Alan Ramsay Sales & Marketing Ltd v Typhoo Tea Ltd

Without prejudice privilege protects communications forming part of genuine negotiations to resolve an existing dispute. The court determines objectively whether a dispute existed and whether litigation was contemplated if agreement failed. Firm or categorical statements remain protected when read as part of the negotiating continuum and should not be isolated from it.

A repudiation must be accepted clearly and unequivocally. Mere silence is generally equivocal, while conduct such as permitting continued contractual performance and paying for it may affirm the contract. For compensation under regulation 17, valuation assumes that the agency would have continued and disregards the contractual notice period.

The claimant acted as the defendant’s commercial agent under an agreement providing for 12 months’ notice. The defendant sent emails, marked without prejudice, proposing termination after three months. The claimant treated them as an effective repudiation, accepted that repudiation, and claimed damages and compensation under the Commercial Agents (Council Directive) Regulations 1993.

The defendant contended that the emails were privileged settlement communications and that the claimant’s response was itself repudiatory. The central issues were whether the emails were protected, whether the defendant accepted or affirmed the claimant’s alleged repudiation, and the proper measure of compensation and damages.

1. Without prejudice privilege. The correspondence was part of negotiations concerning an existing dispute. Objectively, by 15 February and certainly by 4 March 2013, the parties might reasonably have contemplated litigation if they could not agree. The emails of 18 and 26 March therefore formed part of a privileged negotiating continuum.
2. The emails could not be isolated from the surrounding negotiations merely because they stated the defendant’s position in firm terms. In that context they were not unequivocal renunciations of the agency agreement. They were inadmissible and could not constitute a repudiatory breach. Even if admissible, they would not have amounted to repudiation.
3. The claimant’s open email of 28 March, purporting to accept the defendant’s emails as repudiatory, was itself repudiatory. The defendant neither clearly accepted that repudiation nor brought the agreement to an end by mere inactivity.
4. The claimant’s continued work, including attendance at the trade show and the orderly handover, was performed under the existing agreement. The defendant accepted that performance and paid the contractual retainer. Those acts were unequivocal affirmation, not administrative conduct or performance under a new ad hoc agreement. The agency therefore continued until termination on 11 May 2013.
5. Regulation 18(b) did not exclude compensation. Under Lonsdale v Howard & Hallam Ltd [2007] UKHL 32, valuation concerned the future income stream represented by the agency. It was necessary to assume that the agency would have continued, so the 12-month notice provision was disregarded. Compensation was assessed at approximately £130,000, damages for the nine-month shortfall in notice at £45,459, and unpaid retainer at £7,583.33.