South Somerset District Council v Tonstate (Yeovil Leisure) Ltd [2009] EWHC 3308 (Ch)

“It appears from the ‘Consent Order’ filed by the defendant that the defendant admits £103,897.17 and £54,169.24; ii) On 27 March 2008, District Judge Corrigan made an order by consent (“the Consent Order”), incorporating the terms set out in a draft order signed on 10 March by the solicitors to both parties. The Consent Order provides that Tonstate pay the Council within 14 days the sums of £26,206.26 by way of interest and £54,169.26. Further, the Council was given permission to amend its Particulars of Claim. For completeness, I should record that the parties’ agreed draft of 10 March incorporated recitals which, although not reproduced in the formal order of the Court, explain the agreed basis on which the Consent Order was made, as follows: “And Upon the defendant paying to the claimant the sum of £103,897.17 on 25 February 2008 (as admitted in paragraph 14.3 of the defence) 1. The defendant shall pay to the claimant within fourteen days of the date of this Order £26,206.26 by way of interest to 15 February 2008. And Upon the defendant providing to the claimant audited accounts showing the claimant’s agreed share of net public income for the years ending 13 October 2003-2007 as required by clause 1.4 of the Contract dated 14 October 2002 … 2. The defendant do pay to the claimant £54,169.24 within 14 days of the date of this order,”

“This is a claim for [a] declaration that an agreement is void….”

“The Defendants deny the alleged agreement mentioned in the statement of claim. There never was any such or any agreement between the Plaintiffs and the Defendants.”

“Under these circumstances, it seems to me abundantly clear that the existence of this particular agreement was of the essence of the Plaintiffs’ claim in the action, and that it was impossible for the Plaintiffs to recover the instalment of £100,000 in the action unless the agreement alleged in the statement of claim existed.”

“that the judgment on the claim is a judgment for the £100,000 under the agreement alleged in the pleadings, and that the judgment, therefore, affirms the existence of the agreement….”

“In the opinion of their Lordships it is settled, first, that the admission of a fact fundamental to the decision arrived at cannot be withdrawn and a fresh litigation started, with a view of obtaining another judgment upon a different assumption of fact; secondly, the same principle applies not only to an erroneous admission of a fundamental fact, but to an erroneous assumption as to the legal quality of that fact. Parties are not permitted to begin fresh litigations because of new views they may entertain of the law of the case, or new versions which they present as to what should be a proper appreciation by the Court of the legal result either of the construction of the documents or the weight of certain circumstances. If this were permitted litigation would have no end, except when legal ingenuity is exhausted. It is a principle of law that this cannot be permitted, and there is abundant authority reiterating that principle. Thirdly, the same principle - namely, that of setting to rest rights of litigants, applies to the case where a point, fundamental to the decision, taken or assumed by the plaintiff and traversable by the defendant, has not been traversed. In that case also a defendant is bound by the judgment, although it may be true enough that subsequent light or ingenuity might suggest some traverse which had not been taken. The same principle of setting parties’ rights to rest applies and estoppel occurs.”

“It is impossible to read the compromise without seeing that the necessary result of it is – and I believe the intention of the parties to it was – that the dispute between them should be brought to an end.”

“In the opinion of the Board it is highly important to keep fully in view what were the exact terms of that objection”

“If an issue has been distinctly raised and decided in an action, in which both parties are represented, it is unjust and unreasonable to permit the same issue to be litigated afresh between the same parties or persons claiming under them; but in my view the doctrine cannot be made to extend to presumptions or probabilities as to issues in a second action which may be, and yet cannot be asserted beyond all possible doubt to be, identical with those raised in a previous action.”

“As my noble and learned friend, Lord Reid, has already pointed out there may be many reasons why a litigant in the earlier litigation has not pressed or may even for good reason have abandoned a particular issue. It may be most unjust to hold him precluded from raising that issue in subsequent litigation and see Lord Maugham’s observations in the New Brunswick case. All estoppels are not odious but must be applied so as to work justice and not injustice and I think the principle of issue estoppel must be applied to the circumstances of the subsequent case with this overriding consideration in mind.”

“The difficulty which I see about issue estoppel is a practical one. Suppose the first case is one of trifling importance but it involves for one party proof of facts which would be expensive and troublesome; and that party can see the possibility that the same point may arise if his opponent later raises a much more important claim. What is he to do? The second case may never be brought. Must he go to great trouble and expense to forestall a possible plea of issue estoppel if the second case is brought? This does not arise in cause of action estoppel: if the cause of action is important, he will incur the expense: if it is not, he will take a chance of winning on some other point. It seems to me that there is room for a good deal more thought before we settle the limits of issue estoppel.”

