Interbrew SA v Financial Times Ltd and Others
| Jurisdiction | England & Wales |
| Judge | Lord Justice Sedley,Lord Justice Longmore,Lord Justice Ward |
| Judgment Date | 08 March 2002 |
| Neutral Citation | [2002] EWCA Civ 274 |
| Docket Number | Case No: A3/2001/2821, 2826–9 |
| Court | Court of Appeal (Civil Division) |
| Date | 08 March 2002 |
[2002] EWCA Civ 274
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CHANCERY DIVISION
(Mr. Justice Lightman)
Royal Courts of Justice
Strand,
London, WC2A 2LL
Lord Justice Ward
Lord Justice Sedley and
Lord Justice Longmore
Case No: A3/2001/2821, 2826–9
Mr. M. Tugendhat QC and Mr. R. Parkes (instructed by Farrer & Co.) for the Appellant
Mr. C. Hollander QC (instructed by Simmons and Simmons) for the Respondents
Mr D. Mayhew (Solicitor Advocate) sitting for Interested Party – Financial Services Authority
Mrs Maryann Mahon & Mr Kelwin Nicholls (instructed by Clifford Chance) for Reuters
This appeal
On 19 December 2001 Lightman J, on an interlocutory application, granted a Norwich Pharmacal order against the five defendant news media requiring them to preserve and within 24 hours to deliver up to the claimant their original copies of a leaked and (as the judge found) partially forged document about a contemplated takeover by the claimant, a major brewer based in Belgium, of South African Breweries.
The first limb of the order is uncontroversial: Mr Michael Tugendhat QC for the defendants points out that the issue of the proceedings will anyway have made it a contempt not to preserve the documents. The dispute is about the requirement of immediate delivery up, which is stayed pending this appeal by the five defendants. The claimant does not cross-appeal against the judge's dismissal of its claim in breach of confidence. That element therefore leaves the stage, although its voice will be heard occasionally from the wings.
It is the defendant appellants' contention that the outcome of the appeal is likely to be directly affected by the House of Lords' decision in Ashworth Hospital v MGN Ltd [2001] 1 WLR 515, CA. The appeal, for which their Lordships have given leave, is to be heard later this term. Although the claimant submits that it is not capable of affecting the issues before us, it initially seemed to us impossible to be certain that this was so, and undesirable to come to a conclusion which, if it went against the defendants, might be falsified when it was too late to reverse the outcome. The opposite risk of the trail going cold seemed overstated, although the difficulty for the claimant of preparing a fresh bid with the risk of a further leak was real. But in the event our decision to stand the present appeal out had to be reconsidered when it became known that their Lordships might not be able to give their decision in the Ashworth appeal until the summer. In these circumstances the balance of convenience moved in the claimants' favour, and we proceeded to hear out the appeal. The basis on which we have done so has therefore been that we are bound by the Ashworth decision. For reasons which follow, however, there is nothing particularly dramatic in this.
The facts
A full account of the relevant events is set out in Lightman J's judgment, from which I gratefully adopt the following paragraphs:
"7. On the 30 th October 2001 the Claimant's Board asked for work to be carried out on a potential "rapprochement" between the Claimant and SAB. What was particularly in mind was a possible takeover bid by the Claimant of SAB. The shares in both companies were quoted on the Stock Exchange in London and Johannesburg. In answer to this request on the 18 th November 2001 GS produced a preliminary document which formed the basis for a preliminary working analysis by GS and Lazards, namely the Presentation, which on the 20 th November 2001 they submitted to the Claimant's internal mergers and acquisitions department. The very existence of the Presentation and its contents were confidential in so far as they disclosed the fact that the Claimant was considering a possible takeover bid for SAB. This information was market sensitive, being calculated to affect the market price of the shares of both companies.
8. At some time shortly thereafter a person whose identity is unknown (namely the Source) obtained a copy of the Presentation and prepared "doctored" copies of it (namely the Doctored Copies) inserting (most importantly) a fabricated offer price and timetable for the bid. It is not certain whether the Doctored Copies were all identical or differed in any material respect. On the 27 th November 2001 the Source sent by DHL from Belgium the Doctored Copies to various publishers of news. On the material before me I am satisfied that his only purpose can have been (through the medium of the news publishers and their publication of the contents of the Doctored Copies) to create a false market in the shares in both the Clients and SAB and in this undoubtedly he was successful. (I refer to the effect on the market in paragraphs 13 and 18). The Defendants have suggested that his actions may have been some innocent kite flying and indeed that the Source may have acted as he did on behalf of the Claimant or one of the Advisers. This suggestion is totally improbable and any involvement on the part of the Claimant or the Advisers in such an exercise is contrary to the evidence before me.
