Cream Holdings Ltd and Others v Banerjee and another

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLord Justice Simon Brown,Lord Justice Sedley,Lady Justice Arden
Judgment Date13 February 2003
Neutral Citation[2003] EWCA Civ 103
Date13 February 2003
Docket NumberCase No: A3/2002/1516/CHANF

[2003] EWCA Civ 103





(Mr Justice Timothy Lloyd)


Lord Justice Simon Brown

(Vice-President of the Court of Appeal Civil Division)

Lord Justice Sedley and

Lady Justice Arden

Case No: A3/2002/1516/CHANF

Cream Holdings Limited & Others
Chumki Banerjee & The Liverpool Daily Post & Echo Limited

Miss Victoria Sharp QC & Ms Catrin Evans (instructed by Messrs Brabners Chaffe Street) for the Appellants Edward Bartley Jones Esq, QC (instructed by Messrs Wacks Caller) for the Respondents

Lord Justice Simon Brown

This is an interesting, difficult and important appeal concerning the prior restraint of media publications. It raises in stark form the question of the true construction and application of s12(3) of the Human Rights Act, 1998, more particularly the meaning in the subsection of the word "likely".


Section 12(3) provides:

"No such relief [relief affecting the exercise of the Convention right to freedom of expression] is to be granted so as to restrain publication before trial unless the court is satisfied that the applicant is likely to establish that publication should not be allowed."


Does "likely" in this context mean more likely than not or something less than that (and, if so, what)? Somewhat suprisingly this has not yet been clearly and authoritatively decided despite a number of recent high profile cases involving injunction proceedings against newspapers. Hitherto perhaps it has not proved necessary to reach a clear view on the point. On this appeal it is.


The respondents, the claimants in the action, are a group of companies which began in 1992 with a nightclub in Liverpool and have since expanded and diversified their business. In addition to running clubs, they stage large events not only in the United Kingdom but worldwide. They also carry on a substantial business licensing and franchising their brand name and logo and merchandising clothes, records and other items. Nothing turns on the distinctions between the individual companies within the group and, like the judge below, I shall refer to them collectively as "Cream".


The first appellant (Ms Banerjee) is a qualified chartered accountant who, having previously worked for a firm of accountants (Kidsons —now merged with Baker Tilly) dealing with Cream's business, in February 1998 became directly employed by Cream as their in-house accountant. That employment ended in February 2001, Ms Banerjee's subsequent claim for unfair dismissal being settled at an Employment Tribunal hearing in February 2002.


The second appellants publish the Daily Post and Liverpool Echo, Liverpool's leading newspapers with a strong reputation for investigating stories of local public interest. For convenience I shall refer to them simply as the Echo.


Following the settlement of her claim against Cream, Ms Banerjee went to the Echo with a number of allegations of financial irregularities by Cream, allegations which to some extent were supported by documentary material (mostly copied) which she had taken without permission. On 13 June 2002 the Echo published a story using some of those materials, a story of corruption alleging payment of a substantial sum by a Cream director (Mr Davenport) to a senior local council officer (Mr Wadkin) in connection with a licence which Cream needed from the council to stage a particular event. The Echo had earlier told the council of the allegation and they in turn had told the police who, on the day before the article was published, had arrested the two men. By letter to Cream on the day of publication the Echo invited Mr Davenport's immediate response to a number of questions which the letter raised in connection with that story, stating in addition that "the Echo is investigating a number of other allegations which have been raised" and inviting Cream to address various listed questions concerning those allegations too.


It was in these circumstances that Cream immediately decided to seek injunctive relief to prevent publication of any further allegations. They made no complaint about the initial article, recognising both that it was too late to do so and that in any event there was a public interest in exposing corruption. That first article, however, had expressly said that "there is no evidence any other Cream directors knew of the arrangement" and Cream contended that there was no justification for the publication of further material involving the clearest breaches of confidentiality on Ms Banerjee's part.


