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Ecurum Finance Ltd v Ashton and another, Court of Appeal

26 June 2000
The issues

Pleadings – striking out for the abuse of process – early proceedings struck out for delay – whether the second action could be struck out as an abuse of process

The facts

The Defendants in 1987 guaranteed the liabilities of Trafalgar Holdings Limited to Arbuthnot Latham Bank Limited. To secure the guarantee the Defendants granted the bank the legal charge over their home in March 1989. In 1989 the bank’s proceedings to enforce the Defendant’s obligations under the guarantee was struck out for delay (Arbuthnot Latham Bank Limited v Trafalgar Holdings Limited). In 1998 the Plaintiff company who were the bank’s signee commenced new proceedings to enforce the bank’s right under the legal charge. The Defendants argued that although the 12 year limitation period had not expired the second action involved relitigating issues raised in the first action which had been struck out for delay and was therefore an abuse of process.

The decision

The issue was whether the Claimant should continue to have “a second bite at the cherry” as sanctioned by Birkett v James. The Court had to decide that issue in the context of the overriding objective and to decide whether the Claimant’s desire to have a second bite outweighed the need for the Court to allot its own limited resources to other cases. The Judge at first instance had got it wrong because although he had recognised the issue of Court time, he had not given it any weight in reaching his conclusion. The Court of Appeal could substitute its own exercise of discretion in these circumstances and could if it wished strike out the claim which was in substance indistinguishable from the claim in the first action. However, there were other claims made in the second action which had not been made in the first action. In those circumstances the issue of needing to consider the allocation of the Court’s resources had little weight and in the circumstances to strike out the claim for payment as a mark of the Court’s disapproval would be a wrong exercise of the Court’s discretion.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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