CEDH · CASELAW;DECISIONS;ADMISSIBILITY;ENG — 25 octobre 2005

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display:inline-block } .s81C25CBD { width:20.98pt; display:inline-block } .sB82664E4 { width:183.98pt; display:inline-block } FOURTH SECTION DECISION AS TO THE ADMISSIBILITY OF Application no. 68890/01 by George BLAKE against the United Kingdom The European Court of Human Rights (Fourth Section), sitting on 25   October 2005 as a Chamber composed of:   Mr   J. Casadevall ,, President ,   Mr   M. Pellonpää ,   Mr   R. Maruste ,   Mr   K. Traja ,   Mr   S. Pavlovschi ,   Mr   L. Garlicki,   Lord   Brown of Eaton-under-Heywood, and Ms F. Elens-Passos , Deputy Section Registrar , Having regard to the above application lodged on 19 January 2001, Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant, Having deliberated, decides as follows: THE FACTS 1.     The applicant, Mr George Blake, was born in the Netherlands in 1922. He submits that he held a British passport, was granted Soviet citizenship in 1967 and remains a citizen of the Russian Federation. He has lived in Russia since around 1966. He is represented before the Court by Ms   N Mole, of the AIRE Centre, a non-governmental organisation in London. A.     The circumstances of the case The facts of the case may be summarised as follows. 1.     British Secret Intelligence Service (“SIS”) and the autobiography 2.     Between 1944 and 3 May 1961 the applicant was a member of the SIS. On 16 August 1944 he signed an undertaking pursuant to the Official Secrets Act 1911 (“the 1911 Act”). He does not submit the undertaking and neither did the Attorney General (“AG”) in the domestic proceedings described below. However, the AG claimed (before the Court of Appeal) that the declaration recited section 2(1) of the 1911 Act and contained the following undertaking by him: “I understand that the above clauses of the [1911 Act] cover also articles published in the press and in book form, and I undertake not to divulge any official information gained by me as a result of my employment, either in the press or in book form. I also understand that these provisions apply not only during the period of service but also after employment has ceased.” 3.     In or around 1951 the applicant became an agent for the Soviet Union having been detained during the Korean war by North Korean troops. From then until his arrest in 1960 he disclosed secret information and documents to the Soviet authorities. On 3 May 1961 he pleaded guilty to five counts of unlawfully communicating information contrary to section 1(1)(c) of the 1911 Act. He was sentenced to 42 years’ imprisonment. His trial was in camera and the details of the charges against him were never made public. In 1966 he escaped from prison. He made his way to Berlin and from there to Moscow where he lives to date. 4.     In 1989 he wrote his autobiography entitled “No Other Choice” (“the Book”). The High Court later described the Book as follows: “In it he describes his background and early life, the part he played in the 1939–1945 war and his assignment during the war to the S.I.S. He provides details of his training and work as an S.I.S. officer after the war. He describes how, in the Korean War, he was taken into custody by North Korean troops and how, during his internment, he became converted to the cause of communism and offered his services to the K.G.B. He provides details of his activities as an S.I.S. officer after his release from captivity on the termination of the Korean War. He describes the circumstances in which his role as a Soviet agent became known to the British authorities, his trial, his imprisonment and subsequent escape. He provides an account of his life in the Soviet Union following his escape. The [Book] may be fairly described as his apologia for the course his life has taken. It will be apparent from his brief description of the contents of the [Book] that substantial parts of the contents relate to the [his] activities as a member of the S.I.S. and are based on information acquired by him while an S.I.S. officer.” 5.     On 4 May 1989 the applicant signed a publishing contract with Jonathan Cape Ltd (“the Publisher”) granting the latter an exclusive licence to publish the Book in the United Kingdom. The Publisher agreed to pay the applicant, by way of advances on royalties, the sum of 50,000 pounds sterling (GBP) on signature of the contract, GBP 50,000 on delivery of the final manuscript and GBP 50,000 on publication of the Book. By 14 September 1990 the applicant had been paid GBP 50,000. After deduction of agents’ fees and tax, he received a net sum of GBP 33,650. A further GBP 10,000 was then paid to the agent, leaving GBP 90,000 outstanding from the Publisher to the applicant (an after-tax sum of GBP 55,000). The applicant did not seek authorisation from the Crown to publish the Book. He submitted the manuscript to the Publisher at the end of 1989. In early September 1990 a press release announced the impending publication of the Book. 6.     On 14 September 1990 the Treasury Solicitor wrote to the Publisher alleging that some of the information in the Book was subject to the applicant’s obligation of confidentiality to the Crown, that the Crown would hold the Publisher liable for these breaches of the duty of confidentiality and requested the Publisher to undertake by 18 September 1990 that they would direct any payments to the Crown which were due to the applicant. On 17   September 1990 the Publisher responded pointing out that it was common knowledge, since at least 9 September 1990, that it was to publish the Book but that the Crown had waited until the eve of publication to write. However, they undertook not to make payments to the applicant without 7   days’ prior notice to the Crown. The Book was published in the United Kingdom on 17 September 1990. 