“65. … The question is therefore whether, if Motorola’s evidence as to what was said was true, this is a case of unambiguous impropriety.”
“These are clear cases of improper threats, but the value of the without prejudice rule would be seriously impaired if its protection could be removed from anything less than unambiguous impropriety. The rule is designed to encourage parties to express themselves freely and without inhibition. I think it is quite wrong for the tape-recorded words of a layman, who has used colourful or even exaggerated language, to be picked over in order to support an argument that he intends to raise defences which he does not really believe to be true.”
“Speaking for myself, I readily see the force of these points. But it is one thing to suggest, as I for my part would be prepared to recognise, that that is certainly one possible interpretation of the tape, one inference well capable of being drawn from the actual words exchanged -- indeed, particularly if one looks at this through Dr Nikbin’s eyes, this might even be thought the more probable explanation of the plaintiff’s comments -- it is quite another thing to contend that this is the unambiguous conclusion to be drawn from this conversation. That contention I certainly cannot accept … Even accepting that the test of unambiguous impropriety involves a less stringent approach than that adopted by the criminal courts when dealing with allegations such as forgery, I would still not regard the test as having been satisfied on the facts of this case.”
“I add only this. There are in my judgment powerful policy reasons for admitting in evidence as exceptions to the without prejudice rule only the very clearest of cases. Unless this highly beneficial rule is most scrupulously and jealously protected, it will all too readily become eroded. Not least requiring of rigorous scrutiny will be claims for admissibility of evidence advanced by those (such as the first defendant here) who have procured their evidence by clandestine methods and who are likely to have participated in discussions with half a mind at least to their litigious rather than their settlement advantages. That distorted approach to negotiation to my mind is itself to be discouraged, militating, as inevitably it must, against the prospects of successful settlement.”
“I should at this stage make it absolutely clear that the affidavit evidence of [the defendants] is to the effect that no such statement was made. In those circumstances, I proceed upon the basis that the statements were made but note that it may turn out that [the claimant’s witness] will not be believed.”
“In this case we are considering the matter at an early stage when we have not even reached the stage of witness statements. This is an application to strike out and/or to set aside a Mareva order. In my view the court should at this stage decide whether the statements would, if proved, form the basis for establishing unambiguous impropriety. It is for the judge who hears the matter to decide whether they do. In my view, when [the relevant paragraphs of the claimant’s evidence] are taken into account together with the evidence of [the defendants] it is established that the evidence sought to be struck out should be understood as disclosing unambiguous impropriety. The evidence alleges that these gentlemen would make sure that the judgment, which might be obtained by [the claimant], would not be satisfied due to the action they would take, resulting in the company’s assets being transferred out of reach of the order of the court. I also take into account the affidavits of [the defendants] which states that these statements were never made. They may turn out to be right, but they do not suggest that what is alleged to be said was not improper or that something like that alleged was said, but that it was taken out of context. For that reason, I believe that this case is an exception to the without prejudice rule.”
“The words were capable of bearing the meaning that if the plaintiff was to pursue what he perceived to be his legal rights and remedies, then some of the defendants would ensure that the first and second defendants would so conduct the affairs of the third defendant as to ensure that there would be nothing left and that the plaintiff would be left with an empty judgment. The question is whether what was allegedly said disclosed an unambiguous impropriety.”
“The judge undoubtedly considered and applied the correct principle, but I am reluctant to say that I cannot share the judge’s view that the defendants did not display an unambiguous impropriety. The words allegedly used, given their ordinary and proper meaning, amount to an unequivocal implication that the assets of the company would be placed outside the reach of the court by improper means. The words can only have been uttered with the intention or in an attempt to deter the plaintiff from pursuing his rights. Moreover, the words complained of were in themselves capable of amounting to an overt act in furtherance of a conspiracy between the first and second defendants to deter the plaintiff from pursuing his action through the court process and to deprive him of his just desserts [sic.] should he persist and win. They went well beyond the colourful or exaggerated language test.”
