Jersey Unreported Judgments

[2003]JRC194

royal court

(Samedi Division)

 

28^th October, 2003. 

 

 

 

 

 

Decision on the application of the Second Respondent for specific discovery by the Representor of certain legal opinions.

 

 

Advocate A.J. Olsen for the Representor;

The First and Fourth Respondents did not appear and were not represented;

Advocate J.P. Speck for the Second Respondent;

Advocate R.J. Michel for the Third Respondent.

 

 

judgment

 

the COMMISSIONER:

1.        The Second Respondent ("CATJ") seek an order against the Representor ("the Commission") for specific discovery of a number of legal opinions given by certain members of the English Bar dated between July 1995 and October 1999, described at item 5 of the schedule to their summons dated 25th September 2003 as follows: "The opinions of Thomas Putnam (4 July 1995 and 5 October 1999), Michael Crystal and Robin Dicker (13 February 1997, revised 29 January 1998), Robin Dicker (19 February 1997 and 22 June 1999)." 

2.        The existence of these opinions is known to CATJ as a result of a reference to them in a draft report dated 5th January 1999 entitled "Was the Delta Scheme a Collective Investment" prepared by a Dr. John Board on behalf of the Commission and the disclosure of that report in the circumstances described below. 

3.        One of the critical issues in this litigation is whether the Delta Scheme fell within the definition of a "Collective Investment Fund" (a "CIF") contained in Article 2 of the Collective Investment Funds (Jersey) Law 1988 ("the 1988 Law"). Dr. Board of the London School of Economics was instructed by or on behalf of the Commission to provide an expert opinion on this question from the point of view of an economist.   His draft report is dated 5th December 1999. In the Introduction he lists the various written materials that had been supplied to him, which include the opinions currently in issue, and in section III -"Previous Opinions"- he sets out a brief summary of his reading of these and various other opinions in a matter of a few lines each. Section XII of Dr. Board's draft report is devoted specifically to a more extensive treatment of "The Dicker (1999) Draft Opinion" (referred to in JFSC's summons as an "opinion" of 22nd June 1999 by Mr. Dicker but in fact a draft opinion).  If Dr. Board's summaries of these opinions are fair, then it appears that Mr. Crystal and Mr. Dicker concluded in their revised joint opinion of January 1998 that the Delta Scheme was not a CIF, and Mr. Dicker, in his separate draft opinion in June 1999 was of the view that that the scheme did not operate on the principle of "risk spreading" within the meaning of Article 2.2.c of the 1988 Law (this being one of the relevant criteria).  Dr. Board's own conclusion as expressed in his draft report was that the scheme was a CIF within the meaning of the 1988 Law.

4.        The circumstances in which CATJ came to learn of the existence of these opinions appear to be as follows.  Towards the end of 1999 the parties were preparing for the hearing of the preliminary issue on limitation which, in the event, took place before the Bailiff in January 2002. Skeleton arguments were exchanged.  On 5th December 2001 Advocate Kelleher, acting on behalf of the Commission, wrote to those representing CATJ as follows: "With our letter to you dated 28 November 2001 we provided a bundle of documentation which was referred to in the Skeleton Argument and which was also enclosed at that time.  At that time we promised to provide further additional relevant documents, these additional documents are now enclosed.  These documents are relevant to the basis of the Commission's application as set out in the earlier part of the Commission's skeleton." At the same time, the files were lodged with the Court.

5.        Paragraph 23 of the Commission' skeleton argument made reference to the various investigative steps carried out by the Commission after 30th June 1999 and concluded: "The Commission thereafter itself instructed another economist, Mr. John Board, to advise it as to a number of matters in relation to the Delta scheme.  Following further consideration the present proceedings were commenced."

