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Berkeley Square Holdings V Lancer Property Asset Management Ltd [2021] EWCA CIV 551

Berkeley Square Holdings V Lancer Property Asset Management Ltd [2021] EWCA CIV 551

Background facts

The claimants, Berkeley Square Holdings Ltd and others ('the owners'), were offshore companies mainly beneficially owned by H.E. Sheikh Khalifa bin Zayed Al Nahyan, the Emir of Abu Dhabi and the President of the United Arab Emirates, who owned a portfolio of properties in London worth around £5 billion. Lancer Property Asset Management Ltd ("Lancer") managed properties between 2004 and 2017. They dealt with and were instructed by H.E. Sheikh Khalifa's agent and appointed representative, Dr Mubarak Al Ahbabi, under powers of attorney granted to him by the owners.

Under a side letter to the management agreement, enhanced fees were payable to Lancer if the values of managed properties increased above a set amount because of Lancer's management. By a deed of variation, the agent permitted Lancer to make payments to third parties.

A dispute arose over the first defendant's entitlement to management fees. This dispute was settled shortly after a mediation held on 24 September 2012.

In September 2018, the claimants commenced proceedings against the defendants for their role in an alleged fraud, where it was alleged that the defendants had conspired with the claimants' appointed representative to increase payments made to the defendants and passed substantial payments to a company controlled by the claimants' appointed representative. The claimants contended that they had not known about these payments until as late as 2017.

The defendants asserted in their Defence to this claim that the claimants had known and approved of the payments since at least 2012.

Appeal decision

David Richards LJ, giving the sole judgment, upheld Roth J’s decision on varied grounds. He carefully explained the purpose of WP privilege and the six Unilever exceptions. He analysed the two exceptions applied by Roth J to allow Lancer to refer to its WP statements from the mediation. Holding that exception (2) applied, he did not need to determine the possible application of either exception (6) or exception (3) (namely, estoppel, by which Lancer additionally sought to uphold Roth J’s decision). The facts in this particular case enabled the Court of Appeal to create a “principled extension” to the misrepresentation exception (2) because it was not the receiver of the representation who relied on it but the representor.

 “[52] …The purpose of without prejudice negotiations is to arrive at a compromise of the dispute. If a compromise is reached, a contract will be made. It is no different from any other contract. All the familiar issues as to its terms, meaning and validity may arise. Without prejudice, negotiations have achieved their purpose. There is no principled basis for excluding the content of those negotiations in resolving those issues. It would put such contracts into a special category … 

[54] … in my judgment, if the present case amounts to an exception (2) extension, it is a moral extension … it does not leave an unprincipled and undesirable asymmetry in the rule. The purpose for which the defendants may adduce evidence of the mediation statements is to determine the authority of Dr Al Ahbabi, which goes to the validity of the settlement deeds put in issue by the claimants. Just as the claimants could adduce such evidence for that purpose, so can the defendants. It is the claimants’ submission which would lead to an unprincipled asymmetry.” 

Lancer wished to disprove the owners’ argument that they were unaware of payments being made to the agent’s companies, which was pivotal in seeking to set aside the settlement deed, by referring to the position paper Lancer itself had used at the mediation. The purpose behind the extension did not to subvert the principle of exception (2). Its purpose was to allow WP material to be used either to uphold or invalidate a compromise contract. In the instant case, Lancer was being used by Lancer to enforce the parties’ settlement or counter the owners’ claim that it should be set aside. The appeal was unanimously dismissed, with Henderson LJ and Popplewell LJ agreeing with David Richards LJ's judgment.

 

This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being. Further, despite all efforts made to ensure the accuracy and correctness of the information published, White Code VIA Mediation and Arbitration Centre shall not be responsible for any errors caused due to human error or otherwise. 

 

  • Berkeley Square Holdings V Lancer Property Asset Management Ltd [2021] EWCA CIV 551
  • Background facts
  • Appeal decision

BY : Aakrashi Jain

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