The High Court has refused an application by Brendan O’Halloran and Patrick O’Halloran to inspect documents over which Aiden Murphy, the official liquidator of TSON Limited, claimed privilege.
In a ruling delivered on 29 July 2016, Mr Justice David Keane concluded that documents numbered 1–5, 11, 13, 14, and 22, and 60–86 were protected by litigation privilege, without prejudice privilege, or both. He therefore refused the inspection application.
Murphy was appointed official liquidator of TSON by court order in September 2011, following a petition by Allied Irish Banks plc. In separate winding-up proceedings, he is seeking orders that the company’s directors be personally liable for its debts, along with declarations concerning the company’s books and records and the directors’ conduct. He is also seeking disqualification orders or, alternatively, restrictions. Those claims were not determined in this ruling.
The dispute before Keane concerned documents listed in Murphy’s discovery affidavit. The respondents challenged his privilege claim, pointing out that some documents predated by more than two years the July 2013 motion seeking liability and director-related orders. They also said the basis of the claim was unclear. Murphy’s solicitors said privilege was claimed for legal advice and litigation in contemplation, including potential proceedings or other recovery options involving the company’s creditors and related companies.
The judge applied the test that litigation privilege covers communications created for the dominant purpose of gathering evidence for use in adversarial proceedings that are reasonably contemplated. He also considered without prejudice privilege, which applies to communications made in a genuine attempt to settle a dispute on the understanding that they would not be disclosed if negotiations failed.
Keane found documents 1–5 were confidential communications with a third party created for use in the contemplated winding-up proceedings. Documents 11, 13, 14 and 22 involved a genuine attempt to resolve a dispute that culminated in the winding-up petition, preparation for reasonably apprehended litigation, or both.
He found documents 60–65 and 66–86 recorded communications with a third party whose dominant purpose was assisting the preparation or conduct of the winding-up proceedings. The ruling records that Murphy was no longer maintaining privilege over document 49, which had either been provided or was to be provided to the respondents.
The decision concerns inspection of the specified documents. It does not decide the liquidator’s underlying claims against the respondents.