HT02501 & HT04103
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND COMMERCIAL COURT
Royal Courts of Justice
Strand
London WC2
B E F O R E:
HIS HONOUR JUDGE TOULMIN CMG QC
HT02501 | |
LFEPA | (CLAIMANT) |
-v- | |
HALCROW GILBERT & CO LTD | (DEFENDANT) |
HTO4103 | |
HALCROW GILBERT & CO LTD | (CLAIMANT) |
-v- | |
D G JONES | (DEFENDANT) |
Tape Transcription of Smith Bernal WordWave Limited.
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(Official Shorthand Writers to the Court)
MR M WIELICZKO (instructed by Winyard Fearon) appeared on behalf of LFEPA
MISS C DOERRIES (instructed by Mayer Browne Rowe & Maw) appeared on behalf of HALCROW GILBERT
MR CANTLE (instructed by Kennedys) appeared on behalf of D G JONES
J U D G M E N T
JUDGE TOULMIN: This is an application by the defendants, referred to collectively as Halcrow, for specific disclosure of a report by Mr Pickavance dated 30 August 2002 prepared for the London Fire and Emergency Planning Authority ("the Authority"), together with Mr Pickavance's working documents associated with the report, a topic which I will deal with at the end of the judgment. Disclosure is resisted primarily on the grounds of legal professional litigation privilege, although in the course of argument legal advice privilege was also relied upon. Mr Pickavance's transcripts, tapes and notes which relate to the Pickavance report are included in the working documents for which application is made.
Put shortly, Halcrow claims that the Pickavance report is not privileged because: (1) the dominant purpose of the report was not for use in litigation but rather, as it was told repeatedly by the Authority, the dominant purpose was to carry out a project audit on the overspend on the contract and delay in its completion, this report being required by the elected members of the Authority; (2) in the alternative, if I hold that the report would normally have been privileged from disclosure, it is argued that the Authority is deemed to have waived its claim to privilege or is estopped from claiming privilege where (a) the request was put on a basis for which privilege could not be claimed and the real purpose was deliberately concealed from Halcrow and (b) when the document contains, and its conclusions are based on, evidence obtained from Halcrow only by suppressing the purpose for which the evidence was required; (3) the Authority had in any event lost the privilege because it had chosen to disclose the witness interviews and use evidence from parts of the Pickavance report for which privilege was generally claimed, and in doing so it had lost any claim for privilege on the whole document. Halcrow say that it is not possible to sever the disclosure of the interviews and documents from the Pickavance report itself.
The Authority says in response that the Pickavance report is privileged because the dominant purpose of the report was for use in litigation against Halcrow and at least some of the contractors. The Authority supports the case by saying that Halcrow well knew that the contract had suffered substantial delays and overrun on costs and that legal proceedings were contemplated, and Halcrow also must have known that the report would be used in legal proceedings. The Authority also claims that the interviews (for which privilege has not been claimed) are separate from the Pickavance report and that Halcrow's senior employees in co-operating in these interviews did no more than they were contractually bound to do. In final submissions the Authority seemed to accept that the interviews with Halcrow's senior employees on the project had a dual purpose, but this is said by the Authority to be irrelevant. In any event, the Authority maintains that the dominant purpose was for use in litigation, even if a subsidiary purpose may have been the audit required by the elected members.
The Authority also leaves open the claim for legal advice privilege on the basis that it was an integral part of Winyard Fearon's report, Winyard Fearon being the authority's solicitors. Halcrow disputes this and says that a report which was commissioned and written in circumstances which were not privileged does not become privileged by being appended to legal advice. Legal advice privilege cannot be claimed for communications between a client and third party.
The law
In Three Rivers DC v Bank of England (No 5) [2003] QB 1556 at 1561, Longmore LJ, in a judgment of a court consisting of himself, the Master of the Rolls and Sedley LJ, set out the boundaries of the two distinct areas of legal professional privilege, namely litigation privilege and legal advice privilege. In relation to litigation privilege he said:
"It is clear on the authorities that documents emanating from or prepared by third parties or employees of a party are covered by the principle of 'litigation privilege' if prepared with the dominant purpose of use in existing or contemplated litigation."
This he contrasted with legal advice privilege, viz privilege in relation to legal advice that is not founded on the existence or contemplation of litigation. He noted that the reason for the distinction was that in In re L (a Minor) (Police Investigation: Privilege) [1997] AC 16, the House of Lords decided that:
" ... litigation privilege is essentially a creature of adversarial proceedings and thus cannot exist in the context of non-adversarial proceedings."
