Case: Southern Equities Corporation Ltd (in liq) v Arthur Anderson &amp; Co (1997) 70 SASR 166
Outcome: cited
I set out earlier Mr Gurtler's affidavit evidence concerning his proposed joinder of Mr Turnbull. While his evidence related to the fact that he gave instructions to Williams &amp; Hughes to apply to have Mr Turnbull joined and that instruction was acted upon he did not either expressly or impliedly refer to, let alone put in issue, the character or contents of any communications made to, or by, Williams and Hughes. While Finance Now has put in issue the reasons why Mr Gurtler proposed to join Mr Turnbull and Mr Gurtler has sought to answer that, he has not done so in a fashion which could reasonably relate his reasons for the decision, explicitly or implicitly, to communications made in the lawyer-client relationship. Thus he has not engaged in conduct which is inconsistent with the maintenance of the confidentiality of lawyer-client communications. Whatever was the substance of the communications made by Williams &amp; Hughes to Mr Gurtler and Mr Van Noort which related to the decision to join Mr Turnbull and which are listed in Mr Gurtler's affidavit, there is on the material before me no reasonable grounds for believing that legal advice contributed to that decision: cf Southern Equities Corporation Ltd (in liq) v Arthur Anderson &amp; Co (1997) 70 SASR 166 at 175-176. 58 It has been put on behalf of Mr Gurtler that while the email should neither have been couched in the terms it was nor have been sent at all, all it involved was a sharp practice and demonstrated a lack of commercial probity: cf Southern Equities Corporation at 174. The email itself indicated that the accounts had been analysed and the conclusion arrived at from that analysis (i.e. the accounts were "cracked"). It also indicated that the stated conclusion were, in Mr Van Noort's view, supported by the bank statements. This, it is said, is not an allegation of fraud knowingly raised without any basis. A sufficient basis had been given at that stage the matter was not as yet the subject of a pleading and that was enough to dispel the allegation of deliberately improper purpose. 59 My own view is that the email was a disreputable and inflammatory vehicle through which to make imputations against Mr Hambrett and, by implication, Mr Turnbull. This said, the email does not have the particular character ascribed to it by Finance Now. It cannot be said that it lacks any disclosed and proper basis for its core allegation "the accounts are a complete and total fabrication". On this I agree with the submissions made by Mr Gurtler. Yet it is upon the supposed lack of such a basis that the challenge to the claim of legal professional privilege has been made. Reliance, as Finance Now places, on the apparent regularity of the accounts on their face as a foundation for asserting there were prima facie grounds for saying there was no proper basis for the allegations of fraud, simply ignores the basis of the allegation being made. I equally agree that, at the time the allegation was made, i.e. prior to the pleading of the alleged fraud, the basis given for the allegation was sufficient to dispel the assertion that it lacked foundation. Whether it proves to be correct or not is not of present concern. 60 I cannot in the circumstances see why Mr Gurtler's alleged failure to withdraw the allegation is in any way of assistance to Finance Now. Nor do I consider he can relevantly be faulted for present purposes for not disavowing the sharp and unauthorised practice of his agent. There is no material before me suggesting Mr Gurtler knew of, and condoned that practice. While, as a matter of reasonable commercial standards, one may have expected some reassurance from Mr Gurtler of appropriate behaviour in "the Federal court action" an action in any event subject to judicial management and scrutiny the lack of this is not, in the circumstances, suggestive of the improper purpose alleged.