Obtaining information, and then being able to use it, brings
obvious benefits to those seeking to put right errors in the will
drafting process or the administration of an estate (or trust).
Often that information is held by solicitors who can claim
privilege. Overcoming that obstacle may be critical to being able
to establish your entitlement.
The High Court has ruled that the longstanding legal principle that
an act of one executor binds all the executors overrides the
general rule that where clients jointly instruct a solicitor a
single client cannot waive privilege over documents without the
other's consent. In other words, where executors jointly
instruct a solicitor, any one of them can waive privilege over
confidential documents relating to that instruction.
What is Legal Professional Privilege?
If a document is privileged, a party is entitled to withhold it
from a third party (eg his opponent) or the Court.
Legal advice privilege applies if (1) there is a confidential
communication, (2) between a lawyer and his client, (3) for the
purpose of giving or receiving legal advice.
Privilege can be lost or waived both intentionally and unintentionally.
Facts
In 1980, Mr Dring made a will appointing Mrs Dring, Mr Pola and
Mr Doubleday as executors and leaving his residuary estate to Mrs
Dring.
In 1987, Mr and Mrs Dring bought Manor Farm in the name of Dring
Bros, so that his brother and sister in law, Mr and Mrs Cooke (who
were the tenant farmers), could continue to live there. Mr and Mrs
Dring were the sole shareholders of Dring Bros.
In 1999, Mr Dring executed a codicil that left Manor Farm to Mrs
Cooke. Roythornes drafted both the will and the codicil.
Mr Dring died in September 2008. Probate was granted to Mr Pola and
Mr Doubleday (with power reserved to Mrs Dring).
Mrs Cooke died in November 2008. In December, Roythornes (acting
for Mr Pola and Mr Doubleday) told Mrs Cooke’s daughters (the
‘Daughters’), the administrators of her estate, that
Mrs Cooke did not benefit under Mr Dring’s estate. As Dring
Bros owned the farm (not Mr Dring) the gift under the codicil had
no effect because the farm was not Mr Dring's to give away. Mr
Dring's shares in Dring Bros formed part of residue.
The Daughters brought various claims against the estate. These were
compromised on terms that prevented further claims against Mr
Dring’s estate, Mrs Dring or Dring Bros, but not against
Roythornes.
The Daughters then issued proceedings against Roythornes, alleging
that they had acted negligently in drafting the codicil. They
subsequently realised that Dring Bros’ accounts had not
always shown Manor Farm as an asset of the company.
In response to the Daughters' investigations Mr Doubleday
provided a copy of Roythornes' estate administration file. Mr
Pola wrote a detailed letter in which he referred to
communications, meetings, advice and opinions and he said he would
provide a witness statement if required.
The Daughters brought additional claims on the basis that the farm
was held on trust for Mr Dring, and Roythornes had been negligent
in failing to investigate the beneficial ownership of the farm.
They included a paragraph referring to these communications in
their amended Particulars of Claim.
Over a year later, Mr Pola issued an application claiming that the
paragraph and any references to it should be struck out on the
grounds that it referred to privileged information and he had not
waived privilege.
The Daughters defended the application on the basis that:
- The information was not privileged as against Mrs Cooke and her estate (ie the Daughters) because Mrs Cooke was a beneficiary of the estate; and
- Even if the information in question was privileged, that privilege had been waived by Mr Doubleday/ Mr Pola.
The Judge identified the key issues as follows:
- Were communications between the executors and Roythornes privileged as against Mrs Cooke and her estate?
- Did Mr Doubleday waive privilege?
- Did Mr Pola waive privilege?
- Did the loss of confidentiality mean loss of privilege?
Decision
The Judge dismissed the application, addressing the issues in
turn.
1. Were communications between the executors and Roythornes
privileged as against Mrs Cooke and her estate?
A trustee cannot always assert privilege against the beneficiaries
of a trust. However, if a person wants a trustee to disclose
information to him, he must first establish a prima facie case that
he is a beneficiary of that trust. A trustee can maintain privilege
against a person who has only an arguable claim to be a
beneficiary.
The Daughters claimed that Mrs Cooke was a beneficiary because she
was named in Mr Dring’s codicil regardless of whether Manor
Farm formed part of his estate. However, the Judge found that in
order for the Daughters to succeed on this issue, they would need
to make out a prima facie case that Manor Farm was held on trust
for Mr Dring and thus formed part of his estate (which they had not
done). It was not enough that Mrs Cooke was named in the
codicil.
2. Did Mr Doubleday waive privilege?
The general rule is that where clients instruct a solicitor
jointly, a single client cannot unilaterally waive privilege. Mr
Pola argued, therefore, that Mr Doubleday could not waive privilege
without his consent.
The Daughters contended that Mr Doubleday was able to waive
privilege because of the legal principle that an act of one
executor is binding on all the executors (this differs from the
position for trustees who must act together). Mr Pola argued that
they were acting as trustees, rather than executors, at the time
the advice was taken.
The Judge found that the advice was taken as executors not trustees
and that the ‘deeply entrenched’ principle for
executors applied and displaced the general rule regarding waiver
of privilege. Therefore, in circumstances where executors instruct
solicitors jointly, it is possible for one to waive privilege
unilaterally.
3. Did Mr Pola waive privilege?
The Daughters argued that even if Mr Doubleday did not waive
privilege, Mr Pola did. His letter set out the substance of the
advice and relied upon it, even offering to provide the documents
if required.
Mr Pola argued that, because he did not have legal representation,
he was unaware of his rights at the time he wrote the letter and
could not, therefore, waive privilege. He also maintained that
although case law suggests privilege can be waived by accident,
this applies only at trial or during disclosure and it cannot, in
general, be waived unintentionally.
The Judge did not accept that privilege could be waived only where
the person entitled to it is aware of his rights. He said that once
privileged material is disclosed, even by accident, inadvertently
or where there is no intention to do so, it is lost, regardless of
the circumstances. Therefore, Mr Pola would have waived privilege,
even if Mr Doubleday had not already done so.
4. Did the loss of confidentiality mean loss of privilege?
The Judge noted that confidentiality is a precondition for
privilege and, in the circumstances, it was hard to see how
privilege could be sustained. The Daughters already had the
documents in question and that had been included in Mr
Doubleday's list of documents. In the absence of a successful
application for injunctive relief, the documents should be included
in the bundles for the forthcoming trial. If the documents were to
go before the trial judge, it would not be right to strike out the
paragraph from the Particulars of Claim.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
