Malicious Falsehood - Resistant Building Products Ltd v National House Builders' Council

Royal Courts of Justice in Belfast

Author Kenneth Allen Licence CC BY0SA 2.0 Source Wikipedia RCJ Belfast 

Jane Lambert

Chancery Division, Northern Ireland (HH Judge McFarland) Resistant Building Products Ltd v National House Builders' Council [2020] NICh 6 (27 April 2020)

This was an application by the plaintiff, Resistant Building Products Ltd. ("RBP"), for an interim injunction to restrain the defendant, National House Builders Council ("NHBC") until trial or further order from using, publishing, communicating or disclosing to any other person any information relating to RBP's magnesium oxide boards ("MgO boards") which suggests or tends to suggest that accreditation has been withdrawn, and any guidance relating to RBP's MgO boards which suggests or tends to suggest that accreditation has been withdrawn.

The Dispute
RBP manufactures and distributes MgO boards. MgO boards are used for covering or sheathing of walls and ceilings. Inside a building, they can perform a role similar to gypsum-based 'plasterboard'.  They can also be used inside cavity walls and on the outside of buildings with a final coat of render. The use of MgO boards had been called into question by reports of weather deterioration in Denmark and elsewhere.  RBP's board differed from the MgO boards used in Denmark and the company had commissioned research from Queen's University Belfast to show that it performed better than the board used there.  The NHBC issues warranties for newly constructed houses in the UK.  RBP complained of emails and other correspondence from a standards and technical manager with the NHBC. It alleged that the only inference or innuendo that could reasonably be drawn from the correspondence was that RBP's boards are unfit for purpose in the building trade.  It issued proceedings in the Northern Ireland High Court claiming a perpetual injunction and damages on the basis that the inference was untrue and that it had been made recklessly in that it failed to take account of all relevant evidence such as the research from Queen's University.

The Application
The application came on before His Honour Judge McFarland sitting as a judge of the High Court.  The learned judge referred to the judgment of Mrs Justice Whipple (although he referred to her as "Whittle J") in Al-KO Kober Ltd and another v Balvinder Sambhi (t/a Torquebars)  [2017] EWHC 2474 (QB) in which she said at paragraph [7]:

"… I could only grant the injunction sought in relation to malicious falsehood if I was satisfied that no judge or jury could reasonably conclude that the statements made by the Defendant were true … . However, in assessing whether the statements might be true, I am not bound simply to accept the Defendant's assertion that they are true and leave the matter to trial. … the Defendant has at least to explain the basis for his assertion that the statements are true, so that the Court is in a position to assess whether the Claimant's case on falsity might be controverted at trial."

In her judgment, her ladyship cited the well-known decision of Mr Justice Oliver in Bestobell Paints Ltd. v Bigg {1975] FSR 421.  It will be recalled that the defendant posted a notice on a house overlooking the South Circular Road where the paint had changed colour in places from brown to an unpleasant shade of green.  The words on the notice were "This house is painted with CARSONS paint."  The defendant had erected the notice in an effort to shame the manufacturer of the paint into compensating him.   The claimant sued the defendant for malicious falsehood and trade mark infringement and applied for an interlocutory injunction requiring him to remove the notice.

Mr Justice Oliver dismissed the application.   He held that the trade mark point was unarguable. As for malicious falsehood claim, his lordship said that the courts will never restrain the publication of a defamatory statement, whether a trade libel or a personal one, where the defendant pleads justification unless the statement is obviously untrue and libellous.  Bestobell Paints was decided before the Human Rights Act 1998 But Mrs Justice seems to have suggested at paragraph [5] of her decision in Al-Ko Kover that the Act has fortified that decision:

"Section 12(3) of the Human Rights Act 1998 provides that interim relief that might affect the exercise to the freedom of expression will only be granted before a full trial if the court is satisfied that the applicant is likely to establish at trial that publication of the information in question should not be allowed."

Judge McFarland directed himself as follows at paragraph [39] of his judgment:

"The test is that I have to be satisfied (on the balance of probabilities) that no tribunal of fact (be it judge or jury) could reasonably conclude that the statements, or any of the innuendos reasonably drawn from the statements, were and are true."

He made clear at paragraph [40] that he was not of that view:

"It could be open to a tribunal of fact to find truthfulness or correctness in the statements, and some of the innuendos reasonably drawn from them. There is clearly a problem with use of MgO boards in the construction of buildings when it is performing a barrier external role. Much will depend on the quality of the product. There is no approved standard for such quality. There is significant evidence from Denmark, and now limited evidence in the United Kingdom of potential problems with some MgO boards. How the NHBC dealt with its decision making goes more to the issue of recklessness attaching to the issuing of any statement, but a brief analysis indicates an engagement with, and a consideration of the ongoing research emerging from QUB. To date, preliminary findings would appear to indicate no problems with the RBP boards, but the research has not finished. Decisions about whether to provide a warranty for a building using a particular product are commercial decisions, weighing up all the evidence. That evidence includes the research and the science behind it, but it also includes the actual performance of the building and product in the environment as well as an assessment of the cost of any remedial work, taking into account the amount of the premium collected for the dwelling."

The judge, therefore, dismissed the application making clear that he was making no decision on the substantive issue.

Comment

It will be seen that malicious falsehood has much in common with the action for passing off.   The ingredients of both torts are the same, namely goodwill or reputation, misrepresentation and damage. The crucial differences are that the complaint in passing off is that the defendant is misappropriating the claimant's goodwill whereas in malicious falsehood he tries to destroy it and that there is no need to prove malice in the former tort.   Though this was a Northern Irish decision the English courts would approach the issue in exactly the same way.

Anyone wishing to discuss this case or malicious falsehood generally is welcome to call my clerk, Stephen on 07986 948267 or send me a message through my contact page,   I shall gladly respond by phone, VoIP or email,