Philip Donnelly & Ors v Weybridge Construction Ltd

I have before me two applications for specific disclosure. Both the applications are made by the Defendant. One is made against the Claimants and the other is made against the Part 20 Defendants. They are both dated 10^th March 2006.

The underlying disputes in this action arise out of the development of a building called The Icon in Battersea High Street. The 13 Claimants all agreed to buy apartments in The Icon and paid deposits of £25,000 per flat. There were then disputes about the standard and nature of the completed apartments and, as a result, the Claimants did not go ahead with the completion of the apartments. Their deposits were then forfeited. The Claimants now bring claims against the Defendant developer/contractor in respect of those deposits and make other claims for damages for breach of contract.

A complicating factor is introduced by the fact that, in relation to the sale/marketing of The Icon, the Defendant acted in a joint venture with the Heavenly Group. This is a group of companies in which two individuals, Mr. Brohoon and Mr. Carley, appear to have an interest. In the litigation there are major arguments as to the nature of the role played by Mr. Brohoon and Mr. Carley, Heavenly Group, and Brohoon & Associates, being the entities that make up the Part 20 Defendants. Although they were acting in a joint venture with the Defendant, the Defendant complains that on various occasions the Part 20 Defendants appeared to be acting on behalf of the Claimants. This introduces major complications into the resolution of the issues between the Defendant and the thirteen Claimants, particularly in relation to what was said about the nature and standard of the work to be completed at The Icon.

I propose to go through each of the items sought by way of specific disclosure in what I am sure is a laborious fashion, so as to ensure that I deal fully with each of the relevant categories of documents. Before I undertake that task, however, I should point out that, as against the Claimants, an order is sought that each of the Claimants give full disclosure statements, one from each of them, and that those are individually signed. Miss Harrison, who appears on behalf of the Claimants, accepts that that should be done, and therefore I require those statements to be completed no later than Monday, 3^rd April 2006.

I now turn to the application for specific disclosure and I deal first with the categories of documents sought against the Claimants.

Categories 1 and 2 are described as all documents relating to all property developments introduced to any of the Claimants by the Part 20 Defendants prior to June 2004, and documents relating to all property development transactions entered into between any of the Claimants and any of the Part 20 Defendants before that date. The basis for this application is set out in paras.10 and 11 of the statement of the Defendants’ solicitor, Miss Charity.

The documents in this category are said by Miss Galley on behalf of the Defendant to be relevant to a number of the important issues in the case, in particular the issue as to the nature of the relationship between the Claimants and the Part 20 Defendants. Miss Harrison, for the Claimants, contends that the documents are irrelevant because what matters is the nature of the relationship in respect of this project, not previous projects. She also makes the point that, as she puts it, the categories are “hopelessly wide”.

I accept Miss Harrison’s submissions that these categories are much too widely drawn, and that it would be oppressive to order the Claimants to disclose these documents in this way. I also agree that, as a matter of principle, the documents sought are, or are very likely to be, completely irrelevant because they cannot bear on the nature of the relationship relating to this project.

However, as I made clear in argument, I do consider that the Defendant is entitled to some further information in relation to the prior deals between the Claimants on the one hand and the Part 20 Defendants on the other. After all, in this case, one of the major complaints by the Claimants concerns the changes that were made to what the Claimants say was the contractual specification. The Defendants answer that, at least in part, by saying that those changes were agreed on behalf of the Claimants by the Part 20 Defendants.

In this regard, I note that, in answer to request 24 of a request for further information of the reply and defence to counterclaim, it is pleaded on behalf of the Claimants that they did not deny prior dealings between themselves and the Part 20 Defendants. Their principal point was that Joseph Brohoon was not the agent of the Claimants in the context of agreeing changes to the specification. The pleading goes on:

“It is not necessary or proportionate that each Claimant should provide details of his or her dealings.”

