Associated Newspapers (Holdings) Plc v Insert Media Ltd and Others

JurisdictionEngland & Wales
JudgeTHE VICE-CHANCELLOR,LORD JUSTICE STOCKER,LORD JUSTICE BELDAM
Judgment Date28 February 1991
Judgment citation (vLex)[1991] EWCA Civ J0228-13
Docket Number91/0311
CourtCourt of Appeal (Civil Division)
Date28 February 1991

[1991] EWCA Civ J0228-13

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

(MR JUSTICE MUMMERY)

Royal Courts of Justice

Before:

The Vice-Chancellor

(Sir Nicolas Browne-Wilkinson)

Lord Justice Stocker

Lord Justice Beldam

91/0311

Associated Newspapers Group PLC
and
(1) Insert Media Limited
(2) Hampstead Distribution
(3) Christopher J. Arnold

MR CHARLES SPARROW Q.C. and MR M.T.F. BRIGGS, instructed by Messrs Burton Yeates Westburys, appeared for the Appellant (Third Defendant).

MR GAVIN LIGHTMAN Q.C. and MR JOHN WHITAKER, instructed by Messrs Swepstone Walsh, appeared for the Respondent (Plaintiff).

THE VICE-CHANCELLOR
1

This is an appeal against a decision of Mr Justice Mummery who, after a five-day trial, granted a permanent injunction restraining the third defendant, Mr Arnold, from inserting or causing to be inserted advertising inserts into the Daily Mail, the Mail on Sunday and the supplement, "You" magazine. The plaintiffs are the publishers of those newspapers and of "You" magazine.

2

The judgment of Mr Justice Mummery is reported at [1990] 1 W.L.R. 900. I therefore will not take time to repeat the facts of the case. In essence, the third defendant was proposing to carry on business by arranging with newsagents to insert detached advertising leaflets and samples between the pages of national newspapers and magazines, including the plaintiffs' newspaper. These inserts are to be made without the knowledge or approval of the plaintiffs. The plaintiffs contend, and the judge held, that by so doing the third defendant would be procuring newsagents to pass off the advertising inserts as being connected with and having been approved or authorised by the plaintiffs.

3

Advertising by the use of such inserts has expanded very greatly in the last five years. This is referred to in some of the evidence as the "insert boom". The plaintiffs have themselves arranged for inserts to be made into "You" magazine. They also have plans to use inserts in the newspapers themselves. I have no doubt that the business proposed to be carried on by the third defendant, if permissible, would be very profitable to him and to others taking part in the same type of business. Moreover there is no doubt that, apart from the law of passing off and apart from a contractual chain that does not exist in this case, newsagents are fully entitled to do what they like with the papers that they have purchased from the publishers. Since they have been purchased they are the property of the newsagents and there can be no limit on the uses which they make of their papers provided that there is no actionable passing off.

4

After making a very full statement of the facts of the case, the judge formulated the question which he had to answer, based on the propositions laid down by Lord Diplock in Warnink v. J. Townend & Sons (Hull) Ltd [1979] A.C. 731, "the Advocaat case" as follows at page 908D:

"(1) Do the proposed activities of the third defendant involve the making of a misrepresentation, either express or implied? e.g. that the advertising material of his clients inserted into the publications of the plaintiffs without their consent is connected or associated with the plaintiffs. (2) Is such a misrepresentation made in the course of trade to purchasers or prospective purchasers or readers of the publications of the plaintiffs? (3) Is such a misrepresentation calculated to injure the business reputation or goodwill of the plaintiffs in those publications, in the sense that such injury is a reasonably foreseeable consequence of the misrepresentation? (4) Will such a misrepresentation probably cause actual damage to the business reputation or goodwill of the plaintiffs in their publications?"

5

In this appeal, no-one has challenged that the judge posed to himself the right questions. The judge held that all those requirements were satisfied in the present case and accordingly granted the injunction sought. On the appeal Mr Sparrow, for the third defendant, focuses his challenge primarily on two points, first, the finding by the judge that the insertion of the inserts between the pages of the plaintiffs' newspapers by itself constituted a misrepresentation. Secondly he attacked the finding by the judge that such misrepresentations will probably cause actual damage to the goodwill or reputation of the plaintiffs.

