England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice Strand London WC2A 2LL
		6 August 2015

Judge Behrens :

1 Introduction

1. This is an application under section 7(9) of the Data Protection Act 1998 ("the 1998 Act"). The claimants are Ashley Judith Dawson-Damer ("Ashley"), and her children Piers Dawson-Damer ("Piers") and Adelicia Dawson-Damer ("Adelicia"). The application is made against the law firm Taylor Wessing LLP ("TW").
2. The proceedings arise out of subject access requests made on behalf of the Claimants on 4 August 2014. TW have refused to supply any documents pursuant to those requests.
3. TW are the London solicitors to Grampian Trust Company Limited ("Grampian"). Grampian is resident and incorporated in the Bahamas. It is the sole trustee of a discretionary settlement dated 30 June 1992 known as the Glenfinnan Settlement. The governing law of the Glenfinnan Settlement is the law of the Bahamas. TW and/or its predecessor firm have provided advice to Grampian since 1992. From about 1987 TW's predecessor provided advice to the predecessor trust.
4. There are currently proceedings in the Supreme Court in the Bahamas between Ashley and Grampian.
5. TW resist the application. The principal ground for resistance is that Grampian is entitled to rely on legal professional privilege in respect of the majority of the documents. This privilege attaches to advice and requests for advice going back at least 30 years in addition to documents in relation to the Bahamian proceedings. The privilege has not been waived by Grampian. It would be disproportionate and/or unreasonable to expect TW to carry out a search to determine which of the documents are privileged and which are not. The extent of the privilege is a matter of Bahamian law and one which will have to be determined in the Bahamian proceedings. It is a matter upon which differing views have been expressed by Bahamian lawyers. In any event the Court should, as a matter of discretion, decline to make an order. The application has been brought for the purpose of obtaining documents for use in the Bahamian proceedings. The Court should permit the Bahamian Court to determine which documents (if any) are disclosable. As a subsidiary point he submitted that as TW had only had an electronic filing system from a date between 2005 and 2008 information relating to the Claimants for any period prior to the electronic filing was not readily accessible.
6. Mr Swift QC on behalf of the Claimants accepts that the 1998 Act contains an exemption in respect of data in respect of which a claim for legal professional privilege could be made in legal proceedings. He contends that the exemption should be construed narrowly. It does not extend to the rules of equity in England and Wales under which trustees are not required to disclose trust documents to beneficiaries. Equally it does not extend to local Bahamian rules which apply to disclosure in respect of trust litigation in the Bahamian courts. He submits that as Ashley is a beneficiary under the Glenfinnan Settlement any privilege attaching to Grampian resulting from advice taken is a joint privilege with the result that Grampian cannot rely on the privilege against Ashley. Mr Swift QC invited me to take a narrow view of the discretion afforded to the Court in s 7(9) of the 1998 Act. In particular he drew my attention to the large number of exceptions in Part IV and Schedule 7 and of the power of the Secretary of State in s 38 to make further exceptions. He submitted that the Court should not, as a matter of principle, use its discretionary powers under s7(9) to make further exceptions. In general terms he submitted that if the data was not within one of the exemptions the Court should normally order its disclosure. He accepted that one of the motives for making the subject access requests may have been to obtain documents which might be of use in the Bahamian proceedings but he contended that the Claimants could also verify if the data was correct and, if necessary, take steps to have it corrected.
7. Mr Swift QC was also critical of the paucity of the evidence put before the Court on behalf of TW. He made the point that TW must hold some data that was not covered by legal professional privilege. No attempt has been made to identify that data. He invited the Court, if necessary, to use its powers under s 15(2) of the 1998 Act to require that data to be made available for its own inspection. Furthermore in so far as the documents were in a manual filing system he submitted that insufficient evidence had been supplied to indicate whether or not the information was readily accessible.

2 The facts

8. There is little (if any) dispute as to the relevant facts which are contained in the witness statements of Ms Robertson and Ms McGuigan who are partners in the firms of the Claimants' solicitors, McDermott Will & Emery LLP ("MWE") and TW respectively. Much of the following summary is taken from the summary which appears in the skeleton argument of Mr Taube QC.

