Porter-Shirley (as executrix of estate of Kelly) v Whittaker and Briany Ltd

• Jurisdiction: Cayman Islands
• Judge: (Smellie, C.J.)
• Judgment Date: 24 February 2016
• Court: Grand Court (Cayman Islands)
• Date: 24 February 2016

Grand Court, Financial Services Division

(Smellie, C.J.)

PORTER-SHIRLEY (as executrix of the ESTATE OF KELLY)

and

WHITTAKER and BRIANY LIMITED

P. Keeble for the plaintiff;

I. Huskisson and Mrs. C. Richter for the defendants.

Cases cited:

(1) B v. Auckland Dist. Law Socy., [2003] 2 A.C. 736; [2003] 3 W.L.R. 859; [2004] 4 All E.R. 269; [2003] UKPC 38, dictum of Lord Millett considered.

(2) Balabel v. Air India, [1988] Ch. 317; [1988] 2 W.L.R. 1036; [1988] 2 All E.R. 246, dicta of Taylor L.J. followed.

(3) Berezovsky v. Abramovich, [2011] EWHC 1143 (Comm), referred to.

(4) Dore v. Leicestershire County Council, [2010] EWHC 34 (Ch), dictum of Mann J. referred to.

(5) Fulham Leisure Holdings v. Nicholson Graham & Jones, [2006] 2 All E.R. 599; [2006] P.N.L.R. 23; [2006] EWHC 158 (Ch), dicta of Mann J. followed.

(6) General Accident Fire & Life Assur. Corp. Ltd. v. Tanter, [1984] 1 W.L.R. 100; [1984] 1 All E.R. 35; [1984] 1 Lloyd”s Rep. 58, referred to.

(7) Greenough v. GaskellENR(1833), 1 My. & K. 98; 39 E.R. 618, dictum of Lord Brougham L.C. considered.

(8) JSC BTA Bank v. Ablyazov, [2012] EWHC 1252 (Comm), referred to.

(9) L (A Minor) (Police Investigation: Privilege), In re, [1997] A.C. 16; [1996] 2 W.L.R. 395; [1996] 2 All E.R. 78; [1996] 1 FLR 731; [1996] 2 F.C.R. 145, considered.

(10) MMI Research Ltd. v. Cellxion Ltd., [2007] EWHC 2456 (Ch), referred to.

(11) Minter v. Priest, [1929] 1 K.B. 655, considered.

(12) Nea Kartesia Maritime Co. Ltd. v. Atlantic Great Lakes S.S. Corp., [1981] Com. L.R. 138, referred to.

(13) Paragon Fin. plc v. Freshfields, [1999] 1 W.L.R. 1183; [2000] C.P. Rep. 81, dictum of Lord Bingham, C.J. considered.

(14) R. v. Transp. Secy., ex p. Factortame, English High Ct., May 7th, 1997, Transcript No. 1997 WL 1106141, unreported, referred to.

(15) R. (Morgan Grenfell & Co. Ltd.) v. Special Commr. of Income Tax, [2003] 1 A.C. 563; [2002] 2 W.L.R. 1299; [2002] 3 All E.R. 1; [2002] STC 786; [2002] H.R.L.R. 42; [2002] UKHL 21, dicta of Lord Hoffmann considered.

(16) SRJ v. Persons Unknown, [2014] EWHC 2293 (QB), referred to.

(17) Three Rivers D.C. v. Bank of England, [2005] 1 A.C. 610; [2004] 3 W.L.R. 1274; [2005] 4 All E.R. 948; [2004] UKHL 48, applied.

(18) Waugh v. British Rys. Bd., [1980] A.C. 521; [1979] 3 W.L.R. 150; [1979] 2 All E.R. 1169, referred to.

Attorneys-at-Law—professional privilege—litigation privilege—communications between attorney/client and attorney/third parties exempted from disclosure if concern conduct or possibility of adversarial litigation

Attorneys-at-Law—professional privilege—privileged documents—legal advice privilege—communications between attorney and client in legal context assumed to be privileged—in legal context if concern legal rights, liabilities, obligations or remedies

Attorneys-at-Law—professional privilege—waiving of privilege—partial disclosure of communications between client and attorney may require disclosure of further documents concerning same ‘transaction’—court to consider whether partial disclosure selective or misleading, and whether further disclosure necessary in interests of fairness

The plaintiff sought a declaratory order that she had a beneficial entitlement to half the shareholding in the second defendant, or, alternatively, an order that half of the proceeds of the sale of land held by the second defendant be paid to her.

The second defendant was a company in which the sole shareholders were the first defendant and the plaintiff”s mother. In 1991, it acquired a large plot of land, the funds for the purchase being provided by the plaintiff”s mother. It was alleged that, in March 2006, the first defendant wrongfully appointed himself sole shareholder and director of the second defendant, and that he subsequently sold the land in 2011 for US$1.4m.

