Case No. HQ/0100536
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand

London WC2

Date: 19th February 2001

B e f o r e:

MR JUSTICE OWEN

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TOTALISE PLC
Claimant

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THE MOTLEY FOOL LTD AND ANOTHER
Defendants

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Tape Transcript of Smith Bernal Reporting Limited,
190 Fleet Street, London EC4A 2AG

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MR P MALONEY QC (instructed by PCR) appeared on behalf of the Claimant
MR C STYLE (instructed by Linklater & Pains) appeared on behalf of the First Defendant
MR CARDELLE (solicitor's name and address not supplied) appeared on behalf of the Second Defendant
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JUDGMENT

MR JUSTICE OWEN: 

The claimant, Totalise plc, is an internet service provider.  Each of the defendants operates a website containing discussion boards on which members of the public are able to post material.  An anonymous contributor, who calls himself Z Dust, has made numerous postings about the claimant on the defendant's discussion boards.  The claimant asserts that much of the material contained in such postings is defamatory of the company, its officers and directors, and seeks disclosure of the identity of Z Dust, or of any material in the possession of or accessible by the defendants which could lead to the identification of Z Dust.  Accordingly, it seeks an order that:
 
"The defendants do forthwith disclose to the claimant in a witness statement verified by a statement of truth (a) the full name and address of Z Dust, the author of defamatory postings on the defendant's websites, and (b) all documents which are or have been in their possession, custody or power relating to the identity of Z Dust." 
 
The application is supported by witness statements from Damian Gerard Cross.
      The facts are not in dispute and can be shortly stated.  In August 2000 a number of postings under the  "nome de web" Z Dust began to appear on the first defendant's discussion board dedicated to the claimant. Examples of the postings are exhibited to Mr Cross's witness statement at DGC1.
      On 29th August 2000 the claimant's solicitors wrote to the first defendants complaining that such postings were defamatory and asking for their immediate removal.  The letter also pointed out that Z Dust appeared to be in breach of the first defendant's terms and conditions for access to its discussion boards in that Z Dust had failed to identify itself.  The first defendants replied by e‑mail on the same day, saying that the offending postings had been removed from the site and that Z Dust's right of access had been revoked.
      It appears that Z Dust protested against this exclusion and was readmitted to the site.  More postings relating to the claimant appeared, but following further complaints from the claimant Z Dust was permanently barred from the site on 10th September.
      In subsequent correspondence the claimant's solicitors sought disclosure of the identity of Z Dust. The first defendants refused to comply with that request, relying on the Data Protection Act 1998.
      In January 2001 the claimant discovered that  following the removal of the offending postings from the first defendant's website, Z Dust had begun to use the second defendant's discussion board to publish further defamatory statements about the claimant.  By the date of Mr Cross's witness statement, 6th February, Z Dust had posted almost 90 messages concerning the claimant on the second defendant's site.
      On 28th January the claimant's solicitors e‑mailed the second defendant complaining about the defamatory nature of the Z Dust's postings.  The e‑mail was followed by a letter dated 31st January seeking the removal of the defamatory material, the termination of Z Dust's postings right and disclosure of the identity of and registration details of Z Dust.
      By letter dated 1st February the second defendant refused to comply with those requests relying upon the Data Protection Act 1998 and upon its term and conditions for access to the site.
      It is clear from the evidence that Z Dust is waging an intensive campaign of vilification against the claimant.  Much of the posted material is plainly defamatory.  It calls into question both the competence and integrity of the claimant's management and the company's solvency, suggesting that it is on the point of collapse. 
      What then is the position of the defendants with regard to this application?  The first defendant has filed a witness statement which states in paragraph 5:
 
"The first defendant has no interest in the outcome of this application.  It is, however, under an obligation to protect the privacy of the information on which disclosure is sought."
  
That position is reflected in the skeleton argument submitted on behalf of the first defendant which begins with the statement that:
 
"The first defendant neither consents to nor opposes this application."
  
      The second defendant's position is set out in a letter to the claimant's solicitors dated 1st February of this year which said that the second defendant would remove any specific postings identified by the claimant as being defamatory and that the account with the user name Z Dust had been suspended on 31st January.  But the letter went on to refuse the claimant's request for contact details of Z Dust on the basis that the Data Protection Act and the privacy policy embodied in its terms and conditions did not allow the second defendants to disclose:
  
"Personal details about any account holder to a third party in these circumstances."
  
