Plaintiffs v Kenya Pipeline Company Limited (objection to production of the PwC 'Project Bahari' Forensic Audit Report)
The bottom line
#Kenya's High Court ruled that a forensic audit report prepared for legal advice stays privileged even after appearing online.
What this practically means
#Executive summary
#Key legal issues
#Whether the PwC Forensic Audit Report attracts legal professional privilege as a document created in contemplation of litigation for the dominant purpose of obtaining legal advice.
Yes. The correspondence and the report's own privilege legend show it was prepared for use in settlement negotiations or in defending KPC's position in ongoing or anticipated proceedings; there is no justification for finding otherwise, so the disputed report is privileged as claimed.
The court traced the correspondence: a final demand, apparently with a threat of litigation, was sent on 15th January 2009, before the suit filed on 8th April 2009, and the report was produced on or about 6th April 2009. The copy examined by consent carried a privilege legend describing preparation for negotiating settlement with financiers or defending KPC in ongoing or anticipated proceedings. The court held the legend must have reflected PwC's terms of reference, so the report is privileged as claimed.
Whether the appearance of the privileged report on the internet, in the public domain, eroded the privilege.
No. A document once privileged remains privileged unless the person entitled to it waives the privilege; there was no evidence of waiver in this case.
Relying on Waugh v British Railways Board, the court held that privilege is not lost merely because the document surfaces on websites; only waiver by the holder destroys it. The Plaintiffs' own letter of 22nd June 2010 conceded the document was entitled to privilege until its public appearance, and the Defendants consistently asserted that privilege remained intact irrespective of how the copy was obtained. No waiver was established on the evidence.
Whether Sections 137 and 66 of the Evidence Act governed the objection, including admission of the downloaded copy as secondary evidence.
Neither Section 137 nor Section 66 of the Evidence Act applies to these objection proceedings; the objection is resolved under the general law of legal professional privilege, adopting the dominant-purpose formulation from Stuart Sime's text.
Having perused the correspondence between the parties and examined the report by consent, the court agreed that the statutory provisions were inapplicable: Section 137 concerns confidentiality between advocate and client, while Section 66 on secondary evidence did not arise as framed. The court instead decided the matter on the common-law dominant-purpose principle of legal privilege, which it held includes expert reports.
Whether production of the report was in any event necessary for the fair disposal of the cause or for saving costs.
No. Exercising its discretion to examine the document, which had not been verified by any affidavit, and considering the Plaintiffs' own Statement of Issues, the court found the report did not appear material to the fair and just resolution of the issues in dispute.
Guided by Order 24 Rules 11-13 of the Supreme Court Practice, 1995, the court applied the test that no production order should issue unless necessary for fairly disposing of the cause or saving costs. Examining the document with the consent of both parties, and having regard to the issues as the Plaintiff framed them in its Statement of Issues filed 29th November 2010, the court concluded the report was not material, giving an independent ground for refusing production.
Legal principles established
#- Communications between a solicitor or a client and a third party, where a document is created with the dominant purpose of obtaining legal advice or helping in the conduct of litigation reasonably in prospect, are privileged.
- Once a document is privileged it remains privileged unless the holder waives the privilege; availability of the document in the public domain does not by itself erode the privilege.
- No order for production of a document should be made unless the court considers it necessary for disposing fairly of the cause or matter or for saving costs.
Court orders
#- 1.The Defendant's objection to the production of, and reference to, the PwC Forensic Audit Report of 6th April 2009 was upheld.
- 2.The costs of the objection shall be in the cause.
- Jurisdiction invoked
- Original trial jurisdiction of the High Court of Kenya; no specific constitutional or statutory provision conferring jurisdiction is invoked in the ruling.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Plaintiffs v Kenya Pipeline Company Limited (objection to production of the PwC 'Project Bahari' Forensic Audit Report)", Case Analysis (2011). . Source:
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.