The plaintiff”s mother died in October 2006. The plaintiff claimed that she became a shareholder following her mother”s death, the first defendant had wrongfully appointed himself the sole shareholder and director, and the sums paid by her mother to purchase the land had been a loan which was repayable on its sale.

In order to establish that she had not been aware that the first defendant had become shareholder nor that the land had been sold, the plaintiff adduced the witness statement of her former lawyer, who stated that the

first defendant had not informed the plaintiff of the transfer of the shareholding or the sale of the land.

The defendants submitted that the entirety of the file kept by the plaintiff”s lawyers concerning the work done for her should be disclosed. They submitted that although the file might be confidential by virtue of legal professional privilege, the plaintiff had waived such privilege by disclosing the evidence of her former lawyer, and it would be unfair to allow her to rely on selected evidence without allowing the defendants an opportunity to consider other relevant evidence.

The plaintiff submitted that legal professional privilege had not been waived with regard to the entirety of her lawyers” file as her former lawyer”s witness statement had only been adduced in order to demonstrate that she was not aware of the transfer of the shareholding in the second defendant nor the sale of the land, and only limited disclosure was therefore required.

Held, dismissing the application for disclosure:

(1) Disclosure of the file kept by the plaintiff”s lawyers would not be granted, as it was privileged and contained confidential information. Communications between a client and her lawyers made in a legal context were deemed to be privileged because of the importance of maintaining confidentiality within the lawyer/client relationship; in determining whether communications were made in a legal context, the court was to establish whether any discussions concerned the client”s legal rights, liabilities, obligations or remedies, and it was to be implied that such communications involved the giving of advice to the client, therefore giving rise to legal advice privilege. In order to attract ‘litigation privilege,’ which also extended to discussions with third parties, it was necessary to demonstrate that any communications had concerned adversarial litigation; however, as the nature of the file for which disclosure was sought had not been discussed before the court, it was not possible to say that litigation privilege applied in this case (paras. 26–28; para. 34; paras. 40–46; paras. 49–50; paras. 52–56).

(2) The privileged nature of the documents had not been waived by the plaintiff as she had only adduced evidence from her former lawyer in order to rebut any suggestion that she had been aware that the shares in the second defendant had been transferred to the first defendant. Partial disclosure of certain documents did not necessarily require legal professional privilege to be waived with regard to other documents unless they were part of the same ‘transaction’ in respect of which disclosure had been made. If all documents relevant to the ‘transaction’ had not been adduced in evidence, then the court would order their disclosure; further disclosure might also be necessary in order to prevent unfairness. As the ‘transaction’ in the present case was limited to those communications which demonstrated that the plaintiff was not aware that the shareholding in the second defendant had been transferred to the first defendant, no

additional documents ought to have been disclosed and the material adduced had not been partial, selective or misleading. Moreover, no further disclosure was necessary in the interests of fairness (paras. 62–71).

1 SMELLIE, C.J.: The plaintiff brings this action in her capacity as executrix of her deceased mother”s estate, seeking, among other things, declaratory orders as to the beneficial entitlement to shares in the second defendant (‘Briany’), a land-holding company. Alternatively, she seeks the sum of US$719,512.50, being one-half of the proceeds of the sale of land formerly held by Briany. The land in question was sold to the National Trust by Briany, acting under the directorship of the first defendant—the transaction that lies at the heart of the allegations raised by the plaintiff”s statement of claim.

2 The question now to be answered is whether the plaintiff, in having disclosed in this action evidence of certain exchanges between herself and her former lawyer and between her former lawyer and the first defendant, has waived legal professional privilege in relation to the entirety of her file held by the firm of her former lawyer, of which the disclosed material is but a part.

3 The circumstances allegedly giving rise to the plaintiff”s claims in this action are described briefly as follows, as taken from the statement of claim and as necessary for setting the context to answer the question raised. For the purposes of answering the question, I do not need to and so do not express any views on the merits of the claim or the defence.

4 By written agreement dated April 26th, 1991, entered into with Signa South Ltd. (in liquidation), Briany agreed to purchase and, by a transfer of land dated April 30th, 1991, did acquire 118 acres in a property described as ‘North Side, Block 54A, Parcel 74, Grand Cayman’ (‘the property’). The purchase price was US$90,000 plus stamp duty of approximately US$10,000, and the entirety of the sum (i.e. US$100,000) was paid by the plaintiff”s mother (‘the deceased’) on behalf of Briany out of her own moneys. The deceased lived in the United States and left the administration of Briany to the first defendant, who resides here and whom she trusted. The understanding was that he would administer Briany in the interest of its shareholders, being the plaintiff”s mother (as to 50%) and himself (as to the other 50% of the shares). Implicitly, Briany would, of course, be administered in keeping with its articles of association.

5 The...