IN THE SUPREME COURT OF JUDICATURE	LTA 1998/5821/2
COURT OF APPEAL (CIVIL DIVISION)	CCRTI 1999/0075/2
ON APPEAL FROM THE MANCHESTER COUNTY COURT
(His Honour Judge Kershaw)

	Royal Courts of Justice
	Strand, London WC2

	Thursday, 11th March 1999

	B e f o r e :

	LORD JUSTICE NOURSE
	LORD JUSTICE AULD and
	LORD JUSTICE WARD

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	BRADFORD & BINGLEY BUILDING SOCIETY	Plaintiff

	-v-

	MALCOLM WOLSTENHOLME SEDDON	Defendant
	(Appellant)

	and

	(1)  RODNEY CLIFFORD HANCOCK
	(2)  Mr I R WALSH	(Respondent)
	(3)  Mr S L RHODES	(Respondent)
	(Trading as HANCOCKS (a firm)	Third Parties

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	Handed Down Judgment
	Smith Bernal Reporting Limited
	180 Fleet Street  London EC4A 2HG
	Tel: 0171 421 4040  Fax: 0171 831 8838
	(Official Shorthand Writers to the Court)

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Mr M Black QC (Miss E Gardner 11.3.99) (instructed by Messrs Putsmans, Birmingham) appeared on behalf of the Appellant Defendant.
Mr M Halliwell (Mr S Hilton 11.3.99) (instructed by Messrs Oldham Rust Jobson, Stafford) appeared on behalf of the Respondent 2nd Third Party.
Mr P Raynor QC (Mr S Hilton 11.3.99) (instructed by Messrs Lyons Wilson & Co, Manchester) appeared on behalf of the Respondent 3rd Third Party.
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	J U D G M E N T
	(As Approved by the Court)
	Crown Copyright

	Thursday, 11th March 1999

LORD JUSTICE AULD:   This is an appeal by the Defendant, Malcolm Seddon, against an order of HHJ Kershaw QC, sitting as a Judge of the High Court in Manchester, striking out as an abuse of process his third party proceedings against the three Third Parties, as partners in a firm, because, in his, the