8 December 2015Print This Post

High Court: no litigation privilege for recordings of meetings where witnesses “deliberately deceived”

RCJ

Birss J: purpose of meetings to gather evidence for litigation

A Manchester-based property developer cannot claim litigation privilege for secret recordings of meetings where witnesses were “deliberately deceived”, the High Court has ruled.

Mr Justice Birss said David Russell, founder and managing director of the Property Alliance Group (PAG), made the recordings “surreptitiously” without telling two former employees of RBS.

The judge said Matthew Jones and Anthony Goldrick were employed by RBS at the time that PAG entered into the swap contracts – now the subject of a misrepresentation claim by the developer on the grounds that the bank did not reveal it was rigging the LIBOR rate.

“Plainly, assessed objectively today, Mr Russell’s purpose in arranging the meetings was to gather evidence for the litigation. Equally plainly, assessed objectively today, the purpose of the ex-RBS employees in attending the meeting was to catch up and discuss possible future business.

“I am bound to say that starting from just these facts, it does not make a lot of sense to pretend that one can distil a dominant purpose from these two clear but entirely divergent purposes.”

Birss J went on: “In my judgment the critical point is that Mr Russell actively deceived Mr Jones and Mr Goldrick. Mr Russell induced them to attend and speak freely by representing to Mr Jones and Mr Goldrick that the meeting was a catch up and was concerned with possible future business.

“Mr Russell knew or it was obvious to him that they were only likely to attend and speak on that basis. It is the existence of this deception which distinguishes the circumstances from the example of the solicitor taking a proof of evidence relied on by PAG.

“In this case Mr Russell cannot complain if the court concludes that the fair and correct way of assessing what the dominant purpose of the meeting was, is to look at it from Mr Jones and Mr Goldrick’s point of view. If Mr Russell had not misled these two gentlemen then things might be different but that is not what happened.”

Delivering judgment in Property Alliance Group v The Royal Bank of Scotland [2015] EWHC 3341 (Ch), that Mr Justice Birss said Mr Russell “deliberately deceived” Mr Jones and Mr Goldrick about his motives.

“Mr Russell did not think either individual would meet him if he told them why he wanted to meet them and he was right about that. Mr Russell did not tell either of them that the meetings were being recorded because he thought Mr Jones and Mr Goldrick would be more likely to speak openly about RBS if they believed that they were speaking “off the record”. He was obviously right about that too.”

Birss J said Mr Jones and Mr Goldrick both confirmed in their evidence that they believed the meetings were to discuss “the furthering of their respective business relationships with PAG and both were disappointed when they discovered Mr Russell’s deception”.

He ruled that the “dominant purpose” of the meetings, which took place in 2013, was not for litigation, with the result that the recordings were not privileged, nor were transcripts and RBS was entitled to inspection.

In a ruling last month in the same case, this time on legal advice privilege, Mr Justice Snowden ruled that documents drawn up by Clifford Chance for a special RBS committee dealing with the LIBOR scandal were protected by privilege.

By Nick Hilborne

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