Denning Sotomayor Limited v Western Avenue Properties Limited & Anor

Prolonged procedural inactivity may amount to an abuse of process where it demonstrates that a party has warehoused its claim or counterclaim, even if the opposing party has also delayed. The court must distinguish between the parties’ different tactical conduct, but parallel inactivity does not prevent a finding that one party’s conduct independently constitutes abuse.

The analysis has two stages: first, determine whether the conduct is abusive; secondly, decide whether the proceedings should be struck out. On appeal, interference is justified only for legal or factual error, material failure to consider relevant matters, reliance on immaterial matters, an impermissible decision, or a plainly wrong exercise of discretion.

The appeal was brought by the second defendant against Master Davison’s order dated 16 July 2024, which struck out the defendants’ counterclaim for abuse of process and want of prosecution. The underlying claim, alleging breach of confidence and fiduciary duties, had itself been struck out by consent in December 2023, after prolonged inactivity.

The counterclaim had been stayed after an order for security for costs in 2018. The appellant argued that the Master had wrongly treated the parties as being in the same position, had misunderstood the principle against approbating and reprobating, and had inferred prejudice without evidence of actual prejudice. The central issues were whether the counterclaim had been warehoused and whether the strike-out decision was properly open to the Master.

1. Appeal dismissed. The Master’s order striking out the counterclaim was upheld.
2. The principle against approbating and reprobating concerns inconsistent positions. It does not prevent a party from criticising conduct which is materially different from its own. Nevertheless, the Master was entitled to regard the parties’ prolonged inactivity as sufficiently similar to support his secondary observation that the defendants were approbating and reprobating. That point was not determinative.
3. The principal basis of the decision was the approach in Asturion Fondation v Alibrahim. The relevant analysis had two stages: whether the conduct constituted an abuse of process, followed by whether the court should exercise its discretion to strike out the claim or counterclaim.
4. The Master was entitled to find that the defendants had warehoused the counterclaim. Their intention to pursue it was conditional on the underlying claim being revived. They had also failed to answer the Part 18 request or progress their application to re-amend the counterclaim. That conduct independently engaged the warehousing principle, notwithstanding the claimants’ own delay.
5. The Master had properly considered the wider circumstances. He recognised that both parties had made tactical decisions causing delay, but was entitled to conclude that the defendants’ conduct concerning the counterclaim was unilateral for the purposes of the abuse analysis.
6. The inference of prejudice was permissible. The delay was approximately six years, and the nature of the counterclaim indicated that documents and witness evidence would be required. The high threshold for appellate interference with a discretionary decision was not met.

• High Court (King’s Bench Division) — The appeal from Master Davison’s order dated 16 July 2024 was dismissed. The counterclaim remained struck out.