Cherrilow Ltd v Osmond Solicitors Ltd & Anor

Where a solicitor’s file is sought in CPR Part 8 proceedings, a defendant who advances lien, privilege or ownership objections must provide a proper basis for resisting relief. Earlier waiver of privilege prevents a party from selectively withholding relevant material. A party seeking to rely on late evidence must comply with the applicable procedural requirements and explain the delay; indulgence will be refused where justice does not require it. Where there is no substantive answer to the claim, the court may grant the relief sought and determine ownership so that delivery can occur unconditionally. Costs may be awarded on the indemnity basis where resistance has been marked by dishonesty, obfuscation and conduct outside the ordinary run of litigation.

Cherrilow Limited brought CPR Part 8 proceedings against its former solicitors, Osmond Solicitors Limited, and Richard Butler-Creagh concerning solicitor’s files relating to the purchase of Fawley Court. Cherrilow required the files to fulfil disclosure obligations in related fraud proceedings.

The defendants had relied on alleged liens, legal professional privilege and an assertion that Mr Butler-Creagh owned some of the files. The lien and privilege objections were withdrawn or undermined by earlier disclosure and waiver. Mr Butler-Creagh provided no adequate explanation for contesting the proceedings and sought to rely on late evidence. The issues were whether relief should be granted, whether ownership should be determined, and what costs order was appropriate.

1. The claim succeeded. The court granted the relief sought and ordered that Cherrilow recover its costs from both defendants on the indemnity basis. Liability for the costs was joint and several, with an interim payment of £75,000 directed, subject to further submissions.
2. There was no substantive answer to the Part 8 claim. Once the lien and privilege arguments had gone, there was no basis on which Mr Butler-Creagh could resist delivery of the files. The court was entitled to determine ownership so that the files could be delivered to Cherrilow without condition.
3. The ownership claim was unsupported. Cherrilow had paid Osmonds’ bill for the work undertaken, and ownership was consistent with the position advanced by Mr Butler-Creagh in the related litigation that Cherrilow had stepped into his shoes. No cogent explanation was provided for his assertion that he owned part of the file.
4. Privilege could not validly be relied upon after it had been waived in Mr Osmond’s witness statement and by the release of file contents. A selective waiver could not be reversed so as to prevent disclosure of other relevant documents.
5. Mr Butler-Creagh had failed to provide the explanation and evidence required by CPR 8.5(3). In light of CPR 8.6(1), the court declined to admit his late evidence because it gave no adequate explanation and justice did not require indulgence.
6. The conduct of both defendants justified indemnity costs. The resistance to relief was coloured by dishonesty and obfuscation, and appeared connected with a desire to conceal the conflict of interest and associated wrongdoing. The court saw no basis for distinguishing the defendants’ liability.