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- Hello! Ltd ("Hello!"), the publishers of Hello! magazine, appeal against
awards of damages made by Lindsay J in favour of Mr Michael Douglas and his
wife Ms Catherine Zeta-Jones ("the Douglases"), and Northern & Shell Plc
("OK!"), the publishers of OK! magazine. The appeal against the award of
£14,750 in favour of the Douglases is in respect of liability only; the appeal
against the award of £1,033,156 in favour of OK! is in respect of liability
and quantum. The Douglases and OK! contingently cross-appeal; the issues
raised on the cross-appeals concern the liability of Hello! Ltd to OK!, and
the damages awarded to the Douglases.
- The complex factual and procedural history of this matter is fully and
clearly set out in paragraphs 1 to 179 of Lindsay J’s judgment on liability,
which is reported as Douglas v Hello! Ltd (No3) at [2003] 3 All ER 996.
We shall limit ourselves to the essential facts necessary to determine the
issues raised before us.
- On 18th November 2000, Mr Douglas and Ms Zeta-Jones, who were
and are very well-known film stars, were married at the Plaza Hotel, New York.
As soon as the couple’s engagement was announced in early 2000, there was
intense interest in this event from certain sections of the media; in
particular, from the publishers of OK! and Hello! magazines. As the judge
said, in paragraph 12 of his judgment, both those magazines "provide a regular
diet of photographs and text about royal, but, more usually, entertainment,
sporting, and social celebrities, with photographs taking precedence over
text." Most of those photographs are posed, and many of those that are not
will have been taken with the consent of their subjects. As the judge said (at
paragraph 15), the two magazines are "plainly keen rivals in the same market",
and they each had an average weekly circulation in the UK of just over 450,000
copies.
- Both publishers approached the Douglases with a view to obtaining the
exclusive right to publish photographs of the wedding reception. The Douglases
decided, with a view to reducing what Ms Zeta-Jones called "the media frenzy",
that they would grant that right to one publisher. According to Mr Douglas,
they regarded this course as "the best way to control the media and to protect
our privacy". After some negotiations, they entered into a contract with OK!
("the OK! contract") on 10th November, eight days before the
wedding.
- In its preamble, the OK! contract referred to "the
publication of an article, including story and photographs (collectively "the
Article") relating to the Wedding". By clause 1, OK! agreed to pay £500,000
each to Mr Douglas (therein "MKD"), and to Ms Zeta-Jones (therein "CZJ"). By
clause 2, it was agreed that:
"MKD and CZJ hereby transfer to OK! the exclusive right to publish…the
Photographs (as defined in paragraph 6 below) and the text referred to
herein from the date of the Wedding and for nine months
thereafter."
- By clause 3, OK! were permitted to publish "the approved Article" in OK!
magazine. By clauses 4 and 5, Mr Douglas and Ms Zeta-Jones respectively agreed
that OK! would have, for the nine month period referred to, "the exclusive
right...to consent to use" all photographs and other likenesses of the
Douglases in relation to the wedding. By clause 6, the Douglases were to hire
a photographer at their own expense "to take colour photographs of the Wedding
(‘the Photographs’)." They also agreed to:
"use their best endeavours to ensure that no other media…shall be
permitted access to the Wedding, and that no guests or anyone present at the
Wedding… shall be allowed to take photographs."
The Douglases also undertook to "use their best efforts" to ensure that
their guests did not publish any details of the wedding.
- By clause 7, the Douglases agreed that they would procure "joint ownership
of all copyright in the Photographs", and that their selection of the approved
photographs would be provided to OK! by 22nd November 2000. OK!
agreed that they would only publish photographs approved by the Douglases.
Clause 8 was concerned with the rights and obligations of the parties in
relation to the text of an intended article and interview with the Douglases
about the wedding, to be published in OK! magazine. Clause 9 entitled OK! to
determine the contract if "the Photographs…are not of sufficient quality or
quantity for a feature of this significance".
- By clause 12, the Douglases agreed not to authorise the publication of any
photographs of the wedding for the period of nine months, without the prior
consent of OK!. Under clause 13, if any unlicensed third party used any
photograph (or other likeness of the Douglases) in connection with the
wedding, OK! agreed, if so requested by the Douglases, to "pursue all
necessary legal action to cause such third party to cease such infringement".
Clauses 14 and 15 provided for a sharing between OK! and the Douglases of any
sum over £1m received by OK! "from all sources from the exploitation of the
Article".
- By clause 16, the Douglases undertook to:
"take all reasonable means to provide such security (approved by OK!
magazine) during the entirety of the Wedding proceedings…as is necessary to
ensure that third party media…and/or members of the public …are unable to
obtain access…in order to minimise photographs… of the Wedding…being made
available to third party media."
Clause 17 contained a confidentiality provision, and clause 18 stated that
the contract was governed by Californian law.
- The Douglases had sent out invitations to the reception to around 120
family members, a large number of personal friends, and many celebrities. The
invitations included a politely worded statement which made it clear that no
photographs were to be taken. The Douglases also hired appropriate
photographers for the event. They duly took steps to ensure that there were
tight security arrangements at the hotel on 18th November. Indeed,
well before 18th November, there were security staff in place. On
17th November, the day before the wedding, entry cards were
delivered to each of the 350 wedding guests, with a view to ensuring, by means
of a coded marking on each card, that, so far as possible, no unauthorised
person got in.
- The guests began arriving at the hotel at about 7.30 in the evening of
18th November. There were speeches, entertainers, music, and
dancing. The cake was cut at midnight, and the reception ended around 5.30 on
the morning of the 19th. Although the event appeared to have been an
unqualified success, it transpired that a paparazzo, Mr Rupert Thorpe, had
infiltrated the reception, and surreptitiously taken photographs, including
some of the bride and groom (together and separately). How this happened has
still not been explained, at least in these proceedings.
- Mr Thorpe then contacted another paparazzo, Mr Philip Ramey, who was based
in California, with a view to selling the 15 photographs that he had
surreptitiously taken. They included six ("the unauthorised photographs"),
which were, in due course, thought to be of sufficient interest and quality to
publish. These six photographs were described by the judge in these terms, in
paragraph 76 of his judgment:
"The photograph of the bride going down the aisle towards the wedding
ceremony on the arm of her father cuts off all of him but his arm. Two show
the bride eating, one of which has the groom holding the fork down into her
mouth. In one she playfully holds up a cake knife at her husband. In one
taken from a very low level she dances, but not with the groom. Another,
hopelessly out of focus, shows the bride and groom kissing. The bride’s
dress is shown to a greater or lesser extent in all six, and parts of the
very elaborate wedding cake are visible in three."
- Mr Ramey immediately approached potential purchasers, including Hello!.
Negotiations between Mr Ramey, in California, and Ms Sue Neal, then employed
by Hello! as a picture editor in London, were quickly concluded. At some point
during 19th November, with the authority of her superiors in
Madrid, Ms Neal agreed to pay £125,000 for the exclusive right to publish the
unauthorised photographs in Hello! magazine in the UK, and in its sister
publications in Spain and in France. The judge had little difficulty in
concluding that both Mr Ramey and Hello! would, or at least ought to, have
known of the OK! contract, and of the sort of terms it would have included (in
particular, with regard to exclusivity), as well as of the elaborate security
procedures to prevent intrusion and unauthorised photography at the reception.
- The staff of Hello! magazine then started to prepare for the next edition
on the basis that it would include the unauthorised photographs. Meanwhile,
OK! learnt that unauthorised photographs had been taken and were on the
market. The Douglases were informed, and were, according to their evidence,
not surprisingly "shocked". On learning that Hello! had bought, and were
intending to publish, the unauthorised photographs, the Douglases and OK!
("the claimants") applied for, without notice to Hello!, and obtained from
Buckley J, an interlocutory injunction on 20th November. This
injunction, which restrained Hello! from publishing photographs of the
wedding, was continued by Hunt J the following day, after a hearing, at which
Hello!, as well as the claimants, were represented.
- Hello! appealed, and, after a hearing over two days, the Court of Appeal
(Brooke, Sedley and Keene LJJ) announced, a little before 5.00pm on
23rd November, that the appeal would be allowed, and the
interlocutory injunction lifted. Reasoned judgments were given later, on
21st December 2000, and are reported at [2001] QB 967.
- It subsequently transpired that some of the evidence put before the Court
of Appeal on behalf of Hello! was inaccurate. First, the draft statement of
their publishing director, which was put before the court even though she had
declined to sign it, stated that Hello! were unaware that unauthorised
photographs were intended to be taken. In fact, they were aware that an
attempt would be made to take clandestine photographs, although they had not
in any way commissioned, or even agreed to purchase, any such photographs. The
Marquesa de Varela, who frequently supplied features to Hello! magazine,
signed a manufactured letter to support the story in which she said that it
was her company, Neneta Overseas Ltd, which had sold the unauthorised
photographs to Hello!. This was an invention, whose iniquity is reinforced by
the fact that it was persisted in at trial even to the extent of the
production of false apparently supportive invoices.
- In anticipation of the possibility that they would be able to publish the
unauthorised photographs, Hello! had finalised the 639th issue of their
magazine to include them (including one on the front cover). That issue of
Hello! magazine was distributed to newsagents on 23rd November, and
was available to be purchased by the public throughout the UK on and after
24th November.
- OK! had originally intended to publish the authorised photographs over two
issues, its 242nd and 243rd, which were respectively due
to come out on 30th November and 6th December in London,
and a day later in the rest of the United Kingdom. However, on discovering the
existence of the unauthorised photographs, they decided to bring the
publication forward. This meant that the selection of photographs was an
exercise carried out by the Douglases "in some haste", rather than being "a
leisurely, unhurried and pleasant process" to quote from paragraph 89 of the
judgment. As the judge found, the need for expedition resulted in expense,
which would not otherwise have been incurred.
- As a consequence, a large number of the authorised photographs were
included in the 241st edition of OK! magazine, with one of those photographs,
a full family wedding group, on the front cover. Although this edition bore
the date of 1st December, it "went on public sale on the very same
day as Hello!’s issue 639", to quote from paragraph 133 of the judgment. The
balance of the authorised photographs was published in the next edition of OK!
magazine, with a close-up of the bride and groom on the cover, which came out
on 2nd December.
- On the same day that OK! magazine published many of the authorised
photographs and Hello! magazine published the six unauthorised ones,
24th November 2000, the Sun newspaper published five of the
unauthorised photographs, and the Daily Mail newspaper published a
reproduction of the front cover of Hello! magazine (i.e. one of the
unauthorised photographs). The following day, the Daily Mail published four of
the unauthorised photographs.
- The judge accepted the evidence of Hello! magazine’s London editor, Ms
Koumi, that "it was totally untrue that permission had been given to the Sun",
or indeed to the Daily Mail, to republish the Douglas wedding pictures"
(paragraph 138 of the judgment). In answer to requests made on behalf of those
two newspapers, just after the injunction had been lifted, Ms Koumi had said
that they could reproduce the front cover of issue 639, but no other
photographs in the magazine. The editor of the Sun had been told earlier by Ms
Koumi that he might be able to use the other unauthorised photographs, but she
made it clear that he could not do so on 23rd November, when,
according to the judge, "it was ...not too late for the Sun to have withdrawn
from its print run any pictures from the inside of Hello! which the Sun had
proposed to use" (paragraph 134 of the judgment).
- Meanwhile, the proceedings developed. The claimants had initially wanted
only injunctive relief, but, in light of the discharge of the interlocutory
injunction, they also sought damages. Further defendants, including Senor
Sanchez Junco, were joined in addition to Hello!, and this entailed a further
visit to the Court of Appeal. The pleadings on each side were amended on a
number of occasions, disclosure was given, and witness statements exchanged.
- There was then an application by the claimants to debar the defendants,
including Hello!, from defending the claim, on the grounds of their deceit
(including the lies to the Court of Appeal), their failure to give proper
disclosure (which included allegations of destruction of documents), and the
unreliability of some of their evidence. That application came before Sir
Andrew Morritt V-C, who, on 27th January 2003, dismissed it,
although he strongly criticised the way in which Hello! and many of its
employees had conducted the litigation- see at [2003] 1 All ER 1087. (It is
right to add that some of those criticisms were expressly disclaimed by
Lindsay J in paragraphs 103 and 127-8 of his judgment, after having heard and
seen fuller evidence than was available to the Vice-Chancellor).
- Very shortly thereafter, on 3rd February 2003, the case came on
for hearing, on liability only, before Lindsay J. The hearing lasted 25 days,
and the judge gave an impressive and full judgment on 11th April 2003.
Although other points were dealt with in his judgment, it is enough for
present purposes to summarise the judge’s conclusions as follows:
- He found that the Douglases were entitled to damages and a perpetual
injunction against Hello!, on the grounds that the publication of the
unauthorised photographs in this jurisdiction by Hello! constituted a
breach of confidence, effectively because the reception was a private
event.
- He found that OK! were entitled to damages from Hello! on
substantially similar grounds, albeit that the breach of confidence was,
so far as they were concerned, more in the nature of a trade secret.
- He rejected OK!’s case against Hello! in so far as it was based on
what we shall call economic torts, namely deliberate interference with the
business of OK!, or conspiracy to injure either by lawful, or by unlawful,
means.
- There was a subsequent hearing on the issue of quantum, resulting in a
further judgment on 7th November 2003. In that judgment ("the
quantum judgment"), Lindsay J rejected the argument that the Douglases were
entitled to damages calculated on the basis of a notional licence fee, but he
indicated that, if that had been the proper basis, he would have assessed the
notional fee at £125,000. He awarded the Douglases damages on a different
basis, namely, (a) £3,750 each for the distress occasioned by the publication
of the unauthorised photographs, (b) £7,000 between them for the cost and
inconvenience of having to deal hurriedly with the selection of the authorised
photographs to enable them to be published in OK! magazine no later than the
publication of the unauthorised photographs in Hello! magazine, and (c)
nominal damages for breach of the Data Protection Act 1998. The judge awarded
OK! £1,026,706, representing his assessment of their loss of profit from the
exploitation of the authorised photographs (essentially as a result of a much
more modest increase in circulation than would otherwise have been enjoyed by
the 241st and 242nd issues of OK! magazine) attributable
to the publication of the unauthorised photographs on 24th November
2000. He also awarded OK! £6,450 in respect of wasted costs.
The issues raised on this appeal
- First, Hello! contend that the judge was wrong to conclude that the
Douglases were entitled to any relief. This contention is premised on the
proposition that, whether one puts their case in terms of confidence or
privacy, the Douglases had no cause of action against Hello! as a result of
the publication of the unauthorised photographs. Secondly, Hello! argue that
the judge was also wrong when he decided that OK! had a cause of action, based
on confidence, as a result of the publication of the unauthorised photographs.
- Thirdly, if Hello! succeed in establishing that they are not liable to OK!
in confidence, OK! argue that, contrary to the judge’s conclusion, Hello! are
nonetheless liable to them on the basis of one or more of the economic torts.
For reasons which will be explained when dealing with this part of the appeal,
this argument depends on the Douglases maintaining their judgment against
Hello!.
- The fourth and fifth issues relate to damages. Hello! argue that, if they
are liable to OK!, the judge erred, when assessing the effect on OK!’s
profits, in taking into account the effect, not merely of the publication of
the unauthorised photographs in Hello! magazine, but also of the publication
of some of these in the Sun and the Daily Mail. Finally, if Hello! are liable
to the Douglases, but not to OK!, the claimants contend that the damages
awarded to the Douglases should be equivalent to the licence fee which they
would have negotiated with Hello! for the publication of the unauthorised
photographs in Hello! magazine, and that the judge’s assessment of that fee at
£125,000 was too low.
The judgment on liability
- The judgment on liability was 90 pages in length, the first 50 of which
were devoted to the facts. The judge then identified the different kinds of
claim advanced on the basis of these facts. For present purposes the following
are relevant:
- On the basis that the wedding was private, the Douglases claim for
breach of confidence, a duty, in that circumstance, owed only to them.
- Further, or alternatively, on the basis that the wedding was an event
which was exploited for gain, all three claimants claim for breach of
confidence, their case being that photographic representation of the
events was, in effect, a commercial or trade secret.
- In the further alternative, the Douglases claim for breach of their
right to privacy.
- All claimants claim that there was deliberate interference by the
defendants with their trade or businesses, by unlawful means.
- All claimants claim that there was a conspiracy by the defendants to
injure them by unlawful means.
- All claimants claim there was a conspiracy by the defendants with the
predominant purpose of injuring them.
- The judge dealt first with the two claims based on the law of confidence.
He considered the recent development of this area of the law that has been
stimulated by the Human Rights Act 1998. He set out the principles that he
drew from the authorities in relation to what he described as ‘personal or
individual confidence’. He then went on to give consideration to what he
described as ‘commercial confidence’. He concluded that the authorities
suggested that the benefit of a commercial confidence can be shared with and
enforced by the original confider and another or others, where the facts
require that such others should be protected.
- In an important step in his reasoning the judge said this at paragraph 196
of his judgment:
"I see it as appropriate to examine the applicability of the law of
confidence on the basis that the Claimants had here a valuable trade asset,
a commodity the value of which depended, in part at least, upon its content
at first being kept secret and then of its being made public in ways
controlled by Miss Zeta-Jones and Mr Douglas for the benefit of them and of
the 3rd Claimant. I quite see that such an approach may lead to a
distinction between the circumstances in which equity affords protection to
those who seek to manage their publicity as part of their trade or
profession and whose private life is a valuable commodity and those whose is
not but I am untroubled by that; the law which protects individual
confidences and a law of privacy may protect the latter class and provide no
reason to diminish protection for the former. So far as concerns OK!, the
right to exclusivity of photographic coverage of the wedding was, in
contrast with the nature of the confidence as to the 1st and
2nd Claimants, even more plainly a right in the nature of a trade
secret."
- The judge considered a number of defences raised to the claims and
rejected them. These included the contention that the question of whether what
took place at the wedding was confidential was governed by the law of New York
and the contention that any rights of confidentiality were lost as a result of
the publication of the authorised photographs by OK!
- The judge’s conclusion in relation to confidence appears in paragraph 228:
"In my judgment, and first regarding the Claimants’ case as one of either
commercial confidence or of a hybrid kind in which, by reason of it having
become a commodity, elements that would otherwise have been merely private
became commercial, I find the Hello! Defendants to have acted unconscionably
and that, by reason of breach of confidence, they are liable to all three
Claimants to the extent of the detriment which was thereby caused to the
Claimants respectively. "
- The description of the confidence identified by the judge as ‘hybrid’ was
appropriate. The Douglases had claimed damages under two heads: (1) for
invasion of their privacy and (2) for damage to their commercial interest in
information about their wedding. Their contention was that they were
commercially exploiting information about their wedding in such a way as to
preserve residual confidentiality, or privacy, in relation to it. Selected
photographs would be made public, disclosing that part of the private
information that the Douglases were content should be conveyed to the public.
No other images would be made available to the public.
- The judge appears to have accepted that this was a legitimate approach. He
held at paragraph 52:
" the notion of an exclusive contract as a means of reducing the risk of
intrusion by unauthorised members of the media and hence of preserving the
privacy of a celebrity occasion is a notion that can reasonably be believed
in as a potentially workable strategy to achieve such ends."
- When the judge came to assess damages, he made an award under each head.
He awarded Mr Douglas and Ms Zeta-Jones £3,750 each, for distress at the
publication of the unauthorised photographs. This can only have been on the
basis that those photographs had invaded their privacy. He awarded them a
further £7,000 jointly for the labour and expense of expediting the selection
of photographs that were to be provided under their contract with OK!. This
can only have reflected damage, or the cost of mitigating damage, to their
commercial interest in the information about their wedding.
- The judge dealt shortly with the question of whether the Douglases could
bring a separate claim under the law of privacy. He held that in this case the
law of confidence provided them with an adequate remedy. Were that not the
case it would have been for Parliament, not the court, to fill the gap.
- So far as the claims for interference with business and conspiracy to
injure, the judge held that the necessary elements in these causes of action
were not all made out. We shall consider his reasoning in greater detail later
in this judgment.
The issues in relation to confidence and privacy: the principles
Introductory
- Mr Price QC, on behalf of Hello, submitted that it was not possible to
approach this case, as the judge had done, on the premise that the rights
involved were of a hybrid kind, being both personal and commercial. Different
principles applied to the two different types of right.
- So far as the Douglases’ claim was concerned, the right that they invoked
was a personal right in the nature of a privacy right. It was a right which
would be infringed by publication of photos of the wedding if, but only if,
such publication would be highly offensive to a reasonable person. The right
was not transferable. In so far as the Douglases had such a right it was lost
once they entered into an agreement with OK! under which that which they could
have kept private was to be made public. Furthermore, any damages for
infringement of this right could only reflect the values protected by the
legal principle, that is privacy values.
