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England and Wales High Court (Queen's Bench Division) Decisions
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Cite as:  EWHC 2569 (QB)
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QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
|- and -
There being no appearance by the Defendant
Hearing date: 24 September 2019
Crown Copyright ©
THE HONOURABLE MR JUSTICE PEPPERALL:
DEROGATIONS FROM THE PRINCIPLE OF OPEN JUSTICE
"(1) The general rule is that a hearing is to be in public. A hearing may not be held in private unless and to the extent that the court decides that it must be held in private, applying the provisions of paragraph (3).
(2) In deciding whether to hold a hearing in private, the court must consider any duty to protect or have regard to a right to freedom of expression which may be affected.
(3) A hearing, or any part of it, must be held in private if, and only to the extent that, the court is satisfied of one or more of the matters set out in sub-paragraphs (a) to (g) and that it is necessary to sit in private to secure the proper administration of justice
(a) publicity would defeat the object of the hearing;
(c) it involved confidential information and publicity would damage that confidentiality; or
(g) the court for any other reason considers this to be necessary to secure the proper administration of justice.
(4) The court must order that the identity of any party or witness shall not be disclosed if, and only if, it considers non-disclosure necessary to secure the proper administration of justice and in order to protect the interests of that party or a witness."
4.1 First, disclosure of the parties' names would defeat the very purpose of this application in that it would destroy the privacy of the information sought to be protected.
4.2 Secondly, I consider that non-disclosure is necessary in order to protect the interests of both parties:
a) On the evidence before me, Mr J may be the victim of blackmail. Refusing anonymity would be to deny him a potential judicial remedy for such wrong: LJY v Persons Unknown  EWHC 3230 (QB);  EMLR 19.
b) Equally, anonymity is necessary to protect Ms O's interests in circumstances where she has been accused of blackmail but not yet afforded the opportunity to put her side of the case: NPV v. QEL  EWHC 703 (QB),  E.M.L.R. 20, at .
4.3 Thirdly, anonymity has the advantage that the court can then explain rather more of the circumstances of this case in a public judgment: H v. News Group Newspapers Ltd  EWCA Civ 42,  1 WLR 1645.
SITTING IN PRIVATE
5.1 Publicity would have defeated the object of this hearing.
5.2 The case concerns confidential information that would be damaged by publicity.
5.3 Even if those concerns could be dealt with through anonymity and extra care in court, the allegations of blackmail warrant a private hearing at the without notice stage:
a) There is a threat in this case to make public information about a brief sexual relationship even after Mr J agreed to pay US$1.5 million to keep such matters confidential.
b) On the other hand, it must be remembered that Ms O has not yet had an opportunity to defend her position. Here, the allegations are not made against persons unknown (as in LJY) but against an identifiable person.
c) It is at least arguable that Ms O was not seeking to blackmail Mr J at all but to recover compensation for having been negligently or recklessly infected with one or more sexually transmitted diseases. As an English judge, I am not qualified to take a view on the likely award of an American jury, but it may be that Ms O will in due course be able to defend her initial demand of $2.5 million and subsequent settlement of $1.5 million upon the basis that she was simply seeking to settle a threatened tort action.
d) Equally, it may be that Ms O now has a genuine claim under US law arising out of the recent processing of her personal data. As an English judge, I can take a view as to the availability of a claim under the General Data Protection Regulation 2016 ["GDPR"], but it is not for me to assess the merits of any other claim that she might have under US law.
I am therefore satisfied that it is necessary to sit in private in order to secure the proper administration of justice.
"If the person against whom the application for relief is made ('the respondent') is neither present nor represented, no such relief is to be granted unless the court is satisfied
(a) that the applicant has taken all practicable steps to notify the respondent; or
(b) that there are compelling reasons why the respondent should not be notified."
"21. Failure to provide advance notice can only be justified, on clear and cogent evidence, by compelling reasons. Examples which may amount to compelling reasons, depending on the facts of the case, are: that there is a real prospect that were a respondent or non-party to be notified they would take steps to defeat the order's purpose (RST v. UVW  E.M.L.R. 355, paras 7, 13), for instance, where there is convincing evidence that the respondent is seeking to blackmail the applicant: G v. A  EWCA Civ 1574 at ; T v. D  EWHC 2335 at .
22. Where a respondent, or non-party, is a media organisation only rarely will there be compelling reasons why advance notification is or was not possible on grounds of either urgency or secrecy. It will only be in truly exceptional circumstances that failure to give a media organisation advance notice will be justifiable on the ground that it would defeat the purpose of an interim non-disclosure order. Different considerations may however arise where a respondent or non-party is an internet-based organisation, tweeter or blogger, or where, for instance, there are allegations of blackmail."
