WXY v Gewanter & Ors

A court may determine costs in a party’s absence where it provides a fair opportunity to apply to set the order aside. The timing of payment may then be varied where payment before trial would seriously impair a party’s ability to defend the proceedings, having regard to the prejudice to both sides and the quality and currency of the evidence.

Common interest privilege is not a free-standing privilege. It depends on the communication already being protected by legal advice privilege or litigation privilege in the hands of the party who created or supplied it. A document attached to a privileged communication does not thereby become privileged.

Restrictions on private hearings and reporting must be strictly necessary and no wider than required to secure justice.

The claimant brought proceedings for misuse of private information, breach of confidence and harassment against three defendants. The judgment concerned an appeal by the first and second defendants against costs orders made by Master Kay, and the claimant’s application for specific disclosure of communications between those defendants and the third defendant.

The appeal challenged the making and timing of costs orders. The disclosure application raised common interest privilege, legal advice privilege and litigation privilege, including whether communications created between July and August 2009 were made for the purpose of anticipated litigation. The claimant also sought a private hearing and reporting restrictions.

1. Costs appeal. The court upheld the Master’s decision to proceed in the defendants’ absence and to make costs orders. The defendants had been given a proper opportunity to apply to set the order aside. Their challenge to the exercise of the Master’s discretion was not reasonably arguable.
2. The court admitted and considered fresh financial evidence concerning the timing of payment. Although the evidence was incomplete and substantially out of date, allowance was made for the first defendant’s illness and his conduct of the litigation largely without representation. The relevant balance was between the claimant being kept out of her money and the risk that immediate payment would seriously impair the defendants’ ability to defend the action. The balance favoured postponement. Payment of the outstanding costs was therefore deferred until after the trial. There was no order as to the costs of the appeal.
3. Common interest privilege. Applying the principle identified in Buttes Gas and Oil Co v Hammer (No.3) [1981] QB 223, common interest privilege is parasitic on orthodox legal privilege. It protects a communication only if it was privileged in the hands of the party who created it. Communications must satisfy the requirements of legal advice privilege or litigation privilege, including the objective purpose test and, for litigation privilege, creation when litigation was in reasonable prospect for its sole or dominant purpose.
4. The emails created between 3 July and 24 August 2009 concerned pressure and settlement strategies, rather than preparation to resist anticipated litigation. They were not privileged. Later emails supplying evidence during existing litigation were protected by common interest privilege, but the attached photograph was not privileged because it had not itself been created for the purpose of the litigation. The photograph was disclosable.
5. Open justice. The principles stated in JIH v News Group Newspapers Ltd [2011] EWCA Civ 42 and Ambrosiadou v Coward [2011] EWCA Civ 409 required any restriction on access or reporting to be strictly necessary and no wider than required. The hearing could therefore take place in open court, save for brief private submissions concerning the disputed documents.
6. The specific disclosure application was essentially successful. The claimant was awarded £12,000 costs, payable at the conclusion of the trial.

The judgment concerned an appeal from costs orders made by Master Kay on 24 February and 7 April 2010. Permission to appeal was granted by Eady J on 31 January 2011. The High Court deferred payment of the outstanding costs until after trial, made no order as to the appeal costs, and awarded the claimant £12,000 for the disclosure application.