Schweppe -v- Closier [2017] EWHC 1486 (TCC) (Judgment handed down 26 June 2017)

In an interesting decision in the TCC Mr Justice Coulson found that causes of action pleaded against the defendants of fraudulent misrepresentation, unlawful act conspiracy and inducement to breach of contract, were an abuse of process (and also statute barred).  The judgment provides a helpful review of the principles relating to abuse of process when issues could have been (and were) raised in earlier litigation.

The leading case in this area of law remains is Johnson v Gore Wood & Co (No. 1) [2002] 2 AC 1.  The issue is fact specific and will depend upon all the circumstances of the case. Simply because a matter could have been raised in earlier proceedings that does not mean that the raising of it in later proceedings is necessarily abusive. Although various principles can be derived from later cases, essentially what was required was a broad assessment taking account of all the public and private interests and facts of the case.

The facts of the case may be summarised as follows. The dispute related to a development at the Hogwood Lane Industrial Estate in Finchampstead. Two brothers, Mr James and Mr Michael Murray, trading as a partnership called Murray Construction, carried out some early work at the Hogwood Lane site in early 1990. Following the incorporation of Murray Construction Limited (“MCL”), it was MCL who carried out the remainder of the works. MCL was dissolved for the second and final time on 15 May 2016. The claimant, who had no personal involvement in the development at all, became connected with MCL in about 1995 and took assignment of the claim from MCL.

In 1992, shortly before the works were due to be completed, MCL’s contract was terminated. Subsequently, MCL issued proceedings claiming unpaid sums and damages for a contract worth £1,678,454.20. The two defendants had a role in the development, although they disputed the detailed involvement ascribed to them by the claimant.   It was a straightforward construction claim brought by MCL said to be worth just under £500,000. That sum was made up of certified and uncertified sums said to be due, together with claims for loss and expense/damages due to delay and disruption, and a separate claim for damages due to the alleged wrongful termination/repudiation. On 9 March 1993, HHJ Thayne Forbes QC (as he then was) made an order for security for costs. The order required MCL to pay £32,000 into court by way of security. MCL failed to pay and the proceedings were stayed. Subsequently, on 26 March 1996, MCL were struck off the companies’ register and dissolved the following month. Nothing further happened for nine years. Then, in March 2005, on the claimant’s application, MCL was restored to the register. However, the proceedings remained dormant for another six years.

In December 2011, the £32,000 was paid and the stay was lifted. On 7 March 2012, Ramsey J ordered MCL to pay a further sum of £45,000 by way of security. That sum was again not paid. There was an oral hearing before Ramsey J in May 2013, as a result of which the 1992 proceedings were struck out. MCL were ordered to pay costs but they failed to do so.

In April 2014, MCL issued fresh proceedings. Ramsey J concluded that the allegations in the 2014 proceedings were the same or substantially the same as the allegations made by the claimant/MCL in the 1992 proceedings. The claim was therefore struck out. MCL went into compulsory liquidation in April 2014 and was dissolved for the second and final time on 15 May 2016.

Many of the same allegations were specifically made in those two earlier sets of proceedings as in the instant proceedings.  As to the 1992 proceedings themselves, the claimant sought to revive those in 2011. The position in relation to the 2014 proceedings was more astonishing.  In the Particulars of Claim in the 2014 proceedings the defendants were able to point to a pleading making precisely the same allegations. The claimant was unable to advance a coherent reason as to why that had happened.

Mr Justice Coulson concluded that the allegations should have been made in the 1992 proceedings and certainly in the 2014 proceedings. They were now incapable of a fair trial.  He further found that they were part of what appeared to be an unpleasant personal vendetta (and which, on the basis of letters sent to the defendants in August and September 2010, may have had their roots in events which are nothing to do with allegations regarding the development).  In the circumstances he found that the proceedings were an abuse of process.

30 June 2017

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