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Judgment of the Court of Appeal, London

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IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

CHANCERY DIVISION (INTERLOCUTORY LIST)

(MR JUSTICE VINELOTT)

CH 1986 C. No. 6140

Royal Courts of Justice,

Thursday 22nd October 1987.

Before:

LORD JUSTICE FOX

SIR GEORGE WALLER


CHURCH OF SCIENTOLOGY OF CALIFORNIA

(Plaintiffs/
Appellants)

V

MILLER & ANOR
(Defendants/
Respondents)


(Transcript of the Shorthand Notes of The Association of Official Shorthandwriters Ltd., Room 392 Royal Courts of Justice, and 2 New Square, Lincoln's Inn, London, WC2A 3RU)


MR A. NEWMAN and MR J. ALGAZY (instructed by Messrs. Hamida Jafferji, Solicitors, London N4.) appeared on behalf of the Appellant.

MR GAVIN LIGHTMAN, Q.C., MR M. BRIGGS and MR P. JONES (instructed by Messrs. Peter Carter-Ruck & Partners) appeared on behalf of the Respondents.

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Revised Judgment

LORD JUSTICE FOX: Before giving judgment I would say for the convenience of the parties that this appeal will be dismissed.

This is an appeal by the plaintiff from a decision of Vinelott J. refusing to grant an interlocutory . the United States, including the United Kingdom. Those subsidiaries and associations, together with the plaintiffs can for convenience be referred to as the "Church".

The Church was founded by L. Ron Hubbard. Mr Hubbard died in January 1986.

The defendant, Mr Russell Miller, has written a biography of Mr Hubbard called "Bare-Faced Messiah". The second defendant, Penguin Books, is the intended publisher through their subsidiary Michael Joseph Limited. The intended publication date is 26th October -- that is to say, Monday next.

Pursuant to an order of Nicholls L.J. (after the decision of Vinelott J. had been given) pending this appeal, Penguin Books were at liberty to distribute copies of the book to their wholesalers and retailers upon terms that the book should not be published or sold before 26th October. As I understand it, Penguin Books have distributed accordingly.

The plaintiffs seek, in effect, an injunction restraining publication of the book in its present form. The grounds upon which the injunction is sought are as follows:

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1. It is claimed that the plaintiffs are the owners of copyright in two photographs, one of which, of Mr Hubbard alone, appears on the dust cover of the book, and the other is in the body of the book. Breach of copyright is asserted.

2. That the book contains quotations from and material derived from diaries and letters of a confidential character which were communicated in confidence by the plaintiffs to an employee of theirs, a Mr Gerald Armstrong and that the plaintiffs are entitled to prevent the disclosure of such documents or their contents by a person who becomes aware of their confidential nature.

3. That the documents were obtained by Mr Miller in breach of certain orders of the court of the State of California.

As regards the dust cover photograph, Mr Miller's case is that this is what one might call "publicity material" handed out at the Church's College at East Grinstead to a publicity agency from which he obtained it. The Church says that the photograph handed out (lawfully they admit) as publicity at East Grinstead, was a different photograph. The two photographs are very similar. The photograph on the dust cover of "Bare-Faced Messiah" is not an exact reproduction of the one in which the plaintiffs claim copyright. It has been reproduced in such a way as to make it a striking photograph.

The photograph supplied to Mr Miller by the publicity agency could be reproduced in the same way as that on the dust cover so as to be virtually indistinguishable from it.

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The judge concluded (rightly, I think) that there was no likelihood that the Church could be damaged by any breach of copyright resulting from the publication of that photograph.

The other photograph seems to be merely a snapshot. The plaintiffs say that it was taken by an official photographer employed by them. The defendants say that it was taken by an employee of the Church for their own purposes, and was merely a snapshot and nothing more. I agree with the judge that whichever version is true, the publication of the photograph could not damage the plaintiffs.

In those circumstances, the judge refused interlocutory relief regarding the photographs. I should say that I accept that there are triable issues as to the actual existence of copyright.

