Neutral Citation Number:  [2010] EWHC 1544 (QB)
Case No: HQ09X02255
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

Royal Courts of Justice
Strand, London, WC2A 2LL

Date:  24 June 2010 

Before :

THE HONOURABLE MR JUSTICE EADY
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Between :

	NICOLA HORLICK
	Claimant	
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	ASSOCIATED NEWSPAPERS LIMITED	Defendant	

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Richard Spearman QC and Jacob Dean (instructed by Simon Smith, solicitor) for the Claimant
Andrew Caldecott QC and Sarah Palin (instructed by Reynolds Porter Chamberlain LLP) for the Defendant

Hearing date:  17 June 2010
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Judgment

Mr Justice Eady : 

1.	There are a number of applications now before the court in this libel action, which concerns an article appearing in The Mail on Sunday on 3 May 2009 under the heading “Final showdown for failing superwoman:  Nicola Horlick faces a reputation in ruins as shareholders seek to oust board and put fund in liquidation”.  The article also appeared online and, while there were minor adjustments of presentation, there is no significant difference between the two.
2.	The first application now before me is that I should rule on the meanings of the article by way of preliminary issue.  For that purpose, it is necessary to set out the article as a whole and then the parties’ respective contentions as pleaded.
3.	I turn to the article as it appeared in hard copy:
“The end was never supposed to be like this.  Amid a massive shareholder uprising and a backlash of acrimonious allegations, Nicola Horlick looks likely to be toppled from her pedestal as one of the City’s most celebrated fund managers.
Famously dubbed ‘Superwoman’ for her ability to juggle work and a large family, Horlick is this weekend facing the possibility that investors in one of the funds managed by her Bramdean group will call a meeting to oust the board of directors and try to liquidate what is left of the business.
Bramdean was launched in a blaze of publicity four years ago and was designed to raise £500 million by attracting venture capitalists and wealthy individuals.
But despite Horlick’s formidable sales skills and the support of her chairman, the revered City banker Sir Derek Higgs, she was forced to come out fighting against allegations that Bramdean was struggling even then to secure backing.
Sanford Henry, former chairman of the investment committee of Bramdean’s management board, told Financial Mail that he had enticed a Middle East investor to put £25 million into the fund.  The money was, however, conditional on the investor not ending up with more than about ten to 15 per cent of the fund.  But at that time, according to Henry, only £66 million had been raised.
‘This was before Vincent (Tchenguiz) came on board,’ said Henry.  ‘I said to Nicola that my investor couldn’t come in and she just turned round and said, “take the money and we’ll sort the rest out later”’.
Henry, who claims to be owed about £55,000 from the time he was an adviser to Bramdean, describes Horlick’s approach as ‘disingenuous’.  Eventually she managed to raise more than £300 million for the fund, which is quoted on the stock market.
Horlick promised to find the very best fund managers and ‘to be ahead of the game, to spot the niche areas’.
But just a few years later, investors in her Bramdean Alternative Investments fund are sitting on huge losses.
‘The investment community gave her too easy a ride out of sympathy,’ said Henry, referring to the death of Horlick’s eldest daughter of leukaemia at the age of 12.
‘And others didn’t look too closely because they were impressed by the reputation of Derek, who completely supported Nicola.’
Her shareholders have called for an extraordinary general meeting to sack her entire board of directors and are saying that Horlick has ‘lost all credibility’ as a fund manager.
Led by her largest shareholder, Tchenguiz, whose Park Lane offices she shares, they are also demanding that the fund be liquidated and the cash returned to the investors so they can salvage something.  Tchenguiz is proposing that investment trust veteran Jonathan Carr takes over as chairman.
Doubt is being cast on a bid approach the company says it has received.  Without her long-term friend and supporter Higgs, who had encouraged friends and associates to take places on the Bramdean board but who died suddenly last year, the rebellion comes as a bitter blow to Horlick and threatens to leave her isolated.
Shareholders have been asking questions about her investment choices for some time.  James Carthew, managing director of Progressive European Market, which has one per cent of Bramdean Alternative Investment [sic], told Financial Mail:  ‘We’ve been on at the board to do something for ages because there was such a gap between the share price and the assets.  When the idea is to make people money, then you can’t really just follow the market and let the share price get so out of kilter.’
Henry says Horlick’s skill was always in UK stocks rather than international markets or funds of funds.  Her decision to plough money into private equity investments such as Terra Firma, run by Guy Hands, began to worry investors.  Not only were there losses, but it is thought that about £53 million more is committed to private equity deals.
The crunch really came when it emerged that Bramdean faced massive losses from Bernard Madoff’s Ponzi scheme – probably the world’s biggest ever fraud.  Horlick was not alone in losing money, but she had put ten per cent of her funds into Madoff and then raised questions about the quality of her due diligence by publicly railing against US regulators.
Carthew said:  ‘It was just the end of any credibility for Nicola as a fund manager.’
On Friday, Tchenguiz, with 29.9 per cent of the shares, demanded an extraordinary general meeting to oust the entire board as a prelude to liquidating the fund.  Though executives dismissed the move, Financial Mail has established that Tchenguiz has much support.
RMF Investment Management, part of Man Group, with 19 per cent, is backing the plan as does the Merseyside Pension Fund with 15 per cent.  Together with Progressive European Market’s one per cent, the rebels account for at least 65 per cent of the shares and have until the EGM – pencilled in for June 18 – to drum up further support.
The company claims Bramdean is performing near the top of its sector.  A spokesman pointed out that some funds have lost 80 per cent of their value while Bramdean has lost ‘only’ 50 per cent.
Henry said:  ‘Nicola has an ability to reinvent herself and I’d never say never.  But I would think she’ll find it hard to carry on after this.’
Carthew added:  ‘Nicola’s credibility has really been damaged by this.  I don’t think she’s going to be able to go on.’
As the brickbats fly this weekend, Horlick is keeping an unusually low profile.  ‘She feels it would be wrong to speak out,’ said a friend.  ‘I know people are saying some pretty hostile things, but she’s decided to take it on the chin.’
Horlick is still in her forties and is one of the toughest fighters the City has seen.  One aide pointed out, that Bramdean manages or advises on about $1.4 billion (£950,000) of funds so there will still be a job to do even if the Alternative Investments business is liquidated.
However, Sir Alan Sugar’s words to one of his would-be apprentices are looking increasingly relevant.  ‘Like the Wizard of Oz you looked very impressive, but there was nothing behind the curtain.’
COMEBACK QUEEN                                                            
A mercurial career
Nicola Horlick has rarely been out of the spotlight since she first hit the headlines in 1997 in a flamboyant campaign to be reinstated along with colleagues in the asset management arm of Deutsche Morgan Grenfell.  She gathered journalists to watch her storm the offices of her employer, subsequently leading the circus to Frankfurt to continue her protest.
Eventually she gave up and set up an investment management business in London for the French bank Societe Generale with a former Morgan colleague, Keith Percy.
Along the way her private life became public – her five children, the death of one from leukaemia, the ending of her 20-year marriage and revelations that her former husband had been having an affair with a receptionist.
Her celebrity became greater after she fought off a gun-wielding mugger outside her £5 million home in South Kensington, west London.  She even wrote a book called Can You Have It All?  The implicit answer was that she certainly could.
Now married to former journalist Martin Baker, Horlick has always vigorously defended her fledgling Bramdean fund.
Along the way she has made some remarks that may come back to haunt her, including:  ‘Women are more conservative.  It is something to do with nurturing and protecting your funds.  Men are often gung-ho.  They tend to have a spectacular year followed by a less good year.  But women tend to add value year by year.  You tend to end up in the same place, but the women are a bit ahead.’
On launching Bramdean, she said:  ‘I wrote the business plan in my drawing room, rang up a few people for funding and they said yes.  It was easy to get the money – really, really easy.’”
4.	The Claimant’s pleaded meanings in the particulars of claim which are said to be defamatory are as follows:
“5.1	The Claimant had been party to the obtaining of investment funds by deception in that she had secured an investment of £25 million from one Middle East investor by allowing it to be represented to the investor that such an investment would represent not more than 10-15% of the fund whereas, at the time and as she knew, such a sum represented closer to 40% of the value of the fund;
 5.2	The Claimant had invested 10% of the Bramdean fund with Bernard Madoff and when he had been exposed as running a giant Ponzi scheme she tried to deflect attention away from her disastrous and reckless investment strategy and spectacular lack of due diligence by trying to blame US regulators;
 5.3	The huge losses suffered by investors in Bramdean as a result of the Claimant’s investment decisions left her a washed-up failure having lost all credibility;  and
 5.4	In consequence, despite being regarded as one of the City’s most celebrated fund-managers, this reputation was nothing more than a façade and in truth, as her catastrophic stewardship of Bramdean demonstrated, she was utterly incompetent, justifiably faced a shareholder revolt and had only survived exposure as the charlatan she was as a result of exploiting powerful connections and a sympathy felt for her following the death of her daughter to leukaemia.”
5.	The Defendant’s Lucas-Box meanings are to be found in paragraph 6 of the defence in these terms:
“(i)	There are reasonable grounds to suspect that the Claimant’s due diligence on Bernard Madoff had been inadequate;
 (ii)	Investors in Bramdean Alternatives, the fund the Claimant had launched and of which she was now the fund manager, were so dissatisfied with the poor performance of the fund (for which she was responsible), including losses on private equity investments and on investments in Bernard Madoff’s Ponzi scheme, that she faced a crisis of confidence in her abilities and the humiliating prospect of those investors ousting the fund’s board of directors and liquidating the fund;
 (iii)	The Claimant had been disingenuous in her approach to raising money for the fund.”
6.	There is also a plea of fair comment on a matter of public interest and the comments sought to be defended are expressed in paragraph 7 of the defence as follows (paragraph 7(i) having been withdrawn):
“(ii)	That the Claimant had lost all credibility as a fund manager;
 (iii)	That the humiliating prospect of investors ousting BAL’s board of directors and liquidating its funds, was damaging to the Claimant, and that she will find it hard to carry on as a fund manager;
 (iv)	That it is increasingly apparent that her reputation as one of the City’s most celebrated fund managers is undeserved;
 (v)	The Claimant had been disingenuous in her approach to raising money for the fund.”
7.	The principles to be applied when a judge is invited to determine meaning in a defamation case are well settled and are set out in a number of relatively recent Court of Appeal decisions, such as Skuse v Granada Television Ltd [1996] EMLR 278;  Gillick v BBC [1996] EMLR 267;  and Gillick v Brook Advisory Centres [2002] EWCA Civ 1263.
8.	The judge should give the relevant article the natural and ordinary meaning(s) which it would have conveyed to ordinary reasonable readers reading the article once (that is to say, reasonable readers of the journal in question).  Such a hypothetical reasonable reader should not be treated as either naïve or unduly suspicious, but recognised as capable of reading between the lines.  As is well known, however, he or she should not be treated as “avid for scandal”.  Naturally, a judge should have regard to the impression the article has made upon himself in considering what impact it would have made on the hypothetical reasonable reader.  It follows that the exercise is to a large extent that of forming an impression.  It should not be obscured by over-elaborate analysis or by looking for hidden meanings.  
9.	It is sometimes said that the reasonable reader does not, and should not, select one bad meaning where other non-defamatory meanings are available.  That is not to be confused, on the other hand, with the untenable proposition that the reasonable reader should be taken as always selecting the least defamatory of the available meanings.  It is a question of how the particular article, put in its context, strikes the reader.  If he or she thinks that the message conveyed by the article is defamatory, and towards the more serious end of the scale, there would be no reason to opt for an alternative possible meaning just because it is less serious.
10.	It would seem to follow that a judge should be wary of allowing his impression of a newspaper article to be coloured by the detailed submissions of counsel – helpful though they so often are.  As Mr Spearman QC put it in his skeleton argument, on the Claimant’s behalf: 
“ … in light of the task which the Judge is set on the trial of a preliminary issue of meaning, there is a considerable element of artificiality about each side making detailed submissions to the Court both in writing and orally about the meaning that the article would convey to the ordinary reasonable reader on a single reading.  Indeed, such an exercise might be thought not to make that task easier, but rather to tend to make it more difficult, for the Judge to perform.”