Guidance relevant to this case was set out by Lord Denning MR in Buttes Gas v Hammer (No 3) [1981] QB 223 at 243, cited at page 1575 of Longmore LJ's judgment:
"Reports made by agents or employees to employer. Reports made by employees to their employers or by agents to their principals are not privileged unless they satisfy, and are privileged if they do satisfy, the conditions already set out, that is to say they must be reports made for the purpose of being laid before the party's legal adviser for the purpose of obtaining his advice in connection with the anticipated or pending litigation."
At page 1583 Longmore LJ emphasised that:
"The question of dominant purpose is a matter for a court to determine after consideration of the relevant evidence."
In Waugh v British Railways Board [1980] AC 521, the leading case on legal professional privilege, the House of Lords had been concerned with whether an accident report, stated to be for the purpose of enabling the board's solicitor to advise the board, was entitled to litigation privilege. The board resisted disclosure on the ground that one of the principal purposes of the report was so that it could be passed to the chief solicitor to enable him to advise on his legal liability and if necessary to conduct the board's defence to the legal proceedings. At page 533 Lord Wilberforce reached a conclusion on the law with which the other law lords agreed:
"It appears to me that unless the purpose of submission to the legal adviser in view of litigation is at least the dominant purpose for which the relevant document was prepared, the reasons which require privilege to be extended to it cannot apply."
The court held that where there was a dual purpose for the report, it could not be said that the dominant purpose was for advice in relation to litigation and the report should be disclosed. The court observed that the fact that the report had been sent to the legal adviser for his advice was not conclusive.
The following cases illustrate the principles that (a) legal advice privilege is confined to legal advice from lawyers and (b) in relation to legal advice for litigation, the privilege is wider and can include documents brought into being by third parties, provided that the dominant purpose of such documents is to obtain legal advice as to whether a claim can be made or defended in litigation.
In Price Waterhouse v BCCI Holdings [1992] BCLC 583 at 590, Millett J explained his reasoning thus:
"Given that the dominant purpose of the investigation was to establish the facts necessary to enable BCCI's financial position to be determined, documents brought into existence in the course of the investigation did not in my judgment attract legal professional privilege because legal advice might be necessary in order fully to evaluate the financial implication of the facts. The obtaining of legal advice is not an end in itself. To attract privilege it must be for the purpose of actual or contemplated proceedings."
On the other hand, in Re High Grade Traders Ltd [1984] BCLC 151, a claim to privilege was made in respect of reports obtained by insurers who were suspicious of the circumstances attending a fire on the premises of the insured. Oliver LJ held that the dominant purpose of the inquiries was to find out the cause of the fire on the basis of which legal advice would be obtained as to whether claims should be made or defended.
In Plummers v Debenham Plc [1986] BCLC 447 Millett J had to consider at what stage advice could be said to have come into existence for the purpose of litigation. In reaching his conclusion he relied on a passage from Oliver LJ's judgment in Re High Grade Traders Ltd:
"It is I think clear that if litigation is reasonably in prospect, documents brought into existence for the purpose of enabling the solicitors to advise whether a claim shall be made or resisted are protected by privilege, subject only to the caveat that it is the dominant purpose for their having been brought into being."
In Plummers v Debenhams, Millett J also considered the question of whether privilege can be lost. He said at page 458:
"If privilege is to be successfully claimed for material based on information obtained from the other party that contemplated litigation, it is argued that full disclosure of the purpose for which that information is required should be made. I assume without deciding it that it is not open to a party to litigation to withhold production of a relevant document by claiming that the purpose for which it was brought into existence was to obtain legal advice in connection with contemplated litigation when that purpose was deliberately concealed from the other party and when the document contains, and its conclusions are based on, evidence obtained from the other party by suppressing the purpose for which it was required."
Although Millett J suggests (but does not decide) that litigation privilege may be lost if a party is actively misled, in Plummers v Debenham he affirms the principle that short of this a party is not bound to warn another party that litigation is in prospect:
"I can see no good reason in logic or principle for requiring a party to warn the other party that he is contemplating a claim, rejecting his demand or for restricting the privilege to documents obtained or brought into existence only after such a warning has been given. There is no trace in any of the authorities of such a requirement and I decline to introduce it."
