Imperial Tobacco Ltd v Attorney General
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE BROWNE |
| Judgment Date | 09 March 1979 |
| Judgment citation (vLex) | [1979] EWCA Civ J0309-7 |
| Date | 09 March 1979 |
| Court | Court of Appeal (Civil Division) |
[1979] EWCA Civ J0309-7
In The Supreme Court of Judicature
Court of Appeal
(Civil Division)
From: Mr Justice Donaldson, Q.B.D, (Commercial Court), London.
The Master of the Rolls
(Lord Denning)
Lord Justice Orlrod and
Lord Justice Browne
In the Matter of the Lotteries & Amusements Act,1976
MR. STANLEY BRODIE, O.C. and MR STEPHEN NATHAN (instructed by Messrs. Trower still & Keeling, WC2, Agents for Mr. NR Douglas, Bristol) appeared on behalf of the Appellants (Plaintiffs).
THE SOLICITOR-GETERAL (Rt. Hon. Peter Archer, Q.C), MR. HARRY WGOLF and MR ANDREW COLLINS (instructed by The Treasury Solicitor, SWl) appeared on behalf of the Respondents (Defendants).
"Spot Cash" is good advertising. It is also light entertainment. But is it unlawful, as being a lottery or a "competition"?
The idea is simple enough. The Imperial Tobacco Co. started it in October 1973. They issued an advertisement in these words:
SPOT CASH
Over a million prizes to be won YOUR CHANCE TO WIN UP TO £5,000 INSTANTLY
with a FREE
game ticket in every special pack
Then in every packet of their brand of cigarettes called "King Size" they inserted, free of charges, a card with these words on it:
SPOT CASH
YOUR CHANCE TO WIN UP TO
£5,000
INSTANTLY:
Below these words were six little spaces or "boxes", each covered with silver paper, thus:
Below these six "boxes" were these words:
"Each box describes a prize you could win. Using edge of a coin, gently rub all 6 boxes, if three descriptions on this card are the same, you win the prize described"
On my card, I rubbed off the silver paper with a coin, and found underneath these descriptions:
| £100 | £1,000 |
| £10 | £1 |
| FREE PACKET | £1 |
So I get nothing. If I had got three with £1,1 should have got a prize of £1. If I had got three with £5,000, I should have got a prize of £5,000. If I had got three with "Free Packet", I should have got a free packet of cigarettes.
Similar schemes are widespread up and down the country. The City of Winchester has an identical scheme, but they charge25p. for each card. They use the proceeds to augment their local funds. The Samaritans, a charitable concern, have a very similar scheme, but they charge 10p. a card. They use the proceeds to aid their charity. The Imperial Tobacco Co. are different only in this respect. They do not charge anything for the cards. They give a card away free with every packet of "King Size" cigarettes.
Imperial launched this advertising campaign on a grand scale. They inserted these "Spot Cash" cards into every packet of the "King Size" brand of cigarettes. These came to 260,000,000. They also sent out a large number of the cards to retailers so that they could display them in their shops in a stand. Anyone who came into the shop could take a card free, without paying for it, even though he did not buy any cigarettes or anything else. These came to 1,000,000. They also had a considerable number of the cards which they would willingly send to anyone who wrote in asking for one. These came to 250,000.
Now this is the important point. The packets of the "King Size" brand of cigarettes were sold at the same price both before, during and after the campaign. No matter whether the packet of cigarettes contained a card or not, every customer paid the same price for the packet - before, during and after the campaign. Each packet of cigarettes was sold at the proper price,-chat is, the current price normally charged for this brand of cigarettes. The "Spot Cash" card was absolutely free. It was so advertised. They said: "A FREE game ticket in every special pack". The only difference was that each special pack had a thin red tape on it with the words: "SPOT CASH Closes 31.3.79".
The campaign was launched in October 1978 and was to last until 31 March 1979 It was a great success. The sales of the "King Size" brand of cigarettes increased by 39.9%. Research indicate that this increase was not due to more people smoking more. It was because existing smokers of other brands switched over to this brand. No doubt many existing smokers of this brand continued to buy their cigarettes just as before. The cards were just a free bonus thrown in, of which they might, or might not, have taken advantage.
To an outside observer, there would seem nothing in the least objectionable to all this. It was a perfectly innocent advertising campaign. No member of the public would suffer by it.The only persons who could complain - and who did complain -were the rival tobacco firms whose customers switched away. Amongst them the principal rival was British American' Tobacco Ltd.
Imperial had taken great care to see that they were not breaking the law;. They took the advice of leading and junior counsel. They advised it was lawful. EAT were advised differently. They were advised that it was a breach of the criminal law; prohibiting lotteries and competitions: but they did not rush to bring the police into it. That 'was the last thing that they wanted. So instead they applied to the Attorney-General for his consent to a realtor action. But the Attorney-General refused it. I wonder why he did. A relator action would seem to me a very simple way of testing the legality of this campaign. The real complainant - BAT - would be before the court. If a relator action was brought and they were granted an interlocutory injunction, BAT would have to give an undertaking in damages: see Hoffman-La Roch v. Secretary of State (1975) A.C.295 at 360-363 by Lord Diplock. That would only be fair. But the Attorney-General refused his consent. I think he must have been influenced by the dicta of some of the Law Lords in the Gouriet case (1977) 3 W.L.R. 300. They appear to have suggested that, when, there is a breach of the criminal law, the Attorney-General should not give his consent to a relator action, save in exceptional circumstances. He should leave the criminal offence to be dealt with by a prosecution in the criminal court, see particularly by Lord Dilhorne in the Gouriet case at pages 322-3.
