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Cypriot court prevents abuse of process by adopting the “Aldi requirement” and the rule in Henderson v Henderson

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In a recent judgment in action 880/2018, in which our firm acted for the Defendants, the District Court of Nicosia struck out a claim for abuse of the court’s process basing its decision on the so called “Aldi requirement” and the rule in Henderson v Henderson.

The legal significance of this particular judgment lies in the facts that:

  • is the first time in which a Cypriot Court has applied the Henderson rule in solitude and has accepted it as a rule capable of operating on its own, without the need for it to be hinged on res judicata. In doing so the Cypriot court accepted that the Henderson rule can apply to subsequent proceedings even though the first proceedings have not yet been concluded, 
  • the “Aldi requirement” has been adopted in to Cypriot law

The rule in Henderson v Henderson

The rule in Henderson v Henderson is an old common law rule emanating from the old English case of Henderson v. Henderson, 1843-1860, All ER Rep 378. In short, the Henderson rule is a rule of public policy aimed at preventing abuse of process and it dictates that the parties to a litigation must bring their whole case forward in one proceeding. Parties who do not avoid such multiplicity of proceedings run the risk of being found to have abused the Court’s process.

The major English case on the rule is Johnson v. Gore Wood & Co, 2002, 2 AC, in which the rule was summarised as follows:

«Thus the abuse in question need not involve the reopening of a matter already decided in proceedings between the same parties, as where a party is estopped in law from seeking to relitigate a cause of action or an issue already decided in earlier proceedings, but, as Somervell LJ put it in Greenhalgh v Mallard [1947] 2 All ER 255 , 257, may cover:

«issues or facts which are so clearly part of the subject-matter of the litigation and so clearly could have been raised that it would be an abuse of the process of the court to allow a new proceeding to be started in respect of them».

The importance of the Henderson rule in its wide ambit application is that a party may invoke it even though:

  • the first proceedings have not yet been concluded (i.e a judgment is not required before the rule is invoked) and,
  • the parties to the succeeding litigation are not exactly the same as the parties to the first litigation.

The “Aldi requirement”

The “Aldi requirement” was borne out of the more recent English case of Aldi Stores Ltd v. WSP Group Plc, 2007, EWCA Civ 1260. The Aldi case created a requirement for parties who are contemplating to bring further actions in relation to a subject matter already before the Court to make this known to the Court and their opponents so that the Court may exercise its case management powers effectively and maintain fairness to both parties.

In short, the Aldi requirement prevents a party from keeping a claim secret and disallows the tactical use of proceedings. In the case of  Stuart v Goldberg Linde, 2008, 1 WLR 823, which the Cypriot court made reference to in its judgment, the Aldi requirement was summarised as follows:

«Secondly, as Aldi again makes clear and as the Master of the Rolls stresses, a claimant who keeps a second claim against the same defendant up his sleeve while prosecuting the first is at high risk of being held to have abused the court’s process. Moreover, putting his cards on the table does not simply mean warning the defendant that another action is or may be in the pipeline. It means making it possible for the court to manage the issues so as to be fair to both sides.

In the instant case, although the claimant knew that he had a potential claim for inducement to breach the contract after he received Mr Linde’s witness statement in October 2000, he did not make that clear either to Mr Linde or to the court. In my opinion he should have done so and it is at least arguable that his deliberate failure not to do so for partisan tactical reasons renders this second action an abuse of the process of the court».

The decision in action 880/2018

The Court, in accepting the arguments of the Defence, struck out the claim on the grounds of abuse of process basing its decision on the following factors:

  • The Claimants had breached the Henderson rule by choosing to lodge subsequent proceedings when they could have included their particular claim in the first action (that is still ongoing)
  • The Claimants had breached the Aldi requirement by choosing to keep the subsequent action, action 880/2018, secret both from the Court and their opponents in the first action in order to obtain a tactical advantage in interim applications that were being litigated in the first proceedings.

The legal significance of this judgment

This decision is important because:

  • it highlights the Cypriot courts’ unwillingness to excuse or entertain abuse of process. At a time when the backlog of cases is such that that the Cypriot judicial system is overwhelmed, this decision is a step in the right direction of actively preventing unnecessary multiplicity of proceedings and sanctioning parties who cause it,
  • the rule in Henderson has been afforded the wide ambit it enjoys under the English common law and,
  • the adoption of the English common law “Aldi requirement” means that parties to litigation now have to abide by it or else run the risk of being found to have abused the Court’s process. Some parties may have to rethink existing case strategies and other parties, who have found themselves facing actions that their opponents have “kept up their sleeve”, might want to think about applying to the Court for redress.
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