Goodwin v NGN Ltd

The Defendant (“NGN”) publishes The Sun newspaper. It applies to vary an injunction dated 19 May. That injunction prohibited the disclosure of information concerning a sexual relationship between Sir Fred Goodwin and a colleague of his at RBS. The relationship continued while she was working for RBS and he was Chief Executive of that bank. The lady is referred to now as “VBN”. The litigation has attracted very wide publicity. This is in part due to the reputation which Sir Fred Goodwin acquired as he led RBS, at first to a number of business successes, but in the end to the brink of collapse. NGN state that he did this by cutting the number of employees and through a series of acquisitions, the last of which was of ABN Amro. RBS had to be rescued with vast sums of public money. When Sir Fred Goodwin left the bank in November 2008 he was contractually entitled to severance terms which were in very large figures. He has since attracted much adverse criticism in the media reflecting public resentment that he could receive such high rewards after presiding over the failure of one of the country’s leading banks. A bank failure on this scale had not occurred in the United Kingdom since the nineteenth century. NGN state that Sir Fred Goodwin had at an earlier stage attracted much adverse criticism from those who disapproved of the policy he carried out at RBS in cutting the number of employees. It is common knowledge that Sir Fred Goodwin has figured very prominently in the media for a number of years, and that in recent years the coverage has been increasingly hostile.

These facts may well explain why NGN consider that articles about Sir Fred Goodwin will be of interest to the public to whom they wish to sell The Sun. But what is of interest to the public is not the same as what it is in the public interest to publish. Newspaper editors have the final decision on what is of interest to the public: judges have the final decision what it is in the public interest to publish.

The case raises important questions as to the circumstances in which the parties to a sexual relationship may or may not hold a reasonable expectation of privacy in respect of that relationship, and when it may or may not be in the public interest for there to be disclosure in the media of the fact (but not the details) of a sexual relationship.

VBN is not a claimant in the proceedings. She would be entitled to be a claimant if she wished, since her private life is as much engaged as that of Sir Fred Goodwin. But she does not have to be a party. She is a party to this application for the reasons explained more fully below. In brief, she is the person who will be the most affected if the variation to the injunction now sought by NGN is granted. Sir Fred Goodwin would not be directly affected by the proposed variation, since the variation that permitted disclosure of his name was made at the hearing on 19 May. VBN had been given no notice of that hearing and was not represented at it, so there had to be this further hearing.

On the afternoon of 1 March 2011 a representative of The Sun contacted Sir Fred Goodwin regarding an allegation that he was having an affair with a lady who was an employee of the bank at a time. The journalist also gave the name of the lady and the department in which she worked. It was suggested to Sir Fred Goodwin that the public interest in publication of the story was the fact that the lady was involved in determining his severance package when he left RBS. I will refer to this as NGN’s “first argument”.

No evidence for this suggestion has ever been produced by NGN and there has been no explanation as to how it ever came to be advanced. If true, it would have been a very serious matter. It would have involved a clear conflict between the lady’s professional duties to RBS and her personal interest in assisting the man with whom she was in a relationship. Sir Fred Goodwin and the lady have both denied that she had any involvement in determining his severance package and that denial is not challenged. Since that initial conversation on 1 March no one on behalf of NGN has mentioned that suggestion again.

Later that same day Mr Tomlinson QC, on behalf of Sir Fred Goodwin, applied for an injunction against NGN to Henriques J. He was the Judge who was hearing out of hours applications at the time. The application was made by a telephone in a conference call to which Mr Spearman QC was also a party, representing NGN. At that hearing no evidence or legal submissions had yet been put on paper. That is a common situation in urgent applications. So each counsel told the Judge what he had been instructed his client would say about the facts, and a detailed note was kept by the solicitors. As the rules of court provide, an applicant for an injunction in those circumstances is required later to lodge a witness statement by him confirming the facts explained to the Judge on his behalf. A defendant is not required to do that unless, at the next hearing to be held a few days later, the defendant opposes the continuation of the injunction.

Mr Tomlinson asked for an injunction to prohibit the publication of any information concerning the subject matter of proceedings which Sir Fred Goodwin intended to commence, or of any information tending to identify him (save for that contained in the court order and any Judgment), or of any information concerning the facts or details of any sexual relationship between Sir Fred Goodwin and the person named in the confidential schedule to the proposed order (now referred to as VBN). At that time the proceedings were anonymised and Sir Fred Goodwin was referred to as MNB.

Mr Tomlinson submitted that Sir Fred Goodwin had a reasonable expectation of privacy in relation to information about his relationship with the lady because the law generally recognises that sexual relationships are private unless the parties choose to make them public. Further, he submitted, that there was no public interest in the disclosure of the fact that Sir Fred Goodwin and the lady had had this relationship.

