Carrafa v Asfar (No. 3)

In Carrafa v Asfar, the plaintiffs, who are trustees of the estate of a bankrupt, seek to challenge the settlement of real property held by the executor of the estate. The defendants include the executor, the creditors of the bankrupt estate, and the solicitors representing the creditors. The plaintiffs argue that the settlement of the property was dishonest and in breach of the fiduciary duties owed to them by the creditors. The crux of the case revolves around whether client privilege has been lost in the documents related to the settlement, as the plaintiffs contend that these documents were created in furtherance of fraud or an abuse of power.

The court was required to determine whether the loss of client privilege under section 125 of the Evidence Act 1995 applies to the documents in question. The plaintiffs' argument hinges on whether the documents were created with the intent to commit fraud or were communications reasonably known to be prepared in furtherance of an abuse of power. The defendants, on the other hand, assert that the documents are protected by client privilege and should not be disclosed. The court had to weigh the potential loss of privilege against the need to ensure justice and fairness in the administration of the estate.

The court concluded that the documents did not lose their privilege under section 125 of the Evidence Act. The reasoning involved an assessment of the intent behind the creation of the documents and whether they were reasonably known to be prepared in furtherance of fraud or abuse of power. The court found that there was insufficient evidence to establish the requisite intent or knowledge. Consequently, the plaintiffs' application to have the documents disclosed was dismissed.

The final orders of the court were that the plaintiffs' application to have the documents disclosed was dismissed, and client privilege was upheld in relation to the documents in question.