Scottish Court of Session Decisions

LORD GUEST'S OPINION.—The pursuers are an old established news agency which supplies news of all descriptions to their subscribers. The news supplied includes news relating to horse racing. The pursuers employ a body of reporters who report to a central agency from the racecourse, and, by an elaborate system of private telephone lines, subscribers are enabled to receive the result of a horse race a few seconds after it has been run.

The full information supplied to subscribers to the racing news service consists of:—(1) the names of runners and jockeys for each race; (2) the betting prices on the course, with fluctuations as they occur; (3) the instantaneous "off" message; (4) the result of each race giving the winning, second and third horses, with starting prices; and (5) the betting on all runners.

A large staff is employed by the pursuers in collecting and transmitting the information, and the provision of the service involves the pursuers in considerable expense. The pursuers have a number of provincial offices throughout the country, including offices in Glasgow and Dundee. The subscribers in Dundee are connected by private lines to the switchboard in the Dundee office, and for these private lines the pursuers pay. It is important for the bookmaker to have knowledge of the time when the race begins, so as to protect him against bets made after the time when the race begins. The majority of the daily newspapers are subscribers to this service, as are also a great many bookmakers. In Dundee between 80 and 90 per cent of the bookmakers in the city are subscribers to the service. The cost of supplying the information to the subscriber depends on the distance of the subscriber's premises from the office of the pursuers, and all the expenses of providing the service are taken into account in framing a scale of charges for a particular area and a particular subscriber. If a bookmaker has several offices in one town, he may take the service direct to each office, or he may relay the news himself to the other offices, in which case he pays a relay charge to the pursuers.

The defender is a commission agent, or bookmaker, with premises in, inter alia loca, Dundee and Perth. He was a subscriber to the pursuers' news service in respect of his premises at 12 Panmure Street, Dundee, and 30 North Methven Street, Perth. The contract relating to Panmure Street was dated 18th September 1948, and the contract relating to North Methven Street 25th March 1953. Each contract contained a condition (condition 3) in the following terms:—

"The news supplied by the company is to be used only in the office or other place to which it is supplied by the company, and it shall not be communicated to any other party or parties by messenger, telegraph, telephone or otherwise."

The defender agreed under the contract to be bound by, and observe and perform, the conditions of the contract. Both contracts were terminated by the pursuers as from 8th December 1955. The reason for the pursuers' termination was that the defender was supplying his branch offices with the pursuers' news service and refusing to pay the appropriate scale of charges therefor.

During November 1955 traps were set by the pursuers on the defender's activities whereby incorrect information was deliberately injected into the pursuers' racing news service relayed from their Dundee office, which information was subsequently corrected. The evidence of these traps satisfied me that during November 1955 the defender was relaying the pursuers' racing news service from his Panmure Street office to his branch office at 33 Logie Street, Dundee. The defender never at any time had a contract with the pursuers in relation to 33 Logie Street whereby he was entitled to receive the pursuers' racing news service at this address. These traps were set after the pursuers had warned the defender that he was not entitled under the terms of his contract to relay information received from the pursuers' news service in his Panmure Street office to other branch offices. Although the defender at one time disputed that he had relayed the pursuers' racing news service supplied to Panmure Street to other branch offices, including Logie Street, he has now on record, and in evidence, admitted this fact. The only dispute between the parties on the evidence was as to whether the pursuers' news service was relayed direct, or through the intermediary of the defender's telephonist. In view of the defender's admission that the information relayed was derived from the pursuers' news service, it is unnecessary to decide this issue of fact.

Subsequent to the pursuers' termination of their contract with the defender in December 1955, further traps were set in March and July 1956 by the pursuers on the defender. The evidence led by the pursuers concerning these traps satisfied me that the defender was obtaining at 33 Logie Street, Dundee, the pursuers' news service from subscribers of the pursuers in Dundee. Indeed, the defender admitted this fact on record and in evidence. The method employed by the defender was, that he arranged with a fellow bookmaker, who was a subscriber to the pursuers' news service, that this bookmaker would relay this service to the defender's office at Panmure Street. There were in all about six bookmakers who made the pursuers' news service available to the defender during this period. An outside line was employed for this purpose, which was kept open unless interrupted by other telephone calls. The news service was thereupon relayed by loud speaker in the defender's office to all persons who were present there for the purpose of betting. After the defender's contract was terminated in December 1955, he did not have any contract in relation to his premises at Panmure Street or anywhere else.

The pursuers in the present action conclude for interdict in the following terms:—[His Lordship then quoted the first and second conclusions, and continued]—On 22nd February 1957 interim interdict was granted in terms of these conclusions. As a result of information received by the pursuers from further traps set on the defender during March 1957, the pursuers in May 1957 presented a petition for breach of interdict. On 6th June 1957, the defender, after first through his counsel denying the fact, ultimately admitted in Court that he was in breach of interdict, and he was fined £100.

The basis of the pursuers' conclusions for interdict was twofold. Firstly, it was contended that the defender, by obtaining the pursuers' news service from other subscribers, induced these subscribers to commit a breach of contract, and could be interdicted from a continuance of such unlawful acts. In the second place, and alternatively, it was argued that the pursuers had a right of property in the information in the news, and that they were entitled to interdict against the defender to prevent him using or interfering with this right of property.

