Lillicrap v Nalder & Son (A Firm)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE DILLON,LORD JUSTICE RUSSELL,LORD JUSTICE FARQUHARSON |
| Judgment Date | 29 June 1992 |
| Judgment citation (vLex) | [1992] EWCA Civ J0629-4 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | 92/0647 |
| Date | 29 June 1992 |
[1992] EWCA Civ J0629-4
Lord Justice Dillon
Lord Justice Russell
Lord Justice Farquharson
92/0647
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(Mr Justice May)
Royal Courts of Justice
MR RUPERT JACKSON Q.C. and MR ANDREW STAFFORD, instructed by Messrs Hancock & Lawrence (Truro, Cornwall), appeared for the Appellants (Defendants).
MR HUGH BENNETT Q.C. and MISS LINDSAY BOSWELL, instructed by Messrs Preston & Goldburn, appeared for the Respondents (Plaintiffs).
This case comes before us on an application by the defendants, a firm of solicitors called Nalder & Son, for leave to appeal against an order made by Mr Justice May on 17th June 1992. Leave to appeal against that order was refused on that occasion by Mr Justice May.
The application for leave comes before us rather than before the single judge because of the urgency of the matter. It comes before us with a direction that the hearing of the application should be followed by the hearing of the appeal if leave is granted. In fact we have heard on the application the full argument of both sides on the appeal. Accordingly, we grant leave to appeal and I now proceed to deliver judgment on the appeal.
The plaintiffs, husband and wife, are property developers and the defendants, as I have said, are a firm of solicitors who practise at Truro in Cornwall. The complaint by the plaintiffs arises from their having retained the defendants in November 1988 in relation to the plaintiffs' then proposed purchase, subject to contract, of a property known as the Stable Block, Heligan Manor Buildings, Nr. Mevagissey in Cornwall, with the intention of developing the property as a private mews-style development of four units.
On 6th February 1989 contracts were exchanged for part of the property known as the Green Land and an option was granted to the plaintiffs to purchase another part of the property called the Red Land. The reason why it was dealt with that way does not matter for present purposes. It was a requirement of the vendors. On 27th February 1989 the plaintiffs completed the purchase of the Green Land and on 2nd June 1989 they exercised their option to purchase the Red Land. On 5th June 1989 contracts for the purchase of the Red Land were exchanged and on 7th July 1989 the purchase of the Red Land was completed.
The complaint of the plaintiffs is that, in acting as solicitors on that transaction, or those purchases, the defendants acted negligently in that they failed to advise the plaintiffs of the existence of a right of way over, I think, part of the Green Land, and they also failed to advise the plaintiffs that the title did not show that the vendors were entitled to any right of way along a particular track shown on the plan which provided the only convenient way of obtaining access to, and egress from, part of the property.
The writ in the action was issued on 5th March 1991. A statement of claim was served a few days later. A defence was served on 19th April 1991. In June 1991 the statement of claim was amended and an amended defence was served on 26th July 1991. Discovery proceeded and the action was set down on 18th November 1991. On 29th January 1992 it was listed for trial on 8th April 1992. On 24th March 1992 the defendants' solicitors put forward a draft of a re-amended defence. This altered the previous defence in two major respects: firstly, the denial of negligence, which there had been in the former defences, was withdrawn and instead negligence was admitted. In addition, in pursuing their denial of the allegation in the amended statement of claim—that "if the Plaintiffs had been advised of the existence of the one right of way and the absence of a right of way along the track [I have mentioned] they would not have proceeded with the purchase of the Property or any part thereof". Particulars of that denial were added in paragraph 3; firstly, in 3 (A), that "The Defendant [averred] that the Plaintiffs would have proceeded with the transaction, even if they had been advised as it is alleged [that] they should have been" and certain matters are set out and, in addition and as further particulars under paragraph 3, reference was made to six other transactions in which the defendants had acted for the plaintiffs on the plaintiffs' purchase, or negotiations for purchase, of other properties in Cornwall, in each of which in substance—and it is not necessary to go into details—at some stage the plaintiffs had elected to proceed despite advice by the defendants of risks or of the defendants having pointed out that the time-scale the plaintiffs were wanting to go ahead on prevented them from making prudent enquiries. That is the general nature of it. It was sought, therefore, to add these further particulars in paragraph 3 (B).
