Re Sean Dunne (a bankrupt) v Yesreb Holding : Celtic Trustees v Sean Dunne (a bankrupt) No. 2

• Jurisdiction: Ireland
• Judge: Mr. Justice Robert Haughton
• Judgment Date: 15 July 2019
• Neutral Citation: [2019] IEHC 4
• Date: 15 July 2019
• Court: High Court
• Docket Number: [2016 No. 10991 P.] [2017 No. 2146 P.]

[2019] IEHC 4

THE HIGH COURT

COMMERCIAL

Haughton Robert J.

[2016 No. 10991 P.]

[2017 No. 2146 P.]

BETWEEN

CHRISTOPHER LEHANE (AS OFFICIAL ASSIGNEE IN BANKRUPTCY IN THE ESTATE OF SEAN DUNNE)

PLAINTIFF

AND

YESREB HOLDING LIMITED

DEFENDANT

AND

CELTIC TRUSTEES LIMITED

NOTICE PARTY

BETWEEN

CELTIC TRUSTEES

PLAINTIFF

AND

CHRISTOPHER LEHANE (AS OFFICIAL ASSIGNEE IN BANKRUPTCY IN THE ESTATE OF SEAN DUNNE)

DEFENDANT

Litigation privilege – Discovery – Confidentiality – Defendant seeking to challenge litigation privilege claimed by the plaintiff – Whether the plaintiff was entitled to assert litigation privilege

Facts: A notice of motion dated 25th July, 2018 was issued on behalf of Yesreb Holdings Ltd, the defendant in the proceedings, first named in the title hereof (the Lehane proceedings), in which the defendant sought to inspect a sum of 228 documents over which the plaintiff, Mr Lehane (the Official Assignee), asserted privilege. On 19th December, 2018, the High Court (Haughton J) determined, inter alia, that the Official Assignee was not entitled to claim litigation privilege over the transcript of an examination carried out by him in his office pursuant to an order of Costello J made pursuant to s. 21 of the Bankruptcy Act 1988, of Ms Crowley dated 28th October, 2014. Counsel for Yesreb and the Official Assignee agreed that the remaining dispute over documents could be broken down into four categories, some of which could be subdivided according to date. These were as follows: (1) Correspondence between the Official Assignee’s Solicitors, O’Grady Solicitors and Matheson Solicitors which occurred in 2015. Matheson Solicitors acted as the solicitors for Mr Dunne (the Bankrupt) and for Ms Dunne from the “Doc Description” provided in the Official Assignee’s affidavit of discovery, it appeared that the correspondence concerned the s. 21 examination of Mr Sweetman, a former partner of Matheson who acted for the Bankrupt and Ms Dunne in 2005 and 2006. (2) Correspondence between the Official Assignee and his solicitors on the one hand and other solicitors on the other. A good proportion of this correspondence was with Hayes Solicitors who were representing Ms Crowley, and much of the correspondence related to those who were the subject matter of s. 21 examinations/interviews. The correspondence occurred in 2014, 2015 and 2016. (3) Correspondence between the Official Assignee and his solicitors on the one hand and An Garda Síochána and the Revenue Commissioners or other individuals or organisations who were not parties to this litigation, on the other. This occurred during the years 2014, 2015 and 2016. (4) A transcript of the Official Assignee’s examinations pursuant to s. 21. As the court had already directed, Yesreb was entitled to have a sight of the transcript in respect of Ms Crowley’s examination held on 28th October, 2014, and, as the court was informed, Yesreb had already been furnished with a copy of the transcript of the examination of Mr Sweetman held on 30th January, 2017, and this category only applied to a Mr O’Sullivan.

Held by Haughton J that privilege, whether litigation privilege or legal advice privilege, is an exception to the normal rule under which relevant documents must be discovered. As McDonald J emphasises in Artisan Glass Studio Ltd v The Liffey Trust Ltd and Ors [2018] IEHC 278, there is an onus of proof on the party asserting privilege to satisfy the court of the entitlement to privilege; Haughton J held that this applies equally to the Official Assignee, notwithstanding the statutory basis for his office, functions and powers. Haughton J was not satisfied that the Official Assignee had satisfied this onus of proof in relation to the documents in categories (1), (2) and (3) created prior to the commencement of the Lehane proceedings, or prior to the period in the immediate run up to that commencement; no evidence had been adduced to demonstrate that the correspondence between the Official Assignee/his solicitors, and Matheson Solicitors and other solicitors or third parties was undertaken under conditions of confidentiality. Haughton J also agreed with the submission made by counsel on behalf of Yesreb to the effect that the Official Assignee’s averments were not particular to the documents in these categories.

