In Philip Davies v Carillion Energy Services Limited & His Energy Limited (In Liquidation) [2017] EWHC 3206 (QB), Mr Justice Morris sitting in the High Court dismissed Home Installation Services Northwest Ltd’s (the Defendant’s) appeal from the order of District Judge Stuart, who dismissed the Defendant’s application for strike out of the Claimant’s second claim under CPR 3.4(2)(b) on the ground that the second claim was not considered to be an abuse of process.

Facts

The Claimant, as a litigant in person, had issued their first claim on 9 July 2010 against the Defendant for breach of contract in relation to the supply and installation of a central heating system at his property. A Defence was entered and Deputy District Judge Pollard, of his own initiative, made an unless order on 30 September 2010 requiring the Claimant to file and serve a fully pleaded Particulars of Claim. The Claimant filed and served his Particulars of Claim in purported compliance with this order. The Defendant then filed and served an amended Defence. Further directions were made by District Judge Swindley and nothing further was said about the pleadings being inadequate.

The trial was listed for 20 June 2011 before Deputy District Judge Jones who made a further unless order on the day of the hearing requiring the Claimant to file and serve a fully pleaded Particulars of Claim specifying the legal basis of the claim. The Claimant filed and served a 39 page document in purported compliance with this order. On 13 July 2011, District Judge Shaw made an order striking out the Claimant’s claim on the basis that he had not complied with the unless order of 20 June 2011. Despite instructing solicitors at this stage, the Claimant made no application for relief from sanctions nor was an appeal made against the order of 20 June 2011.

A second claim was issued on 4 December 2015 against the Defendant and also Carillion Energy Services Limited. On 1 August 2016, the Defendant applied to strike out the second claim as an abuse of process. This application was heard by District Judge Stuart on 20 October 2016 who dismissed the application, relying on the principles set out in Aldi Stores Limited v WSP Group plc and others [2007] EWCA Civ 1260. The Defendant appealed this decision.

Submissions of the Parties

The Defendant, relying on Securum Finance Ltd v Ashton (No 1) [2001] Ch. 291, submitted that a special reason not to strike out the second claim could not be shown as the Claimant was guilty of a series of procedural failings in the first claim. The Claimant did not appeal the unless order or seek relief from sanctions. The Defendant considered that the Claimant’s position as a litigant in person was not a special reason and noted that he was represented at the point when relief from sanctions could have been applied for. The Defendant also submitted that the Judge had erred in balancing the relevant factors. Therefore, the commencement of the second claim was an abuse of process.

The Claimant submitted that the Judge correctly balanced the relevant factors. The Claimant also submitted that even if the principles in Securum were applied, then a second claim could not be struck out unless the Claimant’s conduct in the first claim amounted to an abuse of process or was inexcusable. In this case, there were special reasons to allow the second claim to continue: the Claimant was a litigant in person who tried to comply with the orders made, with no complaint of non-compliance by the Defendant. There was also a good reason why the Claimant could not apply for relief from sanctions or appeal the unless order, being his lack of funds. 

Consolidation of the Legal Principles

Mr Justice Morris considered a list of previous authorities in addition to Securum: Collins v CPS Fuels Ltd [2001] EWCA Civ 1597; Stuart v Goldberg [2008] EWCA Civ 2; Arbuthnot Latham Bank Ltd v Trafalgar Holdings Ltd [1998] 1 WLR 1426; Johnson v Gore Wood [2002] 2 AC 1; Aldi Stores Limited v WSP Group plc and others [2007] EWCA Civ 1260; Henderson v Henderson [1843-60] All ER Rep 378. The Judge utilised the above authorities to formulate two tests in relation to striking out second claims under CPR 3.4(2)(b).

A. Strike Out of First Claims on Procedural Grounds (Securum, Arbuthnot Latham Bank, Collins)

i. Where a party brings a second claim in respect of matters raised in the first claim but where the first claim was struck out on procedural grounds without considering the merits, the second claim will be struck out as an abuse of process if the first claim was struck out as itself being an abuse of process (intentional and contumelious conduct, or want of prosecution or wholesale disregard of Court rules) unless special reason can be shown.

ii. If the first claim was not struck out as an abuse of process, the second claim may be struck out as an abuse of process absent special reason if the Claimant’s conduct in the first claim amounted to inexcusable conduct.

iii. A single failure to comply with an unless order was not, of itself, sufficient to conclude that the second claim was an abuse of process.

iv. The special reason exception fell to be more narrowly circumscribed following the case of Denton v TH White Ltd [2014] EWCA Civ 906 reflecting a strict approach to compliance with Court orders. Therefore, a second claim would be struck out unless very unusual circumstances applied.

v The importance of the efficient use of Court resources did not trump the overriding need to do justice.

 

B. Strike Out of Second Claims as New Issues Raised (Aldi, Johnson, Henderson, Stuart 

i. Whether a second claim, raising new issues which could have been raised in the first claim, is an abuse of process, is not a matter of discretion but a judgment to be made by the first instance Judge assessing and balancing all the relevant factors in the case.

ii. If abuse of process is found, the Court has a remaining discretion not to strike out but only in very unusual circumstances.

Judgment and Reasoning

Mr Justice Morris accepted that District Judge Stuart erred in law by applying the second set of the above principles when he should have applied the first set of principles. The Judge found that the Claimant’s conduct in the first claim was not an abuse of process, as there was not a wholesale disregard of the rules. The Claimant at all times sought to comply with the unless orders and he had set out in the documents filed and served a lengthy and detailed factual case. He also attempted to set out the legal basis of his claim. The Judge also thought it relevant that the Claimant was a litigant in person not conversant with the rules relating to pleadings.

The Judge also found that the Claimant’s conduct was not inexcusable in the first claim as the Claimant did not know what more he could add to his pleadings, with no complaints from the Defendant in this respect. The Claimant did not repeatedly or persistently disobey Court orders. His strict failure to comply with the unless order of Deputy District Judge Jones was therefore understandable. The Judge also noted that the Claimant did not have the funds to maintain legal representation nor the emotional fortitude to advance the fight at the stage relief from sanctions could have been applied for. In any event, the Court had no basis to interfere with District Judge Stuart’s balancing of the relevant factors. The Judge therefore dismissed the Defendant’s appeal.

Commentary

This case provides a clear analysis of previous decisions of the Court relating to strike out of second claims as an abuse of process pursuant to CPR 3.4(2)(b). Mr Justice Morris usefully consolidates the principles deriving from these cases and provides two step by step tests to be applied in determining whether a second claim ought to be struck out as an abuse of process. This is a welcomed simplification of the relevant principles to aid legal practitioners.

Even more fundamental is the message this case sends out to legal practitioners and Judges. Mr Justice Morris highlighted that the efficient use of Court resources did not trump the overriding need to do justice. He also took into account the fact that the Claimant was, for the most part, a litigant in person with little emotional fortitude and limited funds. The judgment seems to favour a more relaxed approach for litigants in person to comply with rules, practice directions and Court orders. In the context of striking out second claims for abuse of process, the principle of access to justice is therefore shown to be of paramount importance.

Raghav Trivedi

Advocate on the Midlands Circuit