Cream Holdings Ltd and others v Banerjee and others (Court of Appeal)

The Court of Appeal considered the meaning of the word "likely" in section 12(3) of the Human Rights Act 1998 in the context of interlocutory injunctions restraining media publication. The majority concluded that s.12(3) does not require the claimant to show on the balance of probabilities that it will succeed at trial; instead the appropriate threshold is a real prospect of success (a realistic possibility) convincingly established, coupled with a conventional discretionary assessment (including the s.12(4) requirement to have particular regard to freedom of expression).

The court reviewed the authorities (including Douglas v Hello!, Imutran, Theakston and A v B) and relevant statutory guidance. It held that a reading of s.12(3) compatible with other Convention rights and s.3 of the Human Rights Act favours the lower threshold so that urgent interlocutory protection remains available where necessary to prevent irreparable or disproportionate harm. Applying that test to the facts (confidential material taken by a former in-house accountant and a substantial public interest defence argued by the newspaper), the majority found the judge below had been entitled to conclude that Cream had a real prospect of success and that, in all the circumstances, he was entitled to exercise his discretion in favour of an interim injunction. The appeal was dismissed.

Background and procedural posture.

• The claimants (Cream), a group of companies active in the nightclub and events business, sought interlocutory relief after a former in-house accountant (the first appellant) provided confidential documents to the Liverpool Echo (the second appellant), which published an initial article on 13 June 2002 concerning alleged payments. Cream sought an injunction to restrain further publication of confidential material. The application was heard by Timothy Lloyd J who granted an interim injunction; the defendants appealed to the Court of Appeal with permission.

Nature of the application and issues.

• (i) Relief sought: an interlocutory injunction restraining further publication, disclosure or use of specified confidential information pending trial.
• (ii) Principal issues: (a) the meaning and degree of "likely" in s.12(3) HRA 1998 (whether it requires a balance of probabilities or a lesser threshold such as a real prospect of success); (b) whether the judge below applied the correct test; and (c) whether, applying the correct test, the injunction was justified in light of public interest defences, confidentiality and the s.12(4) obligation to have particular regard to freedom of expression.

Court's reasoning.

• The court analysed prior authorities (Douglas v Hello!, Imutran, Theakston, A v B) and other case law on the variable meanings of "likely". Simon Brown LJ concluded the phrase in s.12(3) is capable of bearing the meaning "real prospect of success" and that, as a matter of statutory interpretation and to give effect to Convention rights via s.3 HRA, that lower threshold should be adopted so as not to unduly preclude necessary interlocutory protection. The judge must nonetheless consider merits and Convention balancing; crossing the real-prospect threshold simply enables the court to exercise its discretion.
• Seditional points: Sedley LJ (in a separate judgment) read the ordinary meaning of "likely" as "more probable than not" but accepted that s.3 could require the word to be read down in order to give effect to competing Convention rights; he disagreed with the judge on the merits and would have discharged the injunction. Arden LJ agreed with the outcome (dismissal) and with the approach that the court must be satisfied there is a real prospect of success, assessing merits without reverting to a full trial adjudication.

Outcome on facts. The majority held the judge had applied the correct approach, that Cream had convincingly demonstrated a real prospect of success on the confidential material and that, having regard to s.12(4), the balance of convenience and the inadequacy of damages, the interlocutory injunction should be maintained until trial. Appeal dismissed.

Appeal dismissed. The Court of Appeal held that s.12(3) of the Human Rights Act 1998 is to be read so that the claimant need show a real prospect of success at trial (a realistic possibility) before prior restraint may be granted; once that threshold is crossed the court retains its ordinary discretion (including the s.12(4) duty to have particular regard to freedom of expression) and, applying that test to the confidential material and the judge's findings, the interlocutory injunction was within the generous ambit of reasonable judgment and should stand.

Appeal from the High Court of Justice, Chancery Division (Timothy Lloyd J). Permission to appeal was given (by Robert Walker LJ). The Court of Appeal handed down its judgment, reported at [2003] EWCA Civ 103.