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CACV000019/1978
| IN THE COURT OF APPEAL |
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| on appeal from the High Court |
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1978 No. 19 |
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(Civil) |
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| BETWEEN |
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MUTUAL UNDERWRITERS LTD. |
Appellants |
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CHENG Wai-hing |
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LAM Chau-shing |
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and |
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YU Kam-chung |
Respondent |
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Coram: Briggs, C.J. and Yang, J.
Date of Judgment: 13th September, 1978.
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JUDGMENT
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Yang, J.:
1. The plaintiff in this action claims that his taxi and driver were involved in a traffic accident due to the negligent driving of the second defendant who was employed by the first defendant at the material time.
2. The plaintiff sought the disclosure of a notice of accident sent by the first defendant to her insurers and also certain correspondence between her and the insurers. On the 26th January 1978 Mr. Registrar Barnett ordered the disclosure of the notice of accident but made no order as to the correspondence. The insurers, who are not parties to the action, appealed against that order. The matter then came before McMullin J., who confirmed Mr. Registrar Barnett's order that the notice of accident be disclosed and made no ruling as to the correspondence.
3. The insurers now appeal against the decision of McMullin J. The plaintiff, by means of a Respondent's Notice, cross-appeals against the judge's decision not to rule upon the correspondence.
4. Mr. Ching, leading counsel for the appellants, argues, inter alia, that whenever there is a motor accident, a claim may be expected. The notice of accident and the correspondence, which has been described as "letters passing between the said insurers and the said insured in order to ascertain the details of the accident" - came into existence against the possibility of a litigation, for the insurers had to investigate whether they were at risk. The notice of accident, it is argued, is as much for the protection of the insurers as it is for the insured. The documents are accordingly protected by privilege. A number of authorities were cited, but it is only necessary for us to refer to some of them, which we do below.
5. On the other hand Mr. Litton, leading counsel for the respondent, draws our attention to the fact that the appellants are not a party to the action, and therefore are not entitled to claim privilege. It is further submitted that the recent authorities show a disinclination towards nondisclosure of documents.
6. The situation of a claimant of privilege who is not a party has been dealt with at length by McMullin J. We do not propose to reiterate what he has said except to indicate our full agreement with his judgment on this issue, namely, that a non-party to the litigation must show some good ground of privilege on his own account and in his own rights.
7. The meaning of the rule on privilege was clearly elucidated by Jessel M.R. in Anderson v. Bank of British Columbia(1):
"The object and meaning of the rule is this: that as, by reason of the complexity and difficulty of our law, litigation can only be properly conducted by professional men, it is absolutely necessary that a man, in order to prosecute his rights or to defend himself from an improper claim, should have recourse to the assistance of professional lawyers, and it being so absolutely necessary, it is equally necessary, to use a vulgar phrase, that he should be able to make a clean breast of it to the gentleman whom he consults with a view to the prosecution of his claim, or the substantiating his defence against the claim of others; that he should be able to place unrestricted and unbounded confidence in the professional agent, and that the communications he so makes to him should be kept secret, unless with his consent (for it is his privilege, and not the privilege of the confidential agent), that he should be enabled properly to conduct his litigation. That is the meaning of the rule."
8. It is therefore against this explanation that one must examine the authorities referred to below. The first is Birmingham and Midland Omnibus Co. Ltd. v. London and North Western Railway(2). Buckley L.J. in referring to a party's affidavit of documents, said (at p. 856):
"It is not I think necessary that the affidavit should state that the information was obtained solely or merely or primarily for the solicitor, if it was obtained for the solicitor, in the sense of being procured as materials upon which professional advice should be taken in proceedings pending, or threatened, or anticipated. If it was obtained for the solicitor, as above stated, it is none the less protected because the party who has obtained it intended if he could to settle the matter without resort to a solicitor at all."
9. Vaughan Williams L.J. was of the same opinion (vide p. 855).
10. Hamilton L.J. however put the requirement in a different way (at p. 859):
"It has been argued for the respondents that the claim of privilege is bad in form, because when stating that the documents came into existence for the purpose of being submitted to the defendants' legal advisers, it does not say that they did so 'primarily' or 'substantially' or 'specially.' It is not, contended that the affidavit must state that they did so 'solely.' The contention in reply that 'for the purpose' means in itself as a matter of construction that such purpose is the principal if not the only purpose is, I think, unsound. The affidavit as sworn in my opinion makes the purpose of submission to the solicitor equally one of many purposes, and is consistent with that purpose being the least important and the most unusual of them all. It is then argued by the appellants that even so the claim is good in form, but upon this argument every document that ever comes into existence in the ordinary course of business would be effectually covered by the claim. The larger the business and the better its organization the more necessary it is that written records should be regularly made of every detail and every occurrence, common and uncommon. In a sense not altogether illusory every one of these records, from the office boy's postage book to the chief cashier's ledger, comes into existence for the purpose, if peradventure there should be litigation or fear of it, of putting the legal advisers in a position to advise fully and to conduct the case successfully, though in nine hundred and ninety-nine cases out of a thousand no such use of the entries will ever be made. To hold such documents privileged merely because it can be shewn of them, not untruthfully, that the principal, who made them part of the regular course of business and of the duties of his subordinates, foresaw and had in mind their utility in case of litigation, feared, threatened, or commenced, would in my opinion be unsound in principle and disastrous in practice."
11. It would appear from the two passages cited above that Buckley L.J. was of the view that if one of the reasons for the receipt of the information was for the solicitor to advise on it, then such information would be covered by privilege, Hamilton L.J. however seemed to take the view that the purpose of submission of the information to the solicitor must be a substantial one. The judgment of Buckley L.J. was approved by Scrutton L.J. in Ogden v. London Electric Railway Company(3).
12. The next case is Seabrook v. British Transport Commission(4) where Havers J. held that it was sufficient, for documents to be privileged, if one of their purposes was their submission to a solicitor for use in anticipated litigation, even if that purpose was not the dominant or substantial one for their existence. The judgments of Buckley L.J. and Scrutton L.J. in the authorities cited above were applied.
13. The meaning of "anticipated" proceedings or litigation is to be found in Jarman v. Lambert Cooke Contractors Ltd.(5) where "anticipated" was held to mean "regarded as likely" or "reasonably probable."
14. Taking a line similar to that of Hamilton L.J. (supra), Diplock J. in Longthorn v. British Transport Commission(6) held that although a document could be privileged even if its submission to a solicitor was not a dominant substantial purpose for its existence, yet it must be an appreciable purpose and a document was not privileged merely because such a submission was an improbable contingency. He said (at p. p. 534):
"I do not think it is necessary in the present case for me to seek to lay down to what extent the purpose of furnishing the documents to the solicitors must be a main or substantial purpose, and at what point it becomes so subsidiary to other purposes that privilege cannot be claimed in respect of the documents. I am not satisfied on the authorities that the mere fact that it may be one of the purposes, however insubstantial and however improbable, is a ground for a claim of privilege."
15. Then came the most important case of A. Crompton Ltd. v. Customs & Excise(7). There Lord Reid, Lord Morris, Lord Kilbrandon and Lord Cross took one line of approach (at pp. 419, 432-433, 435) whilst Viscount Dilhorne took another view (p. 421).
16. Referring to the judgment of Havers J. in Seabrook v. British Transport Commission (supra), Lord Cross observed (pp. 432-433):
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There were several reasons why such reports were required. One was that the commission was under a statutory duty to report accidents to the Minister of Transport: another was so that the appropriate department might consider whether any disciplinary measures or changes in the methods of work were called for; yet another was that in the event of a claim being made by the party injured the report could be laid before the commission's solicitor for his advice. Havers J. pointed out that it was difficult - if not impossible - to reconcile all the cases, that the earlier cases tended on the whole to favour disclosure in such circumstances; but that after the approval of the judgment of Buckley L.J. in Birmingham and Midland Motor Omnibus Co. Ltd. v. London and North Western Railway Co. [1913] 3 K.B. 850, by Scrutton L.J. in Ogden v. London Electric Railway Co. (1933) 49 T.L.R. 542, it must be taken as established that the fact that the purpose of submission to the legal adviser was only one and may be not the most important of several purposes for which the report was prepared did not prevent it from being privileged. The Seabrook case was considered a few months later by my noble and learned friend, Lord Diplock - then Diplock J. - in Longthorn v. British Transport Commission [1959] 1 W.L.R. 530. There the commission had held an inquiry into the circumstances of the accident before the plaintiff, who was one of their employees and gave evidence at the inquiry, issued his writ. In the action the commission claimed privilege for the report of the inquiry but the judge having looked at it held that it was not privileged because the inquiry was not to any appreciable extent held for the purpose of obtaining for or furnishing to the solicitor evidence or information to help him in defending any proceedings which the plaintiff might bring. In his judgment he said that it was not necessary for him to decide to what extent the purpose of submission to the solicitors must be the main or substantial purpose of the coming into being of the document in question since he was satisfied that the mere fact that it was a purpose however insubstantial could not found a claim for privilege; but reading the judgment as a whole it is, I think, fair to conclude that my noble and learned friend viewed the trend of the decision since 1913 with some distaste and that he inclined to prefer the judgment of Hamilton L.J. in the Birmingham case [1913] 3 K.B. 850 to that of Buckley L.J. |
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One day it may be necessary for this House to consider the point but in my judgment it does not arise for decision in this case. In the Ogden and Seabrook type of case the reports in question are obtained for two or more quite separate purposes. Here the two purposes for which the documents in question were obtained or came into existence were parts of a single wider purpose - namely, the ascertainment of the wholesale value in the manner prescribed by the Act. The first, and the sole immediate, purpose was to help the commissioners to fix what in their opinion was the true value; the second purpose was to help the solicitor, if the commissioners' opinion was challenged, to prepare their case for the arbitration. It was not - and hardly could have been - suggested that the mere fact that the commissioners would know in every case that their opinion might be challenged would itself enable them to claim that such documents as are in question here would be the subject of legal professional privilege whenever in fact their opinion was challenged. What is said to make them privileged in this case is the fact that the commissioners happened to expect that there would be an arbitration and called in the solicitor to 'hold their hands' in the early stages. But, even so, in this case just as much as in cases in which no arbitration was in fact anticipated the commissioners had to form their own opinion as to value on the evidence available to them, including these documents, before any arbitration could take place. This feature of the case appears to me to distinguish it from the Ogden or Seabrook type of case and to make it analogous to the case of Jones v. Great Central Railway Co. [1910] A.C. 4. There a member of a trade union who thought that he had been unjustly dismissed by his employers furnished the union authorities (as required by the rules) with information in writing as to the facts of the case as he saw them in order to satisfy them that it was proper for them to sanction the employment of a solicitor to conduct the case and also for use by the solicitor in the conduct of the action if the employment of a solicitor was sanctioned. This House held that the letters in question were not the subject of legal professional privilege because the union authorities had themselves to consider them and act on them before the solicitor was employed to conduct the case. So here the commissioners had to form their own opinion as to value before the solicitor would use the documents for the purpose of defending their opinion in the anticipated arbitration." |
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17. It will be difficult if not impossible to reconcile the authorities. However, it is not necessary for us in the circumstances of the present case to attempt to reconcile them or to decide which line of approach we are to follow. Suffice it to say that we do not think a notice of accident is ipso facto a document prepared for the purpose of submission to a solicitor. There may well be situations where one of the substantial purposes of such a notice is to pass it on to a solicitor for his legal advice but we are unable to accept that proposition as having general application. Nor are we able to accept the contention that at the time a notice of accident is made, litigation is anticipated as a matter of course. Whether litigation is anticipated or not depends on the particular circumstance of each case.
18. It seems to us the situation in the case before us is analogous to that in the A. Crompton Case (supra) and Jones v. Great Central Railway(8), the headnote of which reads:
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"A member of a trade union who had been dismissed by his employers furnished the union authorities, as required by the rules, with information in writing to enable the authorities to decide whether he was entitled to bring an action for wrongful dismissal at the expense of the union and with the assistance of their solicitor. The information comprised the evidence available in support of the action and the names of the witnesses. The union authorities sanctioned an action brought by the member, with their solicitor acting as solicitor for the plaintiff. Upon a summons for discovery taken out by the defendants:- |
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Held, that the letters containing the information did not fall within the established rule as to the privilege between solicitor and client and must be produced." |
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19. And Lord Loreburn sitting in the House of Lords said in his judgment (at pp. 5-6):
"The question is whether or not these documents were privileged from disclosure. My Lords, the rule on this branch of the law of discovery is that, in order to enable a man to confide unreservedly in his legal adviser, all communications between client and solicitor are protected. The rule is expressed by James L.J. in the case of Anderson v. Bank of British Columbia 2 Ch. D. 644, at p. 656 as follows. He says: 'The old rule' - meaning the ancient and venerable rule which still exists - 'was that every document in the possession of a party must be produced if it was material or relevant to the cause, unless it was covered by some established privilege. It was established that communications that had passed directly or indirectly between a man and his solicitor were privileged, and the privilege extended no further.' Both client and solicitor may act through an agent, and therefore communications to or through the agent are within the privilege. But if communications are made to him as a person who has himself to consider and act upon them, then the privilege is gone; and this is because the principle which protects communications only between solicitor and client no longer applies. Here documents are in existence relating to the matter in dispute which were communicated to some one who was not a solicitor, nor the mere alter ego of a solicitor."
20. The judgment of Jenkins L.J. in Westminster Airways Ltd. v. Kuwait Oil Co. Ltd.(9) which Mr. Ching relies on, is therefore inconsistent with the judgments of Lord Cross in the A. Crompton Case(7) and Lord Loreburn in Jones v. Great Central Railway(8). The better view seems to be that the Westminster Airways Case will not be followed (see also the Annual Practice Part 1, p. 406, para. 24/5/7).
21. The correspondence between the plaintiff and the insurers which came into existence for the purpose of ascertaining the details of the motor accident is prima facie clearly relevant. We have not seen this correspondence. But we think counsel should examine it and that any correspondence which came into existence for the purpose of finding out the details of the accident as opposed to obtaining legal advice should be disclosed.
22. For the reasons stated above we would dismiss the appeal and allow the cross appeal.
23. Order for discovery of Notice of Accident and correspondence, as stated in para. 8 of the Affidavit of SUEN Yan-kit, to the extent to be agreed between counsel, if not, liberty to apply.
24. Stay for seven days.
25. Costs to follow the event.
Representation:
Mr. Ching, Q.C. and Mr. W. Yeung (Gallant Ho & Co.) for Appellants.
Mr. Litton, Q.C. & Mr. W. Lane (Deacons) for Respondent.
(1) (1876) 2 Ch. D. 644, at 649.
(2) (1913) 3 K.B. 850.
(3) (1933) 49 T.L.R. 542, 544.
(4) (1959) 1 W.L.R. 509.
(5) (1951) 2 K.B. 937.
(6) (1959) 1 W.L.R. 530.
(7) (1974) A.C. 405.
(8) (1910) A.C. 4.
(9) (1951) 1 K.B. 134, 146.
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