9. On the afternoon of the 27 th November 2001 Le Figaro received from the Source a Doctored Copy. At 1600 GMT that day a journalist with Le Figaro telephoned Lazards to inform them that she was in possession of a presentation for a planned purchase of SAB for a Board Meeting of the Claimant scheduled for the 3 rd December 2001 and to be followed by a bid for SAB. (The journalist's account of the conversation accords with the Claimant's pleaded case in the Belgian Proceedings to which I refer in paragraph 10). At about 1700 GMT Mr Thys of the Claimant spoke to the journalist saying that her claims were inaccurate, and that Mr Thys had never seen any GS/Lazards document. Le Figaro in the light of this denial published nothing about any proposed bid by the Claimant.
10. The first defendant Financial Times Limited ("the FT") received from the Source a Doctored Copy at the same time as Le Figaro. At about 1700 GMT on the 27 th November 2001 a FT journalist Mr Adam Jones ("Mr Jones") telephoned Mr Van Praag of GS and told him that he had received the document. This was Mr Van Praag's recollection of what Mr Jones said as recorded in the first affidavit of Mr Vaughan, the Claimant's deponent. In Mr Vaughan's second affidavit, Mr Van Praag is recorded as no longer being certain that Mr Jones did state that he had received the document. It is however clear that the Claimant's' pleaded case in the Belgian Proceedings accords with the contents of Mr Vaughan's' first affidavit. Indeed it states that the journalist from Le Figaro had likewise stated that she had received a copy. It must surely be expected that the Claimant has made every effort and inquiry to ensure that the contents of its criminal complaint in the Belgian Proceedings were correct. In the circumstances I think that I should proceed on the basis that the Claimant through the Advisers knew on the 27 th November 2001 that the FT and Le Figaro were in possession of doctored copies of the Presentation. The Claimant neither took nor threatened any action to recover them or prevent publication of their existence or contents.
11. Mr Van Praag reported his telephone conversation to the Claimant Chief Executive Officer Mr Powell, and at about 1800 GMT Mr Powell telephoned Mr Jones and told him that the Claimant had been looking at a bid for SAB, that the Claimant had carried out research into SAB, but that it was not true that a bid was imminent. This information was plainly not intended to be confidential. Mr Powell made no request that the FT refrain from publishing anything and made no threat of any legal proceedings. At about 2200 GMT FT published a story on its web site and the same night published an article in the same terms in its 28 th November 2001 edition. The article stated that the Claimant had been plotting a bid for SAB; referred to unidentified documents seen by the FT; gave accurate details of the codenames used for the Advisers in the Presentation; stated that the documents indicated that an approach to SAB "could" be made on the 3 rd December 2001 with an offer closing on the 7 th January 2002; quoted from the Presentation on the likely positive market reaction and with reference to potential rival bids; and quoted Mr Powell's conversation with Mr Jones. The article did not identify the proposed offer price or GS or Lazard.
12. At about 1730 GMT on the 27 th November 2001 the fourth defendant Times Newspapers Ltd ("The Times") received from the Source a Doctored Copy, and in its second edition (which reached the news stands at about 5 a.m. on the 28 th November 2001 after the FT story had been published on its web site) carried an article referring to the "confidential" document which it had seen, a supposed approach to SAB "this weekend"; a plot to bid £4.6 billion for SAB; and an offer expected to be pitched at up to 590 pence a share; and identified GS and Lazard as the Claimant's advisers.
13. The same day Reuters at 0051 GMT (and later) in its wire service reported the FT story and the rise in the share price of SAB on the Johannesburg Stock Exchange, and in a further article at 1444 GMT referred to its receipt of a Doctored Copy, sent anonymously to it which it identified as prepared by GS and Lazards.
14. At 0830 GMT on the 28 th November 2001 GS and Lazards contacted the Takeover Panel and the Takeover Panel asked the Claimant to make a statement. In pursuance of this request at 1215 GMT the Claimant issued a press release confirming that it had undertaken a preliminary analysis...
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