- So far as OK!’s claim was concerned, they claimed to have enjoyed a right
of commercial confidence, transferred to them under their contract with the
Douglases. The law recognised no such right in respect of what went on at the
wedding and no such right could be transferred to OK!. Alternatively, if such
a right did exist, it ceased on publication by OK! of the authorised
photographs, which placed the information alleged to be confidential in the
public domain.
- Mr Price advanced separate defences based upon New York law. The
unauthorised photographs were taken by Mr Thorpe in New York. Any duty of
confidence on the part of Hello! could only be based on knowledge that Mr
Thorpe owed a duty of confidence in relation to the photographs. Under the law
of New York Mr Thorpe owed no such duty. It followed that Hello! owed no duty
of confidence either to the Douglases or to OK!.
- It is convenient to consider the issues in relation to the Douglases’
claim separately from those in relation to OK!’s claim. The issues in relation
to the Douglases’ claim are as follows:
- (Disregarding the effect of the OK! contract) did the law of
confidence protect information about the wedding as being private
information? If so,
- Did the OK! contract destroy that protection?
- Did the law of confidence protect the Douglases’ commercial interest
in the information about their wedding?
- The issues in relation to OK!’s claim are as follows:
- Did the OK! contract have the effect of extending to OK! the
protection of the law of confidence in respect of the information about
the wedding? If so
- Was that protection lost when OK! published the authorised
photographs?
- There is one issue common to both claims. Is this area of the law so
uncertain that it cannot be invoked to justify interference with Hello!’s
freedom of expression?
- These issues fall to be considered in a context in which English law is
rapidly developing. The enactment of the Human Rights Act provoked a lively
discussion of the impact that it would have on the development of a law
protecting privacy. The Government has made it clear that it does not intend
to introduce legislation in relation to this area of the law, but anticipates
that the judges will develop the law appropriately, having regard to the
requirements of the Convention – see the comment of Lord Irvine LC in the
course of the debate on the Human Rights Bill HL Debs Vol 583 Col 771 (24
November 1997) and the submissions of the United Kingdom in Spencer v UK
(1998) 25 EHRR CD 105. The courts have not accepted this role with
whole-hearted enthusiasm. Before turning to consider recent developments in
this area of the law, we propose to consider two seminal questions: (1) What
obligation does the Convention impose on the United Kingdom in relation to the
protection of privacy? (2) What obligation is placed on the courts in respect
of the protection of privacy?
The United Kingdom’s Convention obligation in respect of privacy
- We are not the first to acknowledge the assistance to be derived from
Gavin Phillipson’s lucid article, Transforming Breach of Confidence?
Towards a Common Law Right of Privacy under the Human Rights Act (2003) 66
MLR 726. At p 729 he observes that the Strasbourg jurisprudence provides no
definite answer to the question of whether the Convention requires
states to provide a privacy remedy against private actors. That is no
longer the case. In von Hannover v Germany (24 June 2004) the ECtHR
gave judgment in respect of a series of complaints by Princess Caroline of
Monaco. They all related to press photographs of her that had been taken in
public places. She contended that these infringed her privacy and had sought a
remedy in a series of actions in the German courts, which had been
unsuccessful. She alleged that these decisions of the German courts infringed
her Article 8 right to respect for her private and family life. The ECtHR
agreed:
"The Court reiterates that although the object of Article 8 is
essentially that of protecting the individual against arbitrary interference
by the public authorities, it does not merely compel the State to abstain
from such interference: in addition to this primarily negative undertaking,
there may be positive obligations inherent in an effective respect for
private or family life. These obligations may involve the adoption of
measures designed to secure respect for private life even in the sphere of
the relations of individuals between themselves (see, mutatis mutandis, X
and Y v the Netherlands, judgment of 26 March 1985, Series A no. 91, p
11, ss 23; Stjerna v Finland, judgment of 25 November 1994, Series A
no. 299-B, p61, ss38; and Verliere v Switzerland (dec.), no.
41953/98, ECHR 2001-VII). That also applies to the protection of a person’s
picture against abuse by others " .
- The ECtHR went on at paragraph 72 to state that the relevant German
statute should have been interpreted narrowly by the German courts:
"to ensure that the State complies with its positive obligation under the
Convention to protect private life and the right to control the use of one’s
own image"
- It follows that the ECtHR has recognised an obligation on member states to
protect one individual from an unjustified invasion of private life by another
individual and an obligation on the courts of a member state to interpret
legislation in a way which will achieve that result.
What obligation is placed on the courts in respect of the protection of
privacy?
- Some, such as the late Professor Sir William Wade, in Wade & Forsyth
Administrative Law (8th Ed.) p 983, and Jonathan Morgan, in
Privacy, Confidence and Horizontal Effect:" Hello" Trouble (2003) CLJ
443, contend that the Human Rights Act should be given ‘full, direct,
horizontal effect’. The courts have not been prepared to go this far. In
Wainwright v Home Office [2003] UKHL 53; [2004] 2 AC 406 Lord Hoffmann
observed at paragraph 30 that whether the law of confidence should be extended
so as to protect privacy was a question which "must wait for another day", but
he went on to hold that there could be no question of the courts adopting
"some high level principle of privacy". In Campbell v MGN [2004] 2 WLR
1232 Lord Nicholls of Birkenhead observed at paragraph 11 that:
"In this country, unlike the United States of America, there is no
over-arching, all-embracing, cause of action for "invasion of privacy"…But
protection of various aspects of privacy is a fast developing area of the
law, here and in some other common law jurisdictions."
- Lord Nicholls went on to describe the way in which the law of breach of
confidence has been adapted to embrace one aspect of invasion of privacy, the
wrongful disclosure of private information, commenting at paragraph 14:
"The essence of the tort is better encapsulated now as misuse of private
information."
A little later in his speech he said this:
"17.The time has come to recognise that the values enshrined in articles
8 and 10 are now part of the cause of action for breach of confidence. As
Lord Woolf CJ has said, the courts have been able to achieve this result by
absorbing the rights protected by articles 8 and 10 into this cause of
action: A v B plc [2003] QB 195, 202, paragraph 4. Further, it should
now be recognised that for this purpose these values are of general
application. The values embodied in articles 8 and 10 are as much applicable
in disputes between individuals or between an individual and a
non-governmental body such as a newspaper as they are in disputes between
individuals and a public authority.
18. In reaching this conclusion it is not necessary to pursue the
controversial question whether the European Convention itself has this wider
effect. Nor is it necessary to decide whether the duty imposed on courts by
section 6 of the Human Rights Act 1998 extends to questions of substantive
law as distinct from questions of practice and procedures. It is sufficient
to recognise that the values underlying articles 8 and 10 are not confined
to disputes between individuals and public authorities. This approach has
been adopted by the courts in several recent decisions, reported and
unreported, where individuals have complained of press
intrusion."
- Baroness Hale said that the Human Rights Act did not create any new cause
of action between private persons. Nor could the courts invent a new cause of
action to cover types of activity not previously covered. But where there is a
cause of action the court, as a public authority, must act compatibly with
both parties’ Convention rights.
- We conclude that, in so far as private information is concerned, we are
required to adopt, as the vehicle for performing such duty as falls on the
courts in relation to Convention rights, the cause of action formerly
described as breach of confidence. As to the nature of that duty, it seems to
us that sections 2, 3, 6 and 12 of the Human Rights Act all point in the same
direction. The court should, insofar as it can, develop the action for breach
of confidence in such a manner as will give effect to both Article 8 and
Article 10 rights. In considering the nature of those rights, account should
be taken of the Strasbourg jurisprudence. In particular, when considering what
information should be protected as private pursuant to Article 8, it is right
to have regard to the decisions of the ECtHR. We cannot pretend that we find
it satisfactory to be required to shoe-horn within the cause of action of
breach of confidence claims for publication of unauthorised photographs of a
private occasion.
The law of confidence
- We now turn to consider the law of confidence as it has developed up to
this point. We start with Prince Albert v Strange (1849) 1 Mac & G
25. Prince Albert obtained an injunction restraining the defendant from
publishing a catalogue of etchings made by himself and Queen Victoria. One
ground for the grant of this equitable remedy was that the information in the
catalogue must have been obtained by breach of trust, confidence or contract.
The information in question was personal, not commercial, although the
defendant intended to make money out of it, and Lord Cottenham LC remarked
that "privacy is the right invaded".
- We can advance well over a century to Coco v A N Clark (Engineers) Ltd
[1969] RPC 41, a case in which Megarry J analysed three elements of breach
of confidence as established by the authorities up to that point in time.
First the information had to be ‘of a confidential nature’. In explaining this
phrase Megarry J first cited the statement of Lord Greene MR in Saltman
Engineering Co Ltd v Campbell Engineering Co Ltd (1948) 65 RPC 203 at p
215 that it must not be "something which is public property and public
knowledge". This is not the clearest of definitions. It seems to us that
information will be confidential if it is available to one person (or a group
of people) and not generally available to others, provided that the person (or
group) who possesses the information does not intend that it should become
available to others. Megarry J went on to hold that "whether it is described
as originality or novelty or ingenuity or otherwise, I think that there must
be some product of the human brain which suffices to confer a confidential
nature upon the information". While this may have been an appropriate
statement on the facts before him, it is plainly not of general application,
as the Spycatcher litigation demonstrates.
- The second requirement was that the information must have been
communicated by the confider to the confidant in circumstances of confidence.
As to this requirement, Megarry J advanced the following test at p 48:
"…if the circumstances are such that any reasonable man standing in the
shoes of the recipient of the information would have realised that upon
reasonable grounds the information was being given to him in confidence,
then this should suffice to impose on him the equitable obligation of
confidence."
The third requirement was that there had to be an unauthorised use of the
information to the detriment of the confider. We would observe that the
essential feature creating the duty of confidence was the circumstances in
which the information was communicated from the confider to the confidant.
- The information that was the subject matter of Coco v A N Clark was
technical information of value for commercial purposes. It was held not to be
of a confidential nature as it was already in the public domain.
- In Attorney-General v Guardian Newspapers Limited (No 2) [1990] 1
AC 109 Lord Goff of Chieveley observed that an obligation of confidence could
arise even where the information in question had not been confided by a
confider to a confidant. He said at p 281:
"I realise that, in the vast majority of cases, in particular those
concerned with trade secrets, the duty of confidence will arise from a
transaction or relationship between the parties – often a contract, in which
event the duty may arise by reason of either an express or an implied term
of that contract. It is in such cases as these that the expressions
"confider" and "confidant" are perhaps most aptly employed. But it is well
settled that a duty of confidence may arise in equity independently of such
cases; and I have expressed the circumstances in which the duty arises in
broad terms, not merely to embrace those cases where a third party receives
information from a person who is under a duty of confidence in respect of
it, knowing that it has been disclosed by that person to him in breach of
his duty of confidence, but also to include certain situations, beloved of
law teachers – where an obviously confidential document is wafted by an
electric fan out of a window into a crowded street, or where an obviously
confidential document, such as a private diary, is dropped in a public
place, and is then picked up by a passer-by."
- Lord Goff went on to say that he had deliberately avoided the fundamental
question whether, contract apart, the duty lay simply "in the notion of an
obligation of conscience arising from the circumstances in or through which
the information was communicated or obtained". We would observe that the
reference to an obviously confidential document might be said to have
begged the question of what made the document confidential. We would also
observe that in Lord Goff’s examples the nature of the information, together
possibly with the form in which it was recorded, coupled with the
circumstances in which it came to the notice of the person fixed with the duty
of confidence, were such as to lead a reasonable person to conclude that the
information in question was private.
- Lord Goff also deliberately avoided the question of whether confidential
information might be regarded as property, a question of particular importance
in the context of the appeal before us.
- The potential that Lord Goff’s analysis had for protecting private
information that was not recorded in a document was not immediately
appreciated. In Kaye v Robertson (1991) 19 IPR 147 journalists had
gained unauthorised access to the hospital bedside of a celebrity recovering
from a brain injury and taken photographs of his appearance to which he was in
no condition to consent. The Court of Appeal held that the law provided no
protection for the photographic information so obtained. It was not even
argued that the law of confidence could provide a remedy.
- The significance of Lord Goff’s approach was, however, appreciated by Laws
J who, in Hellewell v Chief Constable [1995] 1 WLR 804 at p 807, made
the following obiter observation:
"If someone with a telephoto lens were to take from a distance and with
no authority a picture of another engaged in some private act, his
subsequent disclosure of the photograph would, in my judgment, as surely
amount to a breach of confidence as if he had found or stolen a letter or
diary in which the act was recounted and proceeded to publish it. In such a
case, the law would protect what might reasonably be called a right of
privacy, although the name accorded to the cause of action would be breach
of confidence. It is, of course, elementary that, in all such cases, a
defence based on the public interest would be available."
- The first detailed analysis of the impact of the Human Rights Act on the
protection of privacy afforded by English law and, in particular, the law of
confidence, was that carried out by the Court of Appeal when discharging the
interlocutory injunction which had been granted in this case – reported at
[2001] QB 967. Brooke LJ concluded, on the facts as they then appeared, that
the unauthorised photographs had been taken by someone at the wedding, that is
on a private occasion, who was under a duty of confidence, so that they
constituted ‘confidential information’ under established principles. He went
on to consider the possibility that the photographs had been taken by an
intruder with whom no relationship of trust or confidence had been
established, remarking that in that eventuality the court would have to
explore the law relating to privacy when it was "not bolstered by
considerations of confidence".
- Brooke LJ went on to consider authorities involving invasion of privacy in
England, in the Commonwealth and at Strasbourg, and concluded that it was a
difficult question whether the Human Rights Act required the English courts to
develop a law of privacy, but one that he was not obliged to solve.
- Sedley LJ posed the same question, but gave it a more affirmative answer.
He concluded (paragraph 110):
"We have reached a point at which it can be said with confidence that the
law recognises and will appropriately protect a right of personal
privacy."
He went on (paragraph 125) to conclude that there was a powerfully arguable
case on the existing authorities that the Douglases had a right of privacy
that English law would recognise and, where appropriate, protect. Furthermore,
section 12 of the Human Rights Act expressly required the court to have regard
to Article 10 of the Convention and this, necessarily, brought ‘into the
frame’ Article 8.
- Keene LJ considered that developments in the law of breach of confidence
gave the claimants at least an arguable claim. He remarked (paragraph 166):
"The nature of the subject matter or the circumstances of the defendant’s
activities may suffice in some instances to give rise to liability for
breach of confidence. That approach must now be informed by the
jurisprudence of the Convention in respect of article 8. Whether the
resulting liability is described as being for breach of confidence or for
breach of a right to privacy may be little more that deciding what label is
to be attached to the cause of action, but there would seem to be merit in
recognising that the original concept of breach of confidence has in this
particular category of cases now developed into something different from the
commercial and employment relationships with which confidentiality is mainly
concerned."
- The Court discharged the injunction on the basis that the OK! contract had
substantially weakened The Douglases’ claim to relief based on invasion of
privacy and that damages or an account of profits was likely to provide an
adequate remedy should breach of duty be established at the trial.
- Perhaps the most dramatic use of the law of confidence to protect privacy
occurred within weeks of the interlocutory decision in this case. In
Venables and Thompson v New Group Newspapers Ltd and others [2001] Fam
430 Dame Elizabeth Butler-Sloss P granted injunctions against the whole world
restraining the disclosure of any information that might lead to the
identification of the murderers of James Bulger after their release from
prison. The President held that, taking into account the Convention, the law
of confidence could extend to cover the injunctions sought. Disclosure of the
information in question might lead to grave, and possibly fatal, consequences
for the claimants. This factor not merely rendered the information
confidential, but outweighed the freedom of expression that would otherwise
have underpinned the right of the press to publish the information.
- A remarkable feature of this decision was that the nature of the
information alone gave rise to the duty of confidence regardless of the
circumstances in which the information might come to the knowledge of a person
who might wish to publish it.
- In A v B [2003] QB 195 the Court of Appeal had to consider an
application to set aside an interim injunction preventing the first defendant
newspaper from publishing details of the claimant’s sexual relationships with
the second defendant and a woman to whom he was not married. The injunction
had been granted on the ground that the information was confidential and
subject to the protection of Article 8 of the Convention and there was no
public interest in publication that enabled the defendant’s rights of freedom
of expression to prevail.
- In introducing the judgment of the court, Lord Woolf CJ said this at
paragraph 4:
"The application for interim injunctions have now to be considered in the
context of articles 8 and 10 of the European Convention for the Protection
of Human Rights and Fundamental Freedoms. These articles have provided new
parameters within which the court will decide, in an action for breach of
confidence, whether a person is entitled to have his privacy protected by
the court or whether the restriction of freedom of expression which such
protection involves cannot be justified. The court’s approach to the issues
which the application raise has been modified because, under section 6 of
the 1998 Act, the court, as a public authority, is required not to act "in a
way which is incompatible with a Convention right". The court is able to
achieve this by absorbing the rights which articles 8 and 10 protect into
the long-established action for breach of confidence. This involves giving a
new strength and breadth to the action so that it accommodates the
requirements of those articles."
- Lord Woolf then laid down guidelines which a court should follow when
considering a similar application. These include the proposition that in the
great majority of, if not all, situations where the protection of privacy is
justified in relation to events after the Human Rights Act came into force, an
action for breach of confidence will provide the necessary protection. As to
interests capable of being subject to a claim for privacy, these will usually
be obvious. A duty of confidence will arise whenever the party subject to the
duty is in a situation where he knows or ought to know that the other person
can reasonably expect his privacy to be protected. If there is an intrusion in
a situation where a person can reasonably expect his privacy to be respected
then that intrusion will be capable of giving rise to an action for breach of
confidence unless the intrusion can be justified.
- Lord Woolf went on to deal with the circumstances where a person can and
cannot reasonably expect details of his sexual activities to be treated as
confidential. This was a matter that later fell for consideration by Ouseley J
in Theakston v MGN [2002] EWHC 137 and, in the nature of things, is
likely to call for consideration not infrequently in the future. Having regard
to the facts of the present case this is not an area that we need explore. We
would simply observe that to date the English courts appear to have taken a
less generous view of the protection that the individual can reasonably expect
in respect of his or her sexual activities than has the Strasbourg court.
- The most recent and authoritative consideration that has been given to
this area of the law is to be found in the speeches of the House of Lords in
Campbell v MGN. Naomi Campbell brought proceedings for breach of
confidence in respect of an article in the Mirror newspaper which disclosed
that she was a drug addict, and was attending meetings of Narcotics Anonymous.
Details were given as to the frequency of these meetings and the article was
illustrated by photographs of her on the doorstep of a building where such a
meeting had just taken place. The photographs had been taken covertly from a
car by a freelance photographer who had been employed by the newspaper for
this purpose.
- Miss Campbell did not complain of the publication of the fact that she was
a drug addict. She accepted that, because she had gone on record as saying
that she did not take drugs, the press served a legitimate public interest in
putting the record straight. She complained, however, that the information
about her attendance at Narcotics Anonymous was private information that the
Mirror had disclosed in breach of confidence. As to the photographs, Miss
Campbell expressly did not complain that it was a breach of confidence to
publish these on the ground that they had been taken covertly. Her complaint
was that the information depicted by the photographs formed part of the
private information which the Mirror had no justification for publishing.
- Miss Campbell succeeded at first instance. She lost in the Court of Appeal
on the ground that the information that she alleged was private was
information that it was legitimate for the Mirror to publish, being peripheral
to the central story that she was a drug addict and published in order to
portray her in a favourable light. The House of Lords, by a majority or 3 to
2, took a different view. The details of Miss Campbell’s treatment with
Narcotics Anonymous, together with the photographs, constituted private
information the publication of which amounted to what used to be called a
breach of confidence. While the House divided on the application of the law to
the facts, there was no significant disagreement as to the relevant principles
of law.
- We have already referred to Lord Nicholls’s statement that the essence of
the tort was better encapsulated as a misuse of private information. That
statement was preceded by the following passage:
"Now the law imposes a "duty of confidence" whenever a person receives
information he knows or ought to know is fairly and reasonably to be
regarded as confidential. Even this formulation is awkward. The continuing
use of the phrase "duty of confidence" and the description of the
information as "confidential" is not altogether comfortable. Information
about an individual’s private life would not, in ordinary usage, be called
"confidential". The more natural description today is that such information
is private"
- Later at paragraph 21 Lord Nicholls commented:
"Essentially the touchstone of private life is whether in respect of the
disclosed facts the person in question had a reasonable expectation of
privacy."