Haughton J held that, concerning category (4), the invocation of s. 134 of the 1980 Act was highly significant and introduced the elements of privacy and confidentiality that would not normally be features of s. 21 examinations. Haughton J was satisfied that the Official Assignee was entitled to maintain litigation privilege over the internal notes/documents relating to information provided by Mr O’Sullivan.

Judgment approved.

Judgment of Mr. Justice Robert Haughton delivered on the 15th day of January, 2019

1 This ruling relates to the balance of a Notice of Motion dated 25th July, 2018, issued on behalf of Yesreb Holdings Limited, the defendant in the proceedings, first named in the title hereof (‘the Lehane proceedings’), in which the defendant seeks to inspect a sum of 228 documents over which the plaintiff (‘the Official Assignee’) asserts privilege.

2 This ruling should be read with and is supplemental to the Judgment and rulings which I delivered in the above entitled matters on 19th December, 2018. In those proceedings I determined, inter alia, that the Official Assignee was not entitled to claim litigation privilege over the transcript of an examination carried out by him in his office pursuant to an order of Costello J. made pursuant to s. 21 of the Bankruptcy Act 1988, of Ms. Caroline Crowley dated 28th October, 2014. That judgment set out the background to both of the above titled proceedings, and dealt with s. 21 examinations and s. 134 of the Bankruptcy Act 1988 generally, more specifically with Ms. Crowley's interview, and dealt with the principles applicable to litigation privilege. It is not proposed to repeat these matters unnecessarily in this judgment.

3 Counsel for Yesreb and the Official Assignee have usefully agreed that the remaining dispute over documents can be broken down into four categories, some of which can be subdivided according to date. These are as follows:-

(1) Correspondence between the Official Assignee's Solicitors, O'Grady Solicitors and Matheson Solicitors which occurred in 2015. Matheson Solicitors acted as the solicitors for Sean Dunne (‘the Bankrupt’) and for Gayle Dunne from the ‘Doc Description’ provided in the Official Assignee's affidavit of discovery, it appears that the correspondence concerns the s. 21 examination of Paddy Sweetman, a former partner of Matheson who acted for the Bankrupt and Gayle Dunne in 2005 and 2006.

(2) Correspondence between the Official Assignee and his solicitors on the one hand and other solicitors on the other. A good proportion of this correspondence is with Hayes Solicitors who were representing Ms. Caroline Crowley, and much of the correspondence relates to those who are the subject matter of s. 21 examinations/interviews. The correspondence occurred in 2014, 2015 and 2016.

(3) Correspondence between the Official Assignee and his solicitors on the one hand and An Garda Síochána and the Revenue Commissioners or other individuals or organisations who are not parties to this litigation, on the other. This occurred during the years 2014, 2015 and 2016.

(4) A transcript of the Official Assignee's examinations pursuant to s. 21 of the Bankruptcy Act 1988. As the court has already directed, Yesreb is entitled to have a sight of the transcript in respect of Ms. Caroline Crowley's examination held on 28th October, 2014, and, as the court was informed, Yesreb has already been furnished with a copy of the transcript of the examination of Mr. Patrick Sweetman held on 30th January, 2017, and this category only applies to a Mr. Denis O'Sullivan.

4 The litigation privilege claimed by the Official Assignee in respect of these categories of documents is set out in a revised exhibit ‘JF1’ exhibited in the second replying affidavit of Jennifer Fay solicitor, sworn on 5th November, 2018. This revised schedule provides more detailed descriptions of the documents under columns headed ‘Type of Document’ and ‘Description of Document’, and in the fourth column sets out ‘Reason why this Plaintiff is maintaining a claim of privilege’. In some instances this column states ‘However, Privilege is no longer being maintained’. In other instances the ‘Type of Document’ column indicates that duplicates of the document are to be found in other identified numbered documents. In this way the real number of documents in which privilege is disputed has been considerably whittled down.

5 Typical of the wording used to claim privilege is document no.32, which is a letter from Matheson Solicitors to O'Gradys Solicitors dated 9th April 2015 described as a ‘….letter [which] concerns the Property known as Walford and Properties at Newbridge, County Kildare’:

‘This correspondence relates to the Official Assignee's investigations into, inter alia, the ownership of the Property known as Walford.

As of the date of the creation of the document, the Official Assignee was contemplating litigation in the ownership of Walford.

The queried document was created for the dominant purpose of investigating said contemplated litigation.’

In the case of documents post-dating the commencement of the Lehane proceedings, slightly different wording replaces the latter two sentences. For example, document no.1388 is described as an email exchange between the Insolvency Service of Ireland (‘ISI’) and the Revenue Commissioners on 24th January, 2017, and the following appears in the fourth column:

‘This is correspondence between the Office of the ISI and Office of the Revenue Commissioners and relates to the Official Assignee” investigations into the ownership of the Property known as Walford.

As at the...