Background

9. The trust funds were originally derived from the fortune of G.S. Yuill. G.S. Yuill died in Australia in 1917. From 1973 onwards a Bahamian trust company called Arndilly Trust Company Limited ("Arndilly") held the funds under a Bahamian settlement ("the 1973 Settlement"). The beneficiaries of the 1973 Settlement were the legitimate descendants of G.S Yuill's grandson Viscount Carlow, who died in 1944 on war service, and their respective spouses. Those beneficiaries included:-

1. Viscount Carlow's two sons George ("George"), who is now Lord Portarlington, and John Dawson-Damer ("John"), who died in 2000;

2. George's wife Davina and their four children, Charles, Henry, Edward and Marina, and their grandchildren; and

3. John's second wife Ashley, but not their adopted children, Piers and Adelicia.

10. The majority of the beneficiaries lived and still live in Australia.

The 1992 Resettlement

11. In 1992 the 1973 Settlement funds were resettled on the trustees of four new discretionary settlements, of which Grampian was the original trustee in each case, including:-

1. the Willards Settlement, which was for the benefit of John and his family and held about 25% of the funds;

2. two trusts, which were for the benefit of George and his family and together held about another 25% of the funds; and

3. the Glenfinnan Settlement, which was originally for the benefit of George, Davina, John, Ashley, their spouses and their legitimate, non-adopted issue, and which held about 50% of the funds.

12. At the time of the restructuring in 1992 it was expressly contemplated that the funds in the Glenfinnan Settlement were intended to provide long term funds for the next generation of the family beyond George, John and their wives. In 2007 George and his wife ceased to be beneficiaries.
13. Both before and shortly after John's death in 2000 John and Ashley asked Grampian to make distributions for the benefit of them and their adopted children from the Glenfinnan Settlement funds, even though their children were not beneficiaries. But the trustee declined to do so. Ashley then asked Grampian to retire as trustee of the Willards Settlement and new trustees were appointed.

The 2006 and 2009 Appointments

14. In December 2006 and March 2009 Grampian made substantial appointments of funds from the Glenfinnan Settlement to trustees to hold upon new discretionary trusts, principally in favour of George's children and remoter issue. In December 2006 Grampian appointed three funds to be held by trustees in Bermuda upon discretionary trusts, primarily in favour of (a) Charles and his family, (b) Henry and his family and (c) Edward and his family; and these three trusts are known as the Came, Hewish and Emo Settlements. In March 2009 Grampian declared that it held further funds upon discretionary trusts, primarily in favour of George's children and their families; and this trust is known as the Moray Settlement.
15. The value of the funds appointed totalled approximately $402 million leaving only about $9 million in the Glenfinnan Trust.

Challenge to the 2006 and 2009 Appointments

16. In 2013 and early 2014 Grampian (through TW) provided Ashley and her children with information about the accounts of the Glenfinnan Settlement and the appointments that Grampian had made in December 2006 and March 2009.
17. On 18 February 2014 MWE wrote a long 15 page letter to TW. They asserted that Grampian's appointments made in December 2006 and March 2009 were invalid, and also challenged the validity of the 1992 restructuring leading to the 1973 Settlement. In section 6 of the letter they invited Grampian and the trustees of the four new settlements to participate in a mediation. In section 7 they invited the trustees to disclose a number of documents.
18. On 9 July 2014 TW on behalf of Grampian, sent MWE a detailed reply to the allegations of invalidity, answering all the factual allegations made by MWE. Grampian declined the offer of a mediation but offered to meet Ashley.

The Subject Access Requests

19. On 4 August 2014 MWE sent subject access requests on behalf of all three Claimants to each of the Defendants enclosing a cheque for £30 to each of them. The requests asked for

All data of which they are the data subject (including data in which they are identified expressly or by inference) and which is in your firm's possession custody or power.

20. In the final paragraph of the letter MWE stated that they would reply to the letter of 9 July 2014 on receipt of these documents.
21. On 11 September 2014 TW responded on their own behalf and on behalf of Mr Burns and Mr Morrison.
22. It is not necessary to refer to the replies on behalf of Mr Burns and Mr Morrison as the proceedings against them have been discontinued. Suffice it to state that some personal data was disclosed on 11^th September 2014. Following the institution of these proceedings further searches were carried out which yielded some further information which was disclosed.
23. TW's own response included:

We have carried out searches of the records held by us and our response to your request is as follows:

Personal data records held by us are processed only in connection with our capacity as legal advisors. This data is exempt from the subject access provisions of the Act by virtue of Schedule 7 section 10 of the Act by reason that it consists of data in respect of which a claim to legal professional privilege applies.

24. In a further letter dated 3 October 2014 TW made the following point:

Certain information held by our client is held in manual files with the majority loose leaf in boxes and so not in a relevant filing system for the purposes of [the 1998 Act] for the reason that the files contain multiple categories of information that are not structured by reference to individuals or criteria relating to individuals. Not all documents have been filed in chronological order and those that have are without any further structure that would enable specific information about a particular individual to be located without having to review the contents of the entire file.

