Thyssen-Bornemisza v Thyssen-Bornemisza and Others 1999 Civil Appeal No. 4

• Jurisdiction: Bermuda
• Judgment Date: 02 August 1999
• Date: 02 August 1999
• Docket Number: Civil Appeal No. 4 of 1999
• Court: Court of Appeal (Bermuda)

The Court of Appeal for Bermuda

Astwood, P.

Huggins J.A.

Zacca J.A.

Civil Appeal No. 4 of 1999

BETWEEN:

(1) Hans Heinrich Thyssen-Bornemisza

(2) Lrt Trustee (Pvt) Limited

Appellants

and

(1) Georg Heinrich Thyssen-Bornemisza

(2) Favorita Holding Limited

(3) Thybo Trustees Limited

(4) Tornabuoni Limited

Respondent

cc: Appleby, Spurling & Kempe—Mr. G. Bell/Mr. J. Dill Attorneys for the Appellants

cc: Cox Hallett Wilkinson—D. Kessaram Attorneys for the First Respondent

cc: Conyers Dill & Pearman—Mr. J. Elkinson Attorneys for the 2nd 3rd & 4th Respondents

Lillicrap v NalderWLR [1993] 1 WLR 94

The SagheeraUNK [1997] 1 Lloyds Rep 160

Ramsay v PigramUNK (1968) 118 CLR 271

Henderson v HendersonENR (1843) 3 Hare 100

Hoystead v Commissioner of TaxationELR [1926] AC 155

Yat Tung Investment Company Limited v Dao Heng Bank LimitedELR [1975] AC 581

Talbot v Berkshire County CouncilELR [1994] QB 290

Greehalgh v MallardUNK [1947] 2 All ER 255

Bradford & Bingley Building Society v Seddon [unreported, 17 March 1999]

Carl Zeiss Siftung v Rayner & Keeler Ltd (No. 3)ELR [1970] 1 Ch 506

Johnson v Gore Wood & Co. [1999] PNLR 426

Barrow v Bankside LtdWLR [1996] 1 WLR 257

Paragon Finance plc v FreshfieldsWLR [1999] 1 WLR 183

Gleeson v J. Wippell & Co. Ltd.WLR [1977] 1 WLR 510

House of Spring Gardens v WaiteELR [1991] 1 QB 241

Trawl Industries of Australia Ltd v Effem Foods Pty Ltd.UNK (1992) 36 FCR 406

Action to set aside trust on grounds of undue influence — Discovery — Legal privilege — Joint privilege and sole privilege — Res non judicata — Privity in interest — Unconscionability

JUDGMENT

Huggins, J.A.

The Baron Hans Heinrich Thyssen-Bornemisza (‘the Baron’) is a man of immense wealth with interests in several countries. Wishing to minimise his liability to pay taxes and intending to provide for the distribution of his property after his death and to avoid family disputes whilst at the same time providing himself with an income during his life, the Baron entered into a complicated series of transactions which centered around what has been termed ‘the Continuity Trust’. His eldest son, Georg, was playing a large part in administering the Baron's business empire and was requested by the Baron to have the Continuity Trust drawn up in accordance with the Baron's expressed wishes. The trust was executed on the 18^th April, 1983. In 1986 he created another trust (‘the Art Trust’) which related to his extensive art collection and he addressed various Letters of Wishes to the trustees of that trust and to the trustees of the Continuity Trust.

In 1997 the Baron came to the conclusion that the Continuity Trust had not been drawn up in accordance with his wishes and that his son was to blame. Accordingly he instituted the present action to have that trust set aside on the grounds (inter-alia) of presumed undue influence from 1983 to 1995. The day before the Writ was issued he declared a third trust, (‘The Vlaminck Trust’) whereby the interest in the intended proceedings was conveyed to himself and a trust company, the Second Plaintiff. It was, however, a revocable trust, although it has not yet been revoked. The beneficiaries were the Baron, who during his life was to receive the income earned from any money recovered, and thereafter the Baroness, so that the Baroness had a defeasible contingent interest. The action was brought by the Baron and the Second Plaintiff as trustees of the Vlaminck Trust.

The Defendants to the action are the son whose conduct is primarily impeached (‘Georg’), the company which owns the Baron's industrial group and which is owned by the Third Defendant (‘Favorita’), a company which owns Favorita (‘Thybo’) and, finally, a company which is Protector of the Continuity Trust (‘Tornabuoni’). The Second, Third and Fourth Defendants have been categorised as ‘the Corporate Defendants’, and they have throughout duplicated the contentions of Georg.

There have been fierce disputes over discovery in the action, including applications for further and better discovery upon the hearing of which an issue as to waiver of privilege was tried. The order made on those applications was the subject of an unsuccessful appeal to this Court. The present appeal arises out of subsequent applications by the Defendants for orders for:

• (i) a further and better list of documents,

• (ii) specific discovery under Order 24 rule 7 of the Rules of The Supreme Court,

• (iii) amendment of the Plaintiffs' fourth list of documents,

• (iv) verification by affidavit of the fourth list and of the list sought by these summonses,

• (v) production of specified documents.

Mitchell, J. held that the Plaintiffs were precluded from raising an alleged joint legal professional privilege of the Baron and Baroness as a defence to the application for an order for production and on 4^th March, 1999 made the orders sought. The Plaintiffs again appeal.

In his written submissions on the present appeal Mr. Boyle for Georg said

‘the effect of the Court of Appeal's [previous] ruling was to dispose of any claim to legal professional privilege by the Baron in respect of documents identified in Mr. Justice Ground's Order of 10^th March, 1998, and to affirm Ground, J.'s Order requiring the Plaintiff to list in Part I of Schedule 1 to their list of documents the documents in the various categories specified in that Order’.

That, as I understand it, indicates that the Defendants have been advancing their argument in two ways: first, they say that Ground. J, decided and ordered that all legal professional privileged documents including the joint privilege documents were to be listed in Part I and that that order had been disobeyed, and, secondly, that, if the issue before Ground, J. was confined to sole privilege documents, the Plaintiffs could and should have raised the joint privilege point in those proceedings. There has been some confusion over the legal principles involved but we must first consider both what in fact was argued before Ground. J, and what was the effect of his Order, affirmed as it was by this Court on appeal.

The summonses of the First Defendant and the Corporate Defendants before Ground, J. were in substantially the same terms and sought (inter-alia) an Order that the Plaintiffs serve:

‘a further and better list of all documents which are or have been in their possession, custody or power, relating to any matter in question in this action, including all such documents falling within the categories set out in the schedule hereto; and if the Plaintiffs desire to claim that any such documents or category of documents are privileged from production the Plaintiffs shall separately identify the same with sufficient particularity in the said further and better list to enable [the Defendants] to identify them, together with a sufficient statement of the grounds of the privilege claim in respect of each such document or category of documents’.

The schedule included:

• ‘5. Documents relating to the preparation, negotiation and execution of the Baroness' 1987 testamentary pact in the files and papers of the following advisors of the Baron:

• 5.1 Coleridge

  ……

• 6. Documents relating to the preparation, negotiation and execution of The Art Trust 1990 Letter of Wishes, The Art Trust 1993 Letter of Wishes, The Acquisition Agreement dated the 21^st June, 1993, The 1993 New Family Trust and Estate arrangement including the Family pact and Spanish pact and The Continuity Trust Letter of Wishes in the files and papers of the following advisors of the Baron:

• 6.1 Lloyd

  ………’

Strictly the only matter which fell to be decided on that part of the summonses was whether a further list should be ordered. However, with the consent of the parties, the Judge also considered another question and in his Ruling dated the 10^th March, 1998 he stated that question to be:

‘whether the Baron can effectively maintain that claim to privilege, given the nature of his cause of action and the issues which it places before the Court for determination’ (emphasis supplied).

The words emphasised are a clear reference to the principle laid down in Lillicrap v Nalder[1993] 1WLR 94 and the question was, therefore, whether there had been a waiver of the Baron's sole privilege. He could not effectively waive any joint privilege (The SagheeraUNK(1997) 1 Lloyds Reports 160)...