I have concluded that it would be a proper order for me to make, pursuant to my case management function, to require the Claimants to identify for the two years prior to the sales night – so that is going back to 8^th November 2002 – any relationship concerned with property or property development between each of those Claimants and the Part 20 Defendants, with a very brief description of the capacity in which the particular Part 20 Defendant acted – for instance, estate agent, salesman, introducer, or whatever the capacity was. I acknowledge Miss Harrison’s point that that is not a request that has been made before and that may be something that is reflected in the order on costs, but it does seem to me that that is something which I should order, and I do. However, I make it plain that I do not allow the application for specific disclosure in relation to categories 1 and 2.

These are the documents relating to the sales night and the basis for the application can be found in paras.12 and 13 of the statement of Miss Charity. Miss Harrison’s response in relation to this category is to say in terms that such documents as the Claimants have in relation to the sales night have already been disclosed. The documents, including the drawings, the specification and the brochure, have been identified in the Claimants’ list of documents. So too has one invitation to the sales night.

Miss Harrison’s point was that it is not proportionate to require all of the Claimants to see if they have precisely the same copies of these documents. It does not, she says, help in any way in resolving this case. I have come to the conclusion that Miss Harrison’s submissions are correct. It does seem to me that the Claimants have provided the documents that they have in relation to the sales night, and in those circumstances I can see no benefit at all in requiring 13 different Claimants to trawl through their files to see if they have the same copies of the documents which have already been disclosed. I therefore do not allow the application in relation to category 3.

In relation to category 4, these are documents in respect of the construction of The Icon and in particular the changes to the specification. These documents are therefore critical to the issues between the parties. The documents that are sought are described as “all documents and correspondence passing between any of the Claimants and any of the Part 20 Defendants regarding the construction of The Icon, including the specification for The Icon and any changes to the specification”. The short point raised by Miss Harrison is again that all these documents have been provided. Again, the specification is on the list of documents at item 74.

Miss Galley says that this is a category of documents which should be the subject of some additional verification, but I do not accept that. It does not seem to me that there is anything in the documents that I have seen in respect of this category which would alert the court to any suggestion that the Claimants have not, in relation to this category, properly discharged their disclosure obligations. I therefore do not allow the application for further verification in relation to category 4.

In relation to category 5, the application breaks down into two parts. The first part seeks all correspondence between the Claimants and any of the Part 20 Defendants and any third parties concerning either the completion of the sale contracts and/or any on sales of any of the Claimants’ contracts to any third parties.

Again, I hope I made it plain during the course of the argument that, in my judgment, this category was too widely drawn. However, I do accept Miss Galley’s underlying point that at least some of the documents within this category may have relevance. The relevance arises in this way: the Claimants say that they were entitled to rescind the contracts of sale because of the condition and nature of the completed works. That may or may not be right. However, the Claimants have a claim, not only for the return of their deposits, but also for damages for breach of contract as a result of their failure to purchase the apartments. Part of the pleaded defence to this claim for damages for breach of contract is an assertion by the Defendant that the Claimants would not have purchased the apartments in any event because they could not afford to purchase them and were instead looking to sell these apartments on before completion so as to make a profit in that way.

If the Defendant was right about that, and the Claimants were not in a position to complete in any event then, prima facie, that might give rise to a defence to the claim for damages for breach of contract, even if, by itself, it did not give rise to a defence to the claim for the return of the deposits.

Accordingly, therefore, documents relating to the financial position of the Claimants, and whether or not the Claimants could, in fact, complete on the contracts for sale, do seem to me to be relevant in this litigation. It seems to me that this category is encompassed within category 5, although, for the reasons I have given, the general part of category 5 is far too widely drawn.

Accordingly, in relation to this aspect of the application, I allow the application for specific disclosure, but I limit it to all correspondence passing between the Claimants and any of the Part 20 Defendants, or any third parties, in connection with any financial difficulties that the Claimants might have had in completing the contracts of sale, from 1^st January 2004 onwards. I make it plain that in relation to the general element of category 5, I allow the application only on the limited basis set out above, and I reject it on the wider basis that was sought.