I come then to the documents with which this case is concerned. They consist of the following:

(1) The diaries between the years 1927 and 1929 of Mr Hubbard (the "diaries").

(2) A letter to Mr Hubbard from his mother (the "mother's letter").

(3) A letter from Mr Hubbard to his wife Polly (the "letter to Polly").

(4) Three letters written by Mr Hubbard to a lady called Helen O'Brien (the "letters to Helen").

It would appear that Mr Armstrong was a senior employee of the plaintiffs. He was employed, so far as is relevant to this case, to compile and preserve Mr Hubbard's personal papers. At that time Mr Hubbard was alive. The plaintiffs say that Mr Armstrong's employment was on the footing that

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he would preserve the confidentiality of all documents given into his keeping for the purposes of his duties. Later on a Mr Garrison was appointed as official biographer of Mr Hubbard by the Church. Mr Armstrong then became, in effect, his research assistant.

Mr Armstrong eventually left the employ of the Church, and when he did so he took with him a substantial number of the documents relating to Mr Hubbard. They are referred to as the "archival documents". They included the documents in issue in this case to which I have already referred.

The plaintiffs and Mr Hubbard took proceedings in the courts of California to recover the archival documents. That claim was heard by Judge Breckenridge. In June 1984 the judge gave a Memorandum of intended decision. Mr Armstrong had pleaded that he was entitled to remove the material and lodge it with his attorney for his own protection. He said he feared unlawful harrassment by the Church; he relied on what is called the "fair game" doctrine.

Judge Breckenridge held that Mr Armstrong had been guilty of conversion but he upheld the defence. He ordered that the documents were to remain with the court pending a further hearing. He found that neither the Church nor Mr Hubbard had "clean hands" and held that at that moment in time they were not entitled to the immediate return of the documents, or other material retained by the court Clerk. He said that all exhibits received in evidence in the suit marked for identification, unless specifically ordered sealed, were matters of public record and should be

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available for public inspection or use to the same extent that any such exhibits would be available in any other law suit.

There then followed a series of orders of the superior courts in California, in which in effect the judgment of Judge Breckenridge was stayed, or stays were temporarily removed for short periods. It is a somewhat complex issue, but it is said on behalf of the defendants that these stays opened a number of "windows" which enabled public inspection of the documents. There are, however, disputes between the parties as to when the orders lifting the stays were actually given effect to. The defendants say that that does not matter because there was nothing to prevent Mr Armstrong's attorney, Mr Flynn, releasing copies of exhibits which he had in his possession in accordance with the original order of Judge Breckenridge as soon as the order raising the stay had actually been made and was perfected by the court making it.

It is the defendants' case that Mr Miller obtained copies of the diaries and the mother's letter from Mr Atack who, in turn, obtained them from a photocopying agency employed by Mr Flynn; and that they were supplied during a period when the order of Judge Breckenridge that exhibits (which these were) should be made available to the public, was in force -- during what I may call a "window" period.

Vinelott J. accepted (and I agree) that there is a triable issue whether there was a period during which Mr Flynn was entitled to release to others copies of the exhibits in the Californian action. He also held (and

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I agree) that the suggestion that there was never the faintest chink in the "window" was flimsy.

The letter to Polly and the letters to Helen were not exhibits. The defendants' claimed before the judge that upon the true construction of Judge Breckenridge's order, they were free to deal with them. The judge thought that that construction was strained-- and it is not necessary for me to pursue that matter.

However, the defendants further say that Mr Miller did not obtain these latter documents from Mr Armstrong or Mr Flynn. It is said that the letter to Folly was obtained from a source which Mr Miller is reluctant to disclose; but that Mr Miller obtained the letters to Helen from a Mr Newman.

The conclusions of the judge were as follows:

(1) The plaintiffs' claim that the defendants could not properly have obtained the Court documents in the course of the Californian proceedings, while they were available to the public, is flimsy.

