Stewart Wood v English

• Jurisdiction: Ireland
• Judge: Mr. Justice Twomey
• Judgment Date: 18 October 2022
• Neutral Citation: [2022] IEHC 579
• Court: High Court
• Docket Number: Record No. 2020/3857P

Between

Nicholas Stewart Wood (Trustee in Bankrupcy for Jerry Ryan)

Plaintiff

and

Barry English

Defendant

[2022] IEHC 579

Record No. 2020/3857P

THE HIGH COURT

COMMERCIAL

Disclosure – Privilege – Notice to produce – Defendant seeking disclosure of documents – Whether the documents were privileged

Facts: In the case of HKR Middle Ease Architects Engineering L.C, Jeremiah Ryan and Patrick Stafford v Barry English [2019] IEHC 306 (the 2017 Proceedings), the defendant, Mr English, and Mr Ryan were severely criticised by a High Court judge (McDonald J) for their roles in attempting to siphon away $8 million dollars from the creditors of Mr Ryan, who was bankrupt. In the 2017 Proceedings, Mr Ryan was seeking to recover the $8 million dollars from Mr English, which Mr Ryan falsely alleged was subject to a sham trust in favour of Mr Ryan’s children. Since the trust had been held to be a sham, the plaintiff, Mr Wood, Mr Ryan’s trustee in bankruptcy (the Trustee) claimed that the $8 million was in fact the personal property of Mr Ryan and he sought its recovery from Mr English for the benefit of Mr Ryan’s creditors. A preliminary application came to court as a result of a notice to produce issued by Mr English on 17th June, 2022 in relation to three tranches of documents. Certain documents were exchanged between Mr Ryan and the Trustee in relation to the 2017 Proceedings e.g. a Counsel’s Opinion obtained by Mr Ryan in relation to the consequences for Mr Ryan of the judgment that was delivered by McDonald J regarding the failed attempt to recoup the $8 million from Mr English. Despite legal advice privilege attaching to documents such as that Opinion, Mr English claimed that this privilege was waived by Mr Ryan’s disclosure of that Opinion and other documents to the Trustee. On that basis, Mr English claimed that he was entitled to have those documents disclosed to him. The Trustee disputed that claim and he said that, as he had a common interest with Mr Ryan in the 2017 Proceedings against Mr English, the privilege was not waived by the disclosure by Mr Ryan of the documents to him. On that basis, he said those documents should not be disclosed to Mr English.

Held by Twomey J that the Trustee and Mr English retained a common interest which was fractured on the 10th September, 2019 when the rescission of the Deed of Settlement was communicated by the Trustee to Mr Ryan. The court concluded that this common interest was not retrospectively fractured, notwithstanding that the letter of 10th September, 2019 purported to retrospectively rescind the Deed of Settlement with effect from 10th May, 2019.

Twomey J concluded that all of the documents set out were privileged and therefore did not require to be disclosed by the Trustee to Mr English.

Application refused.

JUDGMENT OF Mr. Justice Twomey delivered on the 18 ^th day of October, 2022

INTRODUCTION

1 . This is a follow up to the case of HKR Middle Ease Architects Engineering L.C, Jeremiah Ryan and Patrick Stafford v. Barry English [2019] IEHC 306 (the “2017 Proceedings”) in which the defendant (“Mr. English”) (in those proceedings and these proceedings) and Mr. Jeremiah (Jerry) Ryan (“Mr. Ryan”) were severely criticised by a High Court judge (McDonald J.) for their roles in attempting to siphon away $8 million dollars from the creditors of Mr. Ryan, who is bankrupt. In the 2017 Proceedings, Mr. Ryan was seeking to recover the $8 million dollars from Mr. English, which Mr. Ryan alleged was subject to a trust, which turned out to be a sham, in favour of Mr. Ryan's children.

2 . Since the trust has been held to be a sham, Mr. Ryan's trustee in bankruptcy (the “Trustee”) is claiming in these proceedings that the $8 million is in fact the personal property of Mr. Ryan and he is now seeking its recovery from Mr. English for the benefit of Mr. Ryan's creditors.

3 . Certain documents were exchanged between Mr. Ryan and the Trustee in relation to the 2017 Proceedings e.g. a Counsel's Opinion obtained by Mr. Ryan in relation to the consequences for Mr. Ryan of the judgment that was delivered by McDonald J. regarding the failed attempt to recoup the $8 million from Mr. English. Despite legal advice privilege clearly attaching to documents such as this Opinion, Mr. English claims that this privilege was waived by Mr. Ryan's disclosure of this Opinion and other documents to the Trustee. On this basis, Mr. English is claiming in these proceedings that he is entitled to have those documents disclosed to him. However, the Trustee disputes this claim and he says that, as he had a common interest with Mr. Ryan in the 2017 Proceedings against Mr. English, the privilege was not waived by the disclosure by Mr. Ryan of the documents to him. On this basis, he says these documents should not be disclosed to Mr. English.

