bank to Quadrant on the Council's guarantee, this to be repayable over three annual instalments beginning in April 1993. These proposals were approved at a meeting of the Policy and Resources Committee of Monklands District Council held on 18 March 1993. The pursuer did not attend that meeting. The proposals then went to the full Council on 25 March 1993 when, after a somewhat turbulent meeting, the proposals were approved, although the four rebel councillors and the S.N.P. councillors voted against them. It must also be observed that it was not disputed that the Council had been given legal advice that they were legally bound to pay one half of the sum of £2 m. apparently representing the overrun costs. The pursuer declined to attend the Council meeting because he considered that because of his connection with both Quadrant and with the Council it was appropriate that he should stand back.
It is against that background that the published material which the pursuer complains of has to be considered. The first of the newspaper articles written by the second defender was published in the Advertiser on 2 April 1993. It has a prominent heading "Reckless Council in Cash Fury". The article then proceeds:
"A furious row erupted last week after it was revealed Monklands District Council are legally committed to put up £1 m. to shore up Coatbridge's new show piece shopping centre.
The shock revelation blasted as 'lunacy' and 'reckless' by one senior councillor caused uproar at the monthly meeting of the Council. Councillor Jim Logue also warned it would have a 'catastrophic' impact on Council's services and lead to job cuts.
The cash strapped local authority are legally bound to plough in the money in a bid to lure more retailers to the recession-hit Quadrant.
Only a handful of shops have opened so far in the £13 m. complex operated as a trust company by Labour bosses.
News of the Council's cash commitment to their Quadrant partners, the Bank of Nova Scotia, caused another furious split in the ruling Labour group.
The four rebel councillors - Jim Logue, Brian Brady, Peter Sullivan and Tommy Morgan - defied the Labour whip to vote against the proposal and were joined by the Scottish Nationalists.
But it was still passed by 8 votes to 6.
The rebels claim the 'secret agreement' with the Bank of Nova Scotia was made by Council leader Jim Brooks and that other councillors knew nothing about it until last week".
Later in the same article the following appears:
"Councillor Logue claimed none of his Labour colleagues had seen the agreement in question 'Once you set up trusts you lose control', he said, 'You lose democracy in local government and you have the situation where one member can commit this Council to £1 million".
The second article was also written by the second defender and was published in the Advertiser on 9 April 1993. In this article the second defender first refers to a letter written by the first defender, Mr. Lind, to the Controller of Audit. The article in the Advertiser reports that in this letter the first defender observes at one point
"There has been a 'malicious misuse of public money and it would seem appropriate that consideration should be given to surcharging the two persons responsible'".
These persons were stated to be the pursuer and Councillor Gilson. The particular comment refers to a matter which arose in 1992 and 1993. The Council were at that time under what they considered to be an unfair attack from the published material in the Advertiser. The view taken by the Council was that the material published by the Advertiser was defamatory of the pursuer and of Mr. Gilson. Moreover, the Council considered that these attacks in the Advertiser were ill-founded in fact and they were anxious to stop them because they thought they reflected badly on the reputation of the Council. After consulting their solicitors, they were advised that there would be difficulty if the Council raised an action of defamation in its own name and that therefore, as an alternative, the Council should arrange that direct proceedings be raised by the pursuer and Mr. Gilson. The actions were not proceeded with because of views later expressed by senior counsel. However, certain legal fees were incurred which the Council paid. It was the payment of these expenses which the first defender had suggested in his letter was a malicious misuse of public money.
In his pleadings the pursuer complained particularly of the fact that the defenders responsible for the newspaper articles had suggested that he had entered into an agreement with the Bank of Nova Scotia which had given rise to a liability resting on the Council to pay the Bank £1 m. Moreover, and in particular, the published material had suggested that the pursuer had entered into a "secret agreement" and kept this agreement from his colleagues. This was said by the pursuer to be defamatory. The pursuer further complained that the reference to the fact that he had been allegedly guilty of "a malicious misuse of public money" was also defamatory of his character, as was the request that because of this he should be surcharged. There were other complaints raised but these were not persisted in before us.
