Ahuja Investments Ltd v Victorygame Ltd
| Jurisdiction | England & Wales |
| Judge | Robin Vos |
| Judgment Date | 08 June 2021 |
| Neutral Citation | [2021] EWHC 1543 (Ch) |
| Court | Chancery Division |
| Docket Number | Appeal Ref. CH-2021-000113 |
| Date | 08 June 2021 |
[2021] EWHC 1543 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND & WALES
CHANCERY APPEALS
ON APPEAL FROM THE ORDER OF MASTER PESTER DATED 29 APRIL 2021
The Rolls Building
7 Rolls Buildings
Fetter Lane
London EC4A 1NL
Robin Vos
(SITTING AS A DEPUTY JUDGE OF THE CHANCERY DIVISION)
Appeal Ref. CH-2021-000113
David Holland QC and Edward Rowntree (instructed by Cardium Law Limited) appeared for the Claimant
Nicholas Trompeter QC (instructed by SBP Law) appeared for the Defendants
Hearing date: 25 May 2021
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This judgment was handed down by the Judge remotely by circulation to the parties' representatives by email and release to BAILII. The date and time for hand-down is deemed to be 8 June 2021 at 3pm.
Introduction
The question in this appeal is whether two documents are within the scope of litigation privilege. In a Judgment given on 29 April 2021, Master Pester decided that they were not and made an Order that the Claimant, Ahuja Investments Limited, should produce the documents to the Defendants. Ahuja appeals against that Order.
Ahuja's underlying claim is for damages in respect of misrepresentations said to be made by the Defendants in the context of a property transaction. There are counterclaims by the Defendants.
An important issue in relation to the underlying claim is what Ahuja's solicitor at the time, Mr Jandu of Stradbrooks, knew and what he told Ahuja.
The two documents in question are a letter of claim written by Ahuja's current solicitors, Cardium Law Limited to Stradbrooks on 10 February 2020 in the form of a letter of claim under the pre-action protocol for professional negligence. The second document is a response from Stradbrooks' insurers dated 19 December 2020.
Ahuja says that, although the correspondence was under the pre-action protocol for professional negligence, the real purpose of the correspondence was to elicit information to be used in the present proceedings. The Defendants argue that, assessed objectively, that was not the dominant purpose of the correspondence.
Background facts
Ahuja had difficulty obtaining the conveyancing file for the relevant property transaction from Stradbrooks. Ultimately, it had to make an application for third party disclosure.
On 19 May 2020, in the context of discussions regarding the disclosure of Stradbrooks' conveyancing file, Ahuja's solicitors had advised the Defendants' solicitors that:-
“… we have provided a letter of claim to Stradbrooks 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 Stradbrooks professional indemnity insurer. This is ongoing.”
In the light of this, following Ahuja's disclosure, the Defendants made an application for disclosure of any correspondence relating to this potential claim.
Ahuja's solicitor, Mr Davies, made a Witness Statement on behalf of Ahuja in opposition to the application. To the extent relevant, this stated the following:-
“64. Cardium Law reviewed the conveyancing file provided by Stradbrooks after the hearing on 20 November 2019 and (again without waiving privilege) advice was sought from Leading and Junior Counsel. Without waiving privilege, it was decided that further information was required from Stradbrooks and Mr Jandu with a view to the conduct of this claim and to assess Mr Jandu's potential as a witness. Following this, on account of his prior lack of co-operation and his conduct, it was decided that the only way in which Stradbrooks or Mr Jandu would give any substantive comment in relation to his involvement in matters relevant to this action was to threaten to issue proceedings against him.
65. Accordingly (and again without any waiver of privilege) on 10 February 2020 a letter in the form of a Letter before Action was sent to Stradbrooks. It must be emphasised that whilst, of course, the Claimant had approved the sending of this letter, no instructions had been given to issue proceedings against Stradbrooks. The dominant purpose of sending the Letter before Action was to obtain information relevant to these proceedings, which was not apparent from the conveyancing file. The Letter before Action made a series of statements and sought a response. It also mentioned the fact that these proceedings had been issued.
66. Stradbrooks did not provide its letter of Response in accordance with the requisite pre-action protocol. So as to further compel a response (again without waiver of any privilege) further letters were sent chasing a response…
67. Without any waiver of privilege, on 19 December 2020, a Letter of Response was received from solicitors instructed by Stradbrooks' professional indemnity insurer. This contained the information sought. At this stage, advice was again sought from Leading and Junior Counsel. The Claimant has not exchanged a statement [from] Mr Jandu.
68. The Claimant in this action has not issued proceedings against Stradbrooks and this firm has not been provided with instructions to issue proceedings.”
Mr Trompeter, appearing on behalf of the Defendants, does not invite the court to go behind Mr Davies' Witness Statement and so I accept what he says at face value, as did the Master.
The Master's Judgment
In reaching his decision, the Master relied heavily on the Decision of Birss J in Property Alliance Group v The Royal Bank of Scotland Plc (No. 3) [2016] 4 WLR 3. The key part of the Master's Judgment is contained in the following extract:-
“15. As I have said, I found that the answer to this question somewhat difficult. Ultimately, it does seem to me that the claim for litigation privilege is not made out. I say that because I accept that this is not on all fours with Property Alliance Group v Royal Bank of Scotland, because it is true that Birss J there stressed that the key factor was deception. I accept I do not see it as being a matter of deception on the part of the claimant in this case, but I have to look at the dominant purpose and the dominant purpose is not determined solely by what one party says it is.
16. In this respect, it seems to me that whilst PAG can be distinguished factually, it is in the same overall category in that seen from the claimant's point of view, all they were trying to do, via the course of conduct they had gone down, was elicit information, but seen as from Mr Jandu and Mr Jandu's insurer's point of view, it seems to me fairly obvious, that a professional negligence claim was being intimated against them, hence the response from the insurers. Even without any statement from Mr Jandu, I think I can safely infer that much.
17. So it seems to me that the court has to step back and not simply accept and say, “Well, this is all for the dominant purpose of use in this litigation”, because you have to look at the other side of the coin.”
As can be seen, the Master considered that, in determining the dominant purpose of the correspondence, he should look not only at the intention of Ahuja but should also take into account how the correspondence would have been seen from the point of view of Mr Jandu and Stradbrooks' insurers. This is where Mr Holland, on behalf of Ahuja, says that the Master went wrong.
Litigation privilege – legal principles
The requirements for litigation privilege were summarised by Lord Carswell in Three Rivers District Council v. Bank of England (No.6) [2005] 1 AC 610 [at 102] as follows:
“Communications between parties or their solicitors and third parties for the purpose of obtaining information or advice in connection with existing or contemplated litigation are privileged, but only when the following conditions are satisfied: (a) litigation must be in progress or in contemplation; (b) the communications must have been made for the sole or dominant purpose of conducting that litigation; (c) the litigation must be adversarial, not investigative or inquisitorial.”
There is no doubt in this case that adversarial litigation was in progress when the documents in questions came into existence. The key question is therefore whether the Master was wrong to conclude that the documents were not brought into existence for the sole or dominant purpose of conducting these proceedings.
Rationale for litigation privilege
It is appropriate to start with a reminder of the rationale for litigation privilege. This was briefly summarised [at 850D] by the Court of Appeal in Lee v. South West Thames Regional Health Authority [1985] 1 WLR 845 as follows:-
“The principle is that a defendant or a potential defendant shall be free to seek evidence without being obliged to disclose the result of his research as to his opponent.”
Aikens J expanded on this in Winterthur Swiss Insurance Company v. AG (Manchester) Limited [2006] EWHC 839 (Comm) explaining [at 68] that the rationale:-
“rests, in modern terms, on the principles of access to justice, the proper administration of justice, a fair trial and equality of arms. Those who engage in litigation or are contemplating doing so may well require professional legal advice to advance their case in litigation effectively. To obtain the legal advice and to 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 must be kept confidential, without fear that what is said or written might be disclosed.”
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