Judgments - Berezovsky v. Michaels and Others Glouchkov v. Michaels and Others (Consolidated Appeals)

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    I would hold therefore that the Court of Appeal did not have a sound basis for interfering with the judge's assessment of the weight which was to be attached to the evidence about the plaintiffs' connections with this country.

The relevant authorities

    The judge dealt in his first judgment with each of the cases which, in the Court of Appeal's view, provided the appropriate guidance as to the approach which he should adopt. The criticism which the Court of Appeal have made of his decision is directed to the fact that, in his second judgment which he delivered later the same day, he made no mention of these cases apart from the Spiliada case. From this it was concluded that, in Hirst L.J.'s words, the judge "unfortunately erred in principle in failing to take account of them in his second judgment, thus entitling us to exercise our discretion afresh."

    It seems to me, with respect, that this is based on a misunderstanding of the approach which the judge took to the authorities. What Popplewell J. said at the outset of his second judgment was:

    "As to the law on the subject, the principles are not in dispute. Like all these principles their application is not always very easy. Counsel have been very helpful in bringing to my attention a large number of cases which are illustrations of the court's approach. If I do not refer to all of them but refer to the principle, it is not out of discourtesy but because each case depends on its own particular facts, and one element in a particular case which is absent from another case may in fact be the factor which persuaded the judge to decide the case one way rather than the other."

He then referred to the Spiliada case, from which he quoted the relevant passages that are to be found in Lord Goff's judgment. In the light of these opening remarks I do not think that it can be assumed that the judge overlooked any of the authorities to which he had just made reference when he was delivering his first judgment. On the contrary, what he appears to have done was to conclude from them that, as each case turns on its own facts, the important thing for him to do was to identify the principles which had been described by Lord Goff and to apply those principles to the evidence. It can be assumed that in adopting this approach he had in mind the advice which Lord Templeman gave in Spiliada Maritime Corporation v. Cansulex [1987] A.C. 460, 465 that the judge should be allowed to study the evidence and that he should not be referred to decisions on other facts.

    But there is a more substantial point which underlies this criticism. This is the Court of Appeal's view that the appropriate guidance for a decision in this case was to be found in Distillers Co. (Biochemicals) Ltd v. Thompson [1971] A.C. 458, in The Albaforth [1984] 2 Lloyd's Rep. 91 and especially in Schapira v. Ahronson [1999] E.M.L.R. 735 in which the doctrine to be found in the Distillers and Albaforth cases was applied to a defamation case. It is therefore necessary to examine the doctrine which was explained in these cases and to consider, having regard to its bearing on the issues which are in dispute in this case, whether the judge is open to the criticism that he failed to follow the guidance which is to be found in that doctrine.

    The Distillers case concerned a challenge on the ground of forum non conveniens to a writ issued in New South Wales by a victim of thalidomide whose mother was in that jurisdiction when the damage occurred. The Albaforth was about a claim in tort for a negligent mis-statement in a telex which had been despatched from New York to London. In the Albaforth [1984] 2 Lloyd's Rep. 91, 94, Ackner L.J. quoted from Lord Pearson's speech in the Distillers case [1971] A.C. 458, 468, where he said that the right approach when the tort was complete was to look back over the series of events constituting it and to ask where in substance did the cause of action arise, and said:

    "These quotations make it clear that the jurisdiction in which a tort has been committed is prima facie the natural forum for the determination of the dispute."

In the Shapira case the two articles which were complained of had been published in an Israeli newspaper circulating mainly in Israel, but a few copies had been circulated in England where the plaintiff was resident and carried on business. The principles that the tort of libel was committed wherever the defamatory material was published and that prima facie the place of publication was the natural forum for the determination of the dispute were applied. The Court of Appeal held that England was the appropriate forum for the actions as the English resident had limited his claim to the effects of its publication in England, even though the circulation was extremely limited there and there was a much larger publication elsewhere.

    Hirst L.J. said that he was satisfied that the appropriate guidance to be applied to a case where there is a substantial complaint about an English tort is that which is to be found in the Distillers and the Albaforth cases. He rejected the argument that they were of no assistance in a case of defamation where publication had occurred in several jurisdictions as they involved different torts which by their nature were confined to a single jurisdiction, since the hypothesis was that a substantial tort had been committed within the jurisdiction. I agree with my noble and learned friend Lord Steyn, for the reasons which he has explained, that Hirst L.J. was right to rely on the Albaforth line of authority. Like him, I would reject the argument which counsel for the appellants advanced that the application of the Spiliada test did not admit of the application in this case of the principle that the jurisdiction in which the tort is committed is prima facie the natural forum for the dispute.