In Plummers v Debenham Millett J also suggests that an important consideration may be whether or not the party obtaining the information was entitled to it as a matter of right. He ends his judgment at page 459 of the report with a passage heavily relied upon by the Authority:
"The evidence they obtained was evidence to which the defendants were entitled as a matter of right and without disclosure of the purpose for which it was required."
In relation to the separate question of waiver of privilege on the ground that where part of a document has been disclosed voluntarily, the privilege has been waived and the rest of the document must be disclosed, Halcrow relies on a passage in the judgment of Mustill J in Karteria v Atlantic [1981] Com LR 138 at 139:
"One can see a rule of positive law being stated in the interests of justice that where a party chooses to deploy evidence which would otherwise be privileged, the court and the opposition must in relation to the issue in question be given the opportunity to satisfy themselves that they have the whole of the material and not merely a fragment."
This principle is not to be seen in opposition to that of Saville J in Bank of Nova Scotia v Hellenic War Risks (Bermuda) Ltd Note No 2 [1992] 2 Lloyd's Rep 540, approved by Hoffman LJ in GE Capital Group v Bankers Trust [1995] 1 WLR 172, where Mustill J held that the disclosure of the unprivileged part of a document was not a waiver of privilege of the rest, even though both dealt with the same subject matter.
The application of these two principles depends on the context. This is illustrated by R v Secretary of State for Transport ex parte Factortame [1997] 9 Admin LR 591 where the Court of Appeal held that in deciding the question of whether or not waiver of privilege for one part of a document necessarily implied waiver of the whole document depended on whether the document or the part of the document that was disclosed could be separated or severed from those documents or parts of documents for which privilege was claimed.
Although the case has been put primarily on the basis of litigation privilege, the Authority introduced late in the hearing the possibility that the Pickavance report was covered by legal advice privilege. In Three Rivers DC v Bank of England [2003] QB 1556 at 1557 Clarke LJ set out the ambit and rationale of legal advice privilege as follows:
"One ought not to lose sight of the public interest that the court, if possible, should come to correct judgments on the basis of all relevant material. Of course legal advice privilege must prevail over this consideration to an appropriate extent. It is a fundamental right which can be overridden only by the express words of a statute or by necessary implication: see R (Morgan Grenfell & Co Ltd) v Special Commissioner of Income Tax [2003] 1 AC 563 but it is a privilege possessed by the client in relation to no other adviser. The judges of the 19th century thought that it should only apply to communications between client and adviser. That is the proper compass of the privilege. It is not in our judgment open to this court to extend the privilege, even if we should."
The Authority says that privilege may arise because the Pickavance report was attached to advice given to the Authority by its solicitors.
I have reached the following conclusions on the law relevant to the issues in this case.
Legal advice privilege can only arise in relation to legal advice given by a legal adviser to the client: see Three Rivers DC v Bank of England [2003] QB 1557.
Litigation privilege arises in relation to documents brought into existence whether by the legal adviser or otherwise for the dominant purpose of advice in relation to actual or contemplated litigation: see Waugh v British Railways Board [1980] AC 521 at 533.
Litigation can be said to be reasonably in prospect in relation to documents brought into existence for the purpose of enabling solicitors to advise whether a claim should be made or resisted: see Re High Grade Traders Ltd [1984] BCLC 151.
There is no affirmative duty on a party in requesting information from another party to disclose the purpose for which it is required: see Plummers v Debenhams [1986] BCLC 1447.
It is a relevant finding in this case, and I hold, for the reasons set out by Millett J in Plummers v Debenhams, that if a party deliberately misleads the other party as to the purpose for which information is required, and that party provides the information, the requesting party cannot thereafter maintain the privilege.
I leave open the question of whether the principle in (5) applies even where a party is entitled to the information by reason of contract, ie in relation to some or all of the documents which were disclosed voluntarily.
When a party chooses to waive privilege to part of a document, it may be waiving privilege to the whole document unless the part for which privilege has been waived can be severed from the rest of the document.
The Facts
This dispute arises out of claims by the Authority against Halcrow in relation to the construction of the Authority's fire house at its Southwark training centre. Work on site started in 1998 and should, under the terms of the contract, have been concluded in about 12 months, at a cost of about £7.6 million. In four years, ie to the middle of 2002, the costs had escalated to a projected cost of £14 million. I am told that the project still has not been completed, although I have been given no details.
