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You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> Coulson v Newsgroup Newspapers Ltd [2011] EWHC 3482 (QB) (21 December 2011) URL: https://www.bailii.org/ew/cases/EWHC/QB/2011/3482.html Cite as: [2011] EWHC 3482 (QB) |
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QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL |
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B e f o r e :
____________________
ANDREW COULSON |
Claimant |
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- and - |
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NEWSGROUP NEWSPAPERS LIMITED |
Defendant |
____________________
Christopher Jeans QC and Nicholas Randall
(instructed by Messrs Allen & Overy LLP) for the Defendant
Hearing dates: 7 December 2011
____________________
Crown Copyright ©
Mr Justice Supperstone :
Introduction
"4.6 To the extent that it is lawfully able to do so, the [Defendant] will pay any reasonable professional (including, without limitation, legal and accounting) costs and expenses properly incurred by the [Claimant] after the Termination Date which arise from his having to defend, or appear in, any administrative, regulatory, judicial or quasi-judicial proceedings as a result of his having been Editor of the News of the World."
"the Defendant must pay the professional costs and expenses properly incurred by the Claimant in defending the criminal allegations." (Particulars of Claim, para 23).
Factual background
"Thank you very much for referring Mr Coulson to me.
I am writing to you to explain how we calculate our fees as your client, News International Limited ('NI') is responsible for Mr Coulson's legal costs.
2. Scope of services
We will provide advice in connection with the investigations (civil, criminal and parliamentary) into the allegations of phone hacking at the News of the World newspaper and any other allegations which arise relating to Mr Coulson's editorship.
7. Bills and payment
We will invoice NI at the end of each month in respect of the work undertaken, and for disbursements and expenses incurred, in the preceding month."
"We take this opportunity to be clear that NGN Limited's payment of your reasonable professional costs and expenses under the Agreement… relates solely to your required participation in any such proceedings by reason of the performance of your duties as Editor of News of the World as a former employee of NGN Limited under the terms set out in your contract of employment. Therefore, NGN Limited will pay for your reasonable expenses in accordance with clause 4.6 in respect of the Leveson inquiry and the Select Committee investigations.
As a result of recent events, NGN Limited has reviewed clause 4.6 and has formed the view that clause 4.6 does not require it to reimburse costs that relate to proceedings (including criminal) which relate to alleged conduct outside the scope of your contract of employment. Consequently, effective from the date of this letter, neither NGN Limited nor any Associated Company will provide any assistance towards costs and expenses incurred by you in defence of, or appearance in, any criminal proceedings or other proceedings relating to alleged conduct outside the scope of the terms set out in your contract of employment. If NGN Limited has previously made payment of invoices relating to any such proceedings it will not seek to recover payment at this stage. If you have any claims for fees incurred up until the date of this letter, please forward them to NGN Limited as soon as possible. Any future invoices for costs incurred after the date of this letter and relating to the matters described above will not be paid by NGN Limited."
The parties' submissions
Discussion
Issue 1: whether the clause covers the alleged personal criminality.
"(1) Interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract.
(2) The background was famously referred to by Lord Wilberforce as the 'matrix of fact'; but this phrase is, if anything, an understated description of what the background may include. Subject to the requirement that it should have been reasonably available to the parties and to the exception to be mentioned next, it includes absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man.
(3) The law excludes from the admissible background the previous negotiations of the parties and their declarations of subjective intent. They are admissible only in an action for rectification. The law makes this distinction for reasons of practical policy and, in this respect only, legal interpretation differs from the way we would interpret utterances in ordinary life. The boundaries of this exception are in some respect unclear. But this is not the occasion on which to explore them.
(4) The meaning which a document (or any other utterance) would convey to a reasonable man is not the same thing as the meaning of its words. The meaning of words is a matter of dictionaries and grammars; the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean. The background may not merely enable the reasonable man to choose between the possible meanings of words which are ambiguous but even (as occasionally happens in ordinary life) to conclude that the parties must, for whatever reason, have used the wrong words or syntax: see Mannai Investments Co. Ltd v Eagle Star Life Assurance Co. Ltd [1997] AC 749.
