Nicola Pauline West v Wendy Elizabeth Churchill & Anor

The without prejudice rule protects genuine settlement negotiations, including proposals and admissions made during negotiations that do not result in an agreement. Its estoppel exception is recognised where a clear and unequivocal statement is reasonably relied on and it would be unconscionable to permit the maker to resile from it. The exception does not make incomplete proposals or agreements in principle binding. A party must still establish the ordinary requirements of proprietary estoppel, assessed holistically: a sufficiently clear assurance concerning identified property, reasonable reliance, and detriment. Where negotiations remain incomplete and the parties continue to make proposals and counter-proposals, the material ordinarily remains within the without prejudice rule and cannot establish an estoppel merely because one party acted consistently with an uncompleted proposal.

The claimant and the first defendant were joint administrators of the estate of Cyril Churchill. The first defendant contended that negotiations concerning her claim under the Inheritance (Provision for Family and Dependants) Act 1975 established that the claimant had represented that the estate and farm belonged beneficially to the first defendant. She relied on those alleged representations to support a proprietary estoppel and a counterclaim for a declaration that the estate was held on bare trust for her.

The claimant applied to strike out the relevant parts of the defence and counterclaim as an abuse of process because they relied on without prejudice communications. Alternatively, she sought summary judgment. The central issues were whether the estoppel exception to the without prejudice rule existed and, if so, whether the pleaded facts disclosed a properly arguable estoppel.

1. Application allowed. The first defendant’s counterclaim that the entire beneficial interest in the estate and farm was held on bare trust for her was dismissed. A declaration was made, or was to be made in appropriate terms, reflecting the statutory distribution under section 46(1)(i) and section 47 of the Administration of Estates Act 1925.
2. The court recognised the estoppel exception to the without prejudice rule. Clear and unequivocal statements made in settlement negotiations may be admitted where they are intended to be acted upon, are reasonably relied upon, and it would be unconscionable to permit the maker to rely on the privilege. The exception was supported by Hodgkinson & Corby Ltd v Wards Mobility Services Ltd and the subsequent approval of that reasoning in Unilever Plc v The Proctor & Gamble Co, Ofulue v Bossert and Oceanbulk Shipping and Trading SA v TMT Asia Ltd.
3. The pleaded matters remained within the without prejudice rule. They comprised agreements in principle, settlement proposals, and subject-to-contract discussions which never matured into a concluded settlement. The later assent of land did not convert one element of an uncompleted package of proposals into an unequivocal representation, particularly where the surrounding document was inconsistent with that interpretation.
4. The ordinary proprietary-estoppel requirements remained applicable: a sufficiently clear and unequivocal representation, promise or assurance concerning identified property; reasonable reliance; and detriment. The court adopted a holistic approach, recognising that unconscionability permeates the doctrine.
5. No properly arguable representation or reasonable reliance was shown. The parties and their solicitor knew that no settlement had been reached, and continued negotiations and counter-proposals demonstrated that the earlier proposals were not treated as binding.