POBEN CONSULTANTS LTD AND OTHERS v. THE CLEARWATER BAY GOLF & COUNTRY CLUB

HCMP 2332/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2332 OF 2016

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REASONS FOR DECISION

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1.  The defendant seeks to “expunge” (exclude) a letter written by its solicitors on 30 October 2015 to the 4^th plaintiff which is exhibited to an affirmation of Cheung Choi Ngor (para 52) filed on behalf of the plaintiffs.

2.  Although the letter is marked “Without Prejudice” and makes reference to a “without prejudice meeting” of the parties on a stated date, it contains not one word of the alleged meeting or any content which could remotely be construed as negotiation, offer or tentative agreement. 

3.  The whole content of the letter, viewed comprehensively and paragraph by paragraph, is a rejection of the plaintiffs’ contentions and the defendant’s averments on the identified aspects of the plaintiffs’ claims, specifically those of the 5^th plaintiff.

4.  Counsel for the defendant accepts that the letter is in content and effect an assertion of its defence, which is in any event set out in the affirmations filed on its behalf, and that there is nothing in the letter which is tantamount to any suggestion of a compromise, negotiation or potential settlement.

5.  However, his argument really proceeds from a contention that since the letter is marked “Without Prejudice” it is for the plaintiff to show that the letter is not within the proper category of “Without Prejudice” correspondence enjoying the protection of privilege, and that it forms part of open correspondence, though not marked as such.

6.  Having cited a number of authorities which he argues support his contention, he is in fact relying upon principles which are well-‌recognised and which have to be applied and understood in the context of each case.  Each of the extracts quoted by defence counsel honours those principles and underlines the importance of the context.

7.  Lord Griffiths (Rush & Tompkins v GLC [1989] AC 1280 at 1299) who was himself a distinguished litigation practitioner, said:

“ The ‘without prejudice’ rule … is founded upon the public policy of encouraging litigants to settle their differences rather than litigate them to a finish.”

8.  He adopted the approach of Oliver LJ (Cutts v Head [1984] Ch 290 at 306):

“ The public policy justification, in truth, essentially rests on the desirability of preventing statements or offers made in the course of negotiations for settlement being brought before the court of trial as admissions on the question of liability.”

9.  Lord Griffiths added that:

“ The rule applies to exclude all negotiations genuinely aimed at settlement whether oral or in writing from being given in evidence.”

10.  Arnold J, who was considering the full ambit of “without prejudice” communications in his judgment in Williams v Hull [2009] EWHC 2844 (Ch) and decisions referred to (and which follow) stated:

“ It is well established that a communication which is not expressed to be ‘without prejudice’ may nevertheless be protected by the rule, and that [one] which is [so expressed] may nevertheless not be protected by the rule.”

11.  Citing Parker LJ in South Shropshire District Council v Amos ‌[1986] 1 WLR 1271 at 1277, where a letter was marked “without prejudice”:

“ This prima facie means that it was intended to be a negotiating document.”

12.  But as Arnold J stated, Parker LJ “[made] it clear that [it] did not mean that the marking was conclusive.”  He went on to say:

“ … that, if a letter is expressly stated to be ‘without prejudice’, that gives rise to a rebuttable presumption that the communicationis a without prejudice communication within the meaning of therule unless it is clear that the expression has been used with some other meaning or purpose.

It [is] common ground ... that the question whether a particular communication is a without prejudice communication is a question which must be assessed objectively as at the date of the communication having regard to the relevant factual circumstances.”

13.  Then he cited Laddie J (in Schering Corp v Cipla Ltd [2005] EWHC 2597 (Ch), [2005] FSR 25 at §14:

“ The court has to determine whether or not a communication is bona fide intended to be part of or to promote negotiations. To determine that, the court has to work out what, on a reasonable basis, the intention of the author was and how it would be understood by a reasonable recipient.”

14.  Later Arnold J referred to Buckinghamshire County Council v Moran [1990] Ch 623 where the Court of Appeal “held that a communication which is not a negotiating document, but is merely an assertion of a party’s rights, is not protected by the without prejudice rule.”

15.  A succinct statement of this consideration is part of the judgment of Slade LJ:

“ … as the letter itself indicated, the defendant was writing [it] in an attempt to persuade the council that his case was well founded. ‌… it amounted not to an offer to negotiate, but to an assertion of the defendant’s rights …. I cannot derive from the letter any indication, or at least any clear indication, of any willingness whatever to negotiate.”

16.  I have underlined this last sentence because it encapsulates precisely my own objective view of the letter with which the defendant, in the application before me, takes issue.

17.  It is of course necessary to consider the letter as a whole and this approach, already dealt with by Lord Griffiths in Rush & Tompkins to which I referred earlier, and endorsed by Robert Walker LJ (as he then was) with attribution in Unilever plc v The Procter & Gamble Co [2000] 1 WLR 2436 at 2448 – 2449, is the logical one.

18.  I sought to draw the strands together in my judgment in Meng Zhu Lin v Xie Xiao and others (HCPI 722/2001, 19 May 2003, unreported) at paragraphs 34 and 35 which I do not need to set out here, with particular reference to the English Court of Appeal’s decision in Buckinghamshire County Council v Moran.

19.  Applying the principles set out in the review of authorities and the objective approach to the contents of the letter in question, it is I consider absolutely clear that the letter is in no way properly to be regarded as a without prejudice communication.  It was inappropriate for the letter to be so marked.  The letter as a whole, or in particular paragraphs bears no relationship or reference to any negotiating stance, or offer, or compromise.  It cannot therefore prejudice the party on whose behalf it was written, so the marking “without prejudice” was and is quite pointless.

20.  I offered Counsel for the defendant the course of removing the reference to “the without prejudice meeting” since that seems to have excited sensitivity even though there is, as I said at the outset, not one jot about the content of the meeting.

21.  It is almost an inevitable concomitant of such litigation that there will be at least some effort to resolve it, and the intervention of mediation seeks to achieve that.  Courts know that takes place but is wholly unaware of what is said or done under its umbrella.  This mere reference to such a “without prejudice meeting” has no effect upon a court so the exclusion in principle of it is in fact immaterial.  However, Mr Horace Wong SC declined the invitation despite his very general approach that nothing must be known of any such meeting, but saying the reference to such a meeting was prejudicial even though he effectively conceded that there was no prejudicial content in the letter.

22.  How essential the contents of the letter are to the plaintiffs’ case is not for me to assess.  If it does not carry the plaintiff’s case any further, for example, by showing some inconsistency in the case advanced by the defendant, then it may be superfluous.

23.  This application is dismissed with costs to the plaintiffs.