Disclosure of documents — Privilege – Waiver – Claimant community association bringing action for breach of trust – Defendant local authority claiming privilege in respect of specified documents – Defendants applying to maintain privilege relating to legal advice — Whether waiver of privilege regarding other material extending to disputed documents — Application granted
In the 1960s, the defendant local authority decided to build a new school. The claimants, who were members of a community association, had raised £3,000 to provide a village community hall. They decided to pay the moneys, which the association held on charitable trusts, to the defendants to build community rooms attached to the new school. The claimants contended that it had been agreed that they would be entitled to occupy the rooms in question.
For many years, the school and the claimants coexisted, each using parts of the other’s premises when the need arose, with the claimants contributing further sums to improve the premises. However, the defendants began to question the desirability and terms of the arrangement and sought to limit and ultimately terminate the claimants’ access to the community rooms. The defendants retained a legal executive and subsequently a firm of solicitors, whose advice was referred to in a number of reports that were later disclosed to the claimants.
The defendants served a notice on the claimants, instructing them to desist from using the community rooms in return for financial recompense. The claimants challenged that decision, alleging breach of trust. The defendants applied to maintain privilege in respect of those documents in correspondence and documents relating to the obtaining of legal advice. The claimants submitted that privilege had been waived because it had been waived with regard to other privileged material; that is, the report and the transaction to which the waiver applied should extend to all the legal advice received.
Held: The application was granted.
The principles underlying waiver were it was necessary to identify the transaction in respect of which the disclosure had been made. That transaction might be identifiable from the nature of the disclosure made. However, it might be apparent from that or other material that the transaction was wider than was immediately apparent. If it were, the entire transaction had to be disclosed. When that had been done, further disclosure would be necessary in order to avoid unfairness or a misunderstanding of what had been disclosed: Fulham Leisure Holdings Ltd v Nicholson Graham & Jones [2006] EWHC 158 (Ch); [2006] 2 All ER 599 applied.
The court had to take a restrictive view of waiver, and the purposes for which, and the circumstances in which, the disclosure took place formed an important part of an analysis as to how far waiver went, both in order to analyse the transaction and to assess fairness. The court had to examine the relevant acts of waiver and put them in context.
Privilege was likely to have been waived in respect of the report because the defendants had co-operated and liaised with the claimants. There was no evidence that the report had been disclosed pursuant to an express provision from a senior member of the legal department or the council. Nor was there any evidence as to any other express purpose for its disclosure. It had been done at a time when it seemed that the relationship between the parties might improve.
Taking that act of waiver by itself, the transaction in question amounted to the disclosure of the report. There was no indication of any purpose or circumstance that made the transaction wider than that. In due course, the report was also disclosed in the instant proceedings, without any claim to privilege. That was a plain waiver, but again nothing in that act took the transaction wider than the act itself and the scope of the waiver was not extended into surrounding documents or circumstances.
Accordingly, privilege had not been waived beyond the acts and documents in question. In each case, the transaction was limited and there was no evidence on which to conclude that fairness required the production of further material. The documents were not misleading, and the purpose of the disclosure would not make it misleading not to disclose further material. It followed that the claimants were not entitled to see any privileged material other than what had already been disclosed to them.
Patrick Lawrence QC and David Halpern QC (instructed by Nick Makin solicitor) appeared for the claimants; Thomas Dumont and Jane Collier (instructed by Browne Jacobson LLP, of Nottingham) appeared for the defendants.
Eileen O’Grady, barrister
