Tobias Gruber & Anor. v AIG Management France, SA & Anor.

A party may be barred from raising at a later stage of the same action a claim or defence which, if it wished to pursue it, ought fairly to have been raised at the final trial. This form of Henderson abuse does not require dishonesty, collateral attack or deliberate gamesmanship. The question is whether, considering all the circumstances, it would be unjust or oppressive to allow the point to be raised late. The mere fact that a matter could have been raised earlier is insufficient. The court may also use issue estoppel where the point, or a matter necessary to the earlier decision, has already been determined. Positive counterfactual defences concerning causation or quantum must ordinarily be pleaded and proved at the trial. They cannot generally be introduced for the first time during a later damages assessment.

The claimants had succeeded at an earlier trial against AIG-FP for breach of contractual obligations concerning deferred remuneration plans, with damages to be assessed: [2018] EWHC 3030 (Comm). The defendants subsequently pleaded extensive positive defences concerning illegality, insolvency, plan amendment or suspension, the timing of realised losses, and conditional restoration. The claimants applied to strike out or dismiss those pleas on the grounds of issue estoppel, Henderson abuse and summary judgment.

The central issue was whether those matters could fairly be raised for the first time during the damages assessment, or whether they ought to have been pleaded and pursued at the final trial.

1. Application granted in substantial part. The court struck out the principal new positive counterfactual defences and required parts of the quantum defence to be re-pleaded.
2. The governing principles of Henderson abuse were drawn from the authorities including Henderson v Henderson (1843) 3 Hare 100 and Johnson v Gore Wood & Co (No. 1) [2002] 2 AC 1. The doctrine promotes finality, prevents repeated vexation and supports efficient case management. A matter may be abusive if it ought to have been raised in earlier proceedings or at an earlier stage of the same action. No additional element such as dishonesty, collateral attack or gamesmanship is required. The assessment remains broad and fact-sensitive.
3. The earlier hearing had been the final trial of all issues. A defendant responding to a claim for damages must plead any positive case that the claimant would have suffered no loss, or materially less loss, even without the breach. This includes counterfactual cases concerning what would have happened, the timing of losses, insolvency, plan amendments, or the lawfulness of payment.
4. The defendants’ new cases were abusive because the alleged time gap between breach and payment was already apparent before and during trial. The defendants had understood that the claim concerned restoration following deductions and payment in 2013. The later judgment did not create an unanticipated opportunity to introduce fundamentally different quantum defences.
5. Some issues were also precluded by issue estoppel. The earlier judgment had established that payment of restored balances would not be unlawful and that the contractual scheme required unconditional restoration and payment in 2013. The proposed illegality, plan-amendment, suspension and conditional-restoration cases therefore could not be pursued.
6. A narrower burden-of-proof argument concerning the sufficiency of the claimants’ basis for calculating damages was allowed to remain. It was a reasoned denial of the claim rather than a new positive counterfactual defence, although any applicable Connecticut-law principles would need to be pleaded and proved.

The judgment records that the defendants had permission to appeal the earlier judgment for damages to be assessed, but this decision determined only the claimants’ application concerning the scope of the remaining first-instance damages process.