      It is accepted by the defendants that there is jurisdiction to grant the relief sought under the principles confirmed by the House of Lords in Norwich Pharmacal [1974] AC 133, but they question whether it is appropriate for me to exercise my discretion to make the order sought by the claimant and have raised a number of points for my consideration.  First, it is argued that, save in exceptional circumstances, which do not arise in this case, such discretion ought not to be exercised unless it is clear that the party seeking disclosure intends to take proceedings against the wrongdoer.
      The claimant says that it needs the information sought in order to take advice as to whether to take legal action.  The first defendant submits that that is not enough and that in effect the claimant is engaged upon a fishing expedition.
      In support of that submission Mr Style relies upon the judgment of the Vice Chancellor, as he then was, Lord Brown Wilkinson, in Handmade Films v Express Newspapers FSR [1986] 463, a decision under section 10 of the Contempt of Court Act 1981.
      Mr Maloney for the claimant makes two points in reply.  First, he strongly disputes the contention that  his clients are engaged upon a fishing expedition.  He was right to do so.  The claimants are not seeking to discover whether a tort has been committed; that is plain from the evidence of Mr Cross.  The problem facing the claimant is simply that it does not know, and has no means of discovering, the identity of Z Dust.  If and when the identity of Z Dust is established it will be necessary for the claimant to consider with its legal advisers the most effective means of protecting its legal rights.  That may or may not involve legal proceedings.
      Secondly, Mr Maloney relied upon the decision of the House of Lords in X Limited v Morgan Grampian [1991] 1 AC 3.  In which it was held:
 
"To confine justice in section 10 of the Act of 1981 to the technical sense of the administration of justice in the course of legal proceedings in a court of law is too narrow.  It is in the interests of justice, in the sense in which the phrase is used in section 10, that persons should be enabled to exercise important legal rights and to protect themselves from serious legal wrongs, whether or not resort to legal proceedings in a court of law would be necessary to attain these objectives."
  
      In my judgment, Mr Maloney is plainly right in his submission that Handmade Films cannot stand with the decision in X Limited v Morgan Grampian.  The availability of the relief that he seeks does not depend  upon the claimant being committed at this stage to legal proceedings against the tortfeasor.
      Secondly, the defendants refer to the Data Protection Act 1998 and invite me to consider whether it is appropriate to grant the relief sought in the light of the duty imposed upon the defendants as data controllers to comply with the statutory Data Protection principles.
      In response Mr Maloney directs my attention to section 35 of the Act which provides:
 
"(1) Personal data are exempt from the non‑disclosure provisions where the disclosure is required by or under any enactment by any rule of law or by order of a court;
 
(2) Personal data are exempt from the non‑disclosure provisions where the disclosure is necessary:
 
(a) for the purpose of or in connection with any legal proceedings including prospective legal proceedings, or
 
(b) for the purpose of obtaining legal advice or is otherwise necessary for the purposes of establishing, exercising or defending legal rights."
  
Mr Maloney submits that the effect of that section is to preserve the Norwich Pharmacal principles with regard to computer data.
      Mr Style for the first defendant contends that the section is to be given a restrictive construction, namely that the exemption in subsection (2) is limited to the use of data by the data controller.  In other  words, that the exemption arises where it is necessary for the purpose of or in connection with any legal proceedings brought or to be brought by the data controller or for the purpose of the obtaining of legal advice by and for the data controller.
      Had it been the intention of the legislator to limit the exemption in that manner it could, and, in my judgment, would, have done so expressly.  I do not consider that section 35 bears the construction for which Mr Style contends.  The Norwich Pharmacal principles are preserved and not restricted by section 35.
      Third, the first defendant seeks to rely on section 10 of the Contempt of Court Act.  Section 10 provides that:
 
"No court may require a person to disclose nor is any person guilty of contempt of court or refusing to disclose the source of information contained in a publication for which he is responsible, lest it be established to the satisfaction of the court that disclosure is necessary in the interests of justice or national security or for the prevention of disorder or crime."
  
      Mr Style argues that the information sought as to the identity of Z Dust is, to used the wording of the section, the source of information contained in a publication for which he, that is to say the first  defendant, is responsible.  He relies upon X Limited v Morgan Grampian as holding that section 10 is to be given a wide rather than a narrow construction (see the speech of Lord Bridge at page 40H) and that on a wide construction the first defendant is responsible for the publication of postings on its discussion boards.
      However it is important to note that Lord Bridge completed the passage upon which Mr Style relies by going on to explain what he meant by "a wide construction", namely:
 
"It is also now clearly established that the section is to be given a wide rather than a narrow construction in the sense that the restriction on disclosure applies not only to direct orders to disclose the identity of a source, but also to any order for disclosure of material which will indirectly identify the source and applies, notwithstanding the enforcement of the restriction may operate to defeat rights of property vested in the party who seeks to obtain that material."
  
Lord Bridge was not adopting a wide construction in relation to the phrase, "publication for which he is responsible."  I do not consider that Mr Style is assisted by reliance on X Limited in this context.
      I have come to the conclusion that section 10 has no application to the instant facts.  It is concerned with the protection of a journalist's sources and is directed at resolving the tension that may arise between  the public interest in a free press and in enabling justice to be attained by a party seeking to enforce or protect its legal rights.  The journalist is responsible at law for the material which he publishes.  The defendants take no such responsibility.  They exercise no editorial control.  They take no responsibility for what is posted on their discussion boards.  It is noteworthy in this context that the postings on the second defendant's boards carry the statement on behalf of the second defendant:
 
"This content above represents the opinions of the author and does not represent the opinions of Interactive Investor International plc or its affiliates.  You should be aware that the other participants of this discussion group are strangers to you and may make statements which may be misleading, deceptive or wrong."
  
