KEITH J

[1] The British Government appeals against the refusal by Salmon J in the High Court to grant an injunction preventing R, a former member of the United Kingdom Special Forces, from publishing a book about events in which he was involved in the Gulf War in 1991. The Government invokes a confidentiality contract signed by the British Ministry of Defence and R in 1996 when he was still a member of the Special Forces. The Judge held on a number of grounds that the contract was invalid and unenforceable.

[2] For the reasons given by Tipping J, I agree that the contract is valid and is in general enforceable. I also agree with Tipping and McGrath JJ that if R goes ahead and publishes his book the Attorney-General for England and Wales will be entitled to claim damages and have an account of profits, but that he is not entitled to injunctive relief preventing publication or in respect of the other matters included in the statement of claim. The Court is unanimous on these matters.

[3] I am writing separately about the remedies available in this case. Before I do that I provide some context by mentioning one notable feature of this proceeding. That feature is the studious avoidance by the parties of two potentially critical issues of public law in their pleadings, their evidence and their argument of the case both in the High Court and, with a limited exception (mentioned in para [5]), in this Court. The whole matter was treated, so far as it could be, as involving a contract governed by private law. That emphasis appears from two matters.

[4] First, R did not make a frontal attack on the contract by contending that the Crown's prerogative powers over the service and deployment of members of its armed forces made it impossible for it to enter into a contract like the present one. Rather he made the specific challenges to the contract reviewed by Tipping J in his judgment. Secondly, as we were informed from the bar, R made no attempt in the High Court to challenge on public law grounds the legality of the "order" relating to the signing of the contract. Salmon J's ruling that the order was invalid on the ground of improper purpose accordingly came as a complete surprise to the parties.

[5] That ruling did mean that the claimed ground of invalidity of the "order" and the question whether a New Zealand court could entertain it were the subject of some discussion before us. Since we have concluded that no order was given in any event I do not enter into those matters. All that I would say about them is that I would have had real difficulty with some of the more absolute statements to the effect that the courts of one country may not sit in judgment on the acts of the government of another done within its own territory; see for instance the passages from nineteenth and early twentieth century judgments of the English Court of Appeal, the House of Lords, the Privy Council and the United States Supreme Court gathered by Lord Wilberforce in Buttes Gas v Hammer [1982] AC 888, 932-934, and indeed his own statements (eg 931G - 932A; cf 938 A-C); but consider as well the compelling facts in that case where what was being questioned were acts operating in the area of transactions between states. To the cases and the comment by Professor F A Mann QC on Buttes Gas cited by McGrath J may be added the careful comment of Judge Rosalyn Higgins in "Dualism in the Face of a Changing Legal Culture" in Meds Adrenas (ed) Liber Amicorum in Honour of Lord Slynn of Hadley, Vol II, Judicial Review in International Perspective (2000) ch 2, 18-19, and the cases she cites.

[6] I turn now to the matter of remedies to prevent or sanction the breach of the contract between R and the United Kingdom Ministry of Defence. While the law of England governs the contract itself, the remedies are being sought in a New Zealand court. Any remedies would be issued by a New Zealand court in exercise of its jurisdiction and powers.

[7] The surveys by Tipping and McGrath JJ of the law and the facts bearing on the availability of coercive relief mean that I can limit myself to emphasising three matters which have particularly influenced me in concluding that relief should be limited to damages and an account of profits.

[8] First is the crucial point that we are unanimous in ruling that the contract is binding. That is to say, the first challenge to the legal effectiveness of the confidentiality contracts prepared for SAS members, following the controversy which Tipping J reviews, has been rebuffed. That ruling presumably meets, at least in part, a major purpose of the United Kingdom Government in bringing this litigation.

[9] Second is the set of factors particular to this case and especially to R. It is now more than decade since his patrol parachuted into north-eastern Iraq during the Gulf War. The account which R would provide in his book contains no confidential information and accordingly would not expose him to the criminal penalties of the Official Secrets Act 1989 (UK). The account would also, he says, provide a balance to the published accounts already given by the officer commanding the British Forces in the Gulf War and by two other members of the eight man squad. Those books and the related films were published before the policy to introduce the contracts was developed. By contrast, R's contract applies retrospectively to prohibit his taking the action which two other squad members had been free to take and did in fact take.

[10] Thirdly, coercive relief is being sought by a foreign government to prevent R exercising his freedom of expression. (A comparison can be drawn with the New Zealand Spycatcher case where the British Government was refused injunctive relief; the comparison, if anything, favours R since the New Zealand Government has not on this occasion offered the same support it did then; Attorney-General for UK v Wellington Newspapers [1988] 1 NZLR 129, 164-165.) Freedom of expression is affirmed in s 14 of the New Zealand Bill of Rights Act 1990, as it is in the law of the United Kingdom by the Human Rights Act 1998. Those two statutes give effect to the two countries' international obligations under the International Covenant on Civil and Political Rights and the European Convention on Human Rights and Fundamental Freedoms respectively. I need not elaborate here on the fundamental character and intrinsic importance of freedom of expression and the reasons supporting it, in part because they have recently been stated in essentially similar terms by both this Court and the House of Lords; see TVNZ v R [1996] 3 NZLR 393, 396-397, Lange v Atkinson (No 1) [1998] 3 NZLR 424, 460-462, 462-467, Lange v Atkinson (No 2) [2000] 3 NZLR 385, paras 26-35, R v Home Secretary ex parte Simms [2000] AC 115, 126, and McCartan, Turkington, Breen v Times Newspapers Ltd [2000] 3 WLR 1670, 1685d-1686e. (See also the commentary on what became s14 of the Bill of Rights in the White Paper on A Bill of Rights for New Zealand (1985), 79.)

[11] Balancing those matters and the related discussions in the other two judgments, I conclude that injunctive relief preventing publication cannot be justified. I accordingly agree with the orders proposed in the judgment of Tipping J.

TIPPING J

Table of Contents

 

	Para No
Introduction	[12]-[15]
Background facts	[16]-[27]
Proper law of the contract	[28]-[30]
Proof of English law	[31]-[32]
Capacity to contract - relationship between Crown and those in the armed forces	[33]-[34]
Consideration - High Court judgment	[35]-[37]
Consideration - general principles	[38]-[42]
Consideration - submissions	[43]-[45]
Consideration - discussion	[46]-[52]
Was R ordered to sign?	[53]-[58]
Duress generally	[59]-[69]
Undue influence - general principles	[70]-[76]
Actual undue influence	[77]-[78]
Presumed undue influence (subject to Etridge)	[79]-[82]
Undue influence - conclusion	[83]
Unconscionable bargain	[84]-[90]
Interpretation of contract	[91]-[93]
Relief	[94]-[113]
Conclusion	[114]-[115]
Formal orders	[116]

Introduction

[12] This appeal from a judgment of Salmon J arises in proceedings brought against the respondent, R, by the appellant, Her Majesty's Attorney-General for England and Wales who acts on behalf of the Crown in right of the United Kingdom.

[13] R was engaged as a soldier in the United Kingdom Special Forces (UKSF) from late 1990 to 1997, and in particular, in 22 Special Air Service Regiment (SAS). In October 1996, shortly before he left the SAS, R signed a confidentiality contract (the contract) with the UK Ministry of Defence (the Ministry). After leaving the SAS, R sought to publish a book entitled Soldier Five. In response the appellant applied for an injunction restraining publication of the manuscript on the basis that it would be a breach of the contract. It was the appellant's position that the contract prohibited disclosure, without prior written authority, of any information relating to the work of the UKSF which R possessed by virtue of his position as a member thereof. In the alternative, the appellant sought to prevent publication of certain parts of Soldier Five on the basis that they disclosed confidential information.

[14] Salmon J found against the appellant on both causes of action. As to breach of contract, His Honour held that R had been ordered to sign the contract, and that this order was unlawful. He also found that R was subject to duress and undue influence when he signed the agreement which was therefore unenforceable. The breach of confidence claim was substantially dismissed on the basis that, subject to some minor exceptions, publication of which the Judge was prepared to restrain, the information contained in the manuscript was in the public domain.

[15] The appellant challenges the Judge's conclusions on the breach of contract cause of action. There is no appeal from the Judge's rejection of the breach of confidence claim. R cross appeals against the findings of Salmon J in which he rejected other defences to the contract claim. He also advances other grounds on which it is said the judgment under appeal can be supported, and contends that even if the appellant is successful in upholding the contract, he should not, as a matter of discretion be subject to injunctive relief.

Background Facts

[16] The events which are the subject of R's manuscript occurred in Iraq during the Gulf War. In January 1991 an eight man SAS patrol, code named B20, more popularly known as Bravo Two Zero, was deployed into north-eastern Iraq to identify the location of mobile surface to surface missiles and to cut fibre optic communication cables in the area. The patrol was compromised at an early stage. Three members of the patrol died, four were captured and one managed to escape across the border into Syria. Those captured, who included R , were interrogated and tortured by Iraqi Forces and held in captivity for 48 days. The four soldiers were eventually released at the conclusion of hostilities in March 1991.

[17] The subsequent publication of a number of books by former UKSF personnel about their experiences while serving in UKSF became of grave concern to the UKSF in light of the importance of confidentiality to the personal security and operational effectiveness of its members. In December 1992 the Commanding Officer of British Forces during the Gulf War, General Sir Peter de la Billiere, published a book about the war entitled Storm Command. It included a chapter on the Bravo Two Zero Patrol. In 1993 the leader of the Bravo Two Zero patrol, under the pen name Andy McNab, published his best selling account of the patrol, Bravo Two Zero. Then in 1995 another best seller, The One That Got Away, was published by the member of the patrol who had escaped into Syria.

[18] The remaining members of the Bravo Two Zero patrol felt that each of these publications gave an inaccurate account of events. They were particularly concerned that the author of The One That Got Away had placed the blame for the patrol being compromised on one of the members who had not survived. Their concern was heightened when films of the books were released and they sought to persuade the SAS to make some public comment. While the Ministry did issue a public statement, R considered it inadequate and was disappointed and angry at the lack of support shown to patrol members. He was also of the view that mistakes at regimental command level in relation to both the planning and the rescue procedures for the Bravo Two Zero operation had not been adequately addressed.

[19] In an attempt to prevent further similar publications, the Ministry decided to introduce contracts requiring confidentiality for all new and existing UKSF personnel. A survey of UKSF personnel and former personnel had indicated strong support for such a move. A Defence Council Instruction was promulgated and was issued on 4 October 1996. This Instruction was then communicated down through the chain of command to all UKSF personnel through identically worded 'Regimental Part One Orders' as follows:

INTRODUCTION OF CONFIDENTIALITY CONTRACTS FOR SERVICE WITH UKSF (U)

Reference:

A. DCI Joint Service 107/96 dated 4 October 96.

a. From the date of this DCI all Armed Forces personnel serving currently or in future on the establishment of units under the operational or administrative command of Director Special Forces will be required to sign a contract binding the signatory to a lifelong commitment not to disclose, without prior permission of the MOD, any information gained during service with Special Forces. All personnel required to sign will be issued with written guidance explaining the nature of the requirement.

b. Failure to sign will result in the individual concerned being reported through the chain of command to the Director Special Forces. If after a fixed period of review any objections to signature cannot be resolved, the individual concerned will be deemed unsuitable for duties with the UK Special Forces and will be "returned to unit".

c. Administrative instructions will be amended.

TO BE REPEATED IN SQN DETAIL

[20] In May 1996 R was in the United States with his squadron. At a briefing on current events affecting the squadron, the then Commanding Officer, Soldier A, informed his men that confidentiality contracts would soon be introduced. He stated that all members would be required to sign in order to continue serving with the regiment, otherwise members would be "returned to unit". SAS members who are "returned to unit" give up their posting with the SAS and take up a posting with the parent unit to which they were assigned before joining the SAS. In R's case, this was the parachute regiment of the British Army, with which he had never actively served.

[21] In August 1996 R was posted to London. In mid October, he was instructed to return to SAS headquarters at Hereford as soon as possible to sign his confidentiality contract. There he saw the Regimental Part One Orders, which confirmed what he had already been told at the squadron briefing in May; members had to sign a contract or be "returned to unit". On 16 October he went to the adjutant's office at regimental headquarters to sign his contract and met another soldier, Soldier Z, who was also attending for the same purpose.

