Rolling back the tide – Henderson v Henderson re-litigation

It always seems much easier in theory than in practice to have a claim struck out as an abuse of process under the well known principle against re-litigation known by its leading authority of Henderson v Henderson (1843) 3 Hare 100.

Perhaps mindful of the overseeing eye of the Human Rights Act and the right to a fair trial, the Courts have been reluctant to exclude litigants from enjoying unfettered access to justice – even those who appear to be seeking little more than a second bite of the cherry. So it was that the Defendant failed to persuade the Court in Johnson v Gore-Wood (No 1) [2002] 2 AC 1 (HL), Dexter v Vlieland-Boddy [2003] EWCA (Civ) 14 and Aldi Stores v WSP Group plc [2008] 1 WLR 748 that subsequent actions by the same, or very closely related, parties constituted an abuse of process. The "broad, merits-based approach" which the House of Lords in Johnson v Gore-Wood explained should be applied to any such case seems most often to consist in a hunt for factors which bring any given case outside the Henderson v Henderson principle.

In Henley v Bloom [2010] 1 WLR 1770 the Court of Appeal likewise declined to hold that a former tenant’s claim for disrepair against his landlord was an abuse even though the tenant could well have brought the claim as a counterclaim in the landlord’s action for possession of the property. The mere fact that a claim could have been brought in earlier proceedings was not itself determinative of whether it should have been, and although the landlord would be somewhat disadvantaged by the tenant’s approach, that disadvantage was not very significant.

We have all got rather used to advising Defendants who find themselves in the position of facing claims which could have been brought in earlier proceedings that the Henderson v Henderson doctrine is honoured more in the breach than the observance. This is so even in case of a client who believes that he has reached a settlement of his claim, only to find that the settlement agreement was not broad enough to encompass anticipated (or even unexpected) claims subsequently brought against him.

It is perhaps heartening, therefore, to find a more robust approach to the question of access to justice in a successful application to strike out such a claim as an abuse of process. Such an approach was taken by Arnold J in Gladman Commercial Properties v Fisher Hargreaves Proctor [2013] EWHC 25. Gladman had contracted to purchase the former Dunkirk fire station in Nottingham with the intention of developing it for student accommodation, unaware of a draft planning policy document which weighed against the prospects for permission for student use. Gladman defended proceedings brought by the vendor for specific performance, claiming fraudulent misrepresentation in the sales particulars as to the suitability of the site for student accommodation, and counterclaimed against the vendor for damages.

Mid way through the trial, the claim for specific performance was compromised on terms which gave a net balance in Gladman’s favour, whereupon Gladman issued fresh proceedings seeking further damages against the vendor’s selling agents, who had not been party to the original claim. The individual agents who had authored the particulars had given evidence at trial before it settled, and faced the same ordeal again.

Arnold J found that the second set of proceedings constituted an abuse on two principal grounds. Firstly the settlement agreement which compromised the original claim and counterclaim had the effect of discharging the claim in tort against the agents, applying the principle that a tort consists in a single indivisible cause of action, and where there are joint tortfeasors (as in the case of agent and principal both liable for the same wrong) an accord and satisfaction with one discharges them all. This itself is noteworthy because here we find the application of a common law principle which the Court has for many years criticised and striven to avoid, but never brought itself to hold as wrong.

Secondly, though, Arnold J found that Gladman not only could, but should, have joined the agents into the original proceedings as defendants to its counterclaim, and the position in which it was now putting the individual agents (who were themselves being sued individually as well as their respective firms) amounted to an abuse. This was particularly so in view of the ordeal which they had endured as witnesses in the original claim without the benefit of being parties, and without therefore enjoying their own representation at trial. To repeat the process, the judge found, would amount to unjust harassment and therefore an abuse. In addition to the application of the unpopular common law principle that a tort is single and indivisible, the case is noteworthy for successfully crossing the difficult threshold set by Clarke LJ in Dexter-Vlieland Boddy in cases where the parties are not identical in both proceedings, but where the Defendant to the second claim was not himself even a party to the first.