Interim restraint orders: Cream Holdings Ltd & Others v Banerjee & Others

The House of Lords last week handed down its judgment in the case of Cream Holdings Limited and Others v Banerjee and Others.  A Merseyside publisher of the “Daily Post” and the “Liverpool Echo”, published allegations by Ms Banerjee, a former employee of part of the Cream Group, the nightclub promoters, regarding alleged corruption involving one of the directors and a local council official. The allegations were, to some extent, supported by documents that Ms Banerjee had copied without permission when she was dismissed from one of the Cream companies. These documents had been passed on to the newspaper. Cream claimed that Banerjee, as an ex-employee, was in breach of her duty of confidence and sought an injunction from the court to restrain the newspaper from publishing any further confidential information given to it by her.

The High Court granted the injunction, a decision that the newspaper appealed on the wording of section 12(3) of the Human Rights Act 1988 which states:

“No such relief [which might affect the exercise of the convention right to freedom of expression] is to be granted so as to restrain publication before trial unless the court is satisfied that the application is likely to establish that the publication should not be allowed.”

The Court of Appeal held that “likely” meant “more probable than not”.  The claimant had to show a “real prospect of success, convincingly established” in order to be successful in its application for an interlocutory injunction.  The Court of Appeal dismissed the newspaper’s application for the removal of the injunction.

The newspaper took this decision to the House of Lords who allowed their appeal, discharging the original injunction imposed by the first instance judge.  With regard to the test to be applied by the courts on an interim injunction application Lord Nicholls said:

“There can be no single, rigid standard governing all applications for interim restraint orders.  Rather, on its proper construction the effect of section 12(3) is that the court is not to make an interim restraint order unless satisfied the applicant’s prospects of success at trial are sufficiently favourable to justify such an order being made in the particular circumstances of the case.  As to what degree of likelihood makes the prospects of success “sufficiently favourable”, the general approach should be that the court will be exceedingly slow to make interim restraint orders where the applicant has not satisfied the court he will probably (“more likely than not”) succeed at the trial.”

This decision raises the threshold higher than the conventional American Cyanamid case that required a claimant only to be able to show that the claim is “not frivolous or vexatious: in other words that there is a serious question to be tried.” In most instances, a claimant would now be expected to show that it is more likely than not that he will succeed at trial.

Despite this, the House of Lords indicated that the courts should retain an element of flexibility where it would be appropriate to allow a lesser degree of likelihood to grant the injunction. This might be appropriate where the adverse consequences of disclosure were particularly serious or where a significant injustice would be done to the claimant if no protection were offered pending trial.

Bulletins are for general guidance only. Legal advice should be sought before taking action in relation to specific matters. Where reference is made to Court decisions facts referred to are those reported as found by the Court. Please note that past bulletins included in the Archive have not been updated by any subsequent changes in statute or case law.