[1955] EACA 315

## COURT OF APPEAL FOR EASTERN AFRICA

Before Sir BarcLay Nihill (President), Sir Newnham Worley (Vice-President) and MACDUFF, J. (Kenya)

## CALTEX (AFRICA) LIMITED (EAST AFRICA), Appellant (Original $Defendant)$ ν.

## • G. ODDIE, Respondent (Original Plaintiff) Civil Appeal No. 47 of 1955

(Appeal from the decisions of H. M. Supreme Court of Kenya, Mayers, J.)

Defamation—Libel—Letter as to dismissal of employee published on day of his dismissal.

The respondent claimed damages from the appellant for wrongful dismissal and libel.

On the day it dismissed the respondent from its employ, the appellant published to a number of firms with which he had had dealings as its representative. a letter in these terms: "This is to advise you that Mr. G. Oddie, Shipping Supervisor, will no longer be connected with Caltex (Africa) Limited, as from 31st August, 1954".

The trial Judge held that the words complained of were not capable, in their natural sense, of any defamatory meaning, but that having regard to the circumstances in which they were published as known to the persons to whom they were published, they were.

There was evidence by several recipients of the letter; only one of whom said that he received the impression that the respondent had been discharged for something "very bad" but he nevertheless said that he would have been prepared to employ him even after reading the letter.

The trial judge in considering the question of privilege, considered this solely from the point of view of whether the appellant had published the letter "pursuant to a legal, moral or social duty". It was conceded that there was a common interest conferring a qualified privilege, but it was submitted that (inter alia) the unseemly haste with which the letter was sent out and the fact of its being exceptional for the appellant to send round such a letter, indicated malice.

Held (30-8-55).-It is not, in itself libellous for a person to publish of one who has ceased to be employed by him that he is no longer so employed, but there may be extrinsic circumstances making the words to be understood in a defamatory sense<br>by those to whom they are addressed. It is unreasonable when there are a number<br>of good interpretations of words that the only bad one should give a defamatory meaning thereto. Accordingly, and having regard to the evidence of the recipients of the letter, the words complained of could not bear and did not, in fact, bear a defamatory meaning. Malice had not been established.

Appeal allowed...

$\mathcal{L}^{(1)}$

Cases referred to: Creen v. Wright, (1876) L. R. 1 C. P. 591; Salt v. Power Plant<br>Co. Ltd., (1936) 3 A. E. 322; Ward v Barclay Perkins & Co. Ltd., (1939) 1 A. E.<br>287; Neville v. Fine Art & General Insurance Co. Ltd., (1897) A.

W. Sanders Universal. Products. (1954) 1 A. E. 47; Turner v. M. G. M. Pictures Ltd., (1950) 1 A. E. 454; Cassidy v. Daily Mirror Newspapers (1929) 98 L. J. K. B. 595; Adam v. Ward, (1917) A. C. 309; De Stempel v. Dunkels, (1938) 1 A. E. 238; The Moorcock (1889) 14 P. 64.

Salter, Q. C. (Shaylor with him), for appellant.

Lean for respondent.

SIR NEWNHAM WORLEY (Vice-President).—This appeal is brought from the judgment and decree of the Supreme Court of Kenya at Mombasa given in Supreme Court Civil Cases Nos. 272 and 273 of 1954, which were consolidated by order of that Court. The present respondent was the plaintiff and the present appellant the defendant in both suits: in the former, the claim was for damages for wrongful dismissal; in the latter it was for damages for libel. It is common ground that the respondent was employed by the appellant company and was dismissed from his employment without notice. The appellant company's case was that such dismissal was provided for in the contract of employment; alternatively, that the contract was terminable at one month's notice and that respondent was offered one month's salary in lieu. The respondent's case was that his employment was permanent until "normal retiring age", subject to good behaviour: alternatively, that he was entitled to six month's notice or salary in lieu. On the issue of the libel the respondent's case was that a letter issued by the appellant company announcing that he was no longer connected with the company was defamatory: the appellants denied that the letter was capable of bearing or did bear any defamatory meaning and, further, averred that it was privileged.