(2) There is a triable issue as to whether the defendants obtained the remaining documents (the letter to Polly and the letters to Helen) from a source unaffected by any duty of confidence. The judge went on to consider the question of confidentiality and public interest. He held that the public interest in maintaining the bond of confidentiality must be weighed against the legitimate public interest in the affairs of the Church and its history, and the life of its founder. He concluded that the public interest far outweighed any duty of confidence that could possibly be owed to Mr Hubbard or the Church -- even assuming (which

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was in fact contrary to the judge's finding) that Mr Armstrong owed the same duty of confidence to the Church as he would have owed to Mr Hubbard, had Mr Hubbard been living.

Further, the judge was of the opinion that the plaintiffs were in any event disentitled to relief because of delay and in the circumstances his conclusion was that the application for an interlocutory injunction should be dismissed. The plaintiffs appeal.

In my judgment Vinelott J. was right in holding that the plaintiffs are disentitled by reason of delay from obtaining the interlocutory relief sought. The Writ and Notice of Motion in this action was served on 29th September of this year. The Notice of Motion in effect seeks an injunction preventing the publication of the book in its present form. The proceedings were launched without any letter before action, less than a week before the planned distribution of the book to retailers, and less than a month before the planned publication date.

In February 1986 Mr Miller informed the Church that he was planning a book about Mr Hubbard. At some date, also in February 1986, Mr Miller' met Mr Armstrong, but asserts he then received no documents from Mr Armstrong other than a transcript of the trial before Judge Breckenridge.

On 21st May 1986 Messrs. Lubell and Lubell, attorneys acting on behalf of the Church, wrote to Michael Joseph Ltd. The first paragraph of that letter is as follows:

"This letter places you on formal notice regarding the rights of the Church of Scientology, International, and

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your legal obligations and liabilities relating to your proposed publication of a biography of L. Ron Hubbard by Mr Russell Miller.

"Publication of this book is not authorised by the Church of Scientology, International, a holder of distinct legal rights in and to the use and propagation of the various Scientology teachings and religious items associated with Mr Hubbard and Scientology. Your failure to obtain such authorisation violates the rights of the Church of Scientology, International, under the laws of the State of California, the laws pertaining to registered trade and property rights and under common law."

In August 1986 Mr Armstrong informed, the Church that Mr Miller had some of the archival documents. In December 1986 the Church settled its dispute with Mr Armstrong and recovered the archival documents held by him. In May 1987 the publication of "Bare-Faced Messiah" was announced in advance in the Michael Joseph catalogue. Is I have already mentioned, Michael Joseph Ltd. is controlled by Penguin Books. Publication was announced for October 1987 in a full-page description of the book.

The plaintiffs' evidence in this case is based upon a copy of a typed proof of the book which came into existence on 5th August 1987. The plaintiffs obtained this material without the knowledge or consent of the defendants. On 4th July 1987, Lubell and Lubell, on behalf of the Church, communicated again to Michael Joseph Ltd. saying: "From the information available to us, Mr Miller's investigation and the book which no doubt will result therefrom, will constitute in regard to certain documents

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and information an invasion of privacy and deprivation of the literary property rights of the various Church entities and individuals associated with Mr Hubbard and Scientology".

Neither in their evidence, nor in the course of the hearing before the judge, did the plaintiffs identify the date on which or (except in a very general manner) the manner in which they obtained a copy of the proof manuscript of the book. What is known is that, without warning on 29th September 1987, when the defendants' preparations were far advanced and when any interference with those preparations was likely to cause the defendants maximum embarrassment and difficulty, these proceedings were launched.

If -- as may well be the case -- the proof came into the plaintiffs' possession soon after 5th August 1987, there could be no justification for the delay until 29th September. It is the duty of a person seeking injunctive interlocutory relief to act with speed . That must more particular]y be so in a case of this kind where time would obviously be of crucial importance to the author and publisher who are sought to be restrained.

It is said that the delay was inevitable because of the heavy task of relating the material in the book to the mass of the archival material. As to that, I agree with the judge that a cursory reading of the book shows that substantial use is made of Mr Hubbard's diaries, which it must have been known were part of the archival material.

In my view the judge was fully entitled to reach the conclusion which he did, namely that the delay itself was a bar to any claim for an interlocutory injunction.

At the end of the first day of the hearing of this

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appeal, an application was made to the court on behalf of the plaintiffs to adduce further evidence as to delay. That application was refused. It was the duty of the plaintiffs to make full disclosure in the evidence before the judge of all material relating to the date when the proof of the manuscript was obtained. As I have said, time was a highly material factor in relation to the grant of relief in the circumstances of this case. To tender evidence at the appellate stage was too late and would inevitably place severe restrictions upon the defendants' ability to investigate its truth.

In my judgment that is enough to dispose of this appeal. However, there are certain further considerations to which I will refer. Let it be supposed, for present purposes, that the plaintiffs have an arguable case of breach of copyright and of confidentiality, and that damages would not be an adequate remedy for the plaintiffs.

The court has then to consider the other side of the coin. Would the plaintiffs be able to meet their implied undertaking in damages if an interlocutory injunction were granted, but that the defendants won at the trial?

In American Cyanamid v. Ethican (1975) AC 396 at 408 Lord Diplock said that when there is doubt as to the adequacy of the respective remedies in damages (or both) the question of the balance of convenience arises.

The evidence on behalf of the defendants in this appeal is to be found in the affidavit of Mr Brooke who, in paragraph 3 of his affidavit, says:

"Seven thousand five hundred copies of the book have been printed, and subject to these proceedings, we confi-

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dently expect that the book could run to several editions. Since this is a book of enormous topical interest there has been a considerable advance publicity for it. It was first announced in advance in the Michael Joseph catalogue for May 1987, in a full page description on page 9, a copy of which is now produced and shown to me marked 'JAdLB 2'. A large full page colour advertisement for it was also featured in the Bookseller issue 17th July 1987, now produced and shown to me marked 'JAdLB 3'. In addition the author has sold serial rights to the Sunday Times, such serialisation being timed to coincide with the publication date of 26 October 1987 to stimulate sales. It is essential that this book is published to coincide with the three-part serialisation in the Sunday Times which commences either on the 18th or 25th October".

I interpose at this point to say that in view of these proceedings, the first serialisation in the Sunday Times will be on 1st November.

"The Sunday Times, by reason of its circulation and its influence, provides a uniquely powerful launch platform for this book and in our experience always strongly stimulates sales of books serialised in it always provided the book is published at the time of serialisation. The whole campaign strategy of Michael Joseph is built round the Sunday Times serialisation which we expect to lead to massive feature and interview coverage for the author. Michael Joseph has already received numerous calls about the book from the media, which encourages us to believe that our strategy will be a success. A successful launch of the book, besides leading to rapid reprints and

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'bestsellerdom' will also encourage paperback publishers to bid keenly for the paperback rights in the book; these could realise revenue of £50,000 or more to the publisher and author. In addition in a work of this nature which is a hardback the three months period before Christmas is crucial for sales since that is when the majority of hardback sales are made."

Then in paragraph 6 of his affidavit Mr Brooke says:

"By the time of swearing this affidavit orders have been received from bookshops which amounted to over 5,000 copies. The procedure regarding books is that Michael Joseph salesmen visit bookshops to subscribe new titles. To ensure that books are not sold before publication date when copies are supplied to bookshops, the publication date is printed on the invoice. Review copies would normally be sent out to a large number of periodicals and in the normal practice reviews would appear on or shortly after publication date. If Michael Joseph were ordered not to release review copies nor to supply orders received from bookshops, we will suffer an irrecoverable loss of sales and there is of course no way of determining the amount of sales lost this way. Moreover, Michael Joseph's high reputation as a publisher would be damaged if Michael Joseph is unable to respond to orders which have been stimulated by advance publication or serialisation because it is under a Court order not to do so. Not only will sales be lost but also some taint will attach to the reputation of both Penguin and Michael Joseph in the minds of both the bookseller and the ultimate customer if Penguin and Michael Joseph are unable to supply copies ordered by

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bookshops. This will cause considerable damage to their relations with bookshops which are essential to their publishing and marketing operations.