“Looking at the matter broadly, the issue of “lending of money” was raised in the Queen’s Bench action. The judge decided that there was a lending of money within the meaning of the Act. The plaintiff appealed. The Court of Appeal gave judgment dismissing the appeal. The judgment was given by consent and the consent was given because the company claimed, and the plaintiff accepted, that there was no lending of money. In my view, that admission by the plaintiff, given to the court and founding the judgment by consent, was just as efficacious for the purpose of issue estoppel as a judicial decision by the court after argument founding a similar judgment. The only sensible approach of the law, in my view, is to treat an issue as laid at rest, not only if it is embodied in the terms of the judgment, or implicit in the judgment because it is embodied in the spoken decision, but also if it is embodied in an admission made in the face of the court or implicit in a consent order.”

“… when the matter came before the Court of Appeal, the language used by counsel then appearing for the plaintiff was really quite definite although it was expressed by reference to a case which he had been shown by counsel for the defence. It amounted to a categorical concession that he could not contest the issue raised, inter alia, by the respondent’s notice to the effect that there had been no loan of money to his client.”

“But Henderson v Henderson abuse of process, as now understood, although separate and distinct from cause of action estoppel and issue estoppel, has much in common with them. The underlying public interest is the same: that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole.”

“It has been said that the question whether an estoppel is to be allowed or not depends on whether the enactment or rule of law relied upon is imposed in the public interest or “on grounds of general public policy” (see In re A Bankruptcy Notice, per Atkin LJ). But a principle as widely stated as this might prove to be rather an elusive guide, since there is no statute, at least public general statute, for which this claim might not be made. In their Lordships’ opinion a more direct test to apply in any case such as the present, where the laws of moneylending or monetary security are involved, is to ask whether the law that confronts the estoppel can be seen to represent a social policy to which the court must give effect in the interests of the public generally or some section of the public, despite any rules of evidence as between themselves that the parties may have created by their conduct or otherwise. Thus the laws of gaming or usury (Carter v James) override an estoppel: so do the provisions of the Rent Restriction Acts with regard to orders for possession of controlled tenancies (Welch v Nagy). General social policy does from time to time require the denial of legal validity to certain transactions by certain persons. This may be for their own protection, as in the case of the infant or other category of persons enjoying what is to some extent a protected status, or for the protection of others who may come to be engaged in dealings with them, as, for instance, the creditors of a bankrupt. In all such cases there is no room for the application of another general and familiar principle of law that a man may, if he wishes, disclaim a statutory provision enacted for his benefit, for what is for a man’s benefit and what is for his protection are not synonymous terms. Nor is it open to the court to give its sanction to departures from any law that reflects such a policy, even though the party concerned has himself believed in such a way as would otherwise tie his hands. See In re Stapleford Colliery Co, per Bacon V-C. These principles, as their Lordships understand them, would point very directly to the conclusion that there can be no estoppel in face of the Moneylenders Ordinance, since the provisions on which the respondent seeks to rely render him a “protected “person” for this purpose, nor any estoppel in the face of the Bills of Sale Ordinance, the provisions of which, whatever other purpose they may serve, are at least intended for the protection of other creditors who may have dealings with the borrower….”

“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 the 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.”

“As we see it, …, in Arnold the House of Lords was carefully distinguishing between cause of action estoppel and issue estoppel, the former allowing of no exceptions save for fraud or collusion, the latter allowing a limited exception when further material is found which could not have been adduced in the earlier proceedings.”

“The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all. I would not accept that it is necessary, before abuse may be found, to identify any additional element such as a collateral attack on a previous decision or some dishonesty, but where those elements are present the later proceedings will be much more obviously abusive, and there will rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party. It is, however, wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before. As one cannot comprehensively list all possible forms of abuse, so one cannot formulate any hard and fast rule to determine whether, on given facts, abuse is to be found or not. Thus while I would accept that lack of funds would not ordinarily excuse a failure to raise in earlier proceedings an issue which could and should have been raised then, I would not regard it as necessarily irrelevant, particularly if it appears that the lack of funds has been caused by the party against whom it is sought to claim. While the result may often be the same, it is in my view preferable to ask whether in all the circumstances a party’s conduct is an abuse than to ask whether the conduct is an abuse and then, if it is, to ask whether the abuse is excused or justified by special circumstances. Properly applied, and whatever the legitimacy of its descent, the rule has in my view a valuable part to play in protecting the interests of justice.”