For NGN Mr Spearman submitted that the affair was being conducted at the time of the disastrous acquisition by RBS of ABN Amro. That acquisition would have led to the collapse of RBS, but for the government bail out which was made with public funds. The argument for NGN was that Sir Fred Goodwin might have been distracted by the affair in particular because of other circumstances of his private life (which he identified, but which cannot be set out in this judgment). Mr Spearman stated that it was not the intention of The Sun to say anything more than that Sir Fred Goodwin was having an affair. There would be nothing published about the details of the relationship.

It is important to note that Mr Spearman also said that the identity of the lady was not of significance for the story, nor was it significant that she was an employee of RBS, nor in what field of employment she worked. Mr Spearman submitted that the only relevance of the fact that the lady also worked for RBS was that that might have made the affair more distracting than it would have been with someone who Sir Fred Goodwin only came across at the weekend. So for that reason the newspaper might wish to publish that she was a work colleague. It will be seen that that argument was very different from the one advanced by NGN before me. At that hearing NGN was expressly disavowing reliance on matters which it is putting at the forefront of its case before me.

Thus the sole argument raised by NGN at that stage was that the relationship with VBN coincided with the disastrous business deal. On that basis NGN submitted that it might have distracted Sir Fred Goodwin’s attention from the business affairs of RBS at the time which was critical to the disastrous takeover. I will refer to this as NGN’s “second argument”.

Henriques J gave a short ex tempore judgment in private recording the submissions for NGN, and rejecting them. Applying the test in the HRA s12 (see below), he was satisfied on the information before him that Sir Fred Goodwin was likely to succeed at trial in establishing that publication of the information in question should not be allowed. He reached this conclusion after finding that Sir Fred Goodwin’s rights under Article 8 were engaged, and that he had a reasonable expectation of privacy, whereas he found no countervailing public interest so as to make it necessary and proportionate to permit The Sun to interfere with that right in the exercise of its right of freedom of expression under Article 10. He held that it was necessary in the interests of justice that Sir Fred Goodwin’s name should not be disclosed at that stage. He ordered that the matter come back before the court on 4 March.

VBN was not present or represented at the hearing. There was no requirement that she should be. But judges are required to have regard to the effect that any order might have on third parties who are not before the court. So Henriques J enquired as to the position of VBN, and, after making his decision, required the parties to inform her of the order he had made.

On 2 March 2011 a claim form was issued and Sir Fred Goodwin made a witness statement. In it he stated that the relationship between himself and the lady was an entirely private matter which neither of them had disclosed to the public, and which had not previously been discussed or mentioned in the media. He said that any suggestion that the lady was responsible for his severance packet was wholly untrue, and that she had nothing whatsoever to do with it. He gave information as to her position in the company. He denied that the affair could have had any impact on his judgment or distracted him from his work at the time of the take over of ABN Amro. He set out facts about the takeover which were well known at the time and which he said demonstrated that his own role in the affair was that of one man amongst very many. There were two other banks involved in the take over (Fortis and Santander); the proposal was approved overwhelmingly by the shareholders of all three banks; there were external advisors; there was another British bank, Barclays, who had been pursuing a possible takeover in competition with RBS; the deal had been approved by regulators in approximately fifty countries and by the FSA; and in December 2010 the FSA concluded that there had been no breakdown of corporate governance in relation to the takeover and that there was no individual wrongdoing. He expressed fears as to the intrusion into his private life that would follow if there were publication of the information about the relationship in question.

On 4 March 2011 the matter came back before the court. Sharp J continued the injunction in substantially similar terms. At that hearing Sir Fred Goodwin was still referred to only by the letters MNB.

NGN abandoned its second argument before the hearing on 4 March. If NGN had wished to oppose the continuation of the injunction at the hearing on 4 March, it would have had to put evidence before the court as the basis of its legal submissions. NGN put no evidence before the court. The same applies to any other newspaper or person notified of the order. If any such third party had wished to oppose the continuation of the injunction on 4 March (or at any later date) it would have had to put evidence before the court, and make submissions. No third party has done that.

Sharp J gave a public judgment [2011] EWHC 528 (QB). This was a reserved judgment given on 9 March. In paragraph 1 of that judgment she recorded how the matter had come to be heard on 1 March 2011 by Henriques J. She stated that, of two public interest justifications for the proposed publication advanced initially for NGN, one had already been abandoned by the time of the hearing before Henriques J. In para 5 of her judgment she stated that, at the start of the hearing before herself, she had been told that the application for an interim injunction was no longer opposed. Subject to its right to apply to discharge or vary the order, NGN had agreed that the order should continue until trial or further order. Thus the second public interest argument (that Sir Fred Goodwin might have been distracted by the affair) was also abandoned by then.

