Suh & Anor v Mace (UK) Ltd

Without prejudice privilege applies where, viewed objectively and in the round, both parties realised or should have realised that their discussions were genuinely aimed at settling litigation. Courts should adopt a broad approach and should not divide a continuous settlement discussion into privileged and open parts.

The unambiguous impropriety exception applies only in the clearest cases. A later denial of an admission truthfully made during privileged discussions does not itself abuse the privileged occasion. Waiver requires an objective assessment of the parties’ conduct, the privilege’s purpose and the justice of permitting continued reliance on it.

Two tenants claimed damages against their landlord for the alleged wrongful forfeiture of a business lease. One tenant, who was acting without representation, attended two meetings with the landlord’s solicitor and allegedly admitted that rent had been outstanding. The County Court held that the meetings were not without prejudice, admitted the solicitor’s evidence and dismissed the tenants’ claim.

Permission to appeal was granted on the ground that admitting the alleged admissions might constitute a serious procedural irregularity. The Court of Appeal considered whether the discussions were privileged, whether the unambiguous impropriety exception applied, whether the tenants had waived privilege and whether admission of the evidence affected the trial’s outcome.

1. Appeal allowed unanimously. The discussions at both meetings, the intervening correspondence and the solicitor’s account of them were protected by unwaived without prejudice privilege and were inadmissible. The substantive issues were ordered to be retried before a different judge: paras [25], [47]–[50].

2. The governing question was whether both parties objectively saw, or ought to have seen, the discussions as negotiations genuinely aimed at settlement. That question required the discussions to be viewed broadly and in the round. The unrepresented tenant had approached the landlord’s solicitor seeking information and a means of leaving the litigation. Objectively, the only sensible purpose of the meeting was to seek a solution to the litigation for her. There was no justification for dividing the interview into open and privileged portions merely because admissions preceded an express discussion of terms: paras [19]–[25].

3. The unambiguous impropriety exception did not apply. It is confined to the clearest abuses of a privileged occasion. The tenant did nothing arguably dishonest during the protected discussions; the landlord’s case was that she then spoke truthfully. Her subsequent denial of the alleged admissions, even if dishonest, did not convert the earlier occasion into a cloak for perjury, blackmail or other unambiguous impropriety: paras [26]–[30].

4. Waiver of without prejudice privilege differs from waiver of legal professional privilege. A without prejudice communication remains inadmissible unless both parties waive exclusion. Whether the tenants had waived protection required an objective evaluation of their conduct in light of the privilege’s purpose and whether continued reliance upon it would be unjust: paras [33]–[37].

5. The tenants’ witness statement, application notice and counsel’s email did not waive privilege. Each was a response to the landlord’s attempt to place the privileged admissions before the court. Treating those reactions as waiver would undermine the privilege and permit one party to procure waiver by forcing the other to respond. The court left open whether privilege could be waived for an interlocutory hearing but retained for trial: paras [38]–[47].

6. The error was material. The trial judge had relied to some extent upon the admissions when deciding whether disputed rent payments had been made. The Court of Appeal could not disentangle that reliance or conclude that excluding the evidence would have made no difference: paras [49]–[50].

1. Court of Appeal (Civil Division): The appeal in [2016] EWCA Civ 4 was allowed. The admissions were held inadmissible and a retrial before a different judge was ordered.
2. Central London County Court: Her Honour Judge Baucher held that the meetings were not without prejudice, admitted the challenged evidence, dismissed the tenants’ claim and entered judgment for the landlord on its counterclaim.