Skymist Holdings Ltd v Grandlane Developments Ltd

In deciding whether documents attract litigation privilege, the party asserting privilege bears the burden of proof. It must show that litigation was reasonably contemplated and that the dominant purpose of the relevant communication was obtaining evidence or information for use in that litigation. A secondary purpose does not defeat privilege if litigation remained dominant. Purpose is assessed objectively, by reference to all relevant evidence and contemporaneous material, taking a realistic and commercial view. The court need not re-run a pre-action disclosure exercise where the alleged deficiencies are unsubstantiated and doing so would be disproportionate.

Skymist sought an order requiring Grandlane to comply fully with an earlier pre-action disclosure order and to disclose additional categories of documents. It also challenged Grandlane’s claims to litigation privilege over communications with PTP, including notes of a meeting on 18 May 2018 and communications during the adjudication and enforcement process.

The central issues were whether further disclosure should be ordered, whether the additional categories were likely to contain undisclosed documents, and whether Grandlane had established litigation privilege and provided an adequate explanation for its claims.

1. Application dismissed. The court declined to order Grandlane to re-run the disclosure exercise. The mistaken listing of certain emails as both privileged and disclosable was remedied promptly and did not demonstrate a defective process. Alleged past disclosure failures and the refusal of an independent review were irrelevant or unsupported. A further disclosure exercise would be disproportionate and contrary to the interests of justice.
2. The four additional categories of documents were not ordered. The evidence did not establish a likelihood of further documents concerning any agreement between Grandlane and PTP, documents affecting the calculation of PTP’s claim, or records of other meetings or telephone calls. The disclosed correspondence was consistent with the parties’ evidence that relevant documents had been provided.
3. For litigation privilege, Grandlane bore the burden of showing that litigation was reasonably contemplated and that the communications were made for the dominant purpose of obtaining evidence or information for use in anticipated proceedings. The court assessed purpose objectively, considered the contemporaneous correspondence, and took a realistic and commercial view. The existence of a secondary purpose did not prevent litigation from being dominant.
4. The correspondence showed that Grandlane and PTP were working together to prepare and pursue the adjudication against Skymist. PTP was not shown to be a mere funder. The possible liability of Grandlane to PTP and the preparation of PTP’s claim were connected with, but did not displace, the dominant purpose of the litigation against Skymist.
5. The notes of the 18 May 2018 meeting were privileged. Although the claim by PTP against Grandlane was discussed, the objective evidence showed that preparation for the claim against Skymist predominated. Privilege also covered the relevant communications from 6 July 2018 to 17 November 2018 and through enforcement of the adjudication award to 29 March 2019.
6. The explanation of privilege was adequate. Given the common subject matter of the email chains, it was unnecessary or impracticable to identify the detailed subject matter of every communication beyond the information supplied in the schedules and witness evidence.

First-instance decision. No appellate history is stated in the judgment.