09 August 2016
Court Awards Damages Against Sunday World
Tuesday 9 August 2016
Summary of Judgment
Mr Justice Stephens, sitting today in the High Court in Belfast, awarded compensation of £50,000 to Robert Coulter, one of the former owners of the Kilmorey Arms Hotel in Kilkeel, for defamatory comments made in an article published in the Sunday World.
On Sunday 21 December 2014, the newspaper published an article entitled “Wage-ing War: Sacked staff left with no pay just before Christmas”. The article, by journalist Roisin Gorman, stated that “Kilkeel Hotel owner Gordon Coulter has been branded a Scrooge for putting his staff on the street a week before Christmas”. It claimed that former workers at the Kilmorey Arms Hotel were “called by a receptionist to say the hotel had gone into administration” but “no one could tell whether they would get wages for the previous four weeks” which should have been paid and customers who paid in advance for Christmas meals had been “left high and dry too”. The article included a quote from a “distraught staff member” who was claimed to have said “Everyone in Kilkeel is angry, calling him a Scrooge and the name does fit perfectly”.
Mr Coulter (“the plaintiff”) brought an action against the newspaper claiming that the article was defamatory in that in their natural and ordinary meaning the words used meant that he was a mean scrooge-like figure; that he was callous and indifferent to the people employed in the hotel; that he was greedy; that he was mercenary; that he callously discharged staff leaving them without pay just before Christmas; that he wantonly caused financial difficulties for the staff; and that he caused anxiety and worry to the staff by unreasonably refusing to give them information. Sunday Newspapers Limited (“the defendant”) denied that the words were defamatory and in the alternative alleged that the words bore a lesser meaning that “there were grounds to investigate or reason to believe that the plaintiff lacked “Christmas spirit” or displayed a certain meanness of spirit, having regard to the time of year and inability to properly communicate with staff about their loss of wages and the closure of the hotel”.
Mr Justice Stephens said that the court, in such cases, is required to determine the single meaning of the article and the impression it would have had on the hypothetical ordinary reasonable reader but not to subject it to over-elaborate analysis. The judge commented that his overall impression was that a reader would have understood the article to mean that the plaintiff was a mean Scrooge like figure and that he acted callously towards his staff without regard to their interests. He rejected the contention that the meaning of the article was not defamatory as he considered they substantially affected in an adverse manner the attitude of other people towards the plaintiff and fell within all the other definitions of the word defamatory.
In 2000, the plaintiff together with a number of others, acquired all the issued share capital in Kilmorey Arms (Kilkeel) Limited which owned and operated the hotel. A reason, if not the main reason, for purchasing the hotel was to benefit the local community, as it was considered that the loss of a local hotel would be detrimental to the future economic growth of the town. All the shareholders agreed that they would not take any financial gain out of the company and they would all pay for any food or drink which they consumed at the hotel. Mr Justice Stephens said he considered this a reflection of the fact that the main reason why they purchased the hotel in the first place was out of a sense of community spirit, rather than for financial gain.
The plaintiff and the other shareholders carried out a £2m expansion of the hotel in 2005-2008 by obtaining 40% grant aid with the remaining being financed either by the shareholders or with a bank loan. In 2009, the company was hit by the recession and by 2013 substantial losses were being incurred. From September 2014 to Summer 2014 attempts were made to obtain an investor. Further works totalling £400,000 were carried out in order to attract business but it became apparent that many suppliers had not been paid for many months and some refused to supply until the old debt was paid off. By September 2014, the company was losing substantial money every per week. A new hotel manager was appointed who made changes which reduced the weekly losses to approximately £5,000 - £7,000 per week.
The turning point in the financial viability of the company came on 6-7 December 2014 when a number of suppliers refused to provide any produce and staff had to go to a local supermarket to get food for a dinner, and the carvery was unable to open on 7 December as there was no meat, fish or other food available. Staff were paid on 9 December. On the following day, the shareholders met representatives of Cavanagh Kelly, accountants who have a business recovery and insolvency team, and a decision was reached that the directors and shareholders could no longer pursue the option of trading through the Christmas period and seeking a buyer of the hotel as a going concern, but had no option but to put the company into administration with the hope that the administrator would either keep the hotel running and quickly find a buyer after a few weeks. The plaintiff and the directors were told that once the administrator was appointed they could no longer “take anything to do with the hotel” and had to hand over all papers and keys – if they did not they could be found guilty of criminal offences. The staff were not told of the decision to put the company into administration which the judge considered was for the valid reason that if they were told then the prospects of a successful administration would have been greatly reduced. The manager was, however, told and subsequently called the staff to a meeting to inform them that the hotel was in administration. The administrator was appointed on 16 December and a notice was placed on the hotel door to that effect. On 17 December the administrator held a staff meeting and explained that all options were being considered.
On 17 December, an employee of the company phoned Roisin Gorman. He said he wished to remain anonymous but made a number of allegations including:
- That the owners knew what was going to happen and did not pay staff;
- He was informed of the closure of the hotel by a phone call from the receptionist on the evening of 16 December;
- He called to the plaintiff’s house but could not get in. When he was there, a cleaner was just leaving who was crying and said she could not get any answer;
- The plaintiff took as much money as he could at Christmas including payment for bookings in advance while not paying staff;
- The plaintiff does not care and all he cares about is money.
The journalist was not told by this member of staff about the meeting that had been held by the administrator on 17 December or the information that had been provided to staff by the manager, or that all the members of staff were fully aware and had been fully aware of the precarious position of their jobs for a considerable period of time.