(5) The 'rule' that words should be given their 'natural and ordinary meaning' reflects the common sense proposition that we do not easily accept people have made linguistic mistakes, particularly in formal documents. On the other hand, if one would nevertheless conclude from the background that something must have gone wrong with the language, the law does not require judges to attribute to the parties an intention which they plainly could not have had. Lord Diplock made this point more vigorously when he said in Antaios Compania Naviera SA v Salen Rederierna AB [1985] AC 191, 201:
'if detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion that flouts business common sense, it must be made to yield to business common sense.' "
"The Editor shall be employed as Editor of the News of the World ('News'). The Editor shall well and faithfully serve the Company and News as Editor and use his best endeavours to promote the success and reputation of the Company and News. In particular (but without prejudice to the generality of the foregoing) the Editor shall:
(a) Be generally responsible for and have control of the editorial content of News with full power to invite, accept or reject any contribution on any subject and (within the annual budget as set and regularly reviewed by the Board for editorial space, staffing levels and expenditure) to agree the amount or rate of payment for such contribution or series of contributions;
(b) Within the annual budget and the staffing, expenditure and pagination levels set and reviewed by the Board from time to time have power to employ or engage such persons as he may think fit as sub-editors, leader writers, reporters, correspondents and otherwise to agree with such persons the rate of remuneration for their services and (having regard to the Company's disciplinary and other procedures in this respect and the need for the efficient management of the resources available to him) to determine such employments or engagements at his discretion;
(c) Endeavour so far as he can, to obtain accurate and authentic information upon all matters and questions dealt with by News;
(d) Take all reasonable precautions to prevent the insertion in any issue of any libellous, blasphemous or immoral matter or advertisements or of any contribution or matter infringing the copyright or other rights of any other person, save that he will not be in breach of this or any other clause in this Agreement if, in the reasonable exercise of his discretion as Editor of News, any such matter is supplied, furnished, written or published and, having taken such reasonable precautions, he does not know that such material is actionable or, knowing either, has grounds to believe that there is a defence to any action brought or that no action will be brought.
(e) Undertake such other duties and exercise such other powers in relation to the conduct and management of the Company and/or News and its business and affairs as the Board shall from time to time assign to or vest in him."
"The Company may, notwithstanding any of the terms of the Editor's employment and irrespective of whether the grounds for termination arose before or after it began, at any time by notice in writing terminate the Editor's employment with immediate effect and without compensation:
(d) If the Editor is convicted of a criminal offence, except one which the Board considers does not affect his position as Editor."
"I have already referred to the statement by Lord James of Hereford in Clouston & Co Ltd v Corry. That case was applied in Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 1 WLR 698, where Lord Evershed MR, at p.700 said: 'It follows that the question must be – if summary dismissal is claimed to be justified – whether the conduct complained of is such as to show the servant to have disregarded the essential conditions of the contract of service.' In Sinclair v Neighbour Sellers LJ at p.287F, said: 'The whole question is whether that conduct was of such a type that it was inconsistent, in a grave way – incompatible – with the employment in which he had been engaged as a manager.' Sachs LJ referred to the 'well established law that a servant can be instantly dismissed when his conduct is such that it not only amounts to a wrongful act inconsistent with his duty towards his master but is also inconsistent with the continuance of confidence between them.' In Lewis v Motorworld Garages Ltd [1985] IRLR 465, Glidewell LJ at 469, 38, stated the question as whether the conduct of the employer 'constituted a breach of the implied obligation of trust and confidence of sufficient gravity to justify the employee in leaving his employment… and claiming that he had been dismissed.' This test could equally be applied to a breach by an employee. There are no doubt many other cases which would be cited on the matter, but the above four cases demonstrate clearly that conduct amounting to gross misconduct justifying dismissal must so undermine the trust and confidence which is inherent in the particular contract of employment that the master should no longer be required to retain the servant in his employment."
"The Employer accepts that the terms of this Agreement are also in full and final settlement of any claims (save in respect of any fraud committed by the Employee) that the Employer and any Associated Company has or may have against the Employee arising out of or in connection with the Employee's employment, or its termination…"
Mr Jeans observes, rightly in my view, that it cannot have been intended that the Defendant could bring civil proceedings against the Claimant for making a fraudulent claim for expenses, or even that there be criminal charges brought against the Claimant arising out of such a claim, but at the same time the indemnity as to legal costs in the clause applied.
Issue 2: whether there are as yet "proceedings".
"…that the proceedings commenced when the suspect was taken to the police station pursuant to such arrest, and when he was formally charged in the presence of a station officer, which would be the normal procedure at the station."
