Totalise Plc v Motley Fool Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Aldous |
| Judgment Date | 19 December 2001 |
| Neutral Citation | [2001] EWCA Civ 1897 |
| Docket Number | Case No: A2/2001/0558 |
| Court | Court of Appeal (Civil Division) |
| Date | 19 December 2001 |
[2001] EWCA Civ 1897
Lord Justice Aldous
Lord Justice Sedley and
Lady Justice Arden
Case No: A2/2001/0558
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION
MR JUSTICE OWEN
Royal Courts of Justice
Strand,
London, WC2A 2LL
Mr J. Higham Qc And Mr J. Abrahams (instructed By Stephenson Harwood For The Appellant Interactive Investor Limited)
Mr P. Moloney Qc (instructed By Dibb Lupton Alsop For The Respondent Totalise Plc)
This is the judgment of the Court in an appeal brought by the second defendant, Interactive Investor Ltd, with permission of this Court against that part of the order of Owen J of 23rd February 2001 ( [2001] 1 P & T 764) which ordered them to pay costs of £4,817.
Interactive were an operating subsidiary of a company listed on the London Stock Exchange. Since the hearing before the judge, they have become part of an Australian Group and have changed their name to Ample Interactive Investor Ltd. Their principal business is the provision of financial information to individual investors through their website. One service they offer consists of a series of "discussion boards" relating to particular companies on which users of the website can post information and opinions likely to be of interest to other investors. Before a user can make a posting on Interactive's discussion boards, the user must register and enter into a contract containing Interactive's standard terms. These proceedings arise out of use of that service. Another service is the provision of a portfolio tracker system through which individuals can track their investments without professional help.
On 31st January 2001 Interactive were sent a letter by solicitors acting on behalf of the claimants Totalise Plc. That letter complained about the content of a number of postings on Interactive's website by a person using the nickname "Zeddust". The letter alleged that the postings contained defamatory statements and that both individually and, when taken together, were maliciously designed to call into question the competency and integrity of Totalise's management team, the solvency of Totalise and generally to cause as much damage to Totalise's reputation as possible. The letter went on to inform Interactive that the solicitors had written to the first defendants, The Motley Fool Limited, to complain about similar postings made by Zeddust. The letter requested confirmation that the postings would be removed, that Zeddust's posting rights be immediately withdrawn and that the identity and registration details of Zeddust be disclosed.
Interactive replied by letter dated 1st February 2001. The letter stated that the postings would be removed and that the account of Zeddust had been suspended on 31st January 2001. As to the request for details of Zeddust, the letter said:
"We also note your request for contact details of the author 'Zeddust', and advise that Interactive Investor is not able to provide this data to you. The Data Protection Act 1998 and our Terms and Conditions and Privacy Policy do not allow Interactive Investor from disclosing personal details about any account to a third party in these circumstances."
On the same day solicitors acting for Totalise wrote stating that they had instructed both leading and junior counsel to advise on and conduct a "Norwich Pharmacal" application to obtain disclosure of the identity of Zeddust.
On 5th February 2001, Totalise issued a claim form naming Motley Fool Limited as first defendants and Interactive as the second. The claim was for disclosure and production in a witness statement of the full name and address of Zeddust and all documents which were or had been in the possession, custody or power of the defendants relating to the identity of Zeddust. That application was what can be referred to as a Norwich Pharmacal application having regard to the decision of the House of Lords in Norwich Pharmacal Co v Customs & Excise Commissioners [1974] AC 133.
Those proceedings came before Owen J on 15th February 2001. At the hearing in chambers Interactive was not represented by counsel, but Mr Kiddell of Stephenson Harwood appeared on their behalf. He made no submissions as to whether the order should be made as Interactive's attitude was purely neutral. The solicitor acting for the first defendant did submit that the order sought should not be made and advanced supporting arguments.
The judge, in his judgment of 19th February 2001, concluded that he had jurisdiction to make the order requested. He went on to hold that there was no reason under the Data Protection Act 1998 for the defendants to withhold the information sought. He also rejected a submission, made on behalf of the first defendant, that the order would be contrary to section 10 of the Contempt of Court Act 1981. He then considered whether, in the exercise of his discretion, he should grant the relief and concluded:
"I have no hesitation in finding that the balance weighs heavily in favour of granting the relief sought. To find otherwise would be to give the clearest indication to those who wish to defame that they can do so with impunity behind the screen of anonymity made possible by the use of websites on the internet. It follows that I propose to make an order against both defendants in the terms sought by the complainant."
After judgment, counsel for the claimants sought an order that the defendants should pay his client's costs. After hearing submissions, the judge concluded that he should make such an order. He said:
"In my judgment the situation that arises in such cases is very different from what could be described as the classic Norwich Pharmacal situation. I consider that there is considerable force in Mr Moloney's argument that those who operate websites containing discussion boards do so at their own risk. If it transpires that those boards are used for defamatory purposes by individuals hiding behind the cloak of anonymity then in justice a claimant seeking to establish the identity of the individuals making such defamatory contents ought to be entitled to their costs.
I have come to the conclusion that it was perfectly plain from the outset that the postings on both websites were highly defamatory and that, accordingly, the claimants were the victims of a sustained campaign amounting to an actionable tort. There was no other way in which the claimants could have proceeded, save by requiring identification of Zeddust from both defendants.
I accept that the defendants had to carry out the balancing exercise, but in my judgment there was only one answer to that balancing exercise, namely that they should have complied with the requests made by the claimant. In those circumstances, I order the defendants to pay the claimant's costs of this application/action."
The judge then summarily assessed the costs to be paid by Interactive at £4,817.
Mr Higham QC who appeared on behalf of Interactive submitted that the judge had exercised his discretion upon wrong principles. He submitted that the actions of his client were perfectly proper. The Data Protection Act 1998 was difficult to construe and arguably prevented disclosure without a court order. Whilst the Act might not prevent disclosure of Zeddust's name, it strongly indicated that personal data should not be disclosed to third parties without the consent of the data subject, save in exceptional circumstances. Further, the judge had failed to place any weight on the fact that Interactive was contractually obliged not to reveal the identity of its users. That was a particularly relevant factor, having regard to Interactive's published privacy policy. To support that submission he referred us to the terms and conditions upon which Interactive contracted with Zeddust which prevented Interactive from passing on Zeddust's information to any other person except in circumstances which do not apply in this case, and also to the published privacy policy which precluded Interactive giving the information required.
Mr Higham also submitted that the judge had failed to distinguish between the attitude of Interactive and that of the first defendant. The first defendant had opposed the grant of the order, whereas Interactive had not. It had left to the judge the question of whether an order should be made which overruled their obligation of confidence and exposed Zeddust to litigation.
Mr Higham went on to point out that in the present case Interactive were under an obligation of confidence, whereas that was not the position in the Norwich Pharmacal case. It followed that the Court should be more inclined to make the applicant pay costs than in the Norwich Pharmacal case where the applicant had to pay the costs of the Customs & Excise Commissioners. He directed our attention to these passages in the speeches of Lord Reid and Lord Cross which he submitted indicated the correct approach that the judge should have adopted. At page 176 Lord Reid said:
"But there may be other cases where there is much more doubt. The validity of the patent may be doubtful and there could well be other doubts. If the respondents have any doubts in any future case about the propriety of making disclosures they are well entitled to require the matter to be submitted to the court at expense of the person seeking the disclosure. The court will then only order discovery if satisfied that there is no substantial chance of injustice being done."
At page 199 Lord Cross...
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