Ms Gorman contacted Cavanagh Kelly on 17 December to investigate the allegations. She was referred to Maria McCann of their public relations company. Ms Gorman spoke to Ms McCann that day and followed this up with an email on 18 December. After speaking to Ms McCann on 17 December, Ms Gorman received another unsolicited phone call from a customer of the hotel who also wished to remain anonymous. The customer said he had paid £160 in advance for a Christmas dinner going on to say that “they had ripped people off” which was “basically theft”. He further said that the “owners are stonewalling”, the “owner is crooked” and “everyone is angry because they have ripped off the local people”.
Mr Justice Stephens said the facts show that this was a “completely unfair description”:
“The plaintiff and the other owners had invested heavily out of a strong sense of community maintaining jobs for as long as they could in Kilkeel without any financial reward over a 14 year period but rather risking and losing their own money. Ultimately they were presented with an impossible financial position and were driven to follow the inevitable by placing the company into administration. Far from ripping people off or treating them like dirt each of them had made a substantial financial and emotional contribution to the community over a substantial period of time.”
Maria McCann replied to Ms Gorman on 19 December with a prepared statement.
Evidence of Roisin Gorman
Ms Gorman said she did not make direct contact with the plaintiff because the statement included a quote from him which she assumed he had provided to Ms McCann. She did not go to Kilkeel or contact the manager or any other members of staff. The judge said that in her evidence to the court, Ms Gorman concentrated on the allegation contained in the article of a lack of communication but accepted that this did not mean that a person was financially mean or a financial miser. She accepted that the article was incorrect in stating that the members of staff had been sacked and that some of the words in the article did not appear in the notes of her conversation with her sources. The judge did not accept the accuracy of some of her evidence:
“Roisin Gorman recognised that she could have written an article about how angry the members of staff felt or that they lacked information and that they did not know that they were going to be paid without naming or blaming the plaintiff but she indicated that this would not have been newsworthy and would not have reflected the feeling in the community. The evidence of the feeling in the community upon which she was relying was the two anonymous sources. Roisin Gorman decided not to include in the article any reference to the considerable personal investment by the shareholder in the company which was referred to in the email from Maria McCann as if this was included then the comment on the story would be longer than the story.”
The Reynolds Defence
The defendant relied on the “Reynolds defence”, namely:
- The subject matter of the publication was of sufficient public interest;
- It was reasonable to include the particular material complained of; and
- The publisher had met the standards of responsible journalism.
Mr Justice Stephens considered the publication was of sufficient public interest given that it involved the running of a company which owned an hotel providing employment and a centre of community life in Kilkeel. He then looked at whether the publisher had met the standards of responsible journalism. The judge said that a responsible journalist should have anticipated that the allegation would cause a considerable degree of distress and harm to the plaintiff, damaging a reputation that had been built up over many years and that there was the potential for the public in the plaintiff’s community to be substantially misinformed. He said this view should have, but did not, inform the steps taken to verify the article. He did not accept that the sources were reliable or that a responsible journalist would have considered them to be reliable. He further considered that the steps to verify the information provided by the sources did not amount to responsible journalism given the seriousness of the allegations that were being made. The judge said that if Ms Gorman had contacted the cleaner it would have been apparent that there were serious credibility issues about the account given by the source or that if she had contacted the manager the record may have been set straight that there was no other option but administration. Further if she had said in her email to Maria McCann that the plaintiff was to be called a Scrooge or was to be criticised those specific allegations could have been put to him:
“I accept that news is a perishable commodity and that the article had more resonance before rather than after Christmas but I consider that accuracy and research were overborne by the imperative to publish. In this case that was another instance of a failure to meet the standards of responsible journalism. The article did publish the plaintiff’s statement but the central charge was that he was a Scrooge. It did not contain his side of the story that the business had struggled to remain profitable, that there had been an economic downturn and that there had been significant personal investment by the shareholders. The response to the most damming allegation was not included in the article. Again I do not consider that amounts to responsible journalism.”
Mr Justice Stephens concluded that the defendant had not established that it met the standard of responsible journalism. He said this failure also meant that he considered that the defendant had not established that it was reasonable to include the particular matter complained of in the article. He further considered that it would have been reasonable to write the article taking one of many other approaches that could have been taken. In conclusion, the judge rejected the defendant’s Reynolds defence.
Assessment of Damages
The role of the court in the assessment of damages in defamation proceedings is to arrive at a figure which is “necessary to compensate the plaintiff and re-establish his reputation”. Mr Justice Stephens summarised the main functions as being:
- To act as a consolation to the plaintiff for the distress he suffers from the publication of the statement;
- To repair loss to his reputation;
- As a vindication for his reputation.
Mr Justice Stephens considered that this was a serious libel in the context of the plaintiff’s community. It had a serious impact on his feelings not only due to the publication but also due to the defendant’s conduct pleading justification and the journalist not accepting, despite all the evidence, that the plaintiff had no other option but to put the company into administration or voluntary liquidation. The judge said there was no recognition by the defendant during the trial that information had in fact been provided to all the employees nor was there any acceptance that the two sources were incorrect in that the plaintiff was not a Scrooge but rather had made a substantial financial commitment losing money and not receiving any financial reward over a 14 year period: “There was no apology”.
Mr Justice Stephens awarded compensation to the plaintiff of £50,000.
NOTES TO EDITORS
This summary should be read together with the judgment and should not be read in isolation. Nothing said in this summary adds to or amends the judgment. The full judgment will be available on the Court Service website (www.courtsni.gov.uk).
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