The second and third defenders stated as defences, that the pursuer's averments were unfounded in fact, a defence of veritas, that the relevant articles were fair comment on matters of public interest, and that they were in any event protected by statutory qualified privilege. There was also a relevancy plea. A proof before answer was allowed and heard by the Lord Ordinary over nine days. By interlocutor dated 28 February 1997 the Lord Ordinary sustained the second and third defenders' second and sixth pleas in law. The second of these pleas in law was a general plea to the relevancy and the sixth plea in law contained a defence of fair comment on a matter of public interest.
It is this interlocutor which the pursuer reclaims against. The pursuer appeared on his own behalf. He explained that the reason he was not legally represented was financial. His extensive grounds of appeal were drafted by counsel. However, the pursuer argued his appeal fairly and effectively and it must be said that the defenders' advocate, Mr. Boyd, showed him every courtesy and understanding.
The pursuer contended that the only reason he was pursuing his reclaiming motion was to clear his name. He argued that the facts set out in the two material newspaper articles were based on a perversion of the facts. If the articles were alleging that sometime subsequent to July 1991, when the Joint Venture Agreement was executed, the pursuer had entered into a "secret agreement" with the Bank of Nova Scotia it was not clear to what this was referring. If it was suggested that the claim against the Council by Quadrant was some kind of an agreement arranged by the pursuer, the fact is that he had not even attended the meeting of Quadrant which had computed the amount of overrun costs and agreed to refer proposals to the Council and the Bank. Indeed in his evidence Mr. Strang, the financial director, had stated quite categorically that the pursuer had no part in the suggestions from Quadrant as to how to deal with overrun costs (volume 4/435). Moreover, the pursuer had not participated in the relative meetings of the Policy and Resources Committee (18 March 1993) and the meeting of the whole Council (on 25 March 1993). In relation to the first of these meetings the minutes showed that the pursuer had declared an interest and then vacated the chair. He had also declared an interest and not participated in the meeting of the whole Council on 25 March 1993. Nor was there evidence to the effect that the pursuer had been responsible for any decision not to reveal details of the Joint Venture Agreement to his colleagues, supposing that some of them had not been fully acquainted with these details. The Joint Venture Agreement had been approved by the Council at the meeting of 9 May 1991. The Provost at that time, Mr. Cairns, had presided at the meeting and indeed was a signatory of the Joint Venture Agreement itself. We must suppose that the Provost, as chairman of the Council meeting, was primarily responsible for any irregularity in the proceedings at the Council meeting (that is of course supposing that such an irregularity took place). The pursuer considered that the expression "secret agreement", coupled with the suggestion that he had entered into such an agreement on his own and then kept knowledge of this from his Council colleagues, was a clear attack on his character. It was suggested that he had acted in an underhand and deceitful manner. He also considered that he had been defamed in the second article when it was suggested that he had been involved in a malicious misuse of public money. Even the Lord Ordinary had been of the view that the reference to "malicious misuse of public money" was defamatory but he had held that this expression had been, in the whole circumstances, not actionable because it was fair comment. The pursuer contended that the reference to a malicious use of public money had been aggravated by the request by the first defender that he should be surcharged, and by other references in the article such as the suggestion that the pursuer had been at the centre of what was described as the Monklandsgate controversy. The pursuer explained that if some of the councillors had not received a proper opportunity to study the Joint Venture Agreement before it was approved, the cause of this could have been that when the Council were considering a sensitive, confidential, commercial agreement, it was not Council practice to allow councillors to take copies away. The pursuer contended that the references by the Lord Ordinary to fair comment and fair reporting had to be viewed against the admitted fact that Mr. Logue (who is quoted in the article) never used the objectionable expression at the Council meeting.
There are two conclusions for damages (relating to the references to malicious misuse of public money and "secret agreement" respectively). The pursuer claimed that the recovery of damages was not his principal concern in the action and it had been agreed by the parties that in the event of the pursuer being successful damages should be awarded at the rate of £2,500 in respect of each of the conclusions for damages.