4 . This is the primary issue to be dealt with in this preliminary application which has come to court as a result of the Notice to Produce issued by Mr. English on 17 ^th June, 2022 in relation to three tranches of documents. Before considering these three tranches of documents, it is necessary to give some further background to the application and in particular the common interest which existed between the Trustee and Mr. Ryan in relation to the 2017 Proceedings.

BACKGROUND

5 . In the 2017 Proceedings, Mr. Ryan and other plaintiffs (the “2017 Plaintiffs”) took the unsuccessful proceedings against Mr. English for the recovery of the $8 million. It is also relevant to note that these 2017 Proceedings have not come to an end as a number of matters remain to be finalised arising from McDonald J.'s judgment.

The commencement of the common interest between the Trustee and Mr. Ryan

6 . Before the Trustee became aware that the trust in favour of Mr. Ryan's children was a sham designed to keep Mr. Ryan's money away from his creditors, the Trustee had an active involvement and interest in the 2017 Proceedings and indeed appeared as a witness in those proceedings. This was because the Trustee had concluded a Deed of Settlement in 2017 (the “Deed of Settlement”) with the 2017 Plaintiffs. Under this Deed of Settlement, the Trustee was to get the either $500, 000 or 22.5% (whichever was the greater) of any monies awarded in the 2017 Proceedings. The Deed of Settlement also provided that the 2017 Plaintiffs would consult with the Trustee, who would provide reasonable assistance in the conduct of the 2017 Proceedings. It is not disputed by Mr. English that at this stage the Trustee and Mr. Ryan had a common interest in the recovery of $8 million from Mr. English.

7 . However, in light of the damning judgment of McDonald J. regarding the trust being a sham, the Trustee issued these proceedings against Mr. English on 28 ^th May, 2020, in which he is seeking to recover the $8 million from Mr. English for the benefit of the creditors of Mr. Ryan.

8 . In the Statement of Claim in these proceedings, the Trustee claims that the Trustee entered the Deed of Settlement in reliance on the averments contained in an affidavit dated 10 ^th July, 2017 sworn by Mr. Ryan for the purpose of the 2017 Proceedings regarding, inter alia, the $8 million being subject to a trust. At para. 20 of the Statement of Claim, the Trustee states:

“In the 2017 Proceedings (and as set out more fully below) the High Court (Mr Justice McDonald) has found, in essence, that the contents of the said Affidavit sworn on 10 July 2017 were false and untrue. Accordingly, the [Trustee] has rescinded the Deed of Settlement.”

9 . At para. 24, the Trustee goes on to claim that, in view of McDonald J.'s judgment, Mr. Ryan is the owner of the $8 million, which therefore forms part of the bankruptcy estate of Mr. Ryan, which he is therefore seeking from Mr. English in these proceedings.

10 . In Replies to Particulars dated 11 ^th December, 2020 in these proceedings, the Trustee replied as follows to the following Notice for Particulars dated 26 ^th November, 2020:

“(ii) Please specify the date that the Deed of Settlement was rescinded.

10 May 2019

(iii) If the rescission of the Deed of Settlement was by way of written notice or by other instrument in writing, please specify the date such notice or written instrument was provided by the [Trustee] and provide a copy of such document. This request is made pursuant to the provisions of Order 31, Rule 15 of the Rules of the Superior Courts.

This is not an appropriate matter for particulars. It is a matter for discovery and/or evidence at the trial of the action.

Without prejudice to the foregoing, a true copy of the written notice issued to [Solicitors for Mr. Ryan] on 10 September 2019 is enclosed herewith.”

11 . Although it does not appear to have been attached to the Replies to Particulars, this notice was in the form of a letter from the Trustee dated 10 ^th September, 2019 to Mr. Ryan's solicitors, which was opened to the Court without objection and it states, inter alia, that:

“Rescission of the settlement agreement

As a result of Mr Ryan's fraudulent misrepresentations, we are writing to confirm that the Trustee has exercised his right to rescind the Settlement Deed with effect from 10 May 2019, the date of the Irish Court Judgement (the Rescission).”

12 . One other Notice for Particulars and Reply which is relevant is:

“(vi) Please confirm whether any other oral or written agreement or arrangement has been entered into between the [Trustee] and [the 2017 Plaintiffs] and/or their representatives and/or associates and/or agents relating to the 2017 Proceedings and/or the present proceedings. If such agreement was made in writing, please provide a copy of such document. This request is made pursuant to the provisions of Order 31, Rules 15 of the Rules of the Superior Courts.

No other a written agreement arrangement has been entered into between the [Trustee] and Jerry Ryan and/or [the 2017...