6.        On 17th December 2001 Advocate Binnington replied to Advocate Kelleher's letter, noting the references in Dr. Board's draft report to various opinions of others and asking for copies to be supplied, but also objecting to the Commission's two bundles of "Additional Documents" being placed before the Court for the purposes of the forthcoming hearing on the ground that they had no bearing on the prescription issue and were, in any event, outside the terms of an earlier direction given by the Court.  The letter added: "Further, the evidential status of much of the material in the "Additional Documents" bundle would be a matter for detailed consideration if it were sought to adduce such documents at any hearing on the substantive issues.

7.        Advocate Kelleher's response to this objection, in a letter dated 20th December 2001, was to say that, having given the matter further consideration, the Commission would not now be referring to the additional documentation at the forthcoming hearing and the two bundles "are therefore to be withdrawn". He asked for arrangements to be made for them to be collected.  The letter did not respond to Advocate Binnington's request for copies of the opinions referred to in Dr. Board's draft report. But disclosure of these reports was, it seems, subsequently "steadfastly refused" on grounds of privilege (Commission's skeleton argument dated 7th October, paragraph 2.)

8.        There was no transcript or note before me as to what was said at the hearing of the preliminary issue by the Bailiff in January 2002 as regards the reference in the Commission's skeleton argument to Dr. Board's draft report, but - given the earlier explicit objection to and withdrawal of the bundles of additional documents - I must assume that no attempt was made by the Commission to place any reliance on that draft report at that hearing and, in all probability, that the court may well have been  made aware by one route or another that the document had been withdrawn from the materials before the court. (Any attempt by the Commission to rely on it would presumably have been met with strenuous objection on the part of CATJ).

9.        Advocate Speck, appearing for CATJ on the present application, contends that the opinions of which his client seeks disclosure are plainly of relevance to the issues in the litigation and that the privilege that originally attached to them was lost when Dr.Board's draft report was included in the second bundle of the Commission's Additional Documents that accompanied Advocate Keleher's letter of 5th December 2001 and reference made to it in Advocate Keleher's skeleton argument .  Advocate Olsen submits that this is not a proper construction to put upon events, and the additional documents, having been objected to by CATJ and subsequently withdrawn, privilege cannot be considered to have been waived.

10.      So far as the issue of waiver is concerned, I was referred to a number of English authorities as affording useful guidance. The subject also appears to me (since the hearing) to have been the subject of some, though not extensive consideration in one or two comparatively modern Jersey decisions: In re Continental Trust Co. Ltd. [1991] JLR 83;  Pacific Investments.Ltd-v-Christensen [1996] JLR N-7; and Bene Ltd-v-VAR Hanson & Partners [1997] JLR N-10.  These appear to indicate a tendency, to date, for the courts here to be guided by English authorities on the subject.  But, beyond that, the only Jersey case that has any significant bearing on the present one is In re Continental Trust Company in which privilege was held to have been waived as a result of the use made of it in court.  The basis of the decision is evident from the following two passages from the judgment of Commissioner Hamon:

 "The problem that Mr. Fielding faces is that, of his own volition, he included the affidavit in the court file and allowed it not only to be referred to in open court but also for passages from it to be read without dissent on his part in the presence of all the other parties"; and "The affidavit was put to the court as evidence.  It was used as evidence by the court, albeit in part.  No objection was raised either by counsel, who voluntarily supplied it, or by the deponent, to whom it was referred in open court.  In our view, any privilege that might have attached to it was waived ....."

11.      Waiver may arise as a problem in a variety of ways.  But as regards the context of the present dispute, there was no real dispute between the parties as to the relevant principles to be derived from English authority.  Until comparatively recently the key question was regarded as whether a document containing reference to what would otherwise be privileged material had been 'deployed in evidence'.  But more recently there has been a tendency to adopt a less rigid approach as reflected in the decision of the Mance J. (as he then was) in Vista Maritime Inc-v- Sesa Goa, (24th October 1997), [1997] CLC 1,600. in the light of the decision of the Divisional Court a few months earlier in R-v- Secretary of State for Transport, ex p. Factortame Ltd. and Others (No.5), (1997) 9 Admin LR 591.

