CIBC Mellon Trust Co & Anor v Wolfgang Otto Stolzenberg & Ors

Material disclosed during without prejudice negotiations cannot ordinarily be severed so that selected facts are used while the negotiations remain protected. The court must consider the character and origin of the material as a whole. Where an application depends on information first revealed at a without prejudice meeting, later correspondence or evidence connected with that disclosure cannot be treated as independent merely because it is open or directed to legal professional privilege. The court may therefore exclude the resulting evidence without deciding an alternative privilege issue.

The claimants sought an order requiring Withers, solicitors connected with a defendant company, to disclose the identity of the company’s beneficial owner and to join Withers as defendants. A deputy judge of the Chancery Division dismissed the application, holding that the claimants’ evidence derived from a without prejudice meeting and that the information was also protected by legal professional privilege.

Permission to appeal was refused on paper by Chadwick LJ. The claimants renewed the application before the Court of Appeal, relying on later correspondence and witness evidence as allegedly independent sources. The central issue was whether that material could be used despite the origin of the application in the without prejudice meeting.

1. The application for permission to appeal, with the appeal to follow, was dismissed with costs. The court rejected the claimants’ case on without prejudice privilege, making it unnecessary to determine the legal professional privilege issue.

2. Per Sir Martin Nourse, with Lord Justice Peter Gibson agreeing, the meeting between the parties’ solicitors was without prejudice. The claimants’ attempt to distinguish between the meeting as a whole and particular statements made about the beneficial owner was inconsistent with the principle stated in Unilever Plc v The Proctor & Gamble Company [2000] 1 WLR 2436.

3. The material disclosed at the meeting was not capable of being selectively extracted from the protected negotiations. The judge was entitled to find that the disclosure occurred only because the meeting had first been agreed to be off the record and without prejudice.

4. The later open correspondence, the third witness statement and other documentary material did not provide an independent basis for the application. They were merely attempts to get round the undoubted origin of the claimants’ case in the without prejudice meeting.

Application dismissed with costs on the standard basis, subject to detailed assessment, with £7,000 to be paid on account within 21 days.

• Chancery Division: On 15 November 2000, the deputy judge dismissed the claimants’ disclosure application, holding that the material relied on derived from a without prejudice meeting and was also protected by legal professional privilege.
• Court of Appeal (Civil Division): Permission to appeal was refused on paper by Chadwick LJ on 9 February 2001. The renewed application was dismissed on 13 July 2001.