Practice and Procedure


PUBLISHED August 27, 2003

A third party law firm, who had acted for a defendant company, was entitled to make unconditional and voluntary disclosure of documents to the administrative receivers of that company. There was no reason to restrain the use of those documents by a claimant who was subsequently given them by the receivers.Applications for interim injunctions to restrain the respondent company ('GE') and administrative receivers ('the receivers') from using documents sent to the receivers by a firm of solicitors ('the firm'). The applicants were two defendant companies and a director ('S') of one of the companies ('APL'). The receivers were appointed to APL and the firm had previously acted for APL. Each application was issued in separate but related proceedings. In the first action, in which the first application was issued, GE claimed a sum from the defendants pursuant to deeds of guarantee and indemnity. The documents at issue were sent to the receivers by the firm in response to the receiver's request, under the Insolvency Act 1986, for documents covering a period up to their appointment and relating to APL's indebtedness to GE and the provision of security and guarantees. The receivers subsequently passed the documents to GE's solicitors. The solicitor for the first defendant ('S') had stated that S's application for an injunction was based on the existence of legal professional privilege in relation to the documents, which privilege S had refused to waiver. Alternative arguments were raised at the hearing of the applications, including that the documents obtained by GE were the subject of a common interest privilege. The second application for an injunction, in respect of an action brought by APL against GE, was made by APL on the basis of its right to restrain a breach of confidence.HELD: (1) The use that the receivers intended to make of the documents was entirely a matter for them, and the solicitor who disclosed the documents had no reason to question the intended use. (2) On the evidence in the first action, the firm was APL's solicitors and did not act for S. S could not therefore assert the existence of legal professional privilege in his favour. It was not for the court to infer a different type of privilege unidentified by evidence and asserted for the first time in argument. APL was entitled at any time to disclose material held by the firm as its solicitors. APL's receivers, by the powers conferred on them under the debenture and the Act, were entitled to any documents to which APL was entitled. (3) The first application was issued in the name of all the defendants to the first action, however, it was only pursued by S. Accordingly, since S's application failed, the whole application failed. (4) In respect of the second application, if an interim injunction was wrongly granted, it would be open to GE to take the matter to trial. If, in the intervening period, GE had been wrongly prevented from using the documents and was thereby put to fatal disadvantage in its application for summary judgment in the first action, GE could well establish a liability, under APL's cross-undertaking on litigation costs and other matters, that APL would be unable to meet. In so far as an undertaking by S was meant to cover that liability, there was no evidence that he could fulfil that undertaking. There was no evidence as to the receiver's position, and nothing from the directors of APL, to demonstrate why it was necessary for the second action to be pursued although the receivers had made a conscious decision to pass the documents to GE. The receivers were entitled to waiver any privilege that APL had in respect of the documents and there was no reason why the receivers would wish to enable S to undermine their own prior decision to surrender the documents to GE unconditionally. (5) There was no reason why, in the exercise of the court's discretion, the second application should be granted.Applications dismissed.

[2003] EWHC 1648 (QB)