McDonalds Corp & Anor v Steel & Anor

Factual and Procedural Background

This is an appeal by the defendants from an order of Mr. Justice Bell dated 15 November 1993, which struck out parts of their defence and particulars in an action brought against them by Company A and its wholly owned subsidiary, Company B. Company A is incorporated in the United States and owns a chain of restaurants there, while Company B manages many of these restaurants within the United Kingdom.

Between October 1989 and April 1990, the defendants and others distributed a leaflet in the country entitled "What's wrong with Company A?" containing serious allegations against Company A. The allegations were grouped under seven headings, with this appeal concerning two: "Destruction of the Environment" and "Employment Practices". The leaflet alleged that Company A had purchased large tracts of land in poor countries, destroying rainforests and evicting native farmers, and that Company A exploited its workforce and deterred trade union membership.

The writ was issued on 20 September 1990, and the defendants served their defence on 16 November 1990, pleading justification and fair comment. Multiple interlocutory applications followed, leading to successive particulars of justification and fair comment served by the defendants over the next two years.

Various court orders were made regarding document disclosure, inspection, and the exchange of witness statements and expert reports. The defendants’ application for further discovery was adjourned pending the service of witness statements, and leave to appeal that adjournment was refused.

On 30 September 1993, Company A applied to strike out parts of the defence and particulars, which was heard by Bell J. on 2 November 1993. Bell J. struck out substantial parts of the defendants' pleadings on 15 November 1993, particularly all passages under the "Destruction of the Environment" heading and most passages under "Employment Practices". The defendants appealed this order.

Legal Issues Presented

1. Whether a defendant pleading justification in a defamation action must provide full and precise particulars of the facts relied upon.
2. Whether a plea of justification should only be placed on record if the defendant has "clear and sufficient evidence" to support it.
3. Whether an interlocutory application to strike out parts of a defence can be made before full discovery, based on the evidence available in exchanged witness statements.
4. The correct legal test and procedural approach for striking out parts of a defence as an abuse of process due to lack of evidential support.
5. The implications of the introduction of the exchange of witness statements under RSC Order 38 r.2A on the timing and basis of strike-out applications in defamation proceedings.

Arguments of the Parties

Appellee's Arguments

• A general plea of justification without particulars is bad because it fails to give the plaintiff a proper opportunity to deny the defence.
• The defendants should not plead justification unless they have clear and sufficient evidence to support it or the material part of it.
• After exchange of witness statements, the court can test whether the plea is supported by clear and sufficient evidence and strike out unsupported parts.
• The striking out application should be decided before further discovery to avoid abuse of process and unnecessary delay or expense.

Appellant's Arguments

• Striking out should only be considered after full discovery, including answers to interrogatories, to ensure a fair opportunity to support the plea.
• The test of "clear and sufficient evidence" imposes an unfair and unrealistic burden on defendants and is not supported by authoritative precedent.
• A defendant may properly rely on evidence obtained after pleading, such as documents revealed in discovery or answers to interrogatories.
• The new procedure for exchanging witness statements was not intended to allow early testing of evidential strength before trial.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Associated Leisure Ltd. v. Associated Newspapers Ltd. [1970] 2 QB 450	Defendant must not plead justification unless clear and sufficient evidence supports it.	Court acknowledged the dictum but rejected the strict "clear and sufficient evidence" test as a threshold for pleading justification.
Atkinson v. Fitzwalter [1987] 1 WLR 201	Reaffirmation of the "clear and sufficient evidence" requirement for justification pleas.	Referenced as part of the submissions, but the court emphasized flexibility and rejected rigid application.
Prager v. Times Newspapers [1988] 1 WLR 77	Same principle on evidential support for justification pleas.	Referenced in submissions; court considered the context and procedural fairness.
Mangena v. Edward Lloyd Ltd. (1908) 98 LT 640	A plea of justification should not be put on record unless the defendant believes it and is prepared to support it with evidence.	Used to trace the origin of the "clear and sufficient evidence" phrase and to support a more nuanced test.
Steamship Mutual Underwriting Association Ltd. v. Trollope & Colls (City) Ltd. (1986) 33 BLR 77	Pleadings should not be issued without reasonable grounds or evidence.	Supported the principle that pleadings must have a reasonable evidential basis but should not be prematurely struck out.

Court's Reasoning and Analysis

The court analyzed the established rule that a defendant pleading justification must provide full and precise particulars of the facts relied upon. It examined the phrase "clear and sufficient evidence," historically cited as a prerequisite to pleading justification, tracing its origin to earlier case law and legal texts.

The court rejected the rigid application of the "clear and sufficient evidence" test as a threshold for pleading justification, holding that such a strict standard would impose an unfair and unrealistic burden on defendants. Instead, the court outlined a balanced approach requiring that before pleading justification, the defendant must:

• Believe the truth of the words complained of;
• Intend to support the defence at trial;
• Have reasonable evidence to support the plea or reasonable grounds to believe sufficient evidence will be available at trial.

The court emphasized that the defences of justification and fair comment protect free speech and that unnecessary barriers should be avoided while preventing abuse of court processes through unsupported pleadings.

Regarding interlocutory applications to strike out, the court considered the relevant procedural rules (RSC Order 18 r.19), confirming the court’s power to strike out pleadings that disclose no reasonable defence or constitute abuse of process. It recognized that the introduction of witness statements exchange under RSC Order 38 r.2A allows earlier assessment of evidential support but cautioned against premature strike-out before full discovery and trial.

The court concluded that the striking out power is a draconian remedy to be used only in clear and obvious cases where a plea is incurably bad and incapable of being proved. Many parts of the defendants' pleadings, though weak at the interlocutory stage, might be improved by trial evidence or further discovery. Therefore, the court held that only passages that are incurably bad and unsupported by any evidence should be struck out at interlocutory stages, with others reserved for consideration at trial or after full evidence is presented.

Holding and Implications

The court ALLOWED THE APPEAL and remitted the matter to the trial judge for further consideration consistent with the principles set out in the judgment.

The direct effect is that substantial parts of the defendants' pleadings struck out by the lower court should not have been struck out at the interlocutory stage unless they were clearly incapable of being proved by any evidence. The judgment clarifies the appropriate legal test and procedural approach for strike-out applications in defamation cases involving pleas of justification.

No new precedent was created beyond restating and refining existing principles. The decision balances the protection of free speech through justification and fair comment defences with the court’s duty to prevent abuse of process and unnecessary delay.