[22] R gave evidence that when his presence and that of Soldier Z was announced to the adjutant by the clerk, the adjutant yelled through the doorway, "give them the contracts and tell them to sign." He stated that they were given the contracts by the clerk, and read and signed them in the clerk's outer office. In contrast the adjutant and Soldier Z said that the two signed their contracts in the adjutant's office. Salmon J made a finding that R signed in the clerk's office "given the evidence of [R] and Soldier Z and [the adjutant's] acknowledgement that his recollection of a number of events could be faulty." In making this finding, the judge appears to have mistakenly placed reliance on the evidence of Soldier Z. Having considered the evidence of the three soldiers, it seems to me more likely that R signed his contract in the adjutant's office, in accordance with the evidence of both the adjutant and Soldier Z, but nothing turns on the precise place of signature.

[23] When R saw the contract he was concerned that the terms of the confidentiality requirements went a lot further than he had anticipated. They covered not only past, current and future confidential or sensitive information but all information relating to UKSF, no matter how innocuous, or lacking in sensitivity or confidentiality, it might be. R asked whether someone else could look at the contract and whether he could take a copy with him. Both requests were refused. He stated that he felt he had no choice but to sign. He also said that by way of protest he did not use his normal signature.

[24] The contract which R signed on 28 October 1996 was in the following terms:

CONFIDENTIALITY CONTRACT

Between MOD and [R] (full name)

In consideration of my being given a (continued) posting in the United Kingdom Special Forces from 28 October 96 (date) by MOD, I hereby give the following solemn undertaking binding me for the rest of my life:-

(1) I will not disclose without express prior authority in writing from MOD any information, document or other article relating to the work of, or in support of, the United Kingdom Special Forces which is or has been in my possession by virtue of my position as a member of any of those Forces.

(2) I will not make any statement without express prior authority in writing from MOD which purports to be a disclosure of such information as is referred to in paragraph (1) above or is intended to be taken, or might reasonably be taken, by those to whom it is addressed as being such a disclosure.

(4) I will assign to MOD all rights accruing to me and arising out of, or in connection with, any disclosure or statement in breach of paragraph (1) or (2) above.

(3) I will bring immediately to the notice of MOD any occasion on which a person invited me to breach this contract.

[25] A short time after signing the contract, R decided to apply for premature voluntary release. He had two meetings with his commanding officer, Soldier A, about this. At the first meeting his request was declined. R became suspicious. He understood that the requests of other soldiers had been granted on the first occasion, and perceived the refusal as a threat not to allow him to leave. However, Soldier A gave evidence, accepted by Salmon J, that it was not his practice to give approval on the first occasion a soldier expressed a desire to leave but to ask the soldier to go away and think about it. Soldier A also gave evidence that he had never declined such a request, as it was incompatible with UKSF operations to use men not committed to serving. In accordance with this practice, R's request was granted at his second meeting with Soldier A and he left the SAS on 3 March 1997, some four months after signing the contract.

[26] R subsequently decided to write his own version of events surrounding the Bravo Two Zero patrol in order to set the record straight. He considered that there was nothing confidential in the book and that what he had written was already in the public domain. Salmon J described what happened next:

At a meeting with his publishers he decided that a copy should be sent to both the New Zealand SAS and the United Kingdom Ministry of Defence as a matter of courtesy, and that was to be done well before publication. Similar arrangements were made with English publishers. He says that the English publishers sent a copy of the manuscript to the Ministry of Defence around 20 September 1998 and the New Zealand SAS would have received a copy around the same time.

[27] While the evidence suggests a slightly different sequence of events, I am satisfied that the result was in substance the same. The New Zealand SAS was sent a copy of the manuscript directly by R, but the Ministry was not. However R's English publishers sent a copy of the manuscript to the Defence, Press and Broadcasting Advisory Committee for scrutiny, and they then passed it on to the Ministry. Proceedings were issued in New Zealand against R in December 1998 and interim orders were thereafter obtained preventing publication pending the hearing of the substantive proceeding.

Proper law of the contract

[28] In both the High Court and in this Court, the parties approached the case on the basis that the proper law to be applied was in all respects the law of England. No point was made, as has sometimes been suggested, that equitable issues arising in relation to the enforceability of the contract or what remedies should be given for its threatened or actual breach, should be determined in accordance with the law in force in the country where the proceedings are heard (the lex fori): for a general reference to this issue see the recent decision of the Federal Court of Australia (Miles, Lehane and Weinberg JJ) in Paramasivam v Flynn (1998) 160 ALR 203, 215-217. This case is mentioned in an article entitled The Soldier, The Order and The Contract by Rickett and Myburgh [2001] NZLJ 157 which I acknowledge as having been helpful on aspects of this case. In remedial terms it may sometimes be necessary or desirable to apply the lex fori if there is a material difference between it and the proper law of contract. But in present circumstances I apprehend no significant difference between New Zealand law and English law on the issues which I address in the section of my judgment directed to relief, commencing at para [94].

[29] Although the question identified in the preceding paragraph does not require decision, I consider there is much to be said for the stance adopted by the parties. It is difficult to see the logic or overall desirability of making a distinction between legal issues and equitable issues (except possibly in terms of remedy) when deciding which legal system should govern the contract in question. The making of such a distinction can lead to quite unnecessary difficulties and potential inconsistencies. It would also tend to depart from the general direction in which most legal systems comparable to ours have been moving in recent times.

[30] Law and equity should be viewed as a consistent whole. The individual influences of the earlier discrete streams now work together to produce the appropriate outcome. While many doctrines are still recognisable as legal or equitable and an understanding of their historical origins often remains helpful, the focus now should be on their combined influence rather than on their originally separate functions. It would be anomalous to apply one system of law to an issue which would have arisen at law, and another to an issue which would have been for the courts of equity to deal with. I make these remarks simply to note the point and to endorse the acceptance of the parties that all issues fall to be determined according to English law.

Proof of English law

[31] English law being applicable, its proof is a factual matter generally requiring evidence from a witness or witnesses who are appropriately qualified in the subject: see Dicey & Morris, The Conflict of Laws (13th ed, 2000) Rule 18(1) at 221; Bilgola Enterprises Ltd v Dymocks Franchise Systems (NSW) Pty Ltd [2000] 3 NZLR 169, 176 (CA); and Attorney-General of New Zealand v Ortiz [1984] AC 1, 45.

[32] To the extent that a point is not covered by evidence, the domestic court applies its own law on the premise that foreign law is the same as its own: see Dicey & Morris, op. cit. Rule 18(2) at 221; Bumper Development Corp v Commissioner of Police of the Metropolis [1991] 1 WLR 1362, 1368 (CA); and in New Zealand Mount Cook (Northland) Ltd v Swedish Motors Ltd [1986] 1 NZLR 720, 727. For New Zealand purposes that will often involve reference to English and indeed other authorities to assist in determining, if the point is in doubt, what the law of New Zealand is on the point at issue. The present case involves a combination of factual evidence and resort to New Zealand law on the premise that it is the same as English law. I will not burden my judgment by making unnecessary further reference to the topic.

Capacity to contract - relationship between Crown and those in the armed forces

[33] It is as well to record at the outset that R pleaded his case and presented his argument, both in this Court and before Salmon J, on the premise that the parties had the capacity to contract with each other. He contended that the contract which they had entered into was not enforceable or was otherwise vitiated by reason of want of consideration, duress, undue influence or as an unconscionable bargain. He did not contend, nor did the appellant, that R and the Crown were incapable of entering into contractual relations, whether by dint of his employment being under the royal prerogative or otherwise.

[34] The basis of the legal relationship between the parties has relevance in other areas of the case, but in the light of the way the case was pleaded and argued we do not have to consider whether the Crown can or does enter into contractual relations with those who serve in the armed forces. This judgment should not therefore be regarded as touching on that issue. For much the same reasons the difficult areas of act of state and the justiciability of actions taken by military or executive authorities in another state do not require close analysis. I would not wish to embark into those areas without full and detailed arguments which the focus of the parties did not require. I can, however, indicate that I agree with what McGrath J has written on this aspect.

Consideration - High Court judgment

[35] In his judgment Salmon J held that the contract was supported by consideration. It could not therefore be impugned for want of consideration. R challenged this conclusion by way of cross-appeal. The contract expressed the consideration as being that R was being given "a (continued) posting in the United Kingdom Special Forces from 28 October 1996 by the Ministry of Defence". The Judge recorded the appellant's acceptance before him that the Ministry of Defence could dismiss R at any time. He then continued (referring to the appellant as the plaintiff and to R as the defendant):

All members of the armed forces are appointed by the Crown under the royal prerogative, and hold their appointments, whatever their rank, at the Crown's pleasure: 41 Halsbury's Laws of England (4th ed, 1983) para.4. Similarly, members of the SAS are liable to be returned to unit at any time for whatever reason.

The plaintiff also accepted that if the Crown enters into a contract with a member of the armed forces whereby it expressly or implicitly agrees not to exercise its prerogative power to dismiss or transfer the member at will, such a contract is illegal and void because it is contrary to the rule that the Crown shall not fetter its royal prerogative or its statutory powers. If it is unable to fetter its discretion to dismiss or transfer at will, then it has to be said that the right to terminate was not affected by the contract. The question therefore arises whether the consideration emanating from the plaintiff has any reality or whether it is a chimera.

The plaintiff's submission was that it provided consideration by forbearing from terminating the defendant's engagement with UKSF. It must be accepted as part of this argument that the forbearance continued to be subject to the prerogative and statutory power to dismiss or transfer. It followed that consideration could not take the form of a promise to forbear because, in accordance with administrative law, such a promise would not be binding upon the plaintiff and would be illusory. The plaintiff therefore argued that the consideration was in the form of an act of forbearance, i.e. the act of allowing the defendant to continue to serve. UKSF could have dismissed all its soldiers and then re-employed them subject to the signing of the contract. What actually happened was that the [Ministry] forbore from terminating the defendant's engagement in return for the defendant giving his undertaking as to confidentiality.

The defendant submits that there was no valuable consideration moving from the Crown to the defendant in the contract. The defendant's submission was that if the Crown's power to dismiss at will cannot be excluded, then the Crown could not have given any consideration for the contract. The defendant accepts that a factual or practical benefit may amount to consideration and presents the following arguments:

1. The contract is framed as an express or implied agreement to give the defendant a "continued posting". This is intended as a positive benefit to be enjoyed in the future, not as a forbearance to terminate an existing benefit.

2. The meaning of contractual words must be judged as at the time the contract was entered into. At the time he signed the contract the defendant had not already received any "continued posting". That was to happen in the future. A future act unconnected to the contract by a promise could hardly be said to be consideration given pursuant to the contract.

3. If technically there was consideration, it was so fleeting and transitory as to amount to little more than an illusion.

[36] After canvassing the various possible ways of analysing the case, the Judge expressed his conclusions in this way:

There are three possibilities:

1. The plaintiff promised to provide a continued posting.

2. The plaintiff promised to refrain from discontinuing the posting.

3. The consideration was the act of the plaintiff in providing a continued posting.

The defendant submits that the consideration moving from the plaintiff falls into one or other of the first two categories. The plaintiff submits that it falls into the third. In my view if the defendant's submission was correct the consideration would constitute an unlawful fetter upon the powers of the MOD to dismiss at will and hence would be unenforceable and illusory. But the act of forbearance does not meet with the same objection. It can exist alongside the power to dismiss at will and does not fetter it. The difference is between an act and a promise.

[37] The Judge referred to the evidence he had heard on the subject of consideration in English law. He cited Coombe v Coombe [1951] 1 All ER 767 and, after referring to a passage from the judgment of Denning LJ at 771, he continued:

Hence there was certainly no express request by the defendant that [the Ministry] forbear from returning him to unit, but there must be at least an implied request. It is inconceivable that the defendant would have signed the contract committing him to his side of the bargain unless he had anticipated that [the Ministry] would act by refraining from returning him to his parent unit. In fact, of course, this is what happened, and in accordance with English law that seems to be sufficient consideration to create a binding contract.

Consideration - general principles

[38] The classic theory of consideration rests on a mutual exchange of benefits. A provides a benefit to B in return for the benefit which B provides to A. If B incurs a detriment it may qualify as consideration provided it is incurred at A's request or is otherwise of benefit to A. Detriment to B is often the logical corollary of the fact that B has conferred a benefit on A. By doing so B suffers the detriment of providing the benefit but receives in return the benefit of what A is providing under the contract.