The second part of category 5 concerns three specific documents. What is sought at 5(a) are the Claimants’ copies of letters of Brohoon & Associates dated 29^th October 2003 and the responses to that letter. I take the view that these documents are not the proper subject of an order for specific disclosure. That is because the documents relate to events that were happening some time before completion, and it does not seem to me that it would be proportionate to require the Claimants to disclose documents relating to potential completion as far back as October 2003. For the reasons I have given above, such documents as I do consider should be the subject of the order are those from 1^st January 2004 onwards.

The next documents sought under category 5, 5(b), are the instructions, if they are in writing, to which Brohoon & Associates refer in their letter to Cripps Harries Hall, the solicitors acting in England for the Claimants at the time of the purchase. The letter is dated 7^th May 2004. In it Brohoon & Associates say that, “We have been instructed by all the purchasers to refute the completion notices.” It seems to me that, if those instructions were in writing, they would be disclosable, because they would go to one of the main issues in the case, namely the circumstances in which the completion as between the Claimants and the Defendants failed to happen.

The question arose as to privilege. It seemed to me that privilege would not attach to those instructions in any event because Brohoon & Associates were not acting as lawyers and were not therefore giving legal advice. As to the question of litigation privilege, it seems that this may well not be caught by litigation privilege, given the nature of the communication, but in any event it seems to me, for reasons which will become apparent in a moment, that these instructions were given before litigation privilege arose. Accordingly it seems to me that, to the extent that the instructions referred to in the letter of 7^th May are in writing from the Claimants, they should be disclosed.

Finally, there was category 5(c), which are the instructions allegedly sent by the Claimants to Mr. Carley, one of the Part 20 Defendants, and referred to in his letter of 10^th May 2004. It seems to me that those instructions are covered by privilege. It may well be the case that they are covered by legal advice privilege because Mr. Carley was a solicitor and it is said by Miss Harrison that he was acting for these Claimants, who are all based in the Republic of Ireland. In any event, it seems to me that it is appropriate for me to find that litigation privilege arose in this case on or about 6^th May 2004, so they would be protected by litigation privilege in any event.

I get to that date, I hope, relatively simply. Litigation privilege attaches once litigation has become “reasonably in prospect”: see the decision of the Court of Appeal in Re Highgrade Traders [1984] B.C.L.C. 151. In this case it seems to me that that would have been 6^th May, because that was the date on which the completion notices were received by the Claimants from the solicitors acting for the Defendant. The letter which I have also seen from Mr. Carley to one of the Claimants of 18^th May 2004 refers to his hope that the difficulties between the parties could be resolved, but now that was no longer possible as a result of the issue of those completion notices on 5^th May, and received on 6^th May. That seems to me as good an indication as any as to when it could be said that litigation was “reasonably in prospect”.

I understand Miss Galley’s point that Mr. Carley was writing to the Claimants, and it was not clear the extent to which he was acting on their behalf. However, doing my best on the information that I have got, it does seem to me clear that from 6 May onwards litigation could be said to have been reasonably in prospect. Accordingly, the document at category 5(c) should not be the subject of specific disclosure.

Categories 6 and 7 concern the correspondence between the Claimants and Cripps Harries Hall. The basis for this claim can be found in paras.15, 16 and 17 of Miss Charity’s statement. The position is that a large volume of documentation from Cripps Harries Hall is about to be provided to the solicitors acting for the Defendant. When it is provided, Miss Charity will need a chance to go through that material to see what it contains. In the light of the fact that these documents are being provided within the course of the next few days, it seems to me that there is no requirement, as things presently stand, for me to make any order in relation to categories 6 and 7. Miss Galley has made it plain that she does not seek the disclosure of any privileged documents, and whether or not any point is taken as to the completeness or otherwise of these documents must plainly await their provision and any analysis of them.

Accordingly, I make no order in relation to categories 6 and 7, although clearly that is something on which the Defendant can come back to court if it chooses. I also note Miss Galley’s point that, of course, these are documents which could and probably should have been provided earlier. If there is a dispute as to precisely how it is that these documents are being provided now, then it seems to me that that debate goes to costs rather than to the nature of the order that I make.

