Victorygame Ltd v Ahuja Investments Ltd
| Jurisdiction | England & Wales |
| Judge | Lady Justice Andrews,Sir Stephen Irwin,Lord Justice Baker |
| Judgment Date | 05 July 2021 |
| Neutral Citation | [2021] EWCA Civ 993 |
| Docket Number | Case No: A3/2021/1014 |
| Court | Court of Appeal (Civil Division) |
[2021] EWCA Civ 993
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE BUSINESS AND PROPERTY
COURTS OF ENGLAND AND WALES
CHANCERY APPEALS
MR ROBIN VOS (sitting as a Deputy Judge of the High Court)
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Baker
Lady Justice Andrews
and
Sir Stephen Irwin
Case No: A3/2021/1014
Nicholas Trompeter QC (instructed by SBP Law) for the Appellants
David Holland QC and Edward Rowntree (instructed by Cardium Law Ltd) for the Respondent
Hearing date: 22 June 2021
Approved Judgment
This is an expedited appeal brought by the Defendants to the underlying proceedings, Victorygame Ltd and its director Mr Pandher, (collectively, “Victorygame”) against the judgment and order of Mr Robin Vos, sitting as a deputy judge of the High Court, dated 8 June 2021.
The Judge upheld a claim to legal professional privilege by the Claimants, Ahuja Investments Ltd, (“Ahuja”) over correspondence between their current solicitors, Cardium Law, and their former solicitors, Stradbrooks, reversing the decision of Master Pester, dated 29 April 2021, to order disclosure of those documents. The documents concerned are:
i) A letter of claim from Cardium Law to Stradbrooks dated 10 February 2020, and
ii) A letter of response dated 19 December 2020 from Stradbrooks' professional indemnity insurers.
Permission for a second appeal was granted on limited grounds on 14 June 2021 by Henderson LJ, who directed that the appeal be listed for hearing on 22 June. The reason for expedition was that the trial of the underlying claim had been listed to take place in a window commencing on 28 June.
After hearing and considering the arguments, attractively presented by Mr Trompeter QC on behalf of Victorygame, and Mr Holland QC (assisted by Mr Rowntree) on behalf of Ahuja, the Court informed the parties that the appeal would be dismissed, and that we would give our reasons in our reserved judgments.
For the purposes of this appeal it is unnecessary to set out the detail of the underlying claim. Suffice it to say that it arises out of the purchase by Ahuja from Victorygame of a commercial property in Southall, Middlesex, the ground floor units of which were rented out for retail purposes. Contracts were exchanged in March 2016, but the sale was not completed until 22 August 2018. Stradbrooks acted for Ahuja in the transaction. The solicitor who handled the file was a Mr Randeep Jandu.
Ahuja claims that it was induced to enter into the sale contract and a related loan agreement by fraudulent (alternatively negligent) misrepresentations about the duration of the leases of the retail units and the rental income. It is common ground that a schedule was provided to Ahuja which stated, in capitalised text, that “all tenants have signed a 15 year lease”. In fact the leases were for 6 years 9 months.
Victorygame accept that there was a misrepresentation, which they say was due to an innocent mistake, but deny that there was any operative inducement. They contend that Ahuja knew the true term of the leases prior to the exchange of contracts, for a number of reasons, one of which is that the original leases were in the possession of Ahuja or Stradbrooks for around two months between February and April 2016 (which spanned the exchange of contracts). The leases were provided to Mr Sohal, Victorygame's selling agent, and subsequently delivered by him to Stradbrooks. It is argued that an inference can be drawn that, before they were returned to Victorygame's then solicitors, Chhokar & Co., Mr Jandu inspected the leases and discussed them with his clients. Victorygame contend that:
“in this context, the advice [if any] which Mr Jandu gave to Ahuja regarding the length of the terms of the leases is of critical importance to the fair resolution of the proceedings.”
Ahuja is not planning to call Mr Jandu as a witness at trial.
