Dean & Dean (A Firm) v Angel Airlines SA & Ors

The use of a firm name identifies the partners liable at the time when the cause of action accrued. A later change in partnership composition does not, without more, alter the parties to existing proceedings. Current partners must be joined using the applicable procedural machinery before orders can bind them.

A judgment or costs order binds only the parties against whom it is made. A later action seeking to reopen issues already decided, or matters which could and should have been raised earlier, may constitute res judicata or an abuse of process. The court applies a broad, merits-based assessment of whether further litigation would misuse the court’s process.

The judgment determined six applications arising from a dispute over solicitors’ costs. Angel Airlines sought recovery of money held by its former solicitors, Dean & Dean, and had obtained costs orders in earlier proceedings. The firm’s composition changed during those proceedings, and statutory demands were later served on several alleged partners.

The applications concerned the liability of later partners for the earlier costs orders, a bankruptcy petition, applications to set aside statutory demands, and a new action challenging Lyndales’ authority to act for Angel after its liquidation. The central issues were whether the later partners were parties to the earlier action and whether the new action was barred or abusive.

1. Parties to proceedings. The 2004 action was commenced against Dean & Dean when Mr Tehrani was the sole practitioner. The use of the firm name operated as a shorthand for the persons who were partners when the cause of action accrued. A later change in the firm’s composition did not automatically add new partners as defendants. The procedural machinery for joinder had not been used.
2. Costs orders and later partners. Costs orders could bind only the parties to the action against whom they were made. The later partners were not bound merely because they conducted the proceedings for the firm. Angel could pursue the separate procedure under CPR 48.2 and Supreme Court Act 1981, s.51, if it wished to establish their liability.
3. Statutory demands and petition. The statutory demand against Miss Turbin was set aside. No judgment debt existed against Dr Mireskandari in respect of the relevant costs orders, so the conditions in Insolvency Act 1986, s.267(2)(a) and (b), were not satisfied and the court had no power to make a bankruptcy order under s.271(1)(a). The petition was dismissed, subject to any application by Mr Sinel to be substituted as petitioning creditor. Mr Tehrani’s application failed because the 2008 action could not provide a basis for setting aside his demand.
4. Res judicata and abuse of process. The issue of Lyndales’ authority had already been determined by Master Seager Berry and the decision of 15 February 2006 had been upheld by the Court of Appeal. The later action sought to reopen those determinations and relied on evidence which could have been deployed earlier. Applying Henderson v Henderson and Johnson v Gore Wood & Co, the court treated the action as an abuse of process. The untested allegation concerning Dr Sabau’s report had already been deployed unsuccessfully in later applications and did not justify renewed litigation.
5. Orders. The 2008 action, including the claims against Angel and Lyndales, was struck out. Mr Tehrani’s application to set aside his statutory demand was dismissed. Mr Bell was awarded the costs of his application, excluding costs attributable to issues raised before his later witness statement.

The judgment records earlier decisions in the related proceedings, including determinations by Master Seager Berry, refusals of permission to appeal, and the Court of Appeal’s decision upholding the Master’s authority ruling. Those decisions formed part of the res judicata and abuse-of-process analysis. This was a first-instance determination of the applications before Patten J.