Counsel for the defenders asked us to uphold the Lord Ordinary's decision. He accepted that the reference in the first article to a "secret agreement" must have been intended to relate to the original Joint Venture Agreement. It was accepted that the Council's supposed obligation to pay £1 m. to the Bank for overrun costs flowed from that 1991 Agreement, if the money was due at all. The defenders' counsel argued that the reference to a "secret agreement" should be regarded as a fair and accurate report of what took place at the relevant meeting of the Monklands District Council and thus was entitled to the benefit of qualified privilege. In any event this was an example of fair comment and thus was not defamatory. It was to be regarded as a comment on the pursuer's political capacity rather than a comment on his private character. Counsel for the defenders indicated that he was departing from any defence of veritas. Indeed he accepted that there was no evidence that, in relation to matters under consideration, the pursuer had personally entered into an agreement with the Bank of Nova Scotia committing the Council to pay overrun costs to the Bank, and that applied to any agreement relevant to that matter, secret or otherwise. Nor had the pursuer personally failed to inform his colleagues of any such agreement which he may have entered into. It was also accepted that the pursuer's appointment as a director of Quantum occurred after the Joint Venture Agreement had been signed.
Counsel gave us a review of the law the Lord Ordinary had analysed. We were referred to the Defamation Act 1952 and to paragraph 10 of Schedule 2 of that Act. It was accepted that the defenders would only be entitled to enjoy qualified privilege in respect of their articles if the reports they had published of the Council meeting were fair and accurate. We were referred to Duncan v. Associated Scottish Newspapers Limited 1929 S.C. 14 where the innuendo claimed by the pursuer was not established. The case deals with a report of a result of a litigation and the facts, in our view, bear no comparison to those in the present action. The defenders' counsel referred us also to Mutch v. Robertson 1981 S.L.T. 217 as vouching that in deciding whether criticism of a person holding public office was capable of bearing a defamatory meaning the test to be applied was whether the ordinary man could reasonably infer from the criticism that the office holder was dishonest, or was guilty of dishonourable behaviour, or if his public conduct was combined with the suggestion of base or indirect motives. In Langlands v. John Leng & Company 1916 S.C. (H.L.) 102 the court observed that whether or not a particular statement bears a defamatory innuendo is a question of law pure and simple for the court to decide. The case concerned observations made by an architect and the court decided that these had referred to a criticism of the system under which the architect was employed and not to the architect individually. In McLaughlan v. Orr Pollock & Company (1894) 22 R. 38 Lord Maclaren's often quoted dicta at page 42 were cited to us. We shall quote what Lord Maclaren stated since the Lord Ordinary refers to it and places weight on it.
"It is hardly necessary to point out that the constitution of this country tolerates the utmost freedom in the discussion of the conduct and motives of those who take part in public business, whether in the higher plain of statesmanship or in the conduct of local affairs. In such criticism, ridicule is just as legitimate as any other rhetorical artifice. If, as the Lord Ordinary observes, this should take the form of rough language and unmannerly jests, the person aggrieved must put up with it, and, I may add, it is open to him to defend himself in the same way, and if he has been unfairly treated he will generally get the better of his antagonist. It is only when private character is attacked or when the criticism of public conduct is combined with a suggestion of base or indirect motives that redress can be claimed on the ground of injury to reputation. The claim in such cases may either take the form of an issue of damages found on specific misrepresentation, as if a Member of Parliament should be accused of bribery, or a member of a local board of corruptly influencing the disposal of public contracts, or where no specific charge is being made the pursuer may be entitled to an issue of holding up to public hatred, ridicule, and contempt. But I venture to think that an issue in the last-mentioned form ought not to be granted except where the libel imputes a moral depravity of some kind, or is capable of being read as containing such an imputation, it being for the jury to say whether the purpose of the libel was to exhibit the pursuer as having laid himself open not merely to ridicule but to the odium of his associates and fellow citizens".
Lord Maclaren's observations followed upon Archer v. Ritchie (1891) 18 R. 719, where Lord Maclaren observed:
"Now the expression of an opinion as to a stated fact truly set forth is not actionable even when the opinion is couched in vituperative or contumelious language".
Defenders' counsel contended that in the present case any innuendo derived from the allegation that the pursuer had entered into a "secret agreement" was a reflection on the exercise of his public function and not on his private character. Founding on Mutch, Archer and McLaughlan the words could not be treated as defamatory. They represented the rough language often encountered in the political arena.
In relation to the second principal branch of the pursuer's case the defenders accepted that the reference to "malicious misuse of public money" could contain a defamatory meaning. In particular it could suggest that the pursuer had used public money to further his own private ends. Indeed it was now accepted that the facts of the matter did not justify that particular innuendo. However, given that Councillor Brooks had been a party to the proposed action against the Advertiser which gave rise to the Council's expenditure on legal expenses, it was reasonable for Mr. Lind to assume that the money expended on legal expenses was for the pursuer's private benefit. Accordingly, it was suggested, the criticism voiced was fair comment on a public matter and had been accurately reported. Thus, although the use of the phrase "malicious misuse of public money" had a defamatory connotation the second and third defenders, like the first defender, were protected against an action for defamation by the principle of fair comment.
In considering the second defender's article in the Advertiser on 2 April 1993 our view is that this article cannot be read as having a meaning such as might be apparent to those having detailed knowledge and experience of the mysteries surrounding the recent history of Monklands District Council. The second defender herself, by virtue of her work, will have been steeped in these details. However, the Advertiser is a local newspaper with an apparently wide circulation in the Coatbridge and Airdrie area. What is significant is the meaning which the second defender's article would convey to an ordinary, reasonable reader of the newspaper. According to the article on a plain reading of it, it is the legal commitment to repay £1 m. to the Bank which caused fury in the Council when it was "revealed". Indeed this commitment is described as a "shock revelation". The article goes on to claim that the rebel group of four councillors claimed that the "secret agreement" with the Bank of Nova Scotia was made by the Council Labour leader James Brooks (the pursuer). Moreover the article goes on to state specifically that other councillors are said to have known nothing about it until "last week". Following upon reference to the shock revelation of a commitment to the Nova Scotia Bank in our view the average reader would conclude from the article that the shock commitment arose from an agreement entered into by the pursuer personally with the Bank and kept from other councillors by the pursuer personally. The implication is not merely that some other councillors did not know about the agreement but that "the other councillors" were ignorant of it. The view about an agreement which readers would have supposed would be emphasised by the reporter's report of Councillor Logue's statement that "One member can commit the Council to £1 m". The allegation that the pursuer, in secret, committed the Council to an agreement to pay the Bank a major sum of money has obviously caused the pursuer distress and it is claimed by him that it was primarily to clear his name of what is alleged that he has pursued the present action. Indeed in his evidence he narrated that he had personally approached a considerable number of his constituents and many of them had formed an adverse view of his conduct from the articles we are considering. In the circumstances, however, we consider that it is important to emphasise that any suggestion that the pursuer himself brought about a secret agreement, which committed the Council eventually to the payment of a large sum of money, is certainly not supported by any of the evidence in the present case, in spite an extensive investigation in the evidence of the history of the matter. Indeed, proceeding beyond that, defenders' counsel accepted that the allegation about a secret agreement was totally unfounded. The Council were advised by their legal advisers that they had a liability to contribute equally with the Bank of Nova Scotia for any overrun costs incurred in respect of the Quadrant project. The £1 m. was the quantification of the Council's share of the costs and the Council at their meeting of 25 March 1993 accepted that they were legally obliged to pay that amount to the Bank. The Lord Ordinary concluded that the legal advice the Council had received in that respect was bad advice, but we need not explore that issue for the reader of the article will be left with the impression (which in fact corresponds with the belief of the Council at the time) that the Council were under a contractual commitment to pay the amount claimed. Now, if that amount had in fact been legally due, it could only have been due because of the Joint Venture Agreement entered into by the Council itself (through associated companies) with the Bank on 15 May 1991. Thus the only agreement which could have given rise to the Bank's claim in 1993, if that claim were a well-founded one, was the 1991 Joint Venture Agreement. There was no evidence that the pursuer had negotiated that agreement. Indeed such evidence as there was on the matter suggests