[39] Analysing consideration in terms of benefit and detriment is not always the most satisfactory way of addressing the topic. In this respect I agree with what Professor John Burrows says on the subject at paragraph 4.1.3 of Cheshire and Fifoot's Law of Contract, 8th New Zealand edition (1997) by Burrows, Finn and Todd. It is often easier to speak in terms of each party having to pay a price for what the contract requires of the other. The result will be the same as that reached by the benefit/detriment analysis, but the difficulties sometimes encountered with that analysis, particularly in the area of detriment, are lessened. Sir Frederick Pollock adopted a price based approach in his work on Contracts (13th edition at page 133). This was approved by the House of Lords in Dunlop v Selfridge [1915] AC 847 at 855. Sir Frederick's summary of consideration was in these terms:

An act or forbearance of one party, or the promise thereof, is the price for which the promise of the other is bought and the promise thus given for value is enforceable.

[40] Benefits may be conferred or, as I would prefer to put it, the necessary price can be paid, either by a promise to do something or by actually doing it. Hence consideration may be provided either by a promise or by an act. A promise confers a benefit in law and an act provides a benefit in fact or a practical benefit, as it is sometimes called. An exchange of promises may provide consideration and so may the exchange of an act for a promise. In the latter case the act must be referable to or respond to the promise, otherwise it will not constitute consideration in law. An act already done without reference to a promise does not satisfy the concept of an exchange which underpins the law of consideration. That is why past consideration, ie. the conferring of a benefit in the past, is no consideration in law. For an act to qualify as consideration for a promise it must necessarily follow the promise unless the promise and the act can be regarded as part of one and the same transaction in which case the sequence will not be critical. The normal situation in which an act can respond to or be referable to a promise is when the promissor expressly or implicitly requests the act as the price of the promise.

[41] Evidence was given on aspects of the law of consideration by Mr Paul Walker QC, a New Zealander who practices at the English bar. It is apparent from his evidence that English law and New Zealand law are materially the same on the subject at the present time. We must identify and apply the relevant English principles and resist any inclination to develop them for New Zealand purposes or indeed for English purposes. That is not our present function. But having identified the principles it is for us to determine whether, according to those principles, consideration was provided by the Ministry of Defence on the present facts.

[42] As is evident from Salmon J's approach to the subject and from the arguments in this Court, the focus in this case is on forbearance as consideration. Both a promise of forbearance and an act of forbearance are capable of being consideration. The essence of the Judge's reasoning lay in his view that whereas a promise to forbear from dismissing R would not have been legally binding, and was thus no consideration in law, an act of forbearance could, and did here, amount to consideration in law. Consideration does not have to be commercially adequate to be sufficient in law. I will use the words adequate on the one hand, and sufficient on the other, to signify that distinction.

Consideration - submissions

[43] The primary focus of R's argument was on the consideration specified in the contract. Parties are not, however, confined to the consideration so specified. If, for some reason, that proves insufficient it is open to the party seeking to uphold the contract to demonstrate that there was nevertheless sufficient consideration, albeit not that specified. The essential question is whether there was consideration which the law recognises. If there was, the fact that such consideration was not specified in the contract or that some other insufficient consideration was so specified, is of no moment. It is for this reason that R's argument based on the way the consideration was expressed in the contract is too confined. While the specified consideration may, as R suggested, be analysed as a benefit to be enjoyed in the future (essentially therefore as a promise to provide that benefit) rather than as a forbearance to terminate an existing benefit (essentially an act), the way the matter is addressed in the contract is not decisive.

[44] The key question is whether there was any act of forbearance by the Ministry which is sufficient consideration in law. R argued that there was not, whereas the appellant submitted the following analysis in support of the existence of sufficient consideration. It was first contended that R had not disputed the proposition that the Ministry had suffered a detriment amounting to valuable consideration. This contention was reinforced by the suggestion that R had failed to recognise that a detriment incurred by the promissor may be sufficient consideration. I regard R's submissions as putting in issue the sufficiency of the asserted act of forbearance, whether from the point of view of benefit to R as the effective promissee, or detriment to the Ministry as effective promissor. For present purposes I do not consider it matters whether one focuses on benefit or detriment. They are essentially opposite sides of the same coin, and in any event the question is more simply addressed by asking whether the Ministry paid any legally recognised price for R's promise of confidentiality.

[45] The appellant's substantive contention was that the Ministry gave consideration for R's promise of confidentiality, not by means of a promise to continue his engagement, but rather by its "continuing to give [R] a posting from 28 October 1996" that being the date when he signed the contract. No reliance is placed on the Ministry's forbearance from returning R to his parent unit up to the time he signed the contract. That is appropriate because such forbearance could not be regarded as having been in exchange for the promise which R gave by signing the contract. Until he signed, it was not known whether he would make a promise of confidentiality. The Ministry's earlier forbearance was past consideration as regards the promise made by R on 28 October 1996.

Consideration - discussion

[46] In my view Salmon J was correct in the conclusion to which he came, albeit in the light of counsel's submissions I will discuss the question more fully. It is possible, indeed appropriate in this case, to view the question of consideration in the comparatively simple way foreshadowed by my earlier discussion. Did the Ministry pay a sufficient price for R's promise of confidentiality? No such price can have been paid by way of a promise of forbearance because, being unenforceable, such promise would not be of value in law and could not therefore constitute a legally recognised price. The question then is whether the Ministry performed any act referable to or in response to R's promise, which act was of value to R and thus constituted a sufficient price for his promise. As earlier noted, giving value in fact will qualify as consideration as well as giving value in law by making a promise capable of enforcement. The Ministry responded to R's promise of confidentiality by not returning him to unit. They forbore from doing so. The Ministry was not bound to forbear and, by doing something they were not already bound to do, they paid a price which the law recognises as sufficient.

[47] There can be no doubt that when making his promise of confidentiality R was implicitly requesting the Ministry not to return him to unit. The Ministry's reciprocal act of forbearance constituted acceptance of R's request, in the sense of creating a contract based on that request and his associated promise of confidentiality. It also constituted consideration for such promise. The contract does not therefore fail for want of consideration.

[48] The foregoing analysis has support in the case law, albeit in cases which were not cited to the Court. Before addressing the cases, I draw attention to the helpful discussion of forbearance as consideration in Treitel's Law of Contract (10th ed - 1999) at 849ff which is mirrored in Chitty's Law of Contract (28th ed - 1999) volume I, General Principles at 3-045ff. The analysis in these works also supports the conclusion which I have reached.

[49] In Alliance Bank Ltd v Broom (1864) 2 Dr. & Sm. 289, Mr Broom owed money to the Bank. The Bank pressed him to give security for his indebtedness. He promised to do so. The Bank made no counter promise of forbearance to sue but, on the strength of Mr Broom's promise, the Bank did in fact forbear to sue. The Court held that by such forbearance the Bank gave consideration for Mr Broom's promise of security which it could therefore enforce. The key point in the Court's reasoning was that Mr Broom had in fact received "some degree of forbearance". That forbearance was of value to Mr Broom and, if one uses the terminology of price, the Bank thereby paid a sufficient price for Mr Broom's promise. It is also inherent in the Court's reasoning that by making his promise Mr Broom offered security and implicitly requested the Bank to forbear. The Bank accepted the offer by its act of forbearance. Because in such circumstances as these the benefit received by the promissor is viewed as factual not legal (in the sense of a counter promise by the promissee), it does not matter that in Broom's case the Bank was capable of giving a binding promise of forbearance, whereas in the present case the Ministry was not. In each case the value to the promissor lay in the fact of forbearance rather than in any legal right to enforce a promise of forbearance. Indeed in Broom's case the Bank had not given any such promise.

[50] The decision of the English Court of Appeal in Miles v New Zealand Alford Estate Co (1886) 32 Ch. D. 267 should also be noted. Having purchased land the company became dissatisfied with its purchase. The vendor promised to make certain payments. His promise was in the nature of a guarantee. Its enforceability came into issue. The company argued that its forbearance from taking steps to rescind the contract provided consideration. The majority of the Court (Cotton and Fry LJJ) held that as no proceedings for rescission were ever intended there was no consideration. Bowen LJ analysed the evidence differently in a judgment which also contains a helpful discussion of the law. He took the view that the case was covered by the principle established in Alliance Bank v Broom (supra) as the threat to rescind was genuine. His legal conclusions were later approved by Lord Macnaghten and Lord Davey in Fullerton v Bank of Ireland [1903] A.C. 309 at 314 and 316. In Fullerton all their Lordships, either expressly or implicitly, approved the decision of the Vice-Chancellor in Alliance Bank v Broom. Even if the view of the majority in Alford were correct, that case is clearly distinguishable from the present because here the Ministry intended to return R to unit if he was not prepared to sign the confidentiality agreement. Indeed it is implicit even in the majority judgments in Alford, that had a claim for rescission been genuinely intended the company would have provided consideration for the vendor's promise by its forbearance from seeking to rescind.

[51] I add one short further point. The view which I take in this case is consistent with the approach to consideration taken by the English Court of Appeal in the relatively recent case of Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1; [1990] 1 All ER 512. There, owners promised a building contractor in financial trouble more money to complete the contract on time. They would otherwise have been required to engage another contractor. The additional money was promised in return for a promise by the contractor to do no more than it was already bound to do. Nevertheless the practical benefit to the owners of obtaining completion on time, rather than having to deal with another contractor, was found to be consideration moving from the building contractor to the owners. The provision of such benefit by the building contractor was a legally recognised and sufficient price for the owners' promise to pay more. That approach to consideration appropriately pays attention to the practical realities of the parties' circumstances rather than to legal niceties. A practical benefit will qualify as consideration as well as the legal benefit of an enforceable promise. Here there can be no doubt that in return for his promise of confidentiality, R obtained the practical benefit of not being returned to unit, a turn of events which he was clearly anxious to avoid.

[52] It is for these reasons that I am of the view the Ministry provided sufficient consideration for R's promise.

Was R ordered to sign?

[53] R contended in the High Court that he had signed the contract only because he had been ordered to do so by his superiors and that as a result the contract was neither valid nor binding on him. That, he argued, was because the order to sign was unlawful and made without authority. The appellant's response was that as R had the option of either signing the contract or returning to his parent unit, there was an element of choice which was inconsistent with the request that he sign being a command or order. Salmon J held that in the circumstances R was ordered to sign. Mr Brown QC for the appellant accepted in this Court that if the Judge was right in that conclusion, the appellant could not enforce the contract because an order to sign was incompatible with the consensual nature of contractual relations.

[54] In coming to his conclusion the Judge placed reliance on the evidence of Soldier A, the commanding officer, which, Salmon J said, suggested that what was in issue was an order. What is important, however, is that Soldier A made the point, as the Judge himself recorded, that members of the UKSF were required to sign only if they wished to continue to serve in that capacity. The Judge also appears to have been influenced by the fact that being returned to one's parent unit involved reduced remuneration, loss of status, and something of a stigma, as it was usually associated with poor performance. The Judge then went on to consider whether what he had found to be an order was judicially reviewable. He concluded that it was and that the order was unlawful. It is unnecessary to consider those last two issues as I am satisfied that R was not ordered to sign the contract.

[55] The kernel of the appellant's argument on this aspect of the case is that the Judge failed to distinguish between what can be described as a true order, ie. one for breach of which a penal sanction could be imposed under military law, and a requirement with which a soldier had to comply only if he wished to remain in the UKSF. R first contended that the Judge's conclusion that he had been ordered to sign the contract was a finding of fact from which this Court should not lightly depart. But in truth the Judge's conclusion was one of mixed fact and law, not subject to the same appellate restraint as are findings of primary fact. We were referred by R's counsel to parts of the evidence in which, amongst other things, the terminology of order was adopted by witnesses and in various documents. I am of the view, however, that matters of terminology are by no means decisive of the present point. What is vital, as other aspects of the submissions on both sides recognised, is the degree of compulsion inherent in what the Ministry was requiring of R: see Nico Keijzer, Military Obedience (1978) at 87.

[56] While the instruction from the Defence Council was an order in the sense that what it required had to be put in place as a matter of process, ie. soldiers who were members of the UKSF had to be told they must sign if they wished to remain members, soldiers at R's level, facing a request to sign, cannot be said to have been ordered to sign. Soldier A did not say any more than that. R had a choice whether or not to sign. While it was an unwelcome choice, it was a genuine choice. He was not ordered to choose the alternative of signing. He was not liable to be disciplined if he did not sign. While the consequences of not signing might be perceived by some to have had disciplinary connotations ie. loss of pay and the stigma of being returned to unit, there is, with respect to the view of the Judge, no basis for saying that R was ordered to sign. He was not. He was ordered to make a choice between signing or being returned to unit. At times the argument on this point became rather theoretical and abstract, but even R accepted in evidence that in the end he was free to choose which course to take; albeit the choice he made was a reluctant one.

