1945 (3) TMI 13 - DSC - Companies Law

Summary

Issues Involved:
1. Defamatory nature of the statements.
2. Actionability of defamation against a company.
3. Admissibility of evidence in mitigation of damages.
4. Cross-examination rules in defamation cases.
5. Award of damages for breach of undertaking.

Issue-wise Detailed Analysis:

1. Defamatory Nature of the Statements:
The court found that the statements made by the defendant were clearly defamatory. The words used implied that the company and Mr. Jackson were operating the Bagatelle Restaurant in a questionable manner, suggesting violations of Rationing Orders under the Defence of the Realm Regulations and involvement in black market activities. The court concluded that "anybody with a modicum of common sense" would recognize the defamatory nature of the statements, making them actionable with regard to both Mr. Jackson and the company.

2. Actionability of Defamation Against a Company:
The court referenced the case of South Hetton Coal Co. v. North-Eastern News Association [1894] 1 QB 133, establishing that a limited company could sue for defamation if the defamation related to its business. The court noted that oral defamation is generally not actionable without proof of special damage, but an exception exists for defamation related to a person's business. Thus, it was concluded that a company could maintain an action for slander if it related to its business, without needing to prove special damage.

3. Admissibility of Evidence in Mitigation of Damages:
The court addressed the defendant's attempt to introduce evidence of the plaintiff company's and Mr. Jackson's previous convictions in mitigation of damages. The trial judge had stopped this cross-examination, and the court upheld this decision. The court cited established law, noting that while cross-examination to credit is permissible, evidence of specific instances of misconduct cannot be introduced to mitigate damages. The court referenced Scott v. Sampson [1882] 51 LJQB 380 and Hobbs v. Tinling & Co. [1929] 2 KB 1, which established that only general bad reputation evidence is admissible, not specific instances of misconduct.

4. Cross-examination Rules in Defamation Cases:
The court elaborated on the rules of cross-examination in defamation cases, affirming that a plaintiff can be cross-examined to credit, but the cross-examiner is bound by the plaintiff's answers and cannot introduce contradictory evidence. The court emphasized that the purpose of cross-examination in this context is to challenge the plaintiff's credibility, not to set up a justification for the defamatory statements.

5. Award of Damages for Breach of Undertaking:
The court found that the trial judge erred in awarding damages for breach of undertaking, as the action was not brought for breach of contract and there was no allegation of such in the writ or statement of claim. The court adjusted the damages awarded to the plaintiffs, substituting lb50 in each case for the previously awarded lb52 and lb54, respectively. The court noted that while the trial judge's decision to award a small sum was proper, it did not affect the merits of the appeal.

Conclusion:
The appeal was dismissed with costs, and the court affirmed the trial judge's decision, including the application of the correct legal principles regarding defamation, admissibility of evidence, and cross-examination rules. The court also made a minor adjustment to the awarded damages, ensuring they were consistent with the nature of the claims.