Practice and procedure – Civil Procedure Rules – Multiplicity of actions – Claimant issuing claim form pursuant to CPR Part 8 – Part 7 claim form already issued – Defendant applying to strike out claim under CPR rule 3.4 – Whether claim being abuse of process resulting in multiplicity of actions – Application granted
The deceased owned part of a dwelling-house at 43 Lansdowne Road, London W11. Prior to 8 February 2008, the registered freehold proprietor of the first, second and third floors of the property was R. The deceased was the registered proprietor of the freehold estate in the remainder of the property, i.e. the ground and lower floors and the roof and airspace above. Thus each of R and the deceased owned a “flying freehold”. The deceased’s part of the property was known as 43A, and R’s as 43B. In addition the deceased was the registered freehold proprietor of three garages which served the property.
The defendant purchased 43B from R and recognised that the title to the property was awkward, largely because of the rules about the (non-) running of freehold covenants. He agreed with the deceased that the freehold of the whole property would be transferred to a company, and long leases granted of 43A and 43B to their formerly freehold owners. Because leasehold covenants were enforceable more easily, that was expected to cure the problem about the running of covenants. The deceased also granted the defendant a right of pre-emption to purchase 43A and the garages for a period of 21 years. The terms of the two agreements were identical. The purchase price to be paid if the pre-emption right was triggered was “the market value of the [relevant property] at the date the Offer Notice is served (exclusive of VAT)”. The term “market value” was not defined.
The deceased died in 2011. The claimants, acting as administrators of her estate, sought declarations against the defendant under CPR Part 8, as to the meaning of “market value” in the pre-emption agreement. The defendant applied for an order striking out the claimants’ claim under CPR rule 3.4 and/or under the court’s inherent jurisdiction on the grounds that it was an abuse of the process and would result in a multiplicity of actions.
Two years prior to the issue of the claim form, the original administrator of the estate of the deceased had issued a Part 7 claim form against the defendant and the company, alleging that the deceased’s sale of the freehold of 43A and her grant of the pre-emption rights were procured by misrepresentation and/or actual and/or presumed undue influence by the defendant, and/or were unconscionable transactions. The defendant argued that the parties had proceeded on the basis that market value did not include any uplift for a special purchaser which therefore acquired the force of an estoppel by convention. Alternatively, the parties created a “private dictionary”, by resorting to the language of surveyors.
Held: The application was granted.
(1) The burden was on the defendant to establish that the Part 8 claim was an abuse. It was open to the parties to enter into a contract on an agreed basis, giving rise to an estoppel by convention. In each case the parties might accept that, as a matter of law, the term in question had a particular meaning, different from that which they sought to ascribe to it. But they might also seek to show that they were not using the term in that sense, but in some other: Chartbrook Ltd v Persimmon Homes Ltd [2009] 1 AC 1101 applied.
(2) The claimants could fairly say that the Part 7 claim, involving as it would disclosure, witness statements and trial with cross-examination of witnesses, would be much more expensive than the Part 8 claim, which might perhaps lead to settlement. The problem was that the defendant was right to say that pure construction, even if possible, would not be determinative. The private dictionary and estoppel by convention points remained open. The undue influence, misrepresentation and unconscionability issues remained unresolved. The company and the garages were only involved in the Part 7 claim. The Part 8 claim could at best be only a staging post on the way to resolving the litigation. If the parties did not settle, the issue between them would only be capable of resolution after a full trial. Sometimes, that was the price of justice. It was the deceased’s estate which chose to bring the Part 7 claim. It was not the defendant who had done so.
(3) Whether or not section 49(2) of the Senior Courts Act 1981 was authority for the principle that a multiplicity of suits should be avoided, or merely an example of it, there could be no doubt that there was such a principle in UK procedural law. In the light of the existing Part 7 claim, there was no sufficient reason for the Part 8 claim to have been brought. The better course was for “market value” to be dealt with, so far as it needed to be, as part of the Part 7 claim. It was an abuse for the claimant to seek to run a fresh claim simply to determine the legal meaning of the term “market value” when it arose and could be dealt with in the Part 7 claim, especially when the fresh Part 8 claim could not determine the existing Part 7 claim on its own.
On that basis, the court would accede to the application to strike out the claim as an abuse. It was not necessary to consider what the court’s decision would have been if the claimants had discontinued the Part 7 claim before launching the Part 8 claim.
Mark Wonnacott QC (instructed by Mishcon de Reya) appeared for the claimants; Marilyn Kennedy-McGregor (instructed by Bond Dickinson LLP) appeared for the defendant.
Eileen O’Grady, barrister
Click here to read transcript: Streather and another v Bodker
