WH Holding Ltd v E20 Stadium LLP
| Jurisdiction | England & Wales |
| Judge | Sir Terence Etherton MR,Lord Justice Lewison,Lady Justice Asplin |
| Judgment Date | 30 November 2018 |
| Neutral Citation | [2018] EWCA Civ 2652 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3/2018/2580 |
| Date | 30 November 2018 |
[2018] EWCA Civ 2652
THE MASTER OF THE ROLLS
Lord Justice Lewison
and
Lady Justice Asplin
Case No: A3/2018/2580
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
CHANCERY DIVISION
Norris J
[2018] EWHC 2784 (Ch)
Royal Courts of Justice Strand, London, WC2A 2LL
Paul Downes QC, Joseph Sullivan and Luka Krsljanin (instructed by Gateley Plc) for the Appellants
Thomas Plewman QC and Tom Wood (instructed by Gowling WLG (UK) LLP) for the Respondent
Hearing date: 15 November 2018
Judgment Approved
Sir Terence Etherton MR, Lord Justice Lewisonand
This expedited appeal raises issues as to: the scope of litigation privilege; the grounds upon which the court will be prepared to inspect documents where there is a challenge to the assertion of privilege; and the application of the “dominant purpose” test in relation to documents produced for more than one reason.
The appeal arises out of an application dated 10 September 2018 made by the Appellants, WH Holding Limited and West Ham United Football Club Limited (together referred to as “West Ham”), by which West Ham applied for the court to inspect a number of documents, by way of a sample of redacted disclosure in relation to which privilege had been asserted. The application was made pursuant to CPR 31.19(6)(a).
By his order of 23 October 2018 Norris J dismissed the application save that: the parties were directed to make submissions on the issue of whether or not sample document 4 had been properly redacted pursuant to the claim of litigation privilege; and the solicitor with conduct of the matter, Ms Carr, was directed to conduct a further review of the two redactions to sample document 5. The citation for Norris J's judgment is [2018] EWHC 2784 (Ch).
The Judge gave permission to appeal on two grounds, namely: whether the scope of litigation privilege is restricted to documents concerned with obtaining advice or evidence for the conduct of litigation; and the correct approach to be taken by a court to an application for inspection of documents by the court where a claim to privilege is challenged. Lewison LJ subsequently granted permission to appeal on the additional ground that the Judge did not consider or apply the “dominant purpose” test when addressing the question of whether to inspect documents 8 – 13 of the sample of redacted documents. It is not in dispute that in order to fall within the ambit of litigation privilege a document must at least have been produced for the dominant purpose of conducting that litigation. Lewison LJ also granted a request for expedition and the application to rely upon the email which had been referred to as document 4 and was made available in unredacted form as a result of the directions made by the Judge in his Order.
The appeal is concerned only with West Ham's challenges to the documents numbered 8–13 of the sample (the “Disputed Documents”). They consist of six emails, all dated 30 January 2017, passing between the Board members of the Respondent, E20 Stadium LLP (“E20”), and between E20 Board members and stakeholders. E20 asserts that each of the six emails were composed with the dominant purpose of discussing a commercial proposal for the settlement of the dispute between E20 and West Ham in relation to rights arising under the agreement between the parties providing for West Ham to use the London Olympic Stadium for its home football matches (the “Concession Agreement”) at a time when litigation was in reasonable contemplation.
The main proceedings, in relation to which the disclosure and the challenges to it arise, were listed for trial for five weeks commencing on 19 November 2018. The claims and counterclaims relate to a dispute over the number of seats in the stadium that West Ham is entitled to use. E20 contends that West Ham is only entitled to use 53,500 seats whereas West Ham asserts that it is entitled to use all of the seats, subject only to necessary permissions being granted by the appropriate authorities. West Ham also contends that E20 is obliged to maximise such permissions and consents, that the Concession Agreement imposes a general obligation of good faith and that E20's refusal in February 2017 to seek the relevant permissions or consents for an increase in capacity was not made in good faith. It is not in dispute that the Disputed Documents are relevant to the issues arising in the proceedings. The only question is whether litigation privilege applies to them.