THE SETTLEMENT AGREEMENT
"[American] juries take great offense at this behaviour."
"Either offer her a lot of money or we file. You can litigate it. Do you want a further discussion or do you want to hang up?
She wants $2.5m if that's not on the table by Friday 4pm then we file
Whatever you may think about this kind of stuff, it seems that your client has had unprotected sex with a number of different women. He's got a billion dollars; he's going to face the facts that if he is going to go around having sex with multiple different partners without a condom then he's going to get [them] sick and he's going to have to pay for it ...
He's a billionaire, he didn't get there by being a good fairy. He knows what he did. I have a lot of information on him. I'm ready to go."
15.1 Clause 1: Ms O agreed to return all property (including electronically and digitally created or stored property) provided to her by Mr J, provided by her to him or which refers to, depicts or concerns Mr J. Further, she agreed to certify under oath that she had searched for and returned all such property and that she had taken all steps necessary to obliterate any residual electronic and digital property.
15.2 Clause 2: Mr J agreed to pay $1.5 million. The settlement sum was payable as follows:
a) $1 million payable upon receipt of the sworn certification referred to in clause 1; and
b) two equal payments of $250,000 payable upon the first and second anniversaries of the agreement.
In advance of such anniversaries, Ms O was required to certify under oath that she had not violated the confidentiality and non-disclosure provisions at clause 3.
15.3 Clause 3: Central to the settlement was Ms O's agreement to maintain the confidentiality of the details of her relationship with Mr J, the disputed allegation of infection and the parties' legal dispute. Clause 3(a) provided:
"[Mr J] warrants that confidentiality and non-disclosure of the claims asserted by [Ms O]; the alleged factual basis for the assertion of claims; and the fact and terms of this Settlement Agreement are of paramount importance to him and a material condition of this Settlement Agreement. By executing this Agreement, [Ms O] undertakes never to disclose to anyone or any entity, for any reason, under any circumstance, (i) the existence of any personal relationship with [Mr J]; (ii) any claim, directly or indirectly, that he was the source of any medical condition hitherto alleged or purportedly identified in the future; (iii) any allegation made in the Summons with Notice; (iv) that there was ever any threat of or actual litigation between the Parties; (v) the existence and terms and conditions of this Settlement Agreement including, without limitation, the amount paid by any party in connection with the settlement; (vi) any assertion of fact or opinion or a statement which reasonably would be understood as false, derogatory, or disparaging of, or concerning [Mr J]; and [vii] assisting or aiding anyone in asserting a claim against [Mr J] or asserting a fact or opinion or a statement which reasonably would be understood as false, derogatory, or disparaging or concerning [Mr J]."
15.4 Clause 4:
a) By clause 4(a), Ms O would forfeit all right to any further monies and be liable to repay any sums already paid in the event that "[she] or anyone acting on her behalf at any time breaches or threatens to breach clause 3 of the Agreement."
b) Clause 4 further provided:
"(c) In addition , [Mr J] has the right to seek injunctive relief arising from any breach of clause 3 of this Agreement.
(d) In the event that [Ms O] challenges the conclusion that she breached clause 3 of this Agreement, including, inter alia, by making or threatening to make a disclosure, the burden of proof shall be on her to prove that she was not the source of the disclosure or threat of disclosure by a preponderance of the evidence."
c) By clause 4(f), the parties agreed to refer any dispute as to "whether there has been an actual or threatened breach" of the agreement to confidential arbitration under the auspices of the American Arbitration Association.
15.5 Clause 5 provided:
"Any violation of the terms of clause 3 will constitute a breach of this Agreement. In the event of such breach, in addition to the above, [Ms O] hereby consents to the granting of a temporary and permanent injunction by any court of competent jurisdiction including but not limited to the High Court in England against her or against any agent acting on her behalf, prohibiting her or her agent from violating the terms of clause 3."
16.1 she had "totally and completely obliterated and destroyed" paper, photographic and electronic copies of property provided to her by Mr J or which refers to, depicts or concerns Mr J or his family;
16.2 no such property remained in her possession, custody or control;
16.3 save for an exception not relevant to this application, she had returned and destroyed, and directed her US attorney to destroy, all such property in her possession, custody or control; and
16.4 if she became aware of the existence of any such property, she would promptly return it and totally and completely obliterate and destroy any copies.
"(iv) any facts concerning the relationship between [Ms O] and [Mr J], or the nature thereof; (v) any communications between [Ms O] and [Mr J] (vi) all documents, photographs, emails, electronic data, or recordings in the possession custody or control of [Ms X] constituting, reflecting or relating to any of the foregoing."
