Zumax Nigeria Limited v First City Monument Bank plc

A second set of proceedings covering the same subject matter as an earlier claim may amount to an abuse of process where the earlier claim was struck out following deliberate and inexcusable non-compliance with a peremptory order. The court should consider the nature of the default, the stage and circumstances of the strike-out, and whether a special reason justifies continuation of the second claim. A claimant cannot ordinarily use a protective or ancillary claim as a substitute for proceedings struck out in those circumstances. Alleged fraud or misconduct by the opposing party does not provide a general escape from sanctions unless it has a sufficient causal connection with the order, the default, or the circumstances leading to the strike-out.

The claimant brought proceedings concerning bank transfers which had also been the subject of earlier proceedings between the same parties. The earlier claim had been struck out after the claimant failed to comply with an unless order requiring repayment of sums ordered by the Court of Appeal. The present claim had been issued as protective proceedings in case amendments to the earlier claim created limitation difficulties, and had remained stayed.

The defendant applied to lift the stay and strike out the present claim as an abuse of process. A proposed assignee also sought to be joined. The central issue was whether the present proceedings should be permitted to continue after the earlier claim had been struck out for deliberate non-compliance.

1. Application granted. The continuation of the 2019 Claim, covering the same subject matter as the 2013 Claim, was an abuse of the court’s process and the claim was struck out.
2. The question whether the second proceedings were abusive was an evaluative question. The burden lay on the party alleging abuse. The relevant considerations included why the first proceedings were struck out, the stage at which that occurred, and the claimant’s conduct. The authorities, including Hunter v Chief Constable of West Midlands Police [1982] AC 529, Harbour Castle v David Wilson Homes Ltd [2019] EWCA Civ 505, Securum Finance Ltd v Ashton [2001] Ch 291, Cranway v Playtech Ltd [2008] EWHC 550 (Pat), Aktas v Adepta [2010] EWCA Civ 1170, C (A Child) v CPS Fuels Ltd [2001] EWCA Civ 1597 and Kishore v Revenue and Customs Commissioners [2021] EWCA Civ 505, supported the requirement for a special reason in an appropriate case.
3. Where the first claim was struck out following sustained and deliberate failure to comply with an unless order, and the order had properly addressed whether the claim would be stifled, a second claim covering the same subject matter would ordinarily be abusive unless a special reason was shown. The present claim had been issued as ancillary protective proceedings and could not properly be elevated into substitute proceedings after the principal claim had been struck out.
4. The claimant could not re-open before this court matters considered, or which should have been raised on appeal from, the earlier sanctions decision. There was no new evidence establishing inability to pay or changing the earlier conclusion that non-compliance was deliberate.
5. The principle that fraud unravels everything did not provide a general answer. The alleged fraud was not shown to have procured the repayment order, the unless order, or the claimant’s failure to comply with it. The joinder application consequently fell with the strike-out, subject to any consequential submissions.

The judgment records the earlier procedural history but does not decide an appeal. The 2013 Claim was struck out pursuant to an unless order made by Miles J. Permission to appeal against that order was refused by the Court of Appeal, including decisions of Coulson LJ, Newey LJ and Rose LJ.