[CHANCERY DIVISION]

GOLDSTONE v. WILLIAMS, DEACON & CO.

[1897 G. 2456.]

Practice - Discovery - Production of Documents - Privilege.

In an action against G. and her trustee in bankruptcy for breaches of trust committed by her as administratrix of her deceased husband's estate, the plaintiffs' solicitors had prepared certain accounts which were produced to her on examination before an examiner, and admitted by her to be correct. The action was afterwards compromised, and the depositions of G. to which the accounts were exhibited were entered as read in the order of compromise. The accounts related to transactions between G. and a firm of bankers with whom she had (in alleged breach of trust) deposited securities belonging to her husband's estate to secure advances to herself. In another action by the same plaintiffs against the bank, the defendants claimed production (1.) of the accounts, and (2.) of the office copy of G.'s depositions, both of which were in the plaintiffs' possession:-

Held, that the accounts were privileged, but the copy depositions was not.

North Australian Territory Co. v. Goldsborough, Mort & Co., [1893] 2 Ch. 381, followed.

THIS was a motion to discharge an order made in chambers on July 18, 1898, whereby it was ordered that the plaintiffs should produce to the defendants the evidence in their possession upon which the order for compromise of an action of In re Goldstone, Goldstone v. Goldstone [1897 G. 893], and dated November 13, 1897, was made, including the office copy depositions of the defendant Jane Goldstone and the exhibits relating thereto.

The plaintiffs, in the action of Goldstone v. Goldstone and in this action, were the infant children of Sampson Goldstone, who died in December, 1884, intestate, leaving the defendant Jane Goldstone his widow, who became his legal personal representative. After her husband's death she had deposited certain securities belonging to his estate with Messrs. Williams, Deacon & Co., a firm of bankers, at first for safe custody, but subsequently by way of security for advances made to her by the bank. The bank had realized their security and applied the proceeds in satisfaction of Mrs. Goldstone's debt to them.

The action of Goldstone v. Goldstone was brought against Mrs. Goldstone and her trustee in bankruptcy, and by it the plaintiffs sought, first, to obtain administration of the intestate's estate, and, secondly, to trace certain property earmarked as belonging to the estate, and to establish the amount of the proof to be allowed. The usual administration order having been made, Mrs. Goldstone did not furnish proper accounts of her husband's estate, but made an affidavit stating what the estate consisted of at the time of his death. The plaintiffs' solicitors then employed an accountant to investigate the estate, with a view not only to the prosecution of that action, but also with a view to any further action which might become necessary; and the result of that investigation was embodied by the accountant in a statement of accounts. Mrs. Goldstone was afterwards examined in the action before an examiner, and in the course of her examination the statement of accounts was put to her and admitted by her to be correct, and was then made an exhibit to her depositions. After this admission the trustee in bankruptcy proposed a compromise; and, on the ex parte application of the plaintiffs, an order was made dated November 13, 1897, in which the depositions of Mrs. Goldstone and the exhibits thereto were entered as read.

On November 16 leave was given by the Court to the plaintiffs to bring the present action against the bank. It was alleged that the bank had notice that the securities deposited by Mrs. Goldstone formed part of the intestate's estate, and that a breach of trust had been committed by Mrs. Goldstone; and the plaintiffs claimed to recover against the bank accordingly.

By their defence the bank denied the case made by the plaintiffs, and also pleaded as follows (paragraph 15): "On or about the 10th March, 1897, Jane Goldstone was adjudicated bankrupt and thereupon an action was commenced by the plaintiffs against the trustee in bankruptcy of her estate claiming certain assets in the possession of the trustee as in fact forming part of the estate of Sampson Goldstone. The said action was compromised by a payment to the plaintiffs of 1700l., which it was agreed should be accepted in full discharge, not only of the claim to the said specific assets, but of all

claims or right of proof on the part of the plaintiffs against Jane Goldstone's estate arising from breaches of trust by Jane Goldstone in the administration of Sampson Goldstone's estate. The bank will rely upon the said compromise as a defence and bar to this action."

Upon the usual order for discovery being made in this action, the plaintiffs' solicitor made an affidavit objecting to produce certain documents on the ground that they were privileged. These documents included "accounts prepared by an accountant relating to transactions between defendant Jane Goldstone and defendant bank and relating to the estate of Sampson Goldstone deceased and office copy depositions of Jane Goldstone."

On July 18, 1898, an order was made in chambers directing the production of the documents in question; and the plaintiffs now moved to discharge that order.

Jenkins, Q.C., and J. Rutherford, for the applicants. The documents directed to be produced by the order of July 18 are privileged.

