High Court Rules on Discovery Application

On July 8, 1998 Mr. Justice Stanley A. Moore, judge of the BVI High Court of Justice, handed down a written decision on an interlocutory application arising in the case of Canada Trust Company and Others v. Century Holdings Limited and Others, suit No. 27 of 1997. The application centered around the issue of whether five documents held by a law firm for its client, the first named defendant company (an IBC) should be disclosed to the Plaintiff and particularly whether the Defendants' claim to privilege in respect thereof was valid. The documents were related to internal corporate matters and included a resolution appointing directors, a notice of a board meeting and resolutions relating to the winding up of the IBC.

The learned Judge found that the documents related to purely administrative functions and were not passed to the solicitors for the purpose of obtaining legal advice thereon. In the circumstances, they did not attract legal professional privilege. Justice Moore held further that even if they did, that privilege would have been defeated by the 'massive prima facie case of fraud' standing against the IBC. This was so despite the fact that as the Judge stressed, the law firm being asked to produce the documents had behaved impeccably throughout and were neither guilty nor accused of any wrong doing whatsoever.

Mr. Justice Moore expressed the view that while communications to and from a legal adviser may be privileged even when litigation is not pending or contemplated, the protection does not however apply when the communications are made for a fraudulent or illegal purpose. Further, advice or instructions sought or given for the purpose of effecting iniquity was not privileged. It is important to note however that the documents were only disclosable because they were relevant to the issues between the parties and were not subject to exclusion on any of the normal grounds.