Lee Victor Addlesee (and the others listed in the Schedule annexed to the Amended Claim Form) v Dentons Europe LLP
| Jurisdiction | England & Wales |
| Judge | Lord Justice Lewison,Lord Justice Floyd,Lord Justice Hamblen |
| Judgment Date | 02 October 2019 |
| Neutral Citation | [2019] EWCA Civ 1600 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3/2019/0421 |
| Date | 02 October 2019 |
[2019] EWCA Civ 1600
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
BUSINESS COURT (ChD)
Master Clark
HC-2016-001537
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Lewison
Lord Justice Floyd
and
Lord Justice Hamblen
Case No: A3/2019/0421
Mr Thomas Grant QC & Mr Thomas Munby (instructed by Forsters LLP) for the Appellant
Mr William Flenley QC & Mr Adam Kramer (instructed by Clyde & Co LLP) for the Respondent
Hearing dates: 23 rd & 24 th July 2019
Approved Judgment
Introduction and background
The question on this appeal is easy to pose, but not so easy to answer. It is: what happens to legal advice privilege attaching to communications between a company and its lawyers, once that company has been dissolved; and the Crown has disclaimed all interest in its former property?
The relevant background to the appeal can be shortly stated. A large group of investors invested in a scheme marketed by a Cypriot company called Anabus Holdings Ltd. The lawyers acting for Anabus were an English LLP called Salans LLP. Salans LLP has since been renamed Dentons Europe LLP. In the course of acting for Anabus documents came into existence on Salans' files which, for the purposes of this appeal, we must assume would have attracted legal advice privilege. The documents in question are in Dentons' possession. Anabus was dissolved in Cyprus on 11 January 2016. In so far as any rights relating to the documents have passed to the Crown as bona vacantia, the Crown has disclaimed all interest in them “without either asserting or waiving any legal professional privilege”. The investors claim that the scheme was fraudulent. In May 2016 the investors issued proceedings against Dentons claiming damages for deceit or negligence. Unsurprisingly, they wish to see documents passing between Salans and Anabus. They are likely to be highly relevant evidence. It is accepted, for the purposes of this appeal only, that the documents in question did attract legal advice privilege at the time when they came into existence (and were not, for example, within the so-called “iniquity exception”). The question on this appeal is whether legal advice privilege subsists notwithstanding the dissolution of Anabus. Master Clark held that it did. In so holding, she distinguished the decision of the Upper Tribunal in Garvin Trustees Ltd v The Pensions Regulator [2015] Pens LR 1, in which Judge Herrington held that legal advice privilege did not survive the dissolution of a Northern Irish company which had been the client. The ground of distinction was that, whereas in Garvin it was no longer possible to restore the dissolved company to the register, in our case that was still a legal possibility. It is common ground that the Master was bound by Garvin; but that we are not. The investors appeal.
The appeal first came on for hearing on 22 May 2019 before Sir Brian Leveson P and Lewison and Floyd LJJ. The area of debate between the parties at that time was, in essence, whether the Master had correctly distinguished Garvin. There was no challenge to the correctness of Garvin itself. However, all members of the court expressed concerns whether Garvin was, indeed, correctly decided. With some encouragement from the court, Mr Flenley QC, on behalf of Dentons, applied for permission to serve a Respondent's Notice taking that point. The court acceded to that application; and adjourned the appeal on terms. This is the judgment following the resumed hearing of the appeal. In the meantime, Sir Brian has retired: hence the different constitution of this court. The issue which the court raised with the parties, as subsequently refined, may be encapsulated as follows:
“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
Mr Grant QC and Mr Munby presented the investors' argument, which can be summarised as follows:
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 question posed above is a novel one, which had not arisen for decision before Garvin. In such circumstances it is necessary to be cautious about taking literally general descriptions of legal professional privilege even when coming from the most distinguished of judges. In addition, legal professional privilege is commonly categorised under two different heads: legal advice privilege and litigation privilege. Although they have a common purpose, the scope of each is different. We are concerned only with legal advice privilege.
The identification of the underlying policy is of critical importance; because, as Lord Scott explained in Three Rivers DC v Governor and Company of the Bank of England (No 6) [2004] UKHL 48, [2005] 1 AC 610 at [35], legal advice privilege “should be given a scope that reflects the policy reasons that justify its presence in our law.” That, to my mind, is the key to the resolution of this appeal.
In R v Derby Magistrates' Court ex p B [1996] 1 AC 487 Lord Taylor of Gosforth CJ comprehensively reviewed the authorities. I will pick out some extracts from them shortly. Unless otherwise stated, the emphasis in quoted passages is mine. Having considered the authorities, Lord Taylor concluded:
“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.”
On the way to his conclusion Lord Taylor quoted from a number of cases which express the same thought.
“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)
As Lord Taylor put it later in his speech:
“… 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.”
Thus, he concluded:
“For this reason I am of the opinion that no exception should be allowed to the absolute nature of legal professional privilege, once established.”
Agreeing with Lord Taylor, Lord Lloyd said:
“If the client had to be told that his communications...
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