The High Court has ruled that the Cunningham Group and Brian Cunningham cannot reargue matters decided in an earlier judgment when defending First Active plc’s counterclaim and guarantee claim.
In a judgment delivered on 5 February 2010, Mr Justice Clarke decided a preliminary question about the effect of the court’s March 2009 judgment, which had resulted in non-suits on most issues then at trial. The remaining proceedings included First Active’s counterclaim against certain Cunningham Group companies for money it said was owed, and a separate claim against Cunningham personally under guarantees.
Those claims had been left for a later hearing. Before that hearing, the Cunningham Group and Cunningham sought to raise issues already addressed in the 2009 judgment as defences. First Active argued they could not do so because the earlier determinations were binding.
The defendants’ position was that a non-suit did not decide the merits and therefore did not prevent the same issues being raised later. They relied on historical authorities concerning non-suits, which could once end a case without preventing a fresh action. First Active argued that this procedure had been superseded and that modern non-suits were, in substance, dismissals on the merits.
Clarke found that the historic form of non-suit had been abolished. In modern practice, he said, “non-suit”, “direction” and dismissal at the close of a plaintiff’s evidence were used without a meaningful distinction. He considered the outcome of a successful application at that stage to be a decision on the merits.
The judge also rejected an argument that the result should differ depending on whether a defendant reserved the right to present evidence. He described that distinction as procedural, concerning how the rest of a trial would proceed, rather than changing the legal effect of a successful application.
Clarke further noted that the terms “non-suit”, “dismissal” and “direction” had been used interchangeably at the 2009 hearing without the Cunningham Group objecting to the distinction now advanced. He said their silence would prevent them relying on that distinction even if it existed.
The court ruled that matters determined in the 2009 judgment were binding on the Cunningham Group and Cunningham personally in both the Case A counterclaim and the Case D guarantee proceedings. No evidence could be tendered, and no argument raised, insofar as it infringed res judicata by reference to relevant findings in that judgment. The ruling addressed that limit on the issues and evidence available in the remaining proceedings; it did not determine the amounts claimed in the counterclaim or the outcome of the guarantee claim.