UK: How Many Bites At The Cherry Will The Court Allow? Discontinuance And Dismissal

Last Updated: 2 December 2011
Article by Rowan Turrall

Discontinuance is governed by Part 38 of the Civil Procedure Rules. All that is required in most cases is for the claimant to file and serve a notice of discontinuance (although in certain circumstances the court's permission is required). The general rule is that a claimant discontinuing its claim is liable to pay the other side's costs although the court has discretion to make an order in different terms.

Part 38.7 provides:

"A claimant who discontinues a claim needs the permission of the court to make another claim against the same defendant if-

  1. he discontinued the claim after the defendant filed a defence; and
  2. the other claim arises out of facts which are the same or substantially the same as those relating to the discontinued claim."

A recent case has highlighted that permission of the court to bring a fresh claim following an earlier discontinuance might not easily be given and it also considered the inter-relationship between an application for permission under Part 38.7 to start a fresh claim following discontinuance and an application to strike out a second claim under Part 3.4(2)(b) (on the basis that the proceedings were an attempt to litigate issues which had already been decided by the court - often referred to as Henderson v Henderson abuse of process).

Westbrook Dolphin Square Limited v Friends Provident Life and Pensions Limited [2011] was a case concerning a claim for collective enfranchisement under Chapter I of Part I of the Leasehold Reform, Housing and Urban Development Act 1993 ("the Leasehold Reform Act"). The Leasehold Reform Act makes provision for service of notices by qualifying tenants and sets out the procedure that is to be followed thereafter.

The case concerned a group of buildings in Pimlico which included 1,223 flats as well as leisure facilities. A complicated corporate structure was put in place to acquire the underleases of the flats involving 612 SPV Jersey companies ("the SPVs") and notices were served pursuant to the Leasehold Reform Act. Friends Provident, the freehold owner, served counter-notices disputing that the SPVs were qualifying tenants entitled to exercise the right to collective enfranchisement on a number of grounds.

A court claim was issued seeking declarations that the SPVs were qualifying tenants. Five working days before the trial the SPVs served a notice of discontinuance in respect of the whole claim. The reason given was that "in the light of the significant fall in capital values since that date it is no longer commercially appropriate to seek to determine a price as at [24 September 2007]" (being the date of the initial notice). However, the letter also indicated that further steps would be taken by the SPVs under the Leasehold Reform Act to acquire the building on more favourable terms.

The SPVs subsequently issued new notices which were identical to the first save in respect of the date, the proposed price and the way in which the notices had been executed by the SPVs. Friends Provident denied that the SPVs were qualifying tenants on largely the same grounds as before. The case returned to court and Friends Provident applied to strike out the claim.

Arnold J noted with surprise that neither counsel could find any authority on the application of CPR 38.7. However, he decided that there was an analogy between an application under Part 38.7 and an application to strike out a case as an abuse of process under Part 3.4.(2)(b). He concluded that the difference between the two was that under Part 38.7 the onus lies upon the applicant to show that there should be permission to bring the new claim whereas under Part 3.4(2)(b) the onus was on the defendant to show that the new claim is an abuse of process. Arnold J cited Lord Bingham in the case of Johnson v Gore Wood in relation to Henderson v Henderson abuse of process:

"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 earlier proceedings if it was to be raised at all...It is, however, wrong to hold that because a matter could have been raised in earlier proceedings it should have been...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."

The court concluded that the new claim arose out of substantially the same facts as the previous claim. The notices differed slightly but the notices were just procedural preliminaries rather than the principal facts out of which the claims arose. The key question before the court had not changed and so the arguments the court needed to consider in the two claims were largely the same.

Counsel for the SPVs argued that as the Leasehold Reform Act envisaged the service of successive notices it followed that successive claims could also be issued. The court disagreed and refused permission for the second claim to be brought on the basis it amounted to an abuse of process. Arnold J was of the view that the original claim should have been pursued to trial to establish the SPVs' right to collective enfranchisement at which stage they could have withdrawn the first notice. They could then have proceeded to serve a fresh notice under which their right to collective enfranchisement could not be called into question.

The case dealt with the question of discontinuance but it is a word which is sometimes confused with dismissal, a concept often used when parties agree to settle matters on a "drop hands" basis by way of consent order. As set out in the case above, a claimant needs leave from the court to issue new proceedings based on the same or similar claim if the notice of discontinuance is served after a defence has been filed. The claimant in a discontinued claim might therefore get a second bite at the cherry if it can persuade the court that it should be entitled to do so. A consent order dismissing a claim operates as a final judgment determining all of the issues in the claim in the favour of the defendant. The claimant who has agreed to the dismissal of its claim is very unlikely to be able to re-open matters.

It is therefore important to understand the difference between discontinuance and dismissal to avoid a position where a claim you thought was settled has been resurrected or that a claim you thought could be restarted cannot be. Likewise very careful thought should be given to discontinuing a claim if a further claim on substantially the same facts is contemplated.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions