Mannering v Cook

A statement of case must identify, concisely and coherently, facts which disclose an identifiable cause of action and the remedies sought. A litigant in person may receive a benevolent reading, but that does not cure pleadings which are vague, abusive, unfairly particularised or incapable of defining the issues for trial.

A shareholder cannot ordinarily recover personally for loss suffered by a company, including loss measured by diverted company funds or reduced dividends. Any such claim belongs to the company, subject to recognised circumstances of direct responsibility. A new claim cannot reopen matters already determined. An extended civil restraint order may be made where repeated totally without merit claims or applications demonstrate sufficient unjustified persistence.

The claimant and defendant had previously litigated disputes arising from the breakdown of their long-term unmarried relationship. Earlier proceedings concerned the claimant’s shareholding in Highscore Scaffolding Ltd, beneficial ownership of the family home, and financial provision for their children.

The claimant issued a further Chancery claim seeking substantial damages based principally on alleged diversion of company funds, loss of share-related benefits, and claims concerning the family home. The defendant applied to strike out or dismiss the claim and sought an extended civil restraint order. The claimant also sought an interim payment and relief concerning an existing limited civil restraint order.

The central issues were whether the new claim disclosed a properly pleaded and legally recognisable cause of action, whether it impermissibly reopened earlier decisions, and whether the claimant’s litigation conduct justified an extended restraint order.

1. Strike out. The claim form and particulars of claim were struck out under CPR 3.4(2). Although the court adopted a benevolent approach to a litigant in person, the pleading was an extended and unfocused narrative, contained insufficiently particularised allegations of fraud, included irrelevant characterisations and third-party allegations, and failed to provide a concise statement of facts capable of supporting identifiable remedies.

2. The pleading also sought to reopen issues decided in the earlier share transfer and TOLATA proceedings. Those matters were barred by res judicata and cause of action estoppel. The claimant could not use a new claim to challenge findings for which permission to appeal had been refused.

3. Claims alleging that company money had been diverted or paid to third parties were claims belonging, if at all, to Highscore Scaffolding Ltd, not to the claimant personally. Applying Sevilleja v Marex Financial Ltd [2020] UKSC 31 and the rule stated in Prudential Assurance v Newman Industries (No 2) [1982] Ch 204, a shareholder could not recover damages merely because the company had suffered loss or because dividends might have been reduced. The alleged relationship and shared family circumstances did not establish a recognised direct responsibility by the defendant as director.

4. A derivative claim could only be brought by a current shareholder or qualifying transferee or transmittee under section 260 of the Companies Act 260. Allowing an amendment would not cure the substantive defects.

5. The application for an interim payment fell away because the claim was being struck out. The application concerning the limited civil restraint order was to be referred to the judge identified in that order.

6. An extended civil restraint order was justified. Applying the principles summarised in Sartipy v Tigris Industries Inc [2019] EWCA Civ 225, the claimant had made or pursued sufficient totally without merit claims and applications, and her repeated attempts to relitigate decided matters amounted to sufficient unjustified persistence. The order excluded family proceedings, an application to set aside the limited order, and an out-of-time appeal application.