6

I will deal first with the question of misrepresentation. At page 911E the judge made the following finding:

"The undeniable fact is that the plaintiffs publish for sale to the public copies of the 'Daily Mail', 'The Mail on Sunday' and 'You' magazine and, as such publishers, they decide what to include and what not to include in their publications, whether by way of journalism or advertising material. Each copy of such publication itself represents that the contents of it are determined by, and are the responsibility of, the proprietors, the plaintiffs. If something is inserted in one of those publications it is thereby represented to be part of that publication issued by the plaintiffs. If the insertion is made without the authority of the plaintiffs it is thereby represented, contrary to the fact, that the publication, so altered, is the publication of the plaintiffs and that the inserts in it are connected or associated with the plaintiffs and that publication."

7

Mr Lightman for the respondents sought to uphold this finding by submitting that whenever a named product was altered by some middleman and then sold under its product name there was necessarily a misrepresentation made to the public: namely, a representation that the object sold was the product of the original manufacturer, whereas it was not such product in its original integrity. In support of that proposition Mr Lightman relied on certain passages in textbooks and a number of authorities, namely Westinqhouse Brake & Saxby Signal Co. Ltd v. The Varsity Eliminator Co. Ltd 52 R.P.C. 295, C.G. Vokes Ltd v. F.J. Evans and Marble Arch Motor Supplies Ltd (1932) 49 R.P.C. 140, Rolls-Royce Motors Ltd v. Zanelli [1979] R.P.C. 148, Morny Ltd v. Ball & Rogers (1975) Ltd (1978) 4 F.S.R. 91, and Illustrated Newspapers Ltd v. Publicity Services (London) Ltd [1938] Chancery 414. From those authorities he sought to extract the principle that I have mentioned. From that he sought to argue that a newsagent who sells a copy of the Daily Mail thereby represents that the paper sold is the paper as published by the plaintiffs without any alteration, save such alterations as might be approved by the plaintiffs.

8

The cases relied upon by Mr Lightman, with the exception of the Illustrated Newspapers Limited case, are all cases in which the court was considering a claim for an interlocutory injunction, and in one of them the misrepresentation appears to have been conceded. In any event they were all concerned with whether there was an arguable case sufficient to found a claim for an interim injunction.

9

The Illustrated Newspapers case has certain similarities to the present case, but some crucial distinctions. In that case an injunction was granted against the defendants, who were binding into magazines something called a "supplement". The supplement was put into the middle of folders in which the plaintiffs' publications were available for use in public places. It was held that by so doing the defendants were misrepresenting that the contents of the folder all consisted of products of the publishers of the magazines. As will be seen, that is a very different case from the present: the insert was physically bound into and formed part of the publication and, perhaps more importantly, was expressly called a supplement to the magazine. In those circumstances it is not surprising that Mr Justice Crossman found that there was a misrepresentation.

10

If the judge, as I think he may have done, was accepting the very wide proposition put forward in this court by Mr Lightman, in my judgment he went too far. Of course in a case where an original product has been altered and resold under its original name such activity is capable of constituting a misrepresentation. Whether it does in fact constitute a misrepresentation must, in my judgment, depend on the facts of each individual case. It must depend upon the nature of the product, the alterations made to it and the circumstances in which the altered product is put before the public. For example, in the present case if it were to be widely thought by the public that advertising inserts were put into the papers by newsagents and not by the publishers, the activities of the third defendant would not constitute any actionable misrepresentation. The question whether or not there has been a misrepresentation causing confusion or deception must depend upon the perceptions of the matter by the public at large. If a substantial body of persons assume that such inserts are made by the publishers, then the insertion of the inserts into the newspaper by newsagents will be calculated to misrepresent the position to the public. In my judgment therefore the mere fact that the inserts have been made without the plaintiffs' consent does not establish the existence of a misrepresentation. One has to go on to ask whether a substantial number of persons will believe that an advertisement inserted between the pages of the Daily Mail is authorised by the Daily Mail.

11

Mr Sparrow submits that there was no sufficient evidence before the judge that the public would be so misled. He relies on the evidence of a Mr Hook, who for many years carried on business as a newsagent in Blackpool. He gave evidence that for many years before this action started loose...

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