In the later case of Elliott the Court of Appeal, noting that the Brentwood Justices case was not a decision of the Court of Appeal but of the Divisional Court, concluded that section 63 of the Administration of Justice Act 1982 should be interpreted as meaning that instituting proceedings relates to the time when a person comes to court to answer the charge.
"It seems to me that on a sensible approach it cannot reasonably be said that the advice sought and given at the initial attendance was not 'in the proceedings' simply because the charge had not yet been preferred."
In Hale there were proceedings that led to a trial. In the present case there are no proceedings; if no charges are ever preferred there will never be proceedings.
" … the court finds that in order for the right to a fair trial to remain sufficiently 'practical and effective' ... article 6(1) requires that, as a rule, access to a lawyer should be provided as from the first interrogation of a suspect by the police, unless it is demonstrated in the light of the particular circumstances of each case that there are compelling reasons to restrict this right. Even where compelling reasons may exceptionally justify denial of access to a lawyer, such restriction – whatever its justification – must not unduly prejudice the rights of the accused under article 6 … The rights of the defence will in principle be irretrievably prejudiced when incriminating statements made during police interrogation without access to a lawyer are used for a conviction."
Lord Hope observed at paragraph 41:
"The statement in para 55 that article 6(1) requires that, 'as a rule', access to a lawyer should be provided as from the first interrogation of a suspect must be understood as a statement of principle applicable everywhere in the Council of Europe area. The statement that the rights of the defence will 'in principle' otherwise be irretrievably prejudiced must be understood in the same way."
Issues 3 and 4: the ex turpi causa principle and time of payment
"When the language of a contract does not expressly, or by necessary implication, fix any time for the performance of a contractual obligation, the law implies that it shall be performed within a reasonable time. The rule is of general application, and is not confined to contracts for the carriage of goods by sea. In the case of other contracts the condition of reasonable time has been frequently interpreted; and has invariably been held to mean that the party upon whom it is incumbent duly fulfils his obligation, notwithstanding protracted delay, so long as such delay is attributable to causes beyond his control, and he has neither acted negligently nor unreasonably."
"It is, I think, a principle of our law that the punishment inflicted by a criminal court is personal to the offender, and that the civil courts will not entertain an action by the offender to recover an indemnity against the consequences of that punishment."
In the more recent case of Safeway Stores Ltd v Twigger [2010] EWCA Civ 1472 the Court of Appeal decided that if an undertaking infringed provisions of the Competition Act 1998 relating to anti-competitive activity and was duly penalised by the Office of Fair Trading, that undertaking was not entitled to recover the amount of such penalties from its directors or employees who are themselves responsible for the infringement. Longmore LJ considered the application of the maxim. He said at paragraph 16:
"… The modern law has now culminated in Gray v Thames Trains Ltd [2009] UKHL 33 … when Lord Hoffmann said (para 30) that it expressed not so much a principle as a policy and that it was a rule which may be stated in a narrower form and a wider form (para 32). In its narrower form it is that a claimant cannot recover for damage which is the consequence of a sentence imposed upon him for a criminal act; in its wider version it is that a claimant may not recover for damage which is the consequence of his own criminal act. Both versions of the rule are often in play as they are in the present case because it is said that recovery of the penalty likely to be imposed by the OFT is recovery for the consequence of a sentence for the criminal (or quasi-criminal) act of entering into an illegal agreement, whereas recovery of the costs of the OFT investigation is recovery for the consequences of making the illegal agreement. The main difference between the application of the two forms of the rule appears to be that there is no question of any causation problem in the application of the narrower version whereas difficult problems of causation may (in theory) arise if it is only the broader version of the rule on which reliance can be placed (para 51). The rationale of the maxim is the need for the criminal courts and the civil courts to speak with a consistent voice. It would be inconsistent for a claimant to be criminally and personally liable (or liable to pay penalties to a regulator such as the OFT) but for the same claimant to say to a civil court that he is not personally answerable for that conduct."
Lloyd LJ at paragraph 38 said:
"It follows that the ex turpi causa principle does apply to preclude the claimants from seeking to recover from the defendants either the amount of the eventual penalty (under the narrow version of the principle) or the costs of coping with the OFT investigation (under the wider version)."
Conclusion
i) clause 4.6 of the Agreement does not cover the criminal allegations made against Mr Coulson personally;ii) if, contrary to my view, the criminal allegations are covered, no proceedings have commenced.