Category 8 of the documents sought against the Claimants are the letters dated 18^th May. I have already referred to the letter of 18^th May from Mr. Carley to one of the Claimants. It is unsigned, and the request is that the signed versions that were actually received by the Claimants be provided. Miss Harrison says that it cannot be proportionate for those documents to be disclosed, and I respectfully agree with that submission. The document is in play. It is a potentially important document and I have already referred to it. It does not seem to me to be necessary or in accordance with the overriding objective to get the Claimants to provide 13 signed copies. Therefore, I reject the application in relation to category 8.

In relation to category 9, what is sought are the responses to that letter from Mr. Carley. Miss Harrison contends that any responses would be privileged, because they would be responses to Mr. Carley after litigation privilege had arisen. Secondly, and in any event, she says that these responses would not have any bearing on the pleaded issues. It seems to me that both of those submissions are right. I cannot see that the responses to this letter have any impact on the pleaded issues, and in any event, by reason of my finding in respect of 6^th May as being the date when litigation privilege arose, it seems to me that these documents would also not be disclosable.

Finally, there are categories 10 and 11 sought against the Claimants. As far as these documents are concerned, those are the Powers of Attorney and the Letters of Authority referred to in the letter of 18^th May. These appear to relate to the potential instruction by the Claimants of a firm of solicitors called Wakefields in place of Cripps Harries Hall. Again, it seems to me that those documents do not relate to any of the pleaded issues. They are a category of documents which might relate to the assertion of champerty, which has been something raised orally by Miss Galley on behalf of the Defendant, but which is not pleaded. Since it is not a pleaded issue, it would be wrong for me to allow disclosure of documents which may be relevant to it. Therefore, I decline to make an order in relation to category 11.

That, I think, addresses the categories sought as between the Defendants and the Claimants. I now turn to the documents sought by the Defendants against the Part 20 Defendants. Although there is some overlap, regrettably there is also quite a lot of new ground.

These are the same as the documents in categories 1 and 2 as sought by the Defendants against the Claimants. For the reasons which I have already given, it seems to me that those documents are not relevant to the issues between the parties and are, in any event, too widely drawn in their present form. I therefore make no order in relation to categories 1 and 2 that are the subject of this application.

However, just as Miss Harrison helpfully indicated that the Claimants would be prepared to provide the list of further dealings going back the two years before the sales night on behalf of the Claimants, so Mr. Atkins on behalf of the Part 20 Defendants has also kindly indicated that that is something which the Part 20 Defendants would also be prepared to provide. As I have said, it seems to me that that is an appropriate and proportionate resolution of the point raised by the Defendants, and I am grateful to both Miss Harrison and Mr. Atkins for obtaining

Category 3 within the application by the Defendants against the Part 20 Defendants was in respect of dummy and draft brochures for the sales night. The brochure that was produced is admitted. Indeed, it forms part of the Defendants’ case against the Part 20 Defendants. It does not appear that there are any issues on the pleadings between any of the parties in relation to the brochure. It therefore seems to me that it would not be right for me to order that dummy or draft brochures should be hunted for and provided. They simply do not go to any pleaded issue between the parties.

Category 4 encompasses other documents relating to the sales night, including all written invitations, the guest list, press advertisements and correspondence with the Claimants in respect of the sales night. The first point to make is that, as has been demonstrated by Mr. Atkins on the face of the pleadings, there is very little in the way of dispute between any of the parties in respect of the documentation relating to the sales night. There is plainly a dispute about what was seen and done and said at the sales night, but none of the documents would have any bearing on that.

The invitations, the guest list and the press advertisements seem to me to be wholly irrelevant to the disputes between the parties. They should not be the subject of any order.