The trial Judge found for the plaintiff / respondent in both suits and awarded, on the claim for wrongful dismissal £3,800 damages and costs; on that for libel $£150$ and costs. The appeal is brought against the whole of that decision.

There is very little dispute on the facts. In March, 1951, the respondent, who was then in the service of the Government of Southern Rhodesia, made an application for employment to the California Texas Oil Co. Ltd., of New York, United States of America (hereinafter referred to as the American company). Subsequently, at Salisbury, Southern Rhodesia, he had an interview with a Mr. Wrigley, the Managing Director of Caltex (Africa) Ltd., which is the appellant company. It is a limited company incorporated, I think, in the Union of South Africa but operating throughout British East Africa and, in particular, in the Colony and Protectorate of Kenya. It is one of a group known as the Caltex Group of Companies of which the American company is the parent. It is common knowledge that the activities of the group in distributing and selling petrol and petroleum products are practically world-wide. I shall, for convenience, refer to Caltex (Africa) Ltd. as the African company, or the appellant company.

At the interview Mr. Wrigley advised the respondent to go to Nairobi to see Mr Foulds, the appellant company's general manager there: he further told the respondent that, if employed, he would be in the first instance employed on probation for one year and receive training at the company's Mombasa terminal. Subsequent to this interview, but before going to Kenya, the respondent received by post from New York an application form for employment with the American company: this he completed on 4th May, 1951, and returned. It is exhibit A in the case and most of the controversy in the first suit is on the question whether it was incorporated in the respondent's contract of service with the appellant company. The particular condition about which the argument mostly revolves, and which may be called the "dismissal clause", reads as follows:-

"Should I be given employment by you, either the position applied for, or some other, now or hereafter, I hereby agree that such employment may

be terminated by you at any time, without liability to me for wages or salary except such as may have been earned at the date of such termination.

The foregoing shall be construed to apply to all positions I may hereafter hold with this company though the particular position for which I now apply is Operating Assistant at overseas terminal."

$\sqrt{ }$ Having sent off this application and having, as he said, "no reasonable doubts as to obtaining employment with Caltex", the respondent about two months later resigned his employment in Southern Rhodesia and went to Kenya where he interviewed Mr. Foulds. The date of this interview is not in evidence, but I think it is reasonable to suppose that it was after Mr. Foulds had received the letter, $\epsilon$ xhibit F.

Exhibit F is dated 16th May, 1951, and is addressed from 551, Fifth Avenue, New York (which is, I understand, the registered address of the American company) by a Mr. McCoy, Director, Caltex (Africa) Ltd., to Mr. Foulds at Nairobi: it reads as follows: $\rightarrow$

"Attached are photostats of correspondence relative to application received from Mr. G. Oddie for employment with our company in East Africa. We are anxious to develop a few capable operating men of British, nationality for our operating organizations in such territories as Ceylon, India, South Africa, your own, and possibly Australia. This applicant seems considerably above average who have applied recently. We shall appreciate it if you will look over the attached correspondence and interview Mr. Oddie when he arrives in Nairobi. If you feel that he could be used to $\{1,\ldots$ advantage in your operating organization, on either a temporary or possibly a permanent basis we shall be pleased to have your recommendations as to the salary and terms to be offered him and your views as to the assignment · that should be given him.

$\therefore$ If he could be tried out on a temporary basis and appears to have the necessary qualifications for developing into a good man for operating work we could undoubtedly use him in other territories if you had no need of his services."

The interview with Mr. Foulds also appears to have been satisfactory to both parties and Mr. Foulds said that the respondent was fortunate to be "New York sponsored." On 14th July, 1951, by letter (exhibit 1) the respondent received a firm offer of employment with the African company. I think I had better set it out in full:-

## "Caltex (Africa) Limited (East Africa)

Stewart Street, Nairobi, Kenya.