Halcrow was retained by the Authority as its project manager. Mr Tovey, as Technical Director, was Halcrow's project director on the project. It was of course known to Halcrow by late 2001 that the project was late and over budget. Mr Tovey, who was an impressive witness whose evidence I accept, denied in evidence that Halcrow knew that the Authority had a current claim against it. He said in oral evidence that the highest the case could be put against Halcrow at the end of 1991 was that the Authority might in due course have a claim which, if successful, would reduce Halcrow's level of fees. He was asked specifically whether by late 2001 Halcrow had notified its insurers. He said that in 2001 Halcrow had notified its insurers as a precaution about one error relating to the control room. The value of the potential claim was £25,000 and the matter had been resolved earlier in 2001, well before the events with which I am concerned and about one year before Mr Pickavance's report in August 2002. In relation to the lengthy interviews which took place with Mr Pickavance, Mr Tovey said that had he known that the Authority was actively contemplating proceedings against Halcrow, he would not have allowed the interviews to have taken place.
Ms Lawrence is the Deputy Head of Legal Services of the Authority. Her evidence was less impressive. She said that in December 2000 the district auditor reported. Thereafter a technical audit was instituted by the Authority. Ms Lawrence' evidence in her witness statement was that "technical audit" was a shorthand term within the Authority to describe the whole process of investigating claims against Halcrow and the contractors. This evidence was not supported by her oral evidence, where she gave it the much wider meaning of "an investigation into what had gone wrong". She also said in written evidence that the principal reason for the Pickavance report was to advise the Authority in claims against Halcrow and possible claims against some of the contractors. The very subsidiary purpose was to assist the Authority to understand the reasons for the overrun in time and cost, ie the reason given to Halcrow.
In oral evidence she said that Pickavance was asked to do a number of things. She said that the Authority wanted to know the cause of the delay and the cost. They were also concerned at the overspend and other budgetary issues and were asking questions as to whether they should go on with the project. She agreed that the Authority would need to understand what had happened, even if no claim was brought.
At a meeting of the Authority on 13 December 2001 the Authority considered a report by the Head of Property. The summary indicated that:
"Part 1 of this report updates members on commercially confidential aspects of progress on the fire house project. Part 2, which includes in particular advice and recommendations from the Head of Legal Services presents a report by external advisers (Winyard Fearon) who were commissioned to undertake a technical audit of the project and recommends the Authority proceeds in accordance with their advice."
The Head of Property then recommended:
Winyard Fearon be instructed to provide the further report they recommend, based on a full review of the project documents obtained from Halcrow, assisted by AR Pickavance Consulting at an estimated cost of £230K (including counsel's fees)."
Item 21 of the minutes of the meeting indicates that this recommendation was agreed. It was one of number of recommendations which were adopted. Numbers 3-7 and 13 were not disclosed in these proceedings.
When it came to this litigation, EC Harris were instructed as experts in project management. I was told that Mr Pickavance was assisting in some expert capacity which was not made clear to me. Mr Pickavance is, so I am told, a claims consultant.
On 17 January 2002, after a meeting on 14 January 2002, Mrs Barbara Riddell, Director of Resources, wrote to Mr Tovey:
"As the fire house project moves towards completion, and against the backdrop of the major time and costs overrun and the various claims presented to the Authority by the contractors, the members of the Authority have called for a full audit of the project. Officers need to be in a position to explain to members in detail precisely why the project has overrun on cost and time to the extent that it has. For this purpose, there is a considerable amount of core documentation which the Authority needs Halcrow to supply to my office."
There followed a detailed request for documents. The letter ended:
"The Authority has commissioned a consultant, Roy Pickavance of AR Pickavance, to assist it in the project audit. It may be helpful for you to liaise with Roy Pickavance directly concerning the provision of documents and I will ask him to make contact with the person you nominate as to the contact point."
I am told by Ms Lawrence that the letter and all subsequent letters from the Authority to Halcrow were drafted by Winyard Fearon, Solicitors, on whose legal advice the legal department of the Authority was totally reliant. This letter gives no indication that solicitors were involved. The Authority now says that the letters were untrue and that the dominant purpose of obtaining the information was to obtain evidence in claims to be made by the Authority against Halcrow and others.