7.     On 23 November 1990 the Treasury Solicitor wrote to the Publisher indicating that, having considered the matter further, they took the view that the applicant owed a fiduciary duty to the Crown, that he was liable to account for his profits to the Crown, that the equitable right to the copyright of the Book belonged to the Crown and that the legal copyright was held on constructive trust for the Crown. On 14 December 1990 the Publisher rejected these claims. 2.     The High Court 8.     The AG issued a writ in the High Court on 24 May 1991 seeking to extract from the applicant any financial benefit he would obtain from publication based on the contention that in writing and authorising the publication of the Book, he had acted in breach of the duty of confidence he owed to the Crown as a former member of the SIS. The Statement of Claim (paragraph 3) described the alleged duty as: “(i)     not to use his position as a former servant of the Crown so as to generate a profit or benefit for himself, (ii) not to use any information imparted to him in his capacity as a servant of the Crown so as to generate such a profit or benefit, and (iii) to give restitution to the Crown of any such profit or benefit generated by misuse of his position and/or the information aforesaid.” 9.     It was contended by the AG that the Crown was the beneficial owner of copyright in the Book and that the applicant was accountable to it for all sums received or receivable from the Publisher. While the sums already paid to him were accepted to be irrecoverable, the Crown intended to recover GBP 90,000 still owed to the applicant together with any future royalties. The AG did not rely on any contravention of the 1911 Act or of the Official Secrets Act 1989 (“the 1989 Act”), or on the applicant’s written undertaking signed in 1944. 10.     Having filed an appearance on behalf of the applicant, his solicitors then filed his defence on 6 January 1992. The applicant denied that in writing or authorising the publication of the Book he had breached any duty to the Crown and denied that the Crown had any right to the copyright of the Book or to the profits made by him from it. (a)     The applicant’s legal representation 11.     The applicant did not return to the United Kingdom for the duration of these proceedings. He attempted, unsuccessfully, to obtain legal aid. 12.     By letter dated 3 December 1991 to the applicant, the Legal Aid Area Office refused legal aid indicating that it appeared “unreasonable that you should receive legal aid in the particular circumstances of your case” and more specifically, “that on the information available you would derive no personal benefit from defending the proceedings”. The applicant appealed. 13.     By letter dated 7 April 1992 to the applicant’s solicitors, the Legal Aid Area Office indicated that the Legal Aid Board Committee had adjourned their consideration of his appeal as they required further information in relation to the payments already made to him. The Committee noted that the applicant had not requested the Treasury Solicitor to release the monies held by the Publisher to fund his defence of the proceedings and had not applied to adjourn the proceedings pending a decision on such release. 14.     By letter dated 23 April 1992 to the applicant’s solicitors, the Treasury Solicitor confirmed that the AG considered it inappropriate that the applicant’s defence be funded by the monies held by the Publisher. 15.     By letter dated 6 May 1992 the applicant’s solicitors wrote to the Publisher’s solicitors requesting an admission of liability and an indication of the amount due and owing to him and demanding payment of the monies owing to him or, at least GBP 20,000, to cover legal costs. The Publisher responded, on 15 May 1992, indicating that the matter of whether and how such monies were to be paid was between the applicant and the Crown. 16.     On 20 May 1992 the applicant’s sister completed a schedule detailing how the monies received from the Publisher had been spent. He had received GBP 33,650 (net) from the Publisher and earned GBP 7,800 in interest payments from 1989 to 1991. Having spent GBP 4,285 on household goods, he had given the balance to family members. 17.     On 20 May 1992 his solicitors requested the Treasury Solicitor to reconsider its refusal to release the funds. The latter refused by letter of 1   July 1992 and confirmed that the release of funds would be inappropriate as he was requesting use of assets the Crown contended were its own. It was also noted that the legal aid appeal had not yet been determined. 18.     