Hanlon & Anr v Rayson & Anr

On a renewed application for permission to appeal, the applicant must show a real prospect of success on a necessary ground. Failure on that ground is sufficient to refuse permission, even where permission might otherwise have been granted on a separate issue.

Whether a meeting is without prejudice depends on its purpose and character in context. An initial disagreement about facts does not itself make a meeting without prejudice. A meeting directed to examining evidence, establishing common facts and reaching a factual position, without offers of compromise, may be a fact-finding exercise rather than settlement negotiations.

This was a renewed application by the first defendant, Mr Carl Rayson, for permission to appeal against an order of the Chancery Division, Manchester District Registry, made by His Honour Judge Bird on 15 May 2015.

The judge had dismissed an application to strike out a paragraph of the reply and parts of witness statements referring to a meeting between Mr Rayson and Mr Hanlon on 16 December 2013. He found that the meeting was not without prejudice. Alternatively, he held that any privilege had been waived by Mr Rayson’s subsequent witness statement.

The central issue was whether there was a real prospect of successfully challenging the judge’s first conclusion. The respondents were absent and unrepresented.

Permission to appeal was refused.

1. The judge’s finding that the meeting was not without prejudice was open to him on the evidence. He had considered the documents and heard oral evidence from attendees, including Mr Hanlon and Mr Rayson. There was therefore no real prospect that the Court of Appeal would interfere with that finding.
2. The fact that the parties disagreed about the relevant facts at the beginning of the meeting did not make it a without prejudice meeting. In the particular circumstances, Mr Hanlon lacked reliable information because of the fraudulent records prepared by his nephew. The parties examined the available evidence, established what sums had been advanced and reached a common factual position. The judge was entitled to characterise this as a fact-finding exercise rather than negotiation.
3. The applicant also relied on the alternative conclusion that privilege had been waived by service of a witness statement. The court did not decide that issue. Lord Justice David Richards stated that, if it had been the only issue, he would have been inclined to grant permission. That observation was unnecessary because the first ground had no real prospect of success.

As the applicant failed on the first ground, the renewed application for permission to appeal was refused.

1. Court of Appeal (Civil Division) — In [2016] EWCA Civ 1168, Lord Justice David Richards refused the renewed application for permission to appeal.
2. High Court of Justice, Chancery Division, Manchester District Registry — On 15 May 2015, His Honour Judge Bird dismissed the application to strike out the relevant pleading and witness-statement passages. He found that the meeting was not without prejudice and alternatively that privilege had been waived.