Attorney General V Blake House of Lords

The private law claim

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Attorney General v Blake, [2001] 1 A.C. 268 (2000)
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9
In the course of his judgment [1998] Ch 439 , 455-459
Lord Woolf MR made some interesting observations
on a matter which had not been the subject of argument
either in the Court of Appeal or before Sir Richard
Scott V-C. The point arose out of the amendments
made to the statement of claim in the course of the
proceedings in the Court of Appeal. On 16 August
1944 Blake signed an Official Secrets Act declaration.
This declaration included an undertaking:
"... I undertake not to divulge any official information
gained by me as a result of my employment, either in
the press or in book form. I also understand that these
provisions apply not only during the period of service
but also after employment has ceased."
This undertaking was contractually binding. Had
Blake not signed it he would not have been employed.
By submitting his manuscript for publication without
first obtaining clearance Blake committed a breach
of this undertaking. The Court of Appeal suggested
that the Crown might have a private law claim
to "restitutionary damages for breach of contract",
and invited submissions on this issue. The Attorney
General decided that the Crown did not wish to
advance argument on this point in the Court of
Appeal. The Attorney General, however, wished to
keep the point open for a higher court. The Court
of Appeal expressed the view, necessarily tentative
in the circumstances, that the law of contract would
be seriously defective if the court were unable to
award restitutionary damages for breach of contract.
The law is now sufficiently mature to recognise a
restitutionary claim for profits made from a breach
of contract in appropriate situations. These include
cases of "skimped" performance, and cases where the
defendant obtained his profit by doing "the very thing"
he contracted not to do. The present case fell into the
latter category: Blake earned his profit by doing the
very thing he had promised not to do.
This matter was pursued in your Lordships' House.
Prompted by an invitation from your Lordships,
the Attorney General advanced an argument that
restitutionary principles ought to operate to enable the
Crown to recover from Blake his profits arising from
his breach of contract. It will be convenient to consider
this private law claim first.
This is a subject on which there is a surprising dearth of
judicial decision. By way of contrast, over the last 20
years there has been no lack of academic writing. This
includes valuable comment on the Court of Appeal
dicta in the 
*278
present case: by Janet O'Sullivan,
"Reflections on the Role of Restitutionary Damages to
protect contractual expectations" (to be published), and
Catherine Mitchell, "Remedial Inadequacy in Contract
and the Role of Restitutionary Damages" (1999) 15
JCL 133 . Most writers have favoured the view that
in some circumstances the innocent party to a breach
of contract should be able to compel the defendant
to disgorge the profits he obtained from his breach
of contract. However, there is a noticeable absence
of any consensus on what are the circumstances in
which this remedy should be available. Professor
Burrows has described this as a devilishly difficult
topic: see "No Restitutionary Damages for Breach of
Contract" [1993] LMCLQ 453 . The broad proposition
that a wrongdoer should not be allowed to profit from
his wrong has an obvious attraction. The corollary is
that the person wronged may recover the amount of this
profit when he has suffered no financially measurable
loss. As Glidewell LJ observed in Halifax Building
Society v Thomas [1996] Ch 217 , 229, the corollary
is not so obviously persuasive. In these choppy waters
the common law and equity steered different courses.
The effects of this are still being felt.