that the bulk of the negotiations were done through senior Council officials as would be expected. Indeed, it may or may not be the case that certain councillors had little experience of this type of agreement, but generally it would not be surprising that the agreement made some provision for what should happen if the budget for the project which was agreed proved inadequate. The agreement was approved by the Council at a meeting of the full District Council on 9 May 1991. They must have known the general nature of the agreement. The Lord Ordinary was not satisfied that they had all been sufficiently informed of the detailed terms and in particular of the provisions about sharing overrun costs. The Lord Ordinary held that Councillors Logue and Morgan were not informed at the meeting of any liability for an overrun in costs. There was some evidence that the matter of the overrun costs was explained to councillors but, at best for the pursuer, there is a lack of clarity about that. Thus it may well be that at the meeting in May 1991 the arrangements for acquainting the Council with the whole terms of the agreement were unsatisfactory. This may not in itself have been sinister. We are dealing with what for Monklands District Council was a major undertaking and no doubt all concerned were aware of the need for commercial confidentiality. That factor may have inhibited the circulation of copies of the agreement. As the Lord Ordinary indicates the precise procedures at the meeting were not fully developed in the evidence. What, however, is a critical fact is that there was no evidence to suggest that any deficiency in the information released at the meeting had anything at all to do with the pursuer. As we have mentioned the Lord Provost chaired the meeting. Nor can it be said that the pursuer "made the agreement". The Joint Venture Agreement was signed by a number of parties for the interest of Monklands District Council, including the Provost.
The Lord Ordinary concluded that the Joint Venture Agreement could be described as a "secret agreement" because when it was entered into it was not fully explained to the councillors. However, the allegation against the pursuer in the articles he objects to is not that there was "a secret agreement" but that he was the person who had made that "secret agreement". The Lord Ordinary indicates that councillors may have supposed that the pursuer was responsible for the agreement because he had been the Council's representative on the Quadrant company. However, the Quadrant company did not come into being until after the Joint Venture Agreement was signed. By the time the pursuer was appointed to the Board the agreement had been entered into and any arrangement for sharing overrun costs was already in place and binding. Councillor Logue had been at the meeting on 9 March 1991. He must therefore have known that it was on that occasion that the Joint Venture Agreement was approved by the Council. If any of the problems at the meeting of 9 March 1991 can be attributed exclusively to the pursuer (or indeed attributed at all to the pursuer) Mr. Logue did not mention this when he gave his evidence.
The other allegation made against the pursuer, which he is still claiming as being defamatory, was that originally in the first defender's letter there was a reference to the "malicious misuse of public money". The first defender may have had sincere cause to believe that the pursuer had personally raised an action against the Advertiser and then, when the action was abandoned, used public money to pay the expenses. However, it is now accepted that the pursuer was prosecuting an action not for his own benefit but as a nominee for the Council because the Council had been advised that they could not pursue the action in their own name. The motive of the proposed litigation was to stop the Advertiser making allegations which the Council supposed were totally unjustified, but damaging nevertheless.
In dealing with the matter of the newspaper comments relating to a "secret agreement" the Lord Ordinary holds that the account in the newspaper was not defamatory, and further that if the article was prima facie defamatory it represents a fair and accurate report of the relevant Council meeting. It therefore attracted qualified privilege under the Defamation Act 1952. We have to part company with the Lord Ordinary in regard to these approaches.
In the first place we do not consider that the defenders' articles fairly and accurately reported what had occurred at the Council meeting of 25 March 1993. We do not, of course, quarrel with the Lord Ordinary's assessment of the credibility and reliability of witnesses, but we cannot agree that the evidence before him, even allowing for his evaluation of it, can justify his conclusions. The relevant proceedings at the Council meeting were taped and then transcribed by Miss Napier, who herself gave evidence. She deponed that she had difficulty with parts of the transcript and had marked the parts which defeated her by question marks. The defenders' counsel did not claim that the transcript did not give a generally accurate account of the proceedings at the meeting. Indeed, he appeared to accept that the transcript gave a fair version of what had actually happened at the meeting. The indecipherable sections are marked as we have mentioned and the general context of these passages is clear. As Miss Napier stated (volume 5 page 620) she used question marks to connote uncertainty.