    But it is not enough for the resolution of the question whether the Court of Appeal were entitled to interfere with the exercise by Popplewell J. of his discretion to say that Hirst L.J. was right on this point. The central and underlying question, as I have said, is whether he was well founded when he said that Popplewell J. erred in principle in failing to take this line of authority into account. I have already given my reasons for doubting the soundness of this proposition in the light of the words which I have already quoted with which Popplewell J. began his second judgment. As for the question of principle, I would regard the following passage which is taken from his concluding paragraph as directly relevant:

    "I come back to look at the matter as a whole. I do not have to decide whether Russia or America is more appropriate inter se. I merely have to decide whether there is some other forum where substantial justice can be done. This case, to my mind, has almost no connection at all with this country. The fact that the plaintiffs want to bring their action here is, I suppose, a matter that I should properly take into account. If a plaintiff is libelled in this country, prima facie he should be allowed to bring his claim here where the publication is. But that is subject to the various matters to which I have already made reference . . . " (Emphasis added)

    My Lords, I am quite unable to understand how it can be said that Popplewell J. erred in principle when he set out with complete accuracy in his judgment the very principle which he is said to have failed to take into account. If the suggestion is that the principle must prevail over the application of the further principles identified by Lord Goff of Chieveley in the Spiliada case, I would reject it. But I do not understand this to be the position which Hirst L.J. wished to adopt. On the contrary, he introduced his discussion of the authorities by stating that the Spiliada principles are so well known as to require only the briefest reminder and that they are very deeply rooted in our jurisprudence. If the suggestion is that the judge failed to apply the principles correctly to the facts, I would respond by saying, first, that this not what Hirst L.J. said in the relevant part of his judgment and, secondly, that questions as to the weight to be attached to the various matters to which the judge made reference were for him to decide and with which - unless an error of principle was demonstrated - the Court of Appeal was not entitled to interfere.

    I should like to add these comments. The principle which Ackner L.J. articulated in The Albaforth [1984] 2 Lloyd's Rep. 91, 94 provides the starting point, but no more than the starting point, for a correct application of the Spiliada principles to the question whether the case is a proper one for service out of the jurisdiction under Ord. 11, r. 4(2). In a defamation case the judge is not required to disregard evidence that publication has taken place elsewhere as well as in England. On the contrary, this feature of the case, if present, will always be a relevant factor. The weight to be given to it will vary from case to case, having regard to the plaintiff's connection with this country in which he wishes to raise his action. The rule which applies to these cases is that the plaintiff must limit his claim to the effects of the publication in England: Diamond v. Sutton (1866) L.R. 1 Ex.130; Shapira v. Ahronson [1999] E.M.L.R. 735; see also Eyre v. Nationwide News Proprietary Ltd. [1967] N.Z.L.R. 851. Common sense suggests that the more tenuous the connection with this country the harder it will be for the claim to survive the application of this rule.

    One of the features of this case which I find most troublesome on the facts is the plaintiffs' apparent lack of attention to detail as to the application to it of this rule. When challenged as to the relevance of a reference to the fact that Lockheed, a U.S. Corporation, had pulled out of a prospective deal with a Russian company with which Mr. Berezovsky was associated because of the Forbes article, counsel for the plaintiffs readily conceded that it would be an abuse for the plaintiffs to sue on matters which had occurred elsewhere and on the effects of any extra-territorial publication of the article. But many of the transactions referred to in the affidavits appear to be of this character. How is one to tell, in a case where the connections with England are so heavily dependent on the plaintiffs' reputation in the minds of those representing foreign banks and institutions in their dealings with the Russian companies, that the loss of reputation in this country of which they complain is due to the effects of publication here as compared with the effects of the publication of the magazine in the countries where these banks and institutions have their principal offices? How is one, in such a case, to separate out the plaintiffs' international reputation and the effects of the article on the transacting of business by the Russian companies internationally from the effects of the article on such reputation, if any, as they can claim to have in England? It would be a matter for regret if orders for service on publishers out of the jurisdiction were to be regarded as available on demand to those who have established international reputations by things said or done elsewhere, who have formed no long-standing or durable connections with this country by residence or by locating any of their businesses here and who are unable to demonstrate that the publication has had a material effect upon business or other transactions by them located only in this country. The interests of all the parties and the ends of justice would suggest that the case should be tried elsewhere.


    I consider that the judge was entitled to conclude, on the evidence before him and upon a correct application of the principles described in the Spiliada case, that the plaintiffs had not been able to show that England was the most appropriate forum to try their actions. I do not think that the further evidence which was before the Court of Appeal justified a departure from the decision which he reached, and I also think that the Court of Appeal were in error when they said that the judge had erred in principle. I would allow the appeal and restore the orders which were made by Popplewell J.


My Lords,

    I agree that this appeal should be dismissed for the reasons given by my noble and learned friend Lord Steyn.


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