Mionis v Democratic Press SA & Ors

A settlement term preventing publication of material that might indirectly refer to a claimant is unenforceable where its scope cannot be stated with sufficient clarity. The court applies an objective test: words refer to a person if reasonable readers would understand them to do so, including where the reference is disguised. However, the contractual context and the parties’ acknowledged need to report a matter of public interest may make the obligation too uncertain to enforce. This is especially important where enforcement would constrain communication and expose a party to contempt proceedings. An unenforceable term may be severed where the agreement so provides, leaving the remaining settlement in force.

The claimant brought applications alleging that the defendants had breached a confidential settlement agreement resolving earlier libel proceedings. The agreement prohibited the defendants from publishing articles or statements which referred to the claimant or his immediate family, subject to specified exceptions. The alleged breaches concerned articles which did not name the claimant but which, the claimant contended, reasonable readers could identify as referring to him and his brother.

The defendants argued that the restriction was too vague to enforce, should not be enforced for public-policy and Article 10 reasons, and did not apply on its proper construction. The central issue was whether the restriction was sufficiently certain to support enforcement and an injunction.

1. Construction of “refer to”. The words were to be given their ordinary meaning in the context of the settlement. In a libel context, words refer to a person where reasonable readers would understand them to do so. The test is objective and includes indirect or disguised reference. The court applied the approach to contractual meaning stated in Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896, having regard to the relevant background.
2. Uncertainty. Clause 3.2 had to be construed against the background that the defendants had an acknowledged right and duty to report accurately and fairly on the Lagarde list controversy. Because reasonable readers might link the claimant with reports about associated individuals or the wider controversy, the clause created recurring and difficult questions about what publications were permissible.
3. The difficulty was not merely factual. The scope of the obligation could not be spelt out with sufficient clarity, particularly because it restricted communication of information and ideas. Clause 3.2 was therefore too vague and uncertain to be enforceable. The court noted the relevance of Article 10 and London Regional Transport v Mayor of London [2001] EWCA Civ 1491; [2003] EMLR 88 to construction and the grant of an injunction.
4. An injunction would also be inappropriate because the uncertainty would make enforcement by contempt process impracticable. No inquiry as to damages was appropriate.
5. Clause 3.2 was severable under clause 9.1. Its unenforceability did not invalidate the settlement agreement as a whole. The remaining provisions continued in force, and clause 9.2 required the parties to use reasonable endeavours to seek an enforceable replacement consistent with the agreement’s spirit and intent. The claimant’s applications were rejected. Separate libel proceedings remained available in respect of the publications.