De Crittenden v Bayliss

A claimant should ordinarily advance the whole of a case in the original action and elect between inconsistent remedies before judgment. Those procedural principles are flexible and require a fair balance between the parties and the public interest in finality.

A later proprietary claim may properly be barred where it concerns the same underlying relationship, could have been pleaded earlier, and its omission has made a fair trial impracticable. This is especially so where earlier findings bind the parties and a central participant has died. Deceit by the defendants does not justify a second action if it did not prevent the claimant from advancing the claim in the first proceedings.

The claimant had succeeded in an earlier action arising from his business arrangement with Mr Bayliss. He recovered a money judgment based on an agreement to share the proceeds and property preserved through litigation with Lloyds Bank.

He later brought the present action against Mr Bayliss’s estate and daughter. He alleged that their relationship gave rise to fiduciary duties and sought a proprietary tracing remedy in the proceeds of a property said to have been acquired partly with recovered funds. Her Honour Judge Kirkham dismissed the claim on election and abuse-of-process grounds, and also rejected the alleged fiduciary relationship.

The appeal concerned whether the claimant could pursue the later proprietary claim despite having omitted it from the first action.

1. Appeal dismissed unanimously. The Court upheld Judge Kirkham’s dismissal of the later action. The claimant’s application concerning a further amendment fell away because the respondents accepted that, if a tracing remedy were otherwise available, he could select the asset into which to trace.

2. The rules associated with Henderson v Henderson and Tang Man Sit were engaged. A claimant should normally bring the whole case in one action and elect between inconsistent remedies before judgment. Neither rule is absolute. Each is an application of the overriding requirement to conduct proceedings fairly, while respecting finality in litigation.

3. The claimant had sufficient knowledge by May 2000 to plead a proprietary claim in the first action. He was then represented by solicitors and counsel. The respondents’ deceitful conduct was serious, but it did not prevent him from bringing that claim at the earlier trial.

4. The decisive consideration was that the later claim would require the court to revisit the parties’ business relationship in a different pleaded context. Findings made in the first action bound the parties, and Mr Bayliss had died. The omission of the proprietary claim had therefore deprived the court of the means to try it properly and fairly, while placing the defendants at a substantial disadvantage.

5. Jonathan Parker LJ also held that the judge’s overall balancing exercise was an evaluative judgment with which an appellate court should be slow to interfere. Moses LJ agreed that the impossibility of a fair trial was sufficient to dismiss the appeal, although he would not have treated the claimant’s knowledge alone as decisive. It was consequently unnecessary to determine fiduciary duty or tracing.

6. The formal order dismissed the appeal, made no order as to its costs, and lifted the freezing order.

• Court of Appeal (Civil Division) — [2005] EWCA Civ 1425: dismissed the claimant’s appeal.
• High Court of Justice, Chancery Division, Birmingham District Registry — Her Honour Judge Kirkham dismissed the present action on 17 January 2005.