“The second flat was sold post year end for£92,000 and 15 Garnet Street was also sold post year end£170,000 .”
“48. Both applications relate to the use by the first and second respondents of the proceeds of sale of 15 Garnet Street and 92 The Nursery. Within the original application, the applicant failed to properly investigate the circumstances surrounding the use of the sale funds from the 2 properties before commencing his application. As a result, it appears the applicant was not aware, or entirely failed to take into account, the fact that HLM Properties received the proceeds of sale of 15 Garnet Street, when he made the original application. However, he certainly was aware of this fact at the latest when he had served on him the second witness statement of Nicholas Hutt dated14 June 2016 . 49. Indeed, the second witness statement of Barry Ward dated30 July 2016 , at paragraph 23, acknowledged the fact that his originally pleaded claim was now incorrect. To repeat my paragraph 20 above, paragraph 23 of Mr Ward’s second witness statement states ‘I originally believed the sale proceeds of 15 Garnet Street were used to repay money owed to the respondents by Brady. Now it seems that the sale proceeds were used to repay money Brady allegedly owed to HLM (although I have seen no evidence of this). As explained in the respondent’s own evidence, the sale proceeds of£160,000 for 15 Garnet Street (an asset of Brady) were transferred to HLM in their entirety purely because the respondents were trying to preserve their own liabilities to RBS in respect of HLM. This was carried out at a time when the respondents knew that money was owed to Mr O’Boyle as a creditor of Brady. Accordingly the respondents failed to ensure that creditors were paid pari passu and accordingly were actually misfeasant in transferring the sale proceeds of 15 Garnet Street to HLM. In view of this new information that has come to light from the respondent’s evidence, I will be adjusting the case advanced against them accordingly’. 50. It is therefore clear at the time he made this statement, over 9 months before trial, that Mr Ward had knowledge that funds to the sum of£160,000 were paid by the company to HLM in June 2011 and if it is correct such payment constituted a preference, then this should have been obvious to the applicant at that time. 51. The original application of course included a claim against Mr Hutt and Mr Laughlin that payments had been made to them by the company which amounted to preferences. These claims were withdrawn by the applicant on or around20 July 2016 . 52. At that time, the applicant was fully aware of the full factual position, the reasons why the 2 properties were sold by the company, and why the funds were paid to HLM Properties. When the applicant withdrew his claim that payments made to Mr Hart and Mr Laughlin were preferences, he could easily have applied at that time to have amended his claim to include the payments made to HLM, without prejudicing any party, or the trial date. However, he failed to do so and it is far too late for him to attempt to do anything about that now as permitting that enables him to vex the respondents in respect of matters that all occurred years ago.”
“Where there has been an error of procedure such as a failure to comply with a rule or practice direction – (a) the error does not invalidate any step taken in the proceedings unless the court so orders; and (b) the court may make an order to remedy the error.”
“60. In my judgment there is indeed an analogy between the re-introduction of a claim previously abandoned in the same proceedings and the making of a fresh claim after discontinuance of a similar claim based on the same or substantially the same facts, as is controlled by Part 38.7. Both types of conduct, unless closely controlled by the court, tend to undermine the public interest in finality in litigation. But Part 38.7 imposes that control not in terms by the requirement to show special circumstances, but rather by the requirement that such fresh proceedings may only be brought with the Court’s permission. In that respect they equate the bringing of fresh proceedings with the re-introduction of an abandoned claim by amendment, since amendment itself requires the court’s permission. Beyond that, it seems to me that the rule leaves it to the court to decide whether to grant or refuse permission having regard, as I have said, to the public interest in finality. 61. It is true that the Notes to the current edition of the White Book use the phrase ‘exceptional circumstances’ as characteristic of the sort of explanation likely to be required in an application for permission under Part 38.7, but it is dangerous in my view to erect that as a test imposed by the rules, not least because of its inherent uncertainty. To that limited extent the judge may have mis-described the ambit of the court’s discretion to give such permission. The real question for the judge was whether, having abandoned the de facto directorship claim in the light of Jean Angela’s Defence (in which the other defendants precisely concurred) a sufficient explanation was offered for its re-introduction to overcome the court’s natural disinclination to permit a party to re-introduce a claim which it had after careful consideration decided to abandon.”