On 3 July 1992 his solicitors informed the Legal Aid Area Office how the royalty payments to date had been spent and about the refusal of the Treasury Solicitor and the Publisher to release the monies to him. By letter dated 27 July 1992 from Legal Aid Area Office the applicant was informed that the Area Committee had rejected his appeal. It appeared to that Committee unreasonable that he should be granted representation (section   15(3)(a) of the Legal Aid Act 1998): since the litigation was known to him, not later than 28 June 1991, he had voluntarily divested himself of funds under his control and direction to the amount of at least GBP 14,285, it being noted that almost GBP 10,000 of that sum was a gift to a third party. The applicant claims that he had given approximately GBP 20,000 to his children before 28 June 1991 and that only GBP 14,000 had been spent thereafter (most of which he had given to his son). The balance remaining (GBP 4,165) was insufficient to fund his litigation. 19.     By letter dated 12 August 1992 his solicitors informed the Treasury Solicitor that he would apply to the Court for an order that the AG consent to the release of the relevant monies to fund his defence. On 18 February 1993 the High Court dismissed the application finding that it had no jurisdiction to make an injunction against the Crown. The matter could be revisited if the Publisher was joined as a third party as the court had jurisdiction to make a mandatory injunction against the Publisher. An order for the costs of the application was made against the applicant. 20.     The applicant then joined the Publisher as a third party to the proceedings and the Publisher did not oppose the release of funds. However, on 22 June 1994 the High Court again rejected his application for the release of the monies. The Crown’s claim was prima facie a strong one. Many litigants presented their cases themselves and the court was able to ensure that there is a fair trial. By being a fugitive from justice, the applicant had put himself in a position where he could not appear in person. Nevertheless, it was considered that the lack of legal representation would not deny him a fair trial. It was also noted that, by this time, he had received in the region of $11,000 for a German television documentary which could contribute to his legal costs. A further order for costs was made against him. 21.     On 12 August 1994 his solicitors applied and were granted leave to cease to act for the applicant. They could not continue to act on a pro bono basis and two costs’ orders had been made against the applicant to date. 22.     Given that the applicant would not be attending to represent himself and on the initiative of the AG, on 25 July 1995 the High Court appointed a Queen’s Counsel and a junior counsel to act as amici curiae in the case. The Crown was also represented by Queen’s Counsel and by junior counsel. The applicant was not present or further represented before the High Court. (b)     A.G. v. Blake and Jonathan Cape (third party) [1996] 3 All ER 903 23.     On 19 April 1996 the judgment of the High Court, delivered by Sir Richard Scott V.-C., rejected the AG’s application. 24.     As to the applicant’s representation, the High Court noted that his solicitors had withdrawn, although it had not been informed of the reasons for this. As to the amici curiae , the High Court noted that: “Their role ... has not been to represent the interests of the [applicant]. They are not counsel for the [applicant]. Their role is to assist me in evaluating the submissions made to me by counsel for the [AG] and to draw my attention to the legal principles and authorities which might seem in argument to oppose the grant of the relief sought by the [AG].” 25.     As to whether, in writing and authorising publication of the Book, the applicant was in breach of the duties he owed to the Crown, it was noted that the AG had not contended that the applicant had committed any breach of his duty of confidence: the information relating to the SIS in the Book was, by 1989, no longer confidential. 26.     The basis of the action was an alleged breach of fiduciary duty which arose by virtue of the relationship of trust between the applicant and his former employer. In this respect, the High Court found that the fiduciary duties as formulated by the AG were too wide to be acceptable. It was in no doubt that a former member of the SIS owed to the Crown a lifelong duty of non-disclosure of confidential information, whether that duty was a contractual one (express or implied) or was an equitable one derived from the relationship of trust between employee and employer. However, any non-disclosure duty imposed by law would not go further than was reasonably necessary to protect the interests of the relevant service and would not therefore prevent publication of material that had already become public knowledge or could be seen to be trivial. 27.     In interpreting the nature and breadth of such a duty, the State’s Convention (in particular, Article 10) obligations should be borne in mind. In this respect, a duty of non-disclosure of information already in the public domain would not constitute an interference necessary in a democratic society in the interests of national security. The High Court noted that, not only did the AG not dispute that the information disclosed was no longer confidential, but there was no evidence of an assessment by, or evidence from, the Crown that the disclosures might or had been, nevertheless, harmful to national security. 28.     