He drew attention to the distinction between identifying whether
information is private and identifying whether it is proportionate to prevent
disclosure of such information, having regard to the competing Convention
right of freedom of expression. He suggested that the test of whether
disclosure would be "highly offensive to a reasonable person" , advanced by
Gleeson CJ when considering the test of what is private in Australian
Broadcasting Corpn v Lenah Game Meats Pty Ltd (2001) 208 CLR 199,
paragraph 42, was more relevant to the latter issue.
- Lord Hoffmann identified two developments of the law of confidence. The
first was the recognition of the artificiality of distinguishing between
confidential information obtained through a violation of a confidential
relationship and similar information obtained in some other way. The second
was the acceptance, under human rights instruments such as Article 8 of the
Convention, of the privacy of personal information as something worthy of
protection in its own right. As to the latter there was no logical ground for
affording a person less protection against a private individual than against
the state. In the result (paragraph 51):
"Instead of the cause of action being based upon the duty of good faith
applicable to confidential personal information and trade secrets alike, it
focuses upon the protection of human autonomy and dignity – the right to
control the dissemination of information about one’s private life and the
right to the esteem and respect of other people."
- Lord Hope of Craighead (paragraph 85) approved Lord Woolf CJ’s statement
in A v B that a duty of confidence will arise whenever the party
subject to the duty is in a situation where he knows or ought to know that the
other person can reasonably expect his privacy to be protected. He considered
that Gleeson CJ’s test was useful where there was room for doubt, but:
"If the information is obviously private, the situation will be one where
the person to whom it relates can reasonably expect his privacy to be
respected. So there is normally no need to go on and ask whether it would be
highly offensive for it to be published." (paragraph 96)
- Baroness Hale held that the cause of action of breach of confidence had
within its scope what has been termed "the protection of the individual’s
informational autonomy". Where the person publishing the information knows or
ought to know that there is a reasonable expectation that the information in
question will be kept confidential the threshold is reached where the court
will have to balance the claimant’s interest in keeping the information
private against the countervailing interest of the recipient in publishing it
(paragraph 137). Lord Carswell at paragraph 166 observed that it was not
necessary to apply Gleeson CJ’s test. It was sufficiently established by the
nature of the material that it was private information which attracted the
duty of observing the confidence in which it was imparted to the respondents.
- Some of the comments that we have cited underline the validity of Lord
Nicholls’s observation that the use of the phrase "duty of confidence" and the
description of private information as "confidential" are not altogether
comfortable. What the House was agreed upon was that the knowledge, actual or
imputed, that information is private will normally impose on anyone publishing
that information the duty to justify what, in the absence of justification,
will be a wrongful invasion of privacy. The House was also agreed that, when
Article 8 and Article 10 are both engaged, one does not start with the balance
tilted in favour of Article 10.
‘Private information’
- Megarry J in Coco v A N Clark identified two requirements for the
creation of a duty of confidence. The first was that the information should be
confidential in nature and the second was that it should have been imparted in
circumstances importing a duty of confidence. As we have seen, it is now
recognised that the second requirement is not necessary if it is plain that
the information is confidential, and for the adjective ‘confidential’ one can
substitute the word ‘private’. What is the nature of ‘private information?’ It
seems to us that it must include information that is personal to the person
who possesses it and that he does not intend shall be imparted to the general
public. The nature of the information, or the form in which it is kept, may
suffice to make it plain that that the information satisfies these criteria.
Photographic information
- This action is about photographs. Special considerations attach to
photographs in the field of privacy. They are not merely a method of conveying
information that is an alternative to verbal description. They enable the
person viewing the photograph to act as a spectator, in some circumstances
voyeur would be the more appropriate noun, of whatever it is that the
photograph depicts. As a means of invading privacy, a photograph is
particularly intrusive. This is quite apart from the fact that the camera, and
the telephoto lens, can give access to the viewer of the photograph to scenes
where those photographed could reasonably expect that their appearances or
actions would not be brought to the notice of the public.
- The intrusive nature of photography is reflected by the various media
codes of practice. It is also recognised by the authorities. In Theakston v
MGN Ousley J refused an injunction restraining publication of a verbal
depiction of the claimant’s activities in a brothel. He granted, however, an
injunction restraining the publication of photographs taken of these
activities. He held, at paragraph 78:
"The authorities cited to me showed that the Courts have consistently
recognised that photographs can be particularly intrusive and have showed a
high degree of willingness to prevent the publication of photographs, taken
without the consent of the person photographed but which the photographer or
someone else sought to exploit and publish. This protection extended to
photographs, taken without their consent, of people who exploited the
commercial value of their own image in similar photographs, and to photographs
taken with the consent of people but who had not consented to that particular
form of commercial exploitation, as well as to photographs taken in pubic or
from a public place of what could be seen if not with a naked eye, then at
least with the aid of powerful binoculars. I concluded that this part of the
injunction involved no particular extension of the law of confidentiality and
that the publication of such photographs would be particularly intrusive into
the Claimant’s own individual personality. I considered that even though the
fact that the Claimant went to the brothel and the details as to what he did
there were not to be restrained from publication, the publication of
photographs taken there without his consent could still constitute an
intrusion into his private and personal life and would do so in a peculiarly
humiliating and damaging way. It did not seem to be remotely inherent in going
to a brothel that what was done inside would be photographed, let alone that
any photographs would be published."
- In D v L [2004] EMLR 1 at p 10 Waller LJ remarked:
"A court may restrain the publication of an improperly obtained
photograph even if the taker is free to describe the information which the
photographer provides or even if the information revealed by the photograph
is in the public domain. It is no answer to the claim to restrain the
publication of an improperly obtained photograph that the information
portrayed by the photograph is already available in the public
domain."
- In von Hannover v Germany the ECtHR remarked at paragraph 59:
"Although freedom of expression also extends to the publication of
photos, this is an area in which the protection of the rights and reputation
of others takes on particular importance. The present case does not concern
the dissemination of "ideas", but of images containing very personal or even
intimate "information" about an individual. Furthermore, photos appearing in
the tabloid press are often taken in a climate of continual harassment which
induces in the person concerned a very strong sense of intrusion into their
private life of even of persecution."
- In Campbell v MGN, although Naomi Campbell made no complaint that
the publication of her photographs itself constituted a breach of confidence,
both Lord Hope and Baroness Hale placed particular weight on the intrusive
nature of photographs. Lord Hope said at paragraph 123:
"Miss Campbell could not have complained if the photographs had been
taken to show the scene in the street by a passer-by and later published
simply as street scenes. But these were not just pictures of a street scene
where she happened to be when the photographs were taken. They were taken
deliberately, in secret, and with a view to their publication in conjunction
with the article. The zoom lens was directed at the doorway of the place
where the meeting had been taking place. The faces of others in the doorway
were pixelated so as not to reveal their identity. Hers was not, the
photographs were published and her privacy was invaded."
- Lord Hope had earlier held applicable the reasoning of the Supreme Court
of Canada in Aubry v Editions Vice-Versa Inc [1998] 1 SCR 591. The
court had held that publication in a magazine of an unauthorised photograph of
a 17 year old girl sitting on the steps of a public building had violated her
right to respect for private life conferred under Article 5 of the ‘Quebec
Charter’ of Human Rights and Freedoms.
- Baroness Hale was not prepared to go this far. She said that by themselves
the photographs would not have been objectionable, contrasting the law of
England with that applied in the Vice-Versa case. She held the
photographs objectionable because (paragraph 155):
"A picture is "worth a thousand words" because it adds to the impact of
what the words convey; but it also adds to the information given in those
words. If nothing else, it tells the reader what everyone looked like; in
this case it also told the reader what the place looked
like."
- With this summary of English law, we turn to the issues raised by the
facts of this case.
The Douglases’ Claim
Disregarding the OK! contract, did the law of confidence protect
information about the wedding as private information?
- We should make clear at the outset that the only issue on liability was
whether the photographs published by Hello! infringed rights of confidence or
privacy enjoyed by the Douglases. As the judge recorded, Hello! did not seek
to argue that it was in the public interest that they should publish the
unauthorised photographs or that their Article 10 rights of freedom of
expression outweighed any rights of confidence or privacy that the Douglases
enjoyed.
- The judge found (paragraph 66):
"To the extent that privacy consists of the inclusion only of the invited
and the exclusion of all others, the wedding was as private as was possible
consistent with it being a socially pleasant event."
He further found that Mr Thorpe took the unauthorised photographs
surreptitiously in circumstances where he was well aware that his presence at
the wedding was forbidden. Finally the judge found that those responsible for
purchasing the unauthorised photographs on behalf of Hello! were aware that
the taking of the photographs would have involved at least a trespass or some
deceit or misrepresentation on the photographer’s part.
- Had the wedding taken place in England, and putting on one side the effect
of the OK! contract, only an affirmative answer could be given to the question
of whether those acting for Hello! knew that the information depicted by the
unauthorised photographs was fairly and reasonably to be regarded as
confidential or private.
- Applying the test propounded by the House of Lords in Campbell v MGN,
photographs of the wedding plainly portrayed aspects of the Douglases’
private life and fell within the protection of the law of confidentiality, as
extended to cover private or personal information. Does it make any difference
that the wedding took place in New York?
The effect of the law of New York
- It was not suggested that section 9(1) of the Private International Law
(Miscellaneous Provisions) Act 1995 is applicable to this case, but we have
none the less considered that question. That section governs the choice of law
for determining issues relating to tort. The Douglases’ claim in relation to
invasion of their privacy might seem most appropriately to fall within the
ambit of the law of delict. We have concluded, however, albeit not without
hesitation, that the effect of shoe-horning this type of claim into the cause
of action of breach of confidence means that it does not fall to be treated as
a tort under English law, see Kitechnology BV v Unicor GmbH [1995] IL
Pr 568; [1995] FSR 795 at paragraph 40, and more generally Clerk &
Lindsell on Torts, (18th edition, 2000) at footnotes 2 and 3 to
paragraph 27-001. Nor has anyone suggested that the facts of this case give
rise to a cause of action in tort under the law of New York (see below).
Accordingly we have concluded that the parties were correct to have no regard
to section 9(1) of the 1995 Act.
- Dicey & Morris on The Conflict of Laws (13th
edition, 2000) Vol II suggest somewhat tentatively, at paragraph 34-029 and
following, that a claim for breach of confidence falls to be categorised as a
restitutionary claim for unjust enrichment and that the proper law is the law
of the country where the enrichment occurred. While we find this reasoning
persuasive, it does not solve the problem on the facts of this case. Even if
the Douglases’ claim for invasion of their privacy falls to be determined
according to principles of English law, these may themselves require
consideration of the law of New York. That indeed is the case advanced on
behalf of Hello!
- The judge held that the conscience of Hello! was tainted, so far as the
use of the unauthorised photographs were concerned, by a number of matters.
They knew of the security precautions taken by the Douglases to prevent
unauthorised photography. They knew of OK!’s exclusive contract. They knew
that the unauthorised photographs must have been taken surreptitiously and
have involved at least a trespass by the photographer. In these circumstances
he brushed aside arguments advanced by Hello! based on the law of New York in
half of a single paragraph (211):
"Then these Defendants say there was no wrong done by the law of the
place, New York, but, firstly, I cannot see how Mr Thorpe can fail to be
regarded as other than having been at least a trespasser by the law of New
York and it has certainly not been demonstrated to me that he was not.
Secondly, so long as the conscience of the publishers of Hello! is tainted,
as I have held it to be, I fail to see how Thorpe’s innocence of any breach
of local law, even had that been proved to me, should assist
them."
- The judge’s finding that Mr Thorpe must at least have been a trespasser
under the law of New York was not challenged. Hello!’s argument, as advanced
before us, was as follows. The information in the unauthorised photographs can
only have attracted the protection of the law of confidence (1) as a
consequence of the subject matter of the photographs or (2) as a result of the
circumstances in which they were taken. So far as the subject matter was
concerned, this could only attract protection if it was, itself, of a nature
that would be highly offensive to a reasonable person of ordinary
sensibilities. That was not this case. It followed that to establish that the
information was protected, the Douglases had to rely upon the circumstances in
which the information was published. As to these, the relevant circumstances
were events in New York, and the implication of those events had to be
considered according to the law of New York. Under the law of New York there
would have been no inhibition upon Mr Thorpe publishing the photographs which
he had taken. Hello!, having derived the photographs from Mr Thorpe, could be
no worse off. Although the judge made no express finding on the point, we
understand that it was common ground that, had the unauthorised photographs
been published by Mr Thorpe in New York, or sold by Mr Thorpe to Hello! and
published by Hello! in New York, no actionable wrong would have been
committed.
- We do not consider that the law of New York has any direct application on
the facts of this case. The cause of action is based on the publication in
this jurisdiction and the complaint is that private information was conveyed
to readers in this jurisdiction. The test of whether the information was
private so as to attract the protection of English law must be governed by
English law. That test, as established by Campbell v MGN, is whether
Hello! knew or ought to have known that the Douglases had a reasonable
expectation that the information would remain private. Where the events to
which the information relates take place outside England – in this instance in
New York – the law of the place where they take place may nonetheless be
relevant to the question of whether there is a reasonable expectation that the
events will remain private.
- If, in the present case, the law of New York had provided that any member
of the public had a right to be present at a wedding taking place in a hotel
and to take and publish photographs of that wedding, then photographs of the
wedding would be unlikely to have satisfied the test of privacy. That was not
the case, however. The law of New York clearly entitled the Douglases to
arrange for their wedding to take place in circumstances designed to ensure
that events at the wedding remained private, at least so far as photographic
detail was concerned. The fact that photographs taken in violation of that
privacy might have been published with impunity in New York has no direct
bearing on whether the information fell to be treated as private and
confidential in England. The question of whether, if unauthorised photographs
of the wedding had actually been published in New York, privacy and
confidentiality in England would have been destroyed is a different question,
and one relevant to the next question that we have to address.
- To summarise our conclusion at this stage: disregarding the effect of the
OK! contract, we are satisfied that the Douglases’ claim for invasion of their
privacy falls to be determined according to the English law of confidence.
That law, as extended to cover private and personal information, protected
information about the Douglases’ wedding.
The effect of the OK! contract
- Hello!’s argument, as advanced by Mr Price, is that, once the Douglases
had committed themselves by the OK! contract to putting before the public
photographs of their wedding, it was no longer possible for them to advance a
claim that events at their wedding were private or confidential. Thereafter,
publication of other photographs of that event could not possibly infringe
Article 8 of the Convention or give rise to a claim for breach of confidence.
- We have seen that the first element of breach of confidence identified by
Megarry J in Coco v A N Clark was that the information had to be ‘of a
confidential nature’, as opposed to being public property and public
knowledge. The Spycatcher litigation concerned republication in English
newspapers of extracts from a book, published without legal restraint in
Australia and elsewhere, which had been written by a former member of the
British secret service in breach of contract and confidence applicable under
English law. In that litigation, which culminated in the decision of the House
of Lords in Attorney-General v Guardian Newspapers Limited (No 2)
[1990] 1 AC 109, it was held, after much discussion, that the protection of
the law of confidence had been lost as a result of the information coming into
the public domain. Care must be exercised in applying that decision generally,
for there is a special principle of law which precludes the State from
asserting breach of confidence where it cannot be shown that this is in the
public interest.
- In general, however, once information is in the public domain, it will no
longer be confidential or entitled to the protection of the law of confidence,
though this may not always be true: see Gilbert v Star Newspaper Company
Limited (1894) 51 TLR 4 and Creation Records Limited v News Group
Newspapers Ltd [1997] EMLR 444 at p 456. The same may generally be true of
private information of a personal nature. Once intimate personal information
about a celebrity’s private life has been widely published it may serve no
useful purpose to prohibit further publication. The same will not necessarily
be true of photographs. Insofar as a photograph does more than convey
information and intrudes on privacy by enabling the viewer to focus on
intimate personal detail, there will be a fresh intrusion of privacy when each
additional viewer sees the photograph and even when one who has seen a
previous publication of the photograph, is confronted by a fresh publication
of it. To take an example, if a film star were photographed, with the aid of a
telephoto lens, lying naked by her private swimming pool, we question whether
widespread publication of the photograph by a popular newspaper would provide
a defence to a legal challenge to repeated publication on the ground that the
information was in the public domain. There is thus a further important
potential distinction between the law relating to private information and that
relating to other types of confidential information.
- Nor is it right to treat a photograph simply as a means of conveying
factual information. A photograph can certainly capture every detail of a
momentary event in a way which words cannot, but a photograph can do more than
that. A personal photograph can portray, not necessarily accurately, the
personality and the mood of the subject of the photograph. It is quite wrong
to suppose that a person who authorises publication of selected personal
photographs taken on a private occasion, will not reasonably feel distress at
the publication of unauthorised photographs taken on the same occasion.
- There is a further point. The objection to the publication of unauthorised
photographs taken on a private occasion is not simply that the images that
they disclose convey secret information, or impressions that are unflattering.
It is that they disclose information that is private. The offence is caused
because what the claimant could reasonably expect would remain private has
been made public. The intrusion into the private domain is, of itself,
objectionable. To the extent that an individual authorises photographs taken
on a private occasion to be made public, the potential for distress at the
publication of other, unauthorised, photographs, taken on the same occasion,
will be reduced. This will be very relevant when considering the amount of any
damages. The agreement that authorised photographs can be published will not,
however, provide a defence to a claim, brought under the law of confidence,
for the publication of unauthorised photographs. It follows that we do not
accept Mr Price’s submission that the effect of the OK! contract precluded the
Douglases’ right to contend that their wedding was a private occasion and, as
such, protected by the law of confidence.
- This conclusion endorses that reached by Sedley LJ, who held at the
interlocutory stage that the Douglases:
"were careful by their contract to retain a right of veto over
publication of OK !’s photographs in order to maintain the kind of image
which is professionally and no doubt also personally important to them. This
element of privacy remained theirs and Hello!’s photographs violated
it."
- Keene LJ was less positive about this point. He concluded that it was
arguable that a limited degree of privacy remained vested in the Douglases so
that they could validly complain of the loss of control over the photographs
to be published, leading to damage to their image because of unflattering
photographs. We agree that the Douglases were entitled to complain about the
unauthorised photographs as infringing their privacy on the ground that these
detracted from the favourable picture presented by the authorised photographs
and caused consequent distress.
- The judge awarded £3,750 to each of the Douglases in respect of the
distress caused by the unauthorised photographs, a very modest sum in the
context of this litigation. No challenge is made to the amount of damages
awarded and so we see no ground for interfering with this head of damage.
Did the law of confidence protect the Douglases’ commercial interest in
information about their wedding?
- The other head of damages awarded to the Douglases related to the labour
and expense of editing the selection of photographs that were to be provided
under the contract with OK!. This head of damage could only be justified in so
far as it represented compensation for interference with the Douglases’
commercial exploitation of their wedding. We agree with Mr Price that this
head of claim had nothing to do with interference with private life. It was
based on an assertion that the Douglases had a commercial interest in making
public information about their wedding, which they were entitled to protect.
The judge accepted that the information of what took place at the wedding was
similar to a trade secret which the Douglases were entitled to exploit and to
keep confidential until exploited. Hello! contend that no such right is known
to English law. Whether the law recognises such a right is of importance not
merely in relation to the £7,000 damages awarded to the Douglases for
interference with their right, but because OK!’s much greater award of damages
was premised on a finding that this right was shared with them.
- The judge, at paragraph 196, held that the law of confidence protects
"those who seek to manage their publicity as part of their trade or profession
and whose private life is a valuable commodity". If this statement is correct
the law treats information about a celebrity’s private life as a trade secret
and grants an injunction against publication of such information, or damages
in respect of it, not because of the distress which the invasion of privacy
causes but because of the commercial damage caused by infringing the
celebrity’s monopoly right to make such information public. Two questions
arise. Was the judge correct to recognise that English law affords protection
to private information on this basis? If so, is the protection afforded in
respect of events which take place in another jurisdiction?
- Recognition of the right of a celebrity to make money out of publicising
private information about himself, including his photographs on a private
occasion, breaks new ground. It has echoes of the droit à l’image
reflected in Article 9 of the French Code Civil and the German
cause of action that Professor Markesinis describes as the ‘tort of publicity
claim’ – see volume 52 of the American Journal of Comparative Law (2004) at p
176. Despite the comment of Rosenberg in Privacy and the Press
(2004) at p 228, we do not see this as any reason to draw back. We
can see no reason in principle why equity should not protect the opportunity
to profit from confidential information about oneself in the same
circumstances that it protects the opportunity to profit from confidential
information in the nature of a trade secret. It is helpful at this point to
consider how far English law has gone in this direction.