In the article of 2 April 1993 the passages which are particularly relevant to a "secret agreement" are firstly "the rebels claim the 'secret agreement' was made by Council leader Jim Brooks and that other councillors knew nothing about it until last week". This passage unambiguously suggests that Mr. Brooks himself had made a secret agreement with the Bank of Nova Scotia and that other councillors knew nothing about it. Moreover, in the context of the article it was this "secret agreement" made by Mr. Brooks which had given rise to the claim for £1 m. the revelation of which liability, according to the report, generated such fury. It has to be noted that the particular reference to "secret agreement" is not attributed to any specific statement by Councillor Logue but rather to claims made by Councillors Logue, Brady, Sullivan and Morgan. Any reader of the article would assume that at the meeting all four rebels made or associated themselves with comment about the secret agreement and with the fact that the agreement had been made and kept secret by the pursuer. The only specific comment at the Council meeting made by Councillor Logue, and possibly referable to the fact that the pursuer had made a "secret agreement", is what is stated later in the article where it is set out that Councillor Logue claimed none of his Labour colleagues had seen the agreement in question. "Once you set up trusts you lose control" he said. "You lose democracy at local government level and you have the situation where one member can commit this Council to £1 m". It has to be noted that in the passage in question Councillor Logue never mentioned the pursuer by name and it may be that in this he was showing a reasonable degree of fairness and prudence. Indeed in the transcript of the Council meeting neither Councillor Logue nor any of his alleged associated councillors ever once mentioned the pursuer by name. Councillor Logue claims in his evidence that certain passages in fact were intended to refer to the pursuer. The complaints he was making were rather confused as to their intended meaning. Councillor Logue seems to be blaming the pursuer for not reporting the development of the cost overrun more promptly to the Council. As a result, according to Councillor Logue the Council had prepared a budget which they could not comfortably cope with once an unexpected liability for £1 m. had arisen. At points in his statement, as disclosed by the transcript, Councillor Logue seems to suggest that given the Council's budgetary requirements they should simply refuse to pay anything to the Bank. Indeed this result would have been the effect of the amendment he was proposing, had it not been defeated. Of course there is evidence that after the question of a cost overrun developed the pursuer stood back from the Quadrant company, but this may not at the time have been realised by Councillor Logue so that, if the councillor was making a statement that the pursuer should have informed the Council sooner that an overrun in costs had occurred, we doubt if that matter alone could have been regarded as defamatory. Looking to the whole terms of what Councillor Logue is reported to have said, as shown in the transcript, it would have been surprising if he intended to suggest that the pursuer had been solely responsible for the execution of the Joint Venture Agreement. His complaint against Councillor Brooks seems rather to be that he allowed the overrun costs to develop without involving the Council. If this is so it is very different from suggesting that Councillor Brooks was responsible for the very agreement which had given rise to the Council's commitment to the Bank, or indeed that Councillor Brooks had been responsible for any suppression of the details of the agreement originally put before the Council in 1991. The Lord Ordinary suggests that blame for the Joint Venture Agreement may have been heaped upon the pursuer because he was the Council's sole representative on the Board of Quadrant. However, the plain reading of the articles in the Advertiser is not to suggest that the pursuer failed to carry out his functions as the Council representative on Quadrant, but rather that he himself had made the operative agreement and then kept it secret.
It requires to be pointed out that the first article in the Advertiser asserts that all four rebel councillors claimed that the pursuer had entered into a secret agreement. In fact, scrutiny of the transcript does not refer to any of the councillors (other than Councillor Logue) referring to the pursuer directly or indirectly. In their reported contributions they suggest nothing remotely resembling the complaint about Councillor Brooks' conduct which is attributed to them. At the end of his substantial contribution Councillor Morgan says he supports the points made by Councillor Logue, but Councillor Morgan spoke before Councillor Logue had made any remark which could even indirectly be regarded as an allegation that the pursuer had entered into a secret agreement.
