Carnduff v Rock

A court may strike out a contractual claim where the pleaded issues cannot be fairly tried without disclosure of sensitive police material whose confidentiality the public interest requires to be preserved. The public interest in adjudicating disputes and enforcing contracts must then give way to the protection of confidential law-enforcement operations.

The conclusion depends on the particular pleadings. It does not establish that an informer can never enforce an agreement for payment, especially where remuneration can be determined without investigating sensitive operational information. Where the need for prejudicial disclosure is inevitable, the court need not permit a preliminary trial which would only postpone the claim’s inevitable termination.

Carnduff v Rock concerned a registered police informer’s claim for reasonable remuneration under alleged oral agreements with the West Midlands Police. The pleaded remuneration depended, among other matters, on the value and utility of the information supplied, the criminal activity involved and the claimant’s personal danger.

His Honour Judge Nicholl, sitting as a High Court judge in the Queen’s Bench Division, dismissed the defendants’ application to strike out the action. The defendants appealed. The central question was whether the claim should nevertheless be stopped because a fair trial would require disclosure of confidential police material contrary to the public interest.

By a majority (Laws LJ and Jonathan Parker LJ; Waller LJ dissenting), the appeal was allowed and the action was struck out.

1. The majority accepted that the alleged agreement was not necessarily unenforceable merely because no fixed price had been pleaded. A court could in principle assess reasonable remuneration. Nor could lack of intention to create legal relations be determined on a strike-out application without evidence.
2. The decisive issue was public interest. The pleaded claim required the court to determine the utility and value of the informer’s information. That would necessarily require examination of police operational methods, the information supplied, its relationship with other intelligence, and possibly material relating to other informers.
3. Laws LJ held that those disputes could not be fairly resolved without injury to the public interest, which outweighed the public interest in a trial. Jonathan Parker LJ agreed that, once it was inevitable from the pleadings that a fair trial required disclosure contrary to the public interest, the court could terminate the action. Allowing a preliminary issue on contract formation would merely delay that result.
4. The majority distinguished Savage v Chief Constable of Hants [1997] 1 WLR 1061. In that case remuneration might have been calculated by a formula not requiring sensitive disclosure. The present pleaded criteria necessarily required confidential operational material.

Waller LJ dissenting

Waller LJ would have dismissed the appeal. He considered that anticipated disclosure difficulties should be addressed after a preliminary determination of whether a legally binding agreement existed. If such an agreement were proved, the court should seek machinery to try the remaining issues fairly.

The order was appeal allowed with costs, subject to detailed assessment and the specified public-funding costs arrangements.

• Court of Appeal (Civil Division): By a majority, allowed the defendants’ appeal, set aside the refusal to strike out, and struck out the action. Permission to appeal to the House of Lords was refused.
• Queen’s Bench Division: His Honour Judge Nicholl, sitting as a High Court judge, dismissed the defendants’ strike-out application on 6 September 2000.