Ahuja Investments Ltd v Victorygame Ltd and another

Civil procedure – Litigation privilege – Claimant seeking damages for misrepresentation against defendants in property transaction – Master deciding certain correspondence passing between claimant and former solicitor not covered by litigation privilege – Claimant 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 allowed The claimant brought an action claiming damages in respect of misrepresentations allegedly made by the defendants in the context of a property transaction. There were counterclaims by the defendants. The claimant had difficulty obtaining the conveyancing file for the relevant property transaction from its former solicitors (S). Ultimately, it had to make an application for third party disclosure. In the context of discussions regarding the disclosure of S’s conveyancing file, the claimant’s current solicitors advised the defendants’ 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 defendants applied for disclosure of any correspondence relating to the potential claim. An issue arose whether two particular documents were within the scope of litigation privilege: a letter of claim written by the claimant’s current solicitors to S under the pre-action protocol for professional negligence; and a response from S’s insurers. The claimant had not issued proceedings against S and its current solicitors had not been instructed to issue such proceedings. The claimant said that, although the correspondence was under the pre-action protocol for professional negligence, its real purpose was to elicit information to be used in the current proceedings. The defendants argued that, assessed objectively, that was not the dominant purpose of the correspondence. A master decided that the documents were not subject to litigation privilege and ordered the claimant to produce them to the defendants. The claimant appealed. Held: The appeal was allowed. (1) To obtain legal advice and pursue adversarial litigation efficiently, the communications between a lawyer and his client and a lawyer and a third party and any communication brought into existence for the dominant purpose of being used in litigation had to be kept confidential. It was clear from the rationale underlying litigation privilege that the main focus had to be on the position of the litigant who was claiming privilege in determining whether a claim to privilege should be upheld: Schneider v Leigh [1955] 2 QB 195, Waugh v British Railways Board [1980] AC 521, Lee v South West Thames Regional Health Authority [1985] 1 WLR 845 and Winterthur Swiss Insurance Company v AG (Manchester) Ltd [2006] EWHC 839 (Comm) considered. There was no doubt in this case that adversarial litigation was in progress when the documents came into existence. The key question was whether the master wrongly concluded that they were not brought into existence for the sole or dominant purpose of conducting these proceedings. Further, the purpose of the relevant person had to be determined objectively based on all the evidence, including evidence of what the persons involved said their intentions were. The burden of proof was on the party claiming privilege to establish it. An assertion of privilege and a statement of the purpose of the communication over which privilege was claimed in a witness statement were not determinative and were evidence of a fact which might require to be independently proved. (2) In assessing, objectively, the dominant purpose of the material for which privilege was claimed, it was the purpose of the instigator (in this case, the claimant, through its solicitors) which was relevant. Whilst it was necessary to take into account all the relevant evidence and not just the witness statement prepared in support of the claim to privilege, a letter of claim under the professional negligence pre-action protocol was simply one piece of evidence to be taken into account in determining what the purpose of the claimant was in writing the letter. It could not itself amount to a separate purpose in the absence of any evidence that the claimant had any intention of pursuing a possible claim for professional negligence: Grant v Downs (1976) 135 CLR 674, Guinness Peat Properties Ltd v Fitzroy Robinson Partnership [1987] WLR 1027 and Winterthur followed. Having considered all the evidence, the court was satisfied that, assessed objectively, the dominant purpose of the claimant in bringing the correspondence into existence was to obtain information for use in the current proceedings: Property Alliance Group v Royal Bank of Scotland Plc (No 3) [2016] 4 WLR 3 considered. (3) The question then was whether there was any deception on the claimant’s part which prevented it from relying on litigation privilege. There was clearly an element of deception in the sense that the claimant wanted information for the purposes of the current proceedings and knew that S would not provide the information voluntarily. The clear purpose of the letter was to make S believe that a professional negligence claim was being considered (when, in fact, it was not). However, it did not follow that a claim to privilege could not succeed. There was no principle of law which prevented a claim to privilege where one party was induced to provide information or documentation to the other party which they would not have provided had they known the true purpose of the request and where the true purpose was deliberately concealed or suppressed. Nor was such a principle extended to cases involving third parties: 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. (4) Accordingly, taking into account all the evidence and assessing the position objectively, the dominant purpose of the claimant, as the instigator of the correspondence, was to obtain information for the purposes of the current proceedings. The documents were therefore privileged and did not have to be disclosed to the defendants. That conclusion was not altered by the fact that S or their insurers might have been misled as to the purpose for which the information was being sought. The correspondence had a sufficient degree of confidentiality in relation to the defendants for a claim to litigation privilege to be maintained. There was sufficient evidence as to the nature of the information contained in the correspondence for the claim to privilege to succeed. David Holland QC and Edward Rowntree (instructed by Cardium Law Ltd) appeared for the claimant; Nicholas Trompeter QC (instructed by SBP Law) appeared for the defendants. Eileen O’Grady, barrister Click here to read a transcript of Ahuja Investments Ltd v Victorygame Ltd and another