Trespass – Mesne profits – Res judicata – Respondent being awarded mesne profits against appellant for occupation of flat as trespasser – Appellant contending that, by virtue of the principles of res judicata, respondent losing right to claim mesne profits – Whether judge erring in granting mesne profits – Appeal dismissed
The respondent and an associated company (G) claimed mesne profits against the appellant for periods of occupation of a flat in Artillery Mansions, Victoria Street, London SWI by him when the respondent and G (the original owner of the flat) maintained that he was a trespasser. The judge awarded mesne profits in favour of G in relation to a period of occupation by the appellant as a trespasser and in favour of the respondent in relation to a second period of occupation, after the ownership of the flat (in the form of a long leasehold) had been conveyed by G to the respondent on 21 November 2012.
The judge found that a lease granted to the appellant in March 2008 had been genuine and that he was not the beneficiary of any underlying arrangement giving him a right to occupy the flat free of charge. Further, when the tenancy agreement came to an end by effluxion of time, the appellant had remained in occupation of the flat as a trespasser until he left in March 2014. In a first action, the respondent simply sought a summary order for possession. It did not include a claim for mesne profits in relation to the period of unlawful occupation of the flat by the appellant, although as a matter of procedure it could have chosen to do so. In a second action by the respondent and G, the judge awarded rent and mesne profits in favour of G, as owner of the flat during the first period of occupation, and mesne profits in favour of the respondent for a second period of occupation after G had conveyed the flat to it.
The judge rejected the appellant’s argument that the claims should be struck out as res judicata and an abuse of process and rejected his reliance on the second and third principles of res judicata identified by Lord Sumption in Virgin Atlantic Airways Ltd v Premium Aircraft Interiors UK Ltd [2013] UKSC 46, [2014] AC 160: (ii) where the claimant succeeded in the first action and did not challenge the outcome, he might not bring a second action on the same cause of action, for example to recover further damages; and (iii) the doctrine of merger, which treated a cause of action as extinguished once judgment had been given on it, and the claimant’s sole right as being a right on the judgment.
Permission to appeal was given, limited to one ground concerning the award of mesne profits to be paid by the appellant to the respondent. The appellant contended that, by virtue of the principles of res judicata, the respondent had lost the right to claim mesne profits.
Held: The appeal was dismissed.
(1) The appellant could not bring himself within the second principle of res judicata. Although he had relied on Conquer v Boot [1928] 2 KB 336 and an authority referred to in that case, Serrao v Noel (1885) 15 QBD 549, neither of those authorities assisted him. Conquer v Boot concerned successive claims for different damages in relation to the same cause of action, constituted by a breach of contract. It was, therefore, clearly distinguishable from the appellant’s case, in which the respondent in its second action sought to rely upon causes of action which were different from the cause of action on which the respondent sought to rely in the first action.
The precise status of Serrao v Noel was not entirely clear. Lord Sumption did not discuss it in Virgin Atlantic, let alone state where it should be allocated in terms of the principles relating to res judicata. In Conquer v Boot, the case was referred to only for the purpose of drawing on one part of the judgment which stated: “The principle is, that where there is but one cause of action, damages must be assessed once for all”. The reasoning of the three judges in Serrao v Noel was expressed in different ways and was opaque in places, so that extracting its ratio was not straightforward. On a proper understanding of the case and what the judges decided, Serrao v Noel did not broaden the technical concept of a cause of action for the purposes of the second principle. The court had used the term “one cause of action” in a loose, non-technical sense so that it referred to Lord Sumption’s fifth principle. There was no appeal in relation to the judge’s dismissal of the appellant’s case in reliance on that principle.
(2) The appellant could not bring himself within the third principle. It only operated where the claimant sought to sue again upon the same cause of action that had been determined in the first action. In the present case, the respondent sought to rely in the second action upon causes of action which were distinct from the cause of action upon which it had relied in the first action. Its causes of action in the second action had not merged with the judgment given in the first action. The respondent remained entitled to seek to bring a claim in reliance upon the separate causes of action on which its second action was based, provided that it was not an abuse of process to do so, as the judge held it was not. The position was the same as it would have been if the respondent had been unaware that the appellant had been in occupation of the flat between November 2012 and January 2014, had only discovered this after the determination of its claim for possession as at February 2014, and had then brought a second action to recover mesne profits in relation to that previous period of unlawful detention. Assuming there was no infringement of Lord Sumption’s fifth principle, there could be no objection to the bringing of a second action in such a case.
Stuart Armstrong (instructed by Candey Ltd) appeared for the appellant; Andy Creer (instructed by Swan Turton Solicitors) appeared for the respondent.
Eileen O’Grady, barrister