As to any correspondence, the Part 20 Defendants’ position is that any correspondence in respect of the sales night has been disclosed. On that basis, therefore, it seems to me that it is inappropriate for me to make any order for specific disclosure. However, I do think that in relation to this category – that is to say correspondence between the Part 20 Defendants and the Claimants in respect of the sales night - it is appropriate to order that the full disclosure that has apparently been made should be confirmed in a signed solicitors’ letter, so that there can be no doubt that the correspondence between the Claimants and the Part 20 Defendants in respect of the sales night has been provided. Beyond that, it seems to me that the documentation sought in category 4 is irrelevant and I should not allow it.

I should say at this stage that Miss Galley had an alternative argument in relation to both categories 3 and 4, based on the assertion that the Part 20 Defendants, or some of them, were acting as their (that is to say the Defendant’s) agents at the sales night and that therefore the Defendant was entitled to these documents as a matter of right. The difficulty with that argument, which is a purely practical one, as I made plain to Miss Galley, was that arguments about the precise nature of the relationship between the Defendants, Claimants and Part 20 Defendants exist on the face of the pleadings and were part of a running debate throughout the exchanges between counsel during the course of today’s hearing. It seems to me that it would be wrong for me to make potentially important findings in relation to agency relationships at a hearing of this sort, particularly when it seems to be the topic in this case most likely to engender lively debate. Any such findings can only be made on the basis of full evidence, at the trial.

Since I have, in any event, come to the firm view that these documents are irrelevant for the purposes of the dispute, save for the correspondence which I have ordered to be verified in the way indicated, it seems to me that it is also unnecessary for me to decide the alleged agency point at this stage, and therefore I decline to do so.

In relation to category 5 sought against the Part 20 Defendants, which are documents relating to the alleged nomination of Berwick Commodities Limited as the partner in the joint venture, as evidenced by the written agreement of 28^th October 2005, Mr. Atkins’ point is that those documents have been disclosed. It seems to me that, given that I have asked for a solicitors’ letter to verify disclosure of part of category 4, verification of the disclosure of category 5 could be added to that letter. This would ensure that there is no debate and no misunderstanding, and that it is clear that the documents sought in category 5 have already been disclosed by the Part 20 Defendants.

Categories 6, 7 and 8 are documents which, from his helpful skeleton argument, Mr. Atkins accepted were documents which should be provided by the Part 20 Defendants. My understanding is that documents have been provided, albeit yesterday, from the Part 20 Defendants which would include documents in these categories. Therefore, it is unnecessary for me to make any order at this stage in relation to categories 6, 7 and 8, but obviously, once the Defendant’s solicitors have looked at the documents in categories 6, 7 and 8, if they consider that disclosure is incomplete, then they can come back to the court on the basis of this application to seek further documents. At this stage, however, it is unnecessary for me to make an order in relation to categories 6, 7 and 8.

Category 9 is the equivalent of category 4 sought against the Claimants. Category 9 includes the documents relating to the specification and the changes to the specification, and the documents and communications passing between any of the Part 20 Defendants and any of the Claimants in relation to those changes. I have already indicated that those are amongst the most important documents in this case.

Mr. Atkins’ original position was to say that any argument about these changes, and the capacity in which the Part 20 Defendants were acting when agreeing to such changes, if that is what they did, was an issue that arose between the Claimants and the Defendants in the main action and was not something which affected the Part 20 Defendants in the Part 20 proceedings. Therefore, the position that he took was that these documents were not disclosable by the Part 20 Defendants. Having considered the position further and having heard the submissions of Miss Galley on that point, I think it is fair to say that Mr. Atkins accepted that this was perhaps too rigorous a view of the Part 20 Defendants’ disclosure obligations.

I consider that he was right to have a change of heart. I have no doubt that pursuant to CPR 31.6, standard disclosure by party X includes not only those documents which either support or adversely affect X’s own case and those of any other party which is making a claim against X or defending a claim made by X, but also requires X to disclose those documents which support or adversely affect any other party’s case in the litigation, whether they have a direct link in the litigation with X or not. In other words, in this case, documents that the Part 20 Defendants have which might go to the strength or weakness of the Claimants’ case against the Defendant, or vice versa, are disclosable by the Part 20 Defendants, even if they are irrelevant to the pleaded issues between the Part 20 Defendants and the Defendant/Part 20 Claimant.