[57] It is not appropriate to describe the consequences of refusal to sign as involving sanctions in a penal sense; there were consequences, but they cannot be regarded as penal in nature. Furthermore, failure to sign was to be followed by a period of review and discussion, a course which hardly reflects the ordinary concept of an order. I consider the Judge's reasoning failed to recognise that although the Defence Council gave an order, that order was not addressed to R. He was required, as a consequence of an order addressed to his superiors, to choose what course he wished to take.

[58] My conclusion is supported by the two cases to which we were referred: Travers v Baltimore Police Department 693 A.2d 378 (Md. App. 1997) and Froggatt v R (1992) 9 CRNZ 181. These cases demonstrate that for there to be an order in the present context, there must be no question of choice whether to comply. An order has to be obeyed; non-compliance is a breach of military law. Hence the presence of an alternative to compliance, which the subject of the so-called order may adopt, is not ordinarily consistent with an order strictly so-called. The position would be different if the alternative is really no alternative at all. But the alternative available to R, albeit unpalatable, was a genuine alternative and R cannot therefore be said to have been ordered to sign the contract.

Duress generally

[59] Salmon J held that the contract was vitiated by duress. Having found that R was ordered to sign, it would have been strange if he had not reached that conclusion. I have found there was no such order and it will therefore be necessary to examine the question of duress from that significantly different standpoint. There may have been duress despite the changed basis but the issue requires consideration afresh on the correct premise. The two leading English cases on duress are Universe Tankships of Monrovia v International Transport Workers Federation [1983] 1 AC 366 and Dimskal Co SA v International Transport Workers Federation [1992] 2 AC 152, both decisions of the House of Lords. Salmon J based himself upon Lord Scarman's analysis in Universe Tankships. With respect, he did so in rather too compartmentalised a way. The appellant criticised his reasoning on that basis and also his application of the law to the facts. In the Dimskal case, Their Lordships made reference to Universe Tankships without any suggestion that in general terms Lord Scarman's analysis was inappropriate. So too did the Court of Appeal in CTN Cash and Carry v Gallagher [1994] 4 All ER 714.

[60] The approach taken prior to these cases, whereby duress was seen as vitiating consent, is no longer the essential focus. The law recognises that in all but the most extreme cases of duress there has been consent. The focus is now on the quality of that consent. If it has been given in circumstances which the law regards as justifying relief, the party who acted under duress may avoid the contract, unless it has been affirmed once the circumstances amounting to duress have ceased to operate. It is, however, necessary for the consistent application of the law that there be recognised criteria to determine what circumstances justify relief.

[61] All cases of duress involve the existence of pressure causing the party under that pressure to enter into a contract which, but for the existence of the pressure, would not have been entered into. The pressure can be to the person or to economic interests and can also involve social, professional or moral elements. The pressure may be direct or indirect, and its impact requires an examination of the circumstances in which the party under pressure is situated as a result of the pressure.

[62] Whether the pressure amounts to such compulsion of the will as to constitute duress in law, depends essentially on an assessment of two often linked matters. The first is whether the pressure is regarded in law as illegitimate, and the second is whether the pressure brought about an absence of practical choice. Illegitimate pressure may amount to duress even if there is a practical choice, but the absence of practical choice may suggest the pressure is illegitimate. Illegitimacy of pressure can sometimes arise from conduct which is lawful in itself, albeit it will of course be easier to demonstrate illegitimacy of pressure if it derives from conduct which is unlawful in itself. The starting point must be that the law recognises people generally act under some degree of pressure in making decisions affecting their commercial and other interests. In all duress cases the Court must consider whether the pressure under which the plaintiff was acting should be regarded as legitimate or illegitimate and, in that respect, the nature of any alternatives reasonably open to the plaintiff will be of major importance.

[63] This summary of the relevant law is based primarily on the speeches of Lord Diplock and in particular Lord Scarman in the Universe Tankships case which the members of the House implicitly approved in Dimskal. As regards the reality of the choice or alternative open to the party under pressure, Lord Scarman qualified the word "choice" with the adjective "practical" at 400C in Universe Tankships and with the adjective "practicable" at 400E; but I doubt any significantly different shade of meaning was thereby intended as His Lordship appeared to use the two adjectives inter-changeably.

[64] Directing myself on the foregoing basis, I will consider first whether the pressure exerted on R by the Ministry was illegitimate. This issue is conventionally looked at in two parts; the first concerns the nature of the pressure, and the second the nature of what is usually called the demand. As in this case, these two aspects will often overlap. The case is unusual because it took place in a military environment. The pressure on R involved a combination of economic and professional matters. It derived from the consequences of his not signing the contract, namely a return to his parent unit. That would have involved a significant drop in his salary together with loss of job satisfaction and the risk of some stigma; albeit those knowing why he had been returned to unit might not necessarily have thought any the worse of him. I recognise also that R's potential return to his parent unit must be seen against the fact that he had never actually served in that unit, having moved straight from the New Zealand SAS to its counterpart in the British Army.

[65] The nature of the demand was that he agree to keep confidential his experiences in the UKSF. That demand came at a time when it seems from the evidence that R was not planning to write a book. Indeed he indicated his plan to do so was formed later. Apart from those not wishing to sign a confidentiality agreement as a matter of principle, the only people practically affected by the Ministry's demand, here more accurately its request, would be those who had actual or potential plans to make public in some form their experiences in the UKSF. The Ministry's request was made in good faith in the reasonable belief that what was proposed would be in the best interests of the UKSF as a whole. Those responsible for initiating the request considered that the confidentiality contract would assist both the morale and the effectiveness of those serving in the UKSF. As noted earlier, there had been a substantial groundswell amongst those involved for something to be done.

[66] It sometimes happens that in the best interests of an organisation as a whole, the interests of some individual members may have to be curtailed to some extent. I consider this is a fair way to analyse the circumstances of this case. It was reasonably thought by those in charge that the interests of the UKSF as a whole would be best served by a total prohibition on disclosure, subject to the capacity of those wishing to disclose something to seek consent, which could reasonably be expected to be given in appropriate circumstances. Bearing in mind these various factors I do not consider the pressure to which R was subject can fairly be characterised as illegitimate pressure, either by dint of its nature or by dint of what it was that R was under pressure to do.

[67] Pressure to yield an important human right, like freedom of speech, must always be viewed with care. But when "all the distinctive features of [the] case", as Steyn LJ put it in CTN Cash and Carry at 714, are brought to account, I find myself unable to hold that the pressure concerned was illegitimate. Indeed it is interesting to note that Salmon J himself held that the introduction of the confidentiality contract was lawful, albeit he regarded R as having signed under duress. Lawful conduct may in some circumstances amount to illegitimate pressure, but I do not think that view can reasonably be taken in the present case.

[68] I do not overlook the nature of the relationship between the parties which is a factor relevant to duress, as it is to the next topic, undue influence. The relationship between R and his military superiors was inherently one of some compulsion but, as already demonstrated, R was not ordered to sign and did have a practical, albeit unpalatable, choice open to him. For this reason R is unable to show the absence of a practical choice or alternative. The degree of pressure on R and the reality of the alternative open to him and therefore the extent to which he suffered from compulsion of his will, must also be assessed in the light of the nature of the disadvantage involved in signing the contract. Obviously signature limited his future options. How great a price he was prepared to pay to avoid such limitation was essentially for him to decide. Having no specific plans to publish when he was asked to sign, he presumably decided that the price of being returned to unit was higher than he was prepared to pay to keep his publishing options fully open. If he had had firmer publishing plans at the time he was asked to sign, he might perhaps have found the price of being returned to unit worth paying. Essentially the choice which R had to make involved his assessment of the advantages and disadvantages which would accrue either way.

[69] Cases involving an absence of practical choice are essentially such that the balance of advantage or disadvantage is so heavily weighted one way or the other that it can fairly be said that the so-called choice was no real choice at all. I do not consider that this case is at that level. In coming to this conclusion I have given careful consideration to the points made on R's behalf, both in written and oral submissions, but find myself unable to uphold Salmon J's conclusion. Although R was under pressure, that pressure was not of such a kind or at such a level that it amounted to duress in law. The quality of R's consent was not impaired to the necessary extent.

Undue influence - general principles

[70] Before I turn to the substance of undue influence, it may be helpful to compare it with duress. Undue influence was equity's reaction to the originally narrow scope of duress at common law, limited as it was to actual violence to the person. The classic circumstance in which equity intervened was when the relationship between the parties was one of trust and confidence thereby invoking the dominant party's conscience. In that event an inference, or presumption as it was conventionally called, of undue influence was deemed by equity to arise from the qualifying relationship. This cast an evidential onus onto the stronger party to demonstrate that no undue influence had been involved in procuring the impugned transaction. No such inference or presumption has ever applied in cases of duress which is normally invoked when the parties are more or less at arms length in relationship terms. Undue influence can of course be affirmatively proved by a plaintiff having sufficient evidence and, in that case, it is conventionally called actual undue influence to distinguish it from presumed undue influence. Duress and undue influence have in common the exercise of pressure, directly or indirectly, by the stronger party on the weaker party to enter into the impugned transaction. The pressure which can establish undue influence is, however, of broader scope than that required for duress, in that, amongst other things, the concept of illegitimacy is not involved. On that basis I turn to consider, to the extent necessary, the current state of the law.

[71] The leading English case on undue influence, at the time of hearing, was Barclays Bank PLC v O'Brien [1994] 1 AC 180. At 189 Lord Browne-Wilkinson adopted, with the concurrence of the other four members of the Appellate Committee, the classification which was first formulated by the Court of Appeal in Bank of Credit and Commerce International S.A. v Aboody [1990] 1 QB 923, 953. Cases in Class 1 represent those in which the plaintiff can affirmatively prove actual undue influence. Class 2 involves cases in which undue influence is presumed unless it can be rebutted. In Class 1 cases the party asserting undue influence (X) proves that the other party (Y) in fact exerted undue influence upon X to enter into the impugned transaction. Cases within Class 2 fall into two sub-classes. Class 2(A) involves certain relationships (such as solicitor and client or doctor and patient) which give rise to a legal presumption of undue influence. Class 2(B) represents cases in which although the relationship between X and Y is not of itself such as to raise a legal presumption of undue influence, X can show that there existed such a relationship of trust and confidence between the parties and the transaction was of such manifest disadvantage to X that it can reasonably be presumed that Y did in fact exert undue influence on X to enter into the impugned transaction.

[72] The preceding paragraph was prepared before the House of Lords gave judgment very recently in Royal Bank of Scotland v Etridge (No. 2) [2001] 4 All ER 449. The majority of Their Lordships held in that case that no presumption of undue influence arises out of any relationship in itself. The relationship may give rise to a presumption of trust and confidence, but not a presumption that such trust and confidence was abused by the exercise of undue influence. But when the nature of the transaction calls for explanation in the light of the relationship between the parties, the evidential onus shifts to the defendant to demonstrate the absence of undue influence. The concept of manifest disadvantage which had caused some difficulties was thus retained as a relevant factor in the overall evidential assessment but was abandoned as a separate criterion.

[73] Paragraph [71] must now be read in the light of the speeches in Etridge. Their Lordships indicated, with a greater or lesser degree of emphasis, that the structural analysis adopted by the House in O'Brien's case should not be regarded as confining, and in places required clarification, the major clarification being that referred to in my previous paragraph. Subject to that, Lord Hobhouse said at 480b that doubt was not intended to be cast on the authority of O'Brien's case.

[74] At 459g Lord Nicholls drew an analogy with what he called the common law principle of res ipsa loquitur. Lord Hobhouse said at 483a that the language of presumption was likely to confuse rather than assist. He also compared the position with res ipsa loquitur. Lord Scott spoke in terms of presumption, albeit doubting the utility of the Class 2(B) classification, as opposed to Class 2(A) which he viewed as useful in identifying particular relationships where the presumption arose. He too likened Class 2(B) with res ipsa loquitur (see 503d and e) and emphasised that he was using the word presumption only in an evidential sense. Lord Clyde was of the view that the attempt to build up classes or categories might lead to confusion and that the division into cases of actual or presumed undue influence appeared illogical. To his mind the distinction confused definition and proof: see 477f and g. Lord Bingham did not expressly address these points. He simply expressed his agreement with both Lord Nicholls and Lord Scott in relation to the minimum requirements resting on banks in cases where wives guaranteed husbands' borrowings. In that respect I note he indicated that if there was any difference of approach, Lord Nicholls' opinion commanded the unqualified support of all members of the House.