Sharp J went on to state in para 6 of her judgment the following:

“There is no doubt in my view that the Claimant's article 8 rights are engaged, both in relation to the subject matter of the action, and the identification of him as the Claimant. There is no doubt either that publication of the information as to the fact or details of the affair will result in some interference with the Claimant's private life. It is not currently suggested by the Defendant that there is a public interest in the publication of the information or that there is any other reason for it to be disclosed. It is not suggested for example that the information was in the public domain. I am satisfied in accordance with section 12(3) of the Human Rights Act 1998 that the Claimant is likely to establish at trial that publication of the information should not be allowed.”

The remainder of her judgment was devoted to explaining why the hearing was in private, why Sir Fred Goodwin was being granted anonymity, and what could be published about the case.

This part of Sharp J’s judgment has been substantially misreported. It was reported that in Parliament Mr Hemming MP had said that she granted an injunction prohibiting calling Sir Fred Goodwin a banker. She did not. What she prohibited was reporting the proceedings in terms which identified Sir Fred Goodwin as the claimant. This prohibition included referring to the applicant for the injunction as a banker, because that would be information which might tend to identify Sir Fred Goodwin as being the applicant. That would defeat the court’s purpose in granting anonymity to him. The reporting of the supposed injunction prohibiting the identification of Sir Fred Goodwin as a banker did not explicitly identify Sir Fred Goodwin as the claimant in this case, although some understood the publicity as giving a hint that it was him.

On 19 May 2011 in the morning there were numerous media reports that in the House of Lords Lord Stoneham, speaking on behalf of Lord Oakeshott, had identified Sir Fred Goodwin as the applicant for the injunction in question. Lord Stoneham was frustrating the purpose of the court order and thus impeding the administration of justice, but he was doing so under the protection of Parliamentary privilege. If he had identified Sir Fred Goodwin in words spoken outside Parliament he would have been interfering with the administration of justice, or committing a contempt of court, as it is called.

In the light of this development NGN gave notice to Sir Fred Goodwin that it would apply to vary the injunction so as to permit the name of Sir Fred Goodwin to be published in the newspapers as the person who had applied for the injunction. That afternoon there was a hearing before myself. Sir Fred Goodwin appeared as did NGN, MGN (the publisher of the Mirror and the Sunday Mirror) and Associated Newspapers Ltd (“ANL”, the publisher of the Daily Mail and the Mail on Sunday). At the start of that hearing Sir Fred Goodwin accepted that the injunction should be varied so as to permit the identification of himself as the claimant and applicant for the injunction.

At hearing neither NGN nor the two third parties put any evidence before the court.

NGN also sought a wider variation of the injunction, which I did not accept. The order continued in a form which prohibited the publication of any information identifying, or tending to identify the person named in the confidential schedule, as being the person with who the claimant was alleged to have had a sexual relationship (save for that contained in the order of the court and any public judgment of the court given in this action). The order also prohibited publication of any information concerning the details of any alleged sexual relationship between the claimant and the person in question.

But the order did permit NGN to apply to vary the order on condition that if the variation it sought might affect the rights of the lady named in the confidential schedule or her family, she must be given three clear days’ notice in writing of the application. Notice was later given to the lady of the present application. It was not three clear days notice, but no point is taken on that.

On 23 May I handed down a public judgment [2011] EWHC 1309 (QB). In it I set out what had happened in the case, and my reasons for making the order that I made on 19 May. These reasons included the fact that the lady had not been given any notice that the court was to be asked to withdraw the anonymity which the injunction of 4 March gave to her (paras [24]-[26]). I also corrected a number of inaccuracies that had been published about the case (paras [9]-[10]).

ANL appeared at that hearing, as any third party affected by an injunction is entitled to do. ANL (then represented by Mr Caldecott QC) raised a new (the third) argument on public interest, namely that if there was a relationship between Sir Fred Goodwin and a lady who was a work colleague, then that by itself would be a serious failure of corporate governance and might be in breach of the RBS Group Code of Conduct on Integrity Matters (dated 2007) (“RBS Code”). I shall refer to this as the “third argument”. However, as stated in paragraph [21] of the judgment, no notice of this new case had been given to Sir Fred Goodwin or to the lady, and there was no evidence that it had been investigated by or on behalf of ANL or anyone else.

No one on behalf of NGN has ever asked VBN anything about this case. On 1 March NGN did not ask for her comments on the suggestion that she had been involved in arrangements for Sir Fred Goodwin’s severance package. NGN has not adduced any evidence as to the enquiries that it has made with RBS (but see now para 149 below), or anyone else who might have been concerned in the ABN Amro takeover, whether Sir Fred Goodwin was distracted, or as to any other aspect of the case. But in the evidence for VBN adduced before me VBN states that it came to her knowledge that NGN had contacted RBS in February. There is no other evidence about that contact.

On 27 May the matter came back before the court for the fourth time. On this occasion the applicant was VBN, although she was not yet referred to in that way. Mr Tomlinson QC appeared for her. He asked me to refer to the Attorney General a publication made in the issue of the Daily Mail dated 20 May 2011, which he submitted was in contempt of court, in that it impeded the purpose the court had sought to achieve by making the previous orders in this case. I declined to make the reference as requested, but I did set out a number of facts relating to the case which, if the Attorney General so chose, he would be able to consider.

In the Daily Mail ANL had published certain pieces of information about VBN. She complained that some of the information was accurate and would tend to identify her. She also noted other information which had been printed which she said was incorrect. A piece of information she said was incorrect was that the Daily Mail said that she had been promoted while Sir Fred Goodwin was in charge of RBS. Counsel for ANL (Mr Caplan QC) did not disagree when Mr Tomlinson informed the court that that information was false.

So up until this point, no evidence had been put before the court on behalf of NGN or any third party in opposition to the continuation of the injunction.

On 26 May 2011 NGN gave notice of its intention to apply to vary the order I made on 19 May so as to permit the identification of the lady named in the confidential schedule. The form of draft order made clear that there was no intention to seek a variation of the order which might permit publication of any sexual or salacious information, or any photographs of the lady or any members of her family.

The application was supported by two witness statements, the first evidence to be put before the court by NGN in this case. Mr Hawkes, the business editor of The Sun, raised two matters in his witness statement. First he stated that he believed that the lady had been promoted while Sir Fred Goodwin was Chief Executive of RBS. The grounds for his belief that he gave were in a document.

Miss Proudler of Olswang was by now instructed to act as solicitor by VBN (in addition to her previous instructions to act for Sir Fred Goodwin). In her witness statement dated 31 May 2011, Ms Proudler explained that Mr Hawkes had misinterpreted the document he referred to. Ms Proudler stated that VBN has not been promoted as Mr Hawkes believed. NGN now accept that that is the true position. The suggestion that the lady had been promoted while Sir Fred Goodwin was Chief Executive is no longer pursued by NGN. I shall refer to this as NGN’s fourth argument. It is the third argument that has been abandoned.

The second point advanced by Mr Hawkes in his witness statement related to the position in RBS held by VBN, and to the fact, as he asserted it to be, that there had been no disclosure to anyone else at RBS of the relationship between herself and Sir Fred Goodwin. Mr Hawkes stated that the relationship between them led to a serious conflict of interest on the part of both of them. This is the third argument, the one initially raised on 19 May by ANL.

The RBS Code includes the following provisions on page 11.

“Conflicts of Interest

So that you can undertake your job properly, maintain your objectivity and impartiality and ensure that your judgment could not be compromised, you should not put yourself in a position where your personal interests could conflict with the interests of the Group. For these purposes the term “Interests of the Group” is taken in its widest sense.

You have a responsibility to act in the interest of the Group and must not misuse your position or any information obtained in the course of your employment to further your private interests – or those of anyone you have a relationship with…

How will I know if I have a conflict of interest?

If, in the context of performing your duties, it could be suggested that you are acting in your own interests or those of another person with whom you have a relationship, rather than in the interests of the Group, you may have a conflict of interest.

Possible conflicts of interest relationships and associations.

For these purposes, the term “relationship” is taken in its widest sense – from playing football with a customer to sharing membership of the same private club or society with a supplier to forming a close personal relationship with a colleague.

While the Group entirely respects the right of every one of us to form friendships and personal relationships at work, there will be occasions when it will be appropriate to tell your manager about a relationship that may impact on your work by creating a conflict of interest.

Here are some examples of when it would be appropriate to notify your manager of a potential conflict of interest:

- You are working under a dual control procedure and have a close personal relationship with your dual control partner

- You are conducting an investigation or a hearing under the disciplinary procedure in which an employee with whom you have a personal relationship is implicated…”

At page 12 of the RBS Code it is stated that the onus is on the employee to identify when it is appropriate to inform a manager of any relationship or association that had potential to create a conflict of interest.

At page 29, in a part of a section of the RBS Code of Conduct related to Group Security, and under the heading “Making a Disclosure within the Group”, there is guidance as to what amounts to an event which ought to be notified to more senior management. These events include matters which are commonly referred to as whistle blowing. The guidance is that such matters should first be raised with an employee’s immediate line manager, and if this is felt to be inappropriate, then it should be raised with a more senior manager or other persons whose job description is given in the RBS Code.

Mr Hawkes also referred to a publication from the FSA encouraging whistle blowers to “first use whistle blowing procedures in the workplace”.

Mr Hawkes went on to state that the position in RBS held by the lady is sufficiently senior that she might be a person to whom a whistle blower might turn to make a disclosure. The fact that she was in a relationship with Sir Fred Goodwin while he was Chief Executive created the obvious risk (he said) that confidential information disclosed to her might, perhaps inadvertently, be disclosed to him, or that she might feel herself to be in a position where her duty to RBS conflicted with her personal obligations to him in relation to the disclosure made to her. Mr Hawkes stated that any employee who might have wished to consider making a disclosure to the lady would be entitled to know of her relationship with the Chief Executive. That may be relevant to the employee’s decision whether to address concerns, or give notification, to the lady or to some other senior manager.

Mr Hawkes stated that it is a matter of public interest that Sir Fred Goodwin and the lady permitted this state of affairs to continue whilst he was Chief Executive.

Mr Hawkes referred to press cuttings about three other cases where a relationship between the Chief Executives of a large corporation and an employee had given rise to conflicts of interest. In one case the cutting reported that the lady had left the company, in another it was the Chief Executive who was ousted and in a third the Chief Executive had resigned.

Mr Hawkes referred to the investigation which the FSA is currently making into the allegations about the relationship between Sir Fred Goodwin and the lady. He stated that there should be full public discussion of these matters at this stage and that such discussion should not await the outcome of that investigation.

He further exhibited an article in the Financial Times dated 24 May 2011. He noted that, according to that article, an internal enquiry by RBS has concluded that the lady “played no part in key strategic decisions at the bank” and “did not compromise the bank in any way”. But he stated that that misses the point that is important in the present application. The public is still entitled to discuss these matters, and discussions are not concluded by that internal investigation.

The article in the Financial Times also reports a source who is not identified as saying “We have only known about this for several weeks” and the writer adds:

“It is not believed Sir Fred or the woman in question disclosed the alleged relationship to their superiors – neither Sir George Matthewson nor Sir Tom McKillop, who both held the role of chairman when Sir Fred ran the bank, were told. Similarly, the Financial Services Authority is not thought to have had prior knowledge of the alleged affair…”

The application is also supported by a witness statement from Mr Hancock, who is the Member of Parliament for West Suffolk. He worked as an economist at the Bank of England until 2005. He now sits on the Public Accounts and Standards Privilege Select Committees. He stated that it is his belief that it is strongly in the public interest that there be published the information that the lady holds the senior position that she does with RBS, and that she did so during the time she was having an affair with Sir Fred Goodwin at the time when he was head of the bank and the affair was not disclosed. He refers to the number of employees for whom the lady is likely to have had responsibility and that that responsibility included possible whistle blowing disclosures. He stated that the matter cries out for independent investigation and that public confidence in any investigation can only be maintained if the public are given the facts now.

Mr Hancock’s evidence is not evidence of any fact in the case. It was adduced in support of an argument which NGN has advanced, but which, in the event, I have not had to consider. The argument is that a reasonable belief on the part of an editor that a matter is of public interest is a factor that the court has to take into account in deciding whether it is in the public interest for something to the published.

Ms Proudler stated that VBN did not notify her relationship to her manager (and the person she reports to is identified) “because there was no relationship that might impact on her work by creating a conflict of interest”. RBS has known about the relationship since February 2011, when they were informed by a journalist from The Sun. An internal investigation has been conducted by RBS. VBN has not been criticised or disciplined as a result and it has not been suggested to her by anyone at RBS that she was in a position of conflict or in breach of the RBS Code. The parts of the Financial Times article referred to by Mr Hawkes are consistent with VBN’s understanding of the position, namely that RBS is satisfied that there was no necessity for her to disclose a personal relationship with the Chief Executive Officer.

VBN remarked that NGN has provided no explanation of why any conflict of interest should arise out of a relationship between the Chief Executive Officer, who is responsible for strategic direction of a substantial business, and a person in her position, which she described.

VBN confirmed that no employee of RBS had ever made a whistle blowing disclosure to her, and she stated that it was not likely that any would do so. She described dedicated arrangements that RBS has put in place for whistleblowers.