- There is cogent authority that supports the proposition that equity will
protect trade secrets that have been divulged in breach of a confidential
relationship. See for example Saltman Engineering v Campbell Engineering
and O Mustad & Son v S Allcock & Co Ltd [1963] 3 All ER
416. The question raised by this appeal is the extent to which similar
protection will be afforded to other types of valuable information which is
acquired, not by breach of a confidential relationship, but by some form of
unauthorised intrusion into a situation of privacy.
- In Prince Albert v Strange the Lord Chancellor relied both on
Prince Albert’s property in the etchings and in the fact that they were
private when holding that he was entitled to prevent the publication of
information about them in the form of a catalogue. Had Prince Albert himself
been intending to publish such information for profit, we doubt if the Lord
Chancellor would have been any the less inclined to afford him a remedy.
- In Gilbert v The Star, W S Gilbert obtained an injunction
restraining publication of confidential information about the plot of his new
comic opera, asserting that such publication was calculated to cause him
economic injury. In Shelley Films Ltd v Rex Features Ltd [1994] EMLR
134 the High Court granted an interlocutory injunction restraining publication
of photographs conveying information about details of a forthcoming film,
which those making it had taken reasonable steps to keep secret for obvious
commercial reasons. In granting the injunction on the grounds, among others,
of an arguable case in confidence, Mr Martin Mann QC, the deputy high court
judge, accurately observed:
"… whether or not equity imposes an obligation to keep information
confidential depends upon a great many factors often unique to the case in
which it is said to do so. However, most cases will have certain common
constituents, namely, the existence of a body of information which a
plaintiff wishes to keep confidential for the protection of some lawful
interest of his, a defendant coming into possession of such information in
circumstances in which he actually knows (or is fixed by operation of law
with knowledge of) or ought as a reasonable person to know the plaintiff
intends to be kept confidential, a detriment actual or potential to the
plaintiff from publication, the non-availability of such information to the
public and the absence of any public interest in
disclosure."
- Creation Records v News Group was another interlocutory decision in
which the issue was whether the facts disclosed an arguable breach of
confidence. Those facts were that a pop group had posed at a specially devised
scene, consisting of a white Rolls Royce in the swimming pool of a hotel and
incorporating various other props. The object of the exercise was to take a
photograph to be used as a record cover. The defendants commissioned a
freelance photographer to take photographs of the scene. Lloyd J granted an
injunction restraining the publication of these photographs on the ground that
it was well arguable that the nature of the operation together with the
imposition of security measures made the occasion one of confidentiality, at
any rate as regards photography.
- These decisions are of no more than persuasive authority and some of them
have not been without critics. We consider, however, that they reflect the
following principles. Where an individual (‘the owner’) has at his disposal
information which he has created or which is private or personal and to which
he can properly deny access to third parties, and he reasonably intends to
profit commercially by using or publishing that information, then a third
party who is, or ought to be, aware of these matters and who has knowingly
obtained the information without authority, will be in breach of duty if he
uses or publishes the information to the detriment of the owner. We have used
the term ‘the owner’ loosely.
- We have concluded that confidential or private information, which is
capable of commercial exploitation but which is only protected by the law of
confidence, does not fall to be treated as property that can be owned and
transferred. We shall explain our reasons for this conclusion when we deal
with OK!’s claim.
- It remains to consider whether, in so far as the Douglases’ claim is in
respect of damage to their commercial interest in the information about their
wedding, the law of New York has any greater relevance than it has in relation
to their claim for invasion of their privacy. We have concluded that it does
not. The Douglases’ claim is for damage done to their commercial interests in
this country by publication of the unauthorised photographs in this country.
Our reasoning in relation to the claim for invasion of privacy applies equally
in respect of this head of claim. The Douglases had taken steps, permitted
under the law of New York, which were intended to ensure that their wedding
was a private occasion and that no unauthorised photographs were taken or
published. Hello! knew this. Hello! also knew that the Douglases expected
commercially to exploit their private wedding by the publication of authorised
photographs. Hello! deliberately obtained photographs that they knew were
unauthorised and published them to the detriment of the Douglases. This
renders them liable for breach of confidence under English law.
- For these reasons the appeal against the judgment in favour of the
Douglases is dismissed.
OK!’s Claim in confidence
Did the OK! contract extend to OK! the protection of the law of confidence
in respect of the information about the wedding?
- Lindsay J recorded at paragraph 187:
"The Hello! Defendants accept, of course, that trade secrets can be sold
and it is common enough in commercial confidence cases for the benefit of
the confidentiality to be shared with others. The confidentiality of a trade
secret, for example, may be shared between, and enforceable by, the inventor
and the manufacturer to whom he had granted licence for the secret to be
turned to account."
- The judge cited in support of these propositions Gilbert v The Star
and Mustad v Allcock. He continued, referring to the latter
decision:
"The report is not entirely clear as it sometimes speaks of Dosen having
acquired information whilst in "their service", i.e. that of Mustad, yet
speaks also of what Dosen had learned in the service of his "former master",
a reference to Thoring & Co.. The better view, as it seems to me, is
that Dosen was never in Mustad’s employ and never acquired the relevant
knowledge whilst in Mustad’s employ. On that footing the case shows that the
benefit of a confidence can pass, in that case by purchase from the
liquidator of Thoring, and, if that is so, then it is hard to see why it
should not be shared between and be enforceable by co-owners or by a
successor in title, at any rate where the defendant knew or could be taken
to have known of the co-ownership or sharing before acting in breach and
where all entitled to the confidence assert it. "
- Mr Price challenged this part of the judge’s
reasoning. He drew an analogy between the wedding and a dramatic performance,
in which the Douglases were the performers. He submitted that the rights of
the performers in respect of unauthorised photographic or sound reproduction
of their live performances were accorded limited statutory protection under
Part II of the Copyright, Designs and Patents Act 1988. Under the 1988 Act
these performers’ rights were ‘non-property rights’ and could not be assigned
or transmitted to third parties – see section 192A. It would be very strange
if, by expressly prohibiting filming, recording or photography, performers
could place themselves in a position to create rights to prohibit
reproductions of their live performances, assignable to and enforceable by
third parties. It would be equally strange if those taking part in a wedding
were in such a position.
- We observe that under sections 185 and 186 of the 1988 Act a person to
whom a performer has granted the exclusive right to photograph his performance
receives a right which he can enforce against third parties. It seems
to us that the nature of the contractual rights conferred on OK! by the
Douglases requires careful analysis before any analogies are drawn with the
position of performers.
- The starting point is to consider the nature of the rights enjoyed by the
Douglases. As we have already indicated, their interest in the private
information about events at the wedding did not amount to a right of
intellectual property. Their right to protection of that interest does not
arise because they have some form of proprietary interest in it. If that were
the nature of the right, it would be one that could be exercised against a
third party regardless of whether he ought to have been aware that the
information was private or confidential. In fact the right depends upon the
effect on the third party’s conscience of the third party’s knowledge of the
nature of the information and the circumstances in which it was obtained.
- Lord Upjohn accurately summarised the position in Boardman v Phipps
[1967] 2 AC 46 at pp 127-8, when he said:
"The true test is to determine in what circumstances the information has
been acquired. If it has been acquired in such circumstances that it would
be a breach of confidence to disclose it to another then courts of equity
will restrain the recipient from communicating it to another. In such cases
such confidential information is often and for many years has been described
as the property of the donor, the books of authority are full of such
references: knowledge of secret processes, "know-how", confidential
information as to the prospects of a company or of someone’s intention or
the expected results of some horse race based on stable or other
confidential information. But in the end the real truth is that it is not
property in any normal sense but equity will restrain its transmission to
another if in breach of some confidential relationship."
- The judge treated the information about the wedding rather as if it were
property when he referred to its benefit being "shared between and…enforceable
by co-owners or by a successor in title". We shall consider the two decisions
upon which the judge relied as showing that the benefit of confidential
information could be transferred.
- In Gilbert v The Star the claim for an injunction restraining
disclosure of the plot of Mr Gilbert’s libretto was initially brought by Mr
Gilbert alone. The basis of the claim was that the plot must have been
disclosed to the Star in breach of confidence and of an implied contractual
term by an actor or employee at the theatre. The judge required the manager of
the theatre to be joined as a plaintiff on the ground that the contracts of
employment were with him, rather than with Mr Gilbert. This decision supports
the proposition that, where the benefit of confidential information is shared
between A and B, B can claim that disclosure of that information will
constitute a breach of a duty of confidence owed to B. However, the
significance of the case is complicated by the fact that the existence of a
contract imposing a duty of confidentiality between B and the supplier of the
information to the Star was considered by the judge to be of critical
importance. Further, it was a first instance case merely concerned with the
grant of an interlocutory injunction.
- The facts of Mustad v Allcock were complex, but can for present
purposes be simplified. Mr Dosen worked for a company T under a contract of
employment that included an undertaking to keep confidential information
acquired at work. T went into liquidation and Mustad bought T’s business,
including the benefit of trade secrets and pledges of secrecy. Dosen then went
to work for Allcock. Mustad obtained an injunction restraining Dosen from
communicating to Allcock information acquired when working for T. This
decision supports the proposition that a purchaser of confidential information
can restrain disclosure of that information in breach of confidence, but again
the picture is complicated by the fact that the benefit of Dosen’s contractual
obligation not to disclose the information was purchased by Mustad.
- The facts of the present case are very different from those of the two
cases relied upon by Lindsay J. The material provisions of the OK! contract
,which we have set out in detail at paragraphs 5 to 9 above, had the following
effect:
- The Douglases would procure the taking of colour photographs of the
wedding wherever and whenever they chose (‘the official photographs’)
(clause 6).
- The Douglases would procure that they became joint owners of all
copyright and any other rights in the official photographs (clause 7).
- The Douglases would provide OK! with approved, and where necessary
retouched, photographs, selected from the official photographs ("the
approved photographs") (clause 7).
- The Douglases would transfer to OK! the exclusive rights to publish
the approved photographs or to authorise others to do so, world wide, for
a period of 9 months (clause 2).
- The Douglases would transfer to OK! the exclusive right for a period
of 9 months to consent to use their names, voices, signatures, photographs
or likenesses in connection with the wedding for advertising purposes
(clauses 4 and 5).
- The Douglases would use their best efforts to ensure that neither the
media nor anyone else should take wedding photographs (clauses 6 and 16).
- The Douglases would not, for a period of 9 months, authorise
publication of any other of the official photographs without prior
approval from OK! (clause 12).
- If any third party not licensed by OK! should use one of the
Douglases’ name, voice, signature, photograph or likeness in connection
with the wedding, OK! would, at the written request the Douglases, where
possible, pursue all necessary legal action to cause such third party to
cease such infringement (clause 13).
- It can thus be seen that the OK! contract did not purport to transfer to
or share with OK! the right to use, or even know of, any photographic
information about the wedding other than the approved photographs released to
OK! by the Douglases for publication pursuant to clause 7, the copyright of
which was vested in the Douglases. OK! were given an exclusive licence to
publish, and to authorise others to publish, these photographs for a period of
9 months.
- The Douglases retained to themselves those of the official photographs
which they did not choose to have published. They undertook not to authorise
the publication of these. They also undertook to use their best endeavours to
see that no other photographs of the wedding were taken.
- The grant to OK! of the right to use the approved photographs was no more
than a licence, albeit an exclusive licence, to exploit commercially those
photographs for a nine month period. This licence did not carry with it any
right to claim, through assignment or otherwise, the benefit of any other
confidential information vested in the Douglases. In Allen & Hanbury
Ltd v Generics Ltd [1986] RPC 203 at p 246 Lord Diplock said that a
licence:
"passes no proprietary interest in anything; it only makes an action
lawful which would otherwise have been unlawful."
- As Jacob J pointed out in Isaac Oren v Red Box Toy Factory Ltd
[1999] FSR 785 at paragraph 28, some statutes expressly give an exclusive
licensee of intellectual property the right to sue an infringer. The
Copyright, Designs and Patents Act 1988 is an example (see paragraphs 124 and
125 above). In the absence of such a statutory provision a mere exclusive
licence to use authorised photographs of an event does not carry with it the
right to sue a third party for infringement of a right vested in the licensor
to object to the publishing of other photographs of that event.
- We have recognised that the Douglases retained a residual right of
privacy, or confidentiality, in those details of their wedding which were not
portrayed by those of the official photographs which they released. It was in
the interests of OK! that the Douglases should protect that right, so that OK!
would be in a position to publish, or to authorise the publication of, the
only photographs that the public would be able to see of the wedding. On
analysis, OK!’s complaint is not that Hello! published images which they had
been given the exclusive right to publish, but that Hello! published other
images, which no one with knowledge of their confidentiality had any right to
publish. The claimants themselves argued that "the unauthorised photographs
were taken at different moments to the authorised ones, showed different and
informal incidents at the reception, and were naturally much less posed".
These photographs invaded the area of privacy which the Douglases had chosen
to retain. It was the Douglases, not OK!, who had the right to protect this
area of privacy or confidentiality. Clause 10 of the OK! contract expressly
provided that any rights not expressly granted to OK! were retained by the
Douglases. The claim successfully advanced by the Douglases in this litigation
is at odds with OK!’s claim.
- For these reasons we conclude that the judge was wrong to hold that OK!
was in a position to invoke against Hello! any right to commercial confidence
in relation to the details of the wedding or the photographic images
portraying these.
The effect of the publication of the photographs in OK! magazine
- If we are wrong in our conclusions that OK! had no right of commercial
confidence in the information portrayed by Hello!’s photographs, this can only
be on the basis that the photographs published by Hello! fell within a generic
class of commercially confidential information to which OK! were party and
which OK! were entitled to protect. On that premise we propose to consider the
effect of the fact that, as a result of OK! advancing the publication date of
the first edition of OK! magazine to carry photographs of the wedding, these
photographs were published on the same day as the unauthorised photographs
were published in Hello! magazine. Mr Price argued that the publication of the
photographs in OK! magazine brought the confidential information that they
portrayed into the public domain, so that this was no longer capable of giving
rise to a duty of confidence.
- Mr Desmond Browne QC advanced more than one answer to Mr Price’s argument.
He relied upon the fact that the unauthorised photographs were "quite
different in nature to the authorised ones", which simply underlined his
difficulty in showing that his clients, OK!, had any rights in respect of the
subject matter of the unauthorised photographs. More pertinently he questioned
the application to photographs of the proposition that information loses
protection of the law of confidence once it is in the public domain. His most
cogent submission was that, when Hello! published the unauthorised
photographs, the photographs in OK! magazine were not truly in the public
domain. They were not widely available to the public. OK! could properly have
expected to be able to control when to publish the authorised photographs and
they could not lose the protection of the law of confidentiality until they
were so widely available to the public that they no longer retained any
commercial value capable of exploitation.
- We have already questioned the application of the ‘public domain’ test to
photographs in the context of invasion of privacy. Where the claimant’s
interest is a commercial interest in the exploitation of information by the
publication of photographs, the legal effect of prior publication of similar
information is particularly difficult to analyse. We do not, however, consider
that the facts of this case raise a problem. If, contrary to the conclusion we
have reached, OK! were entitled to enjoy the exclusive benefit of publishing
photographs of the wedding until their photographs had been put into the
public domain, we are in no doubt that Hello! jumped the gun in publishing the
unauthorised photographs when they did. This was also the view of the judge.
Hello! did not wait until OK!’s photographs were in the public domain before
publishing their own. They took steps which, but for the reaction of OK!,
would have resulted in their publishing their photographs first in breach of
OK!’s rights. In an attempt to mitigate the damage that this would do, OK!
rushed forward the publication of their own photographs, but did no more than
achieve approximately simultaneous publication with Hello!. We agree with the
judge that OK!’s action had not, by the time of Hello!’s publication, had the
effect of destroying such rights of confidentiality as OK! had.
Legal certainty
- This point remains alive in relation to that part of the judgment that
awarded damages to the Douglases which we have upheld.
- Mr Price’s arguments in relation to legal certainty were as follows. The
Claimants’ claims involved a restriction on Hello!’s freedom of expression.
Article 10(2) of the Convention required that any such restriction should be
‘prescribed by law’. When Hello! took the decision to publish the unauthorised
photographs the relevant law was so uncertain that it was not possible to
predict that publication would be held to be unlawful. The four cases from
which the judge chiefly drew his exposition of the modern law in relation to
personal confidence all post dated publication of the relevant issue of Hello!
magazine. It followed that there was, at that time, no relevant restriction on
publication ‘prescribed by law’. In these circumstances, for the court to hold
that by publishing the unauthorised photographs Hello! committed a breach of
duty owed to the Claimants would be in conflict with Article 10.
- In support of this submission Mr Price relied upon well established
principles of Strasbourg jurisprudence, founded on this passage of the
judgment of the ECtHR in Sunday Times v UK (1979) 2 EHRR 245 at
paragraph 49:
"In the Court’s opinion, the following are two of the requirements that
flow from the expression ‘prescribed by law’. First, the law must be
adequately accessible: the citizen must be able to have an indication that
is adequate in the circumstances of the legal rules applicable to a given
case. Second, a norm cannot be regarded as a ‘law’ unless it is formulated
with sufficient precision to enable the citizen to regulate his conduct: he
must be able – if need be with appropriate advice – to foresee, to a degree
that is reasonable in the circumstances, the consequences which a given
action may entail. These consequences need not be foreseeable with absolute
certainty: experience shows this to be unattainable. Again, whilst certainty
is highly desirable, it may bring in its train excessive rigidity and the
law mush be able to keep pace with changing circumstances. Accordingly, many
laws are inevitably couched in terms which, to a greater or lesser extent,
are vague and whose interpretation and application are questions of
practice."
- Lindsay J dealt with this argument in a single sentence at paragraph 212:
"I am not conscious of having extended but merely of having applied the law".
That is not an answer to the point if the law which he applied had only been
established by decisions which pre-dated his judgment but post-dated the
publication of the relevant edition of Hello! magazine.
- Mr Browne submitted that the Strasbourg jurisprudence did not preclude
developments of English common law that were reasonably foreseeable. He
relied, in particular, on observations of the ECtHR in SW v UK (1995)
21 EHRR 363. That case involved two applicants, each of whom had been
convicted of raping his wife. Theirs had been the first cases in which the
English courts had recognised that there was no general immunity available to
a husband against a charge of raping his wife. They contended that their
convictions involved a retroactive change in the law which violated Article
7(1) of the Convention.
- The Court held at paragraph 43/41:
"However clearly drafted a legal provision may be, in any system of law,
including criminal law, there is an inevitable element of judicial
interpretation. There will always be a need for elucidation of doubtful
points and for adaptation to changing circumstances. Indeed, in the United
Kingdom, as in the other Convention States, the progressive development of
the criminal law through judicial lawmaking is a well-entrenched and
necessary part of legal tradition. Article 7 of the Convention cannot be
read as outlawing the gradual clarification of the rules of criminal
liability through judicial interpretation from case to case, provided that
the resulting development is consistent with the essence of the offence and
could reasonably be foreseen."
The Court went on to conclude at paragraph 43/41 that the decision of the
House of Lords withdrawing the husband’s immunity was no more than continuing
"a perceptible line of case law development" which had "reached a stage where
judicial recognition of the absence of immunity had become a reasonably
foreseeable development of the law.
- Had the Claimants’ application for an interlocutory judgment in this case
succeeded, it would have been possible for Hello! to have prevented the
publication of the edition containing the unauthorised photographs. When the
injunction was refused, they decided to proceed with the publication. At that
moment, it is not clear whether the Court of Appeal gave any indication as to
their reasons for refusing the injunction. We do not believe, however, that
the court’s reaction to the arguments advanced on behalf of the Claimants can
have left Hello! confident that the Claimants would not establish a valid
claim in law. Applying the reasoning of the ECtHR in SW v UK, we
conclude that it was reasonably foreseeable to Hello!, when they decided to
proceed with the publication, that this developing area of English law might
result in their being held to have infringed the Douglases’ rights of privacy
or confidence.
- There is a further point. This case involves a conflict between the
Article 8 right of respect for private and family life and the Article 10
right of freedom of expression. The Convention only permits restrictions of
either right where "prescribed by law". In Spencer v UK the applicants
complained that United Kingdom law had failed to protect the Article 8 rights
of Countess Spencer after a newspaper had published a photograph of her, taken
with a telephoto lens, in the grounds of a clinic. The Commission ruled the
application inadmissible on the ground that the courts, through the common law
system in the United Kingdom, should be permitted to develop existing rights
in respect of breach of confidence by way of interpretation so as to cover the
breach of privacy that had taken place.
