GUNNARSSON v. ICELAND
Inadmissible
David Thór Björgvinsson
The applicant, Mr Kjartan Gunnarsson, is an Icelandic national who was born in 1951 and lives in Reykjavik. He was represented before the Court by Mr J.R Möller, a lawyer practising in the same town. On 31 August 2000 the newspaper Dagur published an article amidst a heated public debate in the wake of the acquisition of a large part of the shares of the Icelandic Investment Bank by a group, Orca SA in Luxembourg, and strong criticism of leaders of the Independence Party, of which the applicant was the Secretary General. The author of the article, an Advocate named Sigurdur G. Gudjónsson, had advanced the view that members of the general public were not treated equally when at the hands of Independence Party leaders. He recounted events that had occurred in May 1994 when he, a Mr J. O. and several others, had purchased shares in the Islendska útvarpsfélagid (the Icelandic Broadcasting Company, hereinafter referred to as “the IBC”). The acquisition created a new shareholder majority in the IBC. Following a change in the IBC’s Board of Directors, the Islandsbanki had withdrawn a loan offer to, and had in fact broken off with, the IBC. The article further stated that the Islandsbanki’s Managing Director and the former Chairperson of its Board of Directors had close family ties and that the Chairperson was a member of the Independence Party’s Finance Committee. The article then went on (the two passages in italics were the subject of defamation proceedings brought by the applicant): “At this point, we approached Landsbanki. The Chairperson of Landsbanki’s Board of Directors at the time was [the applicant], Secretary General of the Independence Party and Chairperson of the Broadcasting Licensing Committee, which is concerned with the affairs of independent Broadcasting stations. On 29 July 1994, the IBC received a letter from Landsbanki, notifying that it declined to do any business with the IBC. No explanations were given, but those of us [the respondent and other shareholders] who represented the IBC in the negotiations with the Bank were told that [the applicant] was opposed to Landsbanki’s doing business with a company where Mr J. O. was involved. No formal negotiations took place with the other State owned bank, Bunadarbanki, as we were told in informal discussions that it could not take up business with the IBC as some of its shareholders who had lost their majority holdings in the IBC at the share holders’ meeting in July were customers of the bank and might be offended if the bank were to assist the IBC or take up business relations with the IBC. Fortunately there were savings banks in Iceland at the time who regarded business with the IBC as being a positive and lucrative option. Here, decisions regarding business of IBC were made on the basis of interests of the saving banks, not on the basis of what was best for the Independence Party and acceptable to the leaders of the Party’s Finance Committee.” The applicant subsequently brought defamation proceedings against the author of the article, requesting - in addition to compensation - that the following two statements be declared null and void: (1) “No explanations were given, but those of us [the respondent and other shareholders] who represented the Company in the negotiations with the Bank were told that [the applicant] was opposed to Landsbanki’s doing business with a company where Mr J.O. was involved.” (2)“ Here, decisions regarding business of IBC were made on the basis of interests of the saving banks, not on the basis of what was best for the Independence Party and acceptable to the leaders of the Party’s Finance Committee”. The applicant categorically denied as false the allegation that he had played any part in the decision by Landsbanki (hereinafter “the Bank”) and this was supported by two managing directors. The applicant pointed out that members of the Bank’s Board of Directors normally did not involve themselves in the Bank’s lending activities. He considered the allegations as defamatory in that they accused him of allowing interests other than those of the Bank determine his position regarding the Bank’s business with individual companies and of unlawful conduct, in breach of general business rules and ethics and administrative practice. By a judgment of 3 May 2000 the District Court found for the respondent and against the applicant. The latter appealed but by a judgment of 19 December 2000 the Supreme Court rejected his appeal. The Supreme Court observed that the author of the disputed article had made no attempt to prove that the applicant had been involved in the decision in question. However, he had submitted that the employees of the Bank who had been responsible for assessing the IBC’s credit rating had told him and his associates about the applicant’s involvement. The documentary evidence provided no indication that the refusal of credit could not have been based on legitimate business reasons. The take over by the new majority shareholders had given rise to considerable struggle resulting in some uncertainty about the IBC’s future but everything indicated that things had worked out well. Turning to the impugned statements, the Supreme Court noted that allegation (2) did not specifically address the applicant. As to allegation (1), it observed that the remark did not refer to the Bank’s decision-making process but only to informal explanations offered by its employees – no formal explanation had actually been provided for its withdrawal of the offer of credit. The respondent could only be required to prove what the representatives of the company had been told, by providing statements from the bank’s employees. It would not be sufficient for him merely to provide statements by his associates; he would have to summon the relevant bank employees to give oral evidence before the court. The respondent had refused to do so in order to avoid embarrassing the employees concerned, which was understandable in view of the statutory confidentiality rules in section 43 of the Act on Commercial Banks and Saving Banks applicable to bank employees and the fact that they might be reluctant to give evidence about conduct regarded as embarrassing or even illicit by a member of the Bank’s Board of Directors. Having regard in particular to the context in which the impugned remarks had been made, the applicant’s interest in having them declared null and void could hardly be regarded as sufficient to require the Bank’s employees to give evidence. In the view of the Supreme Court, the respondent could not be required to prove the truth of the disputed remarks as this would be unreasonably difficult for him to do. Considering the applicant’ prominent position within the Independence Party and that he served on the Bank’s Board of Directors and as Chairperson of the Broadcasting Licensing Committee, nominated by the Independence Party and elected by Parliament, as well as the requirement that his work in these areas be independent from his role as Secretary General of the Party, he ought to accept public discussion on these connections. Cautiousness should be observed in any attempts to limit such discussion. In a dissenting opinion Supreme Court Justice Mr Gardar Gislason stated inter alia that it could hardly have been difficult for the respondent author to summon the bank employees to give evidence. Not only had the plaintiff asked him to do so but it could also not be maintained that the bankers would thereby act in breach of confidence contrary to section 43 of the Act on Commercial Banks and Saving Banks. It had not been shown that requiring proof from the respondent would amount to an unreasonable burden being placed on him.