Karel Komarek and Another v Ramco Energy Plc and Others
| Jurisdiction | England & Wales |
| Judge | Mr Justice Eady |
| Judgment Date | 21 November 2002 |
| Neutral Citation | [2002] EWHC B2 QB |
| Court | Queen's Bench Division |
| Docket Number | Case No: HQ01X01631 |
| Date | 21 November 2002 |
[2002] EWHC B2 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr Justice Eady
Case No: HQ01X01631
Mr T Beazley QC, Miss V SharpQC andMiss J Phillips (instructed by Peters & Peters, Solicitors) for the Claimants
Mr M Mendelson QC, Mr P MoloneyQC andMs C Evans (instructed by Simons Muirhead & Burton, Solicitors) for the Defendants
Hearing dates: 21 – 29 October 2002
Judgment Approved
This litigation is due to be tried by me in December sitting with a jury. There are now a number of significant and, in some cases, fundamental applications to be ruled upon. They were heard over no less than six days between 21 and 29 October. They included applications on the defendants' part for summary judgment on issues of qualified privilege and malice, and applications by the claimants for permission to amend (including by way of adding new causes of action) and for specific disclosure of documents. As if this were not enough, there were also arguments on absolute privilege, diplomatic immunity, the so-called double actionability rule and Czech law. These were to be resolved by way of preliminary issues and, particularly, in the light of conflicting oral evidence from legal experts. It was agreed that an application on the defendants' behalf for security for costs would be postponed until the outcome of these other more substantive matters was known.
The first two days of the hearing were largely taken up with disclosure issues. The parties were content to take that course because the questions could be resolved on the statements of case as they then stood and were not affected by the proposed amendments. Moreover, Miss Sharp QC for the claimants wished to reserve her position to make adjustments to her case on qualified privilege and/or malice in the light of any further disclosure I might order. This was another factor affecting the sequence in which I was invited to dispose of the applications. Before turning to the subject of disclosure, it is necessary for me to identify the issues.
A Summary of the Issues
So much is in dispute, both as to the facts and as to the interpretation of them, that it would be inappropriate for me in advance of the trial to set out the background in any detail. I propose to content myself with a very brief summary which I hope is uncontroversial.
The first claimant is the Chairman of the Board of the second claimant ["MND"]. It is pleaded that in 1997 he and his father (Karel Kamarek Senior) founded SPP Bohemia which subsequently acquired a majority holding in MND. The second claimant (which can be conveniently identified in English as The Moravian Oil Mining Company) is incorporated in the Czech Republic and has substantial interests in the production, storage and distribution of natural gas and oil in that part of the world and elsewhere. Ramco Energy PLC (the first defendant) is incorporated in Scotland and carries on the business of developing, exploring and exploiting oil and gas reserves.
Medusa Oil and Gas Limited (the second defendant) is incorporated in England and Wales. The third defendant (Medusa Czech Operations Limited) is incorporated in Jersey. The second and third defendants are subsidiaries of Ramco and carry on the same business under its management and control. The fourth defendant, Mr Burchell, is the Managing Director of Ramco and the fifth defendant, Mr Seymour, is a director of the second and third defendants.
An agreement was entered into in October 1997 between MND and the second defendant with a view to the exploration, and exploitation, of reservoirs of petroleum in the Czech Republic in three areas known as Brezi Mikulov, Bulhary and Karlin. Just over a year later the second defendant transferred its rights and obligations to the third defendant. On 19 August 1999 MND entered into a joint venture agreement with the third defendant with a view to undertaking the prospecting and exploration of reservoirs of petroleum in those three areas and, ultimately, to produce and sell the petroleum found.
To put it neutrally, a commercial dispute arose between the various parties at some point in the first half of 2000. The defendants thought it appropriate to carry out investigations into the claimants' background and, to that end, instructed Hakluyt & Co, which apparently specialises in gathering and analysing information about companies around the world. It was founded in 1995 and is supervised by a Foundation whose members include various distinguished men, including former businessmen, diplomats and civil servants. Its status is very much a matter of dispute in these proceedings.
