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Session 2008 - 09 Publications on the Internet Judgments PDF Print Version 
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| Judgments - Ofulue and another (FC) (Appellant) v Bossert (FC) (Respondent)
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HOUSE OF LORDS SESSION 2008-09 [2009] UKHL 16 on appeal from:[2008]EWCA Civ 9
OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT IN THE CAUSE Ofulue and another (FC) (Appellant) v Bossert (FC) (Respondent) Appellate Committee Lord Hope of Craighead Lord Scott of Foscote Lord Rodger of Earlsferry Lord Walker of Gestingthorpe Lord Neuberger of Abbotsbury Counsel Appellant: Richard Wilson QC Christopher Jacobs (Instructed by Hodge Jones & Allen) Respondent: Peter Cramplin QC Simon Williams (Instructed by RFB Solicitors) Hearing date : 2 and 3 FEBRUARY 2009 ON WEDNESDAY 11 MARCH 2009 HOUSE OF LORDS OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT IN THE CAUSE Ofulue and another (FC) (Appellant) v Bossert (FC) (Respondent) [2009] UKHL 16 LORD HOPE OF CRAIGHEAD My Lords, 1. I have had the advantage of reading in draft the opinion of my noble and learned friend Lord Neuberger. I agree with it, and for the reasons he gives I would dismiss the appeal and make the order that he proposes. I also agree with my noble and learned friends Lord Rodger of Earlsferry and Lord Walker of Gestingthorpe. I wish only to add a few words of my own on the question whether the offer to purchase the property in the letter of 14 January 1992 that was written on the Bosserts’ behalf by their solicitors can be relied on by the Ofulues in these proceedings as an acknowledgement. 2. Sometimes letters get headed “without privilege” in the most absurd circumstances, as Ormrod J observed in Tomlin v Standard Telephones & Cables Ltd [1969] 1 WLR 1378, 1384. But where the letters are not headed “without prejudice” unnecessarily or meaninglessly, as he went on to say at p 1385, the court should be very slow to lift the umbrella unless the case for doing so is absolutely plain. The principle which the court should follow was that expressed by Sir John Romilly MR in Jones v Foxall (1852) 15 Beav 388, 396. If converting offers of compromise into admissions of acts prejudicial to the person making them were to be permitted no attempt to compromise a dispute could ever be made. The basis for the rule has been explained more fully by Oliver LJ in Cutts v Head [1984] Ch 290, Lord Griffiths in Rush & Tomkins Ltd v Greater London Council [1989] AC 1280 and Robert Walker LJ in Unilever plc v The Procter & Gamble Co [2000] 1 WLR 2436. With the benefit of those explanations it may be re-stated in these terms. Where a letter is written “without prejudice” during negotiations with a view to a compromise, the protection that these words claim will be given to it unless the other party can show that there is a good reason for not doing so. 3. In this case there is no doubt that the letter of 14 January 1992 was written in the course of a genuine attempt to settle the proceedings for possession which were then in existence between the parties. It does not contain an admission in so many words that the Ofulues were the owners of the property. But the offer in the last sentence of the letter to purchase it from them can be construed as an express acknowledgement of this fact. In any event it was an implied acknowledgment which was sufficient for the purposes of section 29(2) of the Limitation Act 1980. Can this be used to defeat the defence to the proceedings which have now been issued in which the Ofulues seek an order declaring that their title to the property has not been extinguished? 4. This question would not have arisen if the claimants had not allowed their claim for possession to fall asleep following the breakdown of the attempt at settlement. As it is, the Ofulues allowed so much time to pass that they must now challenge Ms Bossert’s assertion that the title has passed to her by way of adverse possession. That is why the present claim has been brought. The letter of 14 January 1992 was written within 12 years of the start of these proceedings. What grounds are there for saying that, notwithstanding the fact that it was written “without prejudice", it can be founded on as an effective acknowledgment for the purposes of section 29(2) of the 1980 Act? 5. In Cutts v Head [1984] Ch 290 at p 306 Oliver LJ said that the rule that protects without prejudice negotiations from disclosure rests, at least in part, upon public policy. As he explained, the public policy justification essentially rests on the desirability of preventing statements or offers made in the course of negotiations being brought before the court of trial as admissions on the question of liability. At p 310 he said that the public policy protects negotiations from disclosure “whilst liability is still in issue". In that case the offer was unacceptable, the case went to trial and the question was whether the offer could be referred to on the issue of costs. The situation in this case is that the negotiations were not successful but the application for possession in the original action has been struck out. So there is no question of seeking in that action to rely on the letter of 14 January 1992 before the court of trial. The question which this formulation of the public policy justification gives rise to is whether the protection from disclosure has any effect beyond the life of the action which the parties were attempting to settle when they entered into the negotiations. 6. In Rush & Tomkins Ltd v Greater London Council [1989] AC 1280, 1299 Lord Griffiths said that the effect of the phrase was that, as a general rule, in the event of the negotiations being unsuccessful the negotiations were not to be referred to at the subsequent trial. At p 1300 he said that the rule was not absolute and that resort may be had to the “without prejudice” material for a variety of reasons when the justice of the case requires it. In that case the second defendants sought disclosure of correspondence marked “without prejudice” between the plaintiffs and the first defendants which had resulted in those parties reaching a compromise. It was held that admissions made to reach a settlement with a different party within the same litigation were also inadmissible whether or not settlement was reached with that party. Lord Griffiths said at p 1305 that the wiser course, in multi-party litigation, was to protect “without prejudice” communications between parties to litigation from production to other parties in the same litigation. In that case the question whether the protection would continue to be available in any subsequent proceedings between the same parties with reference to the same subject matter was not in issue. 7. In Unilever plc v The Procter & Gamble Co [2000] 1 WLR 2436 the claimant sought to rely on the defendant’s alleged threat to take proceedings in the United Kingdom in respect of an alleged infringement of a patent, made in the course of a without prejudice meeting with reference to proceedings that had been brought in France, to justify the taking of proceedings for a declaration of non-infringement in this jurisdiction. The claimant was not seeking to make use of the alleged threat in the proceedings which were the subject of the negotiations for settlement. In a sense it had nothing to do with those proceedings at all. It would not have been relevant to anything that was to be determined at the trial. As Robert Walker LJ noted at pp 2444-2445, there are various situations in which the without prejudice rule does not prevent the admission into evidence of what one or both parties said or wrote. None of those situations apply to this case. But the general approach which he recommended provides valuable guidance. At pp 2448-2449 he said that to dissect out identifiable admissions and withhold protection from the rest of without prejudice communications would not only create huge practical difficulties but would be contrary to the underlying objective, founded partly in public policy and partly in the agreement of the parties, of giving protection to the parties so that they could speak freely about all issues in the litigation when seeking compromise. These comments show that this is not a situation in which arguments that resort to procedural or linguistic technicalities are appropriate. 8. The argument that the letter cannot be relied on as an acknowledgment faces two difficulties which have persuaded my noble and learned friend Lord Scott of Foscote that the rule does apply in this case. The first is the product of a change of circumstances. The issue that is being litigated between the parties now is not the issue that was being litigated when the letter was written in January 1992. In fact it was not an issue that was in dispute between the parties at that time at all. The second is a more subtle aspect of the same point. It is whether the protection that the rule gives in without prejudice negotiations to an admission against interest extends to an acknowledgment of what at the time it was made was an agreed fact. 9. Normally, when negotiations are entered into with a view to settling a claim that has already been brought, one or other of two things happens: either they result in an agreement or they break down and the claim proceeds to judgment. If they result in agreement, the letter that was written without prejudice is available to show what the agreement was. If the claim proceeds to judgment, the protection remains in place while liability is still in issue but it ceases to have any purpose when the court has resolved the dispute. This case is unusual because the negotiations did not result in an agreement and the claim did not proceed to judgment. It went to sleep and was then struck out. But I would hold that this turn of events did not remove the need for protection. The dispute had not been resolved, so there was still a risk that things said in the letter might be used to the Bosserts’ prejudice. The issue which had given rise to the original proceedings had not gone away. Ultimately of course, if the Bosserts remained in possession and no further steps were taken against them, they would acquire a right of ownership under the provisions of the Limitation Act 1980. But so long as the Ofulues remained the owners and the dispute was unresolved one way or another there was a risk that