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A-G v Blake (Jonathan Cape Ltd third party)

[1998] Ch 439, [1998] 1 All ER 833, [1998] 2 WLR 805, [1998] 04 LS Gaz R 33, [1998] NLJR 15, 142 Sol Jo LB 35, [1998] EMLR 309

Court: CA

Judgment Date: 16/12/1997

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Catchwords & Digest


EQUITY - EQUITABLE RELIEF IN CASES OF FIDUCIARY RELATIONSHIP - TRUSTEES OR PERSONS REGARDED AS TRUSTEES - THE FIDUCIARY CHARACTER - DEFENDANT FORMERLY EMPLOYED BY CROWN AS MEMBER OF SECRET INTELLIGENCE SERVICE AND BECOMING AGENT FOR SOVIET UNION -- DEFENDANT WRITING AND PUBLISHING AUTOBIOGRAPHY BASED ON INFORMATION ACQUIRED IN CAPACITY AS SIS OFFICER -- WHETHER DEFENDANT IN BREACH OF CONTINUING FIDUCIARY DUTY OWED TO CROWN -- WHETHER CROWN BENEFICIALLY ENTITLED TO COPYRIGHT IN BOOK AND FUTURE PROFITS DERIVED FROM PUBLICATION

From 1944 until 1961 the defendant was employed by the Crown as a member of the Secret Intelligence Service (the SIS). As such, he was subject to provisions of the Official Secret Acts and to a contractual undertaking not to divulge any official information gained as a result of his employment. In 1951 he became an agent for the Soviet Union and in 1961 he was convicted on five counts of unlawfully communicating information contrary to s 1(1)(c) of the Official Secrets Act 1911 and sentenced to 42 years' imprisonment. However, in 1966 the defendant escaped from prison and went to live in Moscow, where he wrote his autobiography, substantial parts of which related to his activities as a member of the SIS and were based on information acquired by him in that capacity. The book was published in the United Kingdom without the licence or permission of the Crown. The Crown, suing by the Attorney General, thereafter commenced proceedings against the defendant, contending that, in writing and afterwards authorising the publication of the book, the defendant had acted in breach of the fiduciary duty which he owed to the Crown, as an ex-member of the SIS, not to use his position as a former servant of the Crown, or information imparted to him in that capacity, so as to generate a profit or benefit for himself. The Attorney General contended that the Crown was the beneficial owner of the copyright in the book and that the defendant was accountable to the Crown for all sums received or receivable from the publishers. The judge dismissed the action, holding that the Attorney General was not entitled to any remedy in private law, since the duty owed by former members of the security services not to disclose secret or confidential information acquired by them in the course of their service did not extend to information which was no longer secret or confidential and so the defendant was not in breach of any duty. The Attorney General appealed, advancing additionally a claim for relief in public law based on his duty, as guardian of the public interest, to oversee the enforcement of the criminal law. Held--(1) Although an employee owed a duty of loyalty to his employer by virtue of the fiduciary relationship of trust and confidence between them, and a duty to maintain the confidentiality of information imparted to him in confidence, those duties lasted only as long as the relationship lasted and the information remained confidential. Thus, a former employee owed no duty of loyalty to his former employer and no duty to maintain the confidentiality of information which had ceased to be confidential. It followed, in the instant case, that by submitting his manuscript for publication without obtaining clearance, the defendant was not in breach of fiduciary duty as the information therein was no longer secret or confidential. He was nevertheless in clear breach of his contractual undertaking not to do so, which was not an unlawful restraint of trade, since the restraint did not exceed what was rendered unlawful by s 1(1) of the Official Secrets Act 1989. However, the Crown had not sought an injunction to prevent publication and could not now establish any loss. Accordingly, in the absence of a claim for substantial damages for breach of contract, the Crown's private law claim and appeal would be dismissed.

(2) The court's power to grant injunctive relief in support of the criminal law, on application by the Attorney General, was not limited to restraining the commission of a criminal offence, but extended, where a criminal offence had already been committed, to enforcing public policy with respect to the consequences of the commission of that crime, eg restraining receipt by the criminal of a further benefit as a result of that crime. That policy had been recognised by Parliament in legislation providing for court orders to confiscate the proceeds of crime. The fact that in the instant case the defendant had not been and, in all probability, would never be put on trial for his offence in contravening s 1 of the 1989 Act, so that the statutory machinery could not be applied, did not detract from the force of that policy in the context of the Attorney General's right as guardian of the public interest, to bring proceedings in the civil courts to enforce it. Accordingly, the court would grant an injunction restraining the defendant from receiving any further royalties from the publication of his book.

Per curiam. Although in general damages for breach of contract are compensatory, the law is now sufficiently mature to recognise in exceptional circumstances a restitutionary claim for loss of profits where compensatory damages would be inadequate, for example where the defendant fails to provide the full extent of the services which he has contracted to provide and for which he has charged the plaintiff, or where the defendant obtains his profit by doing the very thing which he contracted not to do. However, the fact that the defendant's breach of contract is deliberate and cynical, or has enabled him to enter into a more profitable contract with someone else is not by itself a good ground for departing from the normal basis on which damages are awarded.