Dexter Ltd v Vlieland-Boddy

A later action is not necessarily an abuse of process because its claims could have been brought in earlier proceedings. The court must make a broad, merits-based assessment of all the circumstances, balancing public and private interests. The party alleging abuse bears the burden of establishing it. Abuse will rarely be found without unjust harassment or oppression.

The doctrine can apply to successive actions against different defendants. However, the involvement of different defendants who are not privies is a material consideration against finding abuse. Litigation costs, the relative strength of claims, secondary liability and the availability of evidence may provide legitimate reasons for proceeding separately. Finality and economy do not invariably require every potential defendant to be sued together.

Dexter Ltd, a company in administrative receivership, alleged that money advanced for the purchase of an aircraft engine had been fraudulently diverted. It first sued Martin Vlieland-Boddy, its former director, and obtained judgment after he abandoned his defence during trial.

Dexter subsequently sued Edwina Harley, Martin's mother, alleging knowing receipt and dishonest assistance. That action was struck out for want of jurisdiction because she was domiciled in Spain. A freezing order continued while Dexter pursued an appeal. Dexter later commenced proceedings against several defendants, including Harley and Clive Vlieland-Boddy, Martin's twin brother. It alleged that Clive had participated in the fraudulent scheme and received misappropriated money.

Clive and Harley applied to strike out the claims as an abuse of process. They argued that they and the other defendants should have been joined in the original action. Harley also relied on delay, the continuing freezing order and the alleged use of other defendants to establish jurisdiction over her. Lloyd J dismissed their applications on 25 July 2002. They appealed with permission. The central issue was whether the successive proceedings constituted an abuse of process.

The appeals were unanimously dismissed. Clarke LJ expressly agreed with Peter Gibson LJ's reasons, and Scott Baker LJ agreed with both judgments.

1. The governing approach was the broad, merits-based assessment stated in Johnson v Gore Wood & Co. [2002] 2 AC 1. The court must consider all the circumstances and the public and private interests involved. The ability to raise a claim earlier does not establish that it should have been raised then. The defendant bears the burden of establishing abuse, and unjust harassment or oppression will ordinarily be central to the inquiry. Finality, efficiency and economy remain important, but do not invariably require striking out later proceedings.

2. The doctrine could apply where successive proceedings involved different defendants who were not privies. That difference nevertheless weighed materially against finding abuse. Lord Millett's categorical view that the doctrine could not sensibly extend to different defendants went beyond the majority reasoning in Johnson v Gore Wood & Co. and was not adopted. The formulation in Yat Tung Investment Co. Ltd. v Dao Heng Bank Ltd. [1975] A.C. 581, equating matters which could have been litigated earlier with matters which should have been, was too wide.

3. Clive was being sued for the first time. His provision of a witness statement in the original action did not mean that he was being vexed twice. Although Dexter's general explanation for omitting him provided little justification, the burden remained on him to establish abuse. Pursuing the director as the obvious primary target was a relevant consideration, particularly for a company in administrative receivership. No real prejudice from the subsequent death of a witness was established.

4. Clarke LJ, supported by Scott Baker LJ, emphasised that separate actions may have legitimate advantages. Additional defendants entail additional lawyers, time and expense. The relative strength of claims and prospects of recovery may justify suing one defendant first. It may also be rational to pursue those allegedly liable on a secondary basis after seeking recovery from those primarily liable.

5. The judge had correctly directed himself. Appellate intervention required omission of material facts, reliance on immaterial facts or an assessment that was otherwise plainly wrong. None was established.

6. Harley's involvement became apparent through disclosure shortly before and during the original trial. The judge was entitled to accept the explanation for omitting her. Permission to appeal the jurisdiction decision had been granted and the appeal was seriously pursued, so jurisdiction existed to continue the freezing order. Her subsequent consent supported its continuation after abandonment of that appeal. The receiver's explanation did not show that the other claims were merely a device to establish jurisdiction under Article 6(1) of the Brussels Convention.

The refusal to strike out was upheld. The appellants were ordered to pay the appeal costs. The freezing order against Harley was continued until judgment or further order.

• Court of Appeal (Civil Division): In [2003] EWCA Civ 14 , dismissed both appeals and upheld the refusal to strike out the claims.
• High Court, Chancery Division: Lloyd J dismissed Clive Vlieland-Boddy's and Edwina Harley's strike-out applications on 25 July 2002. Carnwath LJ granted permission to appeal.
• Related proceedings: Evans-Lombe J entered judgment against Martin Vlieland-Boddy on 11 December 2000. Lloyd J struck out the separate action against Harley for want of jurisdiction on 8 March 2001 and granted permission to appeal. Dexter later abandoned that appeal, which was dismissed with costs in March 2002.