The Lord Ordinary, of course, suggests that the accuracy of the newspaper reports was confirmed by the evidence of the second defender and of Councillor Logue. In her evidence Miss McAuley said that it was her understanding that the pursuer had been involved in the negotiations which led to the £1 m. liability. This is not vouched by the evidence but may suggest some colouring of the reporter's view of matters, particularly as she repeated her opinion of the situation in the face of a number of indications from the pursuer's counsel that it was not factually true. Indeed Miss McAuley appeared to have little knowledge of the circumstances which led to the execution of the Joint Venture Agreement. She also explained what she meant by the phrase "secret agreement" as follows (volume 5/693):
"I think if memory serves the quotation marks around 'secret agreement' were more to denote a special use of the word 'secret' rather than directly attributing it".
One problem in this case is that, reading the transcript of the meeting of 25 March 1993, the feature of the situation which seemed most to have troubled certain members was the fact that they had not been made aware of the whole terms of the original joint agreement nor kept aware of developments after the agreement had been entered into. In relation to the original failure to disclose details before the Joint Venture Agreement was approved there was certainly no material in the transcript to the specific effect that the pursuer was solely responsible or indeed responsible at all for entering into the Joint Venture Agreement or for keeping the councillors short of detail before it was entered into. A full scrutiny of what Councillor Logue said in evidence reinforces this view. Councillor Logue accepts that although there are gaps in the transcript "it is fairly representative of what took place" (volume 6/793). He is asked if the phrase "secret agreement" is an accurate reflection of the stature of the agreement he was referring to in his speech (volume 6/794). His reply was "Inaccurate in respect - secret in respect of the members were not aware of this at all". The point is that Councillor Logue was being asked about the fact that the agreement was being kept secret. He was not asked about the accuracy of any suggestion that the pursuer had alone entered into an agreement with the Bank and that the pursuer himself had kept this matter secret. It would have been surprising if Councillor Logue and other councillors had described the Joint Venture Agreement exclusively to the pursuer. Moreover, the responsibility for any inadequacy in information may be complicated. Thus Councillor Morgan in his evidence stated that it was the director of planning who explained the proposed Joint Venture Agreement to the full Council in 1991. Councillor Morgan also stated that it was not usual for councillors to have copies of all agreements since this would render Council business impracticable. Moreover, he said that the procedure was for any detailed questioning to be made at the Policy and Resources Committee rather than at the eventual full Council meeting. In his evidence Councillor Logue was asked how the £1 m. claim had come to be a legal liability and he replied (volume 6/817) "Based on a legal agreement which had been signed in 1991". There is thus no doubt that he was well aware that the source of the Bank's claim was the 1991 agreement. At volume 6/814 Councillor Logue said:
"I don't think the agreement was secret. I mean what others no doubt said about that, the decisions that were taken by the Joint Venture Trust were secret because they were never related to the Council and at no stage were they ever related to the Council, the operations of the Joint Venture Trust were secretive".
At other points in his evidence Councillor Logue made it clear that one of his serious complaints was that Mr. Brooks and the Council planning officer Mr. Cooper were the Council's sole representatives on the Quadrant company and that it was from them that the request for £1 m. had come. Indeed at one point Councillor Logue seemed to suggest in his evidence that Councillor Brooks and Mr. Cooper had entered into some kind of agreement (although this is not specified). However, Councillor Logue must have known full well, as was obvious, that no agreement as to the details of the proposed arrangements for dealing with the overrun costs had been made, for approval of such arrangements was the very matter which was before the Council. Furthermore, although Councillor Logue and some other councillors advanced arguments for not approving what were only proposals, this opposition was defeated. When Councillor Morgan gave evidence he accepted that there were complaints about the secrecy of the original agreement. However, he at no stage said that the 1991 Agreement had been entered into by the pursuer without telling his colleagues about it. Indeed in a rather cryptic passage of his evidence he said "The rebels claimed the secret agreement there does not seem to be attributed to anyone" (volume 6/841).