25. The correspondence also contains arguments as to privilege to which it is not necessary to refer.

Proceedings in the Bahamas

26. In late 2014 Grampian as trustee was invited by the beneficiaries to make further appointments and distributions from the trust funds. As a result of the threatened litigation from Ashley hanging over it, Grampian took the view that it was unable safely to distribute further funds. Grampian therefore applied to the court in the Bahamas for a "put up or shut up order" against Ashley. As a result on 20 March 2015 Ashley issued in the Bahamas a writ against Grampian in which she challenges the validity of the December 2006 and March 2009 appointments and seeks the return to the Glenfinnan Settlement of the Assets which have been transferred under the 2006 and 2009 appointments.
27. There is no Statement of Claim and thus the basis upon which the claim is made is unclear. There is currently no allegation of bad faith against Grampian.

3 These proceedings

28. These proceedings were commenced by a Part 8 Claim Form on 19 January 2015. The Claimants seek declarations that TW has failed to comply with their requests and orders under s 7(9) requiring them to do so.
29. As already noted two witness statements have been filed by each of Ms Robertson and Ms McGuigan. It is not necessary to repeat the factual content of those statements. It is however worth making three comments:

1. There is no direct evidence before the Court of the Claimants' motives in making the subject access requests. As a result Mr Taube QC submitted that the obvious inference to be drawn was that the purpose was to obtain documents that could be used in the Bahamian proceedings.

2. The evidence relating to TW's pre 2005 filing system was limited. In addition to the statement in the letter of 3 October 2014 Ms McGuigan touched on it in paragraph 26A of her first witness statement

Furthermore the vast majority of documents held by [TW] are not retained in any structured filing system, but on standard paper files in which papers have been filed chronologically. There are currently over 50 files maintained by [TW] in this manner. It was not until 2005 when electronic filing was introduced in the firm, however it did not become standard practice throughout the firm until much later (I recall this was somewhere within 2008) and as I recall this was rolled out amongst different practice areas within the firm at different times.

Mr Swift QC criticised this evidence as inadequate for the purpose of the 1998 Act. It does not give sufficient details of the nature of the files or the date when these files were stored electronically. He also made the point there are likely to have been some electronic documents before 2005 in any event. He pointed to emails and electronic copies of word processed documents.

3. There is no evidence of the extent of any search carried out by TW. Save for the assertion in the letter of 11 September

Furthermore the vast majority of documents held by [TW] are not retained in any structured filing system, but on standard paper files in which papers have been filed chronologically. There are currently over 50 files maintained by [TW] in this manner. It was not until 2005 when electronic filing was introduced in the firm, however it did not become standard practice throughout the firm until much later (I recall this was somewhere within 2008) and as I recall this was rolled out amongst different practice areas within the firm at different times.

2014 there is no evidence that any search was carried out at all. There is a blanket claim for privilege in respect of all documents. Mr Swift QC accepted that – at least after February 2014 – the majority of the documents may well be privileged. However it is likely that some will not. He submitted that there is no reason why TW should not carry out a search and identify the information/documents that are not privileged and disclose those documents.
30. In addition to the above evidence I have been provided with evidence from two Bahamian lawyers – Mr John Wilson on behalf of TW and Sir Michael Barnett on behalf of the Claimants – who have expressed opinions on the law of disclosure in the Bahamas and in particular on the effect of s 83(8) of the Bahamian Trustee Act 1998. Although there was no provision for expert evidence and neither of the lawyers could be described as independent^[1] Mr Swift QC and Mr Taube QC agreed that I should read both opinions and attach such weight to them as I thought appropriate.
31. The matter was argued before me for a day and half on 22^nd and 23^rd July 2015. Before dealing with the arguments it is right that I should acknowledge with gratitude the help I have received in the very full skeleton arguments and the clear submissions from Counsel. It has proved invaluable in a by no means straightforward area of law.

4 The 1998 Act

32. The 1998 Act has been considered in a number of authorities including Durant v FSA [2003] EWCA 1746. As much of the law relating to the Act was common ground it is not necessary for me to set out all of the relevant provisions in detail. I can take the legislative scheme from paragraphs 3 to 8 of the judgment of Auld LJ in Durrant.
33. The 1998 Act was enacted, in part, to give effect to Directive 95/46/EC of 24^th October 1995 On The Protection Of Individuals With Regard To The Processing Of Personal Data And On The Free Movement Of Such Data ("the 1995 Directive"). It should, therefore, be interpreted, so far as possible in the light of, and to give effect to, the Directive's provisions. The primary objective of the 1995 Directive is to protect individuals' fundamental rights, notably the right to privacy and accuracy of their personal data held by others ("data controllers") in computerised form or similarly organised manual filing systems (Recitals (1), (2), (3), (10) and (25)), whilst at the same time facilitating the free movement of such data between Member States of the European Union. [See paragraphs 3 and 4 of the judgment].
34. S 7(4)-(6) of the 1998 Act provides an individual with a right of access to "personal data", entitling him to know whether a data controller is processing any of his personal data and, if so, to be told what it is, its source, why it is being processed and to whom the data are or may be disclosed. He is not entitled to information about his personal data which necessarily, that is, notwithstanding possible redaction, involves disclosure of information relating to another individual, either as a subject or the source of the information, without that other's consent or unless it would be reasonable in all the circumstances for him to have it without that consent. [see paragraph 7]
35. The core of a data subject's entitlement to access to his personal data is to be found in ss 7(1) and 8(2), which, so far as material provide:

