Boris Berezovsky (oligarch B) brought a claim in the court of Chancery against the heirs of Arkadi Patarkatshishvili (AP, for ease of reference) for a 25% interest in Rusal, an aluminium company, under the terms of an alleged oral agreement. Oligarch B is seeking to recover the assets from AP’s estate or an award of damages for the estate’s failure to secure the property. Another oligarch, Roman Abramovich (oligarch A) is alleged to have agreed – again orally – to hold half of his Rusal interests in trust for oligarch B and AP, the subject of an action by oligarch B in the Commercial Court. There is considerable overlap between oligarch B’s claims against oligarch A in the Commercial Court and the Chancery claim against the AP estate. [Link available here].
The issue for the Court of Appeal in Berezovsky v Hine, [2011] EWCA Civ 1089, was whether oligarch B had waived privilege over draft witness statements prepared by his counsel for his use in the Commercial Court action by sending them to the solicitors acting for AP to assist the latter with his claim for asylum in the UK. The AP estate wished to make use of the statements in defending oligarch B’s Chancery claim against it.
Mann J of the Commercial Court thought that oligarch B had waived his privilege by sharing the documents. On appeal, the Master of the Rolls concluded that the statements had been disclosed for a limited purpose only (the asylum claim) and that use for any other purpose was impliedly prohibited without oligarch B’s consent, unless AP’s use (despite oligarch B’s objection) could not cause prejudice to oligarch B or could be achieved without disclosing the contents of the statements to anyone but AP, his successors or counsel. A number of facts supported the conclusion that disclosure had been made for a limited purpose only, notably that oligarch B would clearly have wanted to keep the draft statements from the eyes of adverse parties in the overlapping proceedings (i.e., oligarch A) and that AP would have appreciated this. The fact that the statements were labelled ‘privileged and confidential’ when disclosed also helped. Assertion of a continuing common-interest privilege might have led to the same conclusion, but it was unnecessary to decide the issues on that basis. AP’s estate could not read or use the documents for the purposes of the Chancery proceedings. {Link available here].
Canadian law, as it stands, would have had more difficulty with all of this: limited waiver of privilege has so far been recognised only in, er, limited circumstances, for example when an auditor requires disclosure of privileged material: Philip Services (Receiver of) v OSC (2005) 77 OR (3d) 209 (Div Ct). There is no reason why the principle should not be more widely available, as demonstrated by the English Court of Appeal. [Link available here].
