Ahuja Investments Ltd v Victorygame Ltd and another

Civil procedure – Litigation privilege – Respondent seeking damages for misrepresentation against appellants in property transaction – Master deciding certain correspondence passing between respondent and former solicitor not covered by litigation privilege – High Court allowing respondent’s appeal – Appellants appealing – Whether documents brought into existence for sole or dominant purpose of conducting proceedings – Whether any deception as to true purpose of request for documents preventing reliance on privilege – Appeal dismissed The respondent brought an action claiming damages in respect of misrepresentations allegedly made by the appellants in the context of a property transaction. There were counterclaims by the appellants. The respondent had difficulty obtaining the conveyancing file for the transaction from its former solicitors (S) and applied for third-party disclosure. In the context of discussions regarding the disclosure of S’s conveyancing file, the respondent’s current solicitors advised the appellants’ solicitors that: “…we have provided a letter of claim to (S) in regard to its negligence on this matter and we are currently engaged in the pre-action protocol for professional negligence with the law firm appointed by (S’s) professional indemnity insurer”. In the light of that, the appellants applied for disclosure of any correspondence relating to the potential claim. An issue arose whether two particular documents were covered by litigation privilege: a letter of claim written by the respondent’s current solicitors to S under the pre-action protocol for professional negligence; and a response from S’s insurers. The respondent had not issued proceedings against S and its current solicitors had not been instructed to do so. A master decided that the documents were not subject to litigation privilege and ordered the respondent to produce them to the appellants. The High Court allowed the respondent’s appeal against that decision: [2021] EWHC 1543 (Ch); [2021] PLSCS 103. The appellants appealed contending, among other things, that the judge erred in law in holding that: (i) there was no principle of law that, if one party deliberately misled another as to the purpose for which information was required, and that information was provided, the requesting party could not thereafter maintain privilege over the information; and (ii) the respondent’s purpose in instigating the correspondence was for the dominant purpose of the litigation. Held: The appeal was dismissed. (1) On the face of it, the documents were privileged. The judge found as a fact that the dominant purpose for which they were sought by the respondent was for use in the underlying litigation. The question was whether the respondent had lost the right to maintain the privilege because of some competing public interest that outweighed it. There was no good reason why there should be a principle that a party that was otherwise entitled to claim litigation privilege over correspondence with a third party should lose it simply because, in order to obtain the information it needed, it was forced by the third party’s behaviour to bring pressure on them by threatening litigation (even if it did not intend to carry out the threat), especially when it was probably entitled to that information in the first place. Moreover, there was no basis for concluding that the judge’s reasoning was inconsistent with the rationale underlying litigation privilege: Plummers Ltd v Debenhams plc [1986] BCLC 447 and London Fire and Emergency Planning Authority (LFEPA) v Halcrow Gilbert & Co Ltd [2004] EWHC 2340 (QB) considered.  (2) The respondent’s behaviour came nowhere near the type of reprehensible conduct that was justifiably criticised in the first instance cases on which the appellants sought to rely. S and its insurers were not deceived into handing the documents over on the basis of a misleading impression, deliberate or otherwise, that the respondent was not going to use those documents for the purposes of the underlying litigation against the appellants. There was no obligation to tell S what the respondent intended to do with the information once it was obtained, or why it was wanted: Dubai Aluminium Co Ltd v Al-Alawi and others [1999] 1 WLR 1964, LEFEPA and Property Alliance Group v Royal Bank of Scotland Plc (No 3) [2016] 4 WLR 3 considered. Either there was a present intention to sue S, or there was not. But the implicit misrepresentation of the respondent’s present intentions towards S, even if deliberate, was not a principled basis on which to deny an otherwise well-founded claim for privilege. The judge was right to find that the privilege was not overridden by some wider public interest principle. There was a strong basis for drawing the inference that S would have realised that the information would be used for the purposes of the litigation against the appellants in the light of the protracted history of the attempts to get hold of the conveyancing file, and the fact that S was still instructed by the respondent when the letters before action were sent in respect of both defendants. In any event, there was no evidential basis for concluding that S was misled into believing it was not going to be used for that purpose. Even if S was led to believe that the respondent was contemplating suing S for professional negligence, that would not rule out the use of the information in the underlying litigation. (3) It was not easy to find a succinct and clear definition of when waiver arose, going beyond general statements to the effect that the party alleged to have waived privilege over advice or documents had deployed them in some way as part of its case. However, the underlying principle was fairness, and each case would turn on its own facts. The focus was typically on two factors, namely the nature of what had been revealed and the circumstances in which it was revealed. The question was whether it had simply been referred to, used or deployed, or relied upon in order to advance the party’s case: Brennan v Sunderland City Council [2009] ICR 479; PCP Capital Partners LLP and another v Barclays Bank Plc [2020] EWHC 1393 (Comm) considered. There was nothing unfair about allowing the respondent to reveal certain information, to prevent the Court of Appeal from being misled, while maintaining privilege. In the circumstances, it would have been grossly unfair to find that the very limited references to privileged material for that purpose would have amounted to a waiver of privilege. Nicholas Trompeter QC (instructed by SBP Law) appeared for the appellants; David Holland QC and Edward Rowntree (instructed by Cardium Law Ltd) appeared for the respondent. Eileen O’Grady, barrister Click here to read a transcript of Ahuja Investments Ltd v Victorygame Ltd and another