14th July, 1951.

Personal and Confidential.

- $:$ Mr. G. Oddie, - P. O. Box 37, Njoro,

Kenya Colony.

$\therefore$ Dear Sir, $\therefore$

$\mathbf{1}_{\mathcal{A}^{\mathcal{A}}}$ We have now heard from our principals in New York who have formally agreed to your employment with this company, your services to begin from 1. Ist August, 1951, as an operating assistant in the first instance at our Mom-

**basa terminal.** $\mathcal{L}$ and $\mathcal{L}$ are the expectation of $\mathcal{L}$ and $\mathcal{L}$ are the expectation of $\mathcal{L}$ .

$337 -$

| | | Your terms of employment briefly speaking are as follows: $\rightarrow$ | |-------------------------------------|--|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | and the property of the property of | | <b>Basic salary</b> $\mathbb{R}$ $\mathbb{R}$ $\mathbb{R}$ $\mathbb{R}$ $\mathbb{R}$ $\mathbb{R}$ $\mathbb{R}$ Sh. 1400 per month<br>High cost of living allowance (married) Sh. 360 per month<br><u>Andrew Laboratory</u> | | And the property | | $Sh. 1760 per month$ |

Home Leave.—First term four years which includes one year's probation after which you get three months' leave excluding travelling<br>time-passage 1st class by air or sea. Travelling allowance back and forth 10 per cent of passage fare by sea or Sh. 70 each way if you elect to go and return by air.

Second term and thereafter three years—allowances and fares remain the same.

Annuity Plan.—After one year's probationary service the employee is directed to join the company's Annuity and Group Life Insurance Plan which is contributory.

Local Vacation—After one year's complete service—14 days—and thereafter 14 days per year. No fares or allowances are paid for local vacations.

Sick Leave.—Twelve days per annum unless specially authorized by the management for illness consequent to employment.

Salary Increments.—Normally 18 months from date of last increase. depending on merit and always at the discretion of the management.

Medical Expenses.—The company pays 75 per cent of doctor and hospital bills for you and your immediate family so long as the illness concerned is brought about by living in the Tropics.

It will be necessary for you to undergo a medical examination by our company doctor. Details and forms, etc., will be supplied you when you report to our Personnel Department.

Yours very truly,

Caltex (Africa) Limited (East Africa)

(Signed) J. FOULDS, General Manager."

The respondent does not appear to have accepted the offer in writing but did so by conduct: he reported to the Personnel Department, underwent the required medical examination and started work with the appellant company at its Mombasa terminal. After an initial period in the oils and lubricants section, where he did not give entire satisfaction, the respondent was posted to the shipping section, and in October, 1952, was appointed shipping supervisor, in which capacity he was authorized to sign for the appellant company in transactions with the company's bank, the Customs Department and various shipping firms. An important part of his duties appears to have been to secure shipping space for the transport of the company's products.

On 20th January, 1953, Mr. Mondon, Terminal Superintendent of Mombasa, reported to the Nairobi Head Office, that the respondent had been employed for 18 months and for the last three months had satisfactorily carried out his duties and recommended he be transferred to the Permanent Payroll and given a merit increase of 10 per cent, effective from 1st February, 1953 (exhibit E). This recommendation was accepted and on 26th February, 1953, Head Office, Nairobi, wrote to the respondent as follows (exhibit $2$ ):—

"We are pleased to advise that you have been placed on our Regular General Payroll with effect from 1st February, 1953, and from the same date your salary has been increased from Sh. 1,750 to Sh. 1,925 as a result of which your High Cost of Living is also increased from Sh. 350 to Sh. 385.

It is necessary for you to complete the enclosed two Application Forms for your admission to the Caltex Annuity and Group Life Insurance Plan, and we will be sending you full details later on, but in the meantime these forms are urgently required back and please ensure the information called for is completed in full.