In the whole circumstances we are unable to agree with the Lord Ordinary that the report in the Advertiser dated 2 April 1993 was a fair and accurate report of what took place at the Council meeting. Looking to the material to be found in the transcript of the meeting, to the explanations given by Councillor Logue and Morgan in their evidence, to the apparent lack of any reference by the other alleged rebel councillors to the pursuer, or any agreement entered into by him personally, and to the whole background circumstances surrounding the Council meeting, it would not have been fair nor accurate to report that a furious row erupted at the Council after four rebel councillors had claimed that the liability for £1 m. arose from a secret agreement entered into by the pursuer. There may have been comment at the Council meeting that Councillor Brooks should have reported more regularly to the Council keeping them informed of the emergence of concrete liabilities flowing from the Joint Venture Agreement. However, such claims were of a totally different quality from what was contained in the reports and indeed the pursuer may well have had an answer to them. In summation our view is that the article in the Advertiser by the second defender contained an unjustifiable gloss on what councillors were complaining about and that this would have had a hurtful and damaging effect on the pursuer.
The issue which therefore arises is whether the reference to "secret agreement" entered into by the pursuer was defamatory. In this matter we have again reached a different view from the Lord Ordinary. In our opinion a reasonable reader of the newspaper report of 2 April 1993 is likely to have concluded that all the so-called rebel councillors were accusing the pursuer, on his own of having entered into an agreement which formed the basis for the claim for £1 m. which the Council were then facing. Thus it is not the absence of adequate information about the Joint Venture Agreement which is harmful to the pursuer but the specific statement that he had both made the agreement and kept it secret. We cannot accept the gloss on the phrase "secret agreement" which the second defender puts on it. The phrase in our view implies that there was an agreement which the pursuer deliberately kept from the knowledge of other councillors. We do not see the reference to having entered into a secret agreement as falling within the broad tolerance which the authorities show is allowed to political exchanges. Nor do we agree that the reference does not reflect adversely on the pursuer's private character. For a person in the position of the pursuer as leader of the prominent political group in the Council, to make a significant agreement which could involve the Council in substantial debt and then deliberately to keep knowledge of it from his fellow councillors in our view clearly implies deception. The pursuer would not have been reasonably open and honest with his fellow councillors but would have deliberately deceived them on an important matter. Nor are we dealing with a deception, such as a lie, which might have arisen in the heat of political debate. The conduct attributed to the pursuer could only have been deliberative conduct and protracted over a period of time.
The second alleged defamation arises from the article in the Advertiser of 9 April 1993 where conduct of the pursuer was said to involve "a malicious use of public money". The article attributes use of this phrase to the first defender in a letter he had written to the Controller of Audit. The Lord Ordinary is prepared to find that the phrase complained of could be defamatory. However, he held that the phrase does not give right to an actionable wrong because it was fair comment on a matter of public interest. He had reservations as to whether the phrase complained of attracted qualified privilege as a report. We share these reservations but the defenders did not advance a statutory qualified privilege in relation to this particular matter. Mr. Lind had an obvious public interest to explore a possible misuse of public funds. The factual background was, as we have indicated, that the pursuer and Mr. Gilson had each initiated litigation against the Advertiser and that such litigation had been abandoned after senior counsel had rendered certain advice. It seems that the District Council were meeting the expenses of this litigation. The litigations against the Advertiser on the face of it was for the private benefit of those pursuing it. The first defender therefore cannot be criticised for forming the view that there had been a deliberate misuse of public funds. As a matter of fact his concerns were misconceived and without foundation but he had some justification for pursuing the course he did. We would therefore agree with the Lord Ordinary that Mr. Lind's letter was not defamatory because it represented fair comment on a matter of public interest. It was not suggested that the Advertiser had not fairly and accurately reported the contents of Mr. Lind's letter with reference to the matter of malicious misuse of money. The pursuer did not challenge the Lord Ordinary's apparent view that the report of what was fair comment would itself attract the protection given to fair comment so that we need not consider any question which may arise in that regard.
The overall position is accordingly that we shall recall the Lord Ordinary's interlocutor. We shall sustain the pursuer's first plea in law so far as it relates to the second conclusion and his second plea in law to the extent of finding the defenders jointly and severally liable to the pursuer for the agreed damages of £2,500 relating to that conclusion with interest. Quoad ultra we shall sustain the fourth plea in law for the defenders.
We were asked to deal also at this stage with the matter of expenses but we consider that the preferred course is for this question to be raised before us.