Shepherd v Cail & Anor

A claim based on an oral agreement should not be struck out as statute-barred where the contractual trigger for accrual, the effect of planning decisions, or the date of payment remains reasonably arguable. However, a claim may be barred by issue estoppel where an earlier judgment decided the relevant contractual issue. It may also be an abuse of process to raise a claim in later proceedings when it could and should have been advanced in earlier litigation. That requires a broad, merits-based assessment of all the circumstances, balancing finality, efficient use of resources, and fairness. The fact that a matter could have been raised earlier does not automatically make later proceedings abusive. A party who conceded below that alleged fraud caused no loss cannot generally rely on that claim for the first time on appeal.

Mr Shepherd appealed against an order of the District Judge striking out his claim against the personal representatives of Alan Blair. He claimed 50% of the alleged increase in the value of land following the resolution of planning issues under an oral agreement made in 2007. He also pleaded loss arising from alleged frauds and forgeries connected with earlier litigation.

The District Judge held that the claim was statute-barred under section 5 of the Limitation Act 1980, treating the cause of action as accruing when planning permission was granted on 23 June 2010. The appeal concerned the limitation analysis, whether the claim was barred by issue estoppel or was an abuse of process, and whether the fraud claim remained open.

1. Limitation. The appeal succeeded on the District Judge’s stated limitation reasoning. Even assuming the contractual term identified below, it was arguable that the planning issues were not resolved on 23 June 2010. The grant of planning permission, later notice of that grant, withdrawal of the enforcement notice, and any further approvals required under the permission raised issues requiring determination. Section 180(1) of the Town and Country Planning Act 1990 also made it arguable that the enforcement notice could have continued to restrict use beyond the permission. The date on which value was to be assessed and payment made was likewise arguable.
2. Issue estoppel. The claim was nevertheless barred by issue estoppel. The earlier action had determined the terms of the oral agreement, including what Mr Shepherd was to receive. The findings did not include the contractual term now asserted. The court treated that issue as having been decided in the earlier proceedings.
3. Abuse of process. Independently, the claim was an abuse of process. Applying the principles discussed in Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46 and Johnson v Gore-Wood & Co [2002] 2 AC 1, the question required a broad, merits-based assessment of the public and private interests and all the circumstances. The claim could and should have been brought in the First Action or, alternatively, by counterclaim in the Second Action. Allowing a further trial would create risks of inconsistency and injustice, particularly given the age of the agreement, the death of one contracting party, and the extensive previous litigation.
4. Fraud claim and disposal. Mr Shepherd had conceded below that the alleged fraud and forgery had caused him no loss and that his claim was based on the agreement. He could not rely on that issue for the first time on appeal. The appeal was therefore dismissed and the strike-out order under CPR 3.4(2)(b) upheld.

• High Court (Chancery Division): The appeal against the District Judge’s order dated 11 May 2018 was dismissed. The court upheld the strike-out under CPR 3.4(2)(b), although it rejected the limitation reasoning as an independent basis.
• Permission to appeal: Permission was granted by O’Farrell J on 5 June 2019.