Dual purpose correspondence not protected by privilege

Law and Courts II

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The honourable Court further held inter alia that regarding evidence and the witholding of documents for inspection, the legal right was not envisaged as automatic and still further, the inspection legislatively was to occur as a last resort since there lay a danger in inspecting documents at interlocutory stage and out of context; the key watchword being not to impinge on any forthcoming trial matters. In the claimant's dealings with art expert A, along a pertinent 2016 timeline, the first letter of engagement was for 'an independant and objective investigation' of the painting not 'as part of this Agreement [to] provide expert consultation as a consulting expert or testifying expert'. It was only after the painting was cast in a negative light, the 2nd letter informed art expert A of potential litigation and extended reasons for rescission i.e. the claimant wanted to make the 'right commercial decisions in anticipation of potential litigation'; a committe meeting of the claimants staff, stated by the CEO as his 'corporate decision having legal and financial consequences' and the claimant's decision to rescind that was generated for two purposes - i) to enable the decision to rescind and ii) for use in contemplated litigation. The recission application was thus causa causans to the authenticity of the painting. The learned Judge inter alia evinced points technical in law where both purposes were held to be of equal importance and of equal relevance; where the purpose of litigation inevitably followed the commercial decision and where the terms of contract between claimant and buyer were pursuant to which art expert A was to provide a report - real or false. The engagement with art expert B similarly described the dual purpose in defining his envisaged work for the claimant. The claimant's representation argued for the contemplated purpose being litigation as its dominant one to which the Court viewed art expert B's contract remained evidentiary of a dual purpose agreement. On an objective basis the correspondence and preparatory papers between the claimant and the art experts were not privileged and therefore disclosure was afforded the defendant.
The application for access and inspection of documents was made by the defendant, who had acquired a valuable painting and via a contract of sale with the claimant commissioned it to be sold by private treaty within a specified time bar. The claimant sold the painting subject to the Buyer raising any doubts in writing as to its authenticity, which, based on a report from art expert A, he duly did. As a result the claimant corresponded with art expert B who concluded a 'peer reivew' that showed the painting was a fake however a week later the claimant rescinded the sale and bought the painting. The claimant made application for recission of contract and disclosed relevant documents however further withheld documents between them and the art experts from inspection, claiming privilege on the grounds the correspondence was brought into existence for the dominant purpose of 'contemplated litigation'. In discussing privilege at length the honourable Court stated that if there was another purpose, the principle would not be satisfied, citing inter alia Price Waterhouse and Starbev* where the principles of disputes claiming privilege held precedent.
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Vide Sotheby's v Weiss CL-2017-000071; Neutral Citation [2018] EWHC 3179 (Comm); *Price Waterhouse (a firm) v BCCI Holdings (Luxembourg) SA [1992] BCLC 583,589-590, Starbev GP Ltd v Interbrew Central European Holdings [2013] EWHC 4038 (Comm) and West London Pipeline and Storage v Total UK LTD [2008] EWHC 1729 (Comm), United States of America v Philip Morris Inc [2004] EWCA Civ 330, SFO v ENRC Ltd [2018] EWCA Civ 2006.
Company Law Today comments - the documents were legally relevant, not privileged, therefore the defendant was not prejudiced in his preparations.



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