- In Peck v United Kingdom [2003] 36 EHRR 719 the applicant
complained, among other things, of the lack of a domestic remedy against
infringement of his right to respect for private life in relation to facts
that occurred before the Human Rights Act came into effect. He had been
photographed in a public place by closed circuit television with a knife in
his hands after attempting to commit suicide and the film had been released to
the media and widely published. The Government argued that the facts involved
an area of the law which had been, and would continue to be developed by the
courts and that the Strasbourg jurisprudence, which had had an important
impact on these developments, would have an even more important impact with
the coming into effect of the Human Rights Act. The ECtHR was not persuaded.
It found that it was unlikely that the domestic courts would have afforded the
applicant a remedy at the relevant time had an action been brought for breach
of confidence.
- If one postulates that, at the time of the publication by Hello! of the
unauthorised photographs, English law was insufficiently clear to satisfy the
requirements of providing protection to privacy in a manner "prescribed by
law", the court was on the horns of a dilemma. If it gave a decision which
developed the law so as to provide a protection to respect for privacy
"prescribed by law", it risked infringing Hello!’s Article 10 rights. If,
however, it ruled that the law was insufficiently clear to provide a remedy,
it perpetuated the infringement of the Douglases’ Article 8 rights. It seems
to us that in this situation the proper course was for the court to attempt to
bring English law into compliance with the Convention, even if this was at the
cost of a restriction, in the instant case, of Hello!’s Article 10 rights by
findings which, up to that moment, could not be said to have been "prescribed
by law".
- For all these reasons, we dismiss Hello!’s attack on the judgment below on
the ground that it imposed a restriction on Hello!’s right to freedom of
expression that was not prescribed by law of sufficient certainty.
OK!’s claim based on economic torts: unlawful interference with
business
Introduction
- Having held that OK! were entitled to damages from Hello! for breach of
confidence, it was not strictly necessary for the judge to decide whether
there was any other tortious basis of liability. However, in the light of the
conclusion set out above that OK! are not entitled to damages for breach of
confidence, it becomes necessary to consider whether there is any other basis
of liability. Before the judge OK! put their case in a number of ways,
although it is only necessary for us to refer to three, which the judge
identified in paragraph 180(vi), (viii) and (ix) of his judgment. They were
(so far as relevant) unlawful interference with the business of OK!,
conspiracy to injure OK! by unlawful means and conspiracy to injure OK! with
the predominant purpose of doing so.
- There are two types of conspiracy to injure, namely conspiracy to injure
by lawful means and conspiracy to injure by unlawful means. In Kuwait Oil
Tanker SAK v Al Bader [2000] 2 All ER Comm 271 at paragraph 108, this
court defined them as follows:
"A conspiracy to injure by lawful means is actionable where the claimant
proves that he has suffered loss or damage as a result of action taken
pursuant to a combination or agreement between the defendant and another
person or persons to injure him, where the predominant purpose is to injure
the claimant.
A conspiracy to injure by unlawful means is actionable where the claimant
proves that he has suffered loss or damage as a result of unlawful action
taken pursuant to a combination or agreement between the defendant and
another person or persons to injure him by unlawful means, whether or not it
is the predominant purpose of the defendant to do so."
- In formulating those principles, the court had particular regard to
Lonrho Ltd v Shell Petroleum Co Ltd [1982] AC and Lonrho Plc v
Fayed [1992] 1 AC 448: see paragraph 109. The distinction between the two
types of conspiracy was put thus by Lord Bridge in Lonrho Plc v Fayed
at pp465-6:
"Where conspirators act with the predominant purpose of injuring the
plaintiff and in fact inflict damage on him, but do nothing which would have
been actionable if done by an individual acting alone, it is in the fact of
their concerted action for that illegitimate purpose that the law, however
anomalous it may now seem, finds a sufficient ground to condemn their action
as illegal and tortious. But when conspirators intentionally injure the
plaintiff and use unlawful means to do so, it is no defence for them to show
that their primary purpose was to further or protect their own interests; it
is sufficient to make their action tortious that the means used were
unlawful."
- It is no longer alleged that the predominant purpose of Hello! was at any
stage to injure OK!. That is scarcely surprising in the light of the judge’s
conclusion of fact that Hello!’s purpose was to protect its own interests (see
below). As to their case that Hello! are liable for damages for conspiracy to
injure them by unlawful means, OK! accept that the allegation of conspiracy
adds nothing to their case that Hello! are liable for a tort which the editors
of Clerk & Lindsell on Torts (cited above) describe in
paragraph 24-88 as ‘unlawful interference with economic and other interests’
and which we will call ‘unlawful interference’ for short. The argument before
us has proceeded on the premise that the test of intention is the same in the
two torts and we have concluded that this common ground is correct.
- We propose therefore to focus primarily on the ingredients of the tort of
unlawful interference and their application to the facts of this case. In
paragraph 24-88 of Clerk & Lindsell the editors say:
"There exists a tort of uncertain ambit which consists in one person
using unlawful means with the object and effect of causing damage to
another."
It is not in dispute that the tort of unlawful interference exists but the
parties are not agreed as to its precise ingredients. In particular they do
not agree as to the nature of the ‘unlawful means’ required or as to the
requirement of ‘object and effect’ in this context. In this latter
regard there is an issue as to whether it is necessary to show that the
defendant acted with the object or purpose of injuring the claimant and/or
that the defendant’s acts were in some sense aimed or directed at the
claimant. It is, however, common ground (1) that some mens rea or
intention to injure is required and (2) that it is not necessary to
show that the predominant purpose or intention of the defendant was to injure
the claimant.
- Before focusing on those questions it is convenient to set out the case
for OK! as it has been put in this appeal, in the light of our conclusions on
privacy and confidentiality and of the findings of fact made by the judge as
to the state of Hello!’s knowledge. OK!’s case is that in all the
circumstances the judge should have held that the tort of unlawful
interference with OK!’s business was made out on the basis that the
publication of the unauthorised photographs was an unlawful act, that, in
publishing them, Hello! intended to injure OK! and that OK! suffered loss and
damage as a result.
- The judge accepted that the publication was indeed an unlawful act and
that it amounted to unlawful means. He said in paragraph 249 of his judgment
that, if he had found the intent to injure made out, he would have held the
intent to be to injure by the unlawful means of publishing the unauthorised
photographs in breach of obligations of confidence owed to all the claimants
and by way of contravention of the Data Protection Act 1998. It is not
necessary for us to consider the Data Protection Act for, in the light of our
conclusions as to privacy and confidence, the part of paragraph 249
principally relied upon by OK! is the judge’s conclusion that the publication
was in breach of obligations of confidence owed to the Douglases. Mr Browne
submits that the publication of the unauthorised photographs in breach of the
Douglases’ rights of privacy amounts to a sufficient unlawful act or unlawful
means for the purposes of the tort of unlawful interference. We will return to
this point below in the light of submissions made by Mr Price on behalf of
Hello! but will first consider OK!’s case on intention.
Intention: OK!’s case
- There are a number of contenders for the test
of the state of mind that amounts to an ‘intention to injure’ in the context
of the tort that we have described as ‘unlawful interference’. These include
the following:
a) an intention to cause economic harm to the claimant as an end in
itself;
b) an intention to cause economic harm to the claimant because it is a
necessary means of achieving some ulterior motive;
c) knowledge that the course of conduct undertaken will have the
inevitable consequence of causing the claimant economic harm;
d) knowledge that the course of conduct will probably cause the claimant
economic harm;
e) knowledge that the course of conduct undertaken may cause the claimant
economic harm coupled with reckless indifference as to whether it does or
not.
A course of conduct undertaken with an intention that satisfies test a) or
b) can be said to be ‘aimed’, ‘directed’, or ‘targeted’ at the claimant.
Causing the claimant economic harm will be a specific object of the conduct in
question. A course of conduct which only satisfies test c) cannot of itself be
said to be so aimed, directed or targeted, because the economic harm, although
inevitable, will be no more than an incidental consequence, at least from the
defendant’s perspective. Nonetheless, the fact that the economic harm is
inevitable (or even probable) may well be evidence to support a contention
that test b), or even test a), is satisfied.
- Whatever test is adopted, it is not sufficient for the claimant to show
that it was reasonably foreseeable that the claimant would or might suffer
damage as a result of his act. As much of the discussion in Three Rivers DC
v Bank of England (No 3) [2003] 2 AC 1 shows, albeit in the context of the
tort of misfeasance in public office, there is an important conceptual and
factual difference between a tort, like negligence or breach of duty, which
requires merely that the loss or damage should be reasonably foreseeable and a
tort, which requires actual knowledge (or subjective recklessness) as to the
consequences.
- OK!’s case, as advanced by Mr Browne, can be summarised as follows:
- The judge should have found that Hello! had the deliberate object of
causing economic harm to OK! (i.e. that test a) or b) was satisfied) and
that this amounted in law to the necessary intention to injure.
Alternatively:
- The judge found, or should have found, that Hello! knew that their
conduct would inevitably, or alternatively probably, cause economic harm
to OK! (i.e. that test c) or d) was satisfied) and that this amounted in
law to the necessary intention to injure. Alternatively:
- The judge found, or should have found, that Hello! knew that their
conduct might cause OK! economic harm, acted with reckless indifference as
to whether they did or not (i.e. that test e) was satisfied) and that this
amounted in law to the necessary intention to injure.
- In support of these submissions Mr Browne relies upon the judge’s findings
as to Hello!’s state of mind and we propose to set these out before turning to
the express findings that the judge made in respect of Hello!’s intention.
Intention: the judge’s findings
- The state of mind of Hello! depends largely, if not entirely, upon the
state of mind of Senor Sanchez Junco, who is also the third Defendant. He is a
director and controlling shareholder of the second Defendant, Hola SA, which
publishes Hello! magazine in the United Kingdom. The judge made these findings
as to the state of knowledge of Senor Sanchez Junco in paragraphs 79, 80 and
81 of his judgment:
"79. As he set about arranging the unauthorised photographs into a
lay-out for an issue of Hello!, Senor Sanchez Junco well knew that OK! had
obtained an exclusive contract for coverage of the Douglas wedding. He knew
of Ramey’s reputation and the kind of work that Ramey handled and the
intrusive systems which paparazzi such as Ramey employed. It was a kind of
journalism he and Hello! did not like, he said, and usually tried to avoid.
At least a part of the reasons for Senor Sanchez Junco’s insistence that
Ramey should not be commissioned in advance, was in my judgment, that he, as
a cautious man, was uncomfortable in being seen, as a commission would
involve, to be procuring the sort of unpredictable and possibly unlawful
activity that a paparazzo of Ramey’s reputation might get up to. Whilst he
would not have known of the specific language used, Sr Sanchez Junco knew
that a feature of OK!’s "exclusive" would have been that security
arrangements were required by contract so far as was reasonable to ensure
that only those invited or duly employed would be present at the wedding and
that no photographs were to be taken other than the authorised ones. For
example, Hello!’s own pleaded exclusive contract for coverage of the wedding
of Gloria Hunniford required reasonable security to be enforced. Such
arrangements had to be contemplated by those in the trade as an inevitable
concomitant of an "exclusive", certainly where as much as £1m was at
stake.
80. It was obvious to him that the photographs were unauthorised. He said
in cross-examination that he had no doubt but that the person who did the
photographs was trying to hide himself. He was then asked:-
Mr Tugendhat: Did you ask Mr Ramey any questions about how the
photographs were taken?
Witness: No.
Mr Tugendhat: Is that because you did not care whether they were taken
legally or illegally?
Witness: No, it was because I didn’t want any information. I didn’t want
to know anything about it. I wasn’t curious about it. I didn’t want to
know."
Similarly, to Mr Luke, co-ordinating Editor in Madrid, it was a matter of
indifference how the photographs had been obtained.
Senor Sanchez Junco knew from his contacts with Mr Burry that the Douglases
had been insisting on control over what photographs would be released and his
own proposals to Mr Burry of May 2000 had accordingly offered the Douglases
full picture approval rights.
81. In my judgment Senor Sanchez Junco knew and ought to have known,
as he selected the unauthorised photographs for publication, that what he was
doing would or might significantly diminish the benefits which OK! would
otherwise derive from its exclusive contract with the Douglases, that it would
deny the Douglases the picture approval which he knew they wanted and which he
would have expected them to have procured in their contract with OK! and that
the taking of the unauthorised photographs, which he had been careful not to
commission, would have involved at least a trespass or some deceit or
misrepresentation on the photographer’s part in order for the photographer to
overcome the security arrangements which, in outline, he knew or must be taken
to have known to have been in place at a wedding which he had no reason to
think was other than private. It was obvious, agreed Sue Neal, Hello!’s
Picture Editor at the time, that the photographs had been taken by someone
"who had no business to be there." Mrs Cartwright’s evidence was that they had
to have been taken surreptitiously" (emphasis added).
- Set against the judge’s findings of knowledge must
be his express findings as to the intention of Senor Sanchez Junco and thus of
Hello!. The judge set out Senor Sanchez Junco’s evidence in some detail
between paragraphs 245 and 248 of his judgment. Given the importance of the
evidence to this part of case, especially to the submissions made by Mr Price,
we set out paragraphs 245 to 248 of the judgment here:
"245. As for the relevant intent of the Hello! Defendants, in practical
terms it is either to be found in Senor Sanchez Junco or it does not exist.
As to his intent, his written evidence said:-
"I want to state categorically that there was never an intention to cause
damage to any of the claimants – to the first two claimants because we have
always treated them in Hello! with deference and sympathy, in accordance
with the magazine style. In our 60-year history we have never tried to
damage anyone. Therefore, we would not want to do it to people whom we have
always treated fairly and objectively in our reports portraying them in the
best possible light. With respect to OK! we took it for granted that,
without a doubt, they would have a great editorial success, as they had a
great exclusive and consequently, the magazine would be sold under excellent
conditions as was the case. Our main purpose was to inform our readers about
an event which had been publicised all over the media for weeks before the
wedding, which shows that this wedding was of interest for the United
Kingdom. We did not wish to disappoint our readers. It was never our aim or
intention to damage the third claimant, our prime motivation was only to
give our readers information on the wedding of two celebrities, about whom,
without doubt, our readers expected to read in Hello!.
Other consideration was to defend the interests of our magazine and keep
our place in the market. There was little or no monetary incentive in
publishing these photographs because the increase in sales was not likely to
compensate the costs incurred in purchasing the photographs, changing the
edition and airlifting a proportion of the copies from Spain into the UK.
However, this is something that every publisher must be prepared to do from
time to time and it is a matter of professional pride and an investment in
the goodwill of the publication’s readership.
246. In his oral evidence Senor Sanchez Junco disavowed having acted in
revenge against the Douglases for his not getting the exclusive he so
wished; rather he wanted, despite losing the exclusive, to publish an
edition that would interest his readers, the event being one which had
captured the imagination of the public. His act, he said, was not of revenge
but of salvage. He denied having the intention of spoiling OK!’s sales
adding:
"my motive was never to spoil the exclusive of OK!. I repeat, I wanted to
defend as far as I could my publication …. ."
Mr Tugendhat put this to him:-
"What I am suggesting to you is that in all of this you were driven by
your anger and you were intending to do as much damage as you could both to
the Douglases and to the publishers of OK!"
Senor Sanchez Junco:
"No. My priority was to save my publication after having, in the light of
a very important big loss, and that is that of the exclusive, and I didn’t
think of the possible damage that I could inflict on Hello! [sic] or the
Douglases because the photographs, I never thought that these photographs
could be considered to be damaging for the Douglases and that is because
photographs published in that way were unlikely to damage the authorised
exclusive."
247. Then, referring to an argument which I hold to be not unreasonable,
namely that poor photographs in one of the rival magazines could in fact
increase the sales of the other which covered the event in a better way, he
added, of such a case:-
"In some cases it encourages it. It has happened to me many times and
I’ve never considered it to be that it was a damage which – certainly not a
serious one. This supposed damage which I was supposed to have wanted to
inflict on OK! wasn’t even, in my opinion, clear damage. Maybe it could even
help out its exclusive. In any event, I sold a few more, and I believe that
OK! sold its exclusive very well."
Ms Koumi, too, gave evidence that poor photographs of an event in one of
the rival magazines could increase the sales of the rival that has better ones
(though I am not to be taken to be holding that was in fact the case
here).
248. Mr Luke, in close contact with Senor Sanchez Junco in Madrid was asked
the question:-
"How common, to your recollection, are spoilers by Hello! of OK!
exclusives?"
Mr Luke:
"It is a bit of a misnomer. I would not call it a spoiler because in the
case of … . If we go back to the Zeta-Jones wedding, it was the event of the
year. It is like one had to cover the outbreak of war because – or would not
cover it because Churchill had given his exclusive interview to the Express.
We had to cover it in some way. I think "spoiler" is a bit of a misnomer. It
is something we have to cover, and if photographs become available you
publish them. This is not an attack on your competition, this is because our
readers want to know about these events so you go ahead and publish them. If
those photographs are made available by an orang utan with a Polaroid, well
you publish them."
- That was the judge’s summary of the evidence given on behalf of Hello! as
to what their intentions were. The judge then expressed his conclusion thus:
249. I have not found Senor Sanchez Junco or Mr Luke to be reliable as
witnesses but I do accept the evidence they gave on this subject. Whilst I
recognise that for a defendant to act out of self-interest does not, of
itself, disprove that he had no intent to injure another, here I find on the
evidence that there was no intent to injure by unlawful means because there
was no intent to injure at all. …."
The judge added in paragraph 260 that no intent of any of the defendants
other than Senor Sanchez Junco was proved and that he did not hold Senor
Sanchez Junco to have had "any intent to injure the Douglases". Although the
judge was there referring specifically to the Douglases, it is plain that his
conclusion was the same vis-à-vis OK!.
Intention: conclusions in relation to the judge’s findings
- Paragraphs 245 to 249 are fatal to Mr Browne’s argument that test a) or b)
set out in paragraph 159 above was satisfied. The judge plainly found
that Hello! had not aimed, directed or targeted their conduct at OK! They had
no specific object to cause economic harm to OK!. Mr Browne, on behalf of OK!,
sought to challenge the judge’s findings of fact in this appeal. He argued
that the judge was wrong to hold that Hello! did not have the subjective
intention, in the sense of object or purpose, of causing injury to OK!.
However, the judge heard and considered an enormous body of evidence including
oral evidence and reached the clear conclusion set out in paragraph 249 of his
judgment. This court will very rarely interfere with a judge’s conclusions of
fact in such circumstances. There was ample evidence upon which the judge
could properly reach the conclusion which he did, and in our judgment there is
no basis upon which we could properly interfere with that conclusion. It
follows that the first way in which OK! put their case on intention is not
made out.
- We turn to the second way in which OK! put their case, namely that Hello!
knew their conduct would inevitably, or alternatively probably, cause economic
harm to OK! The key part of the judge’s findings is in the opening words of
paragraph 81, where the judge expressly held that Senor Sanchez Junco
"knew and ought to have known, as he selected the unauthorised
photographs for publication, that what he was doing would or might
significantly diminish the benefits which OK! would otherwise derive from
its exclusive contract with the Douglases …"
The judge was not there stating either what was reasonably foreseeable or
what Senor Sanchez Junco ‘knew or ought to have known’, but what he
‘knew and ought to have known’ (our emphasis). The judge was setting
out his conclusion as to Senor Sanchez Junco’s actual state of mind, namely
that he knew that publication would or might injure OK! because it would or
might diminish the benefits which OK! would otherwise derive from the
contract.
- This finding has to be read, however, with the evidence which the judge
accepted, which he set out in paragraphs 245-248 of his judgment. When this
approach is adopted it becomes impossible to argue that the judge held, or
should have held, that Hello! knew that their conduct would, either inevitably
or even probably, cause economic harm to OK!. The judge’s finding amounts to
no more than Hello! knew that their conduct might cause economic harm
to OK!. Once again this is a finding of primary fact with which we cannot
properly interfere. It follows that the second way in which OK! put their case
on intention is not made out.
- We turn to the third way in which Mr Browne puts OK!’s case on intention.
The judge’s findings of fact were, we consider, sufficient to satisfy test e).
Hello! knew that their conduct might cause economic harm, to OK! and their
attitude to this risk can properly be described as reckless indifference. The
critical question is whether this attitude of mind was, in law, sufficient to
constitute ‘intention to injure’ in the context of the tort of unlawful
interference. A crucial stepping stone in Mr Browne’s argument in support of
test e) is his contention that the authorities firmly establish the validity
of test d). It is, indeed, a short step from knowledge that conduct will cause
harm to knowledge that conduct may cause harm, coupled with reckless
indifference as to whether it does. In advancing test d) as his starting
point, Mr Browne relies particularly on three authorities: Bourgoin SA v
Ministry of Agriculture, Fisheries and Food [1986] QB 716; Lohnro PLC v
Fayed [1992] 1 AC 448 and the Kuwait Oil Tanker case. The first of
these is a case on misfeasance in public office, the second a case on unlawful
interference and the third a case on conspiracy to injure by unlawful means.