“Without in any way underestimating the need for proper analysis of the rule, I have no doubt that busy practitioners are acting prudently in making the general working assumption that the rule, if not ‘sacred’ (Hoghton v Hoghton (1852) 15 Beav 278, 321), has a wide and compelling effect. That is particularly true where the 'without prejudice' communications in question consist not of letters or other written documents but of wideranging unscripted discussions during a meeting which may have lasted several hours. At a meeting of that sort the discussions between the parties' representatives may contain a mixture of admissions and halfadmissions against a party's interest, more or less confident assertions of a party's case, offers, counter-offers, and statements (which might be characterised as threats, or as thinking aloud) about future plans and possibilities. As Simon Brown LJ put it in the course of argument, a threat of infringement proceedings may be deeply embedded in negotiations for a compromise solution. Partial disclosure of the minutes of such a meeting may be, as Leggatt LJ put it in Muller, a concept as implausible as the curate's egg (which was good in parts). …”
“(4) Apart from any concluded contract or estoppel, one party may be allowed to give evidence of what the other said or wrote in without prejudice negotiations if the exclusion of the evidence would act as a cloak for perjury, blackmail or other ‘unambiguous impropriety’ (the expression used by Hoffmann LJ in Forster v Friedland (unreported),10 November 1992 , CAT 1052 of 1992). Examples (helpfully collected in Foskett's The Law & Practice of Compromise, 4th ed, para 9-32) are two first-instance decisions, Finch v Wilson (unreported),8 May 1987 and Hawick Jersey International v Caplan (The Times,11 March 1988 ). But this court has, in Forster v Friedland and Fazil-Alizadeh v Nikbin (unreported),25 February 1993 , CAT 205 of 1993, warned that the exception should be applied only in the clearest cases of abuse of a privileged occasion.”
“For present purposes the standard of proof, in my judgement, must be such as to establish a serious and substantial risk of perjury, which only the content of the negotiations would readily reveal.”
“42. … This court did not address the difficulty of how evidence which was disputed could establish unambiguous impropriety, save in the passage of Aldous LJ’s judgment where he refers to what the directors did not say, the cogency of which point we have respectfully doubted. This court seems to have adopted the approach of admitting the disputed evidence on the footing that the judge who heard the second action would decide whether the statements were made. In the circumstances of that case for that judge to determine that point would not have caused any difficulty because his ability to decide the substantive issues before him would not have been hindered by hearing evidence of statements made without prejudice to the issues in the first action. In the present case the alleged admissions are relied on for the truth of their content and not for the fact that they were made, and, if made, they were indisputably made in the course of genuine negotiations to settle the action; further, as David Steel J himself said, their admissibility could not properly be determined by the trial judge. This last point was disputed by Mr Marshall [counsel for the claimant], who referred to a number of cases where the trial judge has determined, or it has been held that the trial judge should determine, whether evidence was to be excluded by the application of the without prejudice rule. None of those cases was concerned with disputed oral admissions in the course of lengthy negotiations where the unambiguous impropriety exception was in point, and it seems plain to us that it would be undesirable for the trial judge in this case to be left to decide whether the statements were made. We would not therefore accept that the approach in Dora v Simper is one to be applied in the present case.”
“48. We start with the judge’s self-direction that the court, when considering whether statements made in without prejudice discussions may be admitted in evidence, applies the test of whether there is a serious and substantial risk of perjury. Mr Marshall does not suggest that that test has been applied before and we can see nothing in the authorities to support it. On the contrary, it seems to us to weaken significantly the requirement of unambiguous impropriety and of the need for a very clear case of abuse of a privileged occasion. Although the judge in the final paragraph of his judgment says that he bears in mind the need to restrict applications to admit without prejudice statements to the clearest cases of abuse, he then applies the test of a serious and substantial risk of perjury. In our judgment that is too low a test and one which would seriously erode the without prejudice rule. The judge should have looked for nothing less than unambiguous impropriety.”
“53. In our judgment this is simply not the sort of case where the court should be prepared to admit the evidence of without prejudice statements as falling within the exception from the without prejudice rule for unambiguous impropriety. The situation here is precisely what Robert Walker LJ. referred to in Unilever (at p. 2444A) when he talked of without prejudice communications which ‘consist not of letters or other written documents but of wide-ranging unscripted discussions during a meeting which may have lasted several hours.’ It seems to us quite wrong to select from many hours of without prejudice discussions what are said to be an admission here and an admission there in order to mount a claim that by his subsequent statements on oath the alleged maker of the admissions committed perjury. These were not even discussions at which, through tape-recording or the keeping of a detailed note, what was said and the context in which it was said could not be doubted. If the without prejudice rule can be breached in this case, we do not see why it cannot be breached in any case where an admission, inconsistent with some pleading or sworn assertion, is alleged to have been made. No litigant could be advised to enter into without prejudice discussions without a lawyer at his elbow or a prepared script approved by his lawyer. To allow such admissions in evidence flies in the face of the public policy justification for the without prejudice rule.”
