In Davies v HIS Energy, Morris J considered whether in a case where the first action had been struck out, a second action would be an abuse of process. The comprehensive guidance provided is welcome as this question had gone unanswered by the higher courts since the Jackson reforms introduced the more stringent relief from sanctions test.
The first action
The claimant, who was acting in person, brought a claim for breach of contract in relation to the supply and installation of an oil fired central heating system. He had invoiced the defendant on 14 June 2010 to the sum of £19,482.
The court made an unless order, on 10 January 2011, that the claim would be struck out unless the claimant filed “fully pleaded particulars of claim including specifying how the sum of £19,482 is made up”. Within the time limit, the claimant filed and served particulars of claim including “similar but not greater detail” regarding the sum claimed. The defendant filed an amended defence and did not take issue with the claimant’s particulars of claim.
The trial of the claim was due to take place on 20 June 2011. At that hearing, DDJ Jones found that the claimant’s case had not been clarified as ordered, and made a further order that unless the claimant “file and serve a fully pleaded particulars of claim specifying on what legal basis the claim is made and upon what basis the sum of £19,482 is made up” the claim be struck out.
On 4 July 2011, the claimant filed and served a manuscript document headed “Witness Statement of Philip Davies”, which set out the background to the claim but concluded: “Bearing in mind the foregoing 72 paragraphs I consider it unnecessary to repeat what is adequately set out in the Particulars of Claim…”
On 13 July 2011, DDJ Shaw made an order recording that this document did not comply with the order of 20 June 2011 and that the claim had therefore been struck out.
On 4 August 2011, solicitors newly instructed by the claimant wrote to the defendant, stating that they had been instructed to make an application for relief from sanctions. In addition, the letter sought disclosure of a report. The defendant did not reply to this letter and the claimant did not make any application or appeal. Subsequently, the claimant (acting in person) agreed and paid the defendant’s costs.
The second action
The claimant, now represented by solicitors and counsel, filed and served detailed particulars of claim. The defendant filed and served a defence, and subsequently made an application to strike out the claim as inter alia an abuse of process.
The principles to be applied
In determining the appeal, Morris J drew together two lines of authority:
- Cases where the first action was struck out on procedural grounds.
- Cases where a second action raises new facts or issues which could and should have been raised in the first action (often referred to as “Henderson v Henderson” abuse).
Morris J engaged in a detailed analysis of the lines of authority. Whilst there was a tension between them, he derived the following principles from the existing cases:
In procedural cases:
- Where a first action has been struck out as an abuse of process, a second action will be struck out as an abuse itself, unless there is special reason not to do so.
- A first action will amount to an abuse where there is: “intentional and contumelious conduct; or want of prosecution; or wholesale disregard of rules of court”.
- If the first action was struck out in circumstances falling short of abuse of process, the second action may be struck out, absent special reason. However, the particular circumstances in which the first action was struck out fall to be considered: “At the very least, for the second action to constitute an abuse, the conduct in the first action must have been ‘inexcusable’.”
In Henderson v Henderson cases:
- Whether the matters raised in the second action should have been raised in the first action is a judgment to be made by the judge, assessing and balancing all the circumstances of the case. As such, an appeal court will only interfere where the judge has considered immaterial factors, failed to consider material factors, erred in principle, or come to an impermissible or wrong conclusion.
- Even where there is a finding of abuse of process, the court has a discretion not to strike out the second action, however this will only be exercised in very unusual circumstances.
“… falls to be more narrowly circumscribed. Where the conduct of the first action has been found to have been an abuse of process or otherwise inexcusable, then the second action will be struck out as an abuse of process, save in “very unusual circumstances”. (Other terminology might equally be used to indicate this strict approach). In addition, in a case where the first action was not itself an abuse of process, whether the conduct in that action was “inexcusable” might fall to be assessed more rigorously and in the defendant’s favour. However, even post-Jackson, ultimately, the importance of the efficient use of resources does not, in my judgment, trump the overriding need to do justice.”
However, he also considered that it remains the case that “a single failure to comply with an unless order is not, of itself, sufficient to conclude that the second action is an abuse of process” [original emphasis].
Application of the principles to the appeal
Morris J concluded that in the first action there had not been a wholesale disregard of the rules. As delay wasn’t relevant, the remaining factor was whether the claimant’s conduct of the first action was contumelious. He concluded that it wasn’t; the claimant had sought to comply with the rules by producing a detailed factual account including an attempt to set out the legal basis of his claims. Some allowance was to be made for the fact that the claimant was a litigant in person who “would not be conversant with the details of pleading rules”, although it is an established principle that being a litigant in person is not a good reason for failing to comply with the rules.
In considering whether the claimant’s conduct was inexcusable, it appeared that the claimant was aware that he might not be complying with the order when drafting his witness statement. However, this needed to be considered in the light of the claimant not knowing what more he could do. Taking into account all of the circumstances, the failure to comply was “understandable and not inexcusable”.
The fact that the claimant had not made an application for relief from sanctions did not fall to be considered as part of whether the first action was struck out as an abuse, or whether the claimant’s conduct was otherwise inexcusable because these relate to the strike out itself. Rather it should be considered as part of whether there were very unusual circumstances. In general, a failure to apply for relief would “militate strongly against” a finding of very unusual circumstances. However, because the court had determined that the conduct in the first action was not an abuse of process nor inexcusable, whether there were very unusual circumstances did not fall to be considered. (The court went on to consider that if the failure to apply for relief was to be considered under the test of whether the conduct was an abuse of process or inexcusable, on the facts of the case it did not render the claimant’s conduct an abuse or inexcusable.)
Therefore, following the test derived from previous authorities as impacted by the Jackson reforms, Morris J concluded that the second action should not be struck out as an abuse of process.
This case provides clarification of the position in relation to second actions and should provide substantial assistance to those advising in cases where a second action has been brought or is contemplated. In particular, the analysis of previous authorities and the Jackson reforms provide tests to be applied in each of procedural and Henderson v Henderson type cases. This is to be welcomed.
As would be expected, a second action in a case of procedural default is more likely to be considered an abuse of process than was the case pre-Jackson. It will be a case in very unusual circumstances that is allowed to proceed as a second action where the conduct in the first action was abusive or inexcusable. However, if the conduct in the first action was not an abuse of process nor inexcusable, a second action will not inevitably be an abuse of process itself. Critically, if the first action was struck out for a single failure to comply with an unless order that of itself will not be fatal to a second action. Therefore, it is important to consider in detail the conduct in the first action; a second bite of the cherry still may be permissible.