      The defendants simply provide a facility by means of which the public at large is able publicly to communicate its views.  In my judgment, they are not responsible for the publication of such material within the meaning of the section.  But if I am wrong as to that, then, for the reasons which I will subsequently set out, I am satisfied that disclosure is necessary in the interests of justice.  I arrive at that conclusion having taken account of the passages in the speeches of  Lord Bridge and Lord Oliver in X Limited to which Mr Style helpfully invited my attention.
      I turn then to the exercise of my discretion to grant the relief sought.  I am satisfied, first, that much of the content of the Z Dust postings on both defendants' discussion boards is plainly defamatory. Defamation is a tort of strict liability.  The claimant has demonstrated a strong prima facie case against Z Dust.  Secondly, the defamatory material is of a very serious nature, calling into question the claimant's solvency and the competence and integrity of its management and directors.  Third, the concerted campaign waged by Z Dust presents a very considerable threat to the claimant.  The potential audience is vast.  It has no geographical limit.  The claimant, in my judgment, is at risk of serious damage.  Fourth, Z Dust is hiding behind the anonymity afforded by access to the defendants' discussion boards.  Fifth, the claimant has no other practical means of identifying Z Dust.
      I am mindful of the fact that both defendants have a policy of confidentiality with regard to personal information relating to those using its websites and do not wish to deviate from that policy.  But the claimant argues that it simply wants the author of the Z Dust postings to take responsibility for his actions, and  that, when balancing the interests of the parties, the respect for and protection of the privacy of those who chose to air their views in the most public of fora must take second place to the obligation imposed upon those who become involved in the tortious acts of others to assist the party injured by those acts.
      I have no hesitation in finding that the balance weighs heavily in favour of granting the relief sought. To find otherwise would be to give the clearest indication to those who wish to defame that they can do so with impunity behind the screen of anonymity made possible by the use of websites on the internet.
      It follows that I propose to make an order against both defendants in the terms sought by the complainant.

(Submissions re costs followed)

JUDGMENT ON COSTS
 
MR JUSTICE OWEN: 

I do not propose to say anything further as to the form of the order and invite the parties to agree a minute of order for my consideration.
      There remains then the issue of costs.  Mr Maloney argues that the claimant is entitled to the costs of the  action as a whole, which, in effect, is the same as the costs of this application, because I certainly intend to accede to his application to stay the action so that no further costs need be incurred.
      He invites me to make an order for costs in favour of the applicant essentially upon the basis that the defendants have acted unreasonably in refusing to assist the claimant.  He says had they provided that assistance, as clearly they ought to have done, this application would not have been necessary.
      His starting point inevitably is the principle as to costs when an application is made for discovery by reference to Norwich Pharmacal principles.  In such circumstances the party seeking disclosure will ordinarily have to bear the costs of a blameless defendant.
      Mr Maloney argues that the defendants cannot properly be described as blameless in this context.  His reason for making that submission is that the defendants operate discussion boards upon which individuals are free to comment.  He suggests that they run those boards at their own risk.  If it transpires that those boards are used for the purpose of dissemination of defamatory statements, then the defendants ought not to be entitled to the costs of any application made by the victim of  such a tort.
      Mr Style and Mr Cardelle argue, no, that the difficulty in which the defendants are placed is that there is a conflict between their duties of confidence set out in their terms and conditions to those who use their websites and their obligation to assist the victims of tort.  They argue that the balancing exercise may be a very difficult one for them to carry out, and that in those circumstances no blame can be attached to them if they require an applicant to go before the court to make the appropriate order.  Accordingly, they, the defendants, say that there is no reason in principle why I should depart from the ordinary Norwich Pharmacal principles in relation to the costs of this application.
      In my judgment, the situation that arises in such cases is very different from what could be described as the classic Norwich Pharmacal situation.  I consider that there is considerable force in Mr Maloney's argument that those who operate websites containing discussion boards do so at their own risk.  If it transpires that those boards are used for defamatory purposes by individuals hiding behind the cloak of anonymity then in justice a claimant seeking to establish the identity of the individuals making such defamatory contents ought to be entitled to their  costs.
      I have come to the conclusion that it was perfectly plain from the outset that the postings on both websites were highly defamatory and that, accordingly, the claimants were the victims of a sustained campaign amounting to an actionable tort. There was no other way in which the claimants could have proceeded, save by requiring identification of Z Dust from both defendants.
      I accept that the defendants had to carry out the balancing exercise, but in my judgment there was only one answer to that balancing exercise, namely that they should have complied with the requests made by the claimant.  In those circumstances, I order the defendants to pay the claimant's costs of this application/action.