The Court of Appeal has taken the opportunity to clarify the scope of the linked principles of Res Judicata/the Rule in Henderson v Henderson. Res Judicata is the principle that a party cannot litigate issues between it and another party/parties if these issues have already been determined by a Court in a prior case between the parties. The linked Rule in Henderson v Henderson is to the effect that if a party could have pleaded an issue in previous proceedings between parties it cannot then do it in subsequent litigation between these parties.

In Dominic Carney v Bank of Scotland Plc (formerly Bank of Scotland (Ireland) Limited) and Gearoid Costelloe [2017] IECA 295, the Court had to consider the extent to which a Circuit Court Judgment obtained on Motion in default of Defence could be relied upon as the basis for the High Court striking out an analogous claim before it between the same parties pursuant to the principles of Res Judicata/Henderson v Henderson principles. The case essentially concerned whether a Receiver, Mr. Costelloe, had validly taken possession of a commercial property following default in payment of a mortgage. In an ex tempore judgment handed down in the High Court by Mr. Justice Binchy, he was satisfied that the Circuit Court judgment obtained on 19 May 2015 (on Affidavit, and being on foot of a second Motion brought for judgment in default of Defence) could indeed bind the High Court pursuant to the Res Judicata/Henderson principles.

Before the Court of Appeal, the Appellant argued that in fact the High Court Judge had erred in finding that all of the matters before the High Court effectively mirrored prior pleas that had been before the Circuit Court at the time the final judgment was handed down. In particular, the Appellant argued both that certain pleas before the High Court were new and had not formed part of the Circuit Court proceedings and that other claims were in fact claims that could not have formed part of the Circuit Court proceedings at all as the cause of action arose at a later date.

The Court of Appeal, however, considered that the ex tempore judgment of Mr. Justice Binchy had to be read as a whole and it was clear when that happened, and it was clear from the various submissions that had been made before it (which were opened again before the Court of Appeal), that in fact Mr. Justice Binchy had effectively found that the claim of the Appellant should be struck out as constituting either res judicata and/or a breach of the Rule in Henderson v Henderson. Having regard to the similarity of the pleas in the two cases the Court of Appeal upheld the High Court’s decision in that regard save in relation to one aspect (discussed below).

In this regard, the Court reiterated the principles that it had previously set out in the case of Vico Limited & Others v Bank of Ireland [2016] IECA 273. The Court found it should not adopt too dogmatic an approach in determining what pleas were and were not captured by the Res Judicata/Henderson principles but instead should adopt a broad, merits based, judgment taking account of public and private interests. Specifically, the Court should ask “whether in all of the circumstances a party’s conduct is an abuse [of process]”.

Having regard to the aforementioned holistic approach the Court did find that in all of the circumstances (save in respect of one isolated plea) the Appellant should not be entitled to continue to pursue the pleas contained in his High Court Writ. The sole exception was a specific plea that had been made by the Appellant that he was entitled to possession of certain chattels currently in the possession of the Receiver and the Court found solely in respect of that plea that, having regarding to the holistic principles earlier referenced, that the Appellant should be entitled to continue. The Court, however, was at pains to clarify that this was a claim solely in relation to possession of the chattels and that it was in no way countenancing a continuation of the claim for damages and in particular it was not countenancing any continuation of any claim whatsoever in relation to title to/possession of the commercial property, the subject matter of the proceedings. Accordingly, the Court found that every other part of the Plaintiff’s High Court claim against the Receiver should be struck out pursuant to the Res Judicata/Henderson principles and also made an Order for full costs in favour of the Receiver, Mr. Costelloe (he having succeeded almost fully in his Motion both in the High Court and before the Court of Appeal). It should be noted that the First Defendant did not participate in the Motion and the action against it still lies in full.

The case is interesting both in that:-

  1. The Court of Appeal appears willing to isolate certain pleas and in particular will consider whether a particular claim should or should not be dismissed pursuant to the principles of Res Judicata / Henderson v Henderson; and
  2. The Court of Appeal upheld Mr. Justice Binchy’s finding in the High Court that a final Circuit Court decision, even if made at Motion stage on Affidavit only, was capable of binding superior Courts.