(1.) As to the accounts. They were prepared by the accountant upon the instructions of the plaintiffs' solicitors, and form the ground of the whole case against the bank. They were prepared with a view to this action as well as the former action against the trustee in bankruptcy. It is suggested, however, that although the accounts may have been originally privileged, yet that the privilege was destroyed by their being produced to Mrs. Goldstone on her cross-examination, and being made exhibits to her depositions. But a partial waiver of privilege is not waiver to all the world. Although the disclosure of a privileged document to an adversary may destroy the privilege to a certain extent, it does not necessarily destroy it altogether, and the mere putting of a privileged document into the hands of a person who is being privately examined does not destroy the privilege: Reg. v. Hankins (1); Bray on Discovery, pp. 366, 432, 440.

(2.) As to the copy of the depositions. We submit that it is

(1) (1849) 2 Car. & K. 823.

privileged also. These depositions are not copies of evidence taken in open court. In Learoyd v. Halifax Joint Stock Banking Co. (1) the transcript of a shorthand writer's notes of proceedings at the examination of witnesses under s. 27 of the Bankruptcy Act, 1883, was held to be privileged in an action subsequently brought by the trustee in bankruptcy. Even depositions on the file of the court are private to this extent - that no one can inspect them except he can shew to the official in charge of them that he has proper grounds for so doing. The copy of the depositions which is in the plaintiffs' possession is not a transcript of evidence taken in open court, and is not therefore publici juris: Nordon v. Defries. (2)

Upjohn, Q.C., and Kirby, for the defendants. (1.) As to the accountant's report, what is ordered to be produced is the evidence read into the order of compromise. Mrs. Goldstone, upon its being put to her in cross-examination, accepted it as correct - whereupon it assumed a different character. It became a document common to all the parties, and was made evidence for all purposes. It cannot be brought under any head of privilege.

(2.) As to the copy depositions. There is no distinction between evidence taken in open court and that taken before an official of the court to whom the duty of taking the evidence is delegated. The phrase publici juris is misleading. Here it negatives the idea that there is anything confidential in the communication.

Shorthand notes of proceedings in open court are clearly not privileged: Nicholl v. Jones (3); Rawstone v. Preston Corporation(4); In re Worswick. (5)

There can be nothing privileged or confidential in what takes place in open Court.

Reg. v. Hankins (6) turned upon a very technical ground of privilege, namely, that production might incriminate the prisoner.

Jenkins, Q.C., in reply. The depositions are not publici

(1) [1893] 1 Ch. 686.

(2) (1882) 8 Q. B. D. 508.

(3) (1865) 2 H. & M. 588.

(4) (1885) 30 Ch. D. 116.

(5) (1888) 38 Ch. D. 370.

(6) 2 Car. & K. 823.

juris, and the plaintiffs are entitled to claim privilege for their copy. No doubt if the depositions could be inspected by any one as of course, then the copy which the plaintiffs have in their possession would not be privileged; but this case is very like The Palermo (1), where copies of depositions taken by the Receiver of Wreck under s. 432 of the Merchant Shipping Act, 1854, were held to be privileged: see also Lyell v. Kennedy. (2)

As to the accountant's report, the case is even stronger. In its inception the report is privileged, and nothing has been done to destroy or take away that privilege. It is not lost by the production of the accounts to the witness, or by their having been before the judge upon the making of the order of compromise. No authority can be found for the proposition that, because a privileged document is referred to in the course of proceedings not open to the public, the privilege is thereby destroyed.

1898. Oct. 27. STIRLING J. (after stating the facts):- The question is whether the plaintiffs are entitled to object to produce (1.) the accounts and (2.) the copies in their possession of the depositions of Mrs. Goldstone.

The first of these questions is by far the more important, and is one of some nicety. The ground on which production is resisted on behalf of the plaintiffs is that the documents are privileged. It must be taken that the accounts were in the first instance privileged, for they were prepared at the instance of the plaintiffs' professional adviser with a view to a former litigation after that litigation had been commenced. That alone would be sufficient to confer privilege even if they had not been prepared also with a view to the present litigation. On this Walsham v. Stainton (3) is a direct authority. It has also been held that, as a general rule, a document once privileged is always privileged: see Bullock & Co. v. Corry & Co. (4), Pearce v. Foster (5), and the very recent case of Calcraft v.

(1) (1883) 9 P. D. 6.

(2) (1883) 23 Ch. D. 387; 9 App. Cas. 81.

(3) (1863) 2 H. & M. 1.

(4) (1878) 3 Q. B. D. 356.

(5) (1885) 15 Q. B. D. 114.

Guest (1), where the Master of the Rolls makes these remarks: "I take it that, as a general rule, one may say once privileged always privileged. I do not mean to say that privilege cannot be waived, but that the mere fact that documents used in a previous litigation are held and have not been destroyed does not amount to a waiver of the privilege."