Briefly for your advance information you will become a member of the Plan on 1st March, 1953, that is on 1st of the month following the date of your being placed on the General Payroll, and as contributions are payable in advance it was necessary for us to deduct your contribution due 1st March from your February salary, and this amounts to Sh. 168/85.

The above adjustments have all been taken into account in your February salary cheque.

The immediate return of the enclosed forms will be appreciated as we in turn have to send them on the the underwriters where, in fact, they were due by 1st March, 1953.'

The annuity and insurance plan referred to is set out in exhibit 3: it may be necessary later to refer in detail to some of its provisions. For the moment, however it will suffice to note that for male members on the East African payroll the normal retiring age under the scheme is 55. (The respondent's age at this time was 33). The scheme is compulsory and, in addition to provisions of the usual type for benefits on retirement or death, there are special provisions for benefits for which a member may elect on "termination of employment other than by retirement or death".

The respondent presumably duly completed and returned the forms enclosed with the letter of 26th February for, on 14th April, 1953, Head Office, Nairobi, wrote again to the respondent as follows (exhibit $B$ ):—

"This will serve to confirm your appointment by this company, effective 1st February, 1953, at a salary of Sh. 1,925 (Shillings One Thousand Nine Hundred and Twenty-five).

It is to be clearly understood that your engagement is based on the. Application Form signed by you on 4th May, 1951.

Your 'Continuous Service Date' will be deemed to have commenced on 24th July, 1951, being the date on which you originally joined this company, and from when your continuous and exclusive service commenced.

We would remind you that the question of salary is a strictly private and confidential matter between the company and yourself, and should not be discussed with anyone other than the management.

Please acknowledge receipt hereof, and confirm this understanding."

It is common ground that the application form referred to is exhibit A, the form which the respondent filled in and sent to the American company. On 19th April, 1953, the respondent wrote on the face of exhibit B "I hereby confirm my understanding of the terms and conditions outlined in this letter" and on the same date wrote a separate letter to Head Office, Nairobi, the material passage in which reads (exhibit $C$ ): -

"I wish to confirm my understanding of the subject matter of your letter, particularly the effective date of my appointment to the permanent staff of the company and the commencing salary."

In May, 1954, the respondent went on long leave from which he returned in July. After his return, he wrote a personal letter to and had an interview with a Mr. Temple, a senior executive officer of the appellant company at Nairobi. There is no evidence of the subject matter of the letter or the interview though there is a suggestion that the respondent and Mr. Mondon were not getting on well together: however, I think that is entirely irrelevant as we are, at this stage, concerned only with the legal rights of the parties and not with the reasons for the respondent's dismissal. About the end of August, 1954, Mr. Mondon went to Nairobi on the company's' business, unconnected with the respondent, and while there he was given a letter to be delivered to the respondent in Mombasa (exhibit 4). It is dated August, 30th, 1954, and the relevant part of it reads: $-$

"This will confirm that your services with this company will be termin- $\frac{1}{2}$ ated as at 31st August, 1954, and we enclose our cheque for Sh.2,503, representing one month's salary in lieu of notice. Also enclosed is your certificate of service with the company."

The rest of the letter dealt with the refund of respondent's contribution to the pension scheme. This notice of dismissal was handed to the respondent during the afternoon of the 31st. The cheque bore a receipt which included an acknowledgment that the amount shown was received in full and final settlement of all claims in respect of the termination of respondent's employment with the company. The respondent did not accept this cheque.

Before delivering this letter, Mr. Mondon had dictated a letter addressed to the Customs Department and a number of shipping agents with whom the respondent had had dealings as the company's representative. This is the letter on which the libel suit is based: it reads as follows (exhibit 6): $-$

"This is to advise that Mr. G. Oddie, Shipping Supervisor, will no longer be connected with Caltex (Africa) Ltd. as from 31st August, 1954."

Mr. Mondon swore, and his evidence on this point was, I think, accepted that he intended these letters to be sent out by post to reach the addressees on 1st September but, by an error in his office, they, or some of them, were sent by hand and were received during the working hours on the 31st. A good deal was made of this at the trial but, in my view, it was quite immaterial. The respondent appealed unsuccessfully to the Nairobi Head Office against his dismissal, and in October, 1954, started these proceedings.

<span id="page-5-0"></span>I do not think it necessary to go through the pleadings, but I will set out the issues agreed at the trial: -

- "1. What were the terms of plaintiff's employment? - 2. Did they include implied term alleged in paragraphs 5-7 of plaint or either of them? - 3. Was the letter published by defendant re plaintiff capable of any defamatory meaning and, if any, what defamatory meaning? - 4. If so, was it defamatory?

5. If the letter was defamatory, was it published on a privileged occasion?

- 6. If it was published on a privileged occasion, was the defendant actuated by malice in publishing the said letter. - 7. What damages, if any, has the plaintiff suffered (a) by reason of his dismissal, (b) by reason of the publication complained of." $\cdot$

As regards the second issue, the implied term pleaded was that the (respondent's) services should be determinable only for misconduct justifying dismissal until he reached the normal retiring age under the pension scheme: alternatively, that his services should be terminable only by reasonable notice, which was alleged to be six months. It may be convenient here to summarize the learned trial Judge's answers to these questions, as follows: $-$

1 and 2.—That the respondent's employment was to last until he reached normal retiring age, subject only to his dismissal for misconduct.

I do not think this conclusion is anywhere expressly stated in the long and careful judgment, but I think that is its effect. $\mathbf{I}$

3 and 4.—Yes: the defamatory meaning being in the innuendo conveyed that the respondent's conduct had been such as to merit his summary dismissal.

5 and $6$ .—No.

7.—Damages as set out above.

Before us, it was contended in substance for the appellant company: -

- (1) That, as regards the suit for wrongful discharge, the Judge should have found that the respondent was engaged upon the terms contained in the form of application (exhibit $A$ ) and, in particular, upon the terms of the "dismissal clause". - (2) Alternatively, that the Judge should have found what was reasonable notice in the circumstances and could not assess damages without such a finding. - (3) That, as regards the suit for libel, the Judge should have found that the words pleaded in the innuendo were incapable of bearing and did not bear the alleged defamatory meaning. - (4) That he should have held that the occasion was privileged.

Taking first the case for damages for wrongful dismissal I entertain no doubt that the appellant's first submission is plainly right and that the appeal should succeed. The learned Judge held that the application form, exhibit A, and, in particular the dismissal clause, formed no part of the respondent's contract with the appellants, either originally or by subsequent incorporation; alternatively, that if it did form part of the contract by subsequent incorporation, there was no consideration for it: in the second alternative, that if it were so incorporated for valuable consideration, then it provided only for summary dismissal by the American company. With deference, I think the court below was wrong in all these opinions.

The argument for the appellant company is put in two ways both of which in my opinion are equally valid. First, it is said that the relationship between the American company and the African company is that of principal and agent, or master and servant, and that the evidence both oral and documentary shows that the appellant company engaged the respondent in consequence of instructions received from their principals. Exhibit F and exhibit 1 leave no doubt as to this. It is true that exhibit F is written by a New York director of the African company but it seems perfectly clear that the correspondence therein referred to was the correspondence between the respondent and the American company and that Mr. McCoy was himself carrying out instructions. In refutation of this contention Mr. Lean has referred us to a passage on page I of a brochure called "Caltex Circle" for May, 1954, issued by the American Company (exhibit 7). That passage reads: $\rightarrow$ $\ldots\,$ $\mathcal{H}^{\mathcal{A}}(\mathcal{G},\mathcal{G})$ $\mathcal{L}_{\mathcal{A}}(x)$ $\mathcal{L}_{\text{max}} = \mathcal{L}_{\text{max}}$ $\mathcal{L}^{\mathcal{L}}$

"Each company affiliated with the California Texas Oil Company Limited is a separate corporation that manages and controls its own affairs. The use of such terms as 'company', 'organization', 'its', 'our', 'we', and 'us' when referring to subsidiaries and affiliates is only for convenience, and is not intended as an accurate description of corporate relationships."