- One of the problems with this part of the case is that OK! have sought to
expand the way in which their case is put before us, as compared with the way
in which it was put before the judge. This can be seen both from the way in
which the judge approached the relevant principles and from the way in which
he approached the evidence in the passages we have quoted.
- The judge considered the principles relevant to the tort of unlawful
interference in paragraphs 242 to 244 of his judgment on liability, just
before he set out his findings of fact as to Senor Sanchez Junco’s intention.
Before doing so he first considered briefly the tort of interference with
contractual relations, quoted a passage from the judgment of Slade LJ in
RCA v Pollard [1983] Ch 135 at p156, in which Slade LJ was referring
only to that tort, and held (in our view correctly) that there was here no
interference with the contractual relations between the Douglases and Hello!.
- The judge observed in paragraph 243 that OK! must prove an intention to
injure by unlawful means and said in paragraph 244 that, although the role of
intent is not always described in the same terms in the authorities, it was
appropriate to accept the Clerk & Lindsell formulation (quoted
above) that the tort consists in one person using unlawful means with the
object and effect of causing damage to another. He observed that that was the
case being made by OK! and thus the formulation that Hello! were being
required to answer. It was in that context that, having concluded in paragraph
249 that Hello! had no intent to injure at all, he held that OK!’s claim under
this head failed. It is we think clear therefore that the judge was asking
himself whether OK! satisfied the Clerk & Lindsell test, that is
whether it was the object of Hello! to injure OK!. He held that it was not.
- Mr Browne contended that the judge did not consider whether intention can
be established without the necessity to prove object or purpose. This is
correct but the judge is not to be criticised in any way for that because the
case was not put before him in the way in which it has been put before us. The
argument based upon Bourgoin, Lohnro Plc v Fayed and the
Kuwait Oil Tanker case was advanced for the first time in detail before
us and, although it is said in Hello!’s skeleton argument that it is not open
to OK! to advance it, both sides made detailed submissions about it and we can
see no injustice to Hello! in allowing the point to be taken now. It is less
clear that the same is true of the development of that argument based upon the
proposition that the relevant intention can be established by proof of
subjective recklessness. We decided that we would consider Mr Browne’s
submissions on the basis that, should we be minded to accept them, we would
first afford Mr Price the opportunity to advance further submissions in
response to them.
Intention: our approach to the law
- In considering this area of the law of tort, we have found much assistance
in Hazel Carty’s valuable book entitled An Analysis of the Economic
Torts published in 2001. We also wish to pay tribute to the article
entitled ‘Intentional Infliction of Harm by Unlawful Means’ by Philip
Sales and Daniel Stilitz in (1999) 115 LQR 411. They suggest that the tort
would more aptly be called intentional infliction of harm by unlawful means.
We agree.
- As Hazel Carty shows, there are a number of disparate economic torts which
have differing characteristics and do not all fall to be approached in the
same way. Thus care must be taken in concluding that because intention has a
particular meaning in the context of one of the torts it necessarily has the
same meaning in others. This can be seen, for example, by reference to the two
torts of conspiracy to injure to which we have already referred. Both
conspiracy to injure by lawful means and conspiracy to injure by unlawful
means require intention to injure but it is common ground that the former
requires proof that the defendant’s predominant purpose is to injure the
defendant, whereas the latter does not.
- It does not follow from the fact that predominant purpose must be
established in the former case that it is necessary or sufficient to establish
that a purpose was to injure in the latter case. It may be necessary or
sufficient to do so but whether it is or not cannot be deduced from cases of
lawful means conspiracy. In paragraph 260 of his judgment, the judge said this
in the context of unlawful means conspiracy:
"This is not an area of the law where it can be assumed that a
person intends the natural and probable consequences of his actions or
omissions – Crofter Hand Woven Harris Tweed Co. v Veitch [1944] A.C.
435 at 444 per Viscount Simon L.C. - so that for this conspiracy to
succeed an intent to harm the Douglases on the part of the Hello! Defendants
is required to be proved."
If the judge was saying that Viscount Simon was expressing any view about
intention in an unlawful means conspiracy, we respectfully disagree because
the Veitch case involved a lawful means conspiracy where, by contrast
with an unlawful means conspiracy, it is common ground that a predominant
object or purpose to injure is required.
- As we have explained, the argument before us proceeded on the reasonable
premise that the test of intention in the tort of unlawful interference is the
same as the test in relation to unlawful means conspiracy. There is no
agreement that the same is true in relation to the torts of interference with
contractual rights and misfeasance in public office. We intend to consider
first cases on unlawful interference and unlawful means conspiracy, then cases
on interference with contractual rights. Then, after turning to see what
assistance, if any, is to be derived from cases on misfeasance in public
office, we will express our conclusions.
Intention: cases on unlawful interference and unlawful means
conspiracy
- The line of authority starts with Mogul Steamship Co Ltd v McGregor,
Gow & Co (1889) 23 QBD 598. The plaintiff shipowners claimed damages
on the ground that they had been shut out from profitable China trade by the
conspiracy of the defendants, who had formed a Conference from which the
plaintiffs were excluded. The claim failed. Bowen LJ summarised the law as
follows:
"No man, whether trader or not, can however justify damaging another in
his commercial business by fraud or misrepresentation. Intimidation,
obstruction and molestation are forbidden; so is the intentional procurement
or violation of individual rights, contractual or other, assuming always
that there is no just cause for it … but the defendants have been guilty of
none of these acts. They have done nothing more against the plaintiffs than
pursue to the bitter end a war of competition waged in the context of their
own trade. To the argument that a competition so pursued ceases to have a
just cause or excuse when there is ill-will or a personal intention to harm
it is sufficient to reply (as I have already pointed out) that there was
here no personal intention to do any other than such as was necessarily
involved in the desire to attract to the defendant’s ships the entire tea
freights of the ports."
- Allen v Flood [1898] AC 1 involved a demarcation dispute. The
defendant, on behalf of a group of ironworkers, persuaded their employers to
desist from employing the plaintiff shipwrights. This involved no breach of
contract. The plaintiffs alleged that this conduct gave rise to liability in
tort on the ground that the defendant had maliciously induced the employers to
act as they did. The action failed. Lord Watson held at p 96:
"There are in my opinion two grounds only upon which a person who
procures the act of another can be made legally responsibly for its
consequences. In the first place he will incur liability if he knowingly and
for his own ends induces that other person to commit an actionable wrong. In
the second place when the act induced is within the right of the immediate
actor and is therefore not wrongful in so far as he is concerned, it may yet
be to the detriment if a third party; and in that case according to the law
laid down by the majority in Lumley v Gye the inducer may be held
liable if he can be shown to have procured his object by the use of illegal
means directed against that third party." (our
emphasis)
- Allen v Flood was distinguished in Quinn v Leathem [1901] AC
495. The House of Lords upheld a decision of the Irish Court of Appeal that a
conspiracy ‘wrongfully and maliciously’ to induce customers and servants of
the plaintiff not to deal with him was actionable on proof of damage. Lord
Shand at p 514 explained the difference between the two cases as follows:
"As to the vital distinction between Allen v Flood and the present
case, it may be stated in a single sentence. In Allen v Flood the
purpose of the defendant was by the acts complained of to promote his own
trade interest, which it was held he was entitled to do, although injurious
to his competitors, whereas in the present case, while it is clear there was
combination, the purpose of the defendants was ‘to injure the plaintiff in
his trade as distinguish from the intention of legitimately advancing their
own interest.’"
Other members of the House made the point that in Allen v Flood
there was no question of conspiracy or of coercion.
- The distinction between the two types of tortious conspiracy was drawn by
the House of Lords in Crofter Hand Woven Harris Tweed Co v Veitch
[1942] AC 435 where a trade embargo was held not to be tortious because
the predominant purpose of the conspirators was to protect their own
interests, not to damage the plaintiffs. The embargo had involved no
illegality and Lord Wright at p 462 drew a distinction between such a
conspiracy and one to do ‘acts in themselves wrongful’. The mental element
necessary to constitute the latter type of conspiracy tortious was not,
however discussed. It was a matter to which Lord Denning MR gave specific
consideration in Lonrho v Shell (unreported) 6 March 1981.
- Lonrho had been a supplier of oil to Southern Rhodesia and had had to
cease this profitable business when the UK imposed sanctions on that country.
It alleged that Shell had conspired unlawfully to break the sanctions, thereby
prolonging the illegal regime in Southern Rhodesia and causing economic damage
to Lonrho. The Court of Appeal held that this gave rise to no cause of action.
Lord Denning MR said:
"So this point of law arises directly: Is an agreement to do an unlawful
act actionable at the suit of anyone who suffers damage from it which is
reasonably foreseeable? Even though the agreement is not directed at him,
nor done with intent to injure him? In discussing this point of law I put
aside the many modern cases on conspiracy – in which there is an agreement
by two or more to do a lawful act. It is now settled by the House of
Lords that such an agreement is actionable if it is done with the
predominant motive of injuring the plaintiff and does in fact injure him:
see Crofter Hand Woven Harris Tweed Co. Ltd v Veitch [1942] AC 435,
where Lord Simon LC said, at p 445: ‘Liability must depend on ascertaining
the predominant purpose. If that predominant purpose is to damage another
person and damage results, that is tortuous conspiracy’. Here we are
concerned with a different problem altogether. It is an agreement by two or
more to do an unlawful act. … I think there is a cause of action when
it is remembered that the tort is a conspiracy to injure. I would
suggest that a conspiracy to do an unlawful act – when there is no
intent to injure the plaintiff and it is not aimed or directed at him – is
not actionable, even though he is damaged thereby. But if there is an intent
to injure him then it is actionable. The intent to injure may not be the
predominant motive. It may be mixed with other motives. In this context,
when the agreement is to do an unlawful act, we do not get into the
‘quagmire of mixed motives’, as Lord Simon LC described them in the
Crofters case at p 445. It is sufficient if the conspiracy is aimed
or directed at the plaintiff, and it can reasonably be foreseen that it may
injure him, and does in fact injure him. That is what Parker J thought. I
agree with him."
- In the House of Lords [1982] AC 173 at p 179 counsel for Lonrho is
reported at p180 as advancing the following argument in relation to the mental
element of the tort:
"The question of conspiracy assumes no breach of contract, no private
rights arising out of breach of the sanctions Orders and no allegations of
intention to injure. All that is alleged is actual knowledge that damage
would be suffered. A conspiracy to do an unlawful act which is carried into
effect and causes reasonably foreseeable damage is actionable as a
conspiracy although the act may not have been tortuous in itself. There is
conspiracy where an unlawful act is done pursuant to agreement. Here there
was actually knowledge that the acts done would cause damage to the
appellants. The appellants have pleaded that the historical development of
the tort of conspiracy from the crime of conspiracy indicates that a
combination or agreement to do an act unlawful in itself gives a cause of
action if it results in foreseeable damage."
- Lord Diplock at p189 first considered conspiracy to injure where no
unlawful means were employed:
"The civil tort of conspiracy to injure the plaintiff’s commercial
interests where that is the predominant purpose of the agreement between the
defendants and of the acts done in execution of it which caused damage to
the plaintiff, must I think be accepted by this House as too
well-established to be discarded however anomalous it may seem
today."
He then considered the question of whether it was necessary to establish an
intention to injure where the conspiracy involved action that contravened
penal law. He held:
"This House, in my view, has an unfettered choice whether to confine the
civil action of conspiracy to the narrow field to which alone it has an
established claim or whether to extend this already anomalous tort beyond
those narrow limits that are all that common sense and the application of
the legal logic of the decided cases require.
My Lords, my choice is unhesitatingly the same as that of Parker J and
all three members of the Court of Appeal. I am against extending the scope
of civil tort of conspiracy beyond acts done in execution of an agreement
entered into by two or more persons for the purpose not of protecting their
own interests but of injuring the interests of the plaintiff.
"
- One of the cases upon which Mr Browne particularly relies involved a
subsequent claim by Lonrho. The subject matter of the litigation was the
battle to purchase the share capital of the House of Fraser which owned
Harrods. In Lonrho Plc v Fayed [1990] 2 QB 479 Lonrho alleged that the
Fayed brothers had perpetrated a fraud on the Secretary of State, thereby
securing permission to buy the company without a reference to the Monopolies
and Mergers Commission and preventing Lonrho from buying the company. In the
Court of Appeal Lonrho did not pursue a claim for tortious conspiracy,
accepting that this required a predominant intention to injure them. They did,
however, pursue a claim for unlawful interference, appealing against an order
striking out this claim. The appeal succeeded.
- Dillon LJ said at pp 488-9:
"It is submitted to us that, even with this tort, it must, as with the
tort of conspiracy, have been the predominant purpose of the tortfeasor to
injure the victim rather than to further the tortfeasor’s own financial
ends. I do not accept that. It would be inconsistent with the way Lord
Diplock treated this tort and the tort of conspiracy differently in his
speech in Lonrho Ltd v Shell Petroleum Co. Ltd (No2) and in Hadmor
Productions Ltd v Hamilton [1983] 1 AC 191, 228-229. No predominant
purpose to injure is required where the tortuous act relied on is injury by
wrongful interference with a third party’s contract with the victim or by
intimidation of a third party to the detriment of the victim, nor should it
in my view be required where the wrongful interference has been by the
practice of fraud on a third party, aimed specifically at the plaintiff, as
it was put by Oliver LJ in RCA Corporation v Pollard [1983] Ch 135,
151e-f."
"It also has to be proved by a plaintiff who seeks to rely on this tort,
as Mr Beveridge conceded for Lonrho, that the unlawful act was in some sense
directed against the plaintiff or intended to harm the plaintiff. The origin
of those phrases is the oft quoted passage in the speech of Lord Watson in
Allen v Flood [1898] AC 1,96, which was applied by the majority of
this court (Buckley and Kennedy LJJ) in National Phonograph Co. Ltd v
Edison-Bell Consolidated Phonograph Co. Ltd [1908] 1 Ch 335. In that
case the fraud was clearly directed against the plaintiff. "
Ralph Gibson LJ at p 492 also referred to ‘the nature of the intention that
is required to satisfy the requirement that the conduct be "directed against"
the plaintiffs.
- Woolf LJ at p 494 said:
"So far as conspiracy is concerned, there is good reason for requiring
that predominant intent should be an ingredient of the tort. Great
difficulty would, in my view, arise if a requirement of predominant intent
to injure were to be introduced into the tort with which we are concerned
here. This tort is not based upon any agreement, but interference, and
frequently it will be fully appreciated by a defendant that a course of
conduct that he is embarking upon will have a particular consequence to a
plaintiff and the defendant will have decided to pursue that course of
conduct knowing what the consequence will be. Albeit that he may have no
desire to bring about that consequence in order to achieve what he regards
as his ultimate ends, from the point of view of the plaintiff, whatever the
motive of the defendant, the damage which he suffers will be the same. If a
defendant has deliberately embarked upon a course of conduct, the probable
consequences of which to the plaintiff he appreciated, I do not see why the
plaintiff should not be compensated."
- In the House of Lords, Lonrho revived their claim for unlawful means
conspiracy, arguing that there was no need to show that the predominant
purpose of the conspiracy was to injure the plaintiff. It was enough to show
that the defendants knew and intended that the plaintiff would be injured,
albeit that their primary purpose was to benefit themselves. Lord Bridge of
Harwich gave the only speech, with which the other members of the House
agreed. He rejected the submission advanced by the Fayeds that Lord Diplock
had held in Lonrho v Shell that, in an unlawful means conspiracy, there
must be a predominant purpose to injure the plaintiff. After considering the
authorities, he summarised the law as follows at pp 465-6:
"Where conspirators act with the predominant purpose of injuring the
plaintiff and in fact inflict damage on him, but do nothing which would have
been actionable if done by an individual acting alone, it is in the fact of
their concerted action for that illegitimate purpose that the law, however
anomalous it may now seem, finds a sufficient ground to condemn their action
as illegal and tortuous. But when conspirators intentionally injure the
plaintiff and use unlawful means to do so, it is no defence for them to show
that their primary purpose was to further or protect their own interests; it
is sufficient to make their action tortuous that the means used were
unlawful. "
- Lord Bridge added at p 468:
"In the Metall case [1990] 1 QB 391 Slade LJ delivering the
judgment of the court, whilst expressly disclaiming any intention to
construe Lord Diplock’s speech as if it were a statue, nevertheless
subjected it to a detailed textual analysis leading to the conclusion that
it laid down a rule of law that the tort of conspiracy to injure required
proof in every case not merely of an intention to injure the plaintiff but
also that injury to the plaintiff was the predominant purpose of the
conspiracy.
My Lords, I am quite unable to accept that Lord Diplock or the other
members of the Appellate Committee concurring with him, of whom I was one,
intended the decision in Lonrho v Shell [1982] AC 173 to effect, sub
silentio, such a significant change in the law as it had been previously
understood. The House as is clear from the parties’ printed cases, which we
have been shown, had never been invited to take such a step. Moreover, to do
so would have been directly contrary to the view of Lord Denning MR
expressed in the judgment which the House was affirming and inconsistent
with the dicta in what Lord Diplock described, at p 188, as ‘Viscount Simon
LC’s now classic speech in Crofter Hand Woven Harris Tweed Co. Ltd v
Veitch [1942] AC 435, 439’. I would overrule the Metall case in
this respect.
It follows from this conclusion that Lonrho’s acceptance that the pleaded
intention on the part of the appellants to cause injury to Lonrho was not
the predominant purpose of their alleged unlawful action is not necessarily
fatal to the pleaded cause of action in conspiracy and therefore affords no
separate ground for striking out that part of the pleading."
- In neither Lonrho v Shell nor Lonrho v Fayed was the House
of Lords considering what constitutes a sufficient intention for the purpose
of establishing an unlawful means conspiracy claim. Nor indeed was this court
in Associated British Ports v TGWU [1989] 1 WLR 939, but we note that,
at p 966G-H, Stuart-Smith LJ said that the essence of the tort was "deliberate
and intended damage". Moreover both he and, at p952G-H, Neill LJ quoted the
passage in the judgment of Dillon LJ in Lonrho v Fayed, where he said
that it must be proved that the unlawful act was in some way directed at the
plaintiff, without expressing any doubt as to its correctness. Butler-Sloss LJ
referred to Daily Mirror Newspapers Ltd v Gardner [1968] 2 QB 762,
Acrow (Automation) Ltd v Rex Chainbelt Inc [1971] 1 WLR 1676 and
Brekkes v Cattel [1972] Ch 105, and said, at p 960D-E, that in those
three cases it could be shown that the defendant had the object and intention
to injure the plaintiff.
- Assistance is, we think, also to be found in the approach of the New
Zealand Court of Appeal in Van Camp Chocolates Ltd v Aulesbrooks Ltd
[1984] 1 NZLR 354, where the plaintiffs sued for interference with their
business by unlawful means, namely breach of confidence. A preliminary point
of law was argued as to the nature of the intent to injure the plaintiffs
necessary to establish the tort. The court said this:
"In principle, as we see it, an attempt to harm a plaintiff’s economic
interests should not transmute the defendant’s conduct into a tort
actionable by the plaintiff unless that intent is a cause of his conduct. If
the defendant would have used the unlawful means in question without that
intent, and if that intent would not have led him to act as he did, the mere
existence of the purely collateral and extraneous malicious motive should
not make all the difference. The essence of the tort is deliberate
interference with the plaintiff’s interests by unlawful means. If the
reasons which actuate the defendant to use unlawful means are wholly
independent of a wish to interfere with the plaintiff’s business, such
interference being no more than an incidental consequence foreseen by and
gratifying to the defendant, we think that to impose liability would be to
stretch the tort too far" (emphasis added).
- Henry J cited those observations with approval in Barretts & Baird
(Wholesale) Ltd v IPCS [1986] IRLR 331, at paragraph 28, although it
should be noted that, in so far as he said that the defendant must have injury
to the plaintiff as his predominant purpose, he went too far. Further, as
Hazel Carty points out in her book at p 107, the Court of Appeal in Nova
Scotia asserted that the harm "must be directed at the plaintiff" in
Cheticam Fisheries Co-operative v Canada (1995) 123 DLR 121 at p 132.
