Edwardian Group Ltd & Anor v Singh & Ors

This is an application in unfair prejudice proceedings under section 994 of the Companies Act 2006 concerning inspection of two classes of documents: the disclosed but heavily redacted "Litigation Funding Documents" and the "Magwells Documents" held by a former solicitor. The principal legal question was whether the redacted parts were protected by legal advice privilege and, if not, whether the court should nevertheless exercise any case-management discretion to withhold inspection on proportionality or tactical-advantage grounds.

The judge decided the petitioners were entitled to assert legal advice privilege over material that would "give a clue" to the advice (applying the Lyell/Ventouris approach), and was not satisfied that it was reasonably certain that the petitioners had misapplied that test. Taking account of the disclosure order already made, proportionality, the limited time before trial and the likely limited additional value of re-opening the redactions, the court made no order requiring inspection of the redacted parts of the Litigation Funding Documents and also made no order requiring disclosure of the Magwells Documents.

• Key legal principles applied: legal advice privilege extends to material which betrays the trend of legal advice; burden of proof rests on party claiming privilege; CPR rules on disclosure (notably CPR 31.3, 31.5, 31.12 and 31.19) limit the court's ability to withhold inspection; case management and proportionality are important but do not displace privilege.

Background and parties: The petitioners are minority shareholders (about 20%) in Edwardian Group Ltd and brought unfair prejudice proceedings under section 994 Companies Act 2006 seeking, among other relief, an order that the principal shareholders buy out the petitioners at a fair price. One complaint was the removing of a director in 2009. The respondents pleaded delay and laches and argued any buy‑out valuation date should be historic. The petitioners pleaded that time spent seeking litigation funding was not improper delay and that they had actively but unsuccessfully sought funding between 2009 and December 2014.

Relief sought on this application: The First Respondent applied for (a) a declaration that the petitioners had failed to comply with the earlier disclosure/inspection order by withholding or heavily redacting Litigation Funding Documents and the Magwells Documents, and (b) an order permitting inspection of those documents. The application did not seek specific disclosure of documents not disclosed.

Disclosure history and disputed documents: The Registrar ordered standard disclosure and inspection for the first trial. The petitioners disclosed multiple files but produced heavily redacted Litigation Funding Documents (over 250 documents in six lever‑arch files) and asserted legal professional privilege for withheld/redacted material. The Magwells Documents are files held by a former solicitor (Magwells), with the receivers asserting a lien for unpaid fees; the petitioners asserted many of the files would be duplicative of disclosed material and that the lien issue made compulsory production impractical.

Issues framed by the court: (i) whether the redacted parts of the Litigation Funding Documents are subject to legal advice privilege; (ii) whether the court should order inspection of privileged or of non‑privileged but sensitive material; (iii) whether the Magwells Documents should be produced despite the claimed lien and likely duplication; and (iv) whether inspection/disclosure of documents relating to the petitioners’ current funding or the identity of the current funder should be ordered.

Court’s reasoning and conclusions:

• The judge treated the privilege issue as one of legal advice privilege (not litigation privilege) and adopted the Lyell/Ventouris formulation that privilege can extend to documents the selection or content of which "gives a clue" or "betrays the trend" of legal advice. The court also had regard to relevant authorities (including the Financial Services Compensation Scheme decision) and Australian cases for nuance on when inference suffices.
• Applying the West London Pipeline principles, the court acknowledged the burden on the party claiming privilege and that affidavit evidence must be specific. The judge concluded that the petitioners’ solicitor’s account of why material was withheld or redacted was not shown to be incorrectly applied such that the court was "reasonably certain" the claim was wrong.
• Given that conclusion, and balancing proportionality and case‑management considerations (limited time before a lengthy trial, likely duplication, and limited additional benefit from re‑opening the redactions), the court declined to order inspection of the redacted parts of the Litigation Funding Documents. The judge recorded that if the trial judge found the redactions prevented an adequate defence of the delay allegations the petitioners would bear the consequences of their redactions, but that was not a basis to order inspection now.
• The court refused to order disclosure of documents relating to the petitioners’ current funding or to require disclosure of the identity of the current funder, noting it was not part of the application before the court and that relevance, privilege and sensitivity would need to be considered at trial or on a separate specific disclosure application.
• On the Magwells Documents, the judge found the material before the court insufficient to resolve disputed factual points about the receivers’ lien, that most useful material was likely already disclosed and that any additional documents would be few and unlikely to be significant. The court therefore made no order for production of the Magwells Documents and rejected adjournment to the Pre‑Trial Review as impractical given the timetable.

Wider comment: The judge emphasised caution in exercising any discretionary power to refuse inspection of relevant non‑privileged documents on grounds of alleged tactical advantage, and stressed that any such restraint must be grounded in the rules (notably CPR 31.5/31.3) and exercised with care.

The First Respondent's application for inspection and disclosure is dismissed. The court held that the petitioners had made a credible claim to legal advice privilege over the redacted material in the Litigation Funding Documents under the Lyell/Ventouris approach and the court was not reasonably certain that the claim had been misapplied; for reasons of proportionality, likely duplication, limited time before trial and limited incremental value of re‑opening the redactions, the court declined to order inspection. The court also made no order for disclosure of Magwells Documents, concluding the available material did not justify compelling production or judicial intervention against the receivers, and that any application to compel disclosure of current funding terms or the funder's identity should be brought separately if necessary at trial.