By Letter dated 20 May 2000 the defendants are alleged to have published to Her Majesty's Ambassador in Prague and to Mr Martin Day, who was the First Secretary (Commercial) at the British Embassy in Prague and Principal Representative in the Czech Republic of British Trade International, certain allegations about the claimants which are said to be defamatory and which, for the purposes of the present application, do not need to be set out in detail. In particular, they were sent a document apparently emanating from Hakluyt headed "BULLET POINTS ON THE KOMAREKS/MND". This contained a number of allegations which were undoubtedly grave and implicated the claimants in corruption and in one instance in murder. Reliance is placed in the Particulars of Claim by way of aggravation of damages upon a raft of detailed matters. There is a plea of qualified privilege, which may perhaps be regarded as the primary defence, and a plea of malice which to a significant extent overlaps with the detailed history prayed in aid for the purposes of aggravation of damages. It will be noted that there is no plea of justification and the allegations will therefore be presumed to be untrue. It is not for the claimants to prove them false.
That is the very broad context of the applications which now come before me.
Disclosure
On 22 October, I announced my conclusions in relation to the various documents, or classes of documents, which were debated before me, so that the parties could consider their respective positions accordingly. It could well be necessary to address, for example, the possibility of appeal and/or the consequences for the claimants' pleaded case. It was decided that the defendants did not wish, in the circumstances, to pursue any application for permission to appeal and the relatively few documents which I ordered to be disclosed, or unredacted, were then handed over. It is now appropriate, however, for me to explain my reasons for the course I took. I propose to do so in relatively brief and general terms.
The documents fall into several distinct categories, although some of them bridge more than one category. One of the main issues canvassed was that of legal professional privilege. In some cases, it was necessary to address what the dominant purpose of the relevant document was in accordance with the guidance given in Waush v British Railways Board [1980] AC 521. The subject of legal professional privilege needs sometimes to be sub-divided, as here, because legal advice privilege and litigation privilege are governed by different public policy considerations and rules of application. Miss Sharp argued that no litigation was in contemplation until the letter before action in respect of this litigation (i.e. 26 July 2000). Mr Moloney QC, on the other hand, puts the relevant date several months earlier, because the contemplation of litigation for this purpose can embrace the contemplation of arbitration proceedings, and by early March 2000 it was apparent that there was a commercial dispute between the parties to the contract governing the joint venture in the Czech Republic.
The facts of this case give rise to special considerations. When Mr Moloney spoke of internal discussions in the defendants' camp about "the disputes", and about various possible solutions, it became obvious that there was a need for greater definition. The word "dispute" could lead to confusion, since it could refer in some contexts to the contractual dispute, and in others to the libel dispute — and in yet other instances to the overall commercial dispute in relation to which the legal issues formed merely a part. There were many potential methods of resolving the overall commercial dispute and some of these did not involve litigation at all.
In the context of this case, the distinction is significant because there are important allegations of malice which may (subject to the summary judgment application) entail investigation into what the defendants genuinely believed about the claimants and the extent to which allegations about them were being used by the defendants cynically for an "improper" purpose. In untangling these issues, it is obvious that internal communications and their timing could be of significance. The scope of legal professional privilege therefore needed to be scrutinised with particular care. It is recognised that it should not be extended beyond its legitimate purpose and that it must be kept within justifiable bounds: Balabel v Air India [1988] 1 Ch 317.
Whereas discussions about settlement or possible strategies in litigation, or arbitration, would ordinarily be expected to attract legal professional privilege (of one or other category), wider ranging communications about commercial strategies or tactics might well not do so. I decided that on the facts of this unusual case I should attempt to draw such a distinction when deciding...
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Lokhova v Longmuir
...pursuant to section 32A of the 1980 Act. In Komarek v. Ramco Energy Plc, an unreported decision of Eady J in 21 November 2002, [2002] EWHC B2 (QB), the judge found that no such discretion existed. However, conflicting views have been expressed by way of obiter dicta by the Court of Appeal ......