The High Court ruled that most of the disputed documents it inspected in a company share dispute were protected by legal professional privilege, but that a letter already sent to the plaintiff and a Statement of Claim had to be disclosed.
Mr Justice R. Haughton delivered the judgment on 26 February 2016. The application concerned claims of privilege over documents sought in discovery before the plenary proceedings were due to be heard. The court had already made orders on other discovery applications on 19 February, leaving the privilege issue for determination.
Carlo Tassara Assets Management S.A. claims that a €2 million loan to Éire Composites Teoranta was assigned to it in 2008 and that it became a shareholder. The company and the other defendants dispute the assignment and the claimed share transfer. They also assert that the loan was converted into shares in 2014 and that a “Drag Along Option” was used to transfer all the company’s shares to the fifth defendant. The plaintiff challenges those steps. The judgment did not decide the underlying disputes.
The plaintiff argued that, as a shareholder, it should be able to see legal advice obtained by the company about the actions it challenges. The defendants argued that litigation had been anticipated from early 2014 and that the communications were confidential legal advice or were created for litigation.
Justice Haughton said advice obtained to help a company decide whether to take actions that may later be challenged could, in principle, be discoverable by a shareholder with a joint interest in that advice. But he found that hostilities leading to this litigation were evident by February 2014. Advice obtained after the parties’ interests had become opposed, for the purpose of anticipated litigation, could remain privileged even if the disputed corporate steps were formalised later.
The judge also noted that the plaintiff sought damages against the company, so the company was more than a nominal defendant. He did not determine whether the plaintiff had been validly registered as a shareholder; for the privilege issue, he considered the plaintiff’s case on the assumption that it could establish shareholder status.
After inspecting the documents supplied to the court, Justice Haughton held that an email of 14 May 2014 and its attached 12 May letter were not privileged because the letter had been sent to its addressees and the covering email contained no legal advice. He also held that a Statement of Claim attached to an email of 26 January 2015 was not privileged, although the email itself was.
The court held the other documents it had inspected privileged, including communications concerning a draft letter, later emails about the disputed transaction, and a proposed settlement communication. It directed that the unprivileged material be disclosed and returned the inspected copies to the first defendant’s solicitors. The judgment records that two documents listed in the discovery schedules were not provided for inspection, so it did not rule on those documents.