Vanden Recycling Ltd v Kras Recycling BV

Satisfaction of a judgment against one tortfeasor ordinarily bars claims against others only where they are liable for the same damage. A consent order requiring payment of a specified sum may constitute such a judgment when its substance and effect are equivalent to a final payment order following trial. In that event, the judgment fixes the loss irrespective of the parties’ intentions.

The bar does not extinguish claims for permanent injunctive relief or damages arising from separate acts and potentially distinct losses. On a summary judgment application, the court cannot treat several causes of action as producing the same damage where the pleadings and available evidence do not establish that identity.

Vanden Recycling Ltd alleged that a former employee, Bolton Brothers Ltd and Kras Recycling BV had conspired to misuse confidential information and establish a competing business. It also pleaded individual claims against Bolton and Kras for breach of confidence and inducing breach of contract, seeking damages, an account of profits and injunctive relief.

Vanden settled its claims against Bolton through a consent order requiring payment of £275,000, including £176,000 in damages. Cox J subsequently granted Kras summary judgment, holding that satisfaction of the order had extinguished the claims against Kras as another tortfeasor liable for the same damage: [2015] EWHC 3616 (QB).

The central questions were whether the consent order was a judgment for the purpose of the satisfied-judgment rule and, if so, which claims against Kras were barred.

1. Appeal allowed in part. The consent order against Bolton was properly treated as a judgment for the purpose of the rule governing satisfied judgments. Although it used the language of settlement and purported to stay proceedings, the settlement terms formed part of the court’s order. It required payment of a specified sum and was, in substance and effect, equivalent to the final payment order that could have followed a trial. The distinction between an order and the contractual schedule to a Tomlin order considered in Community Care North East v Durham County Council [2012] EWHC 959 (QB) supported that conclusion.

2. A satisfied judgment ordinarily bars proceedings against other joint or concurrent tortfeasors liable for the same damage. Unlike a compromise agreement, whose effect depends on whether it was intended to fix the full measure of the claimant’s loss, a judgment fixes that loss irrespective of the parties’ intention. Jameson v CEGB [1998] 1 AC 455, Heaton v AXA Equity & Law Life Assurance Society plc [2002] UKHL 15 and Bryanston Finance Ltd v de Vries [1975] 1 QB 703 were applied.

3. The damages claim for conspiracy was barred. The pleading alleged a single conspiracy, even though it allowed for participation by any two defendants. Kras’s liability on that cause of action would therefore concern the same conspiracy and damage as the claim settled against Bolton.

4. The remaining claims could not summarily be treated as claims for the same damage. The pleaded breaches of confidence and inducements of breach of contract concerned information separately supplied to Kras and Bolton. Those acts could have caused distinct losses. The absence of particularised damages did not establish identity of damage, and the £100,000 stated on the claim form was only an estimate.

5. Satisfaction of the damages judgment did not bar permanent injunctive relief. Kras’s interim undertakings did not dispose of claims for final relief, including delivery up. Seager v Copydex Ltd (No 2) [1969] 1 WLR 809 did not establish that ownership of the information had passed in the circumstances, because the order required Bolton to deliver it up and different documents had been disclosed separately to Kras.

6. Summary judgment was therefore confined to the conspiracy damages claim. The parties were directed to agree the consequential order, including the treatment of Kras’s two unresolved grounds, failing which they were to provide short written submissions. There was no order as to the costs of the appeal.

• Court of Appeal (Civil Division): Allowed the appeal except in relation to the damages claim for conspiracy. It held that the satisfied consent judgment barred that claim but did not justify summary dismissal of the distinct damages and injunctive claims: [2017] EWCA Civ 354.
• Queen’s Bench Division: Cox J granted Kras summary judgment on the basis that satisfaction of the consent judgment against Bolton extinguished all claims against Kras as another tortfeasor liable for the same damage: [2015] EWHC 3616 (QB).