“34. If there had been a material change of circumstances since the Manx law claims were discontinued and the claims were shown now to have a real prospect of success, then there would in principle be a basis for seeking the permission of the court to amend the particulars of claim again in order to put the Manx law claims back in. I think it plain, however, that there has not been a material change of circumstances and that at the present time there are no reasonable grounds for making the Manx law claims; nor do those claims have a real prospect of success.”
“The court is likely to give permission, for example, where the claimant was misled or tricked by the defendant, where important new evidence has come to light or where there has been a retrospective change in the law (eg a Supreme Court case overruling a Court of Appeal decision which had led the claimant to discontinue). All these examples are, of course, unusual cases and assume that the limitation period has still not expired.”
‘In trying this question I believe I state the rule of the Court correctly when I say that, where a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time... Now, undoubtedly the whole of the case made by this bill might have been adjudicated upon in the suit in Newfoundland, for it was of the very substance of the case there, and prima facie, therefore, the whole is settled. The question then is whether the special circumstances appearing upon the face of this bill are sufficient to take the case out of the operation of the general rule.’ [ … ] 20. The implications of the principle stated in Henderson v Henderson were more fully examined by the House of Lords in Arnold v National Westminster Bank plc[1991] 2 AC 93 . The question at issue in that case was whether in operating a rent review clause under a lease, the tenants were bound by the construction given to the very same clause by Walton J in earlier litigation between the same parties over the previous rent review. The Court of Appeal had subsequently, in other cases, cast doubt on Walton J's construction, and the House approached the matter on the footing that the law (or perhaps, strictly speaking, the perception of the law) had changed since the earlier litigation. Lord Keith of Kinkel began his analysis by restating the classic distinction between cause of action estoppel and issue estoppel: ‘Cause of action estoppel arises where the cause of action in the later proceedings is identical to that in the earlier proceedings, the latter having been between the same parties or their privies and having involved the same subject matter. In such a case the bar is absolute in relation to all points decided unless fraud or collusion is alleged, such as to justify setting aside the earlier judgment. The discovery of new factual matter which could not have been found out by reasonable diligence for use in the earlier proceedings does not, according to the law of England, permit the latter to be re-opened. (104D-E) Issue estoppel may arise where a particular issue forming a necessary ingredient in a cause of action has been litigated and decided and in subsequent proceedings between the same parties involving a different cause of action to which the same issue is relevant one of the parties seeks to re-open that issue.’ (105E) The case before the committee was treated as one of issue estoppel, because the cause of action was concerned with a different rent review from the one considered by Walton J. But it is important to appreciate that the critical distinction in Arnold was not between issue estoppel and cause of action estoppel, but between a case where the relevant point had been considered and decided in the earlier occasion and a case where it had not been considered and decided but arguably should have been. The tenant in Arnold had not failed to bring his whole case forward before Walton J. On the contrary, he had argued the very point which he now wished to reopen and had lost. It was not therefore a Henderson v Henderson case. The real issue was whether the flexibility in the doctrine of res judicata which was implicit in Wigram V-C's statement extended to an attempt to reopen the very same point in materially altered circumstances. Lord Keith of Kinkel, with whom the rest of the Committee agreed, held that it did. 21. Lord Keith first considered the principle stated by Wigram V-C that res judicata extended to ‘every point which properly belonged to the subject of litigation and which the parties exercising reasonable diligence might have brought forward at the time.’
‘There is room for the view that the underlying principles upon which estoppel is based, public policy and justice, have greater force in cause of action estoppel, the subject matter of the two proceedings being identical, than they do in issue estoppel, where the subject matter is different.’ (108G-H) The relevant difference between the two was that in the case of cause of action estoppel it was in principle possible to challenge the previous decision as to the existence or non-existence of the cause of action by taking a new point which could not reasonably have been taken on the earlier occasion; whereas in the case of issue estoppel it was in principle possible to challenge the previous decision on the relevant issue not just by taking a new point which could not reasonably have been taken on the earlier occasion but to reargue in materially altered circumstances an old point which had previously been rejected. He formulated the latter exception at 109B as follows: ‘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 a 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. One of the purposes of estoppel being to work justice between the parties, it is open to courts to recognise that in special circumstances inflexible application of it may have the opposite result.’
‘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. 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.’