Lambie Trustee Ltd v Prudence Anne Addleman

JurisdictionNew Zealand
CourtSupreme Court
JudgeWilliam Young J
Judgment Date01 June 2021
Neutral Citation[2021] NZSC 54
Docket NumberSC 118/2019

[2021] NZSC 54

IN THE SUPREME COURT OF NEW ZEALAND

I TE KŌTI MANA NUI

Court:

William Young, Glazebrook, O'Regan, Ellen France and Williams JJ

SC 118/2019

Between
Lambie Trustee Limited
Appellant
and
Prudence Anne Addleman
Respondent
Counsel:

D A T Chambers QC and J M McGuigan for Appellant

A S Ross QC and R A Rose for Respondent

Trusts — appeal against a Court of Appeal decision which rejected the appellant's claims of legal advice privilege and litigation privilege and ordered disclosure of Trust documents to the respondent — trustee information — personal information — disclosable information — general principles as to disclosure by a trustee of trustee information to beneficiaries — common interest privilege — joint interest exception — Evidence Act 2006 — Trusts Act 2019

The issue was whether disclosure was precluded by legal professional privilege.

The Court held that all of the advice in issue in the appeal was covered by legal professional privilege in the sense that, as against non-beneficiaries, the Trust was entitled to privilege. A trustee was not entitled to privilege against a beneficiary in respect of advice on issues in which the trustee and beneficiary had a joint interest (the joint interest exception). The legal advice in issue was trustee information and not personal to the trustees who received it. A and LTL had not jointly commissioned the obtaining of legal advice and the trustees were not acting as A's agent in obtaining legal advice. A and the trustees shared a joint interest in the due administration of the Trust and therefore in legal advice as to that administration. The joint interest exception meant that LTL was not entitled to claim privilege against A. A joint interest for the purposes of legal professional privilege did not depend on a shared ownership of the documents in respect of which privilege was claimed. Legal professional privilege, whether statutory under the Evidence Act 2006 or common law, could not be exercised against a person who was jointly interested in the documents in respect of which privilege is claimed.

The joint interest exception may cease to apply prior to litigation being commenced. A's joint interest in the advice received by LTL persisted up until the issue of proceedings in June 2015.

Once a beneficiary commenced litigation concerning the administration of a trust, the litigating beneficiary was not entitled to disclosure of legal advice received by the trustees in relation to that litigation. It was questionable whether the trust had been solely funded by J. However, LTL was entitled to assert privilege in legal advice received after the commencement of proceedings.

The appeal was dismissed. The orders for disclosure made by the CA did not extend to legal advice given from June 2015.

  • A With the clarification that the orders for disclosure made by the Court of Appeal do not extend to legal advice given from June 2015 in connection with this litigation and with leave reserved to Lambie Trustee Ltd to revert to this Court in relation to advice received after 7 November 2014 and before June 2015, the appeal is dismissed.

  • B Costs are reserved.

JUDGMENT OF THE COURT
REASONS

(Given by William Young J)

Table of Contents

Para No.

The appeal

[1]

The factual background

[12]

The Jamieson family

[12]

Ms Jamieson's accident

[13]

The Howick development

[14]

The Lambie Trust

[18]

Transactions affecting the Lambie Trust and changes of trustee

[23]

The “memorandum of wishes”

[26]

Distribution to Mrs Addleman

[27]

Mrs Addleman's requests for trust information

[28]

The Court of Appeal's evaluation of the “sole funding” and “sole purpose” contentions

[31]

What advice is subject to the disclosure order?

[38]

General principles as to disclosure by a trustee of trustee information to beneficiaries and their application to this case

[41]

Disclosure and discovery

[41]

Terminology: “trustee information”, “personal information” and “disclosable information”

[43]

Trustee information

[47]

Personal information

[50]

Disclosable information

[53]

The effect of the Court of Appeal judgment and our leave decision

[60]

Is disclosure precluded by legal professional privilege?

[63]

The issues

[63]

The Evidence Act provisions

[65]

Common interest privilege

[69]

Joint privilege

[70]

The joint interest exception

[72]

The approaches adopted in the High Court and Court of Appeal

[76]

A new approach to joint interest?