"7(1) …an individual is entitled –

(a) to be informed by any data controller whether personal data of which that individual is the data subject are being processed by or on behalf of that data controller,

(b) if that is the case, to be given by the data controller a description of -

(i) the personal data of which that individual is the data subject,

(ii) the purposes for which they are being or are to be processed, and

(iii) the recipients or classes of recipients to whom they are or may be disclosed,

(c) to have communicated to him in an intelligible form –

(i) the information constituting any personal data of which that individual is the data subject, and

(ii) any information available to the data controller as to the source of those data, and

(d) where the processing by automatic means of personal data of which that individual is the data subject for the purpose of evaluating matters relating to him such as, for example, his performance at work, his creditworthiness, his reliability or his conduct, has constituted or is likely to constitute the sole basis for any decision significantly affecting him, to be informed by the data controller of the logic involved in that decision-taking.".

"8(2) The obligation imposed by section 7(1)(c)(i) must be complied with by supplying the data subject with a copy of the information in permanent form unless-

(a) the supply of such a copy is not possible or would involve disproportionate effort, or

(b) the data subject agrees otherwise."

36. In Elliott v Lloyds TSB Bank^[2] (Leeds County Court dated 24 April 2012) I had to consider the extent of the obligation imposed by s 8(2) of the 1998 Act. In particular I had to consider a decision of Judge Hickinbottom (as he then was) in Ezsias v Welsh Ministers [2007] All ER (D) 65 and the guidance given by the Information Commissioner in the light of that decision. In paragraph 18 of the judgment I held that the data controller is only required under s 8(2) to supply the individual with such personal data as is found after a reasonable and proportionate search. Neither Mr Swift QC nor Mr Taube QC submitted that this construction was wrong.
37. In paragraphs 26 – 31 of his judgment in Durant Auld LJ considered the meaning of personal data. As this was not an issue in this case it is not necessary for me to summarise his conclusion. However paragraphs 26 and 27 are relevant:

The intention of the Directive, faithfully reproduced in the Act, is to enable an individual to obtain from a data controller's filing system, whether computerised or manual, his personal data, that is, information about himself. It is not an entitlement to be provided with original or copy documents as such, but, as section 7(1)(c)(i) and 8(2) provide, with information constituting personal data in intelligible and permanent form. This may be in documentary form prepared for the purpose and/or where it is convenient in the form of copies of original documents redacted if necessary to remove matters that do not constitute personal data (and/or to protect the interests of other individuals under section 7(4) and (5) of the Act).

In conformity with the 1981 Convention and the Directive, the purpose of section 7, in entitling an individual to have access to information in the form of his "personal data" is to enable him to check whether the data controller's processing of it unlawfully infringes his privacy and, if so, to take such steps as the Act provides, for example in sections 10 to 14, to protect it. It is not an automatic key to any information, readily accessible or not, of matters in which he may be named or involved. Nor is to assist him, for example, to obtain discovery of documents that may assist him in litigation or complaints against third parties. As a matter of practicality and given the focus of the Act on ready accessibility of the information - whether from a computerised or comparably sophisticated non-computerised system - it is likely in most cases that only information that names or directly refers to him will qualify. In this respect, a narrow interpretation of "personal data" goes hand in hand with a narrow meaning of "a relevant filing system", and for the same reasons (see paragraphs 46-51 below). But ready accessibility, though important, is not the starting point.

38. As Auld LJ explained in paragraph 27 it is not the purpose of s7 to enable the individual to obtain discovery of documents that may assist him in litigation or complaints against third parties. Another issue that arose in Elliott was the question of mixed motives. In paragraphs 12 – 13 of the judgment I cited a passage from the judgment of Lewison J (as he then was) in Iesini v Westrip Holdings [2011] 1 BCLC 498 who had cited from a passage from the judgment of Bridge LJ (as he then was) in Goldsmith v Sperrings Ltd [1977] 1 WLR 478. I concluded in paragraph 13:

If it is found that Mr Elliott has mixed motives in bringing the application the application will not be abuse of process unless it can be shown that, but for the collateral purpose the application would not have been brought at all.

