The Aegis Blaze

JurisdictionEngland & Wales
JudgeLORD JUSTICE PARKER,LORD JUSTICE CROOM-JOHNSON
Judgment Date30 October 1985
Judgment citation (vLex)[1985] EWCA Civ J1030-3
CourtCourt of Appeal (Civil Division)
Docket Number85/0637
Date30 October 1985
The Owners of Cargo Lately Laden on Board The Ship "Aegis Blaze"
(Plaintiffs) Respondents
and
The Owners of The Ship "Aegis Blaze"
(Defendants) Appellants

[1985] EWCA Civ J1030-3

Before:

Lord Justice Parker

and

Lord Justice Croom-Johnson

85/0637

1981 Folio Nos. 573 & 574

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION (ADMIRALTY COURT)

(MR. JUSTICE SHEEN)

Royal Courts of Justice.

MR. JULIAN FLAUX (instructed by Messrs. Richards Butler & Co.) appeared on behalf of the (Plaintiffs) Respondents.

MR. DAVID MILDRON (instructed by Messrs. Bentleys Stokes & Lowless) appeared on behalf of the (Defendants) Appellants.

1

LORD JUSTICE PARKER
2

The appellants are owners of the vessel "Aegis Blaze". In December 1980 a cargo of steel coils was damaged whilst being carried in that vessel. In March 1981 proceedings by the cargo owners in respect of the damage were in contemplation, and the appellants' P. & I. club, to whom they had referred the claim, instructed the appellants' present solicitors to defend their interests. For this purpose the solicitors in turn instructed surveyors to accompany them to Sibenik in Yugoslavia, where the vessel then lay, for the purpose of obtaining evidence and preparing a survey report. The visit duly took place, and on the 19th March the surveyors reported to the solicitors in the form of a letter.

3

It is common ground that that document (which I will call the "Sibenik report"), being prepared to enable the appellants' solicitors to advise their clients and defend their interests in contemplated litigation, was privileged from production in English law at least in connection with the litigation then contemplated had it taken place in England or, indeed, if it never took place at all.

4

On the 15th July, 1981, some four months after the survey report had been sent to the appellants' solicitors, further cargo was damaged whilst being carried on the vessel on another voyage. Two lots of cargo owners commenced two separate actions in this country on the 31st July, 1981, which actions were subsequently consolidated. The present appeal arises from an interlocutory judgment of Mr. Justice Sheen in that action on the 24th July, 1985 in which he ordered the appellants to produce the Sibenik report for inspection, rejecting the appellants' claim to privilege in respect of it.

5

The claim to privilege was based on the contention that the document, being privileged in connection with the proceedings contemplated at the time of its preparation, was also privileged in the later proceedings.

6

The contemplated litigation did in fact take place, but in Greece, and is still pending, but that can make no difference.

7

The respondents' claim to production and inspection arose by reason of the disclosure on discovery in the action of a letter, dated the 31st July, 1981, to the appellants from their P. & I. club, which contained the following paragraph:

"We also take this opportunity of referring you to an earlier incident…at which time cracking was found in the ship's sides in way of horizontal tripping brackets. A Surveyor appointed by this Association visited the vessel at Sebenik, Yugoslavia in March 1981, and we take this opportunity of enclosing a copy of his Report from which it will be seen that he is concerned regarding the design of the tripping brackets and describes how these were dealt with in some locations."

8

It is common ground that the Sibenik report is relevant, there being issues in the action as to the condition of the vessel shortly thereafter and the knowledge and state of mind of the appellants of such condition. It is therefore disclosable and, subject to privilege, the respondents are entitled to production and inspection of it.

9

The learned judge dealt with the matter in a very short judgment, in which he says as follows:

"Mr. Crookenden submits that the privilege that attached to the document in the original contemplated proceedings continues to attach to the document in these proceedings. I do not take that view. I have formed a very clear view that the statement in Kerry County Council v. Liverpool Salvage Association (1904) I.L.T. p.7 argued after reference to English authorities states the correct principle. A document does not retain its privilege in subsequent proceedings concerning different parties and subject matter. It is not right that in this action which concerns the state of mind of the shipowner the document should be privileged or protected."

