The Court of Appeal allowed an appeal by the defendants, News Group Newspapers Ltd, publishers of the Sun, Kelvin Mackenzie, its editor, and Ken Irwin, a freelance journalist, against the decision of Mr Justice Waterhouse, awarding the plaintiff, William Roache, the costs of a libel action, in which he obtained an injunction restraining the defendants from further publication, but in which the jury only awarded the plaintiff the same sum in damages, namely pounds 50,000, as the defendants had previously paid into court.
The action concerned an article, published in the Sun on 1 November 1990, in which it was said that Mr Roache, an actor who for 30 years had played the part of Ken Barlow in the television series Coronation Street, had become known as 'boring Ken Barlow'; that he was considered self-satisfied and smug by his fellow actors; that he had been nearly fired on several occasions; that the producer had been authorised to kill off his part, and that he had become a joke among the programme's scriptwriters and production team.
A considerable part of the article, about which the plaintiff made no formal complaint, described his sexual exploits in his younger days.
The defendants pleaded fair comment and, to a limited extent, justification. They paid first pounds 25,000 and then a further pounds 25,000 into court, but the plaintiff did not accepted it.
During the trial, he was cross- examined about the 'sexual exploits' part of the article. The next day the Sun carried a report of the hearing, headed 'Star Bill Tearful at Sex Life Quiz'. It was partly because of this that, after the jury found for the plaintiff, the judge granted an injunction against republication.
Then, because the plaintiff had sought, and got, more than just damages of an amount which had already been paid into court, the judge considered it right to award the plaintiff costs. But he gave the defendants leave to appeal.
David Eady QC and Heather Rogers (Farrer & Co) for the defendants; Charles Gray QC and Tom Shields (Peter Carter-Ruck & Partners) for the plaintiff.
SIR THOMAS BINGHAM MR said two important principles were relevant here. The first was that costs normally followed the event, the winner recovering his costs from the loser.
The second was that where a plaintiff claimed a financial remedy and the defendant paid into a court a sum, not accepted by the plaintiff, equal to or greater than the plaintiff recovered in the action, the plaintiff should pay the defendant's costs from the date of payment in.
The proper approach to orders of costs had been discussed in many cases, the upshot of which was clear. The judge had to look closely at the facts of the particular case before him and ask: 'Who, as a matter of substance and reality, has won? Has the plaintiff won anything of value which he could not have won without fighting the action through to the finish? Has the defendant substantially denied the plaintiff the prize which the plaintiff fought the action to win?'
Normally, the present plaintiff's failure to recover more than the sum paid into court would have led to an order that he pay the defendants' costs from the date of payment in. The judge did not adopt this course on the ground that the plaintiff had to pursue the matter to judgment in order to obtain an injunction, the defendants having failed to give an undertaking.
In so concluding, the judge paid more attention than he should have done to the reasoning of Mr Justice Falconer in Colgate Palmolive Ltd v Markwell Finance Ltd (1990) RPC 197, a case about passing off and trade mark infringement, which was by no means analogous.
Moreover there was, on the facts, little force in the judge's grounds for regarding the plaintiff's apprehension of repetition as being well-founded.
In conclusion, the judge misdirected himself on the effect of Colgate Palmolive, formed factual conclusions for which there was no evidence, gave weight to matters of no or marginal relevance, failed to give weight to a matter of major relevance, namely the payment into court, and failed squarely to address the crucial questions for decision.
In these circumstances, their Lordships were entitled to exercise the court's discretion afresh. On the evidence, the defendants did not wish to fight the action, otherwise, they would not have paid pounds 50,000 into court. It was incredible that they would have allowed a settlement to founder for want of an undertaking not to republish.
The overwhelming probability was that if he had chosen to accept the money, the plaintiff could have had an undertaking, equivalent in effect to an injunction, for the asking. He only chose to go ahead because he wanted to win a larger sum from the jury than the defendants had offered.
The defendants undoubtedly emerged from the trial as the substantial winners: they held the award to a sum no greater than was already on offer. The injunction was a matter of no significance to them because they did not intend to republish anyway.
LORD JUSTICE STUART- SMITH and LORD JUSTICE SIMON BROWN concurred.