12.      The principal points to be derived from the judgment of Mance J. in Vista  for present purposes are as follows:

(i)        He observed that in Factortame the court "discarded the restriction which first instance courts had previously placed on waiver, whereby until material was 'deployed in evidence' there could be no waiver of connected material.  The Divisional Court took a more flexible approach, holding that waiver of connected material may arise at an earlier stage.  Prior to any deployment in evidence, voluntary discovery of certain documents may therefore constitute waiver of connected documents.  In determining whether it does the court said ....: 'Much will depend, of course, on the indication given by the party waiving privilege before trial whether he intends to rely upon the privileged material at trial and, if so, far what purpose' " (at 1,602).

(ii)       As regards experts' reports and witness statements he recognised that, while in some cases service of them might be regarded as indicative of a sufficiently fixed intention to call the witness in question to amount to a waiver of connected materials, in others it would be wrong to impute any such fixed or final intention. "The position is ultimately always flexible, and responsive to the particular factual situation, as the Divisional Court indicated" (at 1,604).

(iii)      In addressing the matter of intention, "The court can and should view the position as it stands today, and on the basis of the relevant party's intention as it is now.  Any other approach would be artificial and anomalous" (at 1,605).

(iv)      The adoption of more 'flexible' approach was not confined to being prepared to hold that waiver could take place at an earlier stage than had previously been thought to be the threshold (point (i) above), but is also intended to embrace general considerations of fairness: "The Divisional Court in Factortame preferred an approach to waiver which avoided mechanistic tests, and looked at the matter flexibly and in the light of general considerations of fairness.  Mr. Hofmeyr's submission that the inclusion in a statement or report of references to privileged matters is an irreversible step which necessarily involves a waiver of privilege in all connected material is an attempt to reintroduce a mechanistic principle, at an earlier stage and in his clients' favour.  There is in my opinion no reason of convenience or fairness for doing so" (at 1,605).

13.      To some extent Mance J.'s reasoning draws on the particular provisions of the English rules of court and it is important, in dealing with cases in this jurisdiction, to bear in mind the observations of the Court of Appeal in Victor Hanby Associates Ltd-v-Hanby & Oliver [1990] JLR 337 concerning the caution with which English authorities on procedural matters need to be approached.   But for the most part his approach appears to me to be one of principle and one that can and should be followed in this court as reflecting a modern and just approach to a frequently troublesome problem.  The decision of the Royal Court in In re Continental Trust contains nothing conflicting with this conclusion and, as regards the result, is plainly distinguishable on its facts from the present case. 

14.      Approaching the present case in this way, it seems to me that the only proper view to be taken is that there has been no waiver of the privilege in the opinions in question.  In the first place, it would seem to me to be artificial to speak of there having been any final or irrevocable deployment of the draft Board report, with its references to those opinions. The facts speak for themselves and need little comment.  The draft report was withdrawn from the materials to be used on the trial of the preliminary issue of limitation before any use was made of it; it was withdrawn, moreover, at the instigation of CATJ; no subsequent use has been made of it; and any intention to rely on the draft report as such at trial has been expressly disavowed by Advocate Olsen on behalf of the Commission (skeleton argument dated 7th October 2003). Secondly, by no stretch of the imagination has any advantage accrued to the Commission as a result of what has happened. Thirdly, it is important to bear in mind the special status of an expert, his obligation of candour towards the court, the fact that that candour may make it difficult for him to avoid reference to privileged materials, and the resultant tension that can arise between the need for privilege to be respected and the need for fair disclosure to the opposing party. Fourthly, no injustice is done to CATJ by denying it inspection of material that it would not in the normal course of events have been entitled to see (cf. the passage in the judgment of Mance J. in Vista at 1,605-E): CATJ criticise the Commission, as a regulatory body, for "seeking to hide behind privilege" (Mr. Siddall's fourth affidavit), but even bodies performing public functions are entitled to seek and preserve from disclosure the confidential advice that they receive. Fifthly, to argue that privilege was irrevocably waived once the draft report had been included in one of the Commission's bundles of Additional Documents is, in effect, to invite the court to adopt a 'mechanistic' approach of the kind that Mance J. rejected, and to saddle the Commission with the fate of having fallen into an inescapable trap for the unwary, albeit one of its own making: hardly the stuff of modern justice.