There is a gap in the correspondence which has been disclosed, including a letter dated 28 February 2002 from Ms Riddell to which Mr Tovey replied on 14 March 2002. Paragraph 6 of Mr Tovey's reply, dated 14 March 2002, indicated that Halcrow was aware that there was the possibility of litigation, although not as a result of Mr Pickavance's audit. He said:
"Bearing in mind the current marketplace whispers which indicate LFEPA have approached several of the large London law firms with a view to suing all those involved on the fire house contract, I do not see the contractors will suddenly change their view and produce information now."
This letter is relied on by the Authority as evidence that Halcrow knew that Mr Pickavance's investigations were being carried out by the Authority for the purpose of use in litigation. Mr Tovey explained to me in evidence that this was not the case. I accept his evidence.
Mr Tovey wrote again on 19 March 2002 to enquire the purpose of Mr Pickavance's investigation:
"Before his visit I would be grateful if I could have a copy of Mr Pickavance's terms of reference and also a definition of the contractual relationship between Mr Pickavance and Halcrow. It would also help me greatly if I could have a brief statement from yourself indicating the expected result from Mr Pickavance's involvement, explaining how he is adding value to the project such that I can assure my team that his involvement is beneficial and that it is not just another bureaucratic hurdle in the way of progress."
I accept, having seen Mr Tovey give evidence, that this letter taken at its face value is a genuine and co-operative request for information. It requests reassurance as to the value of Mr Pickavance's investigations. It does not indicate a knowledge that Mr Pickavance's report will fom the basis of a claim against Halcrow or other contractors.
Mrs Riddell's reply, dated 25 March 2002, answered the points in Mr Tovey's letter as follows:
"I have already explained the position to you in my first letter asking for the documents dated 17 January 2002. I would repeat what is said there, that the members have instructed that a full audit be carried out because of the extensive time and money overrun. This audit has been called for by the elected members and concerns the spending of public funds. I believe that it is important that Halcrow as an organisation that regularly seek to undertake public work do not treat such an audit as 'a bureaucratic hurdle'."
It is noteworthy that the letter not only referred to a full audit, but explained in detail what this means.
Mrs Riddell wrote to Mr Tovey again on 11 April 2002 in a tone of exasperation at not having received Halcrow's documents on the fire house project. She explained again at the outset:
"This is to enable Mr Pickavance to carry out an audit of the project for members. This letter is prompted by my concern that unfortunately Mr Pickavance does not have the paperwork he needs."
Towards the end of the letter she drove home the point:
"All of the files and working documents need to be copied for Mr Pickavance by the end of April at the very latest. I propose to report to members that that will now be done ....
Since Mr Pickavance's aim is to put himself in a position where he can explain to members the reason for the cost overrun and for the project taking so much longer than originally envisaged, it is necessary for him to examine all working papers in relation to variations and the claims made by the contractors for extensions of time and money .... "
On 19 April 2002 Mrs Riddell wrote to Mr Tovey about various categories of documents. The letter started by reiterating the purpose of the enquiry:
"I am writing on the subject of the documents that Mr Pickavance has been reviewing as part of the audit of the fire house project that the members have instructed should be carried out."
The letter went on to say, in relation to the valuation of variations and monetary claims and extensions of time:
"Additionally it would be helpful if the appropriate personnel could be available at the time of the inspection to explain the filing structure. Following the inspection Mr Pickavance may well have questions as to the evaluations undertaken and at that stage I will ask you to identify an individual who could assist Mr Pickavance by answering those questions. Although the above comments are in the context of the VIRSE contracts, the Authority and Mr Pickavance will need to understand the situation in relation to these issues in respect of all the other contracts."
Mr Tovey said in his witness statement, and I accept, that on the basis of the assurances that the Authority gave that Mr Pickavance's audit was no more than a technical audit, he agreed to allow Mr Pickavance to carry out extensive interviews with various of Halcrow's senior employees who had been involved in the project.
It is clear from the transcript that even after he had agreed to allow Mr Pickavance to carry out the interviews, Mr Tovey sought to confirm the basis on which the interviews were being undertaken with Mr Pickavance. At the first interview, which was with Mr Tough on 17 July 2002, Mr Tovey asked Mr Pickavance:
"For the record, may we define, if you like, your terms of reference?"
Mr Pickavance answered:
"My terms of reference are to do a technical audit. I am trying to understand why the project, what has caused the project to be overspent by the amount that it has been overspent and what has caused the the project to be delayed by the amount it has been delayed."
As I have already said, I accept Mr Tovey's evidence that had he been aware that the Authority was carrying out the interviews for the purpose of use in legal proceedings against Halcrow, he would not have let the interviews proceed in the manner in which they did proceed.