22.1 photographs of Mr J both alone and with Ms O, Mr J's family, Ms O with persons or in locations solely associated with Mr J, personal and business documents taken from Mr J, homes and an office associated with Mr J, hotel rooms that had been occupied by Mr J, and a medicine bottle with a printed label showing that it had been prescribed to Mr J; and
22.2 evidence of electronic correspondence between Mr J and Ms O.
THE GDPR DISPUTE
"Many of the pictures on [Ms O's] phone were extremely personal and the fines imposed by GDPR regulators when that kind of data is improperly processed are brutal. I think that an action in [a US State] court in the current environment would result in a very substantial verdict for my client."
27.1 Ms Parker claimed that she was paid to have lunch and drinks with a wealthy businessman, Mr Rubin. After a few drinks, she agreed to sign a non-disclosure agreement by which she agreed to pay Mr Rubin damages of $1 million if she disclosed any of the activities or conduct that occurred between them. She was invited to see his penthouse apartment. She then claimed that her drink was drugged and, in her intoxicated state, she agreed to be tied up. Helpless, she then claimed that she was brutally raped and beaten.
27.2 By a pre-trial motion, Mr Rubin argued that even if her allegations were true, she had no complaint in law. Not surprisingly, the court roundly rejected his arguments. The judgment contained some discussion as to whether Mr Rubin, on the assumed facts, had fraudulently induced Ms Parker to enter into the non-disclosure agreement by failing to disclose his criminal intentions.
28.1 In an email sent on 11 July 2019, ostensibly about breaches of the agreement, he wrote:
"By the way, it would certainly go for your client's credibility when I ask him if he continues to have unprotected sex with women without telling them that he has an STD."
28.2 In a subsequent email sent on the same day, he wrote that Mr J was going to have to testify.
(1) THE PROPER APPROACH TO THIS APPLICATION
"No such relief is to be granted so as to restrain publication before trial unless the court is satisfied that the applicant is likely to establish that publication should not be allowed."
"Section 12(3) makes the likelihood of success at the trial an essential element in the court's consideration of whether to make an interim order. But in order to achieve the necessary flexibility the degree of likelihood of success at the trial needed to satisfy s.12(3) must depend on the circumstances. There can be no single, rigid standard governing all applications for interim restraint orders. Rather, on its proper construction the effect of s.12(3) is that the court is not to make an interim restraint order unless satisfied the applicant's prospects of success at the 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 courts 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. In general, that should be the threshold an applicant must cross before the court embarks on exercising its discretion, duly taking into account the relevant jurisprudence on article 10 and any countervailing Convention rights. But there will be cases where it is necessary for a court to depart from this general approach and a lesser degree of likelihood will suffice as a prerequisite. Circumstances where this may be so include those mentioned above: where the potential adverse consequences of disclosure are particularly grave, or where a short-lived injunction is needed to enable the court to hear and give proper consideration to an application for interim relief pending the trial or any relevant appeal."
(2) PUBLICATION SHOULD NOT BE ALLOWED
"Every case must be considered on its particular facts. But the starting point is that (i) there is not, without more, any public interest in a legal sense in the disclosure or publication of purely private sexual encounters, even though they involve adultery or more than one person at the same time, (ii) any such disclosure or publication will on the face of it constitute the tort of invasion of privacy, (iii) repetition of such a disclosure or publication on further occasions is capable of constituting a further tort of invasion of privacy, even in relation to persons to whom disclosure or publication was previously made - especially if it occurs in a different medium ..."
The effect of a contractual duty of confidence
" the fact that the parties have entered into an agreement voluntarily restricting their article 10 rights can be, and in my judgment in this case is, an important part of the analysis which s.12 then requires the court to undertake. Whilst each case must be considered on its own facts, where the relevant contract is one in settlement of litigation, with the benefit of expert legal advice on both sides, particularly where article 10 issues are in play in that litigation, it seems to me that it would require a strong case for the court to conclude that such a bargain was disproportionate and to refuse to enforce it other than on ordinary contractual or equitable principles."
"91. Parties are of course generally free to determine for themselves what primary obligations they accept; and legal certainty requires that they do so in the knowledge that if something happens for which the contract has made express provision, then other things being equal, the contract will be enforced (pacta sunt servanda). This is a rule of public policy of considerable importance. Furthermore, the principled reasons for upholding a bargain freely entered into, obviously apply to one that finally disposes of litigation with particular force
104. The wording of s.12 requires a consideration of article 10, because the court is being asked to grant an injunction that affects freedom of expression. However, in my view, the analysis after a settlement agreement has been freely entered into and the parties have waived their respective rights, is not the same as that which arises at the interim stage say, in a contested privacy or defamation action. That is to ignore the importance in the public interest of parties to litigation, including this kind of litigation, being encouraged to settle their disputes with confidence that, if need be, the court will be likely to enforce the terms of a settlement freely entered into on either side."
