Tenants invited the court to construe the terms of a rent review provision in the sub-underlease under which they held premises. The provision had been construed in a sense adverse to them in earlier proceedings before Walton J, but they had been unable to challenge his decision on appeal. Later cases threw doubt on his construction. The question was whether the rules governing issue estoppel were subject to exceptions which would permit the matter to be reopened. The landlords issued proceedings on the new understanding. The tenant sought an order striking out the action, claiming an issue estoppel.
Held: Though issue estoppel operated as a complete bar to a subsequent action, some special circumstances existed to allow a subsequent claim where new information came to light. Reasonable diligence in the first action could not have prevented the situation. It did not relate to factual circumstances, but rather an error by the judge, and it would not be just to prevent the second action.
Lord Keith of Kinkel said as to cause of action estoppel: ‘It is appropriate to commence by noticing the distinction between cause of action estoppel and issue estoppel. Cause of action estoppel arises where the cause of action in the later proceedings is identical to that in the earlier proceedings, the latter having been between the same parties or their privies and having involved the same subject matter. In such a case the bar is absolute in relation to all points decided unless fraud or collusion is alleged, such as to justify setting aside the earlier judgment. The discovery of new factual matter which could not have been found out by reasonable diligence for use in the earlier proceedings does not, according to the law of England, permit the latter to be re-opened. The rule in Scotland, which recognises the doctrine of res noviter veniens ad notitiam, is different: see Phosphate Sewage Co. Ltd v Molleson (1879) 4 App. Cas. 801, 814, per Lord Cairns L.C. There is no authority there, however, for the view that a change in the law can constitute res noviter. The principles upon which cause of action estoppel is based are expressed in the maxims nemo debet bis vexari pro una et eadem causa and interest rei publicae ut finis sit litium. Cause of action estoppel extends also to points which might have been but were not raised and decided in the earlier proceedings for the purpose of establishing or negativing the existence of a cause of action.’ and
and ’cause of action estoppel . . prevents a party from asserting or denying as against the other party, the existence of a particular cause of action, the existence or non-existence of which has been determined by a court of competent jurisdiction in previous litigation between the same parties. If the cause of action was determined to exist, i.e. judgment was given on it, it is said to be merged in the judgment. If it was determined not to exist, the unsuccessful plaintiff can no longer assert that it does: he is estopped per rem judicatam.’
As to issue estoppel: ‘Issue estoppel, too, has been extended to cover not only the case where a particular point has been raised and specifically determined in the earlier proceedings, but also that where in the subsequent proceedings it is sought to raise a point which might have been but was not raised in the earlier.’
As to whether there were any exceptions: ‘In my opinion your Lordships should affirm it to be the law that there may an exception to issue estoppel in the special circumstance that there has become available to a party further material relevant to the correct determination of a point involved in the earlier proceedings, whether or not that point was specifically raised and decided, being material which could not by reasonable diligence have been adduced in those proceedings. One of the purposes of estoppel being to work justice between the parties, it is open to courts to recognise that in special circumstances inflexible application of it may have the opposite result.’
Lord Keith of Kinkel concluded: ‘But there is room for the view that the underlying principles upon which estoppel is based, public policy and justice, have greater force in cause of action estoppel, where the subject matter is different. Once it is accepted that different considerations apply to issue estoppel, it is hard to perceive any logical distinction between a point which was previously raised and decided and one which might have been but was not. Given that the further material which would have put an entirely different complexion on the point was at the earlier stage unknown to the party and could not by reasonable diligence have been discovered by him, it is hard to see why there should be a different result according to whether he decided not to take the point, thinking it hopeless, or argue it faintly without any real hope of success. In my opinion your Lordships should affirm it to be the law that there may be an exception to issue estoppel in the special circumstance that there has become available to a party further material relevant to the correct determination of a point involved in the earlier proceedings, whether or not that point was specifically raised and decided, being material which could not by reasonable diligence have been adduced in those proceedings. One of the purposes of estoppel being to work justice between the parties, it is open to courts to recognise that in special circumstances inflexible application of it may have the opposite result, as was observed by Lord Upjohn in the passage which I have quoted above from his speech in the Carl Zeiss case  1 AC 853, 947.’
Lord Keith of Kinkel, Lord Griffiths, Lord Oliver of Aylemton, Lord Jauncey of Tullichettle
 2 AC 93,  3 All ER 41,  2 WLR 1177
England and Wales
Applied – Henderson v Henderson 20-Jul-1843
Abuse of Process and Re-litigation
The court set down the principles to be applied in abuse of process cases, where a matter was raised again which should have been dealt with in earlier proceedings.
Sir James Wigram VC said: ‘In trying this question I believe I state the rule . .
Applied – Mills v Cooper QBD 1967
Two sets of criminal proceedings were brought against the defendant for offences under section 127 of the Highways Act 1959 namely that of being a gypsy and, without lawful excuse, camping on a highway. The first proceedings were brought in respect . .
Applied – Property and Reversionary Investment Corporation v Templar CA 1977
A party sought leave to appeal out of time in reliance on an intervening decision of the House of Lords.
Held: A change in the understanding of the law would not suffice in the absence of special circumstances. . .
Cited – Rothschild Asset Management Limited v Ako CA 1-Mar-2002
The applicant had, in earlier proceedings before the Employment Tribunal, withdrawn issues she had raised. She now sought to pursue them, and the respondent asserted that she was estopped from doing so, and that the matter was res judicata. The . .
Cited – Good Challenger Navegante S A v Metalexportimport SA CA 24-Nov-2003
The claimant sought to enforce an arbitration award made in 1983. Time might otherwise have expired, but the claimants relied on a fax which they said was an acknowledgement of the debt, and also upon a finding in a Romanian court which created an . .
Cited – Ahsan v Carter CA 28-Jul-2005
The claimant sought to assert race discrimination by the Labour Party in not selecting him as a political candidate. The defendant, chairman of the party appealed.
Held: A political party when selecting candidates was not acting as a . .
Cited – Moody and Another v Condor Insurance Ltd and Another ChD 3-Feb-2006
The claimants sought to enforce a deed of guarantee. The defendants argued that the claimant had no entitlement to enforce the deed, not being parties to it, and that they would be able to set aside the deed as against the company whose debts they . .
Cited – Meretz Investments Nv and Another v ACP Ltd and others ChD 30-Jan-2006
The applicant challenged the exercise of a power of sale under a mortgage, saying that the mortgagee’s purposes included purposes not those under the mortgage. The parties had been involved in an attempted development of a penthouse.
Held: The . .
Cited – Special Effects Ltd v L’Oreal Sa and Another CA 12-Jan-2007
The defendants had opposed the grant of the trade mark which they were now accused of infringing. The claimants said that having failed at the opposition stage, they were now estopped from challenging the validity of the mark.
Held: It was not . .
Cited – Johnson v Gore Wood and Co HL 14-Dec-2000
Shareholder May Sue for Additional Personal Losses
A company brought a claim of negligence against its solicitors, and, after that claim was settled, the company’s owner brought a separate claim in respect of the same subject-matter.
Held: It need not be an abuse of the court for a shareholder . .
Cited – Campbell v Leeds United Association Football Misc 3-Apr-2009
The claimant sought damages for psychiatric injury suffered when working for the defendant who replied that the matter had already been litigated in her claims in the Employment Tribunal, and that a cause of action estoppel applied.
Held: The . .
Cited – Specialist Group International Ltd v Deakin and Another CA 23-May-2001
Law upon res judicata – action estoppel and issue estoppel and the underlying policy interest whereby there is finality in litigation and litigants are not vexed twice on the same matter.
(May LJ) ‘the authorities taken as a whole tend to . .
Cited – Schellenberg v British Broadcasting Corporation QBD 2000
The claimant had settled defamation actions against the Guardian and the Sunday Times on disadvantageous terms, when it seemed likely that he was about to lose. He then pressed on with this almost identical action against the BBC.
Held: A . .
Cited – Coke-Wallis, Regina (on The Application of) v Institute of Chartered Accountants In England and Wales SC 19-Jan-2011
The appellant chartered accountant had been convicted in Jersey after removing documents from his offices relating to a disputed trust and in breach of an order from his professional institute. The court now considered the relevance and application . .
Cited – Foster v Bon Groundwork Ltd EAT 17-Mar-2011
EAT PRACTICE AND PROCEDURE – Striking-out/dismissal
In April 2009, the Claimant, who was then 77 years of age, was employed by the Respondent, when he was laid off without pay. While still being employed by . .
Cited – Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd SC 3-Jul-2013
Virgin Atlantic Airways Ltd sought to recover damages exceeding 49,000,000 pounds for the infringement of a European Patent which did not exist in the form said to have been infringed. The Technical Board of Appeal of the European Patent Office had . .
Cited – Moorjani and Others v Durban Estates Ltd and Another TCC 15-May-2019
Allegations of breach of landlords’ repairing obligations – defendants’ strike out application.
Held: ‘ the critical question is whether this second action is based on the same cause, or causes, of action, and not whether it pleads the same . .
Cited – Co-Operative Group v Virk (Valuation Officer) UTLC 22-Oct-2020
Abuse of Process in Rating Alterations
Rating – Alteration of Rating List – validity of proposal challenging alteration to list made by VO to give effect to agreement – application to strike out appeals from the Valuation Tribunal for Wales and Valuation Tribunal for England – res . .
Cited – Takhar v Gracefield Developments Ltd and Others SC 20-Mar-2019
The claimant appellant alleged that properties she owned were transferred to the first defendant under undue influence or other unconscionable conduct by the second and third defendants. The claim was dismissed. Three years later she claimed to set . .
Lists of cited by and citing cases may be incomplete.
Estoppel, Litigation Practice
Updated: 21 January 2022; Ref: scu.180557