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07 January 2020
In Poon v Poon,(1) the defendant successfully applied to have certain paragraphs excluded from witness statements filed on behalf of the plaintiff on the basis that they referred to the content of without prejudice conversations and meetings involving (among others) the plaintiff and the defendant and were, therefore, inadmissible. The judgment applies established principles that underpin the protection given to without prejudice communications and demonstrates the court's reluctance to allow a party to 'cherry pick' from parts of wide-ranging discussions that were clearly undertaken on a without prejudice basis. The judgment also demonstrates the practical importance of the protection given to without prejudice communications and its fundamental importance to the administration of justice and the settlement of disputes.
The plaintiff and the defendant were brothers. On their father's death, the plaintiff became the administrator of the father's estate. At the time of his death, the father jointly held two bank accounts in his name and the name of the defendant. It appears that the money in the bank accounts included the proceeds of the sale of a property which had previously been held in the father's name.
The plaintiff claimed the money in the bank accounts on behalf of the estate. There were four other siblings. The defendant apparently claimed the sale proceeds as a gift to him by the father.
Prior to the commencement of litigation in December 2016, there were several conversations and meetings between the various siblings, over the course of approximately a few months, during which (among other things) settlement and distribution of the money in the bank accounts were discussed. Some of these conversations and meetings were referred to in the plaintiff's witness statements. The plaintiff's list of documents also apparently referred to certain related transcripts of some of the meetings.
The plaintiff's argument appears to have been that the disputed paragraphs in the witness statements contained references to select extracts that:
The defendant applied to exclude the disputed paragraphs from the plaintiff's witness statements and to expunge certain items from the plaintiff's list of documents.
The relevant discussions and communications referred to in the plaintiff's witness statements appear to have fallen into the following broad categories:
The court appears to have had little difficulty in finding that the disputed paragraphs in the plaintiff's witness statements did refer to without prejudice communications and that, as such, they were inadmissible and should be excluded (ie, expunged).
At the outset, the court had no difficulty in finding that the pre-meeting telephone conversations had taken place in the context of a dispute, when legal proceedings were reasonably contemplated, and as part of a genuine attempt to settle the siblings' differences concerning the distribution of the proceeds of sale in the bank accounts. Therefore, the court held that the conversations had been intended to be without prejudice.
The court also considered that the whole of the two meetings had been conducted on a without prejudice basis. They had been conducted for the purpose of negotiations and it did not matter that a settlement had not been concluded. The fact that the defendant had apparently not stated that the meetings were without prejudice at the time was immaterial – in this context, the court looked at substance over form. Therefore, the relevant passages in the plaintiff's witness statements that referred to the meetings were inadmissible and the references to transcripts or recordings of the meetings in the plaintiff's list of documents should be expunged.
Interestingly, the court gave short shrift to the plaintiff's argument that select references to the meetings should be allowed:
The attempts by the plaintiff… to cherry pick certain extracts and suggest that the discussions were otherwise than for negotiations is futile. It is clear from the authorities… that a without prejudice meeting is bound to contain a mixture of statements of different natures, including confident assertions of a party's case or statements which might in itself be characterised as threats. The underlying rationale of the privilege is to give protection to the parties to speak freely, and it would be both impractical and unprincipled to dissect without prejudice communications.(2)
The post-meeting communications (including the WhatsApp messages and the circulation of a draft settlement agreement) had also been conducted on a without prejudice basis because they were part of the continuation of the discussions and negotiations.(3)
As for the plaintiff's alternative argument that some of the discussions and negotiations were not without prejudice because they were inconsistent with the defendant's formal position in the proceedings, the court held that the plaintiff had not come close to establishing that the defendant had acted improperly in seeking to rely on without prejudice protection. A court would reject a claim to without prejudice in such circumstances only where there was the clearest evidence that a party was attempting to act improperly – for example, using without prejudice protection as a cloak for perjury. A mere inconsistency between positions adopted in negotiations and in subsequent proceedings does not come near to showing that a party is seeking to abuse without prejudice protection.
The court granted the defendant's application to exclude the paragraphs from the plaintiff's witness statements and to expunge references to certain documents in the plaintiff's list of documents.
The judgment is likely to be widely welcomed. It is a strong endorsement of the public policy that underpins without prejudice protection.(4) The judgment also comes on the back of recent English cases that have shown some strong support for the general principles that underpin the protection.(5) These principles are every bit as important as legal advice privilege (lawyer-client privilege) because clients and their legal representatives make use of without prejudice communications on a daily basis and in very different circumstances – for example, in conversations, in meetings, outside of court and in correspondence.
What is particularly helpful in this case is the court's reluctance to allow a party to refer to select communications that were part of wider-ranging without prejudice discussions over the course of a few months. The judgment is not only a good summary of the legal principles involved, it is also imbued with a good deal of common sense. For example, during court proceedings, it is not usually an attractive position for a party to try to refer to select parts of wide-ranging without prejudice communications and negotiations. Further, a party that makes an 'opening shot' in settlement negotiations, before litigation has commenced, would normally do so on a without prejudice basis – an offeree's reply that purports to be 'open' does not alter the status of a genuine without prejudice offer.
For further information on this topic please contact Antony Sassi, David Smyth or Warren Ganesh at RPC by telephone (+852 2216 7000) or email (firstname.lastname@example.org, email@example.com or firstname.lastname@example.org). The RPC website can be accessed at www.rpc.co.uk.
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