"7. There has been a substantial investment in this book. A non-returnable advance of 13,250 has been paid to Russell Miller, and a further 5,250 is due to the author on publication of the book. In addition, I am informed and understand from our publicity department that the sum of 2,290 has already been expended on advance advertising. I believe that it is universally recognised that publicity of all forms is entirely wasted if the produce, be it goods or groceries, is unavailable when the publicity appears.

"Therefore, if Michael Joseph is ordered not to distribute this book, the advance publicity will be entirely wasted. Quite apart from the loss of sales this represents, it is annoying and frustrating for book buyers to ask for the book that they had seen advertised to be told they cannot purchase it. This seriously damages our goodwill and the reputation which we have worked so hard to create as one of the best, most efficient and reliable hardback publishers in the British Commonwealth. The taint upon Michael Joseph and Penguin if publication is halted is serious, immediate and long lasting. The implications are quite undesirable and extend far beyond our relationships with the bookshop, the reader and the book buff".

In my view it follows from that evidence that if the publication of the book is restrained until trial that there is a risk that the defendant publishers will be exposed to substantial and

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in part possibly unquantifiable losses in respect both of sales and their reputation as reliable publishers. For publishers of repute to have the publication of one of their books stopped by an order of the court prior to the announced publication date is obviously a very serious matter for them. Therefore here we are dealing with a case in which the damages, if an injunction were granted and such injunction was discharged at the trial, would very likely be substantial and might to a degree be unquantifiable. I come then to the undertaking in damages which would have to be given by the plaintiffs. The evidence of Mr Long for the plaintiffs is this:

"The Church can and will make good any such undertaking of monetary damages that might be required. The last published accounts of the Church show a net worth of approximately 14 million dollars. There is now produced and shown to me ....... a copy of the balance sheet as at November 30th 1986."

So far as the balance sheet is concerned, on 8th December 1986 Messrs. Greenberg & Jackson, auditors to the Church, wrote the following:

"We have compiled the accompanying balance sheet of the Church of Scientology of California as of November 30, 1986, and the related statement of Church operations for the period September 16, 1986 to November 30, 1986, in accordance with standards established by the American Institute of Certified Public Accountants.

"A compilation is limited to presenting in the form of financial statements information that is furnished by management. We have not audited or reviewed the accompanying

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financial statements and, accordingly, do not express an opinion or any other form of assurance on them.

"As is described in Note 5 and Note 6, the Church has various gain and loss contingencies. It is not possible at this time to evaluate the possible effects of such contingencies on its financial position"."

Turning to the Notes referred to in that letter, Note 5 reads as follows:

"Loss Contingencies. The Internal Revenue Service has made assertions that the Church of Scientology of California owes employment taxes penalties, and interest of $4,187,529 for the years subsequent to 1975. Also it has assessed income taxes, penalties, and interest of $8,282,159 for the years 1973 and 1974. Payment of the income tax assessment is contingent on the result of pending litigation. The Church has pledged the land and building which secures the Mortgage Receivable and the Certificate of Deposit as collateral for possible payment of income taxes for 1973 and 1974. It is not possible at this time to evaluate the likelihood of the Internal Revenue Service prevailing in its claims.

"Additionally, the Church is the defendant in certain litigation. It is not possible at this time to evaluate the likelihood of recovery against the Church in the litigation, nor the potential liability to the Church resulting from the claims asserted in the litigation."

Note 6 reads:

"Gain Contingencies. The Church is appealing the payment of $2,946,920 income taxes, penalties and interest to the Internal Revenue Service for the years 1970-1972.

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It is not possible at this time to evaluate the likelihood of the Church prevailing in its appeal."

Against that background the value of any undertaking in damages by the Church must, in my opinion, be conjectural.

