The Court of Appeal’s decision in Ahuja Investments Limited v Victorygame Limited raises interesting issues around the availability of litigation privilege:
- How to assess the evidence supporting the purpose for which a potentially privileged communication was sent.
- Whether there exists an inducement principle which prevents a claim to privilege where the other party to litigation is induced to provide information which they would not have provided had they known the true purpose of the request, and where the true purpose was deliberately concealed or suppressed.
Facts
Ahuja sued Victorygame (VG) for misrepresentations allegedly made during a property transaction. Ahuja had instructed a firm (S), and its solicitor (J), to act for it in that transaction. Ahuja applied for disclosure of S’s conveyancing file, whereafter it decided that further information was needed from S and J, both to assist the conduct of the misrepresentation claim and assess J’s potential as a witness in that action. Ahuja sought J’s input by sending a letter of claim under the Pre-action Protocol for Professional Negligence (LoC) to S. VG’s solicitors were informed of this and applied for disclosure of the LoC and S’s insurers’ response.
In an unchallenged witness statement, Ahuja’s current solicitor explained that this route was adopted because of J’s prior lack of co-operation, such that the only way in which they could extract any substantive comment from him was via the LoC. That statement emphasised that, while Ahuja had approved sending this letter, no instructions had been given to issue proceedings against S. The Master refused Ahuja’s assertion of litigation privilege over these letters.
In the High Court, Deputy Judge Robin Vos allowed Ahuja’s appeal. VG then mounted an expedited appeal.
Decision
The Court of Appeal dismissed the appeal.
Relevant to the issues were:
- Ahuja’s solicitor’s unchallenged witness evidence.
- Deputy Judge Robin Vos’s holding that there was an element of deception on Ahuja’s part, since the purpose of the LoC was to make S believe that a professional negligence claim was being considered (when in fact, it was not).
- Deputy Judge Robin Vos’s holding that the decision in Property Alliance Group v The Royal Bank of Scotland Plc (No. 3) (PAG) was distinguishable.
Assessing dominant purpose
The Court of Appeal held that the judge did not err in law in holding that, objectively assessed, the dominant purpose for which Ahuja instigated the LoC correspondence was for use in this litigation.
Giving the judgment of the court, Andrews LJ said that the judge was entitled to accept the unchallenged evidence to this effect: while the court is not bound by a party’s assertion of privilege, nor obliged to accept at face value the evidence adduced in support, here, there was no other evidence to contradict the explanation given for the form in which the request for information was made.
In relation to that request being made in the LoC, VG submitted that where there were two purposes, patent and latent, then the court had no basis for refusing to treat the patent purpose as the dominant one. For the Court of Appeal, this was a highly unattractive proposition, tantamount to allowing the form of the communication to take precedence over the substantive reason why it was sent, irrespective of the truth. The judge had properly taken into account that the form in which the request was made suggested that the information was required for a different (or additional) purpose, but he was not bound to treat that as a trump card:
“An objective assessment of the dominant purpose for which a document is created does not involve the application of an objective bystander test, particularly when it is the intention of the instigator of the documents that matters.”
Misleading as to purpose?
As to VG’s submissions around the form in which the request was sent, the Court of Appeal held these did not, on the face of it, provide sufficient justification in principle for precluding Ahuja from relying on an absolute right that derived from the purpose for which the information was sought.
Several key points arose.
(1) In PAG, the claimant tricked employees of RBS into attending a meeting which was recorded with a view to obtaining information for its claim against the bank. Birss J considered that what mattered here was the dominant purpose of the meetings, not making secret recordings of the conversations at the meetings. In that specific context, Birss J decided that the intention of the party who arranged the meeting should not be the determinant of whether the recordings were within litigation privilege: and as a dominant purpose for the meeting could not be distilled from the parties’ divergent purposes, the critical point was that the employees had been actively deceived. From there, Birss J concluded that the correct way of assessing the dominant purpose of the meeting was to look at it from the ex-employees’ perspective. The privilege claim failed.
(2) PAG did not help VG because, among other matters, it related to the different situation where the court was concerned with the status of a record of discussions at a meeting. Further, Andrews LJ suggested PAG may no longer be good law:
“… the active deception of the bank’s ex-employees … was treated as the critical factor in distinguishing the situation from the normal one in which a solicitor was interviewing potential third party witnesses. It is unnecessary to express any view as to whether that was the correct approach; that is best saved for a case in which the question directly arises. Whether or not it was rightly decided…[i]t sheds no light on the issues raised on this appeal”.
(3) The Court of Appeal nonetheless examined whether Ahuja had lost the right to maintain its privilege because of “some competing public interest that outweighs it.” The court rejected VG’s argument that the inducement principle was established by the decision in London Fire and Emergency Planning Authority v Halcrow Gilbert & Co Ltd (LFEPA), following an assumption to that effect made by Millett J in Plummers Ltd v Debenhams plc. At best, VG might, by reference to obiter comments in LFEPA, have argued an estoppel by representation, but otherwise that ruling provided no support for:
” … some wider public interest exception to the circumstances in which a party may claim privilege. The question whether such an estoppel had arisen is quintessentially fact-specific. There has been no suggestion of an estoppel in this case.”
(4) Nor did Ahuja’s “element of deception” cause the iniquity exception to arise. The situation was far removed from Dubai Aluminium Co Ltd v Al-Alawi, where private investigators employed by the party claiming privilege had obtained otherwise confidential information by conduct which was, on the face of it, both fraudulent and criminal.
(5) The Court of Appeal conceded, however, without deciding, that an estoppel might be found to arise in circumstances where, in order to get the prospective defendant to divulge information to their opponent that they would not otherwise have been obliged to disclose, a deliberate lie is told by the opponent about why the information is required. However, it would be less easy to apply the estoppel analysis where the supplier of the information is a third party, as with S, because it is, the Court of Appeal suggested, less likely that they will be detrimentally affected by the use to which it is going to be put by the person requesting it, even if they were materially misled into handing it over.
(6) In any event, this was not a case in which anyone was deliberately deceived into handing over documents (or providing information) to which the requesting party was not entitled at that time. The information was not obtained from the other party to the litigation. What the judge chose to describe as “an element of deception” was “very limited and very different from the reprehensible behaviour” considered in cases such as PAG and LFEPA.
Comment
Below I summarise the lessons learned from, and a loose end left by, the Court of Appeal’s decision:
- It is only the instigator’s intention that is relevant to a dominant purpose determination.
- There are dangers in leaving the instigator’s evidence unchallenged.
- While PAG may no longer be good authority in this area, deceiving parties into providing evidence is not without its dangers. Ahuja’s actions here were not “reprehensible”, but in a stronger case, quite aside from concerns as to whether a solicitor is thereby acting consistently with their duty of integrity, there must be a risk that (as per Dubai Aluminium), the iniquity principle might kick in to negate the privilege.
- Is confidentiality relevant to litigation privilege when writing to a party like S? The Court of Appeal did not address this question at all, whereas the judge held, somewhat unconvincingly, that both Ahuja and S would have considered the LoC to be confidential as far as third parties such as VG were concerned. This was a surprising conclusion which raises a doubt as to whether confidentiality is an essential pre-requisite to litigation privilege communications in all situations.
