Lakatamia Shipping Company Limited & Ors v Nobu Su & Ors

The fraud or iniquity exception removes legal professional privilege where communications are made to further fraud or equivalent underhand conduct. It applies where lawyers are unwittingly used as instruments in a strategy to conceal assets, evade court orders or deceive the court. The exception may apply to both legal advice privilege and litigation privilege.

Relief remains exceptional and must be granted with care. Disclosure should be limited to documents materially connected with the iniquity and relevant to the debtor’s assets.

Lakatamia sought release of documents withheld by independent reviewing lawyers following search orders made in aid of enforcement of substantial judgments against Mr Su. The documents comprised correspondence with his English lawyers during disclosure and committal proceedings, and correspondence concerning the sale or possible refinancing of Monaco properties.

Lakatamia argued that the documents were not privileged because Mr Su had used lawyers to conceal assets, mislead the court and breach freezing and disclosure orders. Mr Su did not attend the hearing and served no responsive evidence. The central issue was whether the fraud or iniquity exception applied and, if so, the proper scope of the resulting order.

1. Application granted in modified form. The independent reviewing lawyers were permitted to release specified documents, subject to relevance to Mr Su’s assets.
2. The court accepted the principles stated in JSC BTA Bank v Ablyazov [2014] EWHC 2788 (Comm) and summarised in Z v Z and others (Legal Professional Privilege: Fraud Exemption) [2016] EWHC 3349 (Fam). Legal professional privilege does not attach where the communication is made for a purpose outside the ordinary professional engagement because the lawyer is being used to further fraud or equivalent iniquity.
3. On the evidence, Mr Su had used his lawyers during January to March 2019 to create an appearance of compliance with asset-disclosure orders while concealing assets and misleading both his lawyers and the court. This constituted an abuse of the ordinary solicitor-client relationship. The same reasoning applied to correspondence with the Monaco lawyer concerning the properties and their proceeds, even assuming that lawyer acted unwittingly.
4. The court rejected discretionary objections based on the proceeds’ already having been traced, the absence of an actual refinancing, and the Monaco lawyer’s non-party status. Any privilege belonged to Mr Su, who had failed to establish that privilege existed in the relevant documents.
5. The order was confined to correspondence concerning or containing information about Mr Su’s assets. English-law correspondence covered 16 January to 29 March 2019. Monaco-related correspondence was limited to 16 March 2015 to 28 February 2017. Permission was also given to use the documents in other applications or proceedings.

First-instance application. The judgment records earlier enforcement, contempt and search-order proceedings, but no appeal history.