[75] I have included this reference to Etridge for two reasons. First it should be noted as representing developments in this area of the law since the case was argued in this Court. Second it requires attention lest the developments might necessitate our revisiting this aspect of the case in the light of what the House of Lords has said in Etridge. The rest of this section of my judgment will be couched on the basis of the law as it stood when the case was before Salmon J and when it was argued before us. The developments in Etridge do not, in my view, affect the way in which this part of the case should be decided. If anything they make R's case more difficult to establish. With this interpolation, I return to the text of the judgment I had prepared before the decision of the House of Lords in Etridge was announced. I will not endeavour to recast what follows to reflect the effect of Etridge on O'Brien, which relates essentially to what has been called presumed undue influence as opposed to actual undue influence.

[76] Salmon J held that the relationship between R and his superiors was not such as raised a legal presumption in terms of Class 2(A). The Judge did, however, hold that R had proved a Class 2(B) relationship sufficient to raise the presumption in fact. The Judge was of the view that the presumption did not apply because there was no manifest disadvantage to R in the transaction. That finding is perhaps a little difficult to reconcile with his duress discussion, particularly in the order/practical choice area. R nevertheless succeeded on his undue influence cause of action because the Judge considered he had established Class 1 actual undue influence and to that subject I now turn.

Actual undue influence

[77] The Judge's reasoning and analysis in this respect were necessarily influenced by his finding that there was an order which I have not upheld. As in the area of duress, it is necessary to re-examine the Judge's undue influence finding on the correct footing. I do not consider R established actual undue influence on the part of the Ministry. My discussion of duress is of relevance here also. I am of the view that R exercised a voluntary choice to sign the contract. The pressure he was under did not represent undue influence by the Ministry. Undue influence generally involves such moral pressure on the plaintiff to sign that there is "domination by a wrongdoer of the mind and will of the complainant so that the mind of the latter becomes a mere channel through which the wishes of the former flowed": see Royal Bank of Scotland v Etridge (No 2) [1998] 4 All ER 705, 712 (CA) per Stuart-Smith LJ delivering the judgment of the Court of Appeal in that case. The channel metaphor was taken by His Lordship from the judgment of Morris LJ in Tufton v Sperni [1952] 2 TLR 516, 532. At 713 Stuart-Smith LJ made the distinction between a person signing, however reluctantly, being persuaded that it is the right thing to do, and a case in which, what he called, the "wrongdoer's importunity" had left that person with no will of their own. I do not consider the substance of this approach has been affected by Etridge in the House of Lords. Once the proposition that R was ordered to sign is removed from the equation, I do not think that the circumstances of this case measure up to what is required for actual undue influence.

[78] I consider that there is force in the appellant's submission that R must accept liability for and the legal consequences of his decision to sign. The proposition that R was left essentially with no will of his own is difficult to reconcile with the evidence that after signing the contract R said to a fellow soldier that it was not worth the paper it was written on. Once the connotation of order is removed from the arena, there is in my view no basis for finding actual undue influence against the Ministry. I accept the appellant's contentions in this respect.

Presumed undue influence (subject to Etridge)

[79] I deal with this topic for completeness and commence by saying that I agree with the Judge's conclusion that the relationship between soldiers and their superior officers should not be regarded as one falling into Class 2(A). The relationship is not one which of itself raises a presumption in law of undue influence. It is appropriate to note that R did not contend to the contrary. It is therefore necessary to examine the particular circumstances of the soldier/superior relationship to see whether it comes within Class 2(B). Here I have difficulty with the Judge's approach. Having held that the relationship was not one which per se raised the presumption, it was necessary for the Judge to identify what particular features of the relationship involving R and his superiors justified a Class 2(B) presumption. After discussing the general command structure of army life and the need to show that one party reposed trust and confidence in the other, the Judge continued:

In my view, the relationship between enlisted soldier and superior officers is such that the latter necessarily occupies a position of ascendancy, power and domination over the former who in turn takes a position of dependence and subjection. I therefore conclude that on the facts the relationship falls within class 2B and raises a presumption of influence.

[80] That, with respect, seems to assert little, if anything, more than the general nature of the relationship between a soldier and superior officers which the Judge had earlier rightly held did not give rise to a Class 2(A) presumption. The Judge's conclusion that "on the facts" the relationship fell within Class 2(B) was really based on no facts particular to the relationship between R and his superiors but on the general nature of such a relationship.

[81] In the case of a relationship of the present type, it is necessary, before a Class 2(B) presumption can arise, for there to be something about the relationship between soldier and superior to justify a finding that between those persons there was a particular relationship of trust and confidence of such a nature as to justify raising the presumption. It was not, and could not, be suggested that R had any particular relationship with any particular superior officer, let alone a relationship in which he placed particular trust and confidence in that officer. The present case involves R's superior officers generally, and has none of the conventional indicia of the necessary relationship of trust and confidence to raise the presumption. Indeed the evidence shows that during the period leading up to his signing, R had materially lost confidence in his superiors. Whereas Salmon J rejected R's Class 2(B) argument on the basis of lack of manifest disadvantage, I consider he should also have rejected it on the basis that the necessary relationship was not established.

[82] I will revert briefly to Etridge in the House of Lords. If an approach akin to res ipsa loquitur is taken to the present circumstances, they cannot be said to evoke the response that the nature of the transaction, in the light of the relationship between R and his superiors, was, without further evidence, probably the product of undue influence. The case is not one in which the presence of undue influence speaks for itself in such a way as to justify that conclusion in the absence of contrary explanation. Hence my earlier observation that Etridge does not mandate or justify any different result from that reached under O'Brien.

Undue influence - conclusion

[83] For these various reasons I consider the Judge was in error when he found the contract was vitiated by undue influence. Absent an order to sign, there was no actual undue influence. Any influence that was brought to bear on R cannot in the circumstances be characterised as undue. Nor were the circumstances such as to raise any presumption of undue influence, either under Class 2(A) or Class 2(B). Even if there had been such a presumption, I consider the appellant would probably have been able to claim that the presumption was rebutted in the particular circumstances of this case. In any event the appellant has succeeded in showing that the contract was not liable to be set aside for undue influence and must therefore succeed on this issue.

Unconscionable bargain

[84] By way of cross appeal R challenged Salmon J's conclusion that the contract was not an unconscionable bargain. The Judge accepted that R was in a position of bargaining disadvantage or weakness, but he did not consider that the features necessary to establish an unconscionable bargain were present. I remind myself again that we are required to apply English law to the present case and that the English approach to unconscionable bargains may not have developed to the same extent or in exactly the same way as its New Zealand and Australian counterparts.

[85] The first relevant case is O'Connor v Hart [1985] AC 1000; [1985] 1 NZLR 159, a decision of the Privy Council, coincidentally in a New Zealand appeal. The Privy Council was therefore dealing with the law of New Zealand, but the case is nonetheless of importance because their Lordships did not suggest that there was any material difference from English law. Lord Brightman, who delivered the reasons for their Lordships' judgment, emphasised that what was required for equity to set aside a contract as an unconscionable bargain, was something akin to equitable fraud, engaging the conscience of the party concerned. Fraud in equity was classically some feature which equity regarded as weighing on the conscience of the plaintiff at law to such an extent as to preclude the enforcement of legal rights. It was described by Lord Brightman in O'Connor v Hart in this way at 1012, 171:

"Fraud" in its equitable context does not mean, or is not confined to, deceit; "it means an unconscientious use of the power arising out of the circumstances and conditions of the contracting parties"; Earl of Aylesford v Morris (1873) 8 Ch App 484, 490. It is victimisation, which can consist either of the active extortion of a benefit or the passive acceptance of a benefit in unconscionable circumstances.

[86] A good early example of equity's approach to setting aside contracts on the basis of equitable fraud (in its various forms) is the statement of Lord Thurlow LC in Fox v Mackreth (1788) 2 Bro CC 400, 422:

The Court will not correct a contract, merely because a man of honour would not have entered into it; it must fall within some definition of fraud; the rule must be drawn so as not to affect the general transactions of mankind.

[87] This and other illustrative citations are made by David Ibbetson in his valuable work A Historical Introduction to the Law of Obligations (Oxford University Press - 1999) at 208ff. In rejecting the view that the contract in O'Connor v Hart was an unconscionable bargain, their Lordships said at 1015, 174:

There was no equitable fraud, no victimisation, no taking advantage, no over-reaching or other description of unconscionable doings which might have justified the intervention of equity to restrain an action by Mr Hart at law.

[88] The most recent decision of the English Courts to which we were referred is that of the Privy Council in Boustany v Pigott [1995] 69 P & C.R. 298 on an appeal from the Court of Appeal of Antigua and Barbuda. At 303 Lord Templeman described an unconscionable bargain as one involving the imposition of objectionable terms on a weaker party in a reprehensible manner; the weaker party being someone suffering from a disabling condition or circumstance. The authorities in England also include Alec Lobb (Garages) Ltd v Total Oil Great Britain Ltd [1983] 1 WLR 87, and Multiservice Bookbinding Ltd v Marden [1979] Ch D 84 to which Lord Templeman referred. Marden's case was the source of Lord Templeman's description of an unconscionable bargain referred to above. The judgment of the Court in that case was given by Browne-Wilkinson J and the full passage at 110 is significant because His Lordship spoke of the imposition of objectionable terms in a "morally" reprehensible manner, adding "that is to say in a way which affects his conscience". His Lordship thereby made the link, natural for a Chancery Judge, to the concept of equitable fraud.

[89] These authorities demonstrate that for a bargain to be characterised as unconscionable, and thus able to be set aside, there will necessarily be (1) serious disadvantage on the part of the weaker party known to the stronger party, and (2) the exploitation of that disadvantage by the stronger party in circumstances amounting to actual or equitable fraud. Associated with (1) and (2) will usually, but not necessarily be (3) some procedural impropriety, established or presumed, and attributable to the stronger party, and (4) a substantial inadequacy of consideration. This summary, when compared with that undertaken by the New Zealand High Court in Bowkett v Action Finance Ltd [1992] 1 NZLR 449, 460 shows that the English and New Zealand manifestations of an unconscionable bargain are not markedly different - see also Nichols v Jessup [1986] 1 NZLR 226 mentioned by Lord Templeman in Boustany v Pigott.

[90] I have considered the submissions which counsel made on R's behalf on this aspect of the case. I do not, however, consider that in context R can be regarded as suffering from a serious disadvantage. He was an experienced and obviously highly skilled and intelligent soldier who found himself facing an unpalatable choice. Nor can it be said that the Ministry were guilty of exploitation or victimisation of R. Procedurally there was undoubtedly pressure on R, contributed to both by the unwelcome choice with which he was faced and the way in which the Ministry went about procuring the signatures of members of the UKSF. I do not, however, consider there was any unconscientious use of power, or any taking of advantage, overreaching or other unconscionable doings, as Lord Brightman put it in O'Connor v Hart. All in all, I am of the view that R has not demonstrated circumstances justifying the conclusion that the bargain was unconscionable. The Ministry's conscience does not require it to say to itself - we cannot in all good conscience enforce or take advantage of this bargain. That, in colloquial terms, is what must be established by a party seeking to avoid contractual obligations on the basis that they represent an unconscionable bargain.

Interpretation of contract

[91] In the High Court there was argument about the true meaning of the contract. R contended it should be construed as covering only confidential or sensitive information, whereas the appellant argued that its plain words should not be read down and that accordingly "any information" meant literally any information relating to the work of, or in support of, the UKSF. The Judge had to deal with some collateral issues with which we are not concerned and expressed his conclusion in these words:

The question is, whether these references and the background to the requirement to sign the contract justify the submission that the wide words used should be read down. I have concluded that they do not. Although the purpose may be to ensure that sensitive or potentially damaging information is not disclosed, the method of ensuring that that is so, adopted by the agreement, is a complete prohibition on the disclosure without prior consent of any information as described in para.1 of the contract. It is also clear that that obligation is a lifelong one.

[92] For those reasons the Judge held the contract had the effect for which the appellant contended. By way of cross-appeal R challenged that conclusion. He argued that the parties could not have intended the words "any information" to cover information already in the public domain. In addition it was argued that a so-called confidentiality contract should not be held to apply to information which was not confidential.

[93] To accept those arguments would involve a rewriting of the way in which the contract is expressed. R agreed to keep confidential any information, meaning in context all information, of the kind described. The question when the Ministry might consent to disclosure is a completely separate matter. I have considered the various arguments advanced on R's behalf but find myself in the end driven back to the fundamental point that the parties must be taken to have intended what they have clearly said. No amount of debate about the correct way to interpret contracts can justify a departure from that basic proposition.

