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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Addlesee & Ors v Dentons Europe LLP [2019] EWCA Civ 1600 (02 October 2019) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2019/1600.html Cite as: [2020] Ch 243, [2020] 1 All ER 124, [2019] EWCA Civ 1600, [2019] 3 WLR 1255, [2020] PNLR 4, [2020] Lloyd's Rep FC 1 |
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ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
BUSINESS COURT (ChD)
Master Clark
HC-2016-001537
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE FLOYD
and
LORD JUSTICE HAMBLEN
____________________
LEE VICTOR ADDLESEE (and the others listed in the Schedule annexed to the Amended Claim Form) |
Appellants |
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- and - |
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DENTONS EUROPE LLP |
Respondent |
____________________
MR WILLIAM FLENLEY QC & MR ADAM KRAMER (instructed by Clyde & Co LLP) for the Respondent
Hearing dates : 23rd & 24th July 2019
____________________
Crown Copyright ©
Lord Justice Lewison:
Introduction and background
"whether, legal professional or legal advice privilege having attached to a communication by reason of the circumstances in which the communication was made, the communication remains privileged unless and until privilege is waived; or whether the privilege is lost if there is no person entitled to assert it at the time when a request for disclosure is made."
The investors' argument
i) Legal advice privilege is a right inhering in and solely for the benefit of an identifiable client and the client's successors in title. No third party is entitled to assert it.
ii) If there is no legal person entitled to assert the right, then it ceases to exist. Legal advice privilege cannot be decoupled from the client and the client's successor in title. An ownerless right makes no juridical sense.
iii) On the dissolution of a foreign company the provisions of the Companies Act 2006 do not apply; and legal advice privilege does not pass to the Crown as bona vacantia at common law.
iv) If, contrary to iii) above, legal advice privilege did pass to the Crown, (a) the Crown has no interest in enforcing the privilege; and (b) the Crown has disclaimed all interest in it, the effect of which is to extinguish it.
v) Where no person has the right to legal advice privilege, the right does not exist and the court cannot enforce it.
vi) There is no real prospect of the company being restored to the register.
vii) But even if there were, the mere prospect of restoration does not require either the company's former lawyers or the court to maintain privilege on the off-chance that such a restoration might one day take place. The court must deal with the facts as they are at the time when the application for disclosure is made.
The rationale for legal advice privilege
"The principle which runs through all these cases, and the many other cases which were cited, is that a man must be able to consult his lawyer in confidence, since otherwise he might hold back half the truth. The client must be sure that what he tells his lawyer in confidence will never be revealed without his consent. Legal professional privilege is thus much more than an ordinary rule of evidence, limited in its application to the facts of a particular case. It is a fundamental condition on which the administration of justice as a whole rests."
"it is equally necessary, to use a vulgar phrase, that he should be able to make a clean breast of it to the gentleman whom he consults with a view to the prosecution of his claim, or the substantiating of his defence against the claim of others; that he should be able to place unrestricted and unbounded confidence in the professional agent, and that the communications he so makes to him, should be kept secret, unless with his consent." (Sir George Jessel MR in Anderson v Bank of British Columbia (1876) 2 Ch D 644, 649)
"The reason of the privilege is that there may be that free and confidential communication between solicitor and client which lies at the foundation of the use and service of the solicitor to the client; but, if at any time or under any circumstances such communications are subject to discovery, it is obvious that this freedom of communication will be impaired." (Sir Balliol Brett MR in Pearce v Foster (1885) 15 QBD 114, 119-120)
"I take it that, as a general rule, one may say once privileged always privileged. I do not mean to say that privilege cannot be waived…" (Sir Nathaniel Lindley MR in Calcraft v Guest [1898] 1 QB 759, 761)
"privilege attaches for all time and in all circumstances" (Stevenson J in Hobbs v Hobbs [1960] P 112, 116-117)
"… once any exception to the general rule is allowed, the client's confidence is necessarily lost. The solicitor, instead of being able to tell his client that anything which the client might say would never in any circumstances be revealed without his consent, would have to qualify his assurance. He would have to tell the client that his confidence might be broken if in some future case the court were to hold that he no longer had "any recognisable interest" in asserting his privilege. One can see at once that the purpose of the privilege would thereby be undermined."
"For this reason I am of the opinion that no exception should be allowed to the absolute nature of legal professional privilege, once established."
"If the client had to be told that his communications were only confidential so long as he had 'a recognisable interest' in preserving the confidentiality, and that some court on some future occasion might decide that he no longer had any such recognisable interest, the basis of the confidence would be destroyed or at least undermined. There may be cases where the principle will work hardship on a third party seeking to assert his innocence. But in the overall interests of justice it is better that the principle should be preserved intact."
"Without the consent of the client, and in the absence of iniquity or dispute between client and solicitor, no inquiry may be made into or disclosure made of any instructions which the client gave the solicitor or any advice the solicitor gave the client, whether in writing or orally."
"It is not the case that LPP does no more than entitle the client to require his lawyer to withhold privileged documents in judicial or quasi-judicial proceedings, leaving the question of whether he may disclose them on other occasions to the implied duty of confidence. The policy of LPP requires that the client should be secure in the knowledge that protected documents and information will not be disclosed at all."
"First, LPP is a fundamental human right long established in the common law. It is a necessary corollary of the right of any person to obtain skilled advice about the law. Such advice cannot be effectively obtained unless the client is able to put all the facts before the adviser without fear that they may afterwards be disclosed and used to his prejudice."
"… requires that a lawyer must be able to give his client an absolute and unqualified assurance that whatever the client tells him in confidence will never be disclosed without his consent."
"[68] The society's argument, put colloquially, is that privilege entitles one to refuse to let the cat out of the bag; once it is out of the bag, however, privilege cannot help to put it back. Their Lordships observe that this arises from the nature of privilege; it has nothing to do with waiver. It does not follow that privilege is waived generally because a privileged document has been disclosed for a limited purpose only…. The question is not whether privilege has been waived, but whether it has been lost. It would be unfortunate if it were. It must often be in the interests of the administration of justice that a partial or limited waiver of privilege should be made by a party who would not contemplate anything which might cause privilege to be lost, and it would be most undesirable if the law could not accommodate it.
[69] The society argued that, once the documents were produced to [counsel], they ceased to be privileged. Their Lordships consider that this is playing with words. It confuses the nature of the documents with the rights to which the arrangements with [counsel] gave rise. The documents are privileged because they were created for the purpose of giving or receiving legal advice. If they are not produced voluntarily, production cannot be compelled. If they are produced voluntarily, the right to withhold production no longer attaches to them. In that sense the privilege may be said to be lost. But they are the same documents, and it is not inappropriate to describe them as privileged. Their inherent characteristics are the same. The policy which protected them from unauthorised disclosure is the same. The cat is still a cat. It can be put back in the bag."
"if a communication or document qualifies for legal professional privilege, the privilege is absolute. It cannot be overridden by some supposedly greater public interest. It can be waived by the person, the client, entitled to it and it can be overridden by statute… but it is otherwise absolute."
"So it is settled that, in the absence of a waiver by the client, communications between clients and their lawyers for the purpose of obtaining legal advice must be kept confidential and cannot be made the subject of evidence."
"Where legal professional privilege ("LPP") attaches to a communication between a legal adviser and a client, the client is entitled to object to any third party seeing the communication for any purpose, unless (i) the client has agreed or waived its right, (ii) a statute provides that the privilege can be overridden, (iii) the document concerned was prepared for, or in connection with, a nefarious purpose, or (iv) one of a few miscellaneous exceptions applies (eg in a probate case where the validity of a will is contested)."
The ambit of legal advice privilege
"In cases of doubt the judge called upon to make the decision should ask whether the advice relates to the rights, liabilities, obligations or remedies of the client either under private law or under public law. If it does not, then, in my opinion, legal advice privilege would not apply. If it does so relate then, in my opinion, the judge should ask himself whether the communication falls within the policy underlying the justification for legal advice privilege in our law. Is the occasion on which the communication takes place and is the purpose for which it takes place such as to make it reasonable to expect the privilege to apply? The criterion must, in my opinion, be an objective one."
The "iniquity exception"
"Communications made for illegal or improper purposes, such as the furtherance of crime or the commission of fraud or furtherance of iniquity, are not privileged. This principle is not so much an exception to the rule that communications between client and lawyer for the purpose of obtaining legal advice … are privileged, as a mark of the outer bounds of the definition of privilege."
"(a) communications between a professional legal adviser and his client or any person representing his client made in connection with the giving of legal advice to the client;
(b) communications between a professional legal adviser and his client or any person representing his client or between such an adviser or his client or any such representative and any other person made in connection with or in contemplation of legal proceedings and for the purposes of such proceedings; and
(c) items enclosed with or referred to in such communications and made—
(i) in connection with the giving of legal advice;
or
(ii) in connection with or in contemplation of legal proceedings and for the purposes of such proceedings,
when they are in the possession of a person who is entitled to possession of them"
The public interest dimension
"The present case does not, with respect, involve a contest between competing private and public interests, but between two competing public interests of high importance: the public interest in the maintenance of the integrity of the legal profession and the public interest in the administration of justice. The former interest may be said to require that all relevant information be made available to those charged with the investigation and determination of complaints against legal practitioners. The latter requires that a lawyer must be able to give his client an absolute and unqualified assurance that whatever the client tells him in confidence will never be disclosed without his consent." (B v Auckland District Law Society at [47])
"… the seeking and giving of [legal] advice is strongly in the public interest" (Three Rivers at [34])
"The public interest in a party being able to obtain informed legal advice in confidence prevails over the public interest in all relevant material being available to courts when deciding cases." (Three Rivers at [112], citing Re L (A Minor) [1997] AC 16)
Successors and others
"The mere fact that a testator is dead does not destroy the privilege. The privilege is founded upon the views which are taken in this country of public policy, and that privilege has to be waived, and unless the people concerned in the case of an ordinary controversy like this waive it, the privilege is not gone - it remains."
"People have a legitimate interest in keeping such matters private. The case for confidentiality is, if anything, even more obvious when it comes to the preparation of a will. Rightly or wrongly, the provisions are often shaped by past relationships, indiscretions, experiences, impressions and mistakes, as well as by jealousies, slights, animosities and affections, which the testator would not wish to have revealed but which he must nevertheless explain if the solicitor is to carry out his wishes. Divulging the provisions during the testator's lifetime or disclosing the reasons for them after the testator's death could often cause incalculable harm and misery. The public interest lies in minimising the risk of that happening."
"Privilege is a right to resist the compulsory disclosure of information, and in particular documents which contain legal advice or were created for the dominant purpose of obtaining information or advice in connection with actual or contemplated litigation. … It follows that it is purely a negative right."
"Mr Marshall accepted that the trustee can use privileged documentation and the information contained in it for the statutory purpose of getting in and realising the bankrupt's estate. He submitted, and the judge concluded, however, that the trustee can only use such documentation and information in a way that would not amount to a waiver of privilege. I agree."
A right must belong to someone?
"Whether a witness summons may properly be issued under section 97 of the Magistrates' Courts Act 1980 to compel production by a prosecution witness in committal proceedings of proofs of evidence and attendance notes giving factual instructions to his solicitor which (a) may contain or record previous inconsistent statements by the witness; and/or (b) which are the subject of legal professional privilege which has not been waived."
"… section 97 of the Act of 1980 does not empower the court to order the production of documents which are the subject of legal professional privilege which has not been waived." (Emphasis added)
Dissolution of a corporation
"Determining the bounds of privilege involves finding the proper point of balance between two opposing imperatives, making the maximum relevant material available to the court of trial and avoiding unfairness to individuals by revealing confidential communications between their lawyers and themselves. The practice which has developed is a reconciliation between these principles: Seabrook v British Transport Commission [1959] 1 WLR 509, 513, per Havers J. There is a considerable public interest in each of these. The importance of keeping to a minimum the withholding of relevant material from the court, upon which Mr Pollock laid emphasis, is self-evident. It was stressed by Wigmore (Evidence in Trials at Common Law, vol 8, rev McNaughton (1961), p 554, para 2291), who expressed the opinion that the privilege should be strictly confined within the narrowest possible limits consistent with the logic of its principle, an approach echoed in the speech of Lord Edmund-Davies in Waugh v British Railways Board [1980] AC 521, 543. The competing principle of legal professional privilege is also rooted in public policy: cf B v Auckland District Law Society [2003] 2 AC 736, 756-757, paras 46-47. It is not based upon the maintenance of confidentiality, although in earlier case law that was given as its foundation. If that were the only reason behind the principle the same privilege would be extended to such confidants as priests and doctors, whereas it has been settled in a line of authority stemming from the Duchess of Kingston's Case (1776) 1 East PC 469 that it is confined to legal advisers: see, e g, Cross & Tapper on Evidence, 9th ed (1999), pp 461-465."
"It is obviously true that in very many cases clients would have no inhibitions in providing their lawyers with all the facts and information the lawyers might need whether or not there were the absolute assurance of non-disclosure that the present law of privilege provides. But the dicta to which I have referred all have in common the idea that it is necessary in our society, a society in which the restraining and controlling framework is built upon a belief in the rule of law, that communications between clients and lawyers, whereby the clients are hoping for the assistance of the lawyers' legal skills in the management of their (the clients') affairs, should be secure against the possibility of any scrutiny from others, whether the police, the executive, business competitors, inquisitive busybodies or anyone else."
"The underlying principle is that those clients who do wish to consult a lawyer on the basis of absolute confidence should be entitled to do so, notwithstanding that absolute confidence may be less important to others."
The role of the lawyer
"I take the view that whether or not the client has any recognisable interest in continuing to assert privilege in the confidential communications, the privilege is absolute in nature and the lawyer's mouth is "shut for ever". I further agree with Mr Davidson that it follows from this that it is the lawyer's duty to claim the privilege on behalf of the client, or former client, whose privilege it is, at any rate where it is at least arguable that the privilege exists."
"… he has no privilege of his own but may, indeed must, assert that of his client."
Statutory override
Is there anyone who can waive privilege?
"… all property and rights whatsoever vested in or held on trust for the company immediately before its dissolution … shall … be deemed to be bona vacantia and shall accordingly belong to the Republic, and shall vest in and may be dealt with in the same manner as other bona vacantia accruing to the Republic."
"… the rule at common law is that property must belong to somebody, and where there is no other owner, not where the owner is unknown, that is the distinction, it is the property of the Crown."
"There is no possibility of getting at this property through the deceased. It is because there is no one who can claim through the deceased that the Crown steps in and takes the property. The Crown takes it because it is, as it is described in the cases, bona vacantia. It is property which no one claims - property at large - there is no succession. The Crown does not claim it by succession at all, but because there is no succession."
"The use throughout s. 54 of the words "disclaim" and "disclaimer" is in itself a strong indication of the scope of the section. The words, in my view, connote a renunciation of, or refusal to claim, rights or property which would automatically devolve on or accrue to the person making the disclaimer. They are precisely applicable to a renunciation of a property which with all its rights, interests and liabilities has vested in the trustee under s. 53, sub-s. 2, of the Act. They are not appropriate to any interests, rights or liabilities that have been acquired or undertaken by the voluntary act of the trustee himself, and independently of devolution of the bankrupt. "Disclaime, disclamare .... signifieth utterly to renounce. ....": Co. Litt. 102a; and for other references see Stroud's Judicial Dictionary, 2nd ed., vol. i., p. 539. And the word is habitually used in this sense at the present day with reference to the non-acceptance or renunciation of the office and estate of a trustee under a deed or of an executor and trustee under a will."
Garvin Trustees Ltd v The Pensions Regulator
"This passage highlights another important feature of the right, namely that it is for the person who is entitled to the right to assert it and a third party is not so entitled even if he has possession of the documents concerned."
"It follows that with the Crown having no interest in asserting the privilege that Mr Gordon is under no obligation to maintain the privilege simply because the right has been vested in the Crown. The Crown has correctly concluded that it should not assert the privilege and in those circumstances absent any other restriction Mr Gordon has no obligation to maintain the privilege. As Schneider v Leigh shows the maxim 'once privileged always privileged' is not absolute."
"So far as the High Court is concerned, puisne judges are not technically bound by decisions of their peers, but they should generally follow a decision of a court of co-ordinate jurisdiction unless there is a powerful reason for not doing so."
The costs appeal
Result
Lord Justice Floyd:
Lord Justice Hamblen: