In a landmark decision in Tan Chong Kean v Yeoh Tai Chuan & Anor [2018] 2 MLJ 699 FC, delivered on 18 December 2017, the Federal Court decisively affirmed that a solicitor’s breach of legal professional privilege under Section 126 of the Evidence Act 1950 (EA) provides the client with a direct cause of action for damages and injunctive relief.
The Dispute
The case centered on a dispute between the client, Tan Chong Kean (Appellant), and his former lawyers (Respondents). Tan had engaged the firm to prepare three confidential trust deeds, instructing them specifically that the documents must remain confidential and be destroyed upon the successful completion of a development project.
However, the respondents later used copies of these trust deeds in a court application (a third-party notice against Tan). The purpose of this disclosure was to seek indemnity from Tan to recover unpaid legal fees, which related to a separate monetary claim brought against the solicitors by a third party. Tan sued the solicitors, arguing they breached their professional duty and violated Section 126 EA by disclosing the confidential deeds without his express consent.
The ROAD TO FEDERAL COURT
The High Court initially sided with Tan, finding that the solicitors owed a professional duty to preserve confidentiality and had used the deeds for their own benefit. However, the Court of Appeal (COA) reversed this decision. The COA had held that Section 126 EA was merely a procedural law intended to protect solicitors from being compelled to disclose information to third parties, and a breach only entitled the client to lodge a complaint with the Advocates and Solicitors Disciplinary Board, rather than establishing a private cause of action.
The Federal Court’s Ruling
The Federal Court allowed Tan’s appeal, setting aside the COA’s judgment. The court established several key principles:
- Violation of Section 126: The court found that the respondents committed a clear violation of the prohibition stipulated in Section 126 EA when they disclosed the trust deeds for their own advantage.
- Client Ownership of Privilege: The privilege accorded by Section 126 belongs to the client, not the solicitor, and the solicitor is legally obliged to protect all confidential information and advice.
- Express Consent Required: Section 126 mandates “express consent” for waiver of privilege, meaning consent must be “clearly and unmistakably stated”. The concept of implied waiver at common law was rejected in this statutory context.
- Actionable Breach: The most critical finding was that a breach of Section 126 is actionable. The court rejected the submission that the only recourse was a disciplinary complaint.
The court emphasized the fundamental nature of the privilege, stating:
“… Section 126 is not a mere rule of evidence. It is a principle of fundamental justice. Surely a breach of such principle entitles an aggrieved party to commence an action including a prayer for an injunction to safeguard the confidentiality of the client-solicitor communication. It is even more critical when such confidential communication is used to the advantage of the solicitors who are legally obliged to protect it…”
The Federal Court concluded by granting an injunction restraining the solicitors from disclosing or using the trust deeds, ordering all copies to be delivered up to Tan, and mandating that damages be assessed by a High Court judge. Furthermore, the court confirmed that the client was correct in merely pleading the breach without disclosing the privileged contents, as disclosing them would have been construed as abandoning the privilege.
Disclaimer: This post is for informational purposes only and does not constitute legal advice. Please consult a qualified lawyer for your specific legal needs.