Ms Proudler also gave a very brief account of the personal circumstances of VBN. VBN stated that she is a private person, with a family, who has never spoken to the media about any private matters. She first met Sir Fred Goodwin in the company of large numbers of other people in the course of her work, but when she met him “personally” it was “in a social context”. She did not say anything about her own marital status. She mentioned “a number of family members and associates”, but refers specifically to only one member of her family. She identified that person in order to explain her concerns about the humiliation that person might suffer if her name were to be published by NGN. She made clear that at some point some people had come to know about her relationship with Sir Fred Goodwin, but she did not make clear when or how they came to know about it. Nor did VBN state in terms whether she told anyone at work about it. All that she said is that “there has already been disclosure identifying details” about her in a national newspaper and that “this has led to her being identified by a number of people with whom she works and with whom she has business relationships”. I infer from this that she is saying that no one with whom she works knew about her relationship with Sir Fred Goodwin before the publication in the national newspaper, and the publication was in relation to these proceedings, and so in 2011.

VBN stated that publication of her name by NGN would be a very serious intrusion into her private and family life. She referred to occasions when her identity has been published, but states that in spite of that, it has not become generally known. She distinguishes such publications from publication in the press and broadcast media which would inevitably come to the attention of those she deals with on a daily basis, which she stated would be extremely intrusive. She referred to people known to her who have already been persistently approached by journalists, and she fears that such approaches would intensify if the injunction were varied to permit NGN and the press and broadcast media to identify her.

Ms Proudler stated that VBN asked her “not to go into details of these matters because she is concerned that material put before the court may find its way into the public domain”.

The court has powers to prohibit the publication of information provided to the court, and all the orders made in this action have included provisions designed to achieve that. VBN is entitled to choose what evidence she puts before the court, whatever her reasons for that choice may be. But if she does choose not to put evidence before the court, the court will be able to act only upon the evidence that is before the court.

While there is more evidence than I can set out in this judgment, the upshot nevertheless is that there is very little evidence indeed before the court about the personal circumstances of either Sir Fred Goodwin or VBN.

Mr Spearman did not ask me to doubt, and there is no reason to doubt, the truth of what VBN stated about the facts of her business and family position and the approaches she and others have received.

Sir Fred Goodwin did not adduce any evidence for the purpose of this application. But his witness statement of 2 March is before the court. In it he too gives very little detail about his personal circumstances.

Sir Fred Goodwin stated that:

“the nature of any relationship between me and [VBN] is an entirely private matter. In so far as it is necessary to do so, I am content for the Court to proceed on the basis that there was a relationship as stated by The Sun to my representative. I have not disclosed any such relationship to the public and it has not been discussed or mentioned in the media. I am advised that, for the purposes of an application to restrain the misuse of private information, the truth or falsity of The Sun’s claims is legally irrelevant and I will not say anything further about it…

I am a private man. I have never discussed my personal life or relationships in public. …

I believe that publication of the Confidential Information would also lead to considerable intrusive and disturbing speculation as to my private life and relationships, including on the Internet. If the Confidential Information were disclosed publicly, this would inevitably also reach friends, colleagues and other business contacts, not just in the United Kingdom but worldwide. This would have a very substantial impact on the way in which friends, colleagues and business contacts relate to me and therefore a serious negative impact on my personal life and career”.

I infer from this that Sir Fred Goodwin is content that the court proceed on the basis that he did have a relationship with VBN, as alleged by The Sun, that he had not told any of his friends or colleagues at work about it, and that his friends and colleagues would view the relationship with serious disapproval, albeit for reasons which are not there set out.

Mr Spearman for NGN and Mr Tomlinson for VBN each submit that the law requires the application of a two stage test. They cite the decisions of the Court of Appeal in McKennitt v Ash [2008] QB 73 at para [11], Lord Browne of Madingley v Associated Newspapers Ltd [2008] QB 103 at para [37] and ETK v News Group Newspapers Ltd. [2011] EWCA Civ 439 at para [10].

Mr Spearman set out the position in his skeleton argument, in terms which I adopt (with some alterations), as follows:

On an application for an interim injunction the effect of s.12(3) is that it is for the applicant to satisfy the court that she is likely to succeed at trial. In the present case, the application is by NGN and it is for a variation of an injunction. But VBN is opposing the application by contending that the injunction granted on the application of Sir Fred Goodwin (and subsequently varied) should be maintained. She is in the position of an applicant for an injunction. It follows that the burden is upon her to satisfy the court of the matters upon which it is required to be satisfied by HRA s.12.

In the law of privacy there has been some recognition in the authorities of the concept of a public figure, defined as those who exercise public or official functions (as appears from the words I have italicised in the following citations).

In Campbell v MGN Ltd [2004] AC 457 Baroness Hale said at [158-159]:

“There are undoubtedly different types of speech, just as there are different types of private information, some of which are more deserving of protection in a democratic society than others. Top of the list is political speech. The free exchange of information and ideas on matters relevant to the organisation of the economic, social and political life of the country is crucial to any democracy. Without this, it can scarcely be called a democracy at all. This includes revealing information about public figures, especially those in elective office, which would otherwise be private but is relevant to their participation in public life. Intellectual and educational speech and expression are also important in a democracy, not least because they enable the development of individuals' potential to play a full part in society and in our democratic life. Artistic speech and expression is important for similar reasons, in fostering both individual originality and creativity and the free-thinking and dynamic society we so much value. No doubt there are other kinds of speech and expression for which similar claims can be made. But it is difficult to make such claims on behalf of the publication with which we are concerned here. The political and social life of the community, and the intellectual, artistic or personal development of individuals, are not obviously assisted by pouring over the intimate details of a fashion model's private life.”

In the same case Lord Hoffmann said at [56] and [60]:

“Take the example I have just given of the ordinary citizen whose attendance at NA is publicised in his local newspaper. The violation of the citizen's autonomy, dignity and self-esteem is plain and obvious. Do the civil and political values which underlie press freedom make it necessary to deny the citizen the right to protect such personal information? Not at all. While there is no contrary public interest recognised and protected by the law, the press is free to publish anything it likes. Subject to the law of defamation, it does not matter how trivial, spiteful or offensive the publication may be. But when press freedom comes into conflict with another interest protected by the law, the question is whether there is a sufficient public interest in that particular publication to justify curtailment of the conflicting right. In the example I have given, there is no public interest whatever in publishing to the world the fact that the citizen has a drug dependency. The freedom to make such a statement weighs little in the balance against the privacy of personal information…The relatively anodyne nature of the additional details is in my opinion important and distinguishes this case from cases in which (for example) there is a public interest in the disclosure of the existence of a sexual relationship (say, between a politician and someone whom she has appointed to public office) but the addition of salacious details or intimate photographs is disproportionate and unacceptable. The latter, even if accompanying a legitimate disclosure of the sexual relationship, would be too intrusive and demeaning.”

The majority opinion in Von Hannover v Germany (2004) 16 BHRC 545; (2004) EMLR 21 stated (among other things) the following:

“(1)

a fundamental distinction needs to be made between reporting facts – even controversial ones – capable of contributing to a debate in a democratic society relating to politicians in the exercise of their functions, for example, and reporting details of the private life of an individual who, moreover, as in this case, does not exercise official functions. While in the former case the press exercises its vital role of ‘watchdog’ in a democracy by contributing to ‘imparting information and ideas on matters of public interest’ it does not do so in the latter case” [63];

(2)

… the decisive factor in balancing the protection of private life against freedom of expression should lie in the contribution that the published photos and articles make to a debate of general interest” [76]”.

This test of contribution to a debate of general interest was adopted by the Court of Appeal in Ntuli v Donald [2011] 1 WLR 294 at para [20].

There is no dispute that the fact that parties are in a sexual relationship may, in principle, be a fact in respect of which they have a reasonable expectation of privacy. What I set out next was not in dispute between the parties, except where indicated.

Mr Spearman accepts that where there might otherwise be such an expectation, it will not necessarily be defeated by the fact that the two parties to the relationship work for the same employer.

In the case of RBS, the RBS Code expressly recognises that RBS “entirely respects the right of every one of us to form friendships and personal relationships at work”. What the Code requires is that on occasions “it will be appropriate to tell your manager about a relationship that may impact on your work by creating a conflict of interest”. As Mr Tomlinson points out, the RBS Code does not require that anyone else be told, and in particular it does not require that the newspapers be told.

In ETK at para [11] Ward LJ held that the parties to the sexual relationship between two people who were working together had a reasonable expectation that their work colleagues who knew about the relationship would keep that information confidential. But in that case there was no argument to the effect that the parties to that relationship did not have such a reasonable expectation, save on the basis that the fact that it was known to some other people might itself defeat that expectation (in effect, that it might have been in the public domain). It does not appear to have been a case where one party was a very senior executive and the other an executive of some less senior rank.

There are various categories of information which may be the subject of a reasonable expectation of privacy, and some of these were considered by the courts in Browne. Two that are material to the present case were “(b) the alleged misuse of BP’s resources and manpower to support and assist JC” and “(c) the bare fact of the past relationship between JC and Lord Browne”. At that time Lord Browne was the group chief executive of BP.

