Hagaman v Hagaman
[2023] NZHC 1340
•31 May 2023
THIS IS A REDACTED VERSION OF THE JUDGMENT. THE REDACTED PARTS OF PARAGRAPHS, [15], [18], [21], [30], [31], [32], [33], [34], [39], [41],
[42], [43] AND [48] ARE PERMANENTLY SUPPRESSED. PUBLICATION IN LAW REPORT OR LAW DIGEST PERMITTED OF THE REDACTED
JUDGMENT.
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2018-409-531
[2023] NZHC 1340
IN THE MATTER of the Estate of Earl Raymond Hagaman BETWEEN
DAMON CARLSON HAGAMAN, JENNIFER LYNN HAGAMAN ELDERS, KIMBERLY RAE HAGAMAN AND KEITH ERIC HAGAMAN
Plaintiffs
AND
LIANNA-MERIE HAGAMAN, GILBRALTAR TRUST LIMITED AND FJB
TRUSTEES LIMITED as trustees of the Naciemento Trust
First Defendants
LIANNA-MERIE HAGAMAN
Second DefendantLIANNA-MERIE HAGAMAN,
GILBRALTAR TRUST LIMITED AND FJBTRUSTEES LIMITED as trustees of the Sequoia Trust
Third Defendants
Hearing: 17 May 2023
(Telephone Hearing)
Counsel:
A R Galbraith KC for Plaintiffs
M G Colson KC for First Defendants
Judgment:
31 May 2023
REDACTED JUDGMENT OF ASSOCIATE JUDGE LESTER
(Rulings in respect of disputed privilege)
HAGAMAN v HAGAMAN [2023] NZHC 1340 [31 May 2023]
[1] Counsel have worked through privilege issues in respect of numerous documents and significantly reduced their disagreement over privilege. The documents remaining in issue have been provided to me in a bundle of documents dated 17 May 2023. That bundle is to be sealed and not searched without the authority of a High Court Judge.
[2] A hearing by telephone conference was held on 17 May 2023 to address the remaining disputed claims to privilege.
Legal professional privilege
[3] The privilege claimed for each of the documents is pursuant to s 54 of the Evidence Act 2006 (the Act), which provides:
54 Privilege for communications with legal advisers
(1)A person who requests or obtains professional legal services from a legal adviser has a privilege in respect of any communication between the person and the legal adviser if the communication was—
(a)intended to be confidential; and
(b)made in the course of and for the purpose of—
(i)the person requesting or obtaining professional legal services from the legal adviser; or
(ii) the legal adviser giving such services to the person. (1A) The privilege applies to a person who requests professional legal
services from a legal adviser whether or not the person actually obtains such services.
(2)In this section, professional legal services means, in the case of a registered patent attorney or an overseas practitioner whose functions wholly or partly correspond to those of a registered patent attorney, requesting or obtaining or giving information or advice concerning intellectual property.
(3)In subsection (2), intellectual property means 1 or more of the following matters:
(a)literary, artistic, and scientific works, and copyright:
(b)performances of performing artists, phonograms, and broadcasts:
(c)inventions in all fields of human endeavour:
(d)scientific discoveries:
(e)geographical indications:
(f)patents, plant varieties, registered designs, registered and unregistered trade marks, service marks, commercial names and designations, and industrial designs:
(g)protection against unfair competition:
(h)circuit layouts and semiconductor chip products:
(i)confidential information:
(j)all other rights resulting from intellectual activity in the industrial, scientific, literary, or artistic fields.
[4] Mr Galbraith KC, counsel for the plaintiffs, submitted that the disputed documents were not made for the purposes of requesting or obtaining professional legal services or for the purpose of the legal adviser giving such services.
[5] Mr Galbraith submitted that the essential issue was whether the purpose of the communication in issue was to enable legal advice to be sought and given in confidence. In order to be privileged, the documents had to form part of a necessary exchange of information whose object was the communication of legal advice.1
[6] Mr Colson KC, counsel for the first defendants, who presented the submissions in support of the maintenance of privilege, did not dispute the principles relied on by Mr Galbraith but emphasised that the wide meaning of “professional legal services” can mean a document is privileged even though it does not appear to request or provide such services.
[7]Mr Colson relied on the following United Kingdom authorities.
[8] In Balabel v Air India, the Court of Appeal held that, in a conveyancing transaction, communications which passed in the handling of the transaction were privileged even though they did not incorporate a specific piece of advice, as long as
1 Commerce Commission v Caltex New Zealand Ltd HC Auckland CL33/97, 10 December 1998 at 3.
their purpose was to obtain legal advice.2 Noting a divergence in the authorities, Taylor LJ considered that the “purpose” of the communication had to be construed broadly. He said:3
There will be a continuum of communication and meetings between solicitor and client. … Where information is passed by the solicitor or client to the other as part of the continuum aimed at keeping both informed so that advice may be sought and given as required, privilege will attach.
[9] He went on to explain that the “purpose of legal advice test” will result in most communications between solicitor and client in (for example) a conveyancing transaction being kept from disclosure due to privilege or lack of relevance.4 That approach has long been endorsed in New Zealand.5
[10] It may be hard to determine whether there is a necessary “legal” context. In Three Rivers District Council v Governor and Company of the Bank of England (No 6), Baroness Hale explained:6
[62] This rationale [for legal advice privilege] extends much more broadly than to advice about legal rights and obligations strictly so-called. I understand that we all endorse the approach of the Court of Appeal in Balabel v Air India [1988] Ch 317, and in particular the observation of Taylor LJ, at p 330, that “legal advice is not confined to telling the client the law; it must include advice as to what should prudently and sensibly be done in the relevant legal context”. There will always be borderline cases in which it is difficult to decide whether there is or is not a “legal” context. But much will depend upon whether it is one in which it is reasonable for the client to consult the special professional knowledge and skills of a lawyer, so that the lawyer will be able to give the client sound advice as to what he should do, and just as importantly what he should not do, and how to do it. We want people to obey the law, enter into valid and effective transactions, settle their affairs responsibly when they separate or divorce, make wills which will withstand the challenge of the disappointed, and present their best case before all kinds of court, tribunal and inquiry in an honest and responsible manner.
[11] Both counsel agreed that the context in which the documents were created was important.
2 Balabel v Air India [1988] Ch 317 (CA).
3 At 330.
4 At 331.
5 Equiticorp Finance Group Ltd v Collett (1991) 3 PRNZ 509 (HC); for a more recent example see
NZ Iron Sands Holdings Ltd v Toward Industries Ltd [2019] NZHC 1416, [2019] NZAR 1199.
6 Three Rivers District Council v Governor and Company of the Bank of England (No. 6) [2004] UKHL 48, [2005] 1 AC 610.
[12] In relation to the first document I will refer to, both counsel recognised that there are disputed facts which may mean the status of that document may have to be addressed at trial.
Documents HAG.005.00438 and HAG.005.00439
[13] Legal professional privilege is claimed by Earl Hagaman’s (Earl) estate and the Naciemento Trust in both documents.
[14] Document HAG.005.00438 is a letter from Mr Simon Johnston (Mr Johnston), a partner of the law firm Meares Williams, addressed to the late Earl, dated 17 October 2001.
[15]The letter refers to [REDACTED].
[16] The context of the letter is that Damon Hagaman (Damon) and Earl had entered into a handwritten agreement in respect of the acquisition of properties in Dunedin. Mr Johnston, in an affidavit, says he did not provide legal advice in relation to that agreement. Damon and Earl asked Mr Johnston to write up the agreement, that is, literally copy out what Damon had written because Mr Johnston’s handwriting was more legible. Mr Johnston, in doing so, changed a clause that referred to him acting as a valuer in the case of a dispute because he did not want to take on that role.
[17] Mr Johnston says that it was clear to him from reading the agreement that there were a number of issues it did not cover, and he was concerned about that.
[18][REDACTED]
[19] Mr Colson submits that these documents are a straightforward case of legal advice privilege, that is, advice sought by Earl, addressed to him and marked “private and confidential.” Therefore, it was privileged to Earl and now Earl’s estate.
[20] Mr Galbraith referred to an affidavit in response from Damon, to the effect that at the time of the October 2001 letter, he and Earl had only ever had Mr Johnston acting for them. There is a dispute as to if and when Mr Johnston said to Damon that
he should get independent advice. Mr Galbraith’s submission was that Mr Johnston was acting for both Earl and Damon from the time that he transcribed the handwritten agreement and that Mr Johnston did not advise Damon, even though Mr Johnston had been Damon’s lawyer for an extended time, that he was not acting for him in relation to the matters contained in the October 2001 letter. Accordingly, Mr Galbraith’s submission was that any privilege was a joint privilege.
[21] Mr Galbraith relies on the following passages in the letter [REDACTED]. Mr Galbraith submitted that Mr Johnston could not unilaterally terminate a joint instruction when he was jointly instructed, and therefore the privilege was joint and could not be maintained against Damon.
[22] As Mr Colson submitted at the heart of Mr Galbraith’s submission is the idea that Mr Johnston was acting for both Damon and Earl and Mr Johnston had not told Damon to take independent advice.
[23] Mr Galbraith in reply acknowledged the difficulty of attempting to resolve this factual issue in a summary context.
[24]There are indications both ways in the letter.
[25] I decline to rule on the confidentiality issue given that it largely turns on disputed facts.
[26] Other aspects of privilege concerning this letter will potentially arise at trial, including waiver and Earl’s estate’s ability to maintain privilege pursuant to s 66 of the Act.
[27] Accordingly, the validity of the privilege claim for these documents is adjourned to be dealt with, should it arise, at the substantive hearing. The focus of the submissions was on Mr Johnston’s advice to Earl. The submission did not address in what capacity the advice was given to Earl, so I cannot comment on the Trust’s claim for privilege alongside Earl’s estate.
Document HAG.007.00127
[28] This document is an email for which privilege is claimed by Earl’s estate. Accordingly, the estate will have to establish its right to maintain privilege under s 66 of the Act.
[29] The email exchange is from October 2007, at a time when Earl’s former wife, Barbara Fairbanks, had rekindled relationship property litigation in the United States against Earl.
[30] Earl’s daughter, Jennifer, had been contacting Lani in relation to Earl’s health. [REDACTED]
[31][REDACTED]
[32] Mr Galbraith says the context of this exchange, [REDACTED] does not mean that the email exchange was for the purposes of obtaining legal advice, nor part of the continuum of information so that advice could be received.
[33] I do not accept Mr Galbraith’s submission. As I have noted, privilege is claimed by Earl’s estate. Lani was therefore effectively acting as Earl’s agent in seeking Mr Johnston’s thoughts [REDACTED].
[34] On the assumption that Lani would be relaying Mr Johnston’s comments to Earl [REDACTED], I consider the privilege claimed to be valid.
[35]The claim for privilege is upheld.
Document HAG.005.00172
[36] This document is an email, dated 1 September 2013, which has attached emails between Keith Hagaman and Lani Hagaman from between 21 July 2013 and 1 September 2013.
[37] This document is claimed to be privileged to Earl’s estate and the Naciemento Trust.
[38] The context for the emails is given by Mr Johnston in his affidavit between paragraphs [24] and [28].
[39] Mr Johnston [REDACTED]. I note here there is no mention of the Naciemento Trust in the context of Mr Johnston’s evidence as to the context of the correspondence.
[40] Significantly, Mr Johnston refers to a meeting to resolve the disputes taking place on 11 September 2013, which he attended as Earl’s lawyer.
[41]Mr Galbraith described the covering email [REDACTED].
[42] Mr Galbraith’s submission is not an answer to the contextual of the evidence provided by Mr Johnston. Mr Johnston’s evidence is that because of disputes between [REDACTED].
[43][REDACTED].
[44]The claim for privilege is upheld.
Document HAG.005.00168
[45] This email is similar to the preceding one. Again, the privilege is claimed by Earl’s estate and the Naciemento Trust. The covering email of 3 September 2013 is Lani forwarding to Simon Johnston email exchanges between her and Keith.
[46] Mr Galbraith drew attention to part of an email dated 1 September 2013 from Lani to Keith which begins: “And now I have my wife and mother hat on, not a business one”. Mr Galbraith submitted that this showed that the tenor of that part of the communication was not of a business or commercial nature and therefore not privileged.
[47] I do not accept that submission. This proceeding is, first and foremost, a family dispute. The nature of peoples’ beliefs about the relationships between family members runs through this case. That on 1 September 2013 Lani was expressing
a personal view to Keith and not a commercial one, does not alter the nature of her correspondence with Mr Johnston on 3 September 2013.
[48] In relation to this email, the basis of the Naciemento Trust’s claim to privilege has not been separately explained. [REDACTED]. The Naciemento Trust was not involved.
[49] Accordingly, I consider the material was privileged in relation to Earl, giving rise again to the estate’s ability to maintain that privilege.
[50]The claim for privilege is upheld.
[51] If there is an issue between counsel as to whether the Naciemento Trust can also claim privilege where it has in relation to the above documents, then leave is reserved for that issue to be addressed.
Costs
[52]Costs are reserved.
Associate Judge Lester
Solicitors:
Duncan Cotterill, Christchurch (for Plaintiffs)
Cameron & Co, Christchurch (for Second Defendant) Meares Williams, Christchurch (for First Defendant) South Law, Dunedin (for Third Defendants)
Copy to counsel:
A R Galbraith KC, Barrister, Auckland (on behalf of Plaintiffs)
M G Colson KC, Barrister, Wellington, (for First Defendants in relation to joint interest privilege issues)
J B M Smith KC, Barrister
V L Heine KC, Barrister, Wellington (for non-party Estate E R Hagaman)
0
1
0