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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Ochre Ridge v Cork Bonded Warehouses [2004] IEHC 160 (13 July 2004)
URL: http://www.bailii.org/ie/cases/IEHC/2004/160.html
Cite as: [2004] IEHC 160
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THE HIGH COURT
HC 293/04
Record No. 2000/9333P
BETWEEN/
OCHRE RIDGE LIMITED
PLAINTIFF
AND
CORK BONDED WAREHOUSES LIMITED AND
PORT OF CORK COMPANY LIMITED
DEFENDANTS
Judgment of Mr. Justice Lavan delivered on the 13th day of July, 2004.
This application relates to plaintiff's claim of legal professional privilege over the 53 documents at issue between the parties, as to which the defendant has sought production and inspection thereof. An issue of fundamental importance is also raised here for members of the legal profession as to the contours of legal advice and legal assistance privilege, occupying a very significant practical role in the law of discovery. I propose to examine the issue as to the critical distinction between legal advice and legal assistance privilege firstly, because of its relevance to the present application, where considerable differences lie between the parties.
The Distinction Between Legal Advice And Legal Assistance
In the decision of the Supreme Court in Smurfit Paribas Bank limited v. A.A.B Export Finance [1990] 1 I.R. 469, an important distinction was drawn as to the remit of legal professional privilege, between legal advice and legal assistance, not reflecting the decisions of the English courts where a considerably broader construction has been adopted, shorn of such distinctions: see Balabel v. Air India [1988] Ch. 317. The Irish law of legal professional privilege has been held by the Supreme Court in Smurfit Paribas to be limited as a matter of policy to the former, a distinction that has not been overruled and which the High Court is bound as a matter of precedent to apply, despite the numerous difficulties associated with its contours. "Legal assistance" as a category was there held to lack a close and proximate link to the conduct of litigation and the functioning of administering justice. This distinction also limits the utility of much of the case law of the United Kingdom in the Irish courts.
The precise boundaries of "legal advice" have yet to be visited by the Supreme Court and the academic authorities are not entirely prescriptive in this regard. This absence of definition of the scope of the privilege has been noted in the English context in the Court of Appeal recently in Three Rovers District Council v. Governor and Company of the Bank of England (No. 5) [2003] QB 1556.
The Scope Of "Legal Advice"
While the leading case of Smurfit Paribas Bank governs the area of "legal advice" privilege, there are many principles that must be considered here, certain of which have arisen subsequent to the Supreme Court decision in Smurfit Paribas Bank, almost 14 years ago. They may be summarised usefully as follows:
(1) That a communication must be made between a person and his lawyer acting for him as a lawyer for the purpose of obtaining from such lawyer legal advice;
(2) The dominant purpose of the communications must be the seeking or giving of legal advice. While most of the Irish cases or textbook writers do not employ the terminology of a "dominant purpose" as to the test for legal advice privilege (it more usually being associated with "litigation" privilege, not the subject of discussion here), it is useful in determining the scope of "legal advice" and appears to form part of the test in the English authorities: see Three Rovers District Council v. Governor and Company of the Bank of England (No.5) [2003] QB 1556.
(3) "Advice" does not extend to business matters nor to conveyancing documents but the correspondence associated with a conveyance for the purpose of seeking or giving legal advice is: see Cannon & Neligan Evidence (Roundhall, 2002), p. 260. While the authors there also invoke Balabel v. Air India [1988] Ch. 317 in support of this proposition, the comments of Kelly J. in Miley v. Flood [2001] 2 IR 50 are of note, where he suggests at p.73 that the Supreme Court's decision in Smurfit did not adopt the propositions in Balabel, although cited to the Court and that the decision of the Court to limit the ambit of "legal advice" privilege further limits the relevance of the case law of the English Courts.
(4) The test per Finlay CJ in Smurfit Paribas at p. 478, is of much importance, where it was stated that:
"Where a person seeks or obtains legal advice there are good reasons to believe that he necessarily enters the area of potential litigation. The necessity to obtain legal advice would in broad terms appear to envisage the possibility of a legal challenge or query as to the correctness or effectiveness of some step which a person is contemplating. Whether such query or challenge develops or not, it is clear that a person is then entering the area of possible litigation".
