Cream Holdings Ltd. & Ors v Banerjee & Anor

Under section 12(3) of the Human Rights Act 1998, prior restraint of publication requires a convincingly established real prospect that the applicant will show at trial that publication should not be allowed. The court must assess the merits, rather than apply the American Cyanamid threshold of a serious issue to be tried. The threshold is distinct from the later discretion whether restraint is justified. That discretion must accommodate freedom of expression and competing rights or interests, including confidentiality, privacy and the fairness of the trial. The majority held that the first-instance judge’s decision fell within the permissible range and dismissed the appeal.

Cream, a group of companies, obtained an interlocutory injunction from Timothy Lloyd J restraining Ms Banerjee and the Echo from publishing confidential information concerning alleged financial irregularities. The judge found a real prospect that Cream would obtain a permanent injunction and considered the balance of convenience and the importance of freedom of expression under section 12(4) of the Human Rights Act 1998.

The defendants appealed, arguing that section 12(3) required Cream to show that success at trial was more likely than not, and that the judge’s findings could not justify restraint given the public interest in publication. The central issue was the degree of likelihood required before publication could be restrained pending trial.

1. Majority disposition. Simon Brown LJ and Arden LJ dismissed the appeal. The injunction therefore remained in force. Sedley LJ dissented on the application of the test and would have discharged the injunction and permitted publication.
2. Section 12(3). The majority held that “likely” means a real prospect of success, convincingly established, rather than success more probable than not. The court must consider the merits of the legal and factual case and be satisfied that there is no obvious reason why the claim should fail. This is more demanding than the American Cyanamid threshold because the court must form a view about the merits.
3. Discretion. Crossing the threshold does not require an injunction. The court must exercise its discretion compatibly with the importance of freedom of expression and the need for prior restraint to be convincingly established. Relevant matters include the degree of likelihood, the adequacy of damages, the balance of convenience, the potential delay before trial, and competing rights or interests. Interim relief may be refused where the balance does not clearly favour restraint.
4. Application. The first-instance judge considered the merits, the evidence, the balance of convenience and the factors in section 12(4). The majority concluded that his decision did not fall outside the generous ambit within which reasonable disagreement was possible. Disclosure to regulatory or criminal authorities remained permitted. The issue for trial was whether publication was nevertheless justified in the public interest.
5. Dissent. Sedley LJ considered that the essential disclosure concerned a matter of serious public interest and that confidentiality was not inviolable where the statutory framework for employee disclosures had been exhausted. He would have discharged the injunction.
6. Final order. The appellants were ordered to pay the respondents’ costs on the standard basis, subject to detailed assessment, with an interim payment of £20,000. Permission to appeal to the House of Lords was refused.

• Court of Appeal (Civil Division): [2003] EWCA Civ 103. Appeal dismissed by a majority and the injunction upheld. Permission to appeal to the House of Lords was refused.
• High Court of Justice (Chancery Division): Timothy Lloyd J granted an interlocutory injunction restraining publication of defined confidential information until trial or further order, but refused an order for return of the documents. No citation for the first-instance judgment was stated in the judgment.