In opposition to Victorygame's application for disclosure of the two letters, Ahuja's solicitor, Mr Davies of Cardium Law, served a witness statement, his sixth in the proceedings, dated 25 April 2021, claiming that they were subject to litigation privilege. In that statement, Mr Davies explained at [57] –[59] that Stradbrooks wrote the letter before action (in respect of Victorygame Ltd) to Chhokar & Co. on 29 November 2018, followed by an email expressly stating that Mr Pandher had made fraudulent and/or negligent representations and reserving Ahuja's rights in that regard. His firm was instructed in these proceedings in place of Stradbrooks in late December 2018. Numerous requests were then made by Cardium Law to Stradbrooks for their file relating to the matter, both before and after the commencement of the underlying proceedings against Victorygame in May 2019, but Stradbrooks refused to produce the file. Ahuja therefore had to issue a third party disclosure application for its production, which was successful. Stradbrooks produced their conveyancing file following the hearing of that application on 20 November 2019.
Cardium Law reviewed the conveyancing file upon its receipt, and sought advice from leading and junior counsel. Mr Davies explained what happened thereafter in the following terms:
“64 … Without waiving privilege, it was decided that further information was required from Stradbrooks and Mr Jandu with a view to the conduct of this claim and to assess Mr Jandu's potential as a witness. Following this, on account of his prior lack of co-operation and his conduct, it was decided that the only way in which Stradbrooks or Mr Jandu would give any substantive comment in relation to his involvement in matters relevant to this action was to threaten to issue proceedings against him.
65. Accordingly (and again without any waiver of privilege) on 10 February 2020 a letter in the form of a Letter before Action was sent to Stradbrooks. It must be emphasised that whilst, of course, the Claimant had approved the sending of the letter, no instructions had been given to issue proceedings against Stradbrooks. The dominant purpose of sending the Letter before Action was to obtain information relevant to these proceedings, which was not apparent from the conveyancing file. The Letter before Action made a series of statements and sought a response. It also mentioned the fact that these proceedings had been issued…
[Mr Davies then referred to the fact that various letters were sent chasing a response from Stradbrooks, and to the dates on which they were sent.]
67. Without any waiver of privilege, on 19 December 2020, a Letter of Response was received from solicitors instructed by Stradbrooks' professional indemnity insurer. This contained the information sought…
68. The Claimant in this action has not issued proceedings against Stradbrooks and this firm has not been provided with instructions to issue proceedings.”
The decision of the Master
In his ex tempore judgment, the Master said he did not find the privilege point particularly easy. He was not going to go behind what Mr Davies said. He described the fact that Ahuja had to issue the third party disclosure application against Stradbrooks as “absolutely extraordinary.” He then referred to the decision of Birss J in Property Alliance Group v Royal Bank of Scotland plc (No.3) [2016] 4 WLR 3, (“ PAG”) which was relied on by Mr Trompeter.
The facts of that case were most unusual. A claim was brought by PAG against the defendant bank alleging that it had been mis-sold swaps contracts. A director of PAG, Mr Russell, arranged a meeting with two of the bank's former employees, ostensibly to discuss future business opportunities, and surreptitiously recorded the meetings with a view to obtaining information and evidence that might assist PAG in its claim against the bank. PAG claimed privilege over the recordings and any transcripts of them on the basis that they had been produced for the dominant purpose of conducting litigation.
Birss J accepted the bank's submission that what mattered in this context was the dominant purpose of the meetings, and not the dominant purpose of making the secret recordings of the conversations at the meetings. He considered and followed a number of authorities from this and other common law jurisdictions concerning the recording of conversations (including the decision of the Court of Appeal in Parry v News Group Newspapers Ltd [1990] 140 NLJ 1719, in which the leading judgment was delivered by Bingham LJ). Those cases establish that a record of a non-privileged conversation, whether in the form of a recording, a transcript or a verbatim note, cannot itself be privileged if the underlying conversation was not privileged, even if it can be said that the reason the recording was made was for use in litigation. Birss J decided that this principle applied irrespective of whether the non-privileged conversation was with a witness or between the parties to the litigation itself.
Having established that this was the guiding principle, Birss J went on to consider whether the conversations with the ex-employees were privileged. He rejected the bank's contention that the dominant purpose of the meetings had to be ascertained from the point of view of a dispassionate observer. He found that an objective assessment of the dominant purpose of the meetings (and thus the discussions that took place at them) meant that the court had to take into account all the evidence, including evidence of the intentions of all the participants, (in other words, the dominant purpose of a meeting could not be objectively ascertained merely by considering the intention of the party who convened it). He found that, assessed objectively, Mr Russell's intention...
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