Holyoake & Anor v Candy & Ors

Without prejudice privilege is lost only in the clearest case of abuse of a privileged occasion. The court must make a qualitative evaluation of whether the alleged conduct unambiguously exceeded what was permissible in hard-fought settlement negotiations. Context matters, including the parties’ conduct and whether the alleged threat was treated as genuine or illegitimate. Ambiguous negotiating language remains protected and inadmissible.

The claimants pursued a substantial commercial claim arising from a loan and subsequent agreements concerning a proposed property redevelopment. During without prejudice settlement discussions, the defendants alleged that the claimants, directly and through an intermediary, had made threats intended to force settlement. The defendants applied for a declaration that communications and related materials were admissible under the unambiguous impropriety exception.

The issues were whether the communications unambiguously exceeded what was permissible in settlement negotiations, whether the intermediary’s authority needed to be resolved at the interim stage, and whether later telephone discussions remained protected.

1. Application dismissed. The communications remained protected by without prejudice privilege and were inadmissible.
2. The exception applies only in the clearest cases of abuse of a privileged occasion. The court made a qualitative evaluation of whether the alleged threats unambiguously exceeded what was permissible in hard-fought commercial negotiations, applying the approach in Unilever PLC v The Procter & Gamble Company [2000] 1 WLR 2436 and the caution in Savings & Investment Bank Limited v Fincken [2003] EWCA Civ 1630; [2004] 1 WLR 667.
3. The alleged threat communicated on 9 June was no more than a negotiating tactic in context. The defendants’ lack of intimidation and their decision to continue negotiations without raising the matter supported that conclusion.
4. Ferster v Ferster & Ors [2016] EWCA Civ 717 was distinguished. That case involved a professionally drafted and unambiguous threat connected with criminal or contempt proceedings and an immediate personal financial advantage. Those features were absent here.
5. The 14 June discussions were innocent, proper and ambiguous. The issue of the intermediary’s authority did not need to be finally decided. Any provisional assessment would not bind the trial judge.
6. Costs were assessed on the standard basis at £25,000 plus VAT for the earlier hearing and £43,000 plus VAT for the application hearing.