If I was to conclude conclude that the dominant purpose of the report was for use in litigation, I should also be forced to conclude that on the advice of its solicitors, Winyard Fearon, the Authority and Mr Pickavance made representations to Halcrow which were, at best, grossly misleading.
Mr Pickavance carried out six interviews with Halcrow employees, the first being on 17 July 2002 and the last two being on 15 August 2002 and 11/12 September 2002. The last interview was after the date of publication of Mr Pickavance's report. Those interviews were substantial. The number of pages of transcript run to 133, 212, 149, 43, 76, and 143 pages respectively, making a total of 756 pages of which 143 pages were relevant to the last interview. It has not been suggested that the report was not based to a significant extent on these interviews.
There is no suggestion that the interviews themselves were conducted unfairly. Ms Lawrence said in oral evidence that Halcrow must have realised that Mr Pickavance was not carrying out a technical audit but was gathering information for use in legal proceedings. She admitted that the Authority had been "economical with the truth" in what they told Halcrow at the time.
On 30 August 2002 Mr Pickavance produced his report. It has at the bottom, "Privileged: produced under the instruction of Winyard Fearon in contemplation of litigation". This privilege is maintained, although I have been provided with a brief extract from the first page of the report.
The brief in paragraph 1 is as follows:
"I have been asked to undertake a technical audit to ascertain if possible what has caused a one-year construction project with a construction cost of some £6 million as set out below to increase in time to a little short of four years and with a projected cost excluding fees in the order of £14 million.
It is understood that this report is to be provided as an appendix to the Winyard Fearon (WF) report and therefore it does not include the type of introduction that would normally be required.
Additionally it does not set out the basis of the contractual matrix since this has already been discussed in WF's interim report and is discussed further in the latest WF report."
By a letter dated 6 November 2002 the Authority gave formal notice through Winyard Fearon that it intended to make claims against Halcrow. The 24-page letter outlined the nature of the claims that were to be made. EC Harris, not Mr Pickavance, was retained as the Authority's expert in relation to the relation to the claims against Halcrow. Ms Lawrence accepted that for the purpose of professional negligence litigation it was necessary to have an expert in the same discipline as the party against whom the allegations were being made. Mr Pickavance was a general consultant and would not qualify as an expert in a claim against Halcrow or the contractors.
By a letter dated 24 March 2003 the Authority notified Halcrow that it would be a further month before it was in a position to provide full draft particulars of claim. The Authority says that the fact that they were able to issue a detailed letter in such a short period of time after the publication of the Pickavance report is evidence that the predominant purpose of the report must be in connection with litigation, and that therefore the report is privileged.
On 29 May 2003 the Authority served Draft Particulars of Claim. The letter from Winyard Fearon said:
"The Particulars that are enclosed are the product of a substantial review and investigation of the project and Halcrow's performance as carried out by the Authority's advisers." (quotation not checked)
That letter referred to the letter dated of November 2002 to Halcrow as "the initial letter".
On 12 August 2003, in response to a letter from Halcrow, the Authority claimed for the first time that the review undertaken by Mr Pickavance was done in contemplation of legal proceedings and thus subject to legal professional privilege. It is accepted that no privilege attaches to the interviews themselves.
On 1 September 2003 Halcrow's solicitors wrote to Winyard Fearon explaining why they did not understand the claim of privilege.
On 16 September 2003 Winyard Fearon made its formal response on the privilege issue on behalf of the Authority. Winyard Fearon claimed that it was instructed by the Authority in relation to the construction of the fire house. It asserted that the Authority was already contemplating proceedings. It said that Mr Pickavance was engaged by the Authority on the recommendation of Winyard Fearon with
" ... the aim of more precisely ascertaining the overrun in relation to cost and time. This was part of the detailed factual analysis necessary in order to draft the claims against Halcrow."
The letter appeared to admit that if the above was being asserted as being the purpose of the investigation, Halcrow was unaware of it:
"Your letter proceeds on a number of false premises because you were not aware that Mr Pickavance was engaged on our recommendation by the Authority's legal department specifically to investigate the factual position and in circumstances where Halcrow was already appreciated to have very substantial culpability."