[78]

Legal advice given to the trustees relating to the general administration of the trust, including the distribution to Mrs Addleman in 2002

[82]

Legal advice given to the trustees as to what documents should be disclosed to Mrs Addleman

[83]

Legal advice given to Lambie Trustee Ltd for the purposes of this litigation

[95]

Costs

[100]

Disposition

[103]

The appeal
1

This appeal arises out of a dispute between two sisters, Annette Jamieson and Prudence Addleman. It concerns the Lambie Trust. The sole trustee is Lambie Trustee Ltd, a company which Ms Jamieson controls. Ms Jamieson and Mrs Addleman are both beneficiaries. In issue is the extent to which legal advice received by the Trust should be disclosed to Mrs Addleman.

2

In proceedings commenced on 16 June 2015, Mrs Addleman sought disclosure of a wide range of trust documents. This extended to:

… all legal opinions and other advice obtained by the trustees for the purposes of the Trust Fund and funded from the Trust Fund, including all those that might be privileged as against third parties …

3

In the High Court, Woolford J accepted the argument that the Lambie Trust was, in substance, a “sole purpose” trust for the benefit of Ms Jamieson and had been funded with her money. 1 This conclusion heavily influenced his refusal to order any disclosure of trust documents.

4

On the basis of further evidence admitted for the purposes of the appeal, 2 the Court of Appeal was distinctly sceptical of the contention that the trust had been solely funded by Ms Jamieson and held that in any event, “the Trust cannot properly be regarded as a ‘sole purpose trust’ or ‘essentially [Ms Jamieson's] trust”. 3 Looking at the case on that basis, the Court of Appeal directed disclosure by Lambie Trustee Ltd of: 4

… all documents in its possession or power relating to the Lambie Trust in the following categories:

  • (i) financial statements;

  • (ii) minutes of meetings; and

  • (iii) any legal opinions and other advice obtained by the trustees and funded by the Trust.

5

Leave to appeal to this Court was granted only in relation to the last category of documents: 5

Leave to appeal is granted on whether the Court of Appeal was correct to order the applicant to disclose to the respondent any legal opinions and other advice obtained by the trustees of the Lambie Trust and funded by the Trust.

6

The approved question was expressed in this way: 6

The approved question is whether the Court of Appeal was correct to reject the applicant's claims of legal advice privilege and litigation privilege respectively.

7

The Court noted in its reasons:

[2] We ask counsel for the applicant to include in her submissions to the Court such general information about the nature of the legal opinions and other advice as possible, so that the Court has a proper context in which to consider the privilege issues. For the avoidance of doubt, we confirm the Court does not seek to view the documents themselves. The hearing will be confined to issues of principle only.

Lambie Trustee Ltd's submissions in response to this request were in these terms:

30. The appellant claims legal advice privilege in relation to advice / opinions obtained either by the trustee company or by a former trustee. The advice / opinions fall across a spectrum of issues, ranging from matters of trust administration to advice about the trustees' discretionary powers and dealings with beneficiaries.

31. The appellant further claims litigation privilege in respect of communications between the appellant, its legal advisers, and third parties which were made etc for the dominant purpose of a proceeding (from 16 June 2015, when Mrs Addleman filed her statement of claim) or for the dominant purpose of an apprehended proceeding (from 24 September 2014, when the respondent's former solicitors threatened proceedings).

8

Our leave decision confined the appeal to whether Lambie Trustee Ltd could resist disclosure of legal advice on the basis of legal advice or litigation privilege. As it turned out, the arguments advanced on behalf of Lambie Trustee Ltd extended to

broader conceptions of confidentiality, a general invocation of disclosure principles adopted by this Court in Erceg v Erceg 7 and an attempt to rely on the Trusts Act 2019, which came into full effect on 30 January this year (that is, after the hearing of the appeal but before judgment). As well, counsel for Lambie Trustee Ltd, relying on the last sentence in the leave judgment, invited us to issue a judgment addressing only the general principles which should apply and leaving it to determine what documents should be disclosed
9

We are not prepared to broaden the scope of the appeal beyond the question on which leave was granted, although we will discuss, in passing, some (although by no means all) of the arguments which we regard as outside of that scope. Nor are we prepared to confine ourselves to general principles, only leaving it to Lambie Trustee Ltd to itself determine how those principles apply to the documents in its possession. In respect of virtually all documents in question, the necessary corollary of the principles we adopt is that the documents are to be disclosed. There is,...

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