Relief

[94] At common law only contractual obligations involving the payment of a sum of money were regarded as specifically enforceable. The enforcement of other obligations was available only in equity and was thus discretionary and subject to equitable considerations. As has often been said, specific performance is normally granted when damages or other financial relief would be inadequate. Put conversely, specific performance will not ordinarily be granted in cases where financial relief constitutes an adequate remedy; for a recent authoritative confirmation of this general but not immutable principle see Cooperative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1, 11 per Lord Hoffman. In parallel with this approach is the fact that specific performance and restraint by injunction are discretionary remedies, not available as of right: Stickney v Keeble [1915] AC 386, 419. It is important, however, to note that the discretion involved is a judicial discretion and must be exercised in a principled way: Lamare v Dixon (1873) L.R. 6 H.L. 414, 423 and Argyll Stores (supra) at 16.

[95] As a consequence of his view that the contract was unenforceable, Salmon J did not have to address what relief should be awarded for its breach or threatened breach. I can therefore move immediately to counsel's submissions for and against R's contention that even if otherwise valid and enforceable the contract should not, on equitable grounds, be specifically enforced against him.

[96] R's first stance was that, either by reference to the European Convention on Human Rights or the New Zealand Bill of Rights Act 1990, the Court ought not to restrain publication of his proposed book because to do so would constitute a breach of his right to freedom of expression. I accept that R's right to freedom of expression is a material ingredient in deciding what form of relief should be awarded, but I do not consider it has the decisive force for which R contended. Nor do I consider that R should be held to have waived his right to freedom of expression, as the appellant suggested. There is no evidence that, being consciously aware of his rights, he made a deliberate decision to waive them to the extent inherent in signing the contract; albeit he obviously thought it appropriate, at least at that time, to give up his right to publish in return for remaining in the UKSF. The view I take is that these matters simply form part of the overall fabric of the case on the basis of which the Court's ultimate discretion must be exercised. Other aspects which were the subject of oral discussion rather than written submission, must now be brought into the picture.

[97] The appellant is naturally anxious to have the contract upheld because of the general applicability of its terms to all members of the UKSF. I have upheld the contract in the sense of declaring it to be valid in law in the circumstances found to exist in this case. It is not vitiated by lack of consideration, duress, undue influence or on account of being an unconscionable bargain. Whether it should be specifically enforced, by injunctive relief, is a separate matter involving assessment against the particular circumstances pertaining to R's case. Prima facie the contract is of a kind capable of specific enforcement by injunctive relief, and in respect of which damages or an account of profits would seldom be a sufficient or appropriate remedy. The main purpose of the contract is to prevent disclosure without consent. Ordinarily a person governed by its terms should not be able, in effect, to buy the ability to disclose by paying damages or accounting for profits. But this case has a number of singular features which require careful consideration in order to assess the force of R's contention that in his particular case it would not be equitable for publication to be restrained.

[98] The events with which the proposed book is concerned took place over ten years ago. Almost all of what is to be published is already in the public domain, and the rest is subject to restraint under the breach of confidence cause of action. Several previous books on the same subject have been published. R's intended publication is designed to put the events in question in a different and what he sees as the correct light. As the appellant acknowledged, the contract itself contemplates that some publication may be allowed. It can reasonably be inferred that consent to publication might be expected in the case of subject matter which raised nothing confidential or sensitive. It was not suggested that there was an implied term to that effect but it is hard to think of any other basis on which the discretion to give or withhold consent was intended to be exercised. I have already noted the extent to which the subject matter of the proposed publication is already in the public domain.

[99] There is also the point that the contract covers past events as well as those taking place in the future. It therefore had a substantial and material retrospective effect on R which was apt to bear more heavily on someone like him than on others who were not placed as he was. This aspect is underlined by the fact that others engaged in the Bravo Two Zero patrol, or associated with it, had already published versions of the events in question before the retrospective prohibition was introduced. While ordinarily the appellant would be entitled to expect the court to restrain a threatened breach of the contract, the foregoing combination of circumstances, together with the circumstances in which R came to sign the contract, lend considerable credence to R's argument that overall the appellant should not be entitled to invoke the assistance of the equitable remedy of injunction, but should be left to his financial remedies of damages and account of profits. It is necessary, however, to examine the extent to which R's circumstances can be said to conform with established principles in relation to the occasions in which contractual obligations may not be specifically enforced.

[100] The authorities and texts on the granting of specific performance, either by mandatory order or injunctive relief, demonstrate that there are several principled bases, potentially relevant to the present case, upon which such equitable relief may be withheld. The first is that the contract was procured by means which, although not amounting to grounds of invalidity like duress or undue influence, are nevertheless regarded by equity as unfair. The second related basis is when the conduct of the party seeking specific performance is such as to disqualify that party from seeking the assistance of equity. The third basis is when the contract is supported by consideration which is sufficient in law, but which is materially inadequate in the eyes of equity. The fourth basis is when there is a lack of mutuality of remedy, ie. when the Court could not order specific performance against the plaintiff if the contractual default had been that of the plaintiff.

[101] It is important to appreciate that in circumstances such as those just noted, it is not the case that specific performance must be withheld. The circumstances identified simply represent cases in which it has been recognised that, in principle, specific performance may be withheld and the plaintiff left to such other remedies, almost always financial, as may be available. It is not necessary to refer here to individual cases. The topic is thoroughly discussed in Treitel, The Law of Contract, op. cit. at 949ff: see also Chitty, op. cit. at 28-001ff and in NZ Burrows Finn and Todd op. cit. at 20.4.3 (page 766) ff.

[102] It is convenient to address the first and second of the foregoing bases together. Although I have found that R was not ordered to sign the contract and that there was no duress, undue influence, or unconscionability such as to render the contract unenforceable or liable to be set aside, there can be no doubt that, both in the lead-up to his signing and at the point of signature, R was under significant moral and economic pressure to sign. I do not wish to appear unduly critical of events which took place within the constraints of service discipline. It is apparent, however, that the inherent pressure upon R was compounded by the fact that he was told he could not take any form of outside advice and, in particular, outside legal advice on whether he should sign and what his rights generally were. In a civilian situation to deprive a party to a proposed contract of that ability would seem highly objectionable. I do of course recognise the military environment and the perceived confidentiality constraints which were present. What remains, however, is the inherently coercive situation in which R found himself and his inability to obtain independence advice once he realised the full scope of the contract. Had this point stood alone, it may well not have been enough to justify withholding injunctive relief but it is a significant background feature.

[103] It is also convenient to take the consideration and mutuality of remedy points together. As earlier demonstrated, consideration was provided by the Ministry's act of forbearance. There was no way R could enforce forbearance for any time into the future. Thus the consideration provided by the Ministry, although real and sufficient in law, could well be regarded as unbalanced in equitable terms. I recognise of course that it was R who chose to leave the UKSF and that if he had not chosen to do so it seems probable that he would have remained a member in the ordinary way. But in consideration terms he was not obtaining, in return for his promise of confidentiality, any legal right to require the Ministry to continue to employ him. The other side of this coin is that, although the Ministry claims to be entitled specifically to enforce R's promise of confidentiality, he could not enforce any promise of continuing employment against the Ministry. This is the kind of lack of mutuality of remedy which, in some circumstances, has been held to justify withholding specific performance, whether of a positive or a negative covenant: see Blackett v Bates (1865) L.R. 1 Ch App 117; Page One Records Ltd v Britton [1968] 1 WLR 157, and Price v Strange [1978] Ch 337 (CA) in which Goff and Buckley LJJ gave the subject close consideration with the concurrence of Scarman LJ.

[104] There is a further factor in the present case, briefly touched on earlier, which requires separate mention. It concerns the place of freedom of speech in a situation such as the present. I have already said that R's rights in this respect should not be regarded as decisive. They do, however, have relevance to the exercise of the Court's discretion as to remedy. As already noted, it is not suggested that publication of R's book, with the small restraint which Salmon J approved, will bring into the public arena anything sensitive or confidential in nature which is not already publicly known.

[105] There is a clash of rights between the parties. The Ministry seeks to assert its private law contractual right to restrain R from publishing his book. He seeks to assert his public law right to speak freely about the Bravo Two Zone patrol. Each right is of importance in the overall fabric of the law. There is a public interest in contractual obligations being upheld and enforced, albeit by what remedy is another matter. There is also a public interest in rights to freedom of speech not being curtailed, except for good cause. The contract in this case implicitly recognises the need for some mechanism to assess where the balance should lie in the individual case. It does so by its introduction of the capacity for written consent to be given to a proposed disclosure. I have already mentioned the connotations of that provision which demonstrate that the parties envisaged cases in which some departure from the otherwise total embargo would be appropriate. The question whether any such departure should be allowed must have been intended to be addressed on a principled and logical basis rather than arbitrarily or capriciously. The intended focus must have been on the potential harm of the proposed disclosure, both in itself and as signalling too easy a departure from the total embargo created by the contract.

[106] I have considered the relationship between this case and the Spycatcher cases, particularly Spycatcher 2: Attorney-General v Guardian Newspapers Ltd (No. 2) [1990] 1 AC 109, 233. Spycatcher 2 was a case involving breach of confidence rather than breach of contract; but in substance the obligation was the same. Mr Wright, who disclosed the secret information, was held to have owed a lifelong obligation of confidence in equity, whereas here R undertook a lifelong contractual obligation of confidentiality. In Spycatcher 2, Mr Wright was the first to bring the information into the public domain. In this case others have done so and R wishes to put his own interpretation on events which have already been the subject of several prior publications and films. Whereas in Spycatcher 2 the House of Lords held that the obligation on Mr Wright was a "brightline" absolute one involving no balancing public interest factors, the position as regards secondary publishers like the newspapers was not seen in such sharp terms because, by then, the information had lost its original confidentiality. In some ways R can here be likened to such a secondary publisher because of the earlier publications.

[107] It is therefore appropriate to consider public interest factors such as those discussed by Lord Goff in his speech. The more is this so when the immediate question is not the content of the obligation but rather whether equitable relief by way of restraining publication is, in all the circumstances, appropriate. Although it may not be right to equate the material presently in issue with Government secrets, and military matters are not the same as governmental ones, the following passage from Lord Goff's speech at 283 is helpful by analogy in deciding the present discretionary issue, because the same question of restraint of publication arises:

In cases concerned with Government secrets, as appears from the judgments of two Chief Justices - of Lord Widgery C.J. in Attorney-General v Jonathan Cape Ltd. [1976] Q.B. 752, 770, and of Mason C.J. (then Mason J.) in Commonwealth of Australia v John Fairfax & Sons Ltd., 147 C.L.R. 39, 51-53 - it is incumbent upon the Crown, in order to restrain disclosure of Government secrets, not only to show that the information is confidential, but also to show that it is in the public interest that it should not be published. The relevant passages in the above judgments are set out in the speech of my noble and learned friend, Lord Keith of Kinkel, and I need not repeat them. The reason for this additional requirement in cases concerned with Government secrets appears to be that, although in the case of private citizens there is a public interest that confidential information should as such be protected, in the case of Government secrets the mere fact of confidentiality does not alone support such a conclusion, because in a free society there is a continuing public interest that the workings of government should be open to scrutiny and criticism. From this it follows that, in such cases, there must be demonstrated some other public interest which requires that publication should be restrained.

[108] His Lordship then turned to how the question of article 10 of the European Convention on Human Rights (the freedom of speech provision) fitted into the picture. He said, still at 283:

Finally, I wish to observe that I can see no inconsistency between English law on this subject and article 10 of the European Convention on Human Rights. This is scarcely surprising, since we may pride ourselves on the fact that freedom of speech has existed in this country perhaps as long as, if not longer than, it has existed in any other country in the world. The only difference is that, whereas article 10 of the Convention, in accordance with its avowed purpose, proceeds to state a fundamental right and then to qualify it, we in this country (where everybody is free to do anything, subject only to the provisions of the law) proceed rather upon an assumption of freedom of speech, and turn to our law to discover the established exceptions to it.

[109] The passage from Mason J's judgment in the Fairfax case referred to by Lord Goff is worth citing because of its acceptance, both by Lord Goff and by Lord Keith, who expressed his broad agreement with it at 258:

The equitable principle has been fashioned to protect the personal, private and proprietary interests of the citizen, not to protect the very different interests of the executive government. It acts, or is supposed to act, not according to standards of private interest, but in the public interest. This is not to say that equity will not protect information in the hands of the government, but it is to say that when equity protects government information it will look at the matter through different spectacles.