It is an actionable wrong by the law of Scotland, if damage results, for a third party knowingly and unjustifiably to induce the breach of a lawful contract. Until the decision in British Motor Trade Association v. Gray, 1951 S C 586, it was doubted whether the above rule applied outside the realm of contracts between master and servant, but that decision makes it quite clear that the rule is of general application in the law of contract, thus following the law of England, as exemplified in British Motor Trade Association v. Salvadori, [1949] Ch. 556, and Quinn v. Leathem, [1901] A C 495.

A quotation from the speech of Lord Dunedin in Leitch & Co. v. Leydon, 1931 S. C. (H. L.) 1, at p. 8, was founded on by counsel for the defender as being in conflict with the above expressed principle. Lord Dunedin said:

"…it is a novelty to me to say that A can be compelled by law to do or refrain from doing something lawful in itself, and that to his own prejudice, in order to help B to enforce his contract with C."

But the circumstances in Leitch & Co. v. Leydon were quite different from those in British Motor Trade Association v. Gray, and the dictum of Lord Dunedin cannot, in my view, be taken as impinging on this general principle.

The tests necessary to establish the actionability of the wrong are succinctly set out in the opinion of Lord Russell in British Motor Trade Association v. Gray, 1951 S C 586, at p. 603. These requirements are that the actings were (1) intentional, (2) without lawful justification, (3) productive of damage to the pursuers, and (4) a procuring or inducement of the breach of the contract.

It may be convenient to consider the facts in the present case as established in evidence in the light of these tests. There can be no doubt that the defender's actings were deliberate and, to his knowledge, without lawful justification. The obtaining by him of the news supplied by the pursuers without payment was productive of damage to the pursuers, because they were deprived of the subscription to which they would otherwise have been entitled. Proof of specific damage is unnecessary. It is sufficient, if it is established, that some damage must result from the wrongful acts—Exchange Telegraph Company, Limited v. Gregory & Co., [1896] 1 Q B 147. The defender admitted that he was aware that the source from which he obtained the information was a subscriber to the pursuers' news service; that there was a clause, similar to the condition quoted above (condition 3), in the contract between this subscriber and the pursuers; and that, in supplying this information to the defender, the subscriber was in breach of that contract. The defender thus induced and procured a breach of contract by the subscriber from whom he obtained the information. This is an actionable wrong against which the pursuers are entitled to protection.

For the defender it was, but faintly, argued that, as no active steps were taken by the defender, it could not be held that he induced or procured a breach of contract. I am satisfied, however, that the active steps which he took consisted in the arrangements which he made with the other bookmakers for the transmission of the information. The chief point taken by the defender on this branch of the case was that, as the pursuers had not any right of property in the news supplied, they could not prevent the communication of such news to other persons. It was argued that there could not be a right of property in news which was public, and that the pursuers could not have the exclusive right to material which was public property. I find this argument unconvincing. The news at the racecourse was not known to the whole world: a great many persons knew of it, but a great many were ignorant of it, and, in particular, before it was received at the pursuers' Dundee office, it was not known to anyone in that city. At the time when, and at the place where, the news was communicated to the pursuers' subscribers, it was not public knowledge. An argument on very similar lines was submitted for the defendants in Exchange Telegraph Company, Limited v. Central News Limited, [1897] 2 Ch 48, and was rejected, in my view rightly, by Stirling, J. The facts in that case bear a close similarity to the present, and an injunction was granted upon the ground that there had been an inducement to break a contract.

The defender also maintained that as a result of the Copyright Act, 1911, section 31, there was now no longer any right of property in unpublished works, and that the only right which existed, either in published or unpublished works, was the statutory right of copyright. The provisions of the 1911 Act have now been substantially re-enacted in the Copyright Act, 1956, sections 2 and 46, which would apply to the present proceedings. The present action is not based upon an infringement of copyright but upon an inducement to break a contract. It does not appear to me that, in order to succeed in the present action, the pursuers must show that they have a right of copyright in the news. In the contract between the pursuers and their subscribers the subscriber bound himself by condition 3 only to use the news in the office to which it was supplied by the company, and that it should not be communicated to any other person. The pursuers were entirely at liberty to insert such a condition in their contract in relation to valuable information which they had spent time and money in acquiring. Whether or not they have a right of copyright in this news vis-á-vis an outsider, they are, in my opinion, entitled to restrain a third party from inducing a party to the contract to break his contract with them.

Another aspect of the defender's argument on publication was, that, as the news was relayed to any member of the public who chose to come into the subscribers' offices, this constituted publication to the world. The test, however, to be applied is—Was the information public when it was transmitted by the pursuers' news service? I have already indicated my reasons for thinking that such information was not public. The pursuers are, in my opinion, entitled to protect themselves against the unauthorised obtaining of the news by parties outside the office of the subscriber, albeit their subscribers may in the conduct of their business as bookmakers communicate the news to such members of the public as are interested in betting with them.

