Ocean On Land Technology (UK) Limited & Anor v Richard Land & Ors

In IPEC proceedings, witness evidence should be limited to material linked to identified trial issues, admissible, and justified by the costs benefit test. A list of issues is important but is not a straitjacket. Evidence raising contested matters of pleading or construction should generally be left to the trial judge.

Contractual interpretation is objective. Evidence of subjective intention or understanding is inadmissible, although pre-contractual material may establish the transaction’s genesis, aim, or relevant background facts.

The without prejudice rule affords broad protection. Exceptions must be narrowly applied. An exception affecting one document or passage does not automatically remove protection from all related material. The Oceanbulk interpretation exception is confined to objectively relevant facts within the parties’ common knowledge forming part of the contractual factual matrix.

The claim concerns alleged breaches of share purchase agreements, a patent assignment and a settlement agreement, together with trade mark and patent infringement. The trial was listed before HHJ Hacon.

The court determined three interim applications concerning trial witness evidence. The Defendants sought permission to serve reply evidence. The Claimants sought to exclude portions of the Defendants’ evidence as irrelevant, expert, inadmissible in contractual construction, or protected by the without prejudice rule, and sought conditional permission to reply.

The central issues were the proper role of the list of issues, the admissibility of subjective and negotiating evidence, and the scope of exceptions to the without prejudice rule.

1. Applications. The Defendants’ application for reply evidence was dismissed. The Claimants’ conditional application for reply evidence was dismissed. Specified passages of the Defendants’ witness evidence were removed or redacted. Costs were reserved to the trial judge.
2. IPEC case management. The overriding objective and the IPEC costs benefit test require evidence and interim applications to be focused on matters capable of affecting the trial. The list of issues is important but does not operate as a straitjacket. Evidence covered by the pleadings and reasonably contemplated by a listed issue should not be excluded at an interim hearing where deciding relevance would require determination of a contested pleading or construction issue.
3. Relevance and expert evidence. The trial judge is generally best placed to decide granular relevance disputes and the weight of evidence. Brief scene-setting evidence from a factual witness is not necessarily expert evidence, provided the trial judge can distinguish factual explanation from technical opinion.
4. Contractual construction. Contractual interpretation is objective. Evidence directed only to a party’s subjective understanding or intention as to the meaning of a contractual provision is inadmissible. Negotiating material may establish the genesis or overall aim of a transaction, or a relevant background fact known to the parties, but cannot establish the specific meaning of contractual language.
5. Without prejudice rule. The party relying on an exception bears the burden of establishing it. Exceptions must be applied narrowly and generally to the individual material concerned. The unambiguous impropriety exception requires use of the rule to cloak wholly improper conduct; inconsistency or a possibility of perjury is insufficient. Mere reliance on an open settlement agreement does not waive protection for surrounding negotiations. The Oceanbulk exception applies only to objectively relevant facts within the parties’ common knowledge forming part of the factual matrix. It does not admit material used to explore negotiations or construe particular contractual phrases.
6. None of the Defendants’ identified without prejudice material fell within the asserted exceptions.