It may be a sufficient detriment to the citizen that disclosure of information relating to his affairs will expose his actions to public discussion and criticism. But it can scarcely be a relevant detriment to the government that publication of material concerning its actions will merely expose it to public discussion and criticism. It is unacceptable in our democratic society that there should be a restraint on the publication of information relating to government when the only vice of that information is that it enables the public to discuss, review and criticise government action.

Accordingly, the court will determine the government's claim to confidentiality by reference to the public interest. Unless disclosure is likely to injure the public interest, it will not be protected.

[110] Although, as I have said, there are material differences between the present case and those from which these citations come, I consider that they provide some analogous help when the Court has to consider whether, in its discretion, R should be restrained from publishing his proposed book or whether the appellant should be left to the other rights which the Ministry possesses under the contract.

[111] I have carefully considered the competing considerations, and all that counsel said on the topic. I have considered the appellant's natural desire, on this first challenge to the contract, to avoid any curial suggestion that its terms are invalid or will not be enforced. I am of the view that the contract should generally be specifically enforced. But I am, however, persuaded that the particular and most unusual combination of circumstances in the present case is such that equity should not allow the appellant to obtain enforcement of the contract by injunctive relief. The balance of all the relevant considerations falls clearly in favour of R on this point.

[112] I wish to make it perfectly clear, however, that if R chooses to publish, he will be doing so in breach of his contractual obligations and the appellant will be entitled to claim damages and an account of profits. While I am not prepared to restrain R by injunction, there is no basis upon which the appellant can be denied financial relief if R chooses to publish in breach of the contract. He thereby has his opportunity to put his side of the story but must meet his contractual obligation to compensate for any harm caused and to hold any profit to the Ministry's account.

[113] I have referred to both damages and account of profits. The latter is specifically within the compass of the contract, the terms of which are set out in para [24] above. Clause 4 specifically envisages that R will hold for the Ministry any profits he makes from a publication in breach of the contract which accordingly provides a contractual entitlement to this form of financial relief. As to damages, it seems unlikely that the Ministry would be able to establish any loss or harm deriving from publication of R's manuscript which could properly be the subject of an award of damages in addition to an account of profits. I would, however, leave that point open as it does not yet arise. To an extent an account of profits is, in this case, a kind of specific performance but of a monetary kind. Whereas injunctive relief would not be equitable and should be refused as a matter of discretion, for the reasons already given; the contractually provided remedy of accounting for, strictly assignment of profits is in a different category to which the discretionary issues do not apply, or at least not with the same effect.

Conclusion

[114] The Judge found in the appellant's favour in respect of what he described as some minor matters under the breach of confidence cause of action. These were aspects of the proposed book which, in the Judge's view, represented breaches of R's duty of confidence outside the contract. No appeal was brought by either side in relation to this cause of action. This is what the Judge said in relation to the form of the judgment in his Court:

For the reasons contained earlier in this judgment the plaintiff's claim under the first cause of action fails. I have found in the plaintiff's favour in respect of some minor matters under the second cause of action. I anticipate that the plaintiff and the defendant will be able to reach agreement without difficulty as to appropriate amendments to the manuscript to meet the concerns expressed in Schedule B to this judgment. Subject to that agreement being reached, the appropriate course to follow would be to find in the defendant's favour in respect of both causes of action. The parties should advise the Court when, and if, agreement is reached. If agreement is not reached in relation to the Schedule B matters, leave is reserved to apply, if necessary.

[115] Costs were awarded to R in the High Court. I consider that the best course is to remit the case to the High Court for the entry of such formal judgment, if any, as may be required on the breach of confidence cause of action, and also such formal judgment, if any, as may be required on the breach of contract cause of action to reflect the conclusions reached in the judgment of this Court. The order for costs in R's favour in the High Court should be set aside. In view of the ultimate outcome I would not make any order for costs in this Court. They should lie where they fall. The question of costs in the High Court should be remitted to that Court for determination, if the parties cannot agree, in the light of the fact that the appellant does not succeed in obtaining injunctive relief, but does succeed in upholding the contract for all other purposes.

Formal orders

[116] The Court being unanimous, the appeal and cross appeal are formally determined as follows:

(1) To enable the parties to consider their positions the orders below are not to be sealed and will not come into effect until 14 days have elapsed from and excluding the date of delivery of judgment. The current stay will continue in the meantime but is rescinded at the end of the 14 day period.

(2) The proceeding is remitted to the High Court for the entry of such formal judgment, if any, as may be required on the breach of confidence cause of action; and also such formal judgment, if any, as may be required on the breach of contract cause of action to reflect the conclusions reached in this Court.

(3) The order for costs in R's favour in the High Court is set aside. The question of costs in the High Court is remitted to that Court for determination if the parties cannot agree, in the light of the fact that the appellant has not succeeded in obtaining injunctive relief but has succeeded in upholding the contract for all other purposes.

(4) The appeal is allowed to that extent and the cross appeal is dismissed.

(5) There will be no order for costs in this Court.

McGRATH J

Introduction

[117] I have had the advantage of reading in draft the judgment prepared by Tipping J. I adopt the statement of the facts in Tipping J's judgment. I agree with his conclusions and largely with his reasons. I wish however to add some observations of my own in relation to the extra territorial public law elements in this appeal. To do that it is first necessary to set out the basis on which Salmon J decided the case.

The High Court judgment

[118] In his proceedings the appellant alleged that the respondent had breached a contractual duty or alternatively a common law duty of confidence, by disclosing the text of his book to a publisher without the prior authority of the Ministry. Salmon J held that the contract imposed on the respondent the duty not to disclose, without the express prior authority of the Ministry, any information relating to the work of United Kingdom Special Forces (UKSF) which was in the respondent's possession by virtue of his service with the regiment. In doing so the Judge rejected the submission he should read down the ordinary meaning of the words of the contract to exclude information which had ceased to be confidential because of earlier publication.

[119] The Judge then addressed the defences raised by the respondent. He considered first the respondent's contention that he had signed the contract only because he had been ordered to do so by his superiors. The respondent argued that the order to sign was unlawful and made without proper authority. He submitted that as a result the contract was neither valid nor binding on him.

[120] The appellant's response was that the respondent had the option of either signing the contract and remaining with the UKSF, or of returning to his parent unit. He accordingly had an element of choice which the appellant submitted was inconsistent with there being a command or order to sign. Salmon J however held that the requirement to sign did involve a direct order. The commanding officer's evidence suggested there had been an order. There was no doubt the respondent had to sign if he wished to continue to serve with the regiment. Departure from UKSF on "Return To Unit" would reduce the respondent's remuneration and there was a stigma attached as the usual circumstance was related to poor performance.

[121] Salmon J went on to consider whether that order was reviewable. He confined his consideration to whether the subject matter was amenable to judicial review despite its defence connotation and held that it was. Applying the principles in Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374 and R v Ministry of Defence ex parte Smith [1996] QB 517, Salmon J held that it was not open to the Ministry to issue an order the purport of which was to alter the civil rights of a soldier after leaving the forces. The right to freedom of expression was controlled by military law during the period of a soldier's service but thereafter it was not so limited. The Ministry could not extend the period of control and limitation by ordering the defendant to sign a contract covering the post service period. In administrative law terms the Ministry had used its power to give orders for the improper purpose of restricting freedom of expression after the engagement had concluded. The order to sign the contract was accordingly unlawful. In the Judge's view but for it the respondent would not have signed the contract.

[122] A further defence to the claim was that there was no consideration provided by the Ministry to support the confidentiality contract. The consideration that the contract stipulated was that the respondent was "being given a (continued) posting in the UKSF from 28 October (1996) by the Ministry." The respondent contended that because he held office in the armed forces at pleasure, and could also be returned to unit at any time, the giving of a continued posting, was no more than refraining from returning him to his unit, and did not amount to consideration at all. Salmon J disagreed, accepting the expert evidence of Mr Paul Walker QC that an act of forbearance amounted to consideration in English law.

[123] The respondent also argued that the confidentiality contract was voidable because its execution in all the circumstances had been procured by duress. The duress took the form of either the order to the respondent to sign or the threat of his return to unit if he did not. Salmon J took the view that the option of return to his unit did not present the respondent with a practical choice, in view of the consequential loss of income and reduced status for a soldier serving in an elite regiment. He held that there was economic pressure on the respondent.

[124] That pressure had emanated from a military order with accompanying implications. The Judge identified three factors which to his mind indicated it was pressure of an illegitimate kind. The first was the nature of the relationship of military command between the respondent and his superiors whose orders were the means of applying the pressure. The second was the unlawful nature of the order that was given. Thirdly, in the Judge's view, the Ministry should have known it had no legal rights arising from the contract, even if it were entitled to carry out its threat of returning the respondent to his unit. For these reasons Salmon J held that the economic pressure applied to the respondent in law constituted duress, without which the defendant would not have entered into the confidentiality contract.

[125] The respondent's next defence was undue influence. Salmon J observed that here there are two categories, presumed undue influence and actual undue influence. Applying principles stated by the House of Lords in Barclays Bank plc v O'Brien [1994] 1 AC 180, Salmon J held that the relationship of command imported trust akin to that required in instances of presumed undue influence category. The transaction was not, however, to the respondent's manifest disadvantage. He went on to find that actual undue influence on the facts was established. Accordingly he also upheld the undue influence defence of the respondent.

[126] The further defence pleaded of unconscionable bargain required that there had been objectionable contractual terms imposed on the weaker party in a reprehensible manner. As well, the behaviour of the stronger party had to be shown to be morally culpable or reprehensible. That test had not in the judge's view been met and the defence of unconscionable bargain was not made out. Nor in Salmon J's view was the contractual restriction on disclosure one that was in restraint of trade. Nevertheless because the respondent had succeeded in establishing defences to the claim the first cause of action failed.

[127] The second cause of action, based on breach of a duty of confidence at common law also failed. At issue was whether the information described remained confidential so much concerning the events the manuscript described already being in the public domain. The parties were able to reduce the area of dispute concerning instances of alleged breach of the common law duty by agreement both prior to and during the High Court hearing. Leave to apply was reserved by Salmon J in relation to particular matters. Others were the subject of discussion in schedules to the judgment. Subject only to exceptions, referred to as "minor matters" in Schedule B the Judge held the second cause of action also failed. As it was unnecessary for him to do so the Judge did not address an argument that the Human Rights Act 1998 (UK) precluded the granting of the relief or, by adopting the European Convention on Human Rights, had made the contract invalid or unenforceable. Finally, the Judge rejected an argument that protection of freedom of expression by s14 NZ Bill of Rights Act 1990 invalidated a contractual provision for confidentiality otherwise lawfully entered into. For these reasons the High Court held the appellant's claim failed.

The public law questions

[128] My concern on an extra territorial aspect of the case relates to the respondent's contention and the Judge's finding that the United Kingdom government had given the respondent an invalid order. In his third amended statement of defence the respondent pleaded in support of his denial that he had become bound by the contract that it was "neither valid nor binding from the time it was signed". The reason was that he had signed the contract only after having been ordered by his superiors to do so. A defence of invalidity was then specifically pleaded in the following terms:

By ordering the defendant to sign the contract the defendant's military superiors acted in a manner which was contrary to law and which exceeded their lawful authority.

[129] As already indicated in para [121] above in the course of addressing the invalidity defence Salmon J considered whether the requirement in the Defence Council instruction, that soldiers such as R who were members of UKSF should sign a confidentiality contract, entailed the making of an order which was amenable to review. He found the respondent had been ordered to sign the contract and that the order was of a kind which was reviewable. Salmon J then went on to find the order was made for an improper purpose and was accordingly an unlawful exercise of prerogative power. He did not address the question whether it was open for a New Zealand court to do that.

[130] In their written submissions in this Court counsel for the appellant accepted that the day to day administration of the UKSF by the United Kingdom government was conducted under prerogative powers. Mr Brown QC qualified that position in the course of the hearing of the appeal, when pressed by questions from the bench, by adding that review would be by a Court having jurisdiction in England. Counsel went on to argue that while the making of the Defence Council instruction was amenable to review, the subsequent events, being no more than the means by which R came to be informed by his superiors of the Defence Council Instruction, were not. Individual orders, or directions having the character of orders, could not, he argued, be isolated and subjected to a public law analysis as to their legality. These were the only jurisdictional issues raised in the argument of the appellant concerning the High Court finding there had been an unlawful order. The appellant then proceeded to contend that on the facts there was no order, command or form of compulsion to sign the contract, in that R had a choice as to whether or not he should do so. In essence the appellant was arguing that there was no act done nor any decision made in the course of giving effect to the Defence Council instruction which could be subject of judicial review.