11.	I have come to the conclusion that the article bears the following meanings, although I emphasise that the wording I have selected is not to be treated in an over-rigid way, since it is the thrust of the meaning or meanings which really matters:
i)	The Claimant looked likely to be toppled from her pedestal as a celebrated fund manager amid a massive shareholder uprising and acrimonious allegations (that is to say, as a result of dissatisfaction with her performance as a fund manager).
ii)	She had been called “disingenuous” by a disgruntled former colleague (Sanford Henry) in her approach towards a Middle East investor, who was prepared to put £25m into a Bramdean fund, subject to the condition that his investment would not exceed 15% of that fund (in the sense that she should have informed him that, at the time, only £66m had been raised).  The context suggests that she either misled him or behaved in an underhand manner towards him by not giving him the up to date position.
iii)	Despite her promises to be “ahead of the game”, a few years later investors in her Bramdean Alternative Investments fund were sitting on huge losses.
iv)	The Claimant had lost all credibility as a fund manager and her reputation was in ruins.
v)	Despite offering to make investors money, she had just followed the market and let the share price get out of kilter with assets.
vi)	She had invested about 10% of her fund in Bernard Madoff’s fraudulent Ponzi scheme and thereby caused Bramdean investors to suffer massive losses.  Her subsequent railing at United States regulators raised questions as to the quality of her own “due diligence” prior to investing in Madoff’s fund;  indeed, it gave rise to reasonable grounds to suspect that she fell short of the standard to be expected.
vii)	She had looked impressive at first but, in a phrase attributed to Sir Alan Sugar, “there was nothing behind the curtain” (that is to say, her earlier reputation for fund management was undeserved).
Although I have interpreted the article in my own words, I regard that interpretation as consistent with its bearing each and every one of the Defendant’s Lucas-Box meanings (set out above).
12.	It follows that I consider some of the Claimant’s pleaded meanings as overstated.  In particular, I would not accept that the words complained of mean that the Claimant was guilty of “deception”.  
13.	The suggestion that she had been “disingenuous” (a notoriously vague expression) in relation to the unidentified Middle East investor was made in a specific context.  He was apparently offering to invest £25m subject to the condition that it would not ultimately exceed 10-15% of the fund.  She raised, according to the article, more than £300m in due course and £25m was obviously substantially less than 10% of that.  The allegation cannot amount to deceit or to (say) obtaining money by false pretences.  The criticism made by Sanford Henry (whom the reader knows to be disgruntled because he claims to have been owed £55,000) seems to be confined to the suggestion that the Claimant should not have agreed to accept the £25m investment without telling the investor expressly that, up to that point, she had only succeeded in raising £66m.
14.	It is impossible to read into the article that the Claimant would have accepted the investment, even if she only managed to raise a sum of which £25m would represent a greater proportion than 15%, and would therefore have sought to mislead him as to the total raised.  In any event, that would have been impossible.  She could hardly have kept the total secret – whatever she raised.  The passage in the article attributes to Sanford Henry the opinion that she should have made clear to the investor that, so far, only £66m had been raised.  That is the only possible interpretation.  
15.	I attach particular significance to the wording of the article to the effect that the investor did not want to “end up with” more than just ten to 15 per cent of the fund.  He was not said to be imposing any condition relative to the total sums attracted up to that point.  Also, where the Claimant is supposed to have said, “we’ll sort the rest out later”, that is likely to be taken (and was taken by me) to mean that she would address the investor’s condition at a later stage.  That would naturally be the time when it would be possible to calculate the proportion he had “ended up with”;  that is to say, when the funds had been raised and the final total ascertained.
16.	Mr Spearman attaches importance to the following words attributed in the article to Sanford Henry:  “I said to Nicola that my investor [i.e. the one from the Middle East] couldn’t come in … ”.  But I do not believe that this affects the position.  In context, it can only mean that he could not “come in” (i.e. invest £25m) if she failed to raise a sufficient total to match his stipulation (i.e. about £167m).  He is not reported as having said that he would only invest the £25m if she had already raised the total.
