Trade Indemnity Co Ltd v Workington Harbour and Dock Board (No 2): HL 1938

The plaintiffs’ action was derived from a bond given by the defendants guaranteeing a contractor’s performance in building a dock for the plaintiffs. The bond provided that a certificate which complied with certain criteria would prove the amount due. In the action on the bond the plaintiffs relied upon a certificate which they said complied with the criteria and was thus conclusive evidence of the defendants’ liability under the bond. The action failed because the certificate did not specify a relevant act or default as required by the bond. The plaintiffs brought a second action relying, not upon the certificate, but upon the underlying facts, which they said amounted to breaches of the contract and thus triggered liability under the bond.
Held: The action failed on a plea of res judicata. Lord Atkin described the position: ‘The question will always be open whether the second action is for the same breach or breaches as the first, in which case the ordinary principles governing the plea of res judicata will prevail. In the present case, in my opinion, the plaintiffs are suing on precisely the same breaches as those in the first action, and for the same damages, though on different evidence. . I am satisfied that the first action raised the issue of all the contractors’ breaches, and treated, and meant to treat, the engineers’ certificate as conclusive proof of both the breaches and the losses arising therefrom. . The result is that the plaintiffs, who appear to have had a good cause of action for a considerable sum of money, fail to obtain it, and on what may appear to be technical grounds. Reluctant, however, as a judge may be to fail to give effect to substantial merits, he has to keep in mind principles established for the protection of litigants from oppressive proceedings. There are solid merits behind the maxim nemo bis vexari debet pro eadem causa.’

Judges:

Lord Atkin

Citations:

[1938] 2 All ER 101

Jurisdiction:

England and Wales

Citing:

See AlsoTrade Indemnity Co Ltd v Workington Harbour and Dock Board HL 1937
The House held that a loan of andpound;45,000 made by a building owner to a building contractor did not constitute an agreement ‘for any alteration in or to’ the building contract which the company had guaranteed. The question was whether it was . .

Cited by:

CitedCoke-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 . .
Lists of cited by and citing cases may be incomplete.

Estoppel

Updated: 08 May 2022; Ref: scu.428359