[131] Counsel for the respondent argued that the defence of invalidity which had been upheld by Salmon J, was not an attempt to seek judicial review of the exercise of public power by the United Kingdom Government. They maintained in their written submissions that they accepted that the New Zealand Courts have no supervisory jurisdiction over the acts of foreign officials. Counsel argued, however, that a public law issue could always be raised by way of a collateral challenge to the validity of a private law claim. Counsel cited, in particular Wandsworth London Borough Council v Winder [1985] AC 461, 508-509 and Boddington v British Transport Police [1999] 2 AC 143, 156-157. In Boddington the House of Lords, held that despite the lack of review jurisdiction in the trial court, it was open to a defendant in a criminal prosecution to raise a contention that an administrative act on which the prosecution was founded was invalid. It was not necessary to bring separate judicial review proceedings to determine that question of invalidity.

[132] Salmon J's decision that there had been an order to sign the contract which was made for an improper purpose was said by the respondent to be within the scope of a permissible collateral public law challenge on these principles, and also to be correct. Counsel for the respondent traversed the prerogative nature of the powers in question, but raised no issue which turned on the source of governmental power concerning the contract. Nor was it contended by the respondent there were limits on the United Kingdom Crown's prerogative power of employment which precluded entry into contracts imposing supplementary terms. (as to which see Suttling v Director-General of Education (1985) 3 NSWLR 427)).

[133] I agree with Tipping J for the reasons he gives, to which I later add some brief observations that the respondent was not in fact ordered by his superiors to sign the confidentiality contract. It is accordingly unnecessary for me to decide whether Salmon J was right to hold they had acted for an improper purpose and invalidly by ordering him to sign. Had I had to face that issue, in my view, I would have had to address an important prior question as to whether it was open to the High Court of New Zealand to review the validity of an order being an official action of the government of the United Kingdom.

[134] Having found there is no order the defence referred to in para [132] of this judgment must fail and the appeal must accordingly be determined in this Court on the basis that it concerns a claim by the United Kingdom government for enforcement of a contract which it entered into with a former employee in relation to his terms of employment while he was serving as a member of its defence forces. Contractual issues still arise, of course, in the appeal concerning the nature and degree of pressure placed on the respondent to enter the contract.

[135] I have given consideration to whether even though the validity of an official act by a foreign government will not directly be in issue the New Zealand courts should in this context exercise what Lord Wilberforce referred to as "judicial restraint or abstention" in Buttes Gas & Oil Co v Hammer [1982] AC 888 at p938, on the basis that the courts of one jurisdiction should not sit in judgment on the acts of a foreign state within its own territory. This principle is described as act of state doctrine. Were this Court to decline to adjudicate on the defences concerned on the basis of that principle it might as a consequence have to decline to rule on the proceeding itself.

[136] There are different views of the correctness of dicta in Buttes Gas & Oil and as to the scope of act of state doctrine. Lord Nicholls has recently described it as a "common law principle of uncertain application" (R v Bow Street Magistrate, Ex p. Pinochet (Pinochet 1) [2000] 1 AC 61. In the same case Lord Slynn referred to "divergent views…as to what is covered by the act of state doctrine," although both he and Lord Lloyd, in their dissenting judgments, held that the doctrine precluded inquiry into Senator Pinochet's orders as acts of the executive of Chile. Application of the doctrine in the United Kingdom, and the decision in Buttes Gas & Oil in particular, have also been subject to criticism, and an expression of preference for the more confined approach to act of state doctrine taken in the United States (F A Mann, The Foreign Act of State, (1990) 106 LQR 352; Kirkpatrick Co v Environmental Tectonics Corp (1990) 493 US 400). The extent of doubt concerning the doctrine apparently extends to whether it rests on lack of jurisdiction or merely on a refusal to exercise jurisdiction (compare Dicey and Morris on the Conflict of Laws, 13ed p89 with the speech of Lord Wilberforce in Buttes Gas & Oil at p938).

[137] Whatever the true scope in modern times in New Zealand law of this principle of judicial restraint and abstention it seems to me that nothing in these cases or discussions precludes this Court from determining the present appeal by addressing the appellant's contentions that the High Court's decision to uphold the contractual defences of duress and undue influence was wrong, nor the respondent's contentions that the High Court should not have rejected his other defences, in particular that of unconscionable bargain. The doctrine of act of state appears to be concerned with challenges to the validity in constitutional and administrative law terms of acts done under sovereign authority rather than whether a state has entered into a binding contract with one of its employees.

[138] As the desirability of judicial abstention or restraint was not raised by either party before this Court we have not heard argument on it. The appellant who brought the proceeding understandably did not want impediments to be placed on the just resolution of it. The respondent was content to emphasise that there would be unfairness to the defendant if he could not challenge the validity of the governmental orders or instructions collaterally in its defence of the New Zealand proceeding. Both parties had been alerted to the possible relevance of act of state doctrine by an article The Soldier the Order and the Contract, by C Rickett and P Myburgh, published in [2001] NZLJ 157 following the High Court's judgment.

[139] In those circumstances I regard it as undesirable to endeavour to explore any further the limits of act of state doctrine under the common law of New Zealand in the present context. When that occasion arises it will be necessary to have regard to the different views on the proper scope of the principle taken in other jurisdictions. I am fortified in this view by the reluctance of the House of Lords in similar circumstances to go any further than was necessary to decide the case before it. Kuwait Airways Corporation v Iraqi Airways Co [1995] 1 WLR 1157 per Lord Goff at p1166.

[140] For completeness I would add that, in my view, the present case cannot be characterised as one whereby the United Kingdom government seeks to enforce its public law. The proceeding was brought on private law grounds which, on appeal, are confined to the liability of the respondent in contract. There is at this stage at least no public law element. In that regard the position is akin to that in Attorney-General for the United Kingdom v Wellington Newspapers Ltd [1988] 1 NZLR 129, 173-174 CA.

The contract questions

[141] The appeal must accordingly be decided in terms of the principles applicable in a proceeding by an employer to enforce provisions for confidentiality in an contract imposing obligations on an employee. The employer is the United Kingdom government and the former employee a soldier in its armed forces.

[142] I agree with what Tipping J says in his judgment in relation to the contractual defences to the appellant's causes of action which the respondent raised, largely successfully, in the High Court. In my view the respondent was confronted by his superiors with a Ministry of Defence policy decision in terms of which he could not both retain his capacity to publish material concerning his experiences in the UKSF after leaving its service and continue to serve with the Unit. The application of that policy to the respondent was certainly the result of an order requiring that he make a choice between retaining his right to publish and continuing his service with UKSF. It is also true that there were disincentives from making one of the choices, as declining to sign the contract would result in official disfavour, peer group disapproval, some loss of income and loss of the status of membership of an elite regiment. Nevertheless the extent of pressure on the respondent cannot be equated to that of an order that he sign the contract and in my opinion he was not ordered to sign it. Once that is recognised the defences the respondent raised of duress, undue influence and unconscionable bargain all fall away, for the reasons more fully explained in Tipping J's judgment. It follows that the respondent will be in breach of the confidentiality contract if he persists with his intention to publish the manuscript.

The contractual relief question

[143] In my view the contract between the appellant and the respondent is binding on its terms which were those found by Salmon J:

Although the purpose may be to ensure that sensitive or potentially damaging information is not disclosed, the method of ensuring that is so, adopted by the agreement, is a complete prohibition on the disclosure without prior consent of any information as described in para 1 of the contract. It is also clear that the obligation is a lifelong one.

Para 1 of the contract provided:

I will not disclose without express prior authority in writing from MOD any information, document or other article relating to the work of, or in support of, the United Kingdom Special Forces which is or has been in my possession by virtue of my position as a member of any of those Forces.

[144] The appellant's position on remedy is that the respondent should be required to honour his commitment to confidentiality under the contract. He chose to sign the contract because, at that time, he wished to remain with the UKSF. The factors prompting the respondent to write his manuscript about UKSF operations had all crystallised by that time. The appellant says the respondent's current regret at making his promise is based on no new facts and is simply the result of his change of mind.

[145] This, in essence, is the basis on which the appellant effectively seeks specific performance of the contract and permanent injunctive relief. The scope of that remedy is however subject to many limitations and it is necessary to work out how the principles behind them apply in the case of a contract having a purpose of ensuring damaging or sensitive information is not disclosed.

[146] It is plain this is not a case where the contract should be regarded as suffering from any defect. As well, although there will notionally be a remedy in damages, if publication of the manuscript proceeds, in present circumstances damages would almost certainly be an inadequate remedy. No apparent loss will be caused to the United Kingdom government by the proposed publication. The issue is rather whether an accounting by the respondent for profits is an available and would be a more appropriate remedy. In Attorney-General v Blake [2001] 1 AC 268 at p235 Lord Nicholls of Birkenhead said:

An account of profits will be appropriate only in exceptional circumstances. Normally the remedies of damages, specific performance and injunction, coupled with the characterisation of some contractual obligations as fiduciary, will provide an adequate response to a breach of contract. It will be only in exceptional cases, where those remedies are inadequate, that any question of accounting for profits will arise. No fixed rules can be prescribed. The court will have regard to all the circumstances, including the subject matter of the contract, the purpose of the contractual provision which has been breached, the circumstances in which the breach occurred, the consequences of the breach and the circumstances in which relief is being sought. A useful general guide, although not exhaustive, is whether the plaintiff had a legitimate interest in preventing the defendant's profit-making activity and, hence, in depriving him of his profit.

[147] In the present case a term of the confidentiality contract provides an indication that the remedy of an accounting for profits will be an appropriate remedy for breaches of contract by the employee. The contract envisages that the Ministry, rather than the respondent, would enjoy any financial benefits arising from a publication covered by the contract:

(4) I will assign to MOD all rights accruing to me and arising out of, or in connection with, any disclosure or statement in breach of paragraph (1) in (2) above.

[148] It is recognised that the Court may refuse specific performance of a contract obtained by means which are unfair, instances of which include situations where a claimant has taken unfair advantage of its superior knowledge or has hurried a party into a transaction before discovering the true value of the property involved. Similarly inadequacy of consideration, when coupled with other factors such as surprise or unfair advantage of bargaining position, may warrant refusal of specific performance. (Chitty on Contracts 28ed (1999) Vol 1 paras 28-027 to 28-032).

[149] To my mind the two key relevant factors in the present context are first that it is sought to invoke the contract in relation to past events, occurring ten years ago, concerning disclosure of which there is nothing confidential or on the face of it damaging to United Kingdom interests. What remains confidential is protected by Salmon J's decision on the second cause of action, concerning which there has been no appeal.

[150] Secondly, others involved in the Bravo Two Zero patrol have already told their side of the story, with the apparent support of the Ministry, with the consequence that the respondent and those who support him will be unable to make public their differing perspective if specific performance of the contract and injunctive relief is allowed. There is an unfairness to the respondent in these circumstances which to my mind a New Zealand court should take into account. These two factors are in my view unique to the respondent's situation.

[151] It is also of relevance that the contract did not provide for a total ban on publication indicating that the Ministry of Defence did not contemplate its discretion extended to being able to refuse publication without regard to the broad merits of particular requests for consent. As well, and in spite of the respondent's agreement to relinquish his right to publish, to my mind the right to freedom of speech is a value which should in my view be accorded due weight in deciding whether there should be specific performance of a contract having a public policy purpose of maintaining confidentiality of matters of government operation.

[152] It seems clear that the principal purpose for bringing the proceeding the subject of this appeal has been to demonstrate the legal effectiveness of the confidentiality contracts and the United Kingdom government's determination to enforce them. That purpose will in my view be achieved by the judgment of this Court upholding the legal effectiveness of the contracts. A decision to refuse specific performance and injunctive relief in the unique circumstances of the respondent's situation will not in my view diminish this Court's finding that such contracts are legally effective it being clear that in an appropriate case such relief will be given. In the end I am of the view it would be wrong in principle in this case to give a remedy which prohibits publication by the respondent. The remedy of an accounting by the respondent for his profits is in my view the most appropriate remedy. I would refuse specific performance but indicate that his publication of the manuscript would be in breach of the confidentiality contract for which the respondent must account for all his profits and also be liable for such damages as can be proved to result from the breach. To that end I would allow the appeal dismiss the cross appeal and make the formal orders set out in the judgment of Tipping J.