As to the statutory duty contained in section 1(1)(a) of the 1989 Act, the High Court found that that section applied to the applicant. The offence was established regardless of whether the information was confidential and whether its disclosure was harmful to national interests. It was clear that the applicant’s submission of the manuscript to the Publisher “constituted a disclosure of information which was in his possession by virtue of his work with the SIS and that he thereby committed an offence under subsection   (1)”. However, the AG had not made out a claim for a breach of statutory duty, probably because such a finding would not lead to any of the financial remedies sought by the AG. Criminal penalties were provided for in the 1989 Act and “established principles of statutory construction” precluded civil law remedies being added to the statutory remedies. 29.     The High Court distinguished the United States’ Supreme Court finding (in Snepp v. the United States (1980) 444 U.S. 507) of a breach of a fiduciary duty leading to a constructive trust of profits by the publication of a former CIA agent of a book about CIA activities in South Vietnam. He had breached an express contractual obligation to submit manuscripts for approval prior to publication. While the High Court felt that such a solution could be imposed compatibly with Article 10 of the Convention, the applicant’s contract did not include an express prior-approval term, and such a specific condition could not be implied. 30.     The High Court therefore rejected the AG’s claim of a continuing breach of fiduciary duty by the applicant. It concluded: “The pleadings and the evidence do not ... disclose any breach of duty on the part of the [applicant] on which the relief claimed can be founded. I do not accept that, as a former member of the security intelligence agency, he owed the Crown a continuing duty ‘not to use his position as a former servant of the Crown so as to generate a profit or benefit for himself’ or a continuing duty ‘not to use any information imparted to him in his capacity as a servant of the Crown so as to generate such a profit or benefit:’ ... The Crown has not ... either pleaded or established by evidence any misuse by the [applicant] of his position as a former member of the SIS or of information imparted to him in that capacity. This last conclusion may seem strange in view of the defendant’s status as a self-confessed traitor. The conclusion is, however, a consequence of the Crown’s attempt to establish a case in what, in my judgment, is far too broad a statement of the duty owed by ex-members of intelligence and security agencies and on the Crown’’s decision, the rightness of which I do not question, not to base its case on the misuse of secret or confidential information or to allege that information damaging to the national interest had been disclosed.” 31.     It was not therefore necessary to decide the question of whether the Crown could claim remedies for a breach of fiduciary duty. However, the High Court indicated that if such a duty had been established, the writing and submission for publication of the Book would have been a breach of such a duty, in which case the High Court would have had no difficulty in finding that the wrongdoer would, in equity, be required to hold the fruits of his wrongdoing for the Crown to whom the duty had been owed. The Crown appealed. 3.     The Court of Appeal (a)     the applicant’s legal representation 32.     The Legal Aid Area Office refused legal aid for the appeal by letter dated 30 May 1996 stating that the applicant had not shown reasonable grounds for taking, defending or being a party to proceedings. In particular, he had not made any comment on the grounds of appeal and it was not therefore possible to determine his likely prospects of success. His solicitors appealed this refusal and submitted thirty-two pages of reasoned argument in support of the legal aid appeal. The Legal Aid Area Office, by letter dated 25 June 1996, confirmed the rejection of his appeal noting that the Committee considered that it would be unreasonable to grant legal aid to enable him to continue to pursue a claim so long as he remained “a fugitive from justice already meted out to you”. 33.     His solicitors again applied for the release of the monies to fund his litigation which application was rejected by the Court of Appeal. 34.     The applicant was not represented or present before the Court of Appeal and the Publisher took no part in the proceedings. The AG was represented by the Solicitor-General, Queen’s Counsel and two junior counsel, with a Queen’s Counsel and one junior counsel appearing as amici curiae. The latter’s written submissions to the Court of Appeal began by noting: “Subject to the leave of the Court, the role of the Amicus in the present appeal will be to ensure that all relevant arguments which [the applicant] could have advanced in opposition to the appeal are before the Court; and to make independent submissions to assist the Court in relation to the wider implications of the issues raised.” 35.     The Court of Appeal later noted that during the appeal before it counsel appearing as amici curiae had “deployed before this court all the arguments which the [applicant] might have wished to present to the court if he had been present”. (b)     The proceedings 36.     