The first sentence may be a correct statement of the legal relationship of the separate corporations which make up the Caltex Group, but I do not see how that prevents the relationship of principal and agent existing between them in any particular transaction. Nor do I see how the respondent can claim this representation as an estoppel since there is no evidence that he was ever aware of it before his engagement or that he relied on it or was in any way misled by it.

Secondly, it is said that the respondent's employment with the African company was always impliedly if not expressly, upon the basis of his application made in exhibit A, and that when he was taken upon the permanent payroll this form was expressly included and confirmed by the respondent. The respondent says he does not know whether his interview with Mr. Wrigley was the consequence of his letter to the American company; it seems to be highly probable but whether so or not, it is quite clear that after that interview the respondent knew that, if given employment at all, it would be with the African company and probably at Mombasa. Normally as a locally engaged person he would have been required to make application to the African company in the form exhibit D (page 56) which is in all material particulars identical with exhibit A, but it seems that he was sent exhibit A to fill in because New York was interesting itself in the engagement of a few British subjects to work in certain territories with British connexions or traditions. I do not think that there can be any doubt that the respondent always knew, particularly after Mr. Foulds had told him that he was lucky in being "New York sponsored", that the basis of his engagement with the African company was the application he had made to the American company. I think, with respect, that the learned trial Judge erred in dividing the transactions leading up to the respondent's employment by the appellant company into three distinct and separate phases; that appears to me to be an entirely unrealistic view, attributable in part to a failure to appreciate that the instructions to Mr. Foulds in exhibit F came from a director of the African company and not from the American company.

For my part, I think the first contract between the appellant company and the respondent is to be found in the respondent's offer in exhibit A and the appellant company's counter-offer in exhibit 1 which the respondent accepted by conduct.

But even if I am wrong in this view, I think it perfectly clear that when the respondent was taken on to the permanent payroll this constituted a new contract between him and the appellant company, the terms of which are to be found in exhibit 1, exhibit 2, exhibit B, exhibit C, exhibit 3, and exhibit A, the last being incorporated by reference in exhibit B. This aspect of the matter is not expressly considered in the judgment of the Supreme Court where the transfer of the respondent to the permanent payroll appears to be treated as merely a continuation of his temporary employment. I cannot subscribe to that view particularly in view of the new prospective benefits which accrued to the respondent on becoming a member of the Annuity and Insurance Plan. If I am correct in this then clearly there was consideration for the respondent's confirmation of the incorporation of exhibit $A$ into the contract.

... I think I need only add two brief remarks on this part of the case. Firstly, as to the learned Judge's view that even if the dismissal clause is incorporated in the contract, it only provided for dismissal by the American company. This, with respect, is fallacious for the reason that when the clause is incorporated into the contract it must be read as a term agreed between the parties to the contract, "I" and "you" being the two parties.

Secondly, Mr. Lean contended that the dismissal clause in exhibit A did not: in any case give a right of instant dismissal, as the Supreme Court thought, but was designed merely to get over the difficulty of deciding when a contract of service can lawfully be terminated. It did not, he said, deprive the respondent of the right to reasonable notice or salary in lieu thereof as damages or compensation. He relied on *Creen v. Wright* (1876) L. R. 1 C. P. D. 591, but I think it. sufficient to say, without going fully into the facts of that case, that the dismissal of the plaintiff without notice occurred in circumstances not provided for in the contract.

In consequence of the view I have taken, I think it unnecessary to considerthe other cases relied on by Mr. Lean, namely, Salt v. Power Plant Co. Ltd. (1936) 3 All E. R. 322 and Ward v. Barclay Perkins & Co. Ltd. (1939) 1 All E. R. 287, beyond saying that the latter case is clear authority for the proposition that: eligibility for pensions benefits under a contributory pensions scheme does not necessarily render a contributory a permanent employee.

