Later claim against council not barred

LAW REPORT 16 November 1995

Chin v Hackney London Borough Council; Court of Appeal (Lady Justice Butler-Sloss, Lord Justice Simon Brown, Lord Justice Saville); 25 October 1995

The practice whereby proceedings against a council were brought by a council tenant alone but settlement was reached or judgment was given on behalf of the tenant's family should cease as it might disadvantage those under disability in the family.

The Court of Appeal allowed an appeal by N, suing by her stepfather and next friend, from Judge Graham QC's decision to strike out N's claim against the council.

N, a Down's syndrome girl aged 19, claimed damages for personal injury caused by the council's negligence and breach of statutory duty. She alleged that having lived in a council house let to her mother in a state of disrepair and dampness, she suffered recurrent bouts of chest and upper respiratory infection. N obtained judgment in default of defence.

The council then applied to set aside the judgment and strike out N's claim on the basis that in an earlier action brought by her mother which had been settled by the council undertaking to repair the house and paying pounds 15,000 damages, the damages included compensation for N's loss and alternatively, applying the principle of res judicata, N's claim should not be allowed to go ahead.

The judge rejected the first argument but struck out the claim on the grounds that N's claim should have been advanced at the same time as her mother's and since N was entirely dependent on her mother to authorise litigation, mother and daughter could be regarded as the same party to the actions which raised virtually identical issues.

Benet Hytner QC and Stephen Cottle (Dowse & Co) for N; Ian Lewis (Christopher Hinde) for the council.

Lord Justice Simon Brown said that the plea of res judicata encompassed two distinct forms of estoppel: cause of action estoppel and issue estoppel. Cause of action estoppel arose where the cause of action in the latter proceedings was identical to that in the earlier proceedings between the same parties and involving the same subject matter.

Issue estoppel represented an extension of the doctrine of res judicata to include a bar on the subsequent litigation not only of all decided issues in the earlier proceedings but also every point which might have been brought forward.

The plea of res judicata applied only where the cause of action or issue was and remained between the same parties or their predecessors in title. It was impossible to argue that N's dependence on her mother created a sufficient nexus between them that they should be regarded effectively as the same party.

Furthermore Order 10, rules 10 and 11 of the County Court Rules provided that where money was claimed by a person under disability, no settlement, compromise or payment should be valid without the approval of the court.

The principle that an unlitigated monetary claim was barred if it could have been advanced and established in earlier proceedings could not be extended to those not party to the earlier proceedings. The doctrine of res judicata had no application in the present case.

However lawyers and their clients should not be encouraged to follow the course adopted here. It was plainly in the public interest to have a single action in which the claims of all affected members of the household were included rather than a multiplicity of actions. To some extent, the remedy lay with the council: when faced with a tenant's claim, it could inquire whether other claims too were to be advanced.

The argument that the settlement of the mother's action included compensation for N's loss faced the difficulty that the matter was not dealt with under Order 10, rules 10 and 11.

Serious problems were created by the practice of proceedings being brought by the tenant alone and yet settlement being reached on behalf of the whole family. That practice wholly ignored the effect of Order 10, rules 10 and 11 and might disadvantage both the defendant and those under disability. The defendant lost the protection of the settlement or judgment against future claims. The practice subverted the function of Order 10 which was designed to safeguard the interests of those under disability. The practice should cease.

Lord Justice Saville and Lady Justice Butler-Sloss agreed.

Ying Hui Tan, Barrister