On 19 December 2019, Warby J gave Judgment in the case of Triplark Limited v  Northwood Hall (Freehold) Limited (2) Philip Whale (3) David Wismayer [2019] EWHC 3494 (QB).  He found that the words complained of made a number of factual allegations defamatory of the Claimant.

Background

The Claimant, Triplark Limited, owns the freehold of Northwood Hall which is an Art-Deco styled block of 194 flats in Highgate, London. A group of the existing tenants led by the Defendants have sought to persuade other tenants to take steps in order to enfranchise the block.

Enfranchisement is a statutory process which enables tenants to purchase the freehold reversion from their Landlord. Under the Leasehold Reform, Housing and Urban Development Act 1993, over 50% of tenants are required to agree to the terms of the enfranchisement before the statutory process of purchase can commence.

The First Defendant is the corporate vehicle established to realise the collective enfranchisement of the block. The Second Defendant is a resident and leaseholder at Northwood Hall. He is also a director of the First Defendant. The Third Defendant has a background in property management and has had significant involvement in Northwood Hall’s management.

The Invitation

The first part of the claim concerns a leaflet, published to all the leaseholders in Northwood Hall on 5 March 2018 by the Defendants, entitled “Collective Enfranchisement (s13 Leasehold Reform Housing and Urban Development Act 1993) An invitation to participate”.

The leaflet set out the business case for the leaseholders at Northwood Hall to enfranchise the block. The Claimant’s position was that the entirety of the text in the leaflet was defamatory and that the Defendants had entered into a common design to injure its reputation as a way to encourage leaseholders to accept the enfranchisement scheme.

The Letter

The second part of the claim concerns a letter published to all leaseholders in Northwood Hall by the Defendants on 24 March 2018 entitled “Freehold Enfranchisement, Response to the Allegations made by NWHLG (Northwood Hall Leaseholder Group) and Mr Maunder Taylor”.

The Letter responded to statements made by the Claimant regarding the Defendants in relation to proposals about the enfranchisement scheme. In the Letter, the Defendants state that the Claimant had made a number of false and unlawful statements about the enfranchisement scheme in a bid to dissuade leaseholders from entering into the scheme. The Claimant pleaded that the entirety of the text in the Letter was defamatory and, as above, that the statements were published as a ploy by the Defendants to further injure its reputation for the common purpose of encouraging the leaseholders to enfranchise.

Following pre-action correspondence, the parties agreed to a Trial of preliminary issues for the Court to determine:

  1. The defamatory meanings of the words in each of the statements complained of;
  2. Whether the statements complained of are defamatory at common law;
  3. Whether the statements complained of are allegations of a factual nature or statements of opinion; and
  4. Whether the statements indicated the basis of the opinion stated.

On Thursday 5 December 2019, Warby J heard the parties’ submissions in relation to these issues and judgment was handed down on 19 December 2019.

Claimant’s Submissions

The Invitation

In its pleading, the Claimant contended that the words complained of in the Invitation conveyed the following meanings defamatory of the Claimant. That it had:

  1. Incompetently maintained and intentionally neglected Northwood Hall;
  2. Artificially inflated premiums for lease extensions and unjustifiably overcharged the leaseholders exorbitant professional costs; and
  3. Taken advantage of the leaseholders and blackmailed them with a view to extort service charge arrears.

The Letter

The words complained of in the Letter were, on the Claimant’s case, defamatory in that they allege that the Claimant:

  1. Was responsible for a relentless propaganda campaign that had made misleading and untrue claims about the enfranchisement scheme as well as false statements about the Defendants;
  2. Had acted unlawfully in making those statements about the Defendants and are so serious as to require a retraction and an apology from the Claimant; and
  3. Had engaged in this type of unlawful behaviour in an improper bid to undermine the enfranchisement scheme by confusing the leaseholders and by dissuading them from exercising their legal rights, thereby preventing them from realising the full value of their interests in Northwood Hall.

In addition to the meanings pleaded, the Claimant submitted that the imputations in the Invitation reflected the literal meanings of the words complained of. The Invitation was a serious document which set out a business proposition using words that were deliberately chosen and aimed at Triplark as opposed to an individual.

The statements made by the Defendants had meanings that were interdependent so that where the Claimant was accused of incompetence or calculated neglect, the reader would more likely treat the allegation of blackmail in a literal sense.

Defendants’ Submissions

The Invitation

The Defendants submitted that the Invitation was a form of written advocacy convincing the leaseholders to join the enfranchisement scheme and that it should be read in this context. They submitted that the authors of the Invitation were expressing their dissatisfaction with the current ownership arrangements and were seeking to explain how the enfranchisement could be a better way to manage the block.