15.      That, in my judgment, is sufficient to dispose of the matter and to cause CATJ's application to fail. There are, however, further considerations of relevance and fairness that need to be mentioned . 

16.      The potential relevance of the opinions of which disclosure is sought to the substantive issues in this litigation has been argued by CATJ as being two-fold. First of all, in a letter from Mourant to Olsens dated 17th December 2001 disclosure of the opinions was sought on the ground that "The analysis in these Opinions will be of considerable assistance to the Court on this fundamental issue" (whether the Delta Scheme was a CIF).  This is not so. However learned the authors, their opinions would not be admissible as evidence on this issue.

17.      Then, on the present hearing, Mr. Speck laid considerable emphasis on what he submitted was the importance of these opinions as tending to show that, had the Commission (or its predecessor) sought legal advice back in 1992, it would have been advised that the Delta scheme was not a CIF, and as relevant also to the claims of CATJ and Mr. Langton not to have realised that Blacks Jersey was acting in breach of Article 4 of the 1988 Law (if it was).   But in this context the main point - that the Commission at one or more points received advice that the Delta Scheme was not a CIF - appears to be a matter of open record and already available to the respondents, without the need for reference to anything more: Mourant's letter to Olsens dated 27th March this year, refers to a letter from the Commission to CATJ dated 13th January 1999 "stating that, after legal advice, they had concluded that "the currency investment schemes operated by Delta Options Limited did not constitute a collective investment fund" ". In so far as the arguments adumbrated by Mr. Speck may have force (as to which I am not to be taken as expressing any view in this judgment), that force must depend, for the most part at least, on the fact that advice to the effect described in the Commission's letter of 13th January 1999 was received. How far an insight into the reasoning behind that advice would take the matter any further appears to me to be doubtful, particularly as the opinions in question were not contemporary with the material events.

18.      Moreover, experience tells one that, in a contentious context, sight of counsel's opinion by itself may be insufficient to evaluate its significance or weight without knowledge of the instructions, exchanges with clients and other materials on which it is based, and that disclosure of the opinions in question here would be likely to lead on to an inexorable process of requests for further and other disclosures (the danger of 'infinite regression' as Mance J. put it) to no real advantage to anyone, and at a not insignificant price in terms of time and cost.

19.      To my mind these are important additional factors which, if weighed in the scales of fairness in the context of considering whether there has been a waiver of privilege, help to bring those scales down decisively in favour of the Commission.  But, even if I were wrong in the conclusion that I have expressed on that subject, for these same reasons I am not satisfied that disclosure of the documents sought is "necessary for disposing fairly" of the issues in this litigation (see Chadwick J.A. giving the judgment of the court in Victor Hanby at 351; also the observation of Mance J. in Vista at 1,606 noting the similarity between this requirement and "the test which in the light of Factortame  now governs the prior question of whether there has been any waiver of privilege at all").

20.      The application by CATJ for specific discovery of the various legal opinions listed in Category 5 of its summons will, accordingly, be dismissed.

 Authorities.

re Continental Trust Co. Ltd. [1991] JLR 83;

Pacific Investments Ltd-v-Christensen [1996] JLR N-7;

Bene Ltd-v-VAR Hanson & Partners 1997 JLR N-10.

Vista Maritime Inc-v-Sesa Goa (24th October 1997), [1997] CLC 1.

R-v-Secretary of State for Transport, ex p. Factortame Ltd. and Others (No.5), (1997) 9 Admin LR 591.

Victor Hanby Associates Ltd-v-Hanby & Oliver [1990] JLR 337.