Case Alert - [2016] EWCA Civ 987

Whether a non-party can challenge a finding in earlier proceedings

Withers for appellant, Hogan Lovells for respondent

It is an established principle that it is an abuse of process to re-litigate an issue which has previously been decided by another competent court (known as "a collateral attack"). Of issue in this case is whether that principle applies to a non-party to those earlier proceedings.

Here, a finding had been made (in the course of committal proceedings) that the defendant to a claim brought by the claimant bank was the owner of a property (over which the bank was seeking a charging order). The claimant in this action, Mr Shalabayev, had appeared as a witness in those earlier proceedings, in order to argue that he was the true owner of the property instead. He sought to intervene in the bank's application for a final charging order over the property, arguing that he was not bound by the finding that he was not the true owner because he had not been a party to the earlier proceedings. He lost at first instance and appealed to the Court of Appeal.

The Court of Appeal has now allowed that appeal.

It was held that Mr Shalabayev had had no opportunity to establish his claim to ownership by being a party to any relevant judicial process: "Being a witness in [the defendant's] committal proceedings was a totally different ball game from being a participant … Witness status did not entitle him to address the court upon the conclusion to be derived from the totality of the evidence".

However, there was no "bright-line" test of whether or not a litigant was a party, or the privy of a party, in earlier proceedings. Instead (citing Secretary of State for Trade and Industry v Bairstow [2004] as authority), it will only be an abuse of process where a party was not a party to the earlier proceedings if "(i) it would be manifestly unfair to a party to the later proceedings that the same issues should be re-litigated or (ii) to permit such re-litigation would bring the administration of justice into disrepute". Here, there had been a significant difference between the earlier application for a committal order and the subsequent application for a charging order. A contempt application is a self-contained procedure which does not lend itself to the resolution of other disputes which may later arise.