Westbrook Dolphin Square Ltd v Friends Provident Life and Pensions Ltd

The defendant's application to strike out the claimant's second collective enfranchisement claim was granted. The court held that CPR r.38.7 applied because the second claim arose out of substantially the same facts as the discontinued first claim and the claimant had not obtained the court's permission before issuing the later claim. The judge applied the principles underlying Henderson v Henderson (abuse of process) as explained in Johnson v Gore Wood & Co and concluded that the claimant had had a full and fair opportunity to obtain a judicial determination of the key issues in the earlier proceedings and should have pursued that claim to trial. The collective enfranchisement statutory framework (notably section 13 and section 22 of the Leasehold Reform, Housing and Urban Development Act 1993) and the unaltered factual Structure underlying both claims were decisive in finding that the later claim was an abuse of process.

Background and parties. The defendant, Friends Provident, owned the freehold of Dolphin Square. The claimant, Westbrook Dolphin Square Limited, acted as nominee purchaser for 612 special purpose vehicle companies (the SPVs) which sought collective enfranchisement under the Leasehold Reform, Housing and Urban Development Act 1993. The SPVs had previously issued an initial notice in 2007 and then, after litigation commenced, Westbrook discontinued that claim in February 2009. In April 2010 a further initial notice was served and the present proceedings followed.

Nature of the application. The defendant applied to strike out the 2010 claim under CPR r.3.4(2)(b) and/or (c) on the grounds that: (i) by discontinuing the 2007 proceedings after the defendant had filed a defence, the claimant required permission under CPR r.38.7 before bringing another claim arising out of substantially the same facts and had not obtained it; and (ii) the later claim was an abuse of process on the Henderson v Henderson basis.

Issues for decision.

• Whether the 2010 claim arose out of the same or substantially the same facts as the 2007 claim for the purposes of CPR r.38.7.
• If so, whether permission to bring the second claim should be granted.
• Whether, alternatively or additionally, the second claim amounted to an abuse of the court's process.

Court's reasoning and conclusions. The court analysed the statutory scheme for collective enfranchisement (including the significance of the "relevant date" in section 13 and the court's jurisdiction under section 22 to determine entitlement). Although the two initial notices had different relevant dates and were signed differently, the factual Structure relied on to establish entitlement of the SPVs had not materially changed. The judge held that the principal facts and legal issues in both claims were substantially the same. CPR r.38.7 therefore required permission, and the onus was on the claimant to show why permission should be granted. Permission was refused: the claimant had an arguable case but had had a full opportunity to obtain a judicial determination in the earlier proceedings and chose to discontinue shortly before trial for commercial reasons related to valuation timing. That commercial motive did not justify relitigation of the same entitlement issues. For the same reasons the claim was also an abuse of process and was struck out.

The claim is struck out. The court held that CPR r.38.7 applied because the second claim arose out of substantially the same facts as the discontinued earlier claim and the claimant had not obtained permission to bring the later claim. The claimant failed to show that permission should be granted. Applying the Henderson v Henderson abuse of process principles (as reviewed in Johnson v Gore Wood & Co), the court also concluded that permitting the second claim would amount to an abuse of process because the claimant had had a full opportunity to litigate the entitlement issues in the earlier proceedings and chose to discontinue shortly before trial for commercial reasons.