Maia Luxury Limited v Luxierge Limited & Anor

An application to strike out for Henderson abuse requires a broad, merits-based assessment of all the circumstances. The fact that matters could have been raised in earlier proceedings does not make later proceedings automatically abusive. The court must ask whether the claimant is misusing the court process, having regard to finality, avoidance of repeated vexation, procedural conduct, costs, settlement terms and any resulting unfairness. Discontinuance does not ordinarily bar fresh proceedings arising from the same facts, subject to Civil Procedure Rules 1998, rule 38.7 where applicable. A settlement limited to the earlier proceedings will not prevent a fresh claim unless the surrounding circumstances establish a wider compromise.

The claimant brought a claim exceeding £220,000 concerning an alleged agreement for the sale of a luxury bag, together with claims in contract, sale of goods, misrepresentation, unjust enrichment and mistake as to identity.

It had previously issued substantially identical proceedings. Default judgment and a freezing injunction were obtained, but the proceedings were later discontinued after it emerged that service had failed because of an address error. The defendants’ costs and sums due under the cross-undertaking were paid. The defendants then applied to strike out the new claim under CPR 3.4(2)(b) and (c), contending that it was barred by the rule in Henderson and by the settlement of the earlier proceedings.

1. The application was dismissed. The defendants did not establish, on the balance of probabilities, that the new proceedings constituted an abuse of process.
2. The rule in Henderson, originating in Henderson v Henderson, prevents a party from raising later matters which could and should have been raised earlier. As explained in Johnson v Gore Wood, however, the modern inquiry is broad and merits-based. The court must consider all the public and private interests and ask whether, in all the circumstances, the claimant is misusing or abusing the court process.
3. The fact that the claims were substantially identical was not decisive. Relevant circumstances included the failure of service, the fact that the defendants had not become aware of the first claim until the freezing order, the payment of their costs and compensation, the absence of a served defence, and the absence from the settlement terms of any agreement concerning future proceedings on the same subject matter.
4. Spicer v Tuli supported examination of the surrounding circumstances of the earlier settlement. The discontinuance of proceedings did not itself bar a fresh claim. The defendants accepted that CPR 38.7 did not require permission because the earlier claim had been discontinued before service of a defence.
5. The court therefore found that the defendants’ case fell a very considerable way short of establishing unjust harassment or abuse. It did not need to determine the claimant’s additional arguments on the merits or alleged dishonesty, although it stated that, if necessary, the claim appeared to have a real prospect of success.

Costs and any application for permission to appeal were to be addressed by written submissions after judgment.