- We turn to the decision of this court in the Kuwait Oil Tanker
case. The appeal related to huge awards of damages against defendants who
had conspired fraudulently to divert into their own pockets income that should
have accrued to the claimant company. Counsel for the defendants raised the
question of whether the necessary intention to injure had been established,
leading to the following passage in the judgment:
"120. Mr Brodie submitted that, in order to succeed, the claimant must
prove that the particular defendant and the other conspirator or
conspirators intended to injure the claimant and that such an intention
could not be inferred from the acts themselves. For the reasons already
given we accept the submission that such an intention must be proved, as
held by the House of Lords in the two Lonrho cases. We cannot,
however, accept the second part of the submission. In many contexts it will
be necessary in order to prove intention to ask the court to infer the
relevant intention from the primary facts. We can see no reason why there
should be a special rule of evidence in this situation. On the contrary, in
the case of most conspiracies to injure by tortious means it will be clear
from the acts of the conspirators that they must have intended to injure the
claimant. In the case of a conspiracy to defraud by wholesale
misappropriation it would be absurd to argue that the conspirators did not
intend just that.
121. Mr Brodie was not able to produce any authority in support of his
proposition. We are not surprised. An example of such an inference being drawn
in a similar field is in Bourgoin SA v Minister of Agriculture [1986] 1
QB 716 Oliver LJ said (at page 777), in a part of his judgment with which both
Parker and Nourse LJJ agreed:
"If an act is done deliberately and with knowledge of the consequences,
I do not think that the actor can say that he did not ‘intend’ the
consequences or that the act was not ‘aimed’ at the person who, it is
known, will suffer them."
The facts of the instant case are good example. On the judge’s findings of
fact the defendants’ principal purpose was no doubt to line their own pockets,
but they cannot be heard to say that they did not intend to injure the
claimants or that their acts were not aimed at the claimants. In all the
circumstances we are unable to accept Mr Brodie’s submissions under this
head."
Intention: interference with contractual rights
- The tort of interference with contractual rights overlaps with the torts
of unlawful interference and unlawful means conspiracy. The classic form of
this tort consists of directly inducing a third party to break his or her
contract with the claimant, as in Lumley v Gye. In such a case there is
no requirement for the inducement to involve unlawful means. Where, however,
the inducement is achieved indirectly, unlawful means are an element of the
tort. For present purposes the important questions are what the authorities
indicate in relation to the mental element of the tort and whether those
authorities should be applied to the tort of wrongful interference.
- In South Wales Miners’ Federation v Glamorgan Coal Company [1905]
AC 239 the House of Lords made it plain that malice, in the form of ill-will,
was not required for this tort. It sufficed that the defendants knowingly and
intentionally procured a violation of the plaintiffs’ legal rights. In
Thomson v Deakin [1952] Ch 656 the defendant union was alleged to have
indirectly prevented a supplier from performing its contract to supply paper
to the plaintiffs by inducing its members to withdraw their services from the
supplier. Lord Evershed MR first considered the tort of directly inducing a
breach of contract and remarked at p 677 that it was conceded that the
defendant must have acted with the intention of doing damage to the person
damaged and that he must have succeeded in his efforts. So far as indirectly
procuring a breach of contract was concerned, the same intention had to be
proved, but the tort would only be committed if the acts indirectly inducing
the breach of contract involved wrongful conduct.
- These principles were confirmed by the Court of Appeal in Torquay Hotel
Ltd v Cousins [1969] 2 Ch 106, although the tort was extended to procuring
interference with the exercise of contractual rights that did not involve a
breach of contract. At p 138 Lord Denning MR observed:
"the interference must be deliberate. The person must know of the
contract, or at any rate turn a blind eye to it, and intend to interfere
with it."
- Mercur Island Shipping Corporation v Laughton [1983] 2 AC 571 was
another case of indirect interference. Union officials blacked a ship, with
the result that the plaintiff shipowners were unable to perform a time
charter. Lord Diplock confirmed that the tort required intention on the part
of the defendants to procure the breach of contract. He held that the
intention existed because the defendants must have known that the ship was
about to sail pursuant to a contract of carriage and diminishing the earnings
under the contract was the only way of putting pressure on the shipowners.
- The defendants’ conduct in Mercur was aimed or directed at the
shipowners. Lord Evershed MR’s comments in Thomson v Deakin suggest
that this was a necessary element of the tort. If so, a claim by the
charterers, or indeed by holders of bills of lading, would not have succeeded.
In Dimbleby v National Union of Journalists [1984] 1 WLR 427, the
defendant union caused its members to withdraw their labour from the
plaintiff, thereby preventing the plaintiff from performing a contract with a
firm of printers. The conduct was aimed, primarily, not at the plaintiff but
at the printers, with whom the union was in dispute. The plaintiff’s claim for
an injunction was upheld by the House of Lords.
- Thus far, judicial statements in relation to intention are wholly
consistent with those in relation to the tort of unlawful interference. There
is no requirement of a predominant intention to harm the claimant, but such
harm must none the less be an object of the defendant’s conduct, albeit aimed
at achieving an ulterior purpose. Dimbleby was such a case. The
ultimate object was to harm the printers, but there was a deliberate intention
to prevent Dimbleby from performing the contract in order to achieve this end.
- The decision that is somewhat out of step with the authorities is that of
this court in Millar v Bassey [1994] EMLR 44. Shirley Bassey had
contracted with Dreampace, a record producer, to record an album of songs.
Dreampace contracted with the plaintiffs to provide the backing. Miss Bassey
then declined to make the recording, with the result that Dreampace could not
perform its contract with the plaintiffs. They sued Miss Bassey for inducing
breach of contract. Miss Bassey sought to have the claim struck out on the
ground that the plaintiffs had not alleged that Miss Bassey had acted with the
intention of causing them damage or that her actions were directed at them.
The judge struck out the claim and the plaintiffs appealed.
- Beldam LJ conducted a review of the authorities and was particularly
impressed by the passage that we have already quoted in the judgment of Woolf
LJ in Lonrho v Shell. He observed at p 51:
"In the passage cited, Woolf LJ was in my opinion emphasising the
distinction between an intention to bring about a consequence and the desire
to do so and was pointing out that a person can intend a consequence if he
knows that it will follow from a course of conduct on which he embarks
deliberately. Nor I my view can a consequence properly be regarded as
unintended or incidental if the deliberate action is taken knowing that it
must inevitably bring about the consequence, desired or not. In truth in
such a case the actor intends to bring about both the undesired and the
desired consequence and is willing to bring about the one to achieve the
other. "
- Subsequently, at p 55, Beldam LJ expressed this view.
"If there is no valid distinction between persuading a man to break his
contract with another and making his performance of it impossible by
depriving him in breach of their contracts of the services of his employees,
I do not see a basis for distinguishing the deliberate refusal to perform
irreplaceable services in breach of contract knowing that such refusal will
inevitably make the performance of another’s contract impossible. If it is
actionable to cause loss to the plaintiff by enticing or persuading another
to break his contract with the plaintiff, can it be said to be unarguable
that it is actionable to cause such loss by voluntarily and deliberately
refusing to perform a contract knowing that such refusal will make it
impossible for the other party to fulfil his obligations to the plaintiff? I
do not think so."
His conclusion appears in the following passage at p 58:
"In the present case, on the facts taken to be proved, the appellants
establish that the respondent voluntarily broke her agreement with Dreampace
knowing of the appellants’ contracts and that the performance of those
contracts would be impossible if she refused to perform the obligations
under her agreement with Dreampace. Since she must have realised that her
talents were essential and irreplaceable, she must have intended that
Dreampace would be unable to fulfil its obligations to the appellants. In
such circumstances it seems to me unnecessary to assert a specific intention
to interfere with the performance of the appellants’ contracts which must
necessarily follow from her own refusal to perform her obligations to
Dreampace. In the absence of any explanation advanced by the respondent for
her actions, the only reasonable inference is that in refusing to perform
she must have had a purpose of her own to serve which she pursued at the
expense of the plaintiffs’ right to contractual performance by Dreampace of
its obligations."
- Peter Gibson LJ did not agree. The authorities led him to conclude that:
"… it is a requirement of the tort that it should be established that the
defendant by his conduct intended to break or otherwise interfere with and,
with that intention, did break or otherwise interfere with a contract to
which the plaintiff was a party."
He also said that he would answer the following question in the former,
rather than the latter, sense:
" Must the conduct of the defendant … be aimed directly at the plaintiff,
the contracting party who suffers the damage, in the sense that the
defendant intends that the plaintiff’s contract should be broken, or is it
sufficient that the conduct should have the natural and probable consequence
that the plaintiff’s contract should be broken?"
- Ralph Gibson LJ inclined to the view expressed by Peter Gibson LJ, but
concluded that the authorities were insufficiently clear to justify striking
out the claim so the appeal was allowed.
- Since the decision in Millar v Bassey, it is the approach of Peter
Gibson LJ, rather than that of Beldam LJ, that has found judicial favour. In
Isaac Oren v Red Box Toy Factory Ltd [1999] FSR 785, Jacob J considered
the tort of interfering with contractual relations, which requires an
intention to interfere, and expressly followed the approach of Peter Gibson
LJ, saying at p 799 that the unlawful conduct must "in some real sense be
‘aimed at’ the contract." In OBG Ltd v Allen [2005] EWCA Civ 106, at
paragraphs 43 and 82-3 respectively, Peter Gibson LJ himself (with whom
Carnwath LJ agreed) and Mance LJ (who dissented in the result) adopted the
approach of Peter Gibson LJ, in preference to that of Beldam LJ, in Millar
v Bassey. Indeed, they expressed the view that Peter Gibson LJ’s approach
was that of the majority in Millar v Bassey.
Intention: misfeasance in public office
- The tort of misfeasance in public office occurs when an official acts
beyond his powers provided that the necessary mental element is present. What
do the authorities say about that mental element and can what they say be
applied to the tort of unlawful interference?
- We turn first to Bourgoin v Ministry of Agriculture, which, as we
have seen, was referred to in the Kuwait Oil Tanker case. The
plaintiffs were French producers of turkeys. They alleged that the Minister
revoked their licence to import turkeys into this country by a decision that
was ultra vires and motivated by a desire to assist the British turkey
producers. The Minister sought to have the plea struck out on the ground that
it lacked the essential averment that the Minister acted with the purpose of
inflicting harm on the plaintiffs, in other words that he had ‘targeted
malice’. At p 777 Oliver LJ quoted the view of the judge on this point and
then added his own comments:
" "I do not read any of the decisions to which I have been referred as
precluding the commission of the tort of misfeasance in public office where
the officer actually knew that he had no power to do that which he did, and
that his act would injure the plaintiff as subsequently it does. I read the
judgment in Dunlop v Woollahra Municipal Council [1982] AC 158 in the
sense that malice and knowledge are alternatives. There is no sensible
reason why the common law should not afford a remedy to the injured party in
circumstances such as are before me. There is no sensible distinction
between the case where an officer performs an act which has no power to
perform with the object of injuring A (which the defendant accepts is
actionable at the instance of A) and the case where an officer performs an
act which he knows he has no power to perform with the object of conferring
a benefit on B but which has the foreseeable and actual consequence of
injury to A (which the defendant denies is actionable at the instance of A).
In my judgment each case is actionable at the instance of A and,
accordingly, I determine that paragraphs 23 and 36 of the amended statement
of claim do disclose a cause of action.
For my part, I too can see no sensible distinction between the two cases
which the judge mentions.
If it be shown that the minister’s motive was to further the interests of
English turkey producers by keeping out the produce of French turkey
producers – an act which must necessarily injure them – it seems to me
entirely immaterial that the one purpose was dominant and the second merely
a subsidiary purpose for giving effect to the dominant purpose. If an act is
done deliberately and with knowledge of its consequences, I do not think
that the actor can sensibly say that he did not "intend" the consequences or
that the act was not "aimed" at the person who, it is known, will suffer
them. In my judgment, the judge was right in his conclusion also on this
point."
- On the facts alleged in Bourgoin, this statement of the law could
be reconciled with the requirement of intention in the tort of unlawful
interference. It was the intention of the Minister that harm should be caused
to the French producers. This was because causing such harm would fulfil the
ulterior object of benefiting the British producers. It was necessary to cause
the harm in order to confer the benefit. Causing the harm was ‘a subsidiary
purpose for giving effect to the dominant purpose’. In other words,
Bourgoin was a case where test b) was satisfied.
- Bourgoin was a case where a positive action by the Minister was
aimed or directed at the claimants, the French Turkey producers. Three
Rivers DC v Bank of England (No 3) [2003] 2 AC 1 was a very different
case. The claim was brought by creditors of BCCI. The allegation was that the
Bank of England had wrongly granted a licence to, or failed to revoke the
licence of, BCCI when it knew, believed or suspected that BCCI would collapse
if not rescued. There was no allegation that the Bank’s conduct was aimed or
directed at the claimants. Preliminary issues were tried that raised the
question of whether the claimants had pleaded a viable case. These raised
questions as to the ingredients of the tort of misfeasance in public office.
One such question related to the state of mind that had to be demonstrated in
respect of the damage that the claimants alleged that they had suffered. The
claimants alleged that it sufficed if the damage that they sustained was
reasonably foreseeable by the Bank.
- All members of the House of Lords agreed that there were two forms of the
tort. Common to each was that the defendant must have committed a deliberate
and dishonest abuse of power. This, however, was not of itself enough to
establish liability for consequent economic injury. A further mental element
had to be established in relation to this. All were agreed on the first form.
This was described as ‘targeted malice’, that is a deliberate intention to
cause the injury to the defendant or to a class of which the defendant is one.
- As to the other form, the majority (Lord Steyn, Lord Hope, Lord Hutton and
Lord Hobhouse) agreed that this in its turn could be subdivided into two
mental conditions. The first was knowledge that the abuse of power would
probably cause injury to the claimant or to a class to which he was one. The
second was subjective reckless indifference as to whether such injury was
caused or not.
- Lord Millett’s reasoning differed from that of the majority. He expressed
the view at p 235 that the element of knowledge was a means of establishing
the relevant intention, but not a substitute for it. On the next page he
stated that the fact that the defendant foresaw that his conduct would
probably harm the claimant was not enough. The inference could not be drawn
unless the defendant did foresee the consequences.
Intention: discussion and conclusion
- The law has always shown a reluctance to impose liability in tort for
causing purely pecuniary loss. In the case of conspiracy to injure that does
not involve the use of unlawful means, the law overcomes that reluctance where
the tortfeasors conspire and where the predominant object of the conspiracy is
to cause the claimant economic harm. The fact that the predominant object, or
(which, as far as we can see, is the same thing in this context) the
predominant purpose, of the exercise is to cause harm is of the essence of the
tort. Where conspirators resort, or indeed an individual resorts, to unlawful
conduct with the object of causing the claimant economic harm, the law holds
the conduct tortious, even if causing the harm is not the predominant object
or purpose of the exercise. The tort will be made out even though causing the
harm may only be the means to some other end.
- However, in all cases of alleged unlawful interference and unlawful means
conspiracy where liability has been established, the necessary object or
purpose of causing the claimant economic harm has not been made out unless the
conduct can be shown to have been aimed or directed at the claimant. That
seems to us to be the consistent theme in the two Lonrho cases in the
House of Lords.
- In Lonrho v Shell Lord Diplock referred to "acts done … for the
purpose … of injuring the plaintiffs". In Lonrho v Fayed, Lord Bridge
approved Lord Denning’s formulation in Lonrho v Shell in the Court of
Appeal, where it was said that "[i]t s sufficient if the conspiracy is aimed
or directed at the plaintiff". This approach is to be found elsewhere. We note
in particular the statement in Clerk & Lindsell that the tort
consists of using unlawful means with the object of injuring the claimant, the
dicta of Dillon and Ralph Gibson LJJ in Lonrho v Fayed, Stuart-Smith
LJ’s reference to deliberate and intended damage in the Associated British
Ports case, and the observations in the Van Camp Chocolates and
Ceticam cases.
- Cases on other economic torts appear to us to have approached the question
of intention in the same way. For example, in the context of inducement, in
the passage quoted above from Allen v Flood, Lord Watson referred to "
the use of illegal means directed against a third party". In her book, at p
101, Hazel Carty traces the tort of unlawful interference back to the
assertion of Lord Lindley in Quinn v Leathem at p 495, by reference to
Lumley v Gye (1853) 2 E & B 216, that the underlying principle was
"wrongful acts done intentionally to damage a particular individual and
actually damaging him".
- The relevant conduct was as much directed at the claimant in the Kuwait
Oil Tanker case as in all the others. Only by diverting income that should
have gone to the claimants could the defendants have enriched themselves. In
other words test b) was satisfied, because the very act of diverting the money
to the defendants required and involved (as opposed to merely resulted in)
diverting the money away from the claimant. Indeed, it may be said that the
wrongful act of diverting the money from the claimant in a sense preceded the
ulterior motive, namely the receipt of the money by the defendant. However, in
some situations an unlawful act will have adverse financial consequences to
third parties, which are foreseeable and foreseen, but which are not
consequences that the defendant desires or has any interest in bringing about.
The statement from Bourgoin cited in the Kuwait Oil Tanker
case might suggest that foresight of consequences must always be
equated with intention to cause them – i.e. that satisfying test c) will
suffice to establish the necessary intention. However, as we have explained in
a paragraph 208 above, looked at the context in which the statement was made,
it does not carry that inference.
- The authorities that we have considered indicate that it is of the essence
of the torts of unlawful means conspiracy and unlawful interference
that the conduct that causes the harm is aimed or directed at the claimant,
and that in such cases the courts have inferred that the requisite intention,
that is the purpose or object of causing the claimant economic loss, is
present. The one discordant voice is that of Woolf LJ in Lonhro v Fayed.
He postulated that foresight by a defendant of harm to a plaintiff was
sufficient to satisfy the mental element in the tort of unlawful interference
even though there was no desire to bring about that consequence in order to
achieve what he regarded as his ultimate end. If by this Woolf LJ meant that
foresight of an incidental consequence of unlawful action sufficed to
constitute the mental element of the tort, even though achieving that
consequence was no part of the defendant’s design, we consider that his
statement was contrary to the weight of the authority that we have summarised.
- As to the cases on interference with contractual rights, Tony Weir in his
published lectures on Economic Torts (1997) reacted strongly against the
decision in Millar v Bassey. At p 19 he said this:
"Admittedly it was a striking-out action, but what nonsense that it
should go to trial, that Miss Bassey should have to defend herself against
five people she had never contracted with and did not aim to harm just
because she changed her mind about making a recording. Must I perform my
contract with you just because a third party may, to my knowledge, suffer if
I don’t? Suppose that I agree to buy goods from you knowing that if the sale
goes through, your agent will received a hefty commission: am I liable to
him for refusing to accept delivery? In such a case there is only one third
party: in Millar v Bassey the defendant looked to be liable to a
whole orchestra plus the electronic bank. Dear me! Privity come back! –
almost all is forgiven. It is easy to see how wrong this decision is, and we
shall see later how it came to be possible."
- Other commentators have expressed similar, although more moderate, views.
We consider that the conclusions of Peter Gibson LJ are to be preferred to
those of Beldam LJ. It is often the case that failure to perform one contract
will lead to a series of consequent breaches of contracts to which the
original contract breaker is not party. To render him liable for these
breaches simply because they are consequences which he foresaw would be to
undermine the doctrine of privity of contract.
- Professor Weir and most other writers, including Hazel Carty and Messrs
Sales and Stilitz, are of the view that the gist of all the economic torts is
the intentional infliction of economic harm. We consider that this is a fair
and satisfactory conclusion to draw from the authorities, difficult as some of
these are to reconcile. Intention to inflict harm on a claimant is not the
same as a wish to harm him. It is, however, very different from knowledge that
economic harm will follow as a result of incidental consequences of conduct,
when those consequences are not necessary steps in achieving the object of the
conduct and are unsought.
- Three Rivers establishes that foresight of probable injury or
subjective recklessness as to whether such injury is caused is the mental
element required in relation to the consequences of abuse of power, if the
cause of action of misfeasance in public office is to be made out. This is a
developing tort, as is the tort of unlawful interference. Is there a case for
equating the mental element in the two torts? The House of Lords did not so
suggest in Three Rivers, and Clarke J, who sat at first instance in
Three Rivers, did not consider that there was – see at [1996] 3 All ER
558 at p 583. We do not consider that there is. The gist of the tort of
misfeasance in public office is the deliberate abuse of power. The mental
element in the first form of the tort, namely targeted malice, bears strong
echoes of the mental element required for unlawful interference, particularly
in the early days of the development of that tort. The same is not true of the
alternative requirements of foresight of consequences or subjective
recklessness. These are not the gist of the tort; they are closer to control
mechanisms limiting the liability that flows from the wrongful conduct.