The Echo agreed not to publish any further article pending the hearing of Cream's application for interlocutory relief and both sides then filed extensive evidence, some by way of open statements, some dealing with confidential matters.


The application came before Timothy Lloyd J on 3 July 2002 and on 5 July he granted an injunction restraining the appellants until trial or further order from publishing, disclosing or using certain confidential information as defined in a confidential schedule save to certain specified bodies. He refused, however, to make an interlocutory order for the return of the documents. He handed down two judgments, one described as "open", the other as "private".


On this appeal (brought with the permission of Robert Walker LJ) Miss Victoria Sharp QC for the appellants advances two central contentions. First, she submits that the judge below applied the wrong test under s12(3), that of "a real prospect of success" rather than "more likely than not"; secondly, she submits that whatever is the true meaning of "likely" in the subsection, the judge's own findings on the evidence were such that he could not reasonably have been satisfied that Cream was likely to succeed at trial on the merits given what she submits is "the overwhelming public interest in publication in this case".


Although it is unusual in this court to state one's conclusions so early in the judgment, I propose to do so here because they necessarily dictate whether the confidentiality in much of the material before us needs to be preserved pending trial and what therefore can be said at this stage in an open court judgment. These then, stated in the most summary form, are my conclusions:

i) The judge below was correct in his approach to s12(3): the test is not that of the balance of probabilities but rather that of a real prospect of success, convincingly established.

ii) The judge below was entitled, on the material before him and the findings he made, to form the judgment that he was satisfied that Cream has a real prospect of success at trial (and, the s12(3) threshold having thus been crossed, was entitled then in all the circumstances of the case to exercise his discretion in favour of an order involving prior restraint).

iii) The appeal therefore fails and should be dismissed.

iv) Were the threshold test to be that for which the appellants contend (more likely than not), then the judge could not properly have been satisfied on the findings he made that Cream's prospects of success at trial were good enough to justify the grant of interlocutory relief. On that basis, therefore, I would have allowed the appeal.


Given that in the result the interlocutory injunction should in my opinion remain in force until trial, it follows that only the first of these four conclusions can be fully explained in an open court judgment; the other conclusions necessarily depend on the detailed facts of the case which cannot now be openly revealed and which therefore I propose to deal with only most cursorily.

Section 12(3) of the Human Rights Act 1998 —existing case law on the subsection


It is convenient first to look briefly at the four cases which have thus far touched most closely on the point now arising. This is best done chronologically.


In Douglas -v—Hello! Limited [2001] QB 967, Keene LJ in paragraph 149 of his judgment recorded Mr Tugendhat QC's argument for the claimants as follows:

"…. Mr Tugendhat's submission is that the phrase 'likely to establish' does not mean 'more probable than not', because that interpretation in certain circumstances could bring it into conflict with the European Convention on Human Rights itself by giving priority to article 10, the right to freedom of expression, over article 8, the right to respect for private and family life. Such an automatic priority, it is said, would not be in conformity with the Convention. Since section 3(1) of the Human Rights Act requires the court to construe legislation in a way which is compatible with the Convention rights 'so far as it is possible to do so', section 12(3) itself must be read in a way which avoids giving precedence to article 10 rights. It is argued on behalf of the claimants that the words 'likely to establish' in that subsection should be taken to mean 'not fanciful' or 'on the cards'."


Keene LJ then turned to consider that argument in paragraphs 150–153 of his judgment (paragraphs with which Brooke LJ and Sedley LJ both expressly agreed, Brooke LJ stating in terms that he had "nothing to add" to them):

"150 For my part, I do not accept that there is any need for conflict between the normal meaning to be attached to the words in section 12(3) and the Convention. The subsection does not seek to give a priority to one Convention right over another. It is simply dealing with the interlocutory stage of proceedings and with how the court is to approach matters at that stage in advance of any ultimate balance being struck between...

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