Where, then, does the balance of convenience lie? I draw attention to the following considerations in general terms:

(1) If an injunction is granted and the defendants succeed at the trial, they are exposed to the risk of losses which, insofar as they can be quantified at all, may exceed the available assets of the plaintiffs.

In the course of the plaintiffs' reply on this appeal yesterday, it was suggested that they would give security.

It seems to me there are great difficulties in a case of this kind involving, as it does, damages of uncertain and possibly unquantifiable amounts, in fixing the amount of any satisfactory security for the protection of the defendants. I do not think the suggestion of security is acceptable.

(2) The documents with which we are concerned, with the exception of the mother's letter, are all compiled from the hand of Mr Hubbard himself, the founder of the Church. It is not suggested that the documents contain anything which is untrue or scandalous, or that their content is in any way misleading.

(3) The photographs are harmless, and it is difficult to imagine that any significant damage could result from the use of them by the defendants.

It was suggested that the Church would lose what it called "first publication rights" in respect of those

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photographs. However, I find it difficult to accept, from an inspection of those photographs, that any such loss (if one existed at all) could be other than small. There is, I might add, no question as to the ability of the defendants in this case to meet recoverable damages.

(4) It is suggested that the publication of the book in the United Kingdom might prejudice the Church's prospects of success in its appeal in the Armstrong litigation in California.

As to that matter, the Armstrong litigation is concerned with a large number of documents; whereas the present case is concerned only with a few, which I have already specified.

Further, the court has no up-to-date information regarding the course of the Californian proceedings, or as to how far the appeal is being actively pursued.

It would appear that by agreement with Mr Armstrong the Church has already recovered the archival material in his possession.

(5) The plaintiffs do not contend that the publication of the material in issue in the present case will harm the reputation of either Mr Hubbard or the Church. There has been no allegation that the book itself is defamatory of anybody.

Against those considerations, in effect the plaintiffs assert:

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(1) The Church is not seeking to stop publication of the book in general. It is merely requiring the excision of references to, or reliance upon, the diaries and the letters.

But in my judgment the references to the diaries and the letters are an essential part of the fabric of the book itself. Thus one of the purposes of the book is to contrast the image of Mr Hubbard's life, as is said to be portrayed by the Church (and by Mr Hubbard himself) with the reality of the situation. Thus, for example, in Chapter 1 of the book, Mr Miller examines the version put forward by the Church of Mr Hubbard's family history and his life up to the age of 12 or 13. Mr Miller concludes that it is not true that Mr Hubbard came from a distinguished naval family, or that he was born into a wealthy family. The mother's letter is used in relation to that latter question.

Mr Miller places reliance on the diaries written by Mr Hubbard himself between 15 and 17 years of age in order to question accounts of Mr Hubbard's life during those years. Mr Miller's assertions may be good or bad, but this is the book which he has written and I do not consider that a "blue pencil" can be used as a solution to the matter.

(2) It is said that this material was confidential and that the Church can, and should, protect the privacy of Mr Hubbard, although he is now dead.

The duty of confidentially, if any, must be balanced by a due consideration for the public interest. See, for example, Lion Laboratories Ltd. v. Evans & Ors. (1985) 1 Q.B., 526.

The Church is an active proselytizing Church with, we are told, several million members. It is desirable in the public interest that its doctrines and assertions of fact -- whether in relation to Mr Hubbard or otherwise -- should be exposed to public criticism. Mr Hubbard is dead and, as I have already mentioned, the material in the

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disputed documents is mostly written by Mr Hubbard himself. None of it is said to be untrue or to damage either the reputation of Mr Hubbard or of the Church itself.

(3) There was a suggestion that the Court should not take any step which would interfere with decisions of the United States' courts. As to that matter, the long-standing respect which the courts of this country extend to the decisions of courts in the United States of America is in no way in issue.

This case is concerned with the propriety of granting interlocutory relief in the particular circumstances now existing in relation to this case and which necessarily were not before the United States courts.

Looking at the whole matter it seems to me, as I think it did to the judge (although he did not express himself in terms of the balance of convenience) that the balance of convenience is decisively in favour of refusing an injunction.