This, however, must be fully considered in addition to other aspects of that case, discussed infra;
(5) The provision of legal assistance may entail the provision of legal advice because of the fact that a solicitor's duty of care extends beyond the scope of instructions and requires him to consider the legal implications of the facts told to him: see Delany and McGrath Civil Procedure in the Superior Courts (Roundhall, 2001) at para. 8.012;
(6) That surrounding documents consulted for the purpose of drafting documents and the purpose of obtaining legal advice which included assistance are privileged (see Hurstridge Finance Ltd. v. Lismore Homes (Unreported, High Court Costello J., 15 February 1991);
(7) Delany and McGrath at para. 8.012 note the decision of R. v. Crown Court ex p. Baines [1987] 3 All ER 1025, where it was held that communications between solicitor and client giving legal advice in respect of a conveyancing transaction were privileged but records of a conveying transaction were not because they did not contain legal advice;
(8) The effect of Miley v. Flood [2001] 2 IR 50 is of interest, where it was held that a solicitor will not be required to disclose information as to the details of a client where it is so intertwined with the legal advice that the effect of revealing it would be to disclose the advice;
(9) Privilege does not attach to copies of pre-existing documents which are made for the purposes of obtaining legal advice: Tromso Sparebank v. Beirne [1989] ILRM 257;
(10) The details of when a client met with their lawyer are usually not the subject of legal advice privilege unless in the exceptional instance of where such details are required by a solicitor to give legal advice (see R. v. Manchester Crown Court, ex. P. Rogers [1999] 4 All ER 35);
(11) Communications from an opponent's solicitor to a client do not benefit from legal advice privilege as such communication is hardly likely to convey legal advice, unless it contemplates settlement: see Cross & Tapper on Evidence (Butterworths: 9th Ed., 1999) p.446;
(12) And finally, the objective, as stated by Finlay CJ in Smurfit Paribas that, "the public interest in the proper conduct of the administration of justice" arising from the restriction of a disclosure is a relevant consideration in any discussion of legal professional privilege.
The diversity of these twelve principles that one may extract as to legal advice privilege suggests that the ostensible simplicity of the distinction between "legal advice" privilege and "legal assistance" privilege belies the difficulty of this distinction. Moreover, the construction of the solicitor's duty of care arguably affects the extent to which legal advice privilege may apply, a task which must be approached with some caution. By setting out this catalogue of principles, I hope that this may go some way to assist in the task of establishing when "legal advice" privilege arises.
Reconsidering Smurfit Paribas Bank
Prior to a consideration of the 53 items at hand as to which privilege is asserted, it is useful to recount the facts of Smurfit Paribas, which led to a limitation of the application of legal professional privilege in this country to legal advice and not to legal assistance.
In Smurfit Paribas Bank v. A.A.B. Export Finance Ltd. [1990] 1 I.R. 469, the defendant and the defendant's solicitor had resisted discovery of correspondence or other instructions in relation to the defendants floating charge over which the defendant claimed privilege. In the High Court, Costello J. held that the documents the subject of the proceedings were not privileged from disclosure. They did not request and did not contain any advice about the proposed transaction. They contained reference to the instructions which the defendant solicitors received from the defendant and further instructions and clarifications of instructions to the solicitors, given to enable the defendants solicitors to draft the documentation necessary to complete the transaction which their client was entering into or to advise later on draft documents which the other parties to the transaction might prepare for their consideration. The trial judge (at p.473), and on appeal Finlay C.J. for the Court in the Supreme Court, upheld the conclusion that these documents were not privileged. Costello J. concluded that there had been no request for and no legal advice in the documents. There was no information or remarks that could be regarded as confidential and were merely statements of fact in the documentation as to the transaction which the defendants indicated they wished to have completed by the drafting of the necessary legal documents. The Supreme Court also rejected the attempts of the defendants to broaden significantly the law as to legal professional privilege, Finlay CJ stating that at p. 478:
"Where a person seeks or obtains legal advice there are good reasons to believe that he necessarily enters the area of potential litigation. The necessity to obtain legal advice would in broad terms appear to envisage the possibility of a legal challenge or query as to the correctness or effectiveness of some step which a person is contemplating. Whether such query or challenge develops or not, it is clear that a person is then entering the area of possible litigation"(emphasis supplied).
The three express reasons for the rejection of a claim for privilege in Smurfit Paribas in the High Court, upheld in the Supreme Court require some examination here: that legal advice privilege requires a request for or obtaining of legal advice; confidential information or remarks and/or more than a mere statement of facts to the transaction. However, this is to be compared with the requirement in the later passage quoted above (at P. 478)of the need "to envisage the possibility of legal challenge or query as to the correctness or effectiveness if some step…"
This later passage appears to suggest a rather narrowly prescribed view of "legal advice", narrower than what the Supreme Court appeared to be suggesting otherwise in its decision to uphold the conclusions of the high Court and is much more difficult to apply in the practical exercise of claiming privilege. While the effect of Smurfit Paribas is to greatly restrict the number of occasions where legal professional privilege is available, it is important to note that the decision does not discuss a wide range of factors that have resulted in a finding of "legal advice" privilege in later case law of the High Court listed above or in the leading Irish academic texts particularly as to the duty of care of a Solicitor. This discordance must be noted, particularly in light of the importance of the issue at hand, for as Kelly J. recently stated in Miley v. Flood [2001] 2 IR 50, legal professional privilege "is more than a mere rule of evidence. It is a fundamental notion on which the administration of justice as a whole rests". The fact that legal professional privilege is also protected by Article 8 of the European Convention of Human Rights, now part of Irish law, must also be considered in this regard.
The Correspondence At Issue Here
Generally, the 53 items of correspondence at issue here may be classified as follows:
(1) Communications of a confidential nature between the plaintiff and the plaintiff's solicitor, with the dominant purpose being the provision of legal advice,
(2) Associated communications (for example, telefaxes) constituting surrounding documentation, information and assistance, necessary for the purposes of providing legal advice.
(3) Communications between the plaintiff's solicitors and a third-party bank,
(4) Communications from the defendant's solicitors to the plaintiff's solicitors,
(5) Correspondence from solicitor to plaintiff as to the client account
Items 1-19
1-5. Relate to background matters to obtain advice not dominant purpose duty of care broad and business orientated
6. Relate to obtaining the lease and get advice on matter related correspondence
7. Plan provided- relevant to obtaining lease background to obtaining lease broad range of legal services solicitors provide, still legal advice so-called background advice still business
8. Legal advice
9. Background related to advice required
10-11. Legal advice
12-16. Background related to advice required
17. Background related to advice required
18. Related to advice
19. Background related to advice
Items 20-53
20-21. Background to lease
22. Legal advice
23. Background related-business plan
24. Background related advice
25. Background factual information
26. Related background material
27. Solicitor communication to bank about purchase/ lease
28. Legal advice
29. Bank to solicitors- legal related communication
30. Copy of certificate of incorporation from solicitors to bank
31. Letter to bank as to Articles of Association
32. Legal advice
33. Background related
34. Bank communication to solicitor
35. Solicitor to-bank related correspondence
36. Legal advice
37. Solicitor to counsel communication to obtain legal opinion
38. Counsel communication to Solicitor
39. Communication developments by client to solicitor (background related)
40. Opinion of counsel and related advice
41-42. Correspondence as to developments (background related)
43. Background developments
44. Account correspondence /inter-lawyer correspondence
45. Legal advice sought by client
46. Communication to limit confidential information given to counsel
47. Correspondence drafts between solicitors to agree copy for counsel to advise
48. Opinion of Counsel
49. Correspondence related to prospective developments- legal advice related
50. Up to date position (background as to advice) and response to Counsel's opinion
51. Letter to counsel (legal advice related)
52. Counsel's opinion (legal advice related)
53. Account related correspondence to client
It is stated, as is often the case, at page 55 of the booklet of discovery documents that "All correspondence documentation, attendances and advices between the Plaintiff and its Solicitors and Counsel and between its Solicitors and its Accountants and Solicitors professional agents after this action was contemplated threatened or pending." There is wide usage of "private and confidential" markings on all of the documents which is of some significance to the current proceedings.
The Application Of Legal Advice Privilege To Pre-Incorporation Of The Plaintiff (Items 1-19)
The first named defendant in its outline submissions argues that the plaintiff cannot claim privilege over any documents which came into existence before the company itself came into existence, as a shelf company for the purposes of entering a contract. However, as is stated in Delany and McGrath Civil Procedure in the Superior Courts (Roundhall, 2001) para. 8.013, the concept of a "communication" for the purposes of legal advice privilege is broad and extends to a wide formulation of information passing between client and lawyer. This concentration is upon content and not form, however. The fact that the communications relate to a phase prior to the incorporation of the plaintiff itself, Ochre Ridge Limited, is irrelevant so long as the communications form part of the spectrum of legal advice between legal advisor and client. It would be illogical to claim that a company could not claim privilege over documents relating to a pre-incorporation phase as no claim of privilege could ever be possible as to this period then and would deny the benefit of privilege to a vast array of proceedings. Moreover, there is no need to consider the submissions of the plaintiff as to the existence of a "common interest" in order to assert privilege over the documents pre-incorporation. In the correspondence, even after incorporation of the plaintiff on August 18th, 1999, the documentation is addressed interchangeably both to and from Mr. Tallent and Ochre Ridge Ltd.