The proceedings opened on 6 and 7 October 1997. Counsel acting as amici curiae suggested a possible public law remedy and the court also considered that the AG might have a private law restitutionary remedy against the applicant. The proceedings were therefore adjourned (until 1   December 1997) to allow submissions on two issues. In the first place, whether alternative remedies might be available in public law to prevent the applicant from profiting from the alleged breach of section 1(1) of the 1989 Act by the submission of the manuscript to the Publisher and, in particular, whether it would be open to the AG in his role as guardian of the public interest to seek an injunction to prevent the applicant from receiving any sums due to him and whether the AG wished to seek such an injunction in the present case. Secondly, whether there was an alternative basis for restitutionary remedies for breach of contract in private law, either in respect of the profits of crime or in respect of the applicant’s breach of his contractual undertaking signed in 1944. 37.     The AG was then granted leave to amend its statement of claim. The AG added a claim that the applicant was subject to section 2(1) of the 1911 Act and, from 1 March 1990, to section (1) of the 1989 Act. The AG also referred to the undertaking signed by the applicant in 1944 arguing that it had been signed in consideration of the Crown permitting the applicant to pursue his employment and on the basis that the applicant owed at all material times a contractual duty to the Crown to comply with the said undertaking. However, the AG decided that he did not want to advance argument on the restitutionary damages before the Court of Appeal, but wished to keep the matter open before a higher court. Arrangements were made for the applicant to be sent the amended statement of claim. He did not respond. (c)     A.G. v. Blake (Jonathan Cape Ltd third Party) [1998] 1 All ER 833 38.     On 16 December 1997 Lord Woolf M.R. delivered the court’s judgment dismissing the private law appeal but allowing the appeal on a new public law issue. He adopted the High Court’s description of the Book, finding that: “if the [applicant] had not been a notorious spy who had also dramatically escaped from prison, royalties of this order would never have been paid to him for his autobiography.” 39.     As to the AG’s first private law claim (a breach of a life long fiduciary duty arising from his employment with the SIS), Lord Woolf M.R. found that an employment relationship gave rise to many kinds of fiduciary duties. The duty of trust and confidence, the core obligation being loyalty, did not exist after the termination of the relationship without an express term to the contrary. A fiduciary duty of confidentiality was different and arose from the imparting of confidential information from one person to another. It arose therefore independently of the employment relationship, it therefore survived its termination but lasted only as long as the relevant information remained confidential. The court considered that: “Quite apart from the fact that equity does not intervene when it would serve no practical purpose to do so, an injunction restraining publication in these circumstances would be an unjustifiable restraint of trade and an unwarranted interference with freedom of speech going far beyond what is necessary in a democratic society to protect the national interest.” 40.     As to the second private law matter (breach of contract), Lord Woolf M.R. found that by submitting the manuscript for publication, without having obtained prior clearance, the applicant committed a clear breach of his express undertaking which he signed in 1944 and it was a breach of contract which prima facie entitled the Crown to an injunction and damages. The obligation could not be stigmatised as an unlawful restraint of trade, since it did not exceed what was rendered unlawful by section 1(1) of the 1989 Act. However, the AG had not sought an injunction to prevent publication and could not establish any loss consequent on this breach of contract. Damages would therefore be nominal. 41.     Although the AG had decided, despite the court’s invitation, not to argue that the Crown had a claim in restitutionary damages for breach of contract (a third private law issue), Lord Woolf M.R. gave his view on this third private law matter, accepting that it would be obiter and, since he did not have the benefit of argument, necessarily tentative. 42.     The general and undisputed rule was that damages for breach of contract were compensatory and not restitutionary: damages were measured by the plaintiff’s loss and not by the defendant’s gain. Referring to various academic works and judicial comment, Lord Woolf M.R. noted that it was disputed whether that was an absolute rule and that there were signs that the traditional view that the rule admitted of no exceptions might not survive for long. Indeed, the rule already admitted of some exceptions and, further, if the Court was unable to award restitutionary damages for breach of contract, then the law of contract was seriously defective as it would mean that in many situations the plaintiff would be deprived of an effective remedy due to a failure to attach a value to the plaintiff’s legitimate interest in having the contract performed. In Lord Woolf M.R.’s opinion, the time had come to accept the view that the law was sufficiently mature to recognise a restitutionary claim for profits made from a breach of contract in appropriate circumstances. The question was therefore in what circumstances such damages should be made available. 43.     