“55. The judge, having stated that it would not be appropriate to resolve factual disputes at that interlocutory stage and that the very need to call witnesses to determine differences of recollection as to what was said during the negotiations would undermine the existence of a clear case, nevertheless proceeded to find the disputed evidence admissible. The judge does not explain how he envisaged the matter would then proceed. He knew that the evidence was required by the Claimants for use on the application for summary judgment, but he surely could not have envisaged that on that application evidence contested by the party against whom judgment was sought could be accepted as true. On such applications that party's case is taken to be true. Mr Marshall told us that the Claimants intended that all the material would be available to the judge hearing the application, though he accepted that in so far as there was a conflict of evidence, that judge would not resolve disputes of fact. But given that Mr Ghadimi does dispute making the statements that the agreement was for$2 per metric tonne only, we have difficulty in seeing what utility the judge's ruling on admissibility had for the summary judgment application. 56. The judge gave no directions for the trial of the factual dispute. Had he done so, that trial of that dispute should surely have been the occasion to rule on admissibility. But we would not suggest that, in a case like the present, directions for the trial of the issue whether the alleged statements were made should be given. Not only is there no unambiguous impropriety on the Claimants' evidence, at such trial it would be inevitable that the witnesses would have to give even more evidence to explain what occurred in the without prejudice discussions. Satellite litigation of this sort is bound to discourage settlement negotiations for fear of such consequences, and is in our opinion highly undesirable.”
“53. … All four authorities in this court, while allowing the existence of an exceptional rule to cover cases of unambiguous impropriety, have stressed the importance of the public interest which has created the general rule of privilege and have cautioned against the too ready application of the exception.”
“56. These considerations throw into relief the fact that SIB's evidence has gone unchallenged. How important is that factor in the present context? In my judgment, the courts ought to treat it with considerable caution, for otherwise there is a danger of the exception to the rule displacing the rule by a process of begging the question. If the exception applies, then Mr Fincken is obliged to explain himself or face the consequences, for his admission is in the public domain. The absence of challenge may therefore be critical. If, however, the exception does not apply, then the admission is not in the public domain, the court ought not to know about it, and the absence of challenge is irrelevant. … I can see that the absence of challenge may enable an applicant to establish more easily that an alleged admission is unequivocal. That, however, is not the same thing as an unequivocal or unambiguous impropriety. I would therefore be reluctant to find in the circumstances that an absence of challenge is a critical factor taking this case outside the philosophy of the jurisprudence expressed in the leading authorities cited above. 56. In my judgment that philosophy is antagonistic to treating an admission in without prejudice negotiations as tantamount to an impropriety unless the privilege is itself abused. That, it seems to me, is what Robert Walker LJ meant in Unilever when he repeatedly spoke in terms of the abuse of a privileged occasion, or of the abuse of the protection of the rule of privilege: see at 2444G, 2448A and 2449B. That is why Hoffmann LJ in Forster emphasised that it was the use of the privileged occasion to make a threat in the nature of blackmail that was, if unequivocally proved, unacceptable under the label of an unambiguous impropriety. And that is why Peter Gibson LJ in Berry Trade suggested, without having to decide, that talk of ‘a cloak for perjury’ was itself intended to refer to a blackmailing threat of perjury, as in Greenwood v. Fitt, rather than to an admission in itself. It is not the mere inconsistency between an admission and a pleaded case or a stated position, with the mere possibility that such a case or position, if persisted in, may lead to perjury, that loses the admitting party the protection of the privilege (see the first holding in Fazil-Alizadeh, described in para 47 above). It is the fact that the privilege is itself abused that does so. It is not an abuse of the privilege to tell the truth, even where the truth is contrary to one's case. That, after all, is what the without prejudice rule is all about, to encourage parties to speak frankly to one another in aid of reaching a settlement: and the public interest in that rule is very great and not to be sacrificed save in truly exceptional and needy circumstances.”
