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1. In this judgment I am dealing with two specific points which have arisen in discovery motions in this case.

2. The first point arises in the Petitioner's motion where it is claimed that the Respondents have failed to refer to files of advice given to the above entitled companies by several categories of third party advisors.

3. In my view the question of relevance does not arise: it is clear from the Affidavits filed in these motions and indeed from the judgment of the Supreme Court in this matter delivered the 9th July, 1997 and reported at 1998: 1: I.L.R.M. 110 following, that there is a deep division and controversy between the parties in relation to the historical practice of running the above entitled companies of which the Petitioner and the two Respondents were Directors. The Petitioner claims that historically the company was conducted upon the basis of a triumvirate in which these individuals had an equal say. This broke down it is claimed and the relevance of advices given by third parties to the above entitled companies is that such advice when perused, it is claimed, would tend to support the Petitioner's claim of his equal share in such triumvirate.

4. The relevance of the documents sought being accepted, the precise question is whether these are within the power or possession of the Respondents who claim that these are advices given to a third party, (namely the companies referred to in the title of these proceedings) and not to themselves. It is submitted that the Petitioner can bring a third party discovery motion compelling the relevant companies to furnish him with the documents but that the Respondents themselves should not be obliged in these proceedings as part and parcel of the general obligations under discovery principles to refer to these documents and to produce them for the Petitioner.

5. This case is a "Section 205" petition. The Petitioner alleges that the affairs of the above entitled companies have been operated oppressively against him by the two Respondents. I do not think the company is a "third party" in the usual sense of that term in these circumstances. If the advices furnished to the companies are relevant, as I have held, then they should be produced as part of discovery unless they are privileged. In my opinion the documents are within the power of the Respondents in the circumstances of this case and they should be referred to in the Affidavit and I so direct.

6. The second point arises in the context of the Respondents' motion. The Petitioner has claimed privilege in relation to advices obtained by him in relation to the value of his shares at a time when the parties were in negotiation consisting primarily of the making of an offer by the Respondents to buy out the Petitioner which was refused. The Petitioner says that advice on the value of his shares at this time was for the purpose of the litigation: the Respondents say that it was for the purpose of avoiding litigation. The Respondents say accordingly that this advice is not privileged and should be furnished to them.

7. I have been referred to some cases but there is no clear authority, so far as I am concerned, to say that a document which has been brought into existence in the overall context of anticipated litigation but for the specific purpose of settlement negotiations are not privileged. There is an allusion in the judgment of Denning L.J. in Rabin v. Mandosa & Co (1994: AER: 247 at page 248) which appears to acknowledge that there can be a dominant intention of avoiding litigation but that case did not decide that such a category of documents is not privileged. My view is and I so hold in the absence of clear authority to the contrary that these documents are privileged because I think that the policy of the Courts is to encourage settlement and in any event I consider that the purposes of litigation include attempting to compromise it. This class of documents, in my view, is privileged on principle.

8. Secondly, an issue has arisen concerning a seven page private memorandum prepared by the Petitioner in the context of settlement negotiations and for the purpose of furnishing it to the Respondents. Before he could hand it over, however, relations between the parties deteriorated drastically and the Petitioner decided not to hand over this document. The Respondents now claim that the dominant intention under which this document came into being was for the purpose of being handed over to the Respondents and therefore they say it is not privileged.

9. I disagree. In the context of the "to and fro conflicting elements" of negotiation, a document or memorandum may well be drafted by one of the parties who at the time of drafting intends it to be handed over to the other but who subsequently changes his or her mind. I think it is unrealistic to require the production of such a document if the negotiations "go sour" because I still think that this document came into being for the purposes of litigation, albeit for the specific purpose being presented to the other side as part of an effort to avoid litigation by compromise. I think the Petitioner is entitled to claim privilege over this seven page memorandum.

10. A third category comprises notes made by the Petitioner "to himself" so to speak, prior to the 19th of April, 1996. The petition was presented in October of that year. The Petitioner identifies the 13th November, 1995 as a date upon which there was a major loss of trust between the parties. It is clear, however, that negotiations continued after that date. These memoranda appear in Section (e) of the Petitioner's Affidavit of Discovery which lists a total of 136 documents. A general heading for all of these documents is stated to be "Notes prepared by Client for the purpose of taking legal advice in these proceedings".

11. In my view any notes which fall unambiguously into that category are privileged. In this I am following the observations of Costello P. in Dunnes Stores Limited v. Smyth : unreported: 24th July, 1995 page 1 with reference to document number 1.

12. If Counsel for the Petitioner takes the view, by reference to the content of any of these 136 items, that there is a doubt as to whether the document was in fact prepared for the purpose of taking legal advice, then a typed copy should be prepared and I will read the document myself and make a specific ruling in relation to it.

13. So far as I am aware the foregoing deals with the outstanding issues arising out of these two motions but as the matter was complex and continued before me on a number of days I will hear Counsel as to whether any further Rulings are required.