" the weight which should be attached to an obligation of confidence may be enhanced if the obligation is contained in an express contractual agreement. One type of situation where this consideration is likely to have a significant influence on the balancing exercise which the court has to perform is where the obligation in question is contained in an agreement to compromise, or avoid the need for, litigation, whether actual or threatened. Provided that the agreement is freely entered into, without improper pressure or any other vitiating factor, and with the benefit (where appropriate) of independent legal advice, and (again, where appropriate) with due allowance for disclosure of any wrongdoing to the police or appropriate regulatory or statutory body, the public policy reasons in favour of upholding the obligation are likely to tell with particular force, and may well outweigh the article 10 rights of the party who wishes to publish the confidential information."
36.1 The confidentiality agreement was agreed in settlement of Mr J's first privacy action in London and Ms O's unparticularised claim in the US.
36.2 The settlement was freely negotiated between the parties' lawyers. Both had independent and expert advice.
36.3 There is no evidence that improper pressure was brought to bear upon Ms O or of any other vitiating factor that would entitle Ms O to seek to avoid the settlement.
36.4 Indeed, far from Ms O being vulnerable, she appeared to have had the upper hand as Mr J felt forced to pay a seven-figure settlement in order to preserve confidentiality.
36.5 Further, the parties expressly agreed that any breach would be enforceable by the grant of an injunction.
The GDPR issue
37.1 First, while foreign law is a matter that should be proved by expert evidence, Mr J's own attorney is not an independent expert who could properly give admissible expert evidence pursuant to Part 35 of the Civil Procedure Rules 1998. Indeed, she does not even purport to declare her understanding or compliance with her overriding duty to the court.
37.2 Secondly, the territorial reach of the GDPR is not in any event a matter of US law.
"A person is guilty of blackmail if, with a view to gain for himself or another or with intent to cause loss to another, he makes any unwarranted demand with menaces; a demand with menaces is unwarranted unless the person making it does so in the belief
(a) that he has reasonable grounds for making the demand; and
(b) that the use of the menaces is a proper means of reinforcing the demand."
"Generally, the court has taken the view that blackmail represents a misuse of free speech rights. Such conduct will considerably reduce the weight attached to free speech, and correspondingly increase the weight of the arguments in favour of restraint. The court recognises the need to ensure that it does not encourage or help blackmailers, or deter victims of blackmail from seeking justice before the court. All these points are well-recognised It can properly be said that the grant of a privacy injunction to block a blackmail serves the additional legitimate aim of preventing crime.
43.1 Mr J denies that he infected Ms O. His denial gains some support from his willingness to exchange medical evidence and Ms O's apparent reticence to agree to such exchange.
43.2 If there is no truth in the infection allegation then, on the face of the evidence currently before the court, there are no apparently reasonable grounds for her demand to be paid $2.5 million to refrain from pursuing her original claim in the US.
43.3 Even if Mr J had infected her, such a demand would be most unlikely to be warranted in any action brought in this jurisdiction. I repeat, however, my note of caution at paragraph 5 above that I do not discount the possibility that Ms O will be able to demonstrate that such a demand was reasonable within the context of her intended action in the US.
43.4 The proposed GDPR action does not appear to have merit, but even if there is some other cause of action available to Ms O in the US, it is doubtful that it warrants her attorney's threats to disclose and rely upon alleged sexual misconduct.
44.1 Ms O's intended GDPR action might well be no more than a device to justify the issue of proceedings in the US; and
44.2 Ms O is threatening through her lawyer to use the GDPR action as a vehicle for the disclosure and publication of confidential information about the affair (including the allegation of infection) and the parties' dispute and settlement agreement.
45.1 There is no particular public interest in publication of the details of this affair. [See paragraphs 31-32 above.]
45.2 All other things being equal, the court should look to enforce the contractual duty of confidence in this case. Such argument is strengthened given that the agreement was in settlement of an earlier legal dispute that was freely entered into between two parties who were each in receipt of independent legal advice and under which Mr J agreed to pay a significant seven-figure sum. [See paragraphs 33-36 above.]
45.3 It appears unlikely that Ms O has a claim under the GDPR. [See paragraph 39 above.] It is not, however, necessary to determine at this stage whether she has any proper cause of action. Even if she does have a claim, its existence is not reason for denying Mr J injunctive relief pending a return day.
45.4 The possibility that Mr J was the victim of blackmail adds further weight to the application. [See paragraph 43 above.]
45.5 There is evidence that Ms O is threatening to breach the confidentiality agreement. [See paragraph 44 above.]
(3) THE ADEQUACY OF DAMAGES
(4) TERRITORIAL REACH