Bhagat v Global Custodians Ltd

The case of *Bhagat v Global Custodians Ltd* concerned an appeal to the Supreme Court of New South Wales from a finding of contempt of court made by Justice Young. The dispute arose in the context of complex litigation following the collapse of a financial group. The appellant, Hari Bhagat, was a trustee of a fighting fund established by investors. The first respondent, Global Custodians Limited, had acquired rights concerning the former funds and initiated proceedings seeking access to trust accounts. These proceedings involved the Speights and the Greenlees, who had assigned their interests to Global Custodians. The appellant subsequently commenced his own proceedings against Global Custodians, the Speights, and the Greenlees.

The central legal issues before the court were whether the appellant had committed contempt of court by applying improper pressure to the Speights and the Greenlees to withdraw from proceedings, and whether a letter sent by the appellant to these parties, marked "without prejudice," was admissible as evidence. The court was required to consider the admissibility of this communication under section 131 of the *Evidence Act 1995* (NSW) and whether the communication was between persons "in dispute" for the purposes of that section.

Justice Young had found the appellant guilty of contempt, a decision that was upheld on appeal. The court reasoned that the letter, despite being marked "without prejudice," was admissible because it constituted evidence of conduct that might amount to contempt. The "without prejudice" privilege, the court explained, is not absolute and does not protect communications made in furtherance of a criminal or contemptuous act. The court determined that the appellant's actions in sending the threatening letter constituted an attempt to improperly pressure the Speights and the Greenlees, thereby interfering with the due administration of justice.

The appeals were dismissed with costs.