The "Common Interest" Test
Even if the above is considered incorrect, it is clear that privilege may be claimed by one not strictly a client of the legal advisor if he has an interest in common with such a client, the leading case being that of Buttes Gas and Oil Co. v. Hammer (No.3) [1981] QB 223 (see Cross and Tapper on Evidence (Butterworths: 9th Ed., 1999) p.448). A broad construction of this principle appears possible. This "common interest" concept has been applied in this country in Bula Limited v. Crowley (Unreported, High Court, Murphy J, 8th March, 1991).
The Application Of Legal Advice Privilege To The Remainder Of The Items (excluding correspondence with the bank and the defendant's solicitors)
The remainder of the communications clearly comprises material which has a dominant purpose of requesting or providing legal advice. Otherwise, the balance of this documentation is necessary or relevant to the provision of legal advice as surrounding or background documentation and clearly fulfils the criteria summarised above to ground a claim of privilege and to discharge the duty of care of a solicitor. Moreover, to deprive the plaintiff of the benefit of relying upon legal advice privilege as to the materials at issue would serve no over-riding public interest objective and is not of the order of the documents at issue in Smurfit Paribas.
As to the account related correspondence (item numbers 44 (in part) and 53) this type of documentation does not satisfy the requirements of legal advice privilege and cannot form part of the surrounding documentation that clearly must benefit from legal advice privilege in order not to negate the content thereof. By contrast, as to the correspondence between the opposing solicitors in item numbers 44 (in part) and 47, such communications must benefit from legal advice privilege as necessary for the provision of legal advice on the part of the plaintiff's solicitors.
Litigation Privilege
Litigation privilege, which protects the preparations of parties for litigation in advance of such litigation and the associated documents generated in preparation of litigation, is not relevant here as upon examination of the 53 items over which privilege is claimed, under no circumstances could any of these documents be said to have come into being with the dominant purpose of the contemplation of litigation (see the discussion in the Supreme Court in Gallagher v. Stanley [1998] 2 I.R. 267 for the appropriate test).
Whether Legal Advice Privilege Attaches To The Correspondence With Barclays Bank (Item Nos. 27, 29, 30, 31, 34 & 35)
The submissions of the defendant as to the correspondence with Barclays Bank and the plaintiff's solicitor are predicated upon the application of litigation privilege being asserted, notwithstanding that the plaintiff does not rely upon this ground. However, none of the documents numbered above could be said to satisfy the criteria to ground a successful claim of litigation privilege. As to legal advice privilege, it is difficult to see how the communications between the plaintiff's solicitors and the third party bank could be construed as necessary for the provision of legal advice or that the protection of the communications could be necessary for the provision of legal advice. At best, these communications comprise the provision of legal assistance to the plaintiff.
The Onus Of Proof As To Legal Professional Privilege
Legal advice privilege belongs to the client and entitles them to refuse to disclose any communications with his or her lawyer. As is stated succinctly in Delany & McGrath Civil Procedure in the Superior Courts (Roundhall, 2001) at para. 8.098, the onus of proof as to legal professional privilege is on the person claiming privilege to establish that the documents are privileged. However, once the party claiming privilege has discharged this onus, it then falls on the party impugning the claim of privilege to do so by evidence. Ultimately, however, the decision as to the existence of a privilege lies with the courts (see Murphy v Dublin Corporation [1972] I.R. 215). Each document must also be individually examined. Thus the "broad brush" or "balanced" approach contended for by the plaintiff in its outline submission is incorrect.
Conclusion
The onus of proof as to legal professional privilege rests on the person claiming privilege to establish that the documents are privileged. However, once the party claiming privilege has discharged this onus, it then falls on the party impugning the claim of privilege to do so by evidence. While the plaintiff here has clearly discharged the burden of proof necessary to ground a claim for privilege, the same cannot be said for the first named defendant. Upon consideration of the various criteria set out above, it appears that all of the documentation, excluding the account related correspondence in items 44 (in part) and 53, is privileged on the basis of legal advice privilege only and not litigation privilege.
Approved 13th – 7 – 04
Vivian Lavan