Moorjani & Ors v Durban Estates Ltd & Anor (2019) EWHC 1229 (TCC) (and also extempore judgment of 30 July 2019, on Lawtel).
We have encountered Mr Moorjani before, successfully establishing that in disrepair claims, liability for loss of amenity does not depend on whether the claimant is in occupation of the property (our report). In these two judgments, also on a leasehold disrepair claim, Mr Moorjani was, shall we say, somewhat less successful.
Mr Moorjani’s previous claim had been issued in October 2011. He was awarded damages in that claim in respect of the third floor of the building, but the particulars of claim addressed the building overall. Since the determination of that claim, Mr M had issued a further claim for leasehold disrepair to the building, which included a period prior to October 2011 against the then freeholders (Durban), as well as a claim for the period after that against the new freeholders, about the condition of the building overall.
Durban applied to strike out the claim against them as an abuse of process.
There were two grounds – cause of action estoppel and the rule in Henderson v Henderson (1843) 3 Hare 100
These were defined as
Both cause of action estoppel and merger operate to prevent a second action based on the same cause of action. Such bar is absolute and applies even if the claimant was not aware of the grounds for seeking further relief, unless the judgment in the first case can be set aside.
Even if the cause of action is different, the second action may nevertheless be struck out as an abuse under the rule in Henderson v. Henderson where the claim in the second action should have been raised in the earlier proceedings if it was to be raised at all.
The parties’ arguments were:
Adam Rosenthal, who appears for Durban, argues that this is a classic case of cause of action estoppel. While he accepts that Judge May only awarded damages in respect of the common parts on the third floor and that the Wolmark report was limited to defects on that floor, he submits that the court should look instead to the statement of case. He submits that paragraphs 7(2) and 7(3) of the Particulars of Claim in the County Court case extended Mr Moorjani’s case to the block more generally. In the alternative, this second action is a clear abuse and should be struck out on the basis of the rule in Henderson v. Henderson.
Antonia Halker, who appears for Mr Moorjani, argues that the court should focus not on the pleadings in the County Court claim but upon the judgment. She argues that while the case was pleaded more widely, damages were only awarded for disrepair to the third-floor common parts. Accordingly, she submits that there is no duplication and that this second action is not an abuse.
The TCC held that the focus should be on the particulars of claim, other pleadings and evidence in the previous claim, not the judgment. The 2011 particulars had made a broad allegation of failure to repair to the common parts of the block, but also in respect of specific covenants, some of which were relied upon in the new claim.
Claims for breach of clauses 5(1),(2)(iii) and 5(4)
The County Court action was pleaded in respect of alleged breaches of clauses 5(1), 5(2)(iii) and 5(4) of the lease. Even if his first claim cannot simply be viewed as pleading a single cause of action for breach of Durban’s repairing covenants, Mr Moorjani’s claims against Durban in the current proceedings for breach of the same clauses during the same period of time are in any event barred by both cause of action estoppel and merger. For the reasons already explained, it is unnecessary to consider the detail of the breaches or damages alleged since these are matters of mere particulars of the same cause, or causes, of action.
Claims for breaches of clauses 5(2)(i) & (ii)
Clause 5(2) is a repairing covenant. While it lists separately three specific parts of the building, it is not, in my judgment, properly to be regarded as three separate contractual promises but rather as a single promise to maintain, repair, redecorate and renew a number of separate areas of the building. Accordingly, the claims now pleaded at paragraphs 17(b)(i)-(ii) are further particulars of the cause of action pleaded in the first case, namely alleged further breaches of Durban’s obligation to maintain, repair, redecorate and renew the common parts of the building.
Claim for breach of clause 5(3)
While there was no previous claim under clause 5(3), the lifts and lift shafts were Reserved Parts of the Building as defined by clause 1(E) of the lease. Thus, there was in substance a single promise to maintain and repair the lifts which was repeated at clauses 5(2)(iii) and 5(3) of the lease. Having already brought a claim for breach of the obligation to maintain and repair the Reserved Parts of the Building, the claim now pleaded pursuant to clause 5(3) of the lease is, in my judgment, barred by both cause of action estoppel and merger.
Further, though not strictly necessary to find, there was Henderson v Henderson abuse. There was substantial overlap between the specific breaches of repairing obligation raised, but
In so far as, properly analysed, Mr Moorjani’s current claims against Durban are fresh claims, they could, with reasonable diligence, have been raised in the first action. Mr Moorjani must have known of wider disrepair. Indeed, correspondence sent to him as long ago as 2008 referred to the need to repair the boilers, roof and lifts. He must have known whether the lifts worked from his own experience of living in the block. If he needed expert assistance to determine his full case then Mr Wolmark should have been instructed to inspect and consider other areas of potential disrepair in order that Mr Moorjani’s full case could be brought forward in a single action.
Balancing Mr Moorjani’s interest in being able to pursue his further claim against Durban’s interest in not being vexed a second time in respect of its repairing obligations and the public interests in access to the court and finality, the balance in this case comes down clearly in favour of the defendant. The claims now pursued are further particulars of disrepair by the same landlord and should have been made in the first action. Allowing this second claim to proceed against Durban would, in my judgment, amount to unjust harassment of Durban.
The claim against Durban was struck out.
But what of the claim against the new freeholders, Ivor Court Freehold Ltd? Neither cause of action estoppel nor Henderson v Henderson could apply there, could they?
Alas for Mr Moorjani, the judgment of 30 July 2019 nevertheless struck out his claim against them, too.
After Ivor Court had taken over the freehold, they had carried out substantial works. The service charges for those works had been disputed by leaseholders, including Mr Moorjani, who had raised a ‘counterclaim’ (actually a form of set off) in the First Tier Tribunal proceedings alleging ‘historic neglect’ and that Ivor Court had unreasonably delayed remedying the defects.
The FTT had held that Ivor Court were entitled to a reasonable time to carry out works after acquiring the freehold, there had been no undue delay, and dismissed Mr M’s ‘counterclaim’.
Ivor Court applied to have the TCC claim struck out on the basis that cause of action estoppel applied in view of the FTT proceedings.
Mr M argued that those proceedings were only about the liability to pay and reasonableness of the service charges, so were different.
The TCC was not impressed by Mr M’s argument. The ‘historic neglect’ counterclaim in the FTT was about a) increased cost of works due to delay and b) damages for loss of amenity arising from the delay in repairs. Mr M had produced a detailed Scott Schedule and this had been addressed by the FTT. The FTT had rejected the historic neglect claim. The issues had therefore been determined and cause of action estoppel applied.
With the exception of one element relating to provision of a resident porter, the claim was struck out.
It is often difficult in disrepair cases where there have been previous proceedings to decide whether the issues are new, or a continuation or reoccurrence of the previous problems. Is it a question of enforcing a previous order or settlement, or a new claim? How long an interval between issues would mean that they were ‘new’, rather than the same issue re-appearing?
But these judgments are a reminder that it is very risky, without a very good reason, to revisit periods covered in a previous claim even for different causes of action.
It is also a reminder for precision in pleading, as far as possible. Causes of action and alleged breaches should be clearly identified.
And yes, res judicata does include First Tier Tribunal proceedings.