Kousouros v O'Halloran & Anor

Legal advice privilege attaching to confidential instructions and advice given by a beneficiary to her solicitor is not lost merely because the solicitor later acts in administering the estate in which the beneficiary and another person share an interest. A joint interest must exist when the communication is created, and the communication must further that joint interest. Privilege is not subject to a balancing exercise against the public interest in discovering the truth or supervising an estate. Where privileged material reaches an opposing party, the court may restrain its use under the equitable jurisdiction over breach of confidence. The court will normally intervene, but the party asserting confidentiality must act promptly, subject to proportionality and the circumstances of the case.

The claimant appealed a disclosure decision made by Her Honour Judge Faber in the Central London County Court. The dispute concerned whether documents held by the first defendant, a solicitor who had acted for the claimant’s sister and later as personal representative of their father’s estate, were protected by legal advice privilege.

The claimant claimed that a property had been transferred to him during his parents’ lifetimes and therefore did not form part of the estate. The second defendant relied on her father’s will, under which she and the claimant were to receive equal shares. The principal issue was whether the claimant could use the third paragraph of a letter sent by the solicitor to HMRC, containing information obtained from the second defendant during the solicitor’s original retainer.

1. Appeal allowed. The third paragraph of the solicitor’s letter to HMRC contained privileged material. Its use was restrained and its confidentiality maintained.
2. The claimant and the second defendant had a joint interest as beneficiaries in the proper administration of the estate. That did not deprive the second defendant of legal advice privilege in her original instructions to the solicitor or in advice given to her personally.
3. Joint-interest privilege depends on the joint interest existing when the communication comes into existence. The communication must also have been created for the furtherance of that joint interest. The communications in issue arose before the solicitor had any role in administering the estate, so no joint interest existed at that time.
4. The solicitor remained bound by his duty of confidentiality to the second defendant. Once he considered that his duties as administrator conflicted with his duties to her, he should have withdrawn entirely. He could not treat himself as free to disclose her confidential information.
5. The court rejected the suggestion that legal advice privilege should be outweighed by the need for proper supervision of the estate. The public interest in the emergence of truth is not to be balanced against privilege, because that balance has already been struck by the law of legal professional privilege.
6. Where privileged material comes into the hands of an opposing party, the court may grant an injunction to restrain its use under the equitable jurisdiction to prevent breach of confidence. The court will ordinarily intervene where the recipient acted fraudulently or knew that inspection resulted from an obvious mistake. The party asserting confidentiality must act promptly, but delay is not necessarily fatal. In the circumstances, the delay from July to October 2013 did not defeat relief, particularly having regard to proportionality and the likely refusal of any undertaking.

• High Court (Chancery Division): allowed the appeal from the Central London County Court and ordered that the confidential material could not be used.
• Central London County Court: Her Honour Judge Faber ordered disclosure and held that the second defendant could not assert privilege against the claimant in relation to documents concerning administration of the estate.