things said in the letter might be used against them. The precise way in which they might be used against them is beside the point. The public policy grounds for the rule would be contradicted if the protection was not available in fresh proceedings to replace those which were struck out. 10. The Ofulues’ title was not in issue when the letter was written, as it was common ground in the original proceedings that they were the owners of the property. The Bosserts had already admitted that the Ofulues were the owners in their Defence. So acknowledging that this was so as part of the attempt to achieve a compromise was giving nothing away. It has now become the focus of the fresh proceedings that have been brought. On the other hand the offer of a compromise did contain within it an implied admission that the Bosserts’s defence to the claim for possession was unsustainable. The question whether this makes any difference can be tested in this way. Could the writer of the letter have made the offer that it contains without acknowledging the Ofulues’ ownership? The answer to that question must be, no. It is obvious that an offer to purchase, which is what this was, could not have been made without that acknowledgment. There is no need in this case to explore the outer limits of the rule which were discussed in Bradford & Bingley plc v Rashid [2006] UKHL 37, [2006] 1 WLR 2066. The acknowledgment cannot be said to be unconnected with, or to fall outside the area of, the offer to compromise. It was a necessary part of it. 11. The argument that the acknowledgment can, following Hoffmann LJ’s reasoning in Muller v Linsley & Mortimer [1996] PNLR 74, 79 and in Bradford & Bingley plc v Rashid para 16, be viewed simply as a fact independently from any admission that can be spelled out of it faces the same difficulty. How could the writer have avoided this aspect of his communication when he was making his offer to purchase the property? I do not see how he could reasonably have been expected to have said or done anything differently. As Lord Walker says at para 51, by one and the same words, he was both admitting the Bossert’s need to purchase the property if they were to retain possession of it and acknowledging the Ofulues’ ownership. The protection which the rule gives to that admission must apply equally to the acknowledgment. They are two sides of the same coin. 12. I think that the public policy basis for not allowing anything said in the letter to be used later to her prejudice provides Ms Bossert with all she needs to defeat the argument that the implied admission that it contains can be used as an acknowledgment against her in these proceedings. The essence of it lies in the nature of the protection that is given to parties when they are attempting to negotiate a compromise. It is the ability to speak freely that indicates where the limits of the rule should lie. Far from being mechanistic, the rule is generous in its application. It recognises that unseen dangers may lurk behind things said or written during this period, and it removes the inhibiting effect that this may have in the interests of promoting attempts to achieve a settlement. It is not to be defeated by other considerations of public policy which may emerge later, such as those suggested in this case, that would deny them that protection. LORD SCOTT OF FOSCOTE My Lords, 13. The litigation which has led to this appeal to your Lordships began with a Claim Form issued on 30 September 2003 whereby the appellant, Mrs Ofulue, and her husband, claimed possession of 61 Coborn Road, Bow, London E3, from the respondent, Ms Bossert. Mr and Mrs Ofulue were, and had been since 1976, the registered proprietors of the property. They had not, however, at least since 1981, been in actual possession of the property. In 1981 or 1982 the respondent and her father had been allowed into occupation of the property by a former tenant of Mr and Mrs Ofulue and the respondent, together with her father until his death in 1996, had occupied the property ever since. It is, therefore, not surprising to find that her defence to the possession claim is based on a claim to have been in adverse possession of the property for a period in excess of 12 years (see section 15 of the Limitation Act 1980). 14. The appellant’s response to this adverse possession defence relies on section 29(2)(a) of the 1980 Act - “(2) If the person in possession of the land . . . in question acknowledges the title of the person to whom the right of action has accrued - (a) the right shall be treated as having accrued on and not before the date of the acknowledgement …” Section 30(1) of the Act requires that a section 29 acknowledgement “must be in writing and signed by the person making it” but subsection (2) enables the acknowledgement to be made “by the agent of the person by whom it is required to be made". 