These decisions appear to be based on the necessity of allowing full and free communication for the purposes of litigation, not only between a solicitor and his client, but between the solicitor and persons whose assistance he requires, or with whom he communicates in order to enable him properly to conduct the litigation. But there is another line of decisions under which it is sought to bring the present case. It has been decided that notes of proceedings in open court - Nicholl v. Jones (2); In re Worswick(3) - or before an arbitrator - Rawstone v. Preston Corporation (4) - are, as a rule, not privileged, but must be produced. Those decisions proceed on the ground, as I understand them, that the administration of justice in this country is a matter of public interest, and to be conducted (again as a general rule) in public, and, consequently, that there can be nothing privileged or confidential which passes in open court. If, then, the proceedings in the former action had taken place in open court, and if the plaintiffs had in their possession a shorthand writer's note of them, it would seem to me that such a note must be produced. That, however, does not completely answer the question with which I have to deal. Such a note would only shew that a particular document had been placed in the witness's hands and had been admitted to be correct. The document itself is only made an exhibit, and, consequently, is not on the file at all. The contents of the document did not get on the examiner's notes. Beyond this no use was ever made of the document in the former action, except that it was read in the order of November 13, 1897. That was an ex parte order made in chambers, and the document was obviously brought before the judge to enable him to determine whether the compromise was proper

(1) [1898] 1 Q. B. 759, 761.

(2) 2 H. & M. 588.

(3) 38 Ch. D. 370.

(4) 30 Ch. D. 116.

to be approved on behalf of the infants. Such use was not a public disclosure, but was in its nature confidential, and cannot affect the question which I have to decide. It seems to me that the case stands very much in the same position as if on a trial in open court after a document had been placed in a witness's hands, and its contents had been admitted to be true, but before it had been read, a compromise had been arranged between counsel. It appears to me that the document in question was never effectually made public, and that the use made of it does not amount to a waiver of the privilege. The particular point does not seem to be covered by authority; but the case which comes nearest to it is North Australian Territory Co. v. Goldsborough, Mort & Co. (1) There an action was brought by a company in liquidation. In the course of the winding-up, and after the commencement of the action, some of the directors and officers of the company were examined under s. 115 of the Companies Act, 1862, and their depositions duly taken. These depositions had not been filed. In the action, upon the cross-examination, under commission on behalf of the plaintiffs, of one of the persons examined under s. 115, he was questioned as to certain answers given by himself and other persons who had been examined under s. 115, and those answers were read to him from the depositions and admitted to be correct. Of course, so much as was read of these depositions got on the notes, and the application there was for the production of the rest of the documents. The present Master of the Rolls says (2): "The argument on behalf of the defendants practically comes to this: that because use was made of these depositions by the plaintiffs' counsel in Melbourne, the defendants are entitled to see them. On what principle are they so entitled? It is said that they are entitled because these depositions ought to have been scheduled in the plaintiffs' affidavit of documents as documents in their possession relating to matters in dispute in the action; but, if they had been scheduled, privilege would as a matter of course have been claimed for them, and the defendants would never have seen them; and it would not be fair to the plaintiffs if we were to treat these depositions

(1) [1893] 2 Ch. 381.

(2) [1893] 2 Ch. 387.

as documents in their possession unprotected by a claim of privilege."

There remains the question as to the copies of the depositions - a much smaller question, and one which, but for the existence of the other, would probably not have been brought before me. These copies of the depositions simply constitute a note of what took place before the officer of the court in the course of a hostile litigation. The depositions are on the file of the court, and may be inspected by any person who shews that he has proper grounds for so doing: see Central Office Practice Rules (Annual Practice, 1897, p. 1229). On such an occasion I take it that no question as to privilege could be raised, any more than in the analogous case of documents filed in lunacy, as to which see In re Strachan. (1) It seems to me that the depositions have been filed in the usual way, and have become publici juris within the meaning of the decisions in Nicholl v. Jones (2) and the cases which have followed it, and that they are liable to production accordingly. Some reliance was placed on The Palermo (3); but there the depositions, of which copies were sought, were not publici juris. I think, therefore, that the order ought to be discharged only so far as it directs the production of the accounts. In this way effect is given to both lines of decision. That which has become public is to be produced, while that which has not, and is in its original nature privileged, is to be treated as remaining privileged. The costs of the present application will be costs in the action.

Solicitors: F. Venn & Co., for J. C. Parkinson, Liverpool; Rooke & Sons, for Orford & Sons, Manchester.

G. A. S.

(1) [1895] 1 Ch. 439.

(2) 2 H. & M. 588.

(3) 9 P. D. 6.