39. If the application is an abuse this will be an important factor in the exercise of any discretion under s 7(9). It does not, however, follow that if the application is not an abuse the discretion will necessarily be exercised in favour of the individual.
40. The meaning of a relevant filing system was considered by Auld LJ in paragraphs 32 – 50 of his judgment. I shall not lengthen this judgment by setting out the whole of his conclusions. However paragraph 48 seems relevant:

It is plain from the constituents of the definition considered individually and together, and from the preface in it to them, "although the information is not processed by means of equipment operating automatically in response to instructions given for that purpose", that Parliament intended to apply the Act to manual records only if they are of sufficient sophistication to provide the same or similar ready accessibility as a computerised filing system. That requires a filing system so referenced or indexed that it enables the data controller's employee responsible to identify at the outset of his search with reasonable certainty and speed the file or files in which the specific data relating to the person requesting the information is located and to locate the relevant information about him within the file or files, without having to make a manual search of them. To leave it to the searcher to leaf through files, possibly at great length and cost, and fruitlessly, to see whether it or they contain information relating to the person requesting information and whether that information is data within the Act bears, as Mr. Sales said, no resemblance to a computerised search. It cannot have been intended by Parliament - and a filing system necessitating it cannot be "a relevant filing system" within the Act. The statutory scheme for the provision of information by a data controller can only operate with proportionality and as a matter of common-sense where those who are required to respond to requests for information have a filing system that enables them to identify in advance of searching individual files whether or not it is "a relevant filing system" for the purpose.

41. S 7(9) of the 1998 Act provides:

If a court is satisfied on the application of any person who has made a request under the foregoing provisions of this section that the data controller in question has failed to comply with the request in contravention of those provisions, the court may order him to comply with the request.

42. It is not in dispute that this section creates a discretion which can only be exercised if the data controller in question has failed to comply with a subject access request in contravention of the 1998 Act. In Durant Auld LJ dealt with the discretion in paragraph 74:

If I am correct in my conclusions on the primary issues, the question of exercise of discretion under section 7(9) whether or not to order compliance with Mr. Durant's requests does not call for answer. I say only that I agree with the recent observations of Munby J in Lord, at para. 160, that the discretion conferred by that provision is general and untrammelled, a view supported, I consider, by the observations of the European Court in Lindquist, at paras. 83 and 88, to which I have referred (see para. 61 above).

43. Both Mummery LJ and Buxton LJ agreed with Auld LJ's judgment.
44. In the course of his submissions Mr Swift QC drew my attention to Part IV of the Act which deals with exemptions from the Act. Thus there are specific exemptions including journalism, literature and art (s 32), research, history and statistics (s 33), disclosures required by law or in connection with legal proceedings (s 35) domestic purposes (s 36) and a number of miscellaneous exemptions in Schedule 7. He referred to s 38 which gives the Secretary of State power to make further exemptions by order.
45. Paragraph 10 of Schedule 7 provides:

Personal data are exempt from the subject information provisions if the data consist of information in respect of which a claim to legal professional privilege or, in Scotland, to confidentiality as between client and professional legal adviser, could be maintained in legal proceedings.

5 Legal Professional Privilege

46. Three matters fall for discussion – (1) Joint Privilege, (2) Rules relating to disclosure as between trustee and beneficiary under English law and (3) Rules relating to disclosure as between trustee and beneficiary under Bahamian law.

Joint Privilege

47. There was no real dispute between the parties that following the letter of 18 February 2014 there was a real threat of hostile litigation between Ashley and Grampian. It is also common ground that many of the documents which came into TW's possession after that date would be subject to legal professional privilege and that no question of joint privilege attached to them.
48. The area of disagreement between the parties related to legal advice and requests for legal advice prior to that date. Mr Swift QC put the matter in this way in paragraph 30 of his skeleton argument:

When a trustee seeks legal advice in respect of the affairs of the trust, the trustee and the beneficiaries have a joint interest, and joint privilege arises. Where joint privilege exists no party to the joint interest can assert the privilege as against any other party to the joint interest, and for that reason the need for consent of the other beneficiaries simply does not arise. (See generally (a) Thanki "The Law of Privilege" (Second edition, 2011) at §§6.07 – 6.09, and in particular, the cases referred to at footnote 28; and (b) Lewin on Trusts (19^th edition, 2014) at §§23-048 – 23-049.)

49. It is clear from Thanki that there are two circumstances where joint privilege can arise – (1) where two or more parties jointly retain the same lawyer and (2) where they have a joint interest in the subject matter of the communication at the time that it comes into existence.
50. It is not in dispute that Mr Swift QC is relying on the second of these circumstances. The privilege is not lost simply because the parties subsequently fall out. In paragraph 6.09 Thanki gives as an example of a situation where joint interest has been held to arise the case of a trustee and beneficiary. However the cases cited at footnote 28 are precisely the cases relied on by Mr Taube QC in support of his submissions relating to the rules in English law relating to disclosure between a trustee and beneficiary.

The English Law rules

51. In paragraphs 37 – 39 of his skeleton argument Mr Taube QC summarises the position under English trust law in the following way:

37. First, if Grampian seeks legal advice in response to a threatened or actual claim by a beneficiary against the trustee, the trustee is entitled to assert LPP in respect of that advice against the beneficiary. (See Talbot v Marshfield (1865) 2 Dr & Sm 549 and Thomas v Sec. of State for India (1870) 18 W.R. 312.)

38. Secondly, as regards a case where a trustee takes legal advice in connection with the possible exercise of its powers of disposition, the trustee is not obliged to disclose the contents of those communications to the beneficiary at her request. The trustee may in its discretion preserve the confidentiality in those communications. (See Re Londonderry's Settlement [1965] Ch 918.)

39. In hostile English litigation concerning an English trust the trustee may be compelled under the CPR to disclose such confidential legal advice to a claimant beneficiary – and thus the trustee will be unable to claim LPP against the beneficiary - if the beneficiary seeks to challenge the validity or good faith of the trustee's subsequent decision about the exercise of its power.

52. This is not the place for a detailed analysis of this area of law. Such an analysis can be found in the judgment of Briggs J (as he then was) in Breakspear v Ackland [2009] Ch 32. In that judgment Briggs J considered the effect of Re Londonderry in the light of the Privy Council decision in Schmidt v Rosewood Trust [2003] 2 AC 709 and I can see no reason to add to that analysis.
53. For present purposes I shall make the following observations:

1. I am satisfied that paragraphs 37 to 39 of Mr Taube QC's skeleton argument are a sufficiently accurate summary of the position in English law for the purposes of this application. Re Londonderry is a good example of a case where the Court of Appeal held that there was no obligation to allow inspection of documents relating to trust meetings; Breakspear is an example where Briggs J ordered disclosure of a letter of wishes.

2. It is well established that if a trustee is contemplating proceedings against a beneficiary and makes a Beddoe application the advice he has received is not disclosed to the beneficiary. The final clause in paragraph 39 is supported by the judgment of Salmon LJ at p 938 of Re Londonderry. It is cited in full in footnote 28 of Thanki.

3. Ashley has not so far formulated her claim against Grampian. It is thus not clear whether she is alleging lack of good faith on the part of Grampian. In those circumstances it is unclear whether under English law Ashley would be able to rely on the principle summarised in paragraph 39 so as to obtain disclosure of the documents.

Bahamian Law

54. Under the Bahamian Trustee Act 1998 there is a special provision that has the effect of limiting disclosure in relation to hostile litigation against trustees.
55. Section 83(8) and (10) provide (so far as material) that:

83(8) "Notwithstanding anything to the contrary in this section, trustees shall not be bound or compelled by any process of discovery or inspection or under any equitable rule or principle to disclose or produce to any beneficiary or other person any of the following documents, that is to say –

(a) any memorandum or letter of wishes issued by the settlor … ;

(b) any document disclosing any deliberations of the trustees as to the manner in which the trustees should exercise any discretion of theirs or disclosing the reasons for any particular exercise of any such discretion or the material upon which such reasons were or might have been based; or

(c) any other document relating to the exercise or proposed exercise of any discretion of the trustees (including legal advice obtained by them in connection with the exercise by them of any discretion)."

83(10) No such prohibition or restriction, and nothing in this section shall prejudice the validity of any trust or the entitlement of any beneficiaries who have in any manner become aware of any trusts to obtain orders from the Court for administration or accounts, or for the execution of the trusts or any other order of the Court not being an order for the discovery, inspection, disclosure or production of such documents as are described in subsection (8) …

56. As noted in section 3 above I have been provided with reports from Mr Wilson and Sir Michael Barrett for TW and the Claimants respectively on the position under Bahamian law.
57. Mr Wilson (on page 6 of his report) expresses the opinion that the information sought by Ashley is not compellable by way of discovery. He points out that as a result of the Act the position is different from the common law rules in England and Wales as exemplified by Re Londonderry and Schmidt.
58. Sir Michael Barnett takes a slightly different view. In paragraph 20 of his opinion he makes the point that s 83 of the Act is not part of the law of privilege. It is part of the law of disclosure. In his view s 73 should be given a restrictive meaning. He thinks a court "may find attractive" an argument that s 83 would not protect a trustee from disclosure of documents which may be evidence of misconduct by the trustee. He considers that s 83(10) supports this view. In particular he submits that if s 83(8) was intended to have the wide meaning suggested by Mr Wilson there would be no need for s 83(10) at all.
59. It is perhaps worth repeating the comment that as Ashley has not formulated her claim in the Bahamian proceedings and thus it is not clear whether she is alleging misconduct by Grampian. Thus it is not clear whether the narrow construction contemplated by Sir Michael Barnett arises on the facts of this case. Sir Michael does not, as I understand it, suggest s 83(8) does not mean what it says in cases where no misconduct arises.

6 Discussion and Conclusions

Scope of Paragraph 10 of Schedule 7

60. Mr Swift QC argues for a narrow construction of paragraph 10. The relevant part of paragraph 10 reads:

… information in respect of which a claim to legal professional privilege or, in Scotland, to confidentiality as between client and professional legal adviser, could be maintained in legal proceedings.

61. He submits that the legal professional privilege is confined to English law and does not include the equitable rules in English trust law referred to above. In those circumstances privilege cannot be claimed because of Ashley's joint interest with Grampian as a discretionary beneficiary under the Glenfinnan Settlement. He draws attention to the reference to the reference to "confidentiality" in Scottish law to show that what was contemplated was the English law of legal professional privilege.
62. I cannot accept those submissions for the following reasons:

1. As is clear from paragraph 3 of the judgment in Durant (and the citation from the judgment of Lord Phillips in Campbell v. MGN [2003] QB 633 within it):

… because the Act has, in large measure, adopted the wording of the Directive, it is not appropriate to look for the precision in the use of language that is usually to be expected from the parliamentary draftsman. A purposive approach to making sense of the provisions is called for.

2. Paragraph 10 has to be interpreted to give effect to protect the Claimants' right to privacy and accuracy of the information held by TW. It is no part of its purpose to provide the Claimants with information or disclosure of documents which may assist them in litigation against Grampian whether in England or the Bahamas.

3. I have great difficulty in following the concept that the principles of disclosure in relation to trustees and beneficiaries can in some way be separated from legal professional privilege. As Mr Taube QC pointed out in paragraph 47(5) of his skeleton argument privilege has been described as "a right to resist the compulsory disclosure of information" [See paragraph 67 of the speech of Lord Millett in B v Auckland District Law Society [2003] 2 AC 736]. Furthermore the cases relied on by Mr Swift QC for his submissions in support of his submission that Ashley has a joint interest with Grampian (i.e. those at footnote 28 of paragraph 6-09 of Thanki) are precisely the authorities dealing with disclosure of documents by trustees.

4. I see the force of Mr Swift QC's submissions that the reference to legal professional privilege is a reference to the English law. However this is a case where the only possible proceedings are in the Bahamas. Grampian is not resident in England and it is not suggested that this is a case where service out of the jurisdiction would have been possible. Furthermore the actual proceedings between Ashley and Grampian are in the Bahamas.

63. I accordingly agree with Mr Taube QC that paragraph 10 of Schedule 7 should be interpreted purposively so as to include all the documents in respect of which Grampian would be entitled to resist compulsory disclosure in Bahamian proceedings.

Reasonable and Proportionate Search

64. As Mr Swift QC pointed out in many of the cases to which I have been referred the data processor has in fact carried out quite extensive searches for data and the question for the court was whether those searches were sufficient. One has only to glance at the facts in Elliott and Ezsias to see the extent of the searches that were carried out.
65. In this case there is virtually no evidence of the search carried out by TW. There is an assertion in the letter of 11 September 2014 that searches have been carried out but there is no other evidence. The point is not addressed at all in Ms McGuigan's evidence. Furthermore, as Mr Swift QC pointed out, even though much of the personal data may be covered by privilege there is likely to be some not so covered. It is in that context that he invites the Court to exercise its powers under s 15 of the 1998 Act.
66. Mr Taube QC submitted that it was not reasonable or proportionate to expect TW to carry out any search. It was not reasonable or proportionate to expect TW to be able to determine which documents were protected by privilege and which were not. The privilege belonged to Grampian and the correct person to assert that privilege was Grampian. The question of whether there was such privilege depended on Bahamian law on which different opinions had been expressed. Furthermore until the allegations had been pleaded in the Bahamian proceedings it was impossible to know if allegations of misconduct were being made against Grampian. The question of whether a document was protected by privilege was a matter that required consideration by skilled lawyers. It would accordingly be a very time consuming (and costly) exercise for such lawyers to carry out that task. The Claimants had only paid a modest fee (£10 each) for the subject access requests. To expect TW to carry out the work required was neither reasonable nor proportionate. He also made the point that in all likelihood the question of disclosure will have to be considered and resolved by Grampian and its Bahamian lawyers in the Bahamian proceedings. TW's files would form part of that exercise.
67. I accept the submissions of Mr Taube QC. In my view it was not reasonable or proportionate on the facts of this case for TW to carry out the necessary search to determine if any particular document was covered by privilege.