In its response dated 24 September 2003 Halcrow's solicitors said that it did not accept Winyard Fearon's assertion that at the time that it was instructed by the Authority in 2001, the Authority was seriously contemplating proceedings against Halcrow and one or more of the contractors, and that litigation privilege could be founded on a recommendation that:
"Mr Pickavance be engaged by the Authority with the aim of more precisely ascertaining the causes of the overrun in relation to cost and time."
Conclusion
In relation to claims of privilege, the onus is on the party asserting privilege to make good the claim. The onus of establishing the claim is therefore on the Authority and not on Halcrow.
In relation to litigation privilege, I must start with the consideration of the Pickavance report. I have not been invited to look at the Pickavance report, but since no claim to the contrary has been made by the Authority I conclude that the report was based on evidence provided in substantial part by the extensive interviews with Halcrow's senior employees on the project to which I have referred. Since the privilege is being claimed by the Authority, the onus is on the Authority to prove otherwise. They have made no attempt do so.
I am satisfied that whilst Halcrow may have been under a contractual obligation to provide the Authority with some documents and generally to co-operate with the Authority, it was not under an obligation to tender its senior officials on the project for detailed cross-examination. In doing this Halcrow went well beyond its contractual obligations. I make no finding as to whether it went beyond its contractual obligations in relation to disclosure of some of the documents, since this issue was not argued in any detail.
With these preliminary findings I turn to the main issue of the purpose of the Pickavance enquiry and report. It has been suggested by the Authority and by Ms Lawrence in her witness statement that "technical audit" meant "legal audit for the purpose of litigation", and that therefore it was clear that the dominant purpose was one for which the Authority was entitled to claim privilege. I reject this argument. As Ms Lawrence explained to me in oral evidence, and I accept, "technical audit" was a shorthand term within the Authority for saying that something had gone wrong. As she put it, "The Authority wanted to know the cause of delay and the cost." I am satisfied on the evidence that there were two aspects of this. First, the elected members of the Authority wanted a report on what had gone wrong and whether the project should continue. Secondly, in due course, they wished to have a report that might lead to legal proceedings against one or more of Halcrow and the sub-contractors. The project was still 18 months from completion and the immediate task of Mr Pickavance was that set out by Mrs Barbara Riddell to Mr Tovey dated 17 January 2002. I reject, therefore, the Authority's claim that the dominant purpose of the report was for the purposes of litigation.
I find that the immediate purpose was to investigate the cause of the delay and increased cost of the project, to provide answers for the members and to provide an answer to the question of whether the Authority should continue with the project or not. The more distant purpose was to obtain an analysis which would be helpful in the event of litigation. I note that although the letter dated 6 November 2002 was served two months after the Pickavance report, it was described as an "initial letter". The detail which is required for litigation was not provided until 29 May 2003, nearly ten months after the Pickavance report. By then EC Harris had been instructed as experts for a considerable time.
I go on to consider whether the privilege could in any event be properly claimed by the Authority in the light of the correspondence between the Authority and Halcrow which preceeded it. In my view, having heard the oral evidence, I am satisfied that if I had concluded on the evidence that the dominant purpose of obtaining the information on which the Pickavance report was based was for the purpose of enabling solicitors to advise on whether a claim against Halcrow should be made, I would have concluded that the privilege had been lost. On the hypothesis that the report was prima facie entitled to litigation privilege, the Authority is estopped by representation from asserting the privilege by falsely representing to Halcrow that the purpose of the investigation was one for which privilege could not be claimed. Halcrow relied on the representation in agreeing to allow its employees to give detailed evidence to Mr Pickavance which otherwise it would not have done or been obliged to do. Put in the alternative, by making the representation on which Halcrow relied, they waived the right to assert the privilege.
The case is also put by Halcrow on the basis that the interviews and disclosure cannot be severed from the report and that disclosure of the tapes of the interviews by the Authority constitutes a waiver of the privilege in relation to the report. This does not seem to me to be the case. Although I have found that the report is not privileged for other reasons, I conclude tentatively that, taken in isolation, circumstances could arise where a party agreed to give interviews on the basis that the interviews would be disclosed but the subsequent report would remain confidential. Put another way, in disclosing the interviews, a party would not necessarily be manifesting an intention to waive privilege for a report which was otherwise privileged. For the reasons which I have given, this issue does not now in fact arise in this case.
I conclude therefore that the Pickavance report must be disclosed to Halcrow. The present application also refers to disclosure of working documents associated with the report. In my view it is premature to consider the question of their disclosure. I understand that this view, expressed in the course of the hearing, is accepted by Halcrow.