AAG Investments Ltd v BAA Airports Ltd (Rev 1)

The without prejudice rule protects genuine settlement discussions, including admissions and statements made during wide-ranging negotiations. Exceptions remain narrow. Statements may be admitted where necessary to establish a concluded agreement, an estoppel, or unambiguous impropriety, but mere inconsistency, dishonesty allegations, or a damaging negotiating position is insufficient. An estoppel requires a clear and unambiguous statement intended to be acted upon, actual reliance, and reasonable reliance. A party cannot reasonably treat statements made in a settlement meeting as final contractual admissions when the meeting was plainly exploratory and directed towards finding an amicable solution.

AAG claimed damages for an alleged repudiatory breach of a contract under which BAA had sold the Zetaform construction system. AAG relied on statements made at a meeting expressly held on a without prejudice basis, including assertions concerning the contract’s validity, authority, payment, and intellectual property rights.

BAA applied under CPR Part 3.4(2)(a) to strike out references to the meeting and alternatively sought summary judgment under CPR Part 24, relying on Omani law. The central issues were whether the meeting attracted privilege, whether any exception applied, and whether the alleged Omani-law position defeated AAG’s claim.

1. Without prejudice privilege. The meeting of 22 October 2009 was genuinely aimed at finding a solution to the parties’ differing views. It therefore attracted the without prejudice rule. AAG’s late contention that there was no intention to settle was inconsistent with the evidence and the meeting record.
2. Unambiguous impropriety. The exception applies only in the clearest cases of abuse of the privileged occasion. The fact that BAA allegedly made damaging statements and did not repeat them openly did not justify lifting the privilege. The court found no basis for alleging that BAA’s evidence was untruthful or that the manner of the statements assisted AAG.
3. Estoppel. Even assuming that clear statements had been made and relied upon, reliance on them as admissions of contractual breach was unreasonable. The circumstances showed that BAA was setting out a negotiating position so that the parties could consider an amicable solution.
4. Disposition of strike-out application. References in AAG’s statements of case to what was said at the meeting were struck out. The resulting question whether the action should be dismissed was adjourned, allowing AAG a short period to formulate any amended case independent of the privileged communications.
5. Summary judgment. Even assuming BAA’s evidence of Omani law, it did not address whether BAA’s statements amounted to a repudiatory breach. If liability were established, AAG had at least an arguable case that it was entitled to stop marketing the moulds, with loss then assessed under ordinary contractual principles. Summary judgment was therefore not justified.

First-instance decision. The judgment records no prior appellate decision in the present litigation.