The key focus for the reader of the Invitation would be the financial benefits of the enfranchisement scheme as opposed to the specific words complained of. They would also assess the words with reference to their own experiences as leaseholders.

In terms of the meanings pleaded by the Claimant, the Defendants submitted that:

  1. The first meaning complained of was strained and that use of the words ‘incompetence’ and ‘calculated neglect’ were rhetorical flourishes;
  2. The passages complained of in the second meaning were comparisons between the costs of new leases under the existing scheme with those under the proposed enfranchisement scheme. The use of the words ‘exorbitant fees’ did not refer to Triplark and did not mean it was forcing tenants to pay exorbitant professional fees; collection of those fees were instead the responsibility of other specialist firms; and
  3. The third meaning wrongly attributes to the Invitation a range of condemnatory imputations, for example “taking advantage”, which are nowhere to be found in, nor are they implied by the words used. The use of the word “blackmail” should not be understood to allege the criminal offence. The word was used in the context of a section entitled “The Vendors’ lien”. In this section, the gravest level of accusation is that Triplark in 2015 unnecessarily and wrongly required some tenants to pay disputed arrears of service charge to RTM (the entity to which service charges were then payable) and that since the Claimant had done this once before, they may well do so again. Triplark was in effect the enforcer for RTM and might enforce in the same way again.

The Letter

The Defendants submitted that the allegations complained of in the Letter would not be understood to refer to the Claimant, but instead to Northwood Hall Leaseholders Group (NWHLG).

The Judgment

The Invitation

Warby J found the Invitation to have meanings that, in some respects, went beyond those pleaded. He held that the meanings were that Triplark:

  1. had been guilty of incompetence in its role as head leaseholder of Northwood Hall;
  2. had for decades deliberately neglected the maintenance of the property, thereby oppressing the leaseholders;
  3. had formulated development proposals for the roof of Northwood Hall that were insensitive, allowing leaseholders no say in the matter;
  4. knowing that many leaseholders would be unable or unwilling to take on the financial risks of contesting valuations before an independent body (the First Tier Tribunal), had taken the opportunity to demand premiums for lease extensions that were 10-20% above their true value, inflated, ramped up, and extortionate;
  5. in 2015, deliberately abused its own power and the weakness and lack of sophistication of some leaseholders to force them, in return for lease extensions, to pay substantial arrears of service charges which were disputed and which they did not owe, thereby blackmailing the leaseholders; and
  6. that there were reasonable grounds to fear that, if free to do so, the company would do the same again. [28(1)-(6)]

Of these Warby J found, except for (3), that the imputed meanings at (1), (2), (4), (5) and (6) were defamatory of the Claimant at common law.

The defamatory meanings above were found by the Judge to all be factual in nature, except for the following which he held were opinion:

  1. In meaning (2), the words “thereby oppressing the leaseholders”
  2. In meaning (4), the words “inflated, ramped up and extortionate”
  3. In meaning (5), the words “thereby blackmailing the leaseholders”; and
  4. All of meaning (6).

On the issue as to whether there was a sufficiently factual basis for any opinion found, he held that the factual bases for the statements of opinion found in meanings (2), (4) and (5) were expressly indicated. The factual basis for the statement of opinion in (6) was expressly or implicitly based on the alleged facts set out in meaning (5).

The Letter

In respect of the Letter, Warby J found the Letter bore the following meaning:

In a desperate attempt to defeat the Scheme and prevent leaseholders from exercising their legal rights, or delay it, Triplark has colluded with Crownhelm and Mr Maunder Taylor to use a leaseholders’ organisation (NWHLG) as a vehicle for a propaganda campaign by which the company seeks and will continue to seek to undermine trust in the defendants, by misleading, causing confusion, wasting time and resources, using disruptive tactics, and making outrageous allegations of criminality and deception against the defendants which are false, baseless and libellous [59]

From this meaning, he held that following words were comment/opinion:

  1. “propaganda campaign”;
  2. “by which the company seeks and will continue to seek to undermine trust in the Defendants”;
  3. “desperate”;
  4. “disruptive”; and
  5. “outrageous”.

Overall, he held that the factual core of the Letter was sufficiently strong to be found as defamatory of the Claimant.

Both the Invitation and the Letter were therefore found to contain statements that bore defamatory meanings and were, by and large, factual in nature. Consequently, their publication acted to the reputational detriment of the Claimant.

Subject to any amendments to the Particulars of Claim, the Defendant will now serve a Defence.

Triplark Limited was represented by Alexandra Marzec (5RB) instructed by Christopher Hutchings of Hamlins LLP.

Northwood Hall (Freehold) Limited, Philip Whale and David Wismayer were represented by Adam Speker (5RB) instructed by Hanna Basha of Payne Hicks Beach

James Downes, Associate at Hamlins LLP