A wife and mistress (D) had conspired, after the death of the husband, to remove money in bank accounts from his estate by taking the bearer shares in the company in whose name the accounts were held. The first action, in which D was legally represented, had proceeded to judgment. The second action was a claim for fraud against D and others which was ongoing. Soon after the second action was commenced, D became bankrupt on her own petition. An order had been made for D’s private examination. Her trustee in bankruptcy had obtained possession of all the papers held by D’s previous solicitors. The trustee applied to the court for a direction that he be permitted to provide any documents he had received, including documents in respect of which D claimed privilege, to the administrators for the purposes of (i) the private examination and (ii) the second action. Two issues arose: whether the proposed uses of the documents, and in particular the use in the second action, was for the proper purposes of the bankruptcy, and whether the fraud exception to privilege applied.
Held: Jacob J answered ‘Yes’ to both questions, and ordered disclosure of documents used by the mistress’s previous lawyers for the advancement of her defence at the trial because she had been using her lawyers, who were innocent of any dishonesty, to advance a fraudulent defence in the course of which she perjured herself.
Although using to section 311(1), the trustee had taken possession of ‘papers in respect of which D claimed privilege, or more accurately, would have claimed privilege if they had not passed to the trustee’, and referred to ‘documents which, but for the bankruptcy, would be the subject of privilege’, the court did not find that the benefit of the privilege had passed to the trustee. Jacob J proceeded on the basis that, although it was no answer to the trustee’s claim for possession of the documents, D would continue to be entitled to maintain her privilege, and in particular to do so in the second action, unless the fraud exception applied: ‘Thus, if the matter had stood as simply between the administrators and Diana, I would have required disclosure. That being so, there is no reason for the court to say that the trustee should not do that which he thinks is best in the administration of his office.’
Judges:
Jacob J
Citations:
[2000] BCC 434
Jurisdiction:
England and Wales
Citing:
Cited – Chandler v Church 1987
(New Zealand) Disclosure was sought of papers said to be protected by litigation privilege on the basis of an exception because of alleged fraud.
Hoffmann J said: ‘The principle on which the plaintiffs seek disclosure is that laid down in the . .
Cited – Dubai Bank v Galadari (No 6) ChD 22-Apr-1999
Morritt J said: ‘The rationale for the principle, and the decisions cited all pointed to the conclusion that communications in furtherance of a crime or fraud were not protected from disclosure if they were relevant to an issue in the action whether . .
Cited by:
Cited – Kuwait Airways Corporation v Iraqi Airways Company (No 6) CA 16-Mar-2005
The defendant company appealed against an order allowing inspection of documents for which litigation privilege had been claimed. It was said that the defendants had been involved in perjury in previous proceedings between the parties.
Held: . .
Cited – Shlosberg v Avonwick Holdings Ltd and Others ChD 5-May-2016
Application by a bankrupt, for an order directing that the Second Respondent should cease acting as solicitors for both the First Respondent (‘Avonwick’) and the Third Respondents, Moore Stephens LLP, his joint trustees in bankruptcy.
Held: . .
Cited – Dadourian Group International Inc and others v Simms and others ChD 25-Jul-2008
Applications arising from disclosure of documents . .
Cited – JSC BTA Bank v Ablyazov and Others ComC 8-Aug-2014
The Claimant sought disclosure from the First and Second Respondents of documents relating to their assets which would attract legal professional privilege unless falling within the iniquity exception to such privilege, and which are currently held . .
Lists of cited by and citing cases may be incomplete.
Litigation Practice, Legal Professions
Updated: 19 May 2022; Ref: scu.224370