Family Housing Association (Manchester) Ltd v Michael Hyde and Partners
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE MANN,LORD JUSTICE BALCOMBE |
| Judgment Date | 15 December 1992 |
| Judgment citation (vLex) | [1992] EWCA Civ J1126-6 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | 92/1185 |
| Date | 15 December 1992 |
[1992] EWCA Civ J1126-6
Lord Justice Balcombe
Lord Justice Mann
Lord Justice Leggatt
92/1185
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
MANCHESTER DISTRICT REGISTRY (OFFICIAL REFEREE'S BUSINESS)
(HIS HONOUR JUDGE FRANKS)
Royal Courts of Justice.
MR. CHARLES BLOOM (instructed by Messrs. Sedgwick Phelan & Partners) appeared on behalf of the (Plaintiffs) Respondents.
MR. STEPHEN GRIME (instructed by Messrs. Elliott & Co. of Manchester) appeared on behalf of the (First and Third Defendants) Appellants.
LORD JUSTICE HIRST: This is an appeal by the first and third defendants from the order of His Honour Judge Franks sitting as an official referee dated 18th December 1991, whereby he dismissed the application made by the first and third defendants under Order 41 rule 6 to strike out parts of the evidence of the plaintiffs in answer to the first and third defendants' pending application that the action be dismissed for want of prosecution.
The action arises out of the employment by the plaintiffs of the first and third defendants, both of whom are firms of architects, to design and construct a block of flats in Manchester, under a contract made as long ago as 1973.
The second defendants were employed on the same project as builders, but they dropped out of the action several years ago. The plaintiffs' complaint relates to defects in the flooring of the building, which consisted of a "sandwich" on top of a concrete structure, in the middle of which there is a layer of cement screed which proved faulty. The plaintiffs blamed the architects on the ground that their design specified too thin a layer of cement screed; the architects say that the blame or at least the substantial proportion thereof attaches to the builders for bad workmanship and/or defective mixing of the cement.
The question at present before the court arises as a preliminary issue in the defendants' application to dismiss the action for want of prosecution. The evidence objected to consists in part of statements in the affidavit of the plaintiffs' solicitor, Mr. Geoffrey Kenneth Thornley, in answer to the application, and in part to correspondence exhibited to that affidavit, and focuses in particular on references to the content of without prejudice negotiations which took place between the parties. The essence of the objection is that, while it is permissible to refer to the fact that without prejudice negotiations have taken place, together with the period of those negotiations, it is not permissible to refer to the details of what was offered, or conceded for negotiation purposes only, or said. The defendants therefore object to various passages in Mr. Thornley's affidavit and in the correspondence, including in particular references to settlement offers either precisely quantified or scaled by reference to the total quantum of the plaintiffs' damages, and concessions on some of the controversial issues at stake in the proceedings made for the purpose of the negotiations only. There are also a number of references to trial dates, in which it seems at any rate at first sight that the plaintiffs were suggesting the fixing of an early trial date, while the defendants were demurring to that suggestion pending the completion of the expert evidence and of further amendments to the pleadings.
The learned official referee dismissed the application, and his ratio decidendi is crystallised in the following passage from his judgment:
"It seems to me, when considering questions of delay and striking out for delay, it is not sufficient just to know there have been negotiations. If that is all a Judge knows he might well do an injustice either to a Plaintiff or to a Defendant. To my mind it is sensible in such cases to see what each party was saying to the other, and to see if for instance delay was actively encouraged, whether protests were being made about it, whether both were just letting the action sleep. Such an inquiry would ensure that a Judge, who is deciding whether a party should be struck out or not because of delay, would have a full picture before him so that he could meet the full justice of the case without any blindfold. If it be the case that in any such interlocutory application there are matters a trial Judge should not know of, then of course the Judge making the interlocutory decision sends it over for trial by another Judge. That is in fact what is going to happen in this case in any event because I have already been told of the sums that have been offered by way of settlement and cannot try the matter."
It is of course common ground between the parties that correspondence marked without prejudice cannot be referred to by either side in the course of a trial, or in the course of proceedings following a trial such as applications for costs (subject to the exception of a Calderbank letter).
Mr. Grime on behalf of the appellants submits that the reported authorities establishing that principle, to which I am about to refer, extend on their proper construction to imposing a general embargo on any reference to without prejudice correspondence at any stage of the litigation, including applications of the present kind, apart from a few isolated exceptions which are of no relevance for present purposes.
Mr. Bloom on behalf of the respondents submits that the reported authorities do not on their proper interpretation debar reference to without prejudice correspondence in an application of the present kind, and he also relies on three unreported authorities to which I shall also be referring shortly, and which he submits support his argument.
In Jones v. Foxall (1852) 15 Beav. 388 at page 396 Romilly M.R. stated as follows in a breach of trust action:
"And here I should conclude what I have to say, but that I think it proper to add, that I have paid no attention to the correspondence and negotiations which occurred between the father of the Plaintiff and the Defendant Foxall, which have been given in evidence, and commented upon in this case. In the first place, the Plaintiff, who is an infant, cannot be bound by any admissions made by any one professing to act on his behalf. But, in addition to this, I find that the offers were in fact made without prejudice to the rights of the parties; and I shall, as far as I am able, in all cases, endeavour to repress a practice which, when I was first acquainted with the profession, was never ventured upon, but which, according to my experience in this place, has become common of late—namely, that of attempting to convert offers of compromise into admissions of acts prejudicial to the person making them. If this were permitted, the effect would be, that no attempt to compromise a dispute could ever be made. If no reservation of the person who made an offer of compromise could prevent that offer, and the letters containing or relating to it, from being afterwards given in evidence, and made use of against him, it is obvious that no such letter would be written or offer made. In my opinion, such letters and offers are admissible for one purpose only, namely, to show that an attempt has been made to compromise the suit, which may sometimes be necessary; as, for instance, in order to account for the lapse of time, but never for the purpose of fixing the person making them with any admissions contained in such letters; and I shall do all I can to discourage this modern and, as I think, most injurious practice."
In Walker v. Wilsher (1889) 23 Q.B.D. 335 the Court of Appeal (Lord Esher M.R., Lindley and Bowen L.JJ) ruled out the use of without prejudice correspondence by the unsuccessful litigant seeking to deprive his opponent of costs. Lord Justice Lindley, having referred to a first instance case where such correspondence had been admitted, stated as follows at page 338:
"That case is the only authority that I know of for the course taken by the learned judge, and, when we come to consider the principle on which it was decided, it does not convince me that a judge is entitled to look at letters written without prejudice unless he has the consent of both parties to his so doing. No doubt there are cases where letters written without prejudice may be taken into consideration, as was done the other day in a case in which a question of laches was raised. The fact that such letters have been written and the dates at which they were written may be regarded, and in so doing the rule to which I have adverted would not be infringed. The facts may, I think, be given in evidence, but the offer made and the mode in which that offer was dealt with—the material matters, that is to say, of the letters—must not be looked at without consent. I think, therefore, that there was no good cause for depriving the plaintiff of costs, and that the decision should be reversed."
In Calderbank v. Calderbank [1975] 2 All E.R. 333 the principle was established in a matrimonial case that reference could be made in an application for costs to a without prejudice offer to settle made subject to a clearly expressed reservation of the right to refer to it on the costs issue.
In Cutts v. Head [1984] 1 Ch. 290 the Court of Appeal had to consider whether the Calderbank principle extended across the whole spectrum of civil litigation. Lord Justice Oliver stated as follows at page 306 in relation to the well established meaning of "without prejudice":
"The...
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