Therefore, in the light of this conclusion as to the correct operation of CPR 31.6, it is appropriate to order that the documents in category 9 are documents which the Part 20 Defendants should provide.

I accept that this wider view of CPR 31.6 marks a change from the old pre-CPR position that only documents relevant to the issues between parties with a direct link in the litigation were disclosable by those parties, and not documents which they might have which, although irrelevant as between each other, might affect the strengths or weaknesses of other parties’ cases in the litigation. I take some comfort from the fact that this wider view, and the major change it represents, is supported at paras.8.17- 8.19 of the 8^th edition of Documentary Evidence by Charles Hollander QC.

In those circumstances, I order the specific disclosure by the Part 20 Defendants of the documents in category 9 of the application made by the Defendants.

Category 10 seeks written instructions to an expert, part of whose report was used for the documents attached to the amended particulars of claim. The expert would have been acting on behalf of the Claimants. It seems, therefore, that although there is an argument about privilege and waiver, the point for me is actually a simple one. Mr. Collins, the relevant expert, could not have been acting directly on behalf of the Part 20 Defendants since they had no direct interest in the property. He could only have been acting on behalf of the Claimants. Whether he actually received his instructions from the Claimants or the Part 20 Defendants seems to me not to matter. Mr. Collins was the Claimants’ expert.

Therefore, it could only be the Claimants who could waive the privilege in relation to Mr. Collins and his instructions. It does not seem to me that I can order the Part 20 Defendants to provide copies of his instructions, because the Claimants have asserted privilege in respect of that document. It is not for the Part 20 Defendants to waive that privilege. Thus I cannot order the specific disclosure sought at category 10 of the Defendant’s application.

Categories 11 to 13 are categories of documents relating to the question of the on-sale of the apartments. I have already dealt with this under the general part of category 5 of the application against the Claimants, and I have allowed a re-worded and considerably narrower category of documents in that instance. It seems to me that it would be inappropriate for me to order anything different against the Part 20 Defendants, because precisely the same reasoning applies again. Indeed, the only purpose of making an order in relation to this category against the Part 20 Defendants at all is to ensure that the Defendants get the documents from either the Claimants or the Part 20 Defendants and to ensure that no documents go missing because only one or the other has a copy.

Accordingly, it seems that it is appropriate under categories 11, 12 and 13 for me to order that the Part 20 Defendants provide the limited category of documents that I indicated under category 5 of the application against the Claimants above, that is to say the documents limited to the financial difficulties that the Claimants might have had in completing from 1^st January 2004 onwards, but not otherwise.

Having indicated that that is the appropriate way to deal with the on-sale documents in categories 11, 12 and 13, it follows that, in my judgment, the categories sought are again far too widely-drawn. As I have already stated, in relation to category 12, which is concerned with events in October 2003, I do not believe that those documents are relevant. It would be disproportionate and unfair to require the Part 20 Defendants to provide such documents. As I have indicated, the appropriate and proportionate date when the disclosure obligation is triggered is, in my judgment, 1^st January 2004.

The same point really goes for item 13 because that again seeks documents for the period from November 2002 to June 2004. For the reasons that I have indicated that is simply too widely-drawn.

Accordingly, in relation to the documents sought under categories 11, 12 and 13, I allow against the Part 20 Defendants the particular (limited) disclosure identified under category 5 in respect of the application against the Claimants, but not otherwise.

In relation to categories 14 to 16, these mirror, at least in part, items 5, 10 and 11 of the application made against the Claimants. Accordingly, I do not allow the documents sought in these categories, save for the request at item 14 for the instructions from the Claimants to Brohoon & Associates identified in their two letters of 7^th May 2004. For the reasons which I have given in relation to the application against the Claimants, I think those instructions are disclosable. For the reasons which I have also given under the application against the Claimants, I conclude that the remaining documents sought in categories 14 to 16 are not disclosable and should not be the subject of an order for specific disclosure.

I will deal separately with the question of costs.