Now just consider the consequences. Influenced by those dicta, the Attorney-General passed on Bat's complaint to the Director of Public Prosecutions. The Director came to a firm decision that the scheme was a contravention of the law. He instructed the Metropolitan Police to make enquiries. Imperial Tobacco got to hear of this and prepared a full and complete statement of their case. But without waiting to consider it the Director told the police to lay information in the Magistrates Court at Nottingham. Not only against Imperial Tobacco but also. against some of their senior officers personally. In his very first letter of 24 November 1978 he demanded the immediate stoppage of the campaign, or else some unpleasant things might happen. These were the concluding words of his letter:
"The Director would like. your assurance that you will discontinue these promotions immediately, pending the outcome of the trial…
"It is the Director's intention to proceed on indictment on the present summonses. In the event of your giving the assurance which is now sought it will become unnecessary for the Director to consider what further steps can be taken to prevent further breaches of the law;"
Note his intention, to proceed on indictment. In every previous case in the books, the cases have been tested before the magistrates. But the Director said in this case he would go on indictment. The Solicitor-General told us that this was because the Director thought that the magistrates could only inflict a comparatively small finer whereas on indictment there would be a large fine such as would discourage even this great firm.
Note also the veiled threat by the Director that he would take "further steps" What were they? This appears from a later letter. It was that he would prosecute not only Imperial Tobacco, but also the wholesalers and retailers who sold packets of cigarettes with these "SpotCash" cards in them.
Imperial Tobacco were very much upset by the threat thus made by the Director and by the summonses against the personal defendants. I must say that I sympathise very much with them. Here were Imperial Tobacco and their officers - very responsible people - acting on the best legal advice that it was lawful. They were doing something which no fair-minded person would consider objectionable or reprehensible in the least. Something, indeed, which the Royal Commission on Gambling had, in July 1978, said was quite harmless and recommended should be lawful. Yet the Director insisted on bringing Imperial and their officers before the criminal courts on indictment - not as a test case but in order to see that they were adequately punished for their offence. He required them to discontinue the promotion, without giving them the benefit of any undertaking in damages in case he was wrong.
In reply Imperial acted very honorably and wisely. They discontinued the campaign straight away so far as they could do so. They did not accept any more orders for these "Spot Cash" packets, but they felt they must Honour their promises to people who held the cards. Then they issued a summons in the CommercialCourt so as to decide the issue- They asked for a declaration that their scheme was lawful. The Attorney-General and the Director of Public Prosecutions did not like this at all. They said teat it was an abuse of the process of the court, and that the issue should be decided in the criminal court and not in the civil court.
This is a point of the first importance. Just see what the criminal prosecution would entail before a decision was reached. There would be a preliminary...
To continue reading
Request your trial
-
Airedale NHS Trust v Bland
... ... But it is, of course, true that in general it would not be lawful for a medical practitioner who assumed ... in which he was assisted by an amicus curiae instructed by the Attorney General, the President of the Family Division made these declarations ... , no matter the authority of the court which grants it": see Imperial Tobacco Ltd. v. Attorney General [1981] A.C.718, 741 , per Viscount ... ...
-
Wing Joo Loong Ginseng Hong (Singapore) Company Pte Ltd v Qinghai Xinyuan Foreign Trade Company Ltd
... ... to costs was that where there were two (or more) co-defendants–General rule that only one set of costs would be payable–Separate costs where ... 2006 and 11 May 2006, under the authority of fiats granted by the Attorney-General's Chambers, charges under the Trade Marks Act (Cap 332, 2005 Rev ... v Antilles Landscape Investments NV [2005] RPC 28 (refd) Imperial Group Ltd v Philip Morris & Co Ltd [1982] FSR 72 (refd) Imperial ... cigarettes and “HUGO BOSS” in respect of cigarettes, cigars, tobacco for cigarettes, pipe tobacco, lighters and matches. Those marks were ... ...
- Wing Joo Loong Ginseng Hong (Singapore) Company Pte Ltd v Qinghai Xinyuan Foreign Trade Company Ltd and another
-
Flynn v Denieffe
... ... 'S DIGEST ASSOCIATION LTD V WILLIAMS 1976 1 WLR 1109 IMPERIAL TOBACCO & ANOR V AG 1981 AC 718 Synopsis: WORDS AND ... purchaser to a prize, the prizes varying in character and value; Attorney General (Enright) .v. Best's Stores Limited (1970) I.R. 225 where a ... ...
-
The Development Objective as an Imperative in Interpretation Of International Investment Agreements
...Bennion, Bennion on Statutory Interpretation: A Code (5edn, LexisNexis, 2008) 944 and 732. 100Imperial Tobacco Ltd v Attorney-General [1979] QB 555, 575; Olivier v Buttigieg [1967] AC 115, 128; and Hollinrake v Truswell (1894) 3 ChD 420, 427. 101Mathew v State of Trinidad and Tobago [2005] ......