McCann v Scottish Media Newspapers Ltd

Factual and Procedural Background

The Plaintiff alleged that certain articles published contained defamatory imputations related to his conduct as chairman of Company A. The imputations included accusations of misleading behavior in relation to interim accounts, statements intended to mislead shareholders and investors about the financial performance of Company A, failure to present a true and fair view of the business, non-compliance with statutory and regulatory requirements, and making misleading statements to encourage share purchases contrary to relevant financial legislation. The Defendant denied these imputations, arguing that the words were not defamatory in their natural and ordinary meaning and did not bear the innuendo alleged by the Plaintiff. The case proceeded to consider whether the Plaintiff’s averments set out a relevant case of defamation warranting proof before answer.

Legal Issues Presented

1. Whether the words complained of in the articles were capable of bearing the defamatory meanings ascribed to them by the Plaintiff.
2. Whether the imputations alleged by the Plaintiff were reasonable, natural, or necessary interpretations of the words used.
3. Whether the articles, read as a whole, would lead an ordinary reasonable reader to understand the imputations as defamatory against the Plaintiff.
4. Whether certain imputations should be excluded from probation due to lack of support in the pleadings.
5. Whether the Plaintiff’s claim should proceed to proof before answer or be dismissed on relevancy grounds.

Arguments of the Parties

Defendant's Arguments

• The words complained of were not defamatory in their natural and ordinary meaning.
• The words did not bear the innuendo alleged by the Plaintiff.
• The test for defamation is objective, focusing on the reasonable or right-thinking person's interpretation of the words.
• It is the Plaintiff’s responsibility to specify the meaning alleged for an innuendo, and the court must decide if the words can bear that meaning.
• If the words are not capable of defamatory meaning, the case should be dismissed.
• The imputations broadly alleged were either unsupported by the words or required strained interpretations, which are impermissible.
• Specifically, the imputations that the Plaintiff was dishonest in business dealings were not reasonably inferred from the articles.
• Some imputations related to the press release and Company A, not directly to the Plaintiff, and thus could not be attributed to him.
• In the alternative, exclusion of certain passages from probation was sought to limit the scope of the Plaintiff’s case.

Plaintiff's Arguments

• The proper approach to defamation is a two-stage test: first, determine the direct or inferential meaning of the words as understood by the ordinary reasonable reader; second, determine whether that meaning is defamatory.
• The three articles complained of should be read as one whole due to their cross-references and publication in the same edition.
• The ordinary reasonable reader would associate the Plaintiff closely with Company A and regard the press release as issued by or with the Plaintiff’s authority.
• References in the articles to "misleading behaviour" and financial figures would be understood as imputations against the Plaintiff personally.
• The imputations set out in the pleadings reflected meanings that an ordinary reasonable reader might draw, and these were clearly defamatory.
• Imputations concerning breaches of statutory and regulatory requirements (Companies Acts, AIM Rules, Financial Services Act) were aimed at a knowledgeable subsection of readers, supported by amended averments.
• The case should proceed to proof before answer, allowing examination of the factual basis of the imputations.

Table of Precedents Cited

Court's Reasoning and Analysis

The court’s task was to determine whether the Plaintiff’s pleadings disclosed a relevant case that the articles contained defamatory imputations against him. It applied an objective test focusing on the reasonable, natural, or necessary interpretation of the words, as understood by the ordinary reasonable reader. The court emphasized that the three articles should be read together as one whole, given their cross-references and publication context.

While the phrase "misleading behaviour" was used in reference to Company A, the court accepted the Plaintiff’s averments that the strong association between him and the company would lead a reasonable reader to attribute the reference to the Plaintiff himself. The court found that most of the imputations alleged were within the scope of meanings a reasonable person might infer from the articles, particularly those relating to the Plaintiff’s intention to sell shares and the selective presentation of financial figures to potentially mislead investors.

The court excluded from probation the imputation that the Plaintiff was generally dishonest in his business dealings, as this was too broad and unsupported by the pleadings. Regarding imputations involving breaches of the Companies Acts, AIM Rules, and Financial Services Act, the court found that the amended pleadings sufficiently established that a knowledgeable subsection of readers might infer these meanings, warranting their inclusion for proof.

The court distinguished between the judge’s role in assessing relevancy and the factual determination of defamation, which would be resolved at proof. It rejected strained or sinister interpretations and emphasized the necessity of reasonable inferences. Ultimately, the court found that the Plaintiff’s averments, except for the excluded imputation, were relevant and justified proceeding to proof before answer.

Holding and Implications

The court allowed a proof before answer on the majority of the imputations alleged by the Plaintiff, concluding that the pleadings disclosed a relevant case of defamation warranting further inquiry. However, it sustained the Defendant’s plea-in-law to exclude from probation the imputation that the Plaintiff was generally dishonest in his business dealings and actions as chairman of Company A.

The direct effect of this decision is that the Plaintiff’s defamation claims, except for the excluded imputation, will proceed to evidential proof. No new precedent was established; the court applied established principles of defamation law to assess the relevancy of pleadings and the reasonableness of the imputations alleged.