Attorney General v Blake
|Attorney General v Blake|
|Court||House of Lords|
|Full case name||Attorney General v Blake (Jonathan Cape Ltd Third Party)|
|Decided||27 July 2000|
|Citation(s)|| UKHL 45,  1 AC 268|
|Transcript(s)||Full text of judgment|
|Prior action(s)|| Ch 439|
|Judge(s) sitting||Lord Nicholls, Lord Goff of Chieveley, Lord Browne-Wilkinson, Lord Steyn and Lord Hobhouse|
|Account of profits, breach of contract, restitution|
Attorney General v Blake  UKHL 45 is a leading English contract law case on damages for breach of contract. It established that in some circumstances, where ordinary remedies are inadequate, restitutionary damages may be awarded.
George Blake was a former member of the Secret Intelligence Service (MI6) from 1944 to 1961. For his employment contract, he had signed an Official Secrets Act 1911 declaration to disclose no information about his work. It applied after his employment ceased. In 1951, he became a Soviet agent, thus, being a double agent. He was discovered in 1961 and the British government imprisoned him in Wormwood Scrubs (HM Prison). He escaped in 1966 and fled to the Soviet Union. He wrote a book about it and his secret services work called No Other Choice. He received a publishing contract for its release in 1989, with Jonathan Cape Ltd. The information in the book was no longer confidential. Blake received advanced payments and was entitled to more. The Crown brought an action for all the profits he made on the book including those that he had not yet received. It argued a restitutionary principle should apply.
Lord Nicholls, Lord Goff of Chieveley, Lord Browne-Wilkinson and Lord Steyn held that in exceptional cases, when the normal remedy is inadequate to compensate for breach of contract, the court can order the defendant to account for all profits. This was an exceptional case. Blake had harmed the public interest. Publication was a further breach of his undertaking of confidentiality. Disclosure of non-confidential information was also a criminal offence under the Official Secrets Act 1911. An absolute rule against disclosure was necessary to ensure that the secret service was able to deal in complete confidence. It was in the Crown’s legitimate interest to ensure Blake did not benefit from revealing state information. The normal contractual remedies of damages, specific performance or injunction were not enough, and the publishers should pay any money owing to Blake to the Crown. Lord Hobhouse dissented. He would have held that since the information was no longer confidential, there could be no misuse of confidential information. Lord Nicholls  made the famous statement that [R]estitution for breach of contract must be accepted in some situations. These situations may never be as exceptional as that which we are passing judgment on today, but notwithstanding this there is no other conclusion the court can reach.
- Termination and restitution cases
- Ruxley Electronics & Construction v Forsyth  AC 344
- Experience Hendrix LLC v PPX Enterprises Inc  EWCA Civ 323,  1 All ER (Comm) 830
- World Wide Fund for Nature v World Wrestling Federation Entertainment Inc  EWCA Civ 286
- Trusts cases
- Keech v Sandford (1726) 25 ER 223
- Boardman v Phipps, the strict fiduciary duty in English trusts law to have no possibility of a conflict of interest
- Other contract cases
- Nottingham University v Fischel  EWHC 221 (QB),  IRLR 471, where an employee was held to be under no general fiduciary duty to refrain from undertaking outside private clinic work, but did breach a fiduciary duty where he had directed junior university staff to assist him in that outside work. The latter created a conflict of interest, whereas the former did not since patients would not have used the University's services.
- Hospital Products Ltd v US Surgical Corporation (1984) 156 CLR 41, a senior executive of an American company, Mr Blackman, was held liable to pay heavy compensation for breach of contract for copying the invention of the company when he found it was unpatented in Australia. But, the Australian High Court held Mr Blackman (and his company, Hospital Products Ltd) was not liable to disgorge profits unless some "fiduciary" relationship could be identified. Deane J dissented, holding there could be an account of profits. The dissent was approved by P Birks, 'The Content of Fiduciary Obligation' (2000) 34 Israel Law Review 3, 22
- Adras Building Material Ltd v Harlow & Jones GmbH  RLR 235, Israel Supreme Court holds a person liable for account of profits after breach of an employment contract
-  1 AC 268