Barrowfen Properties v Girish Dahyabhai Patel
| Jurisdiction | England & Wales |
| Judge | Tom Leech |
| Judgment Date | 24 September 2020 |
| Neutral Citation | [2020] EWHC 2536 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: BL-2018-002028 |
| Date | 24 September 2020 |
[2020] EWHC 2536 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
BUSINESS LIST (CH D)
Royal Courts of Justice
Strand, London, WC2A 2LL
Tom Leech QC (sitting as a Judge of the Chancery Division)
Case No: BL-2018-002028
Ms Lexa Hilliard QC and Mr Tim Matthewson (instructed by Withers LLP) for the Claimant
Ms Angharad Start (instructed by Reynolds Porter Chamberlain LLP) for the Second Defendant
Hearing dates: 15 and 16 September 2020
Approved Judgment
I direct that pursuant to CPR PD39A 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.
Tom Leech QC:
Introduction
By Application Notice dated 5 August 2020 the Claimant, Barrowfen Properties Ltd (“ Barrowfen”), applied to challenge the Defendants' right to withhold disclosure of documents containing legal advice given by the Second Defendant, Stevens & Bolton LLP (“ S&B”), to the First Defendant, Mr Girish Patel, and the Third Defendant, Barrowfen Properties II Limited (“ Barrowfen II”). For convenience and ease of reference I will refer to Mr Patel as “ Girish” and to other members of his family by their given names. By doing so I mean no disrespect either to him or to them.
Barrowfen's challenge to the Defendants' right to withhold disclosure of documents attracting legal professional privilege (“ LPP”) was made under Practice Direction 51U (“ PD51U”), paragraph 14.2 on two grounds: first, under the “iniquity exception” and, secondly, on the basis that the documents were created by S&B in the course of a joint retainer from Girish and Barrowfen and that neither party was entitled to assert LPP against the other. Barrowfen also challenged the redactions made by the Defendants to jointly privileged documents under PD51U, paragraph 16.2.
It is well-established that a client may not continue to assert LPP in relation to documents which were brought into existence for the purpose of furthering a criminal or fraudulent purpose. It is often called the “iniquity exception”: see, e.g., Barclays Bank plc v Eustice [1995] 1 WLR 1238 at 1248B to 1249D (where Schiemann LJ adopted the word “iniquity” from Bingham LJ's judgment in Ventouris v Mountain [1991] 1 WLR 607 at 611). It is sometimes called the “fraud exception”: see Kuwait Airways Corpn v Iraqi Airways Co (No 6) [2005] 1 WLR 2734 at [14] (Longmore LJ). I will have to examine briefly the limits of the principle but on this application the parties used the description the “ iniquity exception” and I am content to adopt it. The parties also described this part of Barrowfen's disclosure application as the “ Iniquity Application” and I will also use that expression.
In the Application Notice Barrowfen also applied for orders that the Defendants undertake a further search and serve revised Disclosure Certificates and Extended Disclosure Lists. In Girish's case this order was intended to extend not only to documents which he was required to disclose on the Iniquity Application but also his disclosure obligations more generally. Barrowfen also sought an order requiring Girish to file and serve a witness statement setting out the scope of the searches which he had undertaken under PD51U, paragraph 17.1 and applied for an unless order against him. The parties described this application as the “ Compliance Application” and I will also use that expression.
Finally, by Application Notice dated 7 September 2020 (the “ Part 18 Application”) S&B sought an order requiring Barrowfen to answer a request for further information under CPR Part 18. By the time of the hearing Barrowfen had complied with this request and served a response (and, indeed, a revised response during the hearing). Subject to four points on the contents of the response S&B did not pursue the Part 18 Application.
Ms Lexa Hilliard QC and Mr Tim Matthewson appeared for Barrowfen at the remote hearing of the applications and Ms Angharad Start appeared for S&B. Girish did not appear and I turn to the reasons for his non-appearance and the consequences shortly (below). In the course of argument, Ms Hilliard addressed the four outstanding points on S&B's application and it was unnecessary for me to make any order on the Part 18 Application.
On Tuesday 15 September 2020 the first day of the hearing took place. Girish did not appear. He had made no application to the Court for an adjournment but I was told that he had provided a letter to the parties showing that he had a hospital appointment for a medical procedure on 14 September 2020. I was also told that he had been on the call at which the hearing had been fixed and that he had not filed any evidence in answer. I was referred to an Application Notice dated 4 September 2020 and to his second and third witness statements dated 4 September 2020 and 8 September 2020.
In the event I decided to proceed with the applications under CPR Part 23.11 and I heard the Iniquity Application. At the end of the hearing, I indicated that I was provisionally prepared to make the order and I asked Ms Hilliard to ask Withers LLP (“ Withers”), Barrowfen's solicitors, to write to Girish (whose evidence was that he had no access to the internet or email) informing him that if he appeared at the resumed hearing on 16 September 2020 I would reconsider the position in the light of any submissions which he might have to make.
On Wednesday 16 September 2020 Girish did not appear again. I was informed by Chancery Listing that he had called them by telephone and said that he was unable to attend the remote hearing because he had a fever after his medical procedure on 14 September 2020. Chancery Listing asked him to write to the Court setting out his position or to ring in to the hearing. (I add that Withers had provided him with the telephone number on the previous evening.) But Girish did not contact the Court or attend the hearing or ask for an adjournment.
Again, I decided to proceed with the Compliance Application under CPR Part 23.11. I heard the application and delivered a short judgment identifying a number of breaches by Girish of his disclosure obligations. However, in his absence I was not prepared to order that he should provide a witness statement under PD51U, paragraph 17.1 or to make an unless order. I set an extended date for Girish and S&B to serve revised Disclosure Certificates and Extended Disclosure Lists dealing with privileged documents. I also made it clear in my judgment that I expected Girish to comply fully with the existing Extended Disclosure order by that date. In this judgment, therefore, I set out my reasons for granting the Iniquity Application.
Background
Girish is one of four brothers. The others are Mr Suresh Patel (“ Suresh”), Mr Rajnikant Patel (“ Rajnikant”) and Mr Yashwant Patel (“ Yashwant”). They and Rajnikant's son, Mr Prashant Patel (“ Prashant”), are businessmen who operate in various jurisdictions, including Malaysia, Singapore and the United Kingdom. In 1984 Barrowfen was incorporated in England and Wales and acquired its principal asset, commercial premises at 180 to 216 Upper Tooting Road London SW17 7EW (the “ Tooting Property”).
The shareholders of Barrowfen had originally included a number of different families. But by 2006 the Patel family had acquired 100% of the shares. From 2006 onwards its share capital of 180,000 ordinary shares were held as follows:
i) Bedford Development Ltd (“ Bedford”) (a BVI company) held 60,000 shares for Rajnikant's branch of the family and Prashant was a director of Bedford.
ii) The Mrs PD Patel Discretionary Settlement (the “ Mrs PD Trust”) held 60,000 shares on trust for Girish's children and the trustees were Suresh and Yashwant;
iii) The Mr DP Patel Discretionary Settlement (the “ Mr DP Trust”) held 60,000 shares on trust for Suresh's children and the trustees were Yashwant and Girish.
It was of some importance to appreciate that the trustees of the Mrs PD Trust were Suresh and Yashwant although it was a trust for the benefit of Girish's children and the trustees of the Mr DP Trust were Yashwant and Girish although the beneficiaries were Suresh's children. This was obviously a family policy to ensure oversight of the trusts' investments.
On 20 January 1994 the directors of Barrowfen passed a resolution delegating the powers of the board to Girish and from at that time at least he acted as the de facto managing director of Barrowfen. On 26 July 2002 Suresh was appointed to be a director and by 20 December 2004 Girish and Suresh had become the only directors of the company.
In 1990 Allied Dunbar Assurance plc (“ Allied Dunbar”) provided a loan to Barrowfen which was secured by a charge over the Tooting Property. In 1998 Zurich Assurance Ltd (“ Zurich”) acquired Allied Dunbar and by October 2015 the amount of the loan outstanding was approximately £850,000. I will refer to the loan made by Allied Dunbar as the “ Loan” and the charge over the Tooting Property as the “ Charge”.
Between 2010 and 2013 relations between the various branches of the family broke down. It is unnecessary for me to give any detail about those disputes except to say that by letter dated 26 November 2013 Suresh wrote to Girish proposing that Prashant should be made a director of Barrowfen to resolve the perceived deadlock.
The subsequent events form the subject matter of the present action....
To continue reading
Request your trial
-
Karam Salah Al Din Awni Al Sadeq v Dechert LLP
...were “ brought into existence for the purpose of furthering” the iniquity, in accordance with Barrowfen Properties v Patel & Ors [2020] EWHC 2536 (Ch). Applying those criteria, no documents had been found to fall within the iniquity 31 On behalf of Mr Al Sadeq it was contended that the wro......
- Barrowfen Properties Ltd v Patel and Others
-
Luc A. Despins (as Foreign Representative of HO Wan Kwok) v HO Wan Kwok
...by one party alone.” 46 This principle was applied by Tom Leech QC (then sitting as a Deputy Judge) in Barrowfen Properties v Patel [2020] EWHC 2536 (Ch) at paragraphs 29–30: “29. Where a firm of solicitors is retained under a joint retainer, neither client may assert LPP as against the ot......
-
An application under s 212 of the Companies Act 2014 - Brock Delappe Ltd
...applicant referred to a number of authorities in which the “iniquity exception” is discussed. In Barrowfen Properties v Patel & Ors. [2020] EWHC 2536 (CH), Tom Leech QC (sitting as a judge of the Chancery Division) stated as follows: “33. It is well-established that the exception is not co......
-
‘Iniquity Exception’ Extends to Breaches of a Director’s Statutory Duty
...of privilege. [i] Barrowfen Properties Ltd v (1) Girish Dahyabhai Patel (2) Stevens & Bolton LLP (3) Barrowfen Properties II Limited [2020] EWHC 2536 (Ch). [ii] ss. 172-175 & s. 177 Companies Act [iii] BBGP Managing General Partner Ltd v Babcock & Brown Global Partners [2011] Ch 296. [iv] A......
-
‘Iniquity Exception’ Extends to Breaches of a Director’s Statutory Duty
...of privilege. [i] Barrowfen Properties Ltd v (1) Girish Dahyabhai Patel (2) Stevens & Bolton LLP (3) Barrowfen Properties II Limited [2020] EWHC 2536 (Ch). [ii] ss. 172-175 & s. 177 Companies Act 2006. [iii] BBGP Managing General Partner Ltd v Babcock & Brown Global Partners [2011] Ch 296. ......