17.	To what extent that passage is defamatory and whether there is any defence available would be questions for later.
18.	I would not accept, either, that the article conveys that there had been a lack of diligence on the Claimant’s part prior to investing with Madoff – whether “spectacular” or otherwise.  In other words, I would not accept that the article conveys a Chase level 1 meaning:  see Chase v News Group Newspapers Ltd [2003] EMLR 11, CA.
19.	As I have said, the article states merely that “questions were raised” about her due diligence.  (As it is sometimes said, that would equate to a Chase level 3 meaning.)  Yet I would not agree that these particular references are suggesting that the Claimant was motivated, in “railing” against United States regulators, by a desire to deflect attention away from her own errors of judgment.  The suggestion seems to me to be that if, on her own case, the US regulators were open to criticism for not picking up warning signs, the question might legitimately be asked also as to her own possible “failures” in that respect.  The article withholds final judgment on that point and confines itself to enquiring whether her due diligence would be found wanting. 
20.	Nor, in my judgment, does the article accuse the Claimant of being a “charlatan”.  There is no reason to suppose, from the article, that the Claimant had been making claims to prospective investors which she knew to be false.  It rather suggests that she clearly had considerable faith in her abilities and in the capacity of Bramdean to make money for investors.  Whether that faith was borne out by events, or misplaced, would be a matter for debate.  But there is nothing to suggest that she was a “charlatan”.
21.	I would reject also the contention that the article means that the Claimant’s investment strategy was “reckless” – if that is supposed to convey the notion that she was indifferent to the success or otherwise of her investment strategy.
22.	The references in the article to the loss of her daughter through leukaemia are, no doubt, cruel and tasteless.  Yet I do not see them as being defamatory of the Claimant.  There is no suggestion at all that she was seeking to exploit this tragic loss herself.  What is said is that others may have let their sympathy for her colour their judgment.  Furthermore, although the article refers to support from the late Sir Derek Higgs, that does not by itself sustain the proposition that she had been “exploiting powerful connections”.  That is a strained meaning.
23.	The Defendant’s application seeks that I should also give certain rulings on the defence of fair comment.  First, I am asked to rule that the words complained of do indeed contain the expressions of opinion pleaded in paragraphs 7(ii) and 7(v) of the defence.  Subject to minor differences of wording that are of no significance, I hope I have made it clear that I concluded that the article did convey those allegations and I confirm that I regard them as expressions of opinion or comment.
24.	It seems clear to me, for example, that propositions to the effect that the Claimant has “lost all credibility”, or “will find it hard to carry on”, or has a reputation that is “undeserved” are essentially matters of opinion.  There can be no definitive answers and they are not verifiable matters of fact.  An ordinary reasonable reader would recognise them as comments.  So too, in my judgment, there is room for differences of opinion as to whether she misled the Middle East investor, or behaved towards him in an underhand manner, by not ensuring that he was told that she had only raised £66m by the time his offer was made.  A straight allegation of dishonesty has generally in the past been treated as factual in character, but much depends on context and readers would recognise that Sanford Henry was expressing a personal opinion when he described her approach towards the investor as “disingenuous”.
25.	I am, secondly, asked to rule that any such expressions of opinion relate to matters of public interest (as opposed, presumably, to purely private matters).  I have no hesitation in doing so, not least because when Bramdean was launched members of the public were invited to invest.  But, more generally, the fate of the fund and its investors is clearly a matter of public interest.  I also understand that Bramdean Alternatives Ltd is traded on the London Stock Exchange main market for listed securities.
26.	There was a complaint from the Defendant also that the Claimant had not pleaded in a properly informative way to the factual averments in the defence.  Eventually, this was sorted out and an order agreed in the following terms:
“By 4.30pm on 8 July 2010, or earlier if practicable, the Claimant will admit or deny the passages in the Defence identified in the Application Notice dated 11 June 2010, save for paragraphs 6.23.10 and the first sentence of 6.23.9, and if unable to do so will give brief reasons why.”