Judge dismisses company director and convicted fraudster’s defamation action against newspaper

William Roddie, the sole director of Spectrum Properties (Scotland) Limited, raised an action against Associated Newspapers after the Scottish Mail on Sunday published a story which criticised the quango Clyde Gateway for providing grant funding to the company.

The pursuer claimed that the terms article “were false and calumnious” and that the “plain meaning” of the story was that he was “a convicted fraudster who continued in criminal enterprise”.

But Lord Jones (pictured) said: “There is nothing in the article which is capable of conveying the meaning that the first pursuer continues in a course of criminal conduct.”

The court heard that on page 45 of the newspaper’s edition of 12 January 2014, the defenders published an article under the headline: “Quango under fire as £150,000 of public cash is given to convicted fraudster’s firm”.

On behalf of the pursuers, it was averred that the “main theme” of the article was to suggest that, in the wake of the forthcoming Commonwealth Games in Glasgow, public money was being handed out to companies that did not deserve it.

The central complaint was that money was given to the second pursuers, who were run by the first pursuer, who had a criminal background.

It was alleged that the picture created by the article was that the first pursuer was running his company as “a vehicle for committing further fraud on the public purse,” that he had caused the company to conduct itself in an “irregular manner” and that the auditors PKF had resigned as a result.

However, senior counsel for the defenders moved the court to dismiss the action, arguing that it was settled law that it was for the pursuer in a defamation action to aver on record the meaning of the words complained of that he contended for. If such meaning could not be drawn from the words used, the claim was “irrelevant”.

In a written opinion, Lord Jones said: “The reasonable reader, possessing the characteristics ascribed to him or her in the authorities referred to earlier in this opinion, reading the piece for the first time, and taking the bane and antidote of the publication together, would regard the article as, principally, an attack on Clyde Gateway.

“The payment of a grant to Spectrum Properties (Scotland) Limited was one of three transactions in which the quango had paid public money in circumstances in which questions might be said to arise as to its stewardship of those funds.

“Nowhere is the first pursuer described simply as ‘a fraudster’. That word is used twice. On both occasions, it is qualified by the adjective ‘convicted’.

“The pursuers’ meaning communicates two separate facts: that the first pursuer has a conviction for fraud, which is true; and that the first pursuer continues to commit fraud, which is untrue. The pursuers’ two-fact meaning is not a reasonable, natural, or necessary interpretation of the words actually used, which convey a single fact.

“There is nothing in the article which is capable of conveying the meaning that the first pursuer continues in a course of criminal conduct.”

Nor was the article capable of bearing the meaning that the pursuers ascribed to it in respect of the company, the judge added.

The article contained a number of assertions of fact about the pursuers: that the first pursuer, the sole director of the second pursuers, was a convicted fraudster; that the second pursuers’ auditors, PKF, had reported a significant doubt about the ability of the second pursuers to continue as a going concern; that PKF had thereafter resigned; but that PKF had indicated that there were no circumstances connected with the resignation which required to be reported to members or creditors of the second pursuers.

“None of these pieces of information is challenged by the pursuers as having been untrue,” Lord Jones said.

The pursuers argued that the suggestion was that the company were “not a company to do business with” because they were “run by a fraudster which rendered them a poor credit risk and their auditors had resigned in suspicious circumstances,” but the judge said that was “not a reasonable, natural, or necessary interpretation of the article”.

Lord Jones added: “For the foregoing reasons, the defenders’ first plea in law falls to be sustained, and the action dismissed.”