At para [53] the Court of Appeal held that “it was open to the judge to hold that the claimant had no reasonable expectation of privacy with regard to the use of BP equipment and resources”. The court was approving the reasoning of Eady J at para [50] of his judgment. He had held that the claimant had failed at the first stage of the enquiry. He had asked himself at para [43]:

“43 … One may ask whether there can be a reasonable expectation that the law will protect the privacy of a senior executive, in relation to the use of corporate information and resources, when the effect would be to keep such allegations from those who might ordinarily be expected to make the relevant judgments, or exercise supervision; that is to say, shareholders and colleagues on the board of directors. For example, they might wish to know that a company was set up (to enable JC to deal in ring-tones for mobile phones) with the assistance of [BP] personnel. It is at least accepted by the claimant that his personal assistant helped with "secretarial tasks". The company no longer trades.

44.

Mr Spearman [who then appeared for Lord Browne] has argued that these matters, if they are to be criticised at all, should be regarded as relatively trivial. There is, for example, a dispute as to the extent to which [BP] personnel were involved in the project. He may well be right, but it seems to me that it is not desirable for the court to make a value judgment on such behaviour in a corporate context: more specifically, if the circumstances call for a judgment to be made on relative gravity, it is not for a judge to help him keep the information from those whose right and responsibility it is to make it.”

Having upheld the judge’s decision on that point, the Court of Appeal went on to consider whether publication of the bare fact of the relationship between the claimant and JC should be permitted. At para [59] the Court held that there was

“a sufficient reason to permit publication of the bare fact of the relationship. Publication of the information in categories b) and d) would make no sense without publication of the nature of the relationship between the claimant and JC” (the information in category (d) was an alleged breach of a duty of confidence owed by the claimant to BP in discussing BP’s affairs with JC).

In the present case Mr Spearman did not clearly distinguish in his submissions between the first and the second stages of the court’s approach as laid down in cases such as McKennitt. As he summarised his written submissions:

“Any confidentiality or reasonable expectation of privacy that the lady (and [Sir Fred Goodwin]) may succeed in establishing at trial with regard to the revelation of the identity of the lady (or at least the role she had at RBS) would be outweighed by the Article 10 rights of the freedom of expression of NGN to impart and of the general public to receive information and ideas”.

Mr Tomlinson submits that the real and only question in the present case is the one that arises at the second stage, and that Mr Spearman had effectively conceded the first stage, namely that Sir Fred Goodwin and VBN did have a reasonable expectation of privacy.

It is true that the main weight of Mr Spearman’s submissions did appear to be directed mainly to the second stage, but I did not understand him to concede that the first stage was satisfied in this case. It seems to me that Mr Spearman’s submissions are better considered at the first stage of the enquiry. That is how the Court of Appeal approached a similar issue in Browne as I note in para 74 above.

I have sympathy with Mr Tomlinson in that the case for NGN has changed at each hearing of these proceedings (as described above), and the case advanced before me on this application is a case that could have been, but was not, advanced at an earlier hearing.

Moreover, although the case now advanced on public interest is one that is open to NGN on the basis of the evidence adduced before me, it is remarkable that that is all the evidence that NGN has chosen to advance. As Mr Tomlinson points out, NGN has not given evidence as the investigation it has made into this matter, it has not asked any questions of VBN, and the only evidence of investigation is the approach to RBS referred to by VBN herself, and the initial and very limited approach to Sir Fred Goodwin on 1 March which caused him to set these proceedings in motion. Thus it has had to rely on the article in the Financial Times as the only source of information that it has disclosed. There must, of course, also have been a report by a source to NGN about the relationship, but journalists do not normally disclose their sources, and it is not surprising that NGN gives no evidence about that.

NGN submits that in this case there was no reasonable expectation of privacy in respect of this particular relationship between Sir Fred Goodwin and VBN, because he was Chief Executive of RBS at the time and she was an employee holding a senior position. In the alternative, Mr Spearman submits that, if the second stage is reached, it is in the public interest that the fact of the relationship be disclosed. He stresses that all that is in question is the fact of the relationship, not any intimate or salacious details, or even photographs.

Mr Tomlinson submits that a reasonable expectation of privacy is a concept which must be applied with some flexibility in the light of the circumstances of the case. There may be a reasonable expectation of privacy confined to a very small class of other persons, or one that extends to a larger class, or no such expectation at all.

As I understand the submission, it can be illustrated by the examples given in the RBS Code. So, if two employees of RBS working under a dual control procedure have a close personal relationship with one another, they cannot have a reasonable expectation that their relationship will be kept so private that no one else working for RBS may know about it. If such a couple were to attempt to keep the fact of their relationship unknown to anyone at RBS, then a third employee of RBS who came to know about it would be entitled, and may be bound, to notify a manager at an appropriate level of seniority – in other words to blow the whistle.

Mr Tomlinson refers to the distinction drawn by the Court in Browne at para 61:

“It appears to us that there is potentially an important distinction between information which is made available to a person’s circle of friends or work colleagues and information which is widely published in a newspaper”.