He suggested two particular circumstances: in the first place, the case of “skimped performance” (where the defendant did not provide all of the contracted services and for which he had charged the plaintiff) and, secondly, where the defendant obtained profit by doing the very thing which he contracted not to do. This latter case covered the applicant’s position exactly. He had promised not to disclose official information and he earned his profits by doing exactly what he had contracted not to do. However, in the absence of a claim for substantial damages for breach of contract, Lord Woolf M.R. found himself bound to dismiss any such private law claim. 44.     The fourth possible basis for damages was the Crown’s public law claim. It was noted that, in amending his pleadings, the AG was seeking relief given his historic role as guardian of the public interest: “Its source in some instances is derived from statute. However, in relation to other functions, the role is an inherent part of his ancient office. It is the inherent power flowing from his office which enables the [AG] either to bring proceedings ex-officio himself or to consent to the use of his name, so as to enable proceedings to be brought by another party clothed with his authority in what are known as relator proceedings for the protection of the public interest in the civil courts. The proceedings may be proceedings to enforce a duty which a public body, such as a local authority, owes to the public or the proceedings may be to vindicate the criminal law. In connection with the criminal law, the [AG] historically has had, and still has, both statutory and inherent powers of great importance involving the enforcement of the criminal law, which involve him having to make decisions of a highly sensitive nature. He has the overall responsibility for the enforcement of the criminal law.” 45.     The need to adopt a conservative approach to the scope of the AG’s powers was a reflection of the reluctance of the civil courts to become involved in criminal proceedings. While it was desirable, where practicable, for proceedings about criminal offences to be confined to the criminal courts, there were situations where the criminal courts were powerless to act, in which case, the inherent power of the AG was extremely valuable and should not be artificially confined. 46.     However, the power was considered to extend to preventing the criminal law being flouted and being brought into disrepute. Lord Woolf M.R. agreed that section 1 of the 1989 Act applied to the applicant: from 1944 until 4 May 1961 he was a member of the SIS, the manuscript of the Book contained information relating to security or intelligence which was in his possession by virtue of his membership of the SIS and he disclosed the information without lawful authority when he submitted it to his publisher. Criminal penalties were prescribed for such an offence and conviction could be followed by a confiscation order (under the Criminal Justice Act 1988, as amended by the Proceeds of Crime Act 1995) thereby depriving the applicant of the proceeds of his crime. 47.     The public policy of preventing a criminal retaining profits directly derived from his crime had been recognised by statute (Drug Trafficking Offences Act 1986 and the Criminal Justice Act 1988 as amended by the Proceeds of Crime Act 1995) and even before that by the courts by the grant of injunctions to freeze the suspected proceeds of crime prior to conviction for that criminal offence. Lord Woolf M.R. went on: “In the legislation providing for court orders to confiscate the proceeds of crime Parliament recognised the public interest in promoting a policy of preventing a person from retaining property obtained by him as a result of, or in connection with, the commission of a criminal offence. The fact that the statutory machinery cannot be applied in the circumstances of this case, where the defendant has not been and, in all probability, will never be put on trial for his offence, does not detract from force of the policy in the context of the [AG’s] right, as guardian of the public interest, to bring proceedings in the civil courts to enforce that policy. For the respondent to receive the balance of the royalties would amount to the law being flouted in a different way. However, the consequence for the reputation of the criminal justice system would be the same. The ordinary member of the public would be shocked if the position was that the courts were powerless to prevent the respondent profiting from his criminal conduct.” 48.     Accordingly, Lord Woolf M.R. granted an injunction restraining the applicant from receiving (or from authorising any person to receive on his behalf) any payment or other benefit resulting from or in connection with the exploitation of the Book in any form or of any information therein relating to security and intelligence which is or had been in his possession by virtue of his position as a member of SIS. The injunction determined only what would not happen to the money and not what could be done with it. There was nothing therefore to prevent an application to vary the order to allow its disposal in a manner not contrary to the public interest. 49.     On 24 January 1998 the applicant’s solicitors acting on a pro bono basis lodged skeleton appeal arguments to the Court of Appeal and the latter Court gave leave to appeal on 22 April 1998. 4.     The House or Lords (a)     The applicant’s legal representation and costs’ matters 50.     