Undesirable Conduct Not Sufficient to Strike Out Defences

The trial of Douglas and Zeta-Jones v Hello! Limited and Others has received prominent coverage in both the broadsheet and tabloid newspapers over the last few weeks. Analyses of the privacy laws in this country have been mixed in with snippets about, and commentary on, the evidence given at the High Court by the film stars, Michael Douglas and Catherine Zeta-Jones. One procedural development in the case which did not receive much attention, but which is of interest to those involved in litigation, was the unsuccessful application by the claimants to strike out some of the defences. This decision indicates that only in very exceptional cases will defences be struck out for undesirable conduct and serious transgressions of the rules.

Background

When Michael Douglas and Catherine Zeta-Jones married in November 2000 in New York they gave OK! magazine the exclusive rights to publish photographs of their wedding. However the rival magazine, Hello!, obtained some unauthorised photographs. Hello! printed the unauthorised photographs, but the claimants (Douglas, Zeta-Jones and the publishers of OK!) obtained an injunction to restrain their publication. The Hello! defendants (namely the publishers and distributors of Hello! and related magazines) appealed to the Court of Appeal against the injunction. Two separate hearings were held and the injunction was discharged. This allowed Hello! to publish the unauthorised photographs.

The claimants continued the action against the Hello! defendants for damages for breaches of confidentiality, privacy and the Data Protection Act 1998 and also interference with their respective rights and businesses, including conspiracy. The claimants subsequently added further defendants to their claim, including the photographer who had supplied the unauthorised photographs and a media consultant to Hello! magazine. Before trial the claimants sought permission to re-amend their particulars of claim, in light of information which had emerged following the joinder of one of the further defendants, and applied for the defences of the Hello! defendants to be struck out. A further application by two of the defendants was made to dismiss the claims against them.

The grounds for the application were that the Hello! defendants had interfered with the course of justice and/or put the fairness of the trial in jeopardy in that they:

1. made false statements to the Court of Appeal during the injunction hearings, knowingly or without an honest belief in their truth, and
2. deliberately destroyed or disposed of documents, and
3. made false disclosure statements, knowingly or without an honest belief in their truth.

Decision

Judgment on the applications was given by Sir Andrew Morritt, Vice-Chancellor, shortly before the trial commenced ([2003] EWHC 55). He allowed the amendments and refused to strike out the defences or dismiss the claims against two of the defendants.

The Vice-Chancellor found that the case advanced by Hello! before the Court of Appeal in the injunction hearings had been based on false statements by Hello! witnesses, each of whom knew that his or her statement was false or misleading in certain respects. In relation to the destruction of documents and the failure to give proper disclosure, the Hello! defendants had admitted those allegations, but sought to minimise their importance. They admitted that they had failed to preserve any document in electronic form and destroyed or failed to preserve all or most of the documents passing between them and the media consultant, and that their disclosure was therefore defective, as alleged by the claimants. However, the Hello! Defendants argued that the false evidence was due to the speed of preparing the application to the Court of Appeal, the destruction of documents was due to "muddle or misunderstanding" and the failure to give adequate disclosure was due to "occupational hazard". None of these arguments were accepted by the judge who considered that the actions by the Hello! defendants were deliberate (no criticism was made of the solicitors involved).

The Vice-Chancellor held, however, that the deployment of the false evidence in the Court of Appeal did not interfere with the course of justice and/or put the fairness of the trial in jeopardy because of the admissions by those defendants or the findings of falsity.

In relation to the destruction of documents, the Vice-Chancellor drew a distinction between those documents destroyed or disposed of before the proceedings commenced, and those destroyed or disposed of after the commencement. As to documents destroyed before proceedings commenced, he followed the recent decision of the appeal court in the Australian state of Victoria in British American Tobacco Australian Services Limited v Cowell and McCabe [2002] VSCA 197 that the criteria for the court’s intervention is whether destruction or disposal amounts to an attempt to pervert the course of justice. He found that there was no evidence to suggest that these documents, including e-mails, had been destroyed in an attempt to pervert the course of justice.

Although the Vice-Chancellor found that documents had been deliberately destroyed after the commencement of proceedings and false disclosure statements were made, he stated that the issue to be decided was whether the rules had been transgressed and, if so, whether a fair trial was still possible (Arrow Nominees Inc. v Blackledge [2001] BCC 591). He quoted Chadwick LJ in the Arrow case who adopted the observations of Millett J in the earlier case of Logicrose Ltd v Southend United Football Club Ltd (The Times, 5 March 1988) in stating :

The Vice-Chancellor accepted that unless a litigant’s conduct puts the fairness of the trial in jeopardy or amounts to such an abuse of process as to prevent the court from doing justice, then the litigant will not be deprived from taking further part in the proceedings.

In this case, the Vice-Chancellor found that the majority of the documents known to have been disposed of or destroyed had now been supplied by the other party to those communications. Although he noted that there may have been manuscript notes on the destroyed documents which were not now available and he inferred there would have been further material undisclosed documents, he concluded that this was not sufficient to strike out either the whole or any part of the defence. He referred to the statement of Millett J in the Logicrose case as follows:

The Vice-Chancellor then accepted that the court could strike out part of a defence, by reference to specific issues (as held in the BAT case). However, he did not think that this was appropriate in this case. The claimants would have to prove the relevant issues against the other defendants and he did not consider there was a real risk that there couldn’t be a fair trial on those issues, given the documentary evidence available and the ability of the trial judge to draw inferences. Similarly, he found that the absence of documents which may have assisted in cross-examination, did not justify striking out parts of the defences.

Comment

This decision is a clear indication that only in very exceptional cases will a court find that a litigant is determined to prevent a fair trial from occurring. In this case, even clear disregard of the disclosure rules and conduct which left "a very great deal to be desired" was not sufficient to persuade the judge that a fair trial was no longer possible.

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