Midgeley v Oakland Glass Ltd

For without prejudice privilege to apply, there must be a real dispute capable of compromise. Communications addressing only payment of an admitted liability, or requests for concessions, do not satisfy that requirement. The existence of earlier litigation or the possibility that a dispute may later arise is insufficient if no dispute had emerged when the communications were made. An admission does not, by itself, remove without prejudice protection where the parties are genuinely negotiating a disputed liability. In applications for relief from a procedural sanction, the court may consider the administration of justice, the explanation for default, responsibility for the failure, its effect on the trial timetable and the evidential material available. An appellate court will not interfere where the lower court was entitled to refuse relief.

Mr Midgeley sought permission to appeal against two interlocutory decisions. First, HHJ Belcher had held that four letters concerning payment of a judgment debt and a possible assignment were not without prejudice communications. Secondly, a district judge had refused relief from a sanction imposed for failure to serve expert evidence by the prescribed date, thereby dismissing an application to rely on a second handwriting expert.

The central issues were whether the letters disclosed a real dispute capable of compromise and whether the district judge had been entitled to refuse an extension of time or relief from sanction.

1. Without prejudice application. Permission to appeal was granted, but the appeal was dismissed. The court considered the guidance in Bradford & Bingley v Rashid, including the requirement that there be a real dispute capable of settlement by compromise. The rule does not generally protect open communications concerned only with repayment of an admitted liability.
2. The fact that an admission may be made in correspondence does not itself take the communication outside the rule. Protection may apply where the extent of liability is genuinely disputed and the parties are attempting to settle that difference. The relevant question is whether a dispute had actually come into existence when the letters were written. Earlier litigation, the failure to name an individual partner, and the possibility that a dispute would later arise did not establish that fact.
3. The disputed letters contained no identifiable dispute. A request for a discount or an assignment was a request for a concession, not a dispute. References to indebtedness and a request for an interest calculation were either an admission or neutral correspondence. The judge had therefore made no error in refusing to remove the letters from the trial bundle.
4. Expert evidence application. Permission to appeal was refused. The district judge was entitled to regard the interests of the administration of justice as weighing against an extension, to find no good explanation for the failure to disclose the report by the deadline, and to attribute the failure to Mr Midgeley or his representatives. The consequences for the trial timetable and the effect of the failure could not satisfactorily be assessed on the material supplied.
5. The absence of intentional default, promptness of the application and an otherwise clean record did not require separate mention on the facts. The proposed appeal had no real prospect of success.

• High Court (Queen's Bench Division): HHJ Belcher held on 20 January 2009 that the disputed letters were not without prejudice and refused permission to appeal. A district judge later refused relief from sanction for late expert evidence. Mr Justice Tugendhat granted permission on the first issue but dismissed that appeal, and refused permission on the second.