- The gist of the tort of unlawful interference is the intentional
infliction of economic harm. In other words, it must be shown that the object
or purpose of the defendant is to inflict harm on the claimant, either as an
end in itself, or as a means to another end. If foresight of probable
consequences or subjective recklessness sufficed as the mental element of the
tort, this would transform the nature of the tort. This, in effect, is what Mr
Browne sought to persuade us to do when he advanced tests d) and e) as
sufficient to satisfy the mental element in the tort of unlawful interference.
Indeed, we take the view that satisfaction of test c) would not be sufficient
to establish the requisite mental element. However, as mentioned in paragraph
159 above, establishing that the defendant knew that the claimant would suffer
economic loss may well be evidence which can support a contention that test b)
or even test a), is satisfied..
- It might be possible to envisage a case in which an intention satisfying
test a) or b) could be established even though the unlawful act was not aimed,
targeted or directed at the claimant. Equally it might be possible to envisage
a case in which the relevant intention was not established, even though the
unlawful conduct was in some way directed at the claimant. These are, however,
unlikely scenarios and the decided cases do not provide an example of either.
In principle we agree with Hazel Carty, and what she describes as ‘most
commentators’, that it is necessary to prove targeted or directed harm. The
essence of the tort is that the conduct is done with the object or purpose
(but not necessarily the predominant object or purpose) of injuring the
claimant or, which seems to us to be the same thing, that the conduct is in
some sense aimed or directed at the claimant.
- For the reasons that we have given, we reject this part of OK!’s case and
hold that the claims founded on the economic torts are not made out.
Unlawful means
- In the light of the above conclusions it is strictly unnecessary to
consider what amount to unlawful means for the purposes of the tort with which
we are concerned. We therefore refer to it relatively shortly.
- There is scope for argument as to what can and cannot amount to unlawful
means for the purposes of the tort of interference with business by unlawful
means or of the tort of conspiracy to injure by unlawful means. It is not
suggested that any distinction is to be drawn between the two torts for this
purpose. It appears possible that not every unlawful act amounts to unlawful
means – see for instance RCA v Pollard. But, if that is so, it is not
always easy to know which acts qualify and which do not. However, it appears
to us that the exceptions should be few and identified on some clear and
principled basis.
- The economic torts may be regarded as somewhat anomalous, in the sense
that they give rise to a claim by a party who, ex hypothesi, is not within the
class of persons who could claim for damage suffered simply as a result of the
act embodied in the "unlawful means". However, once one accepts the existence
of the economic torts, it seems to us that it would add to any anomalies if
only certain types of unlawful acts could, as a matter of principle, qualify
as "unlawful means", at any rate unless the principles of exclusions were
clearly identified and justified. It would be more consistent and more likely
to lead to just results if any unlawful act could be "unlawful means", while
requiring a sufficient nexus between the act and its unlawfulness and the harm
complained of. The need for a claimant to establish an intention on the part
of the defendant to harm him, sufficient to satisfy test a) or b), would, at
least normally, serve to incorporate this rather ill-defined reference to a
sufficient nexus, although it is right to add that it also goes further than
that.
- Fortunately, it is not necessary for us to try to identify or formulate
any exclusionary principle of general application in order to determine this
appeal. In the light of the decided cases, it would not be easy to do so. The
question here is whether publication by Hello! of unauthorised photographs
which amounts to an infringement of the Douglases’ rights of privacy and a
breach of a duty of confidence owed to them is sufficient unlawful means to
entitle OK! to maintain a claim in tort for loss intentionally caused to it by
the publication.
- In Clerk & Lindsell, at paragraphs 24-97 to 24-98, the editors
consider whether breach of confidence can amount to "unlawful means", albeit
for the purpose of the tort of interference with economic interests, and
conclude that it can. As they suggest in the text and the footnotes, this view
seems to be supported by the majority of this court (Otton LJ and Owen J) in
Indata Equipment Supplies Ltd v ACL Ltd [1998] FSR 248. The facts were
these, essentially as summarised by Clerk & Lindsell. A broker
arranged through a finance house the leasing of cars and computers for
clients. In one transaction he gave confidential information about the client
and his own trade terms, including his profit margin, to the defendant which
used it without authorisation to offer more attractive terms, aiming to cut
out the broker from deals with the client. It was held that there was no
fiduciary duty or relationship between the broker and the finance house; they
were at arm’s length. However, it was held that the broker’s profit margin and
to a lesser degree the invoice price between the defendant and the broker were
items of confidential information which had been misused by the defendant to
enable it to put forward another deal to the client.
- In these circumstances the claim succeeded in breach of confidence so that
the views of the majority of this court on the tort of unlawful interference
with business or, as Otton LJ put it, economic or other interests, were
obiter. Simon Brown LJ preferred to express no view on the point. Otton
LJ said at p 260 that in the particular circumstances of the case, the breach
of contract coupled with the ruthless conduct of the defendant would amount to
unlawful means. Owen J agreed that the defendant had used unlawful means.
- That was a stronger case than this on the facts, and each case depends
upon its own facts. However, the position here was that Hello! published
photographs which it knew to be unauthorised by the Douglases in circumstances
in which it also knew that OK! had acquired the rights to publish authorised
photographs of the wedding and that it was OK!’s case that the publication
would be in breach of duties of confidence owed both to OK! and to the
Douglases. Indeed, two judges had granted an injunction to restrain Hello!
from publishing the photographs and, although the Court of Appeal had allowed
Hello!’s appeal against the interlocutory injunction (but had not yet given
its reasons for doing so), Hello! must have appreciated that the court may
well conclude that OK!’s case was well-founded, although damages would be an
adequate remedy.
- To publish unauthorised photographs in those circumstances with the
intention of injuring OK! (in the sense discussed above) and in fact injuring
OK! was in our opinion to do so by unlawful means, namely the infringement of
the rights of the Douglases. Moreover there would have been, in our view, a
sufficient nexus between the publication, the fact that it was unlawful and
the injury to OK! to justify the conclusion that there was here an
interference with the business of OK! committed with the intention of injuring
OK!.
- We recognise that, having regard to the conclusions reached earlier as to
OK!’s claim for breach of confidence, there was no breach of a duty of
confidence owed to OK!, but it cannot be necessary for the unlawful means to
amount to an actionable infringement of the claimant’s own rights. Otherwise
the tort would be largely ineffective: see Associated British Ports v
Transport and General Workers’ Union [1989] 1 WLR 939, especially per
Stuart-Smith LJ at p 965.
- Accordingly, if we had held that OK! had satisfied the high test of
intention, bearing in mind the principle suggested by Sales and Stilitz that
it is not appropriate to determine whether the means used were in a relevant
sense unlawful by the seriousness of the civil wrong, we would have held that
the test of unlawful means was satisfied.
Conclusion on OK!’s cross-appeal
- For the reasons given above, OK! has failed to establish that Hello! had
the requisite intention to establish the tort of unlawful interference with
business or conspiracy to injury by unlawful means with the result that OK!’s
cross-appeal fails.
The two issues on damages
- As mentioned above, two issues were raised before us on the judge’s
assessment of damages. Because we have allowed Hello!’s appeal against the
judgment in favour of OK!, the first of those issues, which only bears on the
level of damages awarded to OK!, has become moot. We nonetheless propose to
deal with it, and we will then turn to the Douglases’ appeal in relation to
damages. That appeal is in point because we have concluded that OK! have no
cause of action against Hello!; accordingly, the Douglases maintain their
contention that the damages they were awarded were far too low, and, in
particular, were assessed on a wrong basis.
Liability for losses from publication in the newspapers
- After the judgment on the issues of liability, there was, as we have
mentioned, a subsequent hearing to determine the measure of damages. OK!’s
damages were assessed on the basis of the profit they lost as a result of the
reduction in sales of the two issues of OK! magazine containing the authorised
photographs caused by the publication of the unauthorised photographs. The
judge decided, when assessing the effect on the circulation of Issues 241 and
242 of OK! magazine, that he should take into account not only the effect of
the publication of the unauthorised photographs in Hello! magazine, but also
that of the publication of copies of some of those photographs in the Sun and
in the Daily Mail on (or shortly after) 24th November 2000. For
Hello! it is said that this was wrong in principle, in light of the facts
found by the judge. The relevant facts relied on to support that contention
are as follows.
- First, no consent was ever given by Hello! to the publication of any
photographs in the two newspapers. Secondly, following the discharge of the
interlocutory injunction, the two newspapers had been expressly forbidden by
Hello! from publishing the photographs. Thirdly, at the time they were
forbidden from publishing any of the photographs, it was not too late for the
Sun to have withdrawn from publishing them, even though preparatory steps had
been taken to do so. Fourthly, the judge said, in paragraph 40 of his main
judgment, that, albeit after "a hesitant start", Hello! had "acted with
reasonable speed to stop publication by others". In these circumstances, it is
said that the judge’s conclusion, whose basis was only briefly explained in
the damages judgment, that the damages flowing from the publication of the
unauthorised photographs were not "so remote a consequence of Hello!’s
publication as not to be laid at Hello!’s door", cannot stand.
- In our judgment, although it might have been better if the judge had given
fuller reasons for his decision on this point, his determination on remoteness
was one that he was entitled to reach. While the resolution of the question of
remoteness will often involve issues of law, it is normally a fact-sensitive
determination, which must carry with it a degree of inference and value
judgment. As Laws LJ said in McManus v Beckham [2002] 1WLR 2982, at
paragraph 39, in connection with a slander action, "The reality is that the
court has to decide whether, on the facts before it, it is just to hold [the
defendant] responsible for the loss in question". The judge held that the "but
for" test was satisfied, but that that was clearly not enough (although it was
necessary) to justify his conclusion. However, there were a number of other
findings, or items of uncontroversial evidence, which, when taken together, in
our view, justify his conclusion.
- First, Hello! knew well before 24th November 2000 that some
newspapers were wishing to publish copies of some of the unauthorised
photographs. Secondly, it had been indicated on behalf of Hello! that the
newspapers might be able to do so. Thirdly, there was evidence that it was not
uncommon for newspapers to copy at least the front cover of Hello! (as well as
OK!) magazine. Fourthly, it was foreseeable, especially to those in this
business, that these photographs would provide particularly attractive copy
for the newspapers, bearing in mind their subject matter and controversial
history. Fifthly, there was Hello!’s "hesitant start" referred to by the
judge. Sixthly, there was the judge’s finding in his quantum judgment that,
after the newspapers learnt of the discharge of the interlocutory injunction,
"they not unnaturally thought that they were free to use the pictures".
Seventhly, given that Hello! were publishing photographs which they well knew
had been taken in an underhand way, it could scarcely have come as any
surprise that others in the same line of business were prepared to run risks
by publishing copies of those photographs. Indeed, having agreed to the
circumstances in which the photographs had been taken, it is questionable
whether Hello! could successfully have brought proceedings for breach of
copyright. Ex turpi causa non oritur actio.
- In all these circumstances, we have reached the conclusion that the judge
was entitled to decide, as he did, that the losses suffered by OK! from the
publication of the unauthorised photographs in the two newspapers were
"sufficiently consequential upon the breach and sufficiently foreseeable to
make Hello! Ltd liable for them in the normal way".
The Douglases’ claim for a notional licence fee
- When it came to the assessment of damages, the Douglases were awarded
£3,750 each as general damages for mental distress, plus a further £7000
between them for additional expenses and disruption in respect of selecting
photographs for publication. Given that they are entitled to damages and that
OK! are not entitled to damages, it is contended on behalf of the Douglases
that they should be entitled to more substantial damages, namely a sum equal
to the notional licence they would have charged Hello! to permit them to
publish the unauthorised photographs. The Douglases also contend that the
judge’s assessment of that fee at £125,000 was significantly too low. We
observe at the outset that it is not easy to understand why the Douglases’
appeal in this connection should be contingent upon Hello!’s appeal succeeding
against OK!. This anomaly raises an immediate question mark over the validity
of this claim.
- It is well established that damages in a case involving unauthorised use
of, or unauthorised benefiting from, intellectual property and similar rights
can be assessed in a number of different ways. In General Tire & Rubber
Co v Firestone Tyre and Rubber Co Ltd [1975] 1 WLR 819 at pp 824 to 827,
Lord Wilberforce identified the normal categories at least in patent cases.
They are the profit, or the royalty, which was or would have been achieved
(e.g. where the defendant manufactures, or licences the manufacture of, goods
covered by the patent), and the licence fee which would reasonably have been
charged (e.g. where it is not possible to assess the level of profit). The
present case is far from normal, and in our view none of these normal methods
of assessment would be appropriate.
- This is not a case where a profit was made by the defendant: bearing in
mind the payment they made, £125,000, for the unauthorised photographs, Hello!
actually made a loss on the whole exercise. This is not a case where a
royalty, or its equivalent, would be appropriate, partly for the same reason,
and partly because Hello! effected no licensing, or its equivalent, in
relation to the use of the unauthorised photographs.
- There are obvious problems with assessing the Douglases’ damages on a
notional licence fee basis. First, the whole basis of their (as opposed to
OK!’s) complaint about Hello!’s publication of the unauthorised photographs is
upset and affront at invasion of privacy, not loss of the opportunity to earn
money. Indeed, they have already claimed and been paid, damages assessed on
that former basis. That factor alone would not prevent an assessment on a
notional licence fee basis, but it is not a good start. Secondly, the
Douglases would never have agreed to any of the unauthorised photographs being
published. The licence fee approach will normally involve a fictional
negotiation, but the unreality of the fictional negotiation in this case is
palpable.
- Thirdly, and most importantly, having sold the exclusive right to publish
photographs of the reception to OK!, the Douglases would not have been in a
position to grant a licence to Hello!. In this connection, we do not consider
that, in light of the terms of the OK! contract, especially clause 10, the
Douglases could claim to be required to account for the notional licence fee
to OK!. Accordingly, an award of a notional licence fee would involve the
Douglases being unjustly enriched: they have already been paid £1m for the
exclusive right to publish photographs of the reception. As was said in
argument, they have thereby exhausted their relevant commercial interest.
- Quite apart from these factors, while it is not a sufficient reason for
rejecting the notional licence fee approach, there is the difficulty of
assessing a fee. The Douglases would have been very unwilling to agree to
publication of the unauthorised photographs in light of the terms of the OK!
contract, the quality of the photographs, and the circumstances in which they
were taken. Hello! would presumably have been prepared to pay at least
£125,000, as that is what they actually paid for them, but Mr Browne made it
clear that the Douglases would have wanted a lot more. The worse the quality
of the photographs, the less they would have been worth to Hello! and the more
the Douglases would have wanted for their publication.
- In all these circumstances, we are of the view that a notional licence fee
would not be the right basis on which to assess the Douglases’ damages, even
given that they, but not OK!, are entitled to claim against Hello!. If,
however, Hello! had made a profit on the publication, we would have had no
hesitation in accepting that the Douglases would have been entitled to seek an
account of that profit. Such an approach would not run into the difficulties
of principle which their notional licence fee argument faces. Such an approach
may also serve to discourage any wrongful publication, at least where it is
motivated by money.
- Finally, if it had been right to award damages to the Douglases on the
basis of a notional licence fee, we would not, in any event, have thought it
right to interfere with the judge’s assessment of £125,000. Various factors to
which we have made reference render it impossible to contend that the figure
adopted by the judge was one which he could not properly have reached. We have
in mind the fact that the assessment was a matter of valuation opinion, the
difficulties inherent in this particular assessment, the fact that Hello!
actually paid £150,000 for the unauthorised photographs, and the fact that
Hello! made a loss on the whole exercise.
The discharge of the interlocutory injunction
- We turn to an issue upon which we were not addressed, but which we believe
justifies revisiting. It is the decision of this court in November 2000,
reported at [2001] QB 967, to lift the interlocutory injunction granted by
Hunt J, restraining Hello! from publishing the unauthorised photographs. In
our view, in the light of the law as it can now be seen to be, that decision
was wrong, and the interlocutory injunction should in fact have been upheld.
- The reasons given by the three members of this court for concluding that
an interlocutory injunction was inappropriate were slightly different. Brooke
LJ considered that it was no more than arguable that the Douglases "had a
right to privacy which English Law would recognise", and that their claim
based on privacy was "not a particularly strong one" (paragraphs 60 and 95).
Although Sedley LJ thought that the Douglases had "a powerful prima facie
claim to redress for invasion of their privacy", he considered that "by far
the greater part of that privacy has already been traded and falls to be
protected, if at all, as a commodity in the hands of [OK!]" - paragraphs 137
and 144). At paragraph 171, Keene LJ was primarily influenced by the point
that the "court in exercising its discretion at this interlocutory stage must
still take account of the widespread publicity arranged by the [Douglases] for
this occasion".
- In our view, these analyses, and indeed the decision to discharge the
injunction, did not give sufficient weight to two factors. The first was the
strength of the Douglases’ claim for an injunction restraining publication of
the unauthorised photographs. Although Sedley LJ took the view that they had a
strong case in this connection, it would appear that Brooke and Keene LJJ were
more doubtful. The Court of Appeal did not have the benefit of the reasoning
in the House of Lords in Campbell v MGN or, even more significantly for
present purposes, the reasoning of the ECtHR in von Hannover v Germany.
Had the court had the opportunity to consider those two decisions, we believe
that it would have reached the conclusion that the Douglases appeared to have
a virtually unanswerable case for contending that publication of the
unauthorised photographs would infringe their privacy.
- Of course, even where a claimant has a very strong case indeed for
contending that publication of information would infringe his privacy, there
may be good reasons for refusing an interlocutory injunction. In the present
case, however, we find it difficult to see how it could be contended that the
public interest (as opposed to public curiosity) could be involved over and
above the general public interest in a free press. Particularly so, as it was
clearly the intention of the Douglases and OK! to publish a large number of
(much clearer) photographs of the same event. The fact that the Douglases can
be fairly said to have "traded" their privacy to a substantial extent as a
result of their contract with OK! does not undermine the point that
publication of the unauthorised photographs would infringe their privacy.
- The second factor to which this court appears to have given insufficient
weight was the likely level of damages which the Douglases would recover if an
interlocutory injunction was refused and, as now turns out, publication of the
unauthorised photographs infringed their rights. We have been provided with
transcripts recording remarks from the Bench during the argument, which
suggested that the level of damages which would be awarded to the Douglases,
if they established that the publication of the unauthorised photographs
infringed their right to privacy, would be very substantial. In the event, the
damages awarded to them was the relatively small sum of £14,600 (of which
nearly half is attributable to the inconvenience they suffered as a result of
having to select photographs for publication by OK! owing to the imminent
publication of the unauthorised photographs by Hello!).
- The characterisation of this sum as "relatively small" is not intended to
indicate that we think that the level of damages should have been greater. The
description is appropriate because damages, particularly in that sum, cannot
fairly be regarded as an adequate remedy. As we have already observed, the
Douglases would never have agreed to the publication of the unauthorised
photographs. In those circumstances, bearing in mind the nature of the injury
they suffered, namely mental distress, a modest sum by way of damages does not
represent an adequate remedy.
- The sum is also small in the sense that it could not represent any real
deterrent to a newspaper or magazine, with a large circulation, contemplating
the publication of photographs which infringed an individual’s privacy.
Accordingly, particularly in the light of the state of competition in the
newspaper and magazine industry, the refusal of an interlocutory injunction in
a case such as this represents a strong potential disincentive to respect for
aspects of private life, which the Convention intends should be respected.
- Of course, as recently emphasised by the House of Lords in Cream
Holdings Limited v Banerjee [2004] 3 WLR 918, a claimant seeking an
interlocutory injunction restraining publication has to satisfy a particularly
high threshold test, in light of section 12(3) of the Human Rights Act 1998.
However, with the benefit of the reasoning in Campbell v MGN and von
Hannover v Germany, we consider that this threshold test was in fact
satisfied by the Douglases when they sought the interlocutory injunction in
this case.
- The Douglases had a very strong claim; indeed, in the light of the two
recent authorities to which we have referred, we would have thought that it
was one which may well have been clear enough to justify summary judgment in
their favour. The award of damages eventually made to the Douglases, although
unassailable in principle, was not at a level which, when measured against the
effect of refusing them an interlocutory injunction, can fairly be
characterised as adequate or satisfactory. Only by the grant of an
interlocutory injunction could the Douglases’ rights have been satisfactorily
protected. Further, the interests of Hello! at the interlocutory stage, which
were essentially only financial, could have been protected by an appropriate
undertaking in damages by the Douglases.
Conclusion
- In the event, the outcome of this appeal is as follows: