Expandable Ltd and Others v Rubin
| Jurisdiction | England & Wales |
| Judge | Lord Justice Rix,LORD JUSTICE JACOB,MR JUSTICE FORBES |
| Judgment Date | 11 February 2008 |
| Neutral Citation | [2008] EWCA Civ 59 |
| Docket Number | Case No: A2/2007/1881 |
| Court | Court of Appeal (Civil Division) |
| Date | 11 February 2008 |
[2008] EWCA Civ 59
Lord Justice Rix
Lord Justice Jacob and
Mr Justice Forbes
Case No: A2/2007/1881
2007/1881
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CHANCERY DIVISION
MR JUSTICE PATTEN
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Daniel Lightman (instructed by Messrs Goldkorn Mathias Gentle) for the Appellant
Mr Hermann Boeddinghaus (instructed by Messrs Edwin Coe) for the Respondent
Hearing dates : 21 st January 2008
What is involved in a document being “mentioned” in a statement of case or witness statement or the like? If a document is so mentioned, has privilege against its inspection been waived? These are the two questions which arise on this appeal. The provisions of CPR Part 31 are in issue.
The circumstances in which these questions arise do not much matter, but they are briefly these. Mr David Rubin, the respondent, is the supervisor of a failed IVA of the debtor Mr Martin Clarke, who is now a discharged bankrupt. There is a dispute as to whether Mr Rubin should transfer to the debtor's trustees in bankruptcy some £684,000 in his hands which represent the debtor's share of the sale and development of some land in Hendon, London (the “Hendon project”). A claim has in turn been made to that sum by Expandable Limited and Prime Trust Corporation Limited, two Gibraltar companies, who are appellants in this appeal (the “companies”). They say that in return for the advance to the debtor in 2001 of £245,000, they were to receive a secured 50% interest in the debtor's profit from the Hendon project. The debtor acknowledges the advance of the £245,000 from a Mr Robert Noonan, a Gibraltar resident, but not a proprietary interest by the companies in the project proceeds.
At one time Mr Rubin considered that it was not possible for him to reject the claim outright and he therefore sought the determination of the court under an application under section 363 of the Insolvency Act 1986. However, in due course he came to the conclusion that there was no proper basis for the companies' claim and that he did not need the assistance of the court. It was eventually agreed that the section 363 proceedings should continue but with the companies having carriage of the application as claimants in it. They are now appellants in this court, and Mr Rubin is the respondent.
In the course of Mr Rubin's enquiries into this matter, his solicitors, Messrs Edwin Coe, had interviewed the debtor. In particular, a Mr Ali Zaidi of that firm had interviewed the debtor on 19 December 2005. Mr Rubin referred to that interview in his second witness statement dated 21 February 2007. He said:
“22. I confirm that the above-mentioned documents represent the totality of my written communications with the Debtor (including those of my Solicitors on my behalf) concerning the issue of the Expandable claim…
23. In particular it will be noted that there are several inconsistencies between Mr Clarke's note to me and what he told Mr Zaidi…I think it right I draw the Court's attention to the fact that after Mr Zaidi had interviewed Mr Clarke he [Mr Zaidi] wrote to me enclosing a copy of his note of the meeting and drawing my attention to the discrepancies (which, by the way, I did not think in any way assisted Prime/Expandable Trust with their claim)” (emphasis added).
The words emphasised are the basis of the dispute on this appeal. It is recognised that Mr Zaidi had enclosed his notes of interview under cover of a letter to Mr Rubin in which, as Mr Rubin said in his statement, Mr Zaidi had drawn attention to discrepancies between what the debtor had said at the December 2005 interview and what the debtor had said in his own note to Mr Rubin on an earlier occasion. The companies have disclosure of those notes of interview and of the debtor's own note to Mr Rubin. What they seek further is Mr Zaidi's covering letter. They plainly want to be able to determine for themselves whether the debtor's inconsistencies do or do not assist them in their claim to the funds held by Mr Rubin. In practice, however, it must be doubtful how disclosure of the covering letter would tell them anything more than they already have in the form of the underlying material.
It is nevertheless common ground that privilege would, subject to the arguments raised below and again on this appeal, attach to the solicitor's letter that Mr Zaidi had sent to his client, Mr Rubin. It is submitted, however, that such privilege has been waived and lost by mention of the letter in Mr Rubin's witness statement.
On 9 March 2007 the companies' solicitors, Messrs Goldkorn Mathias Gentle (“GMG”), wrote to Edwin Coe to request a copy of Mr Zaidi's letter, claiming a right of inspection pursuant to CPR 31.14(1)(b). On 26 March 2007 Edwin Coe replied to say –
“The document you have requested is privileged and there has been no waiver of that privilege simply by reference to it in a witness statement.”
On 28 March 2007 Edwin Coe again wrote:
“As we have stated previously, mere reference to a document in a witness statement does not in itself waive privilege.”
On 5 April 2007 the companies applied for disclosure of the covering letter, citing inter alia a right of inspection under CPR 31.15. Their application came before Registrar Simmonds who, in a reserved judgment dated 21 June 2007, refused it. He held that “he wrote to me” did not amount to mention within the meaning of CPR 31.14. Even if it did, he observed “in passing” that such mention would not have waived privilege. He did not elaborate that second point, but as to the first he said this:
“The communication is imprecise. It does not say whether it is a letter or email. It is not mentioned by date. The wording is explanatory of process rather than being mentioned in a specific and direct form.”
There was an appeal by the companies to Patten J, whose judgment was given on 24 July 2007, [2007] EWHC 2463 (Ch). He came to the same conclusions. He referred to the corresponding provisions under RSC Order 24, rule 10 and to relevant jurisprudence, and rejected the submissions made by Mr Daniel Lightman on behalf of the companies that the detailed provisions of CPR Part 31 demonstrated a fundamental change in approach. He agreed with Registrar Simmonds that there had been no mention of any document in the witness statement and that even if there had, there had been no waiver of privilege. As to the first point, he said –
“33. As Mr Registrar Simmons pointed out, the term “wrote” could connote a number of different types of document, not just a letter, nor were the contents of the letter relied on in themselves.”
As for waiver of privilege, Patten J rejected the submission that the general provisions of CPR 31.19 relating to a claim for privilege did not apply equally to documents for which there might otherwise be a right of inspection by reason CPR 31.14. He referred to Buttes Gas and Oil Company v. Hammer (No3) [1981] QB 223 (CA), decided under the old law, for the proposition, which he considered to remain good under the CPR regime, that bare reference to a document in a pleading did not waive any privilege attached to it. In as much as it was also submitted to him that Mr Rubin's witness statement had gone beyond bare mention and amounted to a deployment of the contents of the covering letter and on that broader ground amounted to a waiver of privilege, he decided otherwise.
The appeal to this court is now a second appeal, for which permission has been given by Sir John Chadwick, who correctly observed that important points of principle or practice were involved in the interpretation and application of Part 31. However, he refused permission to appeal on the separate ground that, even if there was mention of a document but no automatic waiver of privilege, nevertheless there had been waiver in this particular case. We are therefore concerned only with the two issues: (1) Was a document mentioned in Mr Rubin's witness statement for the purposes of CPR 31.14? (2) If so, was that an automatic waiver of privilege?
The provisions of CPR Part 31
The focus of Mr Lightman's submissions for the companies is on CPR 31.14 and 31.15, but it is necessary to see those provisions in a wider context within Part 31 as a whole. Thus Part 31 provides –
“31.1–(1) This Part sets out rules about the disclosure and inspection of documents…
31.2 A party discloses a document by stating that the document exists or has existed.
31.3–(1) A party to whom a document has been disclosed has a right to inspect that document except where –
…
(b) the party disclosing the document has a right or a duty to withhold inspection of it;…
In this Part –
“document” means anything in which information of any description is recorded…
–(1) The procedure for standard disclosure is as follows.
(2) Each party must make, and serve on every other party, a list of documents in the relevant practice form…
(4) The list must indicate –
(a) those documents in respect of which the party claims a right or duty to withhold inspection…
(Rule 31.19(3) and (4) require a statement in the list of documents relating to any documents inspection of which a person claims he has a right or duty to withhold.)…
–(1) The court may order specific disclosure or specific inspection…
–(1) A party may inspect a document mentioned in –
(a) a statement of case;
(b) a witness statement;
(c) a witness summary; or
(d) an affidavit
(e) [Revoked]
(2) Subject to rule 35.10(4), a party may...
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