X Ltd v Morgan-Grampian (Publishers) Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Bridge of Harwich,Lord Templeman,Lord Griffiths,Lord Oliver of Aylmerton,Lord Lowry |
| Judgment Date | 04 April 1990 |
| Judgment citation (vLex) | [1990] UKHL J0404-1 |
| Date | 04 April 1990 |
| Court | House of Lords |
[1990] UKHL J0404-1
Lord Bridge of Harwich
Lord Templeman
Lord Griffiths
Lord Oliver of Aylmerton
Lord Lowry
House of Lords
My Lords,
The plaintiffs are two associated private companies whose anonymity it is essential to preserve if the proceedings they have brought are to serve their intended purpose. In 1989 the plaintiffs wished to raise additional capital and a number of their senior officers with the assistance of their accountants were engaged in preparing a corporate plan for submission to prospective lenders. Much of the information in the plan was in the highest degree confidential and, as Hoffman J. found, its publication pending the finalisation of the negotiations for the purpose of which it was being prepared would be likely to cause severe damage to the plaintiffs. This finding of fact has not been challenged.
On 1 November 1989 there were eight numbered copies of the latest, but not yet final, draft of the plan in existence, each in a ring binder marked "Strictly Confidential." Between 3 p.m. and 4 p.m. on 1 November one copy was left in an unattended, unlocked room at the plaintiffs' premises. During that time it disappeared.
On the next day somebody, whom it is convenient to refer to as "the source," telephoned to the third defendant, Mr. Goodwin, who is a young trainee journalist employed by one or other of the defendant companies, the publishers of a weekly journal called "The Engineer." I shall refer to these defendants as "the publishers." The source gave Mr. Goodwin certain information about the plaintiffs. The nature of the information and the timing of the communication justify the inference that the source had obtained the information from the plan and was either the person who had stolen the missing copy or was closely associated with that person.
Mr. Goodwin was minded to write an article for "The Engineer" about the plaintiffs based in part on the information given to him by the source and in part on other information which he could obtain from publicly accessible sources. He telephoned to the plaintiffs and their bankers to check certain facts. He then drafted an article which was circulated for consideration by members of the publishers' editorial staff. But before any decision was taken to publish, the plaintiffs, alerted by Mr. Goodwin's enquiries, obtained an ex parte injunction to restrain publication.
When the matter came before Hoffman J., inter partes, the plaintiffs sought not only injunctions against all the defendants to restrain publication but also orders for disclosure of the identity of the source and of the notes which Mr. Goodwin had made of his conversation with the source as a means of discovering that identity. No issue arises regarding the injunctions. The outcome of several hearings between 14 and 22 November was that the publishers, who did not know the identity of the source, were ordered to disclose the notes but could not comply with the order because they had no means of coercing Mr. Goodwin. By order dated 22 November, Mr. Goodwin was ordered to disclose his notes to the plaintiffs by 3 p.m. on the following day, but later on 22 November the Court of Appeal (Lord Donaldson of Lymington M.R., Ralph Gibson and McCowan L.JJ.) varied this order by giving Mr. Goodwin the option of delivering his notes to the court in a sealed envelope which would remain sealed until final determination of Mr. Goodwin's appeal against the order. If the appeal was allowed, the envelope was to be returned to him unopened. Mr. Goodwin failed to comply with the order. On 24 November the plaintiffs moved to commit him for contempt. The motion was adjourned by Hoffman J. pending the outcome of the appeals against his orders. It was for the purposes of this motion that Mr. Goodwin swore an affidavit dated 24 November purporting to explain and indeed to justify his non-compliance with the order as amended by the Court of Appeal. It will be necessary to refer to the contents of this affidavit later. At this point I need only say, as will be apparent, that after the order of Hoffman J. had, on Mr. Goodwin's own application to the Court of Appeal, been amended to ensure that there would be no disclosure of his notes unless and until his avenues of appeal against the order for disclosure had been exhausted, Mr. Goodwin's failure to comply with the order was a plain declaration of his determination to set himself above the law.
In judgments delivered on 12 December 1989 the Court of Appeal (Lord Donaldson of Lymington M.R., Ralph Gibson and McCowan L.JJ.) [1990] 2 W.L.R. 421 dismissed the appeals of the publishers and Mr. Goodwin. In view of the nature of Mr. Goodwin's contempt of court in failing to comply with the order of Hoffman J. as amended, the court held that they had a discretion whether or not to hear argument in support of Mr. Goodwin's appeal and exercised the discretion to decline to do so. Both the publishers and Mr. Goodwin were granted leave to appeal to your Lordships' House.
When the appeal came on for hearing, the first question that arose was whether Mr. Goodwin's counsel should be heard in support of his appeal or whether the Appellate Committee should, as the Court of Appeal had done, decline to hear him. This issue raised important and difficult questions on which the Committee were unwilling to reach an immediate decision. They accordingly decided to hear all submissions made on Mr. Goodwin's behalf de bene esse and to leave for considered decision when delivering judgment the question that had been canvassed regarding the rights of contemners to be heard as appellants at a time when they are in contempt of court.
Jurisdiction to order disclosure
The first submission made on behalf of the appellants is that the court had no jurisdiction to order them to make discovery of Mr. Goodwin's notes. It is said that, since the sole purpose for which the plaintiffs seek the notes is to derive from them whatever assistance they may afford in identifying the source, Mr. Goodwin and the publishers are in the position of mere witnesses who, though they might be compelled by subpoena to testify in proceedings instituted by the plaintiffs against either the source or the thief of the missing copy of the corporate plan, are not amenable to any process of discovery to assist the plaintiffs in advance of litigation against those parties.
The short answer to this submission is that the appellants are already subject to the court's jurisdiction as parties properly impleaded as defendants to claims for quia timet injunctions to restrain them from publishing information imparted to them in breach of confidence. In that capacity they are amenable to the full scope of the court's wide power to order discovery inter partes. The notes are unquestionably discoverable for the purposes of the quia timet litigation. It is said that, in disclosing the notes for that purpose, the appellants would be entitled to cover up any material which identified the source on the ground that it would be irrelevant to any issue in the quia timet litigation. But it is not until it is disclosed that the relevance of the material can be determined. The fact that the plaintiffs' primary purpose in seeking to obtain disclosure of the notes is to identify the source does not in any way inhibit or restrict the court's power to order discovery for the purposes of the quia timet litigation, subject always to any claim for privilege from disclosure which the appellants can establish.
But if it were necessary to invoke the principle which enables the court, in certain circumstances, to order discovery by a party against whom the party seeking discovery has no cause of action, I have no doubt that the circumstances here bring the appellants within that principle. The principle was fully explored and expounded in Norwich Pharmacal Co. v. Customs and Excise Commissioners [1974] A.C. 133. It is shortly stated by Lord Reid in the following terms, at p. 175:
"[The authorities] seem to me to point to a very reasonable principle that if through no fault of his own a person gets mixed up in the tortious acts of others so as to facilitate their wrong-doing he may incur no personal liability but he comes under a duty to assist the person who has been wronged by giving him full information and disclosing the identity of the wrongdoers."
In the Norwich case the plaintiffs alleged that the Customs and Excise Commissioners were, in the exercise of their official duties, handling goods which infringed the plaintiffs' patent and which were being illicitly imported into this country. They sought discovery of documents in the possession of the commissioners which would enable them to identify the importers. The commissioners resisted the claim. Although the commissioners had acted entirely innocently, they were required to make disclosure. Just as in the Norwich case the commissioners had innocently come into possession of goods tortiously imported, so here the appellants, whether innocently or not, came into possession of confidential information tortiously obtained and tortiously imparted to them. In the Norwich case the commissioners had already delivered some infringing goods to the importer. The plaintiffs' purpose in seeking discovery was to enable them to identify the importer and bring proceedings against him to restrain further infringing importations. Here the appellants were about to publish the confidential information and would have done so if not restrained by injunction. The plaintiffs here seek the identity of the source to enable them to take...
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