It is also unnecessary for me to consider the question of what would be a. reasonable period of notice for an employee in the position of the respondent if he were entitled to notice. In case the matter should go further, I will, however, briefly express the opinion that for a junior commercial assistant in East Africa with no special training or qualifications, three months would be a reasonable: period.

I turn now to consider the issues in the libel suit and here again I am of opinion that this appeal should be allowed. The learned trial Judge held that the words complained of were not in their natural sense capable of any defamatory meaning, but he held that, having regard to the circumstances in which they were: published, as known to the persons to whom they were published—

"any reasonable man receiving such a letter sent to him by hand on the same day as it was written, would assume that the reason for the termination of the plaintiff's employment was that he had committed conduct of such a nature as to result in his summary dismissal without notice and to render it: essential for persons with whom the plaintiff had dealt on behalf of the: defendants to be warned at once that the plaintiff was no longer employed by them."

With respect. I think that this is doing exactly what Lord Halsbury, L. C., said in Nevill v Fine Art and General Insurance Co. (1897) A. C. 76, 77, ought not: to be done. "It is unreasonable that when there are a number of good interpreta-tions, the only bad one should be seized upon to give a defamatory sense to thedocument." The letter sent round by Mr. Mondon was clearly capable of other innocent interpretations; and the case of Beswick v. Smith (1907) 24 T. L. R. 169 is authority for the proposition, which I take from Gatley on Libel and Slander 4th Edition 31:-

"It is not in itself libellous for a person to publish of one who has. ceased to be employed by him that he is no longer so employed, and is nolonger authorized to do business or receive moneys on behalf of the person lately employing him. There may, however, be extrinsic circumstances making: the words to be understood in a defamatory sense by those to whom they were addressed."

This latter proposition is illustrated by the case of Gallagher v. Murton (1888) 4 T. L. R. 304, cited by Mr. Lean; there was evidence that the notice was published for a malicious purpose. In the instant case, the learned Judge heard the evidence of several recipients of the letter only one of whom said that he received the impression that the respondent had been discharged for "something very bad", yet he further said that he would have been prepared to employ the respondent even after reading the letter. I think therefore that the learned Judge erred in holding that the words complained of were capable of bearing and did in fact bear a defamatory meaning.

On the question of privilege, Mr. Lean has conceded that the Judge misdirected himself in considering this solely from the point of view of whether the appellant company published the letter "pursuant to a legal, moral or social duty" and in not considering whether a common interest existed both in the appellant company and in the recipients. Mr. Lean conceded that there did exist in fact such a common interest conferring qualified privilege on the publication. He however desired to argue that the Supreme Court ought to have found that the publication was malicious. We permitted him to do so on the ground that a respondent may seek to uphold his judgment on the grounds other than those found by the trial Court. He rested his arguments upon what he termed the unseemly haste with which the notice was sent out; the fact that it was exceptional for the appellant company to send round such notices (at any rate in Mombasa) and a number of other circumstances which, he said, indicated malice. Having considered these, I find myself in entire agreement with the Supreme Court on this issue.

In the result, therefore, I would allow this appeal in full, set aside the whole of the decree appealed from, and substitute therefor a decree ordering that the plaintiff's claim in both suits should be dismissed with costs. The respondent should pay the appellant company's' costs of this appeal.

SIR BARCLAY NIHILL (President).—I have read the judgment prepared by my learned brother the Vice-President and I am in full agreement with him. That the appellant company was within its legal rights in doing what it did to this respondent I entertain no doubt. I hope, however, that this case is a quite exceptional instance of modern business methods rather than an example of what is generally in operation.

An order will be made in the terms proposed by the Vice-President.

MACDUFF, J.-I have had the advantage of reading the judgment prepared by the learned Vice-President. I entirely agree with it and have nothing to add.