Care needs to be taken when withdrawing proceedings where the intention is to bring the same claim at a later date. Estoppel may become an issue in such a situation.
This was the position in Spicer and Shinners v Tuli, in which the claimants were the receivers of a charge over a flat in which the defendant resided. The claimants thought the defendant was a trespasser and issued possession proceedings accordingly. The defendant alleged she had a tenancy agreement.
The claimants believed the tenancy agreement was not genuine but agreed to withdraw the proceedings by consent in order to have time to inspect the documents. They made it clear they thought the documents were fraudulent and that they reserved their right to issue fresh proceedings. Unfortunately, the consent order referred to the proceedings being dismissed by consent, which had the effect that the action had been determined on its merits, albeit by consent.
When the new proceedings were issued, the defendant sought to strike out those proceedings on the basis that the consent order operated in the same way as a judgment, establishing a cause of action estoppel (i.e. the same cause of action could not be raised again). Alternatively, the defendant argued it was an abuse of process.
Dismissing the defendant's application, the Court of Appeal held that in considering whether the second action was an abuse of process, the parties' conduct in bringing the first action to an end was relevant. The consent order had been entered into with the clear intention of bringing further proceedings if appropriate. Cause of action estoppel was intended to promote finality in litigation and prevent injustice. However, it was not to be applied inflexibly whenever there had been a judgment by consent, if it was clear that a party intended to pursue a claim. That was the position here.
Things to consider
Reference to the case having been dismissed was an error. It would have been unconscionable for the defendant to take advantage of that error, having known all along that the claimants had clearly reserved their position. Parties need to be very careful in such cases to avoid issues such as this arising.