Cream Holdings Ltd & Ors v. Banerjee & Ors

Factual and Procedural Background

Company A, a well-known entertainment business headquartered in The City, dismissed Defendant in January 2001. Upon departure, Defendant removed documents said to evidence serious wrongdoing within Company A and provided them to Company B, a major regional newspaper publisher, without receiving payment. Company B subsequently ran stories alleging corruption involving a senior figure at Company A and a local public official.

On 18 June 2002, Company A (hereafter “Plaintiff”) sought an interim injunction restraining further publication of the material on the basis of confidentiality. Judge Lloyd (the first-instance judge) granted the injunction on 5 July 2002, concluding that Plaintiff had a “real prospect of success” and that the balance of convenience favoured restraint.

Defendants appealed, contending that Judge Lloyd applied the wrong legal test. The Court of Appeal (Judge Simon Brown, Judge Sedley and Judge Arden) dismissed the appeal by majority, although Judge Sedley dissented on the facts. Defendants then appealed to the House of Lords, challenging both the legal test applied under section 12(3) of the Human Rights Act 1998 and the factual assessment of Plaintiff’s likelihood of ultimate success.

Legal Issues Presented

1. The correct interpretation of the word “likely” in section 12(3) of the Human Rights Act 1998 as a threshold for granting interim injunctions that restrict freedom of expression.
2. Whether, applying the correct standard, Plaintiff was sufficiently likely to succeed at trial to justify continuation of the interim injunction restraining publication by Defendants.

Arguments of the Parties

Appellants' Arguments

• “Likely” in section 12(3) means “more likely than not,” setting a higher threshold than the American Cyanamid “serious question to be tried” test.
• Judge Lloyd erred by using a lower “real prospect of success” standard and by over-estimating Plaintiff’s chances of prevailing at trial.
• The information concerned matters of serious public interest, so any restriction constituted an unjustified prior restraint contrary to Article 10 of the European Convention on Human Rights.

Respondents' Arguments

• The documents were plainly confidential, obtained in breach of duty, and their disclosure would irreparably harm Plaintiff.
• Section 12(3) does not require proof that success at trial is “more likely than not”; a “real prospect of success” suffices, especially where confidentiality will be permanently lost if an injunction is refused.
• The balance of convenience favoured maintaining the status quo until a speedy trial could determine the merits.

Table of Precedents Cited

Court's Reasoning and Analysis

The House began by examining the legislative context of section 12, enacted to ensure that freedom of expression receives heightened protection when interim relief is sought against media defendants. It noted that “likely” is a flexible term whose precise meaning shifts with context.

After reviewing pre-existing interlocutory injunction jurisprudence (American Cyanamid), the court observed that Parliament intended section 12(3) to raise — but not rigidify — the standard beyond a mere “serious question.” A fixed “more likely than not” rule would, in practice, thwart urgent protective orders in scenarios where disclosure could cause grave harm yet the merits remained uncertain.

Consequently, the House interpreted “likely” as requiring courts to consider whether the applicant’s prospects are “sufficiently favourable” in the specific circumstances. Ordinarily, this will mean the applicant should show that success at trial is probable, but the court retains discretion to accept a lower threshold when:

• Disclosure threatens particularly severe consequences (e.g., risk to life or safety); or
• A short “holding” injunction is needed to allow proper argument or an appeal to be heard.

Applying that test, the House concluded that the information Defendants wished to publish was of obvious and serious public interest. Judge Lloyd misdirected himself by undervaluing that public-interest element. Viewing the evidence afresh, the House held that Plaintiff’s ultimate prospects were below the generally required “more likely than not” level, and no special circumstances justified departure from the usual standard.

Holding and Implications

Appeal ALLOWED; the interim injunction is discharged in relation to material already supplied to Company B.

The decision clarifies that, under section 12(3) of the Human Rights Act 1998, courts should ordinarily require an applicant to demonstrate that it will probably succeed at trial before imposing prior restraint on publication. However, a flexible, context-sensitive approach remains permissible where disclosure poses exceptionally grave risks or where short-term protection is essential pending fuller consideration. While the ruling relieves Defendants of the immediate restraint, it does not foreclose any damages claim Plaintiff may later pursue, and it sets important guidance for future media-injunction applications.