“30. The cases to which I have referred (and others) show that, because of the importance of the without prejudice rule, its boundary should not be lightly eroded.”
“15. … The reasoning of Aldous LJ has been respectfully criticised by the Court of Appeal in Berry Trade Ltd v Moussavi[2003] EWCA Civ 715 , but it appears to me that the criticism there is more to do with the situation where there is some dispute about what was said in the course of the without prejudice negotiations. Such a dispute about what was said raises difficulties for the court in arriving at a conclusion about what was said at an interlocutory stage, when it is really only once that conclusion has been arrived at that the court can properly determine whether there has been an unambiguous impropriety at all. In the instant case, however, there is no dispute about what was said, because it is all set out very clearly in the email …”
“11. … the critical question is whether the privileged occasion is itself abused. Although the test remains that of unambiguous impropriety, it may be easier to show that there is unambiguous impropriety where there is an improper threat than where there is simply an unambiguous admission of the truth.”
“23. Nuo Xu presented two options (1) appeal or (2) "retreat" to China. … 24. As part of Hytera's ‘Retreat to China’ plan, Nuo Xu said that Hytera would do at least the following: 24.1 Undercapitalize subsidiaries operating outside of China to keep on hand the minimum cash to operate their business. He gave an example of a U.K. subsidiary that now has$25M in cash, but Hytera would reduce that cash holding to$5 million . 24.2 Revise Hytera's ‘Treasury policies’ to frustrate enforcement of any judgment in favour of Motorola. For example, Hytera would shorten customer payment / credit terms to make payment due to Hytera in a shorter time frame than the collection process in that country would take. Mr. Xu also stated that Hytera would change the entities to be paid in its contracts to further frustrate collection by making payment due directly to a Chinese entity rather than local entities. 24.3 Move assets out of countries where collection is easier. Notably, Mr Xu stated that Hytera already had taken steps to move assets out of Motorola's anticipated reach and to reduce holdings in various countries. 24.4 To the extent Motorola engaged in collection actions, he stated that Hytera would further retreat to operate primarily in China, Russia, and Africa (which he described as the "murky" countries) and said in effect, ‘good luck collecting in those places’. A nearly identical presentation and statements were also made by Mr Xu on1 November 2019 , where Hytera's CEO Qingzhou Chen was present, which Mr Chen did not contradict. Urgent relief is necessary because I witnessed Hytera make explicit threats to move cash from its UK subsidiaries and claim that it already has begun this process.”
“(1) The claimant must show a real risk, judged objectively, that a future judgment would not be met because of an unjustified dissipation of assets. In this context dissipation means putting the assets out of reach of a judgment whether by concealment or transfer. (2) The risk of dissipation must be established by solid evidence; mere inference or generalised assertion is not sufficient. (3) The risk of dissipation must be established separately against each respondent. (4) It is not enough to establish a sufficient risk of dissipation merely to establish a good arguable case that the defendant has been guilty of dishonesty; it is necessary to scrutinise the evidence to see whether the dishonesty in question points to the conclusion that assets may be dissipated. It is also necessary to take account of whether there appear at the interlocutory stage to be properly arguable answers to the allegations of dishonesty. (5) The respondent's former use of offshore structures is relevant but does not itself equate to a risk of dissipation. Businesses and individuals often use offshore structures as part of the normal and legitimate way in which they deal with their assets. Such legitimate reasons may properly include tax planning, privacy and the use of limited liability structures. (6) What must be threatened is unjustified dissipation. The purpose of a WFO is not to provide the claimant with security; it is to restrain a defendant from evading justice by disposing of, or concealing, assets otherwise than in the normal course of business in a way which will have the effect of making it judgment proof. A WFO is not intended to stop a corporate defendant from dealing with its assets in the normal course of its business. Similarly, it is not intended to constrain an individual defendant from conducting his personal affairs in the way he has always conducted them, providing of course that such conduct is legitimate. If the defendant is not threatening to change the existing way of handling their assets, it will not be sufficient to show that such continued conduct would prejudice the claimant's ability to enforce a judgment. That would be contrary to the purpose of the WFO jurisdiction because it would require defendants to change their legitimate behaviour in order to provide preferential security for the claim which the claimant would not otherwise enjoy. (7) Each case is fact specific and relevant factors must be looked at cumulatively.”