TW's manual filing system

68. In the light of my views in relation to the necessity of TW to carry out a search the issues relating to the nature of TW's filing system do not arise. In case, however, I am wrong about this I shall deal with it shortly.
69. I agree with Mr Swift QC that the evidence relating to the filing system is not detailed. Furthermore it may be thought that paragraph 26A of Ms McGuigan's first witness statement is not wholly consistent with the letter dated 3 October 2014. The extent to which the files are filed chronologically is not made clear. It is not clear at what date between 2005 and 2008 electronic filing in fact commenced in relation to these files.
70. I also agree with Mr Swift QC that it is possible that there are some electronic documents in relation to the period prior to the electronic filing of the documents relating to the Glenfinnan Settlement.
71. However Mr Swift QC's criticisms of the filing system were taken for the first time in his skeleton argument served only a short time before the hearing before me. In those circumstances – if it had been relevant to the decision – I would have adjourned this aspect of the application so as to give TW the opportunity to give more detailed evidence in relation to it.
72. It is, however, also right to comment that, especially in the light of Auld LJ's observations in paragraph 48 of Durant, my provisional view is that the further evidence might well have satisfied me that the manual filing system adopted by TW did not fall within the definition of a "relevant filing system" in s 1(1) of the 1998 Act.

Discretion

73. In the light of the views I have expressed the discretion under s 7(9) does not arise. In case I am held to be wrong it is right I should express my views on discretion. I would have declined as a matter of discretion to order TW to comply with the subject access requests for the following reasons:

1. In my view the real purpose of the subject access requests was to obtain information to be used in connection with the Bahamian proceedings. As Mr Taube QC said at the beginning of his oral submissions – "context is everything". These requests were made after MWE had written the letter of 18 February 2014 challenging the validity of the 2006 and 2009 appointments and TW had sent a detailed reply on 9 July 2014. It is, to my mind, of considerable significance that MWE stated in their letter of 4 August 2014 that they would reply to the letter of 9 July 2014 when they have received the documents. Furthermore there is no suggestion in any of the evidence filed on behalf of the Claimant that they wish to check the accuracy of the information held by TW and to have it corrected if it is inaccurate. In my view the Claimants would not have brought the application at all if it had not been for the purpose of assisting in the Bahamian proceedings which were being contemplated. As Auld LJ makes clear in paragraph 27 of Durant this is not a proper purpose.

2. In my view Mr Taube QC's arguments on the question of whether it is reasonable and proportionate to expect TW to carry out a search are just as valid on the question of the exercise of the discretion under s 7(9) of the 1998 Act. This is a case where the question of which documents are discoverable will have to be determined in the Bahamian proceedings according to Bahamian law. The extent to which disclosure will be ordered may depend (if Sir Michael is correct) on the allegations that Ashley makes in those proceedings. The parties in the Bahamian proceedings are the trustee and the beneficiary. It is plainly more desirable that the issue be determined between those parties rather than between TW and the beneficiary. It seems quite unnecessary that the matter should be determined by the English Court in addition to the Bahamian Court.

3. If and in so far as the exception in paragraph 10 of Schedule 7 is restricted to the English law of disclosure and if and in so far as the documents discoverable under English law are more extensive than those under Bahamian law it does not seem to me a proper use of the 1998 Act to enable the Claimants to obtain documents that they could not obtain in the Bahamian proceedings.

7 Conclusion

74. In the result I would dismiss this application. I have so far not heard any submissions on costs or on permission to appeal. The views I express are accordingly provisional. My provisional view is that costs should follow the event on the standard basis.
75. There are a number of points of law involved in my decision including (it may be argued) my decision on discretion. It seems to me to be quite possible that the Court of Appeal might take a different view and in those circumstances I would provisionally be minded to grant permission to appeal.

Note 1   Sir Michael Barnett is Counsel with the law firm acting for the Claimants in the Bahamian proceedings. Mr Wilson is a partner in the firm acting for Grampian.    [Back]

Note 2   Regrettably the report of my decision contains a typing error. The hearing dates were 26 and 27 March 2012 and not 2011 as the report suggests. I did not take 13 months to produce the judgment!    [Back]