15. Two documents are relied on by the appellant as constituting effective section 29 acknowledgements of title. Both documents came into existence in earlier possession proceedings that had been brought by the appellant and her husband against the respondent and her father. The earlier possession proceedings had been commenced in 1989. The Statement of Claim, served on 26 June 1990, pleaded in paragraph 1 the plaintiffs’ title to 61 Coborn Road and in paragraph 2 that the defendants had wrongfully taken possession of the property and were wrongfully retaining possession. The respondent and her father served their Defence on 18 July 1990. Paragraph 1 of the Defence admitted paragraph 1 of the Statement of Claim and was, accordingly, an admission of Mr and Mrs Ofulue’s title to 61 Coborn Road. The Defence went on to claim (in paragraph 6) that Mr Bossert had become in equity the tenant of 61 Coborn Road, or, alternatively (paragraph 8) was entitled to remain in possession pursuant to an oral agreement with Mr Ofulue for the grant of a fourteen year lease. No adverse possession claim was made, for the Bosserts had not yet been in possession for the requisite twelve years. The three paragraphs of the Defence to which I have referred contain, perhaps individually but certainly collectively, a clear acknowledgement of Mr and Mr Ofulue’s title to 61 Coborn Road. The Defence, signed by counsel instructed by the Bosserts’ solicitors, is the first of the documents on which the appellant relies as a section 29 acknowledgement. Her problem is that the date of the document, July 1990, is more than twelve years before 30 September 2003, the date when the current possession proceedings were commenced. 16. The second document relied on as a section 29 acknowledgement also came into existence for the purposes of the first possession proceedings. On 12 August 1991 Geoffrey Levine & Co., the Bosserts’ solicitors, wrote to Mr and Mrs Ofulue’s solicitors communicating an offer by their clients to purchase the freehold of 61Coborn Road from Mr and Mrs Ofulue for £20,000. The letter was headed “Without Prejudice". The Ofulues’ solicitors replied on 19 December 1991, in a letter headed “Without Prejudice save as to Costs", indicating that they would advise their clients, whose instructions on the offer they had not yet received, that the £20,000 offered was inadequate. This led to a further letter from the Bosserts’ solicitors, dated 14 January 1992, also headed “Without Prejudice", increasing to £35,000 the sum offered. This revised offer was not accepted and although, in a letter dated 20 January 1992, the Ofulues’ solicitors continued the bargaining, the negotiations ran into the sand. 17. The letter of 14 January 1992 is the second document relied on by the appellant as a section 29 acknowledgement of her and her husband’s title to 61 Coborn Road. The letter does contain a clearly implied acknowledgement of Mr and Mrs Ofulue’s title to the property and its date is within twelve years of the commencement of the current possession proceedings. The appellant’s problem, however, is that the letter was marked, as the associated correspondence had been marked, “Without Prejudice” and that marking, it is submitted, bars its admissibility into evidence in the present proceedings. 18. Before addressing the critical issue of the admissibility into evidence of the 14 January 1992 “Without Prejudice” letter, it is convenient to refer to the fate of the first possession proceedings. Following the service of the Defence in July 1990 the case was transferred from the High Court to the Shoreditch County Court and a Directions Hearing took place on 17 July 1991. It appears that Lists of Documents were shortly thereafter exchanged but that nothing else was done to prosecute the action and, on 26 April 2000, the appellant’s claim, 1996, became automatically stayed pursuant to the Civil Procedure Rules. On 1 February 2002 an application by the appellant to lift the stay was issued and on 16 April 2002 the case was struck out. She, therefore, had to commence fresh possession proceedings at a time when, subject to her ability to pray in aid a section 29 acknowledgement of title, her title was barred under section 15 of the 1980 Act. The twelve years adverse possession period would have long since expired. 19. As my noble and learned friend Lord Neuberger of Abbotsbury has observed in paragraph 73 of his opinion, which I have had the advantage of reading in advance of writing my own, there are two live issues which your Lordships must decide. The first is whether the admission of title in the Defence in the first proceedings can be regarded as a continuing acknowledgement, effective for section 29 purposes until, in April 2002, the case was struck out. On this issue I am in respectful agreement with Lord Neuberger that, for the reasons he has given (paras 80 to 84 of his opinion), it cannot. Section 29(2) (a) refers to “the date of the acknowledgement", subsection (3) to “the date of the payment", and subsections (4) and (5) to “the date of the payment or acknowledgement". In my opinion, the scheme of section 29 is as incompatible with an acknowledgement in writing being treated as a continuing acknowledgement extending into the future beyond the date on which it was given, as would be a payment being accorded a continuing effect. Both a section 29 acknowledgement and a section 29 payment start time running as from the date on which the acknowledgment or the payment was made. The concept of a continuing acknowledgement is, in my opinion, incompatible with the section. The Bosserts’ defence in the first proceedings constituted, in my opinion, a section 29 acknowledgement on the date it was signed, and perhaps again on the date it was served, and would have been capable of constituting a further acknowledgement on any subsequent date on which it was, so to speak, re-published, e.g. by being re-served after an amendment had been made. But nothing that could constitute a re-publication ever happened and the Defence’s effect as a section 29 acknowledgement was, in my opinion, spent on the expiry of twelve years after it had been served, at the latest. 20. It follows that, in my opinion, the appellant must rely on the Without Prejudice letter of 14 January 1992. On this point Lord Neuberger, and my noble and learned friends Lord Hope of Craighead and Lord Walker of Gestingthorpe have expressed the view that the public policy that encourages the negotiated settlement of actions requires that the 14 January 1992 letter be held inadmissible in evidence in the present action. My Lords I have the misfortune to disagree. I believe that that result of this appeal would represent a marked extension of the Without Prejudice rule that previous judicial authority does not warrant and that public policy does not require. 21. The Bosserts’ Defence in the first possession proceedings became spent as a section 29 acknowledgement but remains, in my opinion, of importance in providing the context against which the purpose of the 14 January 1992 letter must be assessed. There was no issue between the parties to the first possession proceedings about the Ofulues’ title to the property. The Ofulues’ ownership, never in issue, was admitted in the Defence and was the basis on which the Bosserts’ pleaded claims to be entitled to remain in possession had been formulated and on which the settlement negotiations were throughout conducted. What was suggested in the letter of 12 August 1991 that started off the without prejudice negotiations was the acquisition by the Bosserts of the freehold of 61 Coborn Road in place of their disputed claim to a tenancy or lease. The ensuing negotiations related to the amount that the Bosserts should pay for that enhanced interest, an interest that they could not claim in the then current proceedings. It would, of course, have been out of the question for that correspondence to have been admitted in evidence (otherwise than with the consent of both parties) if the first possession proceedings had progressed to a trial, but not because of any admission regarding the Ofulues’ title. 22. The early cases, which established the rule that without prejudice settlement negotiations were to be immune from admission into evidence on the trial of the issues sought to be settled, provide no warrant for extending the rule to other actions involving other issues. In Whiffen v Hartwright (1848) 11 Beav. 111 Lord Langdale M.R. upheld an objection to the production of letters passing between the parties’ respective solicitors and written “… with a view to an amicable adjustment of the questions in issue in this suit …” (emphasis added). In Hoghton v Hoghton (1852) 15 Beav. 278 Sir John Romilly M.R. said at 314 that he would disregard “… admissions made solely for the purpose of compromise". The acknowledgement of title contained in the 14 January 1992 letter cannot be described as an admission made for the purpose of compromise. It was the common ground on the basis of which the Ofulues’ pleaded claim to possession was made and the Bosserts’ pleaded defences were formulated. At 321 the Master of the Rolls said that “communications made with a view to an amicable settlement ought to be held very sacred for if parties were to be afterwards prejudiced by their efforts to compromise, it would be impossible to attempt an amicable arrangement of differences.” But he was not speaking of matters referred to in the communications that were never in issue but were common ground between the parties. In Jones v Foxall (1852) 15 Beav. 388 Sir John Romilly MR at 396 fulminated against attempts to introduce into evidence offers of compromise “made without prejudice to the rights of the parties” (emphasis added). In that case, unlike the present case, the rights protected by the Without Prejudice label were the contested rights in issue in the case. In Hoghton v Hoghton the issue had been whether a resettlement of settled estates should be set aside on, essentially, undue influence grounds. The without prejudice communications must have proceeded on the footing that the Hoghton sons, or grandsons, were legitimate offspring and, therefore, potential beneficiaries of the settled estates. If, subsequently, an illegitimacy issue had arisen and some content of the without prejudice communications, common ground at the time, had become relevant to the illegitimacy issue, why should the communications not have been given in evidence on that new issue? What public policy argument would exclude the evidence? How can protection of common ground facts and matters on the basis of which compromise negotiations are being conducted be seriously thought to be necessary for the encouragement of such negotiations? |
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