Johnston v Arbitrium (Cayman Islands) Handels A.G.

• Jurisdiction: Cayman Islands
• Judge: Smellie, J.
• Judgment Date: 27 February 1997
• Court: Grand Court (Cayman Islands)
• Date: 27 February 1997

Johnston

and

Arbitrium (Cayman Islands) Handels A.G.

Smellie, J.

Grand Court

Civil practice and procedure - Discover of documents

Practice and procedure - Banker—customer relationship — Use of confidential information in English proceedings — Confidential Relationships (Preservation) Law, s.3(2)(b)(v) not confined to transactions for, or with, customer.

Appearances:

Orren Merren & Co. for the plaintiff.

W.S. Walker & Co. for the defendant.

Smellie, J.

1 This is the defendant's application that the plaintiff be ordered to give discovery of a document — the plaintiff's affidavit —, which is referred to in the Statement of Claim. The application is brought against the following background. The plaintiff's writ seeks, among other things, an account of moneys alleged by him to have been received by the defendant Company as his trustee or agent. That relationship of trust or agency is alleged to have arisen in the context of a former joint venture scheme in which, the plaintiff, through a corporate entity in the United States, and the defendant company, as nominee for its owner, Mr. Vendel, were jointly beneficially entitled.

2 In para.6 of his Statement of Claim, the plaintiff describes the transactions or payments by which the moneys are said to have been transferred to the defendant and states that “particulars of the dates and amounts of all such payments are set out in the plaintiff's affidavit.” That reference to the affidavit in the pleadings gives rise to the present procedural application. It is raised by the defendant under the Grand Court Rules, O. 24, r.2, which requires a party to an action to make discovery of the documents, which are or have been in his possession, custody or power relating to any matter in question in the action.

3 Under r.10 a party in whose pleadings a document is referred to is prima facie obliged on request to produce that document for inspection by the other side and to provide copies. Under r.10(2) the party requested under r.10 (1) may serve notice of objection to production of the document and stating the grounds of objection. In this case the r.10(2) notice was served and lodged by the plaintiff relying on the ground of legal professional privilege claimed in respect of the affidavit. The matter then falls for determination by the Court pursuant to r.11(1).

4 The affidavit, apart from the above-mentioned reference to it in para.6 of the Statement of Claim, has played no part until now in the case. It has not been filed in the action. Mr. Taylor, the plaintiff's local instructing attorney, explains in an affidavit filed by him that the reference in the pleadings is to an affidavit sworn by the plaintiff, who lives overseas, in which the plaintiff sets out his brief to his local attorneys. Thus, the plaintiff's affidavit is, in effect, a statement of instructions and a witness statement and took the form of an affidavit only because the plaintiff had been so advised by his overseas attorney. It is therefore submitted on behalf of the plaintiff that the document is covered by legal professional privilege and is exempt from discovery. It was also submitted on behalf of the plaintiff that the reference to the affidavit in para.6 of the Statement of Claim is not tantamount to a reliance upon the affidavit for the purposes of the case. The reliance is intended to be upon the particulars of payments, which are not in the body of the affidavit itself but are instead exhibited to it in the form of accounting records and numerous photocopy cheques.

5 I was invited to and did read the affidavit for the purpose of determining the primary issue of whether it is privileged as claimed. I am satisfied that it clearly is, and for the reasons asserted on behalf of the plaintiff. In this regard, I only need further add my express finding that the affidavit was intended to be a communication by way of instructions between the plaintiff and his legal advisers for the purpose of obtaining advice. These were instructions, which, I find, were also given in contemplation of litigation. The affidavit falls squarely within the first of the two classes of what Lord Denning, M.R. described as “privilege in aid of litigation” in ( Buttes Gas & Oil Co. v. Hammer (No. 3) [1981] 1 Q.B. at 243):

“Privilege in aid of litigation can be divided into two distinct classes:

The first is legal professional privilege properly so called. It extends to all communications between the client and his legal adviser for the purpose of...