The case was therefore adjourned and applications were made in respect of these amendments. There was a summons by the defendants to re-amend and a summons by the plaintiffs who took the view that the defendants should not be allowed to make use of documents relating to other transactions in which the defendants had acted as solicitors for the plaintiffs.
Following the general practice in cases where privileged documents are in the hands of persons not entitled to hold them, a summons was issued for the plaintiffs, calling for an order that the defendants deliver up all files, papers, and documents relating to all transactions carried out on behalf of the plaintiffs except those relating to the purchase and sale of the particular Heligan Stable Block.
Mr Justice May's order gave the defendants leave to re-amend the defence to admit liability and to plead the particulars under 3 (A) but not 3 (B). He refused them leave to introduce 3 (B). He gave directions, with which we are not concerned, as to further and better particulars of the amendments, and he further ordered that the defendants
"(1) do forthwith deliver up to the Plaintiffs all original and copy documents belonging to the Plaintiffs and presently in the Defendant's possession or control
(2) do forthwith deliver up to the Plaintiffs any documents and copy documents prepared by any person on the basis of any confidential information belonging to the Plaintiffs and not arising under the retainer specifically pleaded in paragraph 2 of the Amended Statement of Claim
(3) be restrained until after Judgment in this action or until further Order in the meantime from publishing or making use of any confidential information belonging to the Plaintiffs and not arising under the retainer specifically pleaded in paragraph 2 of the Amended Statement of Claim."
The position of the plaintiffs is this, as clearly explained by Mr Bennett on their behalf in this court. Each retainer of a solicitor is a separate retainer for a particular transaction. If a property developer buys seven properties from different vendors on different occasions and the same solicitor acts for the developer on each purchase, there will have been seven retainers. There is not one continuing retainer which continues whether or not there is anything to be done for the client at a particular time. It is not right to say, and this is no doubt common ground, of any person at any particular time in any general sense that "X" is his solicitor. Therefore it is said that the institution of proceedings by the plaintiffs against the defendants in respect of this one transaction in respect of the Stable Block, merely waives the professional privilege of the plaintiffs in relation to documents concerned with that transaction only. Reference is made to the judgment of Lord Justice Nourse in Goddard v. Nationwide Building Society [1987] Q.B. 670, at 685 C-F, where he said:
"Third the right of the party who desires the protection to invoke the equitable jurisdiction does not in any way depend on the conduct of the third party into whose possession the record of the confidential communication has come. Thus, several eminent judges have been of the opinion that an injunction can be granted against a stranger who has come innocently into the possession of confidential information to which he is not entitled…This view seems to give effect to the general rule that equity gives relief against all the world, including the innocent, save only a bona fide purchaser for value without notice. It is directly in point in the present case and our decision necessarily affirms it.
Fourth, once it is established that a case is governed by Lord Ashburton v. Pape [1913] 2 Ch. 469 there is no discretion in the court to refuse to exercise the equitable jurisdiction according to its view of the materiality of the communication, the justice of admitting or excluding it or the like. The injunction is granted in aid of the privilege which, unless and until it is waived, is absolute. In saying this, I do not intend to suggest that there may not be cases where an injunction can properly be refused on general principles affecting the grant of a discretionary remedy, for example on the ground of inordinate delay."
Thus the client has the right to insist on his professional legal privilege and it is for him to choose whether or not to waive it. But it is accepted that the waiver may be implied and that there is an implied waiver where the client brings proceedings for professional negligence against the solicitor. Mr Bennett suggests that the waiver is only in respect of documents and information concerned with that particular retainer. This may in general prima facie be so, but it is...
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