Cardiff City Football Club Limited v William Arthur McKay & Ors

Without prejudice privilege is a fundamental protection and its exceptions must be applied narrowly. The exception for unambiguous impropriety requires clear impropriety, such as using settlement communications to cloak perjury, blackmail or an equivalent abuse. The mere negotiation of outcomes which go beyond the court’s powers does not establish impropriety. Nor does referring in settlement discussions to the disposal of contempt proceedings necessarily show an improper purpose, since resolving contempt issues may be necessary to settle the wider dispute. A private applicant’s motivation is not generally relevant where a civil contempt application complies with procedural requirements, is properly arguable and draws an allegedly serious contempt to the court’s attention. Privileged communications cannot be disclosed unilaterally where privilege has not been waived.

The claimant had obtained a Tomlin Order requiring the defendants to disclose documents relating to Emiliano Sala’s transfer. Following alleged non-compliance, the claimant obtained a further disclosure order and commenced contempt proceedings. Documents were later disclosed, but the claimant maintained the contempt application.

The defendants sought to strike out the contempt application as an abuse of process under Civil Procedure Rules 1998, relying on without prejudice communications. They contended that the communications showed an improper use of contempt proceedings to obtain disclosure beyond the claimant’s entitlement. The central issue was whether the communications fell within the unambiguous impropriety exception to without prejudice privilege.

1. The application was refused. The defendants were not entitled to rely on the without prejudice communications. They remained privileged and inadmissible in support of the proposed abuse-of-process application.
2. Without prejudice protection is founded on public policy and, in part, the parties’ agreement. It encourages candid settlement negotiations and must be scrupulously protected. Exceptions must not be applied too readily: Unilever plc v Procter & Gamble Co and Motorola Solutions Inc v Hytera Communications Group Corporation Ltd.
3. The unambiguous impropriety exception is narrow. It may apply where exclusion would cloak perjury, blackmail or comparable misconduct. The conduct must clearly exceed what is permissible in hard-fought commercial litigation. It is unnecessary that the conduct satisfy a formal definition of blackmail: Ferster v Ferster and Boreh v Republic of Djibouti.
4. The threat or continuation of contempt proceedings must not be used to secure a settlement. Nevertheless, contempt proceedings may properly be pursued to secure compliance with a court order. The fact that settlement communications address the disposal or timing of contempt proceedings does not, without more, establish an improper purpose. The court should recognise the practical need to resolve contempt issues as part of settlement negotiations: Integral Petroleum SA v Petrogat FZE (No.2).
5. A private applicant in civil contempt proceedings is not required to act as a wholly disinterested party. Where the application complies with procedural requirements, is properly arguable and draws an allegedly serious contempt to the court’s attention, the applicant’s personal motivation does not by itself make the proceedings abusive: Navigator Equities Ltd v Deripaska.
6. On the facts, the negotiations were typical of hard-fought commercial litigation. The defendants had not complained contemporaneously that the claimant was applying improper pressure. The later assertion of unambiguous impropriety did not justify lifting privilege.
7. Where privilege has not been waived, a party asserting an exception must raise the issue with the opposing party and the court without disclosing the communications to the court: Berg v IML London Ltd, approved in Cammack v Gresham Pension Trustees.

The contempt application was directed to be fixed for hearing before the end of July 2025.