Farrar v Leongreen Ltd

Res judicata principles preventing recovery twice on the same cause of action do not bar a later claim based on distinct causes of action. Each day of continuing unlawful occupation constitutes a fresh cause of action for mesne profits. Cause of action estoppel, the rule against a second action for further damages, and merger operate only where the later proceedings concern the same cause of action determined earlier.

An older decision concerning detention of goods does not enlarge those technical rules. Properly understood, it illustrates the separate principle that matters which could and should have been raised earlier may be abusive in later proceedings.

The respondent first brought proceedings seeking only possession of a flat occupied by the appellant. A possession order was made by HHJ Dight on 24 February 2014. The appellant left on 26 March 2014.

The respondent and Galleondeal then brought a separate claim for rent and mesne profits. HHJ Walden-Smith awarded the respondent mesne profits for the period from 21 November 2012 to 26 March 2014. Permission to appeal was limited to whether the respondent’s failure to claim mesne profits in the possession proceedings engaged the second and third res judicata principles.

1. The appeal was dismissed. Sales LJ gave the judgment, with which Lindblom LJ agreed.
2. Cause of action estoppel could not apply. Each day of the appellant’s unlawful occupation constituted a fresh cause of action for mesne profits. The possession proceedings concerned only the respondent’s entitlement to possession at the date of the order and did not determine claims for earlier periods of trespass. The rule was supported by Arnold v National Westminster Bank plc [1991] 2 AC 93.
3. The second res judicata principle identified in Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46; [2014] AC 160 prevents a claimant who has succeeded from bringing a second action for further damages on the same cause of action. It did not apply because the later mesne profits claim rested on distinct causes of action. Conquer v Boot [1928] 2 KB 336, concerning successive claims arising from the same breach of contract, was distinguishable.
4. The doctrine of merger likewise operates only where the later action concerns the same cause of action. The respondent’s distinct causes of action had not merged in the possession judgment.
5. Serrao v Noel (1885) 15 QBD 549 was not authority enlarging the technical concept of a cause of action. Properly understood, it illustrated the separate principle associated with Henderson v Henderson (1843) 3 Hare 100 and Johnson v Gore-Wood & Co. [2002] 2 AC 1, namely that matters which could and should have been raised earlier may be abusive in later proceedings. The first-instance decision on that abuse-of-process issue was not under appeal.

• Court of Appeal (Civil Division): dismissed the appeal against the award of mesne profits to the respondent.
• Central London County Court: HHJ Walden-Smith awarded the respondent mesne profits for the appellant’s occupation of the flat between 21 November 2012 and 26 March 2014.