Henley v Bloom

Abuse of process – Disrepair – Possession claim compromised on terms that tenant giving up possession and landlord making payment in respect of tenant’s improvements – Subsequent claim by appellant tenant for damages for disrepair – Whether disrepair claim abuse of process – Whether disrepair should have been raised at time of possession claim – Whether subsequent claim challenging integrity of compromise – Whether fair trial impossible – Appeal allowedThe appellant held a tenancy of a basement flat of which the respondent became the landlord in 2001. He complained to the respondent about damp in the flat and, in 2002, the local council served notices on the respondent requiring her to carry out specified repairs. Although the respondent obtained a report as to the state of the flat, no works were carried out.In August 2006, the respondent brought a possession claim against the appellant on the ground that he held an assured shorthold tenancy that had been validly determined. The appellant resisted the claim on the ground that no notice had been served on him under section 52 of the Housing Act 1980 and it was not otherwise just and equitable to make a possession order because, inter alia, he had carried out improvements to the flat that were worth more than £10,000. The possession proceedings were settled by a consent order under which the appellant agreed to give up possession and the respondent agreed to pay him £16,000 plus £4,000 costs. The recitals to the order stated that the respondent’s payments were in full and final settlement of the appellant’s claims in respect of the improvements he had carried out; and that the appellant would give up possession of the flat in good and tenantable repair and condition. The appellant vacated the flat in May 2007, after having obtained an expert report on the extent of its disrepair and dampness. The respondent subsequently carried out refurbishment works.In 2008, the appellant brought a claim against the respondent, claiming damages for breaches of the landlord’s repairing obligations since 2001. The respondent applied to strike out the claim as an abuse of process, arguing that it should have been raised in the earlier possession proceedings. The strike-out application was allowed on the grounds that: (i) the state of the property had been raised in the possession claim and the ensuing negotiations and in the terms of the resulting consent order, such that it was an abuse of process to raise a subsequent claim for damages for disrepair; and (ii) a fair trial of the disrepair claim would be impossible because the respondent did not have, and could not obtain, her own report into the condition of the flat at the relevant time. The appellant appealed.Held: The appeal was allowed. (1) Although the appellant had had sufficient information at the time of the possession claim to enable him to bring the disrepair claim at that time; it did not mean that he was abusing the court process by bringing that claim at a later date. However desirable it might be for a party to air all its claims in one action, the abuse principle did not bar a claim merely because a claimant had failed to raise a claim when it could have done so; it was necessary to show that it should have done so and that the second action amounted to an abuse on the facts, in the light of all the circumstances: Johnson v Gore Wood & Co (No 1) [2002] 2 AC 1 and Stuart v Goldberg [2008] EWCA Civ 2; [2008] 1 WLR 823 applied.The disrepair claim was not an abuse of process. The possession claim did not address the questions of whether the flat was out of repair or whether that was the respondent’s liability. The state of the flat was raised only in respect of the appellant’s own improvements and his obligations regarding the state of the flat at the end of the tenancy, rather than any failure on the part of the respondent to repair during its currency. The issues in the disrepair claim were not clearly part of the subject matter of the possession claim; the two claims involved different issues: Greenhalgh v Mallard [1943] 2 All ER 234 applied.Further, this was not a case in which the bringing of the disrepair claim, in circumstances where the possession claim had been compromised, represented a challenge to the integrity of that compromise. The consent order expressly spelt out the extent to which the parties had intended it to prevent any further claims; the respondent’s payment related only to claims by the appellant in respect of the improvements that he had carried out and did not cover the disrepair claim. It was also relevant that the possession claim had been brought by the respondent against the appellant. Where an action was brought by a party that was a defendant in an earlier action involving the same parties, it was more difficult to argue that the later action was an abuse of process than if the same party were the claimant in both actions.(2) The respondent could not unequivocally show that there was a substantial risk that a fair trial was impossible: Taylor v Anderson [2002] EWCA Civ 1680; [2003] RTR 21 applied. The fact that one party to litigation was better informed or advised, or had stronger expert evidence than the other, did not justify a conclusion that the trial could not be fair unless the inequality was substantial and significantly prejudicial. The disadvantage to the respondent in the instant case would not be substantial or extraordinary. Although the appellant might have acted unattractively in keeping the disrepair claim up his sleeve, the respondent had been aware of the disrepair and had had no reason to think that the appellant had abandoned the possibility of making a claim in that regard.Jan Luba QC and Michael Paget (instructed by the Brighton Housing Trust) appeared for the appellant; Guy Fetherstonhaugh QC and Simon Sinnatt (instructed by Osler Donegan Taylor, of Brighton) appeared for the respondent.Sally Dobson, barrister