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16 April 2013
A recent High Court decision has confirmed that where a party seeks to bring an application, it should deal with any related aspects in that application the first time round, rather than holding it over for another application. If the party fails to do so, and holds over another related issue, it is likely to be precluded from prevailing on that second application. Although premised on an old rule, it was raised again in Walsh & Rattigan v Newlyn Homes (Portugal) Limited.(1) The court ruled that where the defendant had previously challenged the jurisdiction of the courts, it could not bring subsequent application seeking to refer the matter to arbitration.
The defendant was an Irish registered company which had developed a holiday resort in Portugal, in which the plaintiffs had decided to buy a property, paying a deposit of €7,500. The deposit was refundable until the signing of an investment agreement, which was duly entered into with local legal advice. On signing the agreement, the plaintiffs paid an additional deposit of €22,500 in September 2006. However, in October 2008 the plaintiffs had concerns about the terms of a promissory contract. Although it was altered, the plaintiffs ultimately refused to enter the promissory contract and the defendant retained the deposit. The plaintiffs sought the return of the deposit but the defendant refused to hand it over. A plenary summons was issued in the High Court.
The defendant issued a notice of motion seeking an order from the court declining jurisdiction under Articles 23 and 24 of EU Regulation 44/2001. This application was premised on a jurisdiction clause in the real estate investment agreement, providing that Portugal be the agreed forum. The court refused the defendant's application. It found that since the plaintiffs were 'consumers' within the meaning of the Brussels Regulation, the jurisdiction clause in the agreement could not be enforced against them.
Subsequently, the defendant applied to the court to stay the proceedings on the basis that the dispute was subject to an arbitration clause. However, the application was based on the same clause which had been raised before the president of the High Court in the prior jurisdictional challenge.
The court noted that the defendant argued that it could not have raised the case for a stay based on the arbitration element of the clause at the same time as it argued the jurisdictional part. It was submitted that had the defendant done so it would have constituted taking a step in the proceedings, from which the defendant would waive its right to arbitration. The court noted that it was not referred to any authority in support of that proposition and that in Heifer International Inc v Christiansen(2) both an application to determine jurisdiction under the Brussels Convention and an application for a stay for arbitration were heard together without criticism.
The court was persuaded by the plaintiffs that the application should be decided under the rule in Henderson v Henderson.(3) In that case, it was held:
"Where a given matter becomes the subject of litigation in, and of adjudication by, a court of competent jurisdiction, the court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties exercising reasonable diligence, might have brought forward at the time."
The court identified that the doctrines of res judicata and abuse of process are concerned with circumstances where a person seeks to re-litigate a matter that has already been decided by a competent court. However, it noted that a person may also be precluded from litigating an issue that has not previously been decided when it is one that could have been put before the court in previous proceedings. This principle was derived from the authority of Henderson. The court further noted that:
"the efficient conduct of legal proceedings is something that should inform this court in this type of application. Upon that basis there seems an overwhelming case that the proceedings should be resolved in the Irish courts. In my view, it would have been possible and highly desirable that both elements of clause 11 be argued at the same time before the President."
On that basis, the court refused the application.
The decision is a useful reminder that a party to litigation should ensure not only that matters which have been litigated are not re-litigated, but also that matters which ought properly to be brought before the court at a particular hearing are actually brought before it. The courts are keen to avoid parties duplicating court resources and costs, and otherwise abusing the court process, when very closely related issues should be properly kept together. Accordingly, in considering strategic steps, it is important to consider whether related issues should be brought before the court at the same time.
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