We heard this appeal on Thursday 15 November 2018. In view of the imminence of the trial we announced our decision on the following day to allow the appeal and to order disclosure of the Disputed Documents, with reasons to be given in writing in due course. These are those reasons.
Appeal Ground 1 —scope of litigation privilege
The real issue under this ground is whether litigation privilege extends to documents which are concerned with the settlement or avoidance of litigation where the documents neither seek advice or information for the purpose of conducting litigation nor reveal the nature of such advice or information. Mr Downes QC, on behalf of West Ham, submits that it does not. The Judge dealt with the matter in the following way. First, he held that litigation privilege did not apply to the process of expert determination of disputes envisaged under clause 50 of the Concession Agreement and, therefore, on the facts of this case, if litigation privilege were to apply it must do so in relation to court-based proceedings: [38] of the judgment. Further, he noted that it was accepted that litigation privilege only arises when litigation is reasonably contemplated or anticipated, and he found at [44] that E20 could fairly and properly say that litigation was in reasonable contemplation from 31 August 2016. Having recorded that it was common ground that “litigation privilege relates to documents brought into existence for the purpose of the conduct of litigation, and passing between client, lawyer, agent or third party” (see [45] of the judgment), he went on to consider the scope of the principle and the documents in the sample. He concluded as follows:
“46. First, Mr Downes QC submitted that the only documents to which litigation privilege can attach are documents concerned with obtaining advice or evidence for use in litigation because only such communications could fairly be said to relate to “conducting” the litigation. He said the documents which concern strategy or potential settlement offers fall outside the ambit of litigation privilege. I do not accept that this narrow formulation is now correct. In SFO v Eurasian Natural Resources Corporation Ltd [2018] EWCA CIV 2006 (“the ENRC case”) the Court of Appeal made clear (a) at para [102] that legal advice given to head off, avoid or settle reasonably contemplated proceedings is as much protected by litigation privilege as advice given for the purpose of defending those proceedings (a proposition that Mr Downes QC was inclined to accept); and (b) at para. [118] that documents prepared for the purpose (I will come back to that) of settling or avoiding a claim are created for the purpose of defending litigation. At a time when there is so much emphasis (by means of pre-action protocols and otherwise) on discouraging the commencement of proceedings and encouraging compromise this is entirely understandable. The pre-action gathering of evidence for potential deployment in reasonably contemplated proceedings is plainly within the scope of litigation privilege: and so, in my judgment, is the pre-action gathering of information and material created for the purpose of settling or avoiding a claim (whether or not it might be deployed in evidence if litigation started), and the analysis of that material for the purpose of considering a settlement offer. The documents at issue in the ENRC case itself consisted not only of notes of evidence that could be given by individuals relevant to the events under investigation but also summaries of reviews of documents and information about the work being undertaken, presentations made to the Board or internal committees, and reports prepared by forensic accountants. These were held to be the proper subject of a claim to litigation privilege once litigation was reasonably in contemplation (and a consideration of self-reporting to avoid or mitigate criminal proceedings was under way).
47. Second, Mr Downes QC submitted (in my judgment correctly) that it was not sufficient that a document was of the correct character; but it must also have been produced for the sole or dominant purpose of conducting the relevant litigation. He referred to Rawlinson & Hunter v Akers [2014] 2 BCLC 1 at [53]. So, the task of the person or tribunal considering a potential claim that litigation privilege applies is to determine the actual intention of the party claiming privilege, and, if there is more than one purpose, what is the dominant purpose of the author or of the person or entity commissioning the creation of the document. Faced with a challenge the Court must subject the evidence in support of such a claim to “anxious scrutiny”. Given the evidential constraints upon challenging a witness statement on an interlocutory application this means that the Court must make an objective assessment of the document itself and of what is disclosed by the evidence as to the circumstances of its creation.
…
55. Mr Downes QC submitted that the discussion of settlement proposals does not fall within the scope of litigation privilege, which is confined to documents generated to obtain advice or to gather evidence. The consequence of this submission appears to be that if E20 in fact made...
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