Privilege

The key issue in dispute in Octagon Overseas Ltd & Ors v Circus Apartments Ltd was whether a text sent by one of the parties (after the other side had refused to allow it to assign a contract) was covered by "without prejudice" privilege and so could not be disclosed in the proceedings. It was held that it was. Although part of the text could have been characterised as a commercial negotiation (aimed at securing a deed of variation), it also expressly threatened to commence proceedings if the variation was not provided by the other side. In effect, the party was prepared to trade a cause of action for a commercial deal. That still, therefore, amounted to an attempt to settle future litigation.

Nor was there any "unambiguous impropriety" here because the party had threatened to support an action that would be brought by others (if its offer was refused). Unambiguous impropriety arises only in exceptional circumstances and needs elements such as personal threats (with devastating consequences for the victim) and unjustified financial benefit for the maker of the threat. Here, the party was "threatening" only to support an entirely proper (and ultimately successful) cause of action. The party had offered a reasonable sum to settle and there was nothing wrong in offering this "carrot" if it is accompanied with "a stick only tangentially related to [the parties'] relationship".

This follows a run of cases in the last few years which have found that pretty extreme circumstances are needed before the unambiguous impropriety exception will prevent a claim for without prejudice privilege. You are really looking for a blackmail-type situation, or a case of the threat of proceedings being used as a lever to bully the other side into settlement.