Accordingly, for the reasons which I have given, I would dismiss this appeal.

SIR GEORGE WALLER: I entirely agree with my Lord's judgment.

If I added anything on any part of the case, I would only be repeating, in less adequate words, that which has already fallen from my Lord.

ORDER: Appeal dismissed with costs of the appeal and Respondents' Notice to be taxed forthwith.

Leave to appeal to the House of Lords refused.

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LORD JUSTICE FOX: Yes, Mr Lightman?

MR LIGHTMAN: I would therefore invite your Lordships to dismiss the appeal, and I ask two matters. First of all I ask that the costs should include the costs of our Respondents' Notice. Your Lordships will remember that the respondents raised the balance of convenience and the matter of the cross-undertaking in damages.

I invite your Lordships also to follow the learned Judge below in two respects: first of all, order an immediate taxation of costs. I think that is the normal course in the Court of Appeal, but certainly that was the order made in this case below, and in my submission it is appropriate here. Not only was this a hopeless appeal, but in addition having regard to the dubious finances of the Church we would request our taxation and payment right away.

The other matter is that the learned Judge gave a certificate for three Counsel. If I may explain to your Lordships, there was a mass of documentation below which had to be dealt with as a matter of great acceleration. Your Lordships will also have seen a substantial Skeleton Argument was provided, which I hope may be somewhat abbreviated at the hearing, and, as with the Court below, I would invite your Lordships to say that this was a proper case for three Counsel.

LORD JUSTICE FOX: What was the situation below?

MR LIGHTMAN: There were three below, my Lord.

LORD JUSTICE FOX: And the other side -- did they have two below?

MR LIGHTMAN: Yes my Lord, they did. Your Lordship will of course appreciate that we were faced with a very short timetable, not only on the appeal, but below. The matter came before Lord Justice Nicholls I think on the Friday, and then we had to prepare the Skeleton Argument and the Respondents' Notice to be ready for your Lordships.

LORD JUSTICE FOX: What do we do with regard to Lord Justice Nicholls' order?

MR LIGHTMAN: I think Lord Justice Nicholls directed that the costs of that application be costs in the appeal.

LORD JUSTICE FOX: I meant the actual order itself -- can that stand?

MR LIGHTMAN: That will come to an end, my Lord.

LORD JUSTICE FOX: Yes.

MR LIGHTMAN: There is one other matter, Can I also ask for an order that our costs should be on an indemnity basis. In my submission this was a totally hopeless appeal.

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LORD JUSTICE FOX: Thank you. What do you say, Mr Algazy?

MR ALGAZY: My Lord, I would resist my learned friend's applications. In my submission the order made by Mr Justice Vinelott was based on the particular observations made by the learned judge as to the application and his opinion of the application for interlocutory relief. That being so I would submit that the proper order in this case be the defendants' costs in the cause.

So far as concerns the certificate for three Counsel, that application below was based on the volume of documentation required to be gone through at a very short stage. I wonder whether that was still the case, so far as the appeal is concerned.

So far as the question of indemnity is concerned, I would resist that. There are clearly triable issues all the way through and in my submission the normal order should stand. My Lord, those are my arguments on costs.

Whilst I am on my feet, my Lord, I should say I am specifically instructed to seek your Lordships' leave to go to the House of Lords in respect of certain matters of law. I have not formulated them in my mind as yet, my Lord, but, for example, the extent the application of delay to a case of this sort.

My Lord, those are my submissions.

(Their Lordships conferred)

LORD JUSTICE FOX: Leave to appeal to the House of Lords is refused. Do you wish to add anything, Mr Lightman?

MR LIGHTMAN: No, my Lord, I have made my submissions.

LORD JUSTICE FOX: The order that we will make is that the appeal is dismissed, with costs, to be taxed and paid forthwith, to include the costs of the Respondents' Notice.

We are not disposed to make a direction concerning three Counsel.

MR LIGHTMAN: If your Lordship pleases.

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