10

The question which arises for decision on this appeal is whether the learned judge was right. I examine first the authority upon which he based his decision. It is reported at first instance in [1905] I.L.T. 38. The headnote to that case reads as follows:

"In an action by the plaintiffs against the defendants, claiming damages arising from the acts of the defendants in causing, during the course of salvage operations, a wrecked vessel to become an obstruction, the defendants, under an order for discovery of documents, stated, on affidavit, that they had in their possession certain documents, consisting of confidential correspondence, reports, etc., obtained or made by them as agents for an Insurance Company, in reference to matters arising in litigation 'then anticipated and afterwards instituted' by the owner of the vessel against the said Insurance Company for the purpose of enabling the latter to be advised upon, and to defend, the claim made against them:—

Held, that the defendants were not entitled to exemption from discovery, as the documents would not have been privileged in the earlier action by the shipowner."

11

In the argument of Mr. Sullivan, K.C., for the plaintiffs, it was contended that, even if the documents were privileged in the earlier action, that privilege did not attach to the documents in the second action, which was one between new parties, and brought on the footing of a distinct cause of action.

12

The judgments of the court made it perfectly plain that their decision turned on the sole question whether the documents had ever been privileged, and all three came to the conclusion that there was no such privilege. At page 41 Mr. Justice Kenny said this:

"Having disposed of these matters, I come to the substantial question discussed before us, namely, Are the plaintiffs entitled to see these fifty-three documents that came into being in August and September 1900, at a time when the present cause of action had not arisen? The ground of privilege in connexion with them is that they are in the nature of professional communications. I shall assume that the reasonable intendment of the claim put forward is that in former litigation—either actual or anticipated—the defendants acted as agents for one of the parties to it, and that these documents contain information of a confidential character given or obtained by the defendants to or for their principal for the defence of an actual suit, or for obtaining legal advice with regard to an anticipated suit."

13

He then goes on on page 42:

"Assuming, therefore, that the claim here is based on the confidential relationship of solicitor and client, the defendants in effect say that their principal, the Maritime Insurance Company, for whom this information was obtained, could decline to show those documents, because the information was obtained in order to be laid before their Company, and if they could decline we, as their agents, can decline, notwithstanding that there are new parties, and a new cause of action. I think there can be little doubt that if, instead of the Salvage Company, we had the Maritime Insurance Company, or their solicitors, claiming privilege on the ground of the professional relationship, the claim should be allowed if we were satisfied that the documents were of the character they were represented to be."

14

Then a little lower down on that page he says:

"I have read every one of them, and I can see no indication of any sort that the Maritime Insurance Company were at the time threatened with any claim by Spillane, the owner of the vessel, or that they were taking legal advice with respect to the latter, or in any way utilizing the information given by the defendants in connexion with legal advice."

15

On that ground he reached his conclusion.

16

Mr. Justice Barton at page 45 said:

"It is suggested that this correspondence was privileged in that action, and that it is, therefore, privileged in the present action. If it was privileged in the other action, the rule 'once privileged, always privileged,' would come under consideration, and Mr. Sullivan, not having seen these documents, was forced to argue that the well-established general rule does not apply to this case. But it is not necessary for us to decide, or even to express, an opinion upon that question. We have had the advantage of reading the documents. From a perusal of them it seems to me quite clear that these documents were not, and could not, have been privileged in the action between Spillane and the Liverpool underwriters."

17

Mr. Justice Wright concurred, and there is a note in the Irish Reports that the defendants thereafter appealed to the Court of Appeal and that the appeal was dismissed with costs. It was apparently not thought that the decision of the Court of Appeal was sufficiently important to be reported.

18

It was, however, reported in the Irish Law Times of 1904, and it is to this report that the learned judge referred. The conclusions expressed in the headnote to that case are as follows:

" Held, that the correspondence was not privileged: Held also, that the principle of 'once privileged always privileged'...

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