The applicant claims that it took several months for him to raise the GBP   1,500 necessary to lodge his appeal and several more months to convince the House of Lords to waive the security for costs’ requirement. The expenses (not including legal costs) of preparing the hearing bundles for the House of Lords amounted to GBP 2,709. He did not apply for legal aid given the reasons for the prior refusals and the House of Lords later agreed that he would not have obtained legal aid. Nevertheless, his solicitor and junior counsel represented him on a pro bono basis. The Crown was represented by two Queen’s Counsel and two junior counsel. (b)     The proceedings 51.     The appeal hearing was fixed for 7-9 March 2000. Although he accepted that the restitutionary damages’ issue raised points of general interest, the AG confined the appeal to the public law injunction. By letter dated 14 February 2000 to the parties, the House of Lords indicated that it wished to hear argument at the hearing on the matter of restitutionary damages for breach of contract. Both parties prepared written submissions on the point. However, according to the applicant, the account of profits’ point was not raised in oral submissions until the last day of the hearing, when Lord Hobhouse stated that an account might have been available if the Crown had not had notice of the publication of the Book. After considering the matter over lunch, Lord Hobhouse indicated that he did not wish to pursue the point. (c)     A.G. v. Blake (Jonathan Cape Ltd, third Party) [2000] 4 All ER 385 52.     The main judgment was delivered on 27 July 2000 by Lord Nicholls, with whom Lords Goff and Browne-Wilkinson concurred. Lord Steyn delivered a separate judgment and Lord Hobhouse dissented. Lord Nicholls noted at the outset that: “Plainly, had [the applicant] not been a infamous spy who had also dramatically escaped from prison, his autobiography would not have commanded payments of this order.” 53.     Turning to the operation of restitutionary principles, Lord Nicholls noted that, while there was a surprising dearth of judicial decision, there was consensus between academic writers that the possibility should exist but disagreement as to the circumstances in which it should arise. 54.     He reviewed the jurisprudence on non-compensatory remedies. He started with interferences with property rights. He reiterated the general principle that if someone uses another person’s property without permission, the owner of the property can recover in damages the price that a reasonable person would have paid for the right of user, even if the property owner has not suffered any loss. 55.     He then noted that in respect of the equitable wrongs of passing off, infringement of trade marks, copyrights and patents and breach of confidence, one of the standard remedies is an account of profits. He pointed out that a similar remedy is available for the tort of conversion. A person who has wrongfully converted another person’s goods may be ordered to pay the proceeds of the conversion to the owner of the goods. 56.     He went on to mention breach of fiduciary duty, where the court routinely orders an account of profits in order to ensure that fiduciaries are financially disinterested in carrying out their duties. 57.     He also mentioned the jurisdiction to award damages under section 2 of the Chancery Amendment Act 1858, also known as Lord Cairns’ Act, which still survives although the original act has now been repealed. According to this jurisdiction, the courts can, instead of awarding an injunction, award damages. As with violations of a property right, the level of damages is measured by reference to the benefits wrongfully obtained by the defendant. 58.     Lastly, Lord Nicholls looked at the law in relation to breach of contract. He began by saying: “[T]he rule of the common law is that where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same position as if the contract had been performed (see Robinson v Harman (1848) 1 Exch 850 at 855...). Leaving aside the anomalous exception of punitive damages, damages are compensatory. That is axiomatic.” 59.     However, he went on to say that there are some situations, where an award of damages, assessed by reference to loss, will not compensate a claimant adequately and where the court, as a result, will make orders for specific performance and injunctions. He pointed out, however, that these remedies were discretionary and were sometimes refused on the grounds that they were oppressive. He cited Wrotham Park Estate Co Ltd v Parkside Homes Ltd ([1974] 2 All ER 321) as an example of this: for social and economic reasons, the court had refused to make a mandatory order for the demolition of houses built on land burdened with a restrictive covenant and damages under the jurisdiction originating from Lords Cairns’ Act. Even though the plaintiffs in that case had suffered no loss, the High Court awarded them 5% of the developer’s anticipated profit, this being the amount of money which could reasonably have been demanded for a relaxation of the covenant. In so doing, the High Court had applied, by analogy, the cases mentioned above concerning the assessment of damages when a defendant has invaded another’s property rights but without diminishing the value of the property. 60.     Lord Nicholls approved this approach and added: “[I]t is not easy to see why, as between the parties to a contract, a violation of a party’s contractual rights should attract a lesser degree of remedy than a violation of his property rights...” 61.     