Michael Douglas (1st Respondent) Catherine Zeta-Jones (2nd Respondent) Nothern & Shell Plc (3rd Respondent) v Hello Ltd (1st Appellant) Hola S.A. (2nd Appellant) Eduardo Sanchez Junco (3rd Appellant)

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
Judgment Date18 May 2005
Neutral Citation[2005] EWCA Civ 595
Docket NumberCase No: A3/2004/0147, A3/2004/0148 & A3/2004/0330 PTA

[2005] EWCA Civ 595

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

(Mr Justice Lindsay)

HC0100644

Royal Courts of Justice

Strand, London, WC2A 2LL

Before

Lord Phillips of Worth Matravers, Mr

Lord Justice Clarke and

Lord Justice Neuberger

Case No: A3/2004/0147, A3/2004/0148 & A3/2004/0330 PTA

Between
Michael Douglas
1st Respondent
Catherine Zeta-Jones
2nd Respondent
Nothern & Shell Plc
3rd Respondent
and
Hello Limited
1st Appellant
Hola S.A.
2nd Appellant
Eduardo Sanchez Junco
3rd Appellant

James Price QC & Giles Fernando (instructed by Messrs M Law) for the Appellants

Desmond Browne QC & David Sherborne (instructed by Messrs Addleshaw Goddard) for the Respondents

CONTENTS

THE BACKGROUND

1–38

THE BASIC FACTS

1

THE ISSUES RAISED ON THIS APPEAL

26

THE JUDGMENT ON LIABILITY

29

THE ISSUES IN RELATION TO CONFIDENCE AND PRIVACY: THE PRINCIPLES

39–91

INTRODUCTORY

39

THE UNITED KINGDOM'S CONVENTION OBLIGATION IN RESPECT OF PRIVACY

47

WHAT OBLIGATION IS PLACED ON THE COURTS IN RESPECT OF THE PROTECTION OF PRIVACY ?

50

THE LAW OF CONFIDENCE

54

'PRIVATE INFORMATION'

83

PHOTOGRAPHIC INFORMATION

84

THE DOUGLASES' CLAIM

92–121

DISREGARDING THE OK! CONTRACT, DID THE LAW OF CONFIDENCE PROTECT INFORMATION ABOUT THE WEDDING AS PRIVATE INFORMATION ?

92

THE EFFECT OF THE LAW OF NEW YORK

96

THE EFFECT OF THE OK! CONTRACT

103

DID THE LAW OF CONFIDENCE PROTECT THE DOUGLASES' COMMERCIAL INTEREST IN INFORMATION ABOUT THEIR WEDDING ?

111

OK!'S CLAIM IN CONFIDENCE

122–151

DID THE OK! CONTRACT EXTEND TO OK! THE PROTECTION OF THE LAW OF CONFIDENCE IN RESPECT OF THE INFORMATION ABOUT THE WEDDING ?

122

THE EFFECT OF THE PUBLICATION OF THE PHOTOGRAPHS IN OK! MAGAZINE

138

LEGAL CERTAINTY

141

OK!'S CLAIM BASED ON ECONOMIC TORTS: UNLAWFUL INTERFERENCE WITH BUSINESS

152–236

INTRODUCTION

152

INTENTION: OK!'S CASE

159

INTENTION: THE JUDGE'S FINDINGS

163

INTENTION: CONCLUSIONS IN RELATION TO THE JUDGE'S FINDINGS

166

INTENTION: OUR APPROACH TO THE LAW

174

INTENTION: CASES ON UNLAWFUL INTERFERENCE AND UNLAWFUL MEANS CONSPIRACY

178

INTENTION: INTERFERENCE WITH CONTRACTUAL RIGHTS

194

INTENTION: MISFEASANCE IN PUBLIC OFFICE

206

INTENTION: DISCUSSION AND CONCLUSION

213

UNLAWFUL MEANS

226

CONCLUSION ON OK!'S CROSS-APPEAL

236

THE TWO ISSUES ON DAMAGES

237–250

LIABILITY FOR LOSSES FROM PUBLICATION IN THE NEWSPAPERS

238

THE DOUGLASES' CLAIM FOR A NOTIONAL LICENCE FEE

243

THE DISCHARGE OF THE INTERLOCUTORY INJUNCTION

251–259

CONCLUSION

260

Lord Phillips, MR:

This is the judgment of the court, to which all members have contributed.

The Background

The basic facts

1

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 £14,600 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.

2

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.

3

On 18 th 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.

4

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 10 th November, eight days before the wedding.

5

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."

6

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.

7

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 22 nd 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".

8

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".

9

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.

10

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 18 th November. Indeed, well before 18 th November, there were security staff in place. On 17 th 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.

11

The guests began arriving at the hotel at about 7.30 in the evening of 18 th 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...

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