As I have found the pursuers entitled to interdict upon the basis that the defender induced a breach of contract, I have found it unnecessary to deal with the pursuers' alternative argument based on a right of property. Moreover, there are no averments which could justify the pursuers obtaining interdict on these grounds.

The defender tabled two additional defences. First, it was said that as the pursuers had acquiesced in the breach of condition 3 by permitting their subscribers to communicate the information to members of the public in their office, they could not found on a breach of condition 3 by their subscribers. There are in my view several answers to this argument. The plea of acquiescence is a plea of personal bar, as its name implies, which can only be pleaded by a party to the contract. It is wholly inapplicable to the circumstances of the present case. If the pursuers were claiming breach of contract as against a subscriber, it might be open to the subscriber to plead personal bar by acquiescence. But until such a plea is tabled by the subscriber, the pursuers are entitled in a question with the defender to found upon his inducement of a breach of contract. The defender, not being a party to the contract, cannot found on any acquiescence by the pursuers to its breach. In the second place, although the pursuers may have waived the restrictive condition by permitting the relaying of news to the public in the betting shop, it does not follow that they are barred from founding on the communication of the news by one bookmaker to another outside the premises. "Acquiescence in the disregard of one restriction does not imply any disability to enforce others"—Gloag on Contract (2nd ed.), p. 253. To imply acquiescence there must be a virtual departure from the whole condition. I am unable to find any such acquiescence in the present case. Finally, acquiescence by the pursuers in the past, even if established, cannot amount to tolerance for the future—Gloag on Contract (2nd ed.), p. 169. The interdict is operative against future breaches of contract. Upon the whole question of acquiescence I find that the defender's plea is not established.

The last answer tabled by the defender is one which I have the greatest difficulty in appreciating. It is formulated in the ninth plea in law which is in the following terms:—[His Lordship quoted the ninth plea in law, and continued]—It was not explained to me how the question of bar affected this matter. But the vague and insubstantial approach made by counsel for the defender was on these lines. It was proved, he argued, that persons resorted to the betting shops for the purpose of ready money betting. I am prepared to hold this established in general. As this was contrary to law, and the news was thus supplied by the pursuers in the knowledge that it would contribute to an illegality, the contract for the communication of the information was void as being contrary to the law. This is not the effect of the ninth plea in law as I read it. Moreover, it is nowhere alleged that the contract was illegal, and I should have the greatest difficulty in holding such a contract to be illegal in the absence of the parties to it. The onus lies upon the defender to establish the illegality of the contract, if he is to found on the illegality and he has, in my view, failed to do so. For these reasons I am of opinion that the ninth plea for the defender cannot be sustained.

The result is, in my view, that the pursuers are entitled to interdict against the defender using the information supplied by the pursuers' horse racing news service and communicating it to others. The defender raised a question as to the terms of the interdict concluded for, and argued that the first conclusion, as it stands, would prevent any prospective backer from receiving the information in the subscriber's betting shop. But the interdict is not directed against a backer. It is directed against the defender, who is a bookmaker, and who has in the past deliberately and flagrantly obtained information to which he had not any right, and who on previous occasions was in breach of interdict. In my opinion, the terms of the first and second conclusions are not wider than is necessary to protect the pursuers against the continuance by the defender of what I hold to be illegal actings.

The pursuers also conclude for payment under the fourth conclusion of £57, 10s., and under the fifth conclusion of £107, 2s. These sums are calculated on the basis of the minimum payment which the defender would have had to pay to the pursuers for the news service, if he had received this service under contract for the period from 1st January 1956 to 5th June 1957. The basis of this claim is quantum lucratus. It is argued that the defender obtained possession of the pursuers' property, namely their racing news service, without any contract, and made use of it for the purposes of his business, and that on the principle of recompense he is bound to pay for such information. There was no case on recompense quoted which even remotely resembles the present. Moreover, in general the party putting forward a claim for recompense must show that he has suffered loss. "Recompense is a remedial obligation well known to the law, but that obligation is founded on the consideration that the party making the demand has been put to some expense or disadvantage and by reason of that expense or disadvantage there has been a benefit created to the party from whom he makes the demand which cannot be undone"—Stewart v. Stewart, (1878) 6 R. 145, Lord President Inglis at p. 149. In Edinburgh and District Tramways Company v. Courtenay, 1909 S C 99, Lord Dunedin, at p. 105, put the illustration that a man, who heats his own house, cannot recover part of the expense from his neighbour on the plea that that neighbour is incidentally benefited by the warmth. In the present case, the expense had been incurred by the pursuers in providing the racing news service to their subscribers. The fact that the defender by obtaining the news service from other subscribers incidentally benefited did not involve the pursuers in any extra expenditure. In my opinion the claim of the pursuers based on quantum lucratus fails.

In the result I shall sustain the first plea in law for the pursuers and grant interdict in terms of the first and second conclusions of the summons. I shall repel the second plea in law for the pursuers for interim interdict, which is no longer applicable. I shall repel the third and fourth pleas in law for the pursuers. I shall repel the eighth and ninth pleas in law for the defender.