He then turned to the judgment of the Court of Appeal in Surrey CC v Bredero Homes Ltd ([1993] 3 All ER 705) where a developer breached a covenant by building more houses than he had agreed to do. The local authority brought a claim for damages but, as they had suffered no loss, they were awarded nominal damages of 2 GBP. Lord Nicholls said that he preferred the approach adopted in the Wrotham Park case. He said:   “The Wrotham Park case, therefore, still shines, rather as a solitary beacon, showing that in contract as well as tort damages are not always narrowly confined to recoupment of financial loss. In a suitable case damages for breach of contract may be measured by the benefit gained by the wrongdoer from the breach. The defendant must make a reasonable payment in respect of the benefit he has gained. In the present case the Crown seeks to go further. The claim is for all the profits of Blake’s book which the publisher has not yet paid him. This raises the question whether an account of profits can ever be given as a remedy for breach of contract. The researches of counsel have been unable to discover any case where the court has made such an order on a claim for breach of contract.” 62.     He then cited Tito v Waddell (No. 2) ([1977] Ch. 106, 332), where the Court said that, as a matter of fundamental principle, the question of damages was not one of making the defendant disgorge his gains, but one of compensating the plaintiff and Occidental Worldwide Investment Corporation v. Skibs A/S Avanti [1976] 1 Lloyd’s Rep. 293, 337, where the High Court summarily rejected a claim for an account of profits after the defendants had withdrawn ships on a rising market. 63.     However, he balanced those cases with a “light sprinkling of cases” (including Lake v. Bayliss [1974] 1 W.L.R. 1073, Reid-Newfoundland Co. v. Anglo-American Telegraph Co. Ltd. [1912] A.C. 555 and British Motor Trade Association v. Gilbert [1951] 2 All E.R. 641) where courts had made orders which had the same effect as an order for an account of profits but where they had attached a different label. He said: “These cases illustrate that circumstances do arise when the just response to a breach of contract is that the wrongdoer should not be permitted to retain any profit from the breach. In these cases the courts have reached the desired result by straining existing concepts. Professor Peter Birks has deplored the "failure of jurisprudence when the law is forced into this kind of abusive instrumentalism": see ‘Profits of Breach of Contract’ (1993) 109 L.Q.R. 518, 520. Some years ago Professor Dawson suggested there is no inherent reason why the technique of equity courts in land contracts should not be more widely employed, not by granting remedies as the by-product of a phantom ‘trust’ created by the contract, but as an alternative form of money judgment remedy. That well known ailment of lawyers, a hardening of the categories, ought not to be an obstacle: see ‘Restitution or Damages’ (1959) 20 Ohio S.L.J. 175.” 64.     He concluded that there was no reason in principle why the courts must in all circumstances rule out an account of profits as a remedy for breach of contract. He said that the authorities encouraged him to reach this conclusion and went on to say: “The law recognises that damages are not always a sufficient remedy for breach of contract. This is the foundation of the court’s jurisdiction to grant the remedies of specific performance and injunction. Even when awarding damages, the law does not adhere slavishly to the concept of compensation for financially measurable loss. When the circumstances require, damages are measured by reference to the benefit obtained by the wrongdoer. This applies to interference with property rights. Recently, the like approach has been adopted to breach of contract. Further, in certain circumstances an account of profits is ordered in preference to an award of damages. Sometimes the injured party is given the choice: either compensatory damages or an account of the wrongdoer’s profits. Breach of confidence is an instance of this. If confidential information is wrongfully divulged in breach of a non-disclosure agreement, it would be nothing short of sophistry to say that an account of profits may be ordered in respect of the equitable wrong but not in respect of the breach of contract which governs the relationship between the parties. With the established authorities going thus far, I consider it would be only a modest step for the law to recognise openly that, exceptionally, an account of profits may be the most appropriate remedy for breach of contract. It is not as though this step would contradict some recognised principle applied consistently throughout the law to the grant or withholding of the remedy of an account of profits. No such principle is discernible.” 65.     He said that it would only be in exceptional circumstances, where other remedies were inadequate, that courts would order an account of profits. He declined to lay down any fixed rules but said: “The court will have regard to all the circumstances, including the subject matter of the contract, the purpose of the contractual provision which has been breached, the circumstances in which the breach occurred, the consequences of the breach and the circumstances in which relief is being sought. A useful general guide, although not exhaustive, is whether the plaintiff had a legitimate interest in preventing the defendant’s profit-making activity and, hence, in depriving him