DISCOVERY LAND COMPANY, LLC v AXIS SPECIALTY EUROPE SE

The Henderson principle applies to successive interlocutory applications as well as final hearings. A party generally cannot raise at a later interlocutory hearing a point that was reasonably available, but not pursued, earlier unless there has been a significant and material change of circumstances or new facts that could not reasonably have been discovered. The court must make a broad, merits-based assessment of abuse, considering the public interest in finality, efficient case management and judicial resources, together with the private interest in avoiding vexation and wasted costs. The possibility that the point could be raised at trial, or might save trial costs, does not by itself justify a second application.

The claimants sought summary judgment on the construction of a professional indemnity policy issued by Axis to the Jirehouse entities. The policy excluded claims arising from dishonest or fraudulent acts, subject to a provision concerning acts committed or condoned by all directors or members of the relevant body corporate.

Axis had obtained permission at an earlier amendment hearing to plead that a director, Mr Prentice, had condoned the relevant misconduct. The claimants had then accepted that the policy wording was sufficiently close to the wording considered in Zurich Professional v Karim & Ors and that the amendments were arguable. They later advanced a different construction and sought to dispose of the condonation case summarily. The central issue was whether that application was an abuse of process.

1. The application was refused as an abuse of process. The claimants could have advanced the construction argument at the amendment hearing and accepted that the proposed amendments were arguable. The present application therefore sought to take a second bite at the cherry.

2. The governing approach was the broad, merits-based assessment stated by Lord Bingham in Johnson v Gore Wood & Co (No. 1) [2002] 2 AC 1. The court had to consider all the circumstances, including the public interest in finality and efficient use of court resources, and the private interest in protecting the opposing party from vexation, harassment and wasted costs.

3. Following Koza Ltd v Koza Altin Isletmeleri AS [2021] 1 WLR 170, the Henderson principles applied to interlocutory hearings as much as to final hearings. There was no different test or general indulgence for interlocutory applicants. Where a point was open and not pursued, a later application would ordinarily be abusive absent a significant and material change of circumstances or newly discovered facts.

4. Woodhouse v Consignia Plc (CA) [2002] 1 WLR 2558 did not assist the claimants. Its exceptional example concerned new material making a summary judgment application unanswerable. Here there was no overlooked authority, new evidence or changed factual circumstance. The claimants’ present case represented a change of view on legal analysis that had already been considered.

5. Allowing the application would undermine the finality of the unappealed interlocutory decision, encourage circumvention of the appeal process and disrupt preparation for trial. It was no answer that the construction issue might otherwise arise at trial or assist settlement. The merits of the construction issue were therefore unnecessary to determine.

The judgment describes an earlier amendment hearing before Mr David Railton QC, sitting as a deputy High Court Judge, at which Axis was granted permission to plead the condonation case. The present application was a subsequent first-instance application for summary judgment and was refused.