The appellant company sought to recover assets which, it said, had been acquired by a former partner in breach of his obligations under the partnership agreement, but which had been taken in the names of some of the respondents. There had been an arbitration beween the claimant and the former partner, which were lost, and the defendants had successfully argued that it was an abuse of process for the claimant now to pursue them, even though they had not been party to the arbitration. The claimants now appealed.
Held: The appeal was allowed. There was indeed a jurisdition for a court to take account of an earlier arbitration (as opposed to a court) award, when considering whether proceedings were an abuse, but the Judge had been wrong to exercise the discretion which arose in these particular circumstances.
The court summarised the relevant principles: (1) In cases where there is no res judicata or issue estoppel, the power to strike out a claim for abuse of process is founded on two interests: the private interest of a party not to be vexed twice for the same reason and the public interest of the state in not having issues repeatedly litigated; see Lord Diplock in Hunter v. Chief Constable, Lord Hoffmann in the Arthur Hall case and Lord Bingham in Johnson v. Gore Wood. These interests reflect unfairness to a party on the one hand, and the risk of the administration of public justice being brought into disrepute on the other, see again Lord Diplock in Hunter v. Chief Constable. Both or either interest may be engaged.
(2) An abuse may occur where it is sought to bring new proceedings in relation to issues that have been decided in prior proceedings. However, there is no prima facie assumption that such proceedings amount to an abuse, see Bragg v. Oceanus; and the court’s power is only used where justice and public policy demand it, see Lord Hoffmann in the Arthur Hall case.
(3) To determine whether proceedings are abusive the Court must engage in a close ‘merits based’ analysis of the facts. This will take into account the private and public interests involved, and will focus on the crucial question: whether in all the circumstances a party is abusing or misusing the court’s process, see Lord Bingham in Johnson v. Gore Wood and Buxton LJ in Taylor Walton v. Laing.
(4) In carrying out this analysis, it will be necessary to have in mind that: (a) the fact that the parties may not have been the same in the two proceedings is not dispositive, since the circumstances may be such as to bring the case within ‘the spirit of the rules’, see Lord Hoffmann in the Arthur Hall case; thus (b) it may be an abuse of process, where the parties in the later civil proceedings were neither parties nor their privies in the earlier proceedings, if it would be manifestly unfair to a party in the later proceedings that the same issues should be relitigated, see Sir Andrew Morritt V-C in the Bairstow case; or, as Lord Hobhouse put it in the Arthur Hall case, if there is an element of vexation in the use of litigation for an improper purpose.
(5) It will be a rare case where the litigation of an issue which has not previously been decided between the same parties or their privies will amount to an abuse of process, see Lord Hobhouse in In re Norris . .
(6) An appeal against a decision to strike out on the grounds of abuse, described by Lord Sumption JSC in Virgin Atlantic Airways Ltd v. Zodiac Seats UK Ltd [2014] AC 160 at [17] as the application of a procedural rule against abusive proceedings, is a challenge to the judgment of the court below and not to the exercise of a discretion. Nevertheless, in reviewing the decision the Court of Appeal will give considerable weight to the views of the judge, see Buxton LJ in the Taylor Walton case, at [13].
Judges:
Patten , Simon LJJ, Sir Ernest Ryder SPT
Citations:
[2017] EWCA Civ 3, [2017] WLR(D) 18
Links:
Jurisdiction:
England and Wales
Citing:
See Also – Emmott v Michael Wilson and Partners Ltd CA 12-Mar-2008
The court considered the implication of the obligation of confidentiality in banking contracts or in arbitration agreements. It is ‘really a rule of substantive law masquerading as an implied term’. . .
Cited – Reichel v Magrath PC 1889
The new vicar of Sparsholt, Dr Magrath, was able to rely on the abuse of process even though he had not been party to earlier proceedings between Reichel and the Bishop of Oxford and the Queen’s College and so was not bound by any issue estoppel . .
Cited – Arthur JS Hall and Co (A Firm) v Simons; Barratt v Woolf Seddon (A Firm); Harris v Schofield Roberts and Hill (A Firm) HL 20-Jul-2000
Clients sued their solicitors for negligence. The solicitors responded by claiming that, when acting as advocates, they had the same immunities granted to barristers.
Held: The immunity from suit for negligence enjoyed by advocates acting in . .
See Also – Michael Wilson and Partners Ltd v Emmott ComC 6-Nov-2008
Challenge to jurisdiction of arbitration proceedings. . .
See Also – Michael Wilson and Partners Ltd v Emmott ComC 8-Jun-2011
The claimant challenged an arbitration award made concerning the agreement under which the defendant had been admitted to partnership. MWP contended that the Tribunal were guilty of a large number of serious irregularities in their conduct of the . .
See Also – Michael Wilson and Partners Ltd v Sinclair and Others ComC 21-Sep-2012
The claimant company alleged that the defendants had variously received assests (shares and cash) acquired by a former partner in the claimant company and held on his behalf, in breach of his obligations to the caimant partnership. The defendants . .
See Also – Michael Wilson and Partners Ltd v Sinclair and Others CA 16-Jan-2013
Application to stay order for costs. . .
See Also – Michael Wilson and Partners Ltd v Sinclair and Others CA 23-Jul-2015
. .
See Also – Michael Wilson and Partners Ltd v Emmott CA 14-Oct-2015
Appeal against a finding that payments made by the appellant were made in the ordinary course of business and not in breach of a freezing injunction. . .
See Also – Michael Wilson and Partners Ltd v Emmott CA 11-Dec-2015
The court considered a residual jurisdiction to set aside an arbitrator’s award after a first appeal. . .
See Also – Emmott v Michael Wilson and Partners ComC 24-Nov-2016
Application for an anti-suit injunction against the defendant to restrain it from taking any further steps in ongoing proceedings in New South Wales and from commencing or pursuing any other substantive claims against the claimant on the ground that . .
Cited – 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 . .
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 – Bragg v Oceanus Mutual Underwriting Association (Bermuda) Ltd CA 1982
The court considered the ability to prevent relitigation of issues already decided. The Court identified some of the limits of the abuse jurisdiction. Kerr LJ said: ‘To take the authorities first, it is clear that an attempt to relitigate in another . .
Cited – 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 . .
Cited – In re Norris, Application by Norris HL 28-Jun-2001
The applicant’s husband had been made the subject of a drugs confiscation order. Part of this was an order against the house. She had failed in asserting that the house was hers. Her appeal to a civil court had been disallowed as an abuse. It was . .
Cited – The Secretary of State for Trade and Industry v Bairstow CA 11-Mar-2003
The Secretary of State attempted, in the course of director’s disqualification proceedings, to rely upon findings made against Mr Bairstow in an earlier wrongful dismissal action to which he had been a party but the Secretary of State not. The . .
Cited – Taylor Walton (A Firm) v Laing CA 15-Nov-2007
The appellants appealed against a refusal to strike out as an abuse of process the respondent’s claim against them for professional negligence in the drafting of development agreements.
Buxton LJ considered the nature of the enquiry on such an . .
Cited – Taylor Walton (A Firm) v Laing CA 15-Nov-2007
The appellants appealed against a refusal to strike out as an abuse of process the respondent’s claim against them for professional negligence in the drafting of development agreements.
Buxton LJ considered the nature of the enquiry on such an . .
Cited – Kotonou v National Westminster Bank Plc CA 30-Oct-2015
Appeal against summary dismissal of claim against the bank based on Henderson v Henderson.
Gloster LJ, commented on Buxton LJ’s observations in the Taylor Walton case: ‘Thus, in my view, what is required in the present case is ‘an intense focus . .
Lists of cited by and citing cases may be incomplete.
Arbitration, Torts – Other
Updated: 16 September 2022; Ref: scu.573280