Legal News & Analysis – Asia Pacific – Singapore – Dispute Resolution

It is trite law that the contents of “without prejudice” (“WP”) communications between disputing parties to a suit are inadmissible as evidence. Protection against the admissibility of WP communications is generally termed as “without prejudice” privilege (“WP privilege”), which is recognised under s 23 of the Evidence Act and the common law. A rationale behind WP privilege is the public policy to encourage litigants to settle their dispute out of court without the fear that their WP communications will be subsequently admissible in evidence against them. 

Typically, a litigant will assert WP privilege against the opposing litigant over WP communications between themselves. Based on the public policy rationale, there have, however, been cases where a litigant successfully asserted WP privilege against a person who was not a party to the WP communications (“Third Party”). In the recent High Court decision of Krishna Kumaran s/o K Ramakrishnan v Kuppusamy s/o Ramakrishnan [2014] SGHC 158 (“Krishna”), one of the issues raised was whether a litigant could assert WP privilege against a Third Party, who was the opposing litigant, regarding a WP communication sent to a neutral party, who was acting as an informal mediator between the litigants. 

Facts 

In Krishna, a dispute arose between two brothers (“the Parties”) over their family home (“the Property”). The legal interest in the Property was held by various persons as tenants-in-common, including the Plaintiff (“P”) (32%), P’s wife (“PW”) (1%), the Defendant (“D”) and his wife (33%) and the Parties’ sister (“S”) (1%). 

In 2011, P, PW and S agreed to transfer their respective shares in the Property to D. D claimed that the Parties had agreed that P would be paid SGD 95,194.83 for his share in the Property, which reflected the value of his beneficial interest in proportion to his contribution towards the purchase price. However, P denied that there was any such agreement and maintained that the stated contract price for P’s share in the Property of SGD 255,997.62 reflected his legal and beneficial interest in the Property of 32%.

In February 2012, P sent an e-mail (“the Email”) to another brother (“T”) that suggested that P was offering to transfer his share in the Property to D for SGD 186,000, which was lower than the stated contract price. P deposed that he sent the Email to T because the Parties were no longer on speaking terms, and he had hoped that T, as P’s elder brother, could help persuade D to settle the dispute. T did not reply to the Email and forwarded it to D about 8 months later. 

In March 2012, D issued two cheques for SGD 33,320 and SGD 222,677.92 respectively to P. However, after the transfer of legal interests in the Property to D was completed, D’s cheques were returned dishonoured. 

In August 2012, P commenced proceedings against D. D’s case was that although P had a 32% legal interest in the Property, P’s beneficial interest was only 8.61% and P had already been separately paid SGD 95,194.83 for the transfer of his beneficial interest. D claimed that the Parties had never intended for D’s cheques for the sum of SGD 255,997.62 to be presented for payment, as they were issued solely to facilitate the transfer of legal title. 

The appeal in this case arose out of an application filed by P to strike out the Email included in D’s list of documents and expunge the Email from court records. The Assistant Registrar (“AR”) had dismissed P’s application because although the Email, which was sent in an attempt to settle a genuine dispute and contained an admission against P’s interests, was covered by WP privilege, P had waived the privilege as the Email was exhibited in D’s affidavit for another interlocutory application as well as P’s own affidavit for this application. 

Decision 

The High Court allowed P’s appeal. It agreed with the AR’s finding that the Email was covered by WP privilege, but held that P had not waived and did not intend to waive the privilege. 

Applicability Of WP Privilege Against D 

As a starting point, the High Court referred to s 23(1) of the Evidence Act, which provides that in civil cases, an admission is irrelevant if it is made: (a) upon an express condition that evidence of it is not to be given or; (b) upon circumstances from which the court can infer that the parties agreed together that evidence of it should not be given. 

The High Court observed that s 23(1) of the Evidence Act did not apply in this case where a Third Party (i.e. D) was seeking to adduce evidence of it, as it was concerned with privilege from disclosure of WP negotiations by the parties to the action only. 

Nevertheless, the High Court held that under the common law, the Email was covered by WP privilege. Referring to a House of Lords decision which allowed a litigant to assert WP privilege against a Third Party in a multi-party litigation over WP communications¹, the High Court noted that in that case, such communications had been made between two other disputing parties, unlike Krishna where the Email was sent by P to T, who was “not a disputing party himself but was acting as a messenger or an informal mediator between the two disputing parties”.

In view of the public policy underlying WP privilege to encourage litigants to settle their differences, the High Court held that WP privilege should still arise over the Email, as “the relevant consideration should be whether the communication in question was made in an attempt to settle a dispute, and not whether there was a dispute between the two parties to the communication”. The doctrine of WP privilege should be applied flexibly to address “situations where the relationship between two disputing parties has broken down to such an extent that they have to communicate through a third party to negotiate a settlement”.
On the facts, the High Court found that the Email was covered by WP privilege because:

• T acted as a conduit between P and D regarding communications made for the purpose of settlement; 
• it was sent in the course of negotiations to settle a dispute between the Parties over the Property; and 
• it contained an admission as P’s offer to transfer his share in the Property to D for SGD 186,000 raised inferences as to the proper share and/or value of his beneficial interest in the Property, and whether the Parties had in fact agreed that P would be paid SGD 255,997.62 for his share in the Property.

Waiver Of WP Privilege 

The High Court took the view that the AR had erred in holding that P had inadvertently waived WP privilege by not seeking to expunge the Email which was exhibited in D’s affidavit for another interlocutory application and by exhibiting the Email in his own affidavit for this application. 

The High Court observed that waiver of WP privilege required the consent of both parties and mere disclosure of the Email in another interlocutory application did not constitute a waiver. It must be shown that P had expressly or impliedly agreed to the waiver of WP privilege over the Email. Given that it was D who first adduced evidence of and sought to rely on the Email, and P had thereafter claimed WP privilege over it, there was no implied waiver of WP privilege. 

The High Court also held that by introducing the Email in this application, P did not waive WP privilege because “it was necessary to exhibit a copy of the Email so that the court could make an informed decision on whether the requirements of WP privilege have been met”. For WP privilege, the issue was the admissibility of the WP communication as evidence, and not its confidentiality. In this case, the issue was whether the Email, which both Parties were already privy to, might be used as evidence in the proceedings between them. Hence, mere disclosure of the Email to D or to the court did not amount to consent by P to waive WP privilege. 

Comment 

The High Court in Krishna has reinforced the importance of the public policy rationale underlying WP privilege. The decision in Krishna accords with the Court of Appeal’s views in a 2006 case²that where a third party seeks to adduce evidence of negotiations, “[i]t is only on the basis of public policy that such admissions are inadmissible”. This is because “[t]here can be no express or implied agreement to which the third party can be bound”.

Krishna has also reaffirmed that s 23(1) of the Evidence Act is irrelevant to whether WP privilege can be asserted against a Third Party, and that it is the common law that will determine this issue. Although the English courts have allowed claims of WP privilege to be asserted against a Third Party based on public policy grounds, Krishna has taken this development a step further by extending the scope of such privilege to a situation where a WP communication was made between a litigant and a neutral party who acted as a conduit to settlement.

End Notes:

1 Rush & Tompkins Ltd v Greater London Council and another [1989] AC 1280.
2 Mariwu Industrial Co (S) Pte Ltd v Dextra Asia Co Ltd and another [2006] 4 SLR(R) 807.

For further information, please contact:

Renganathan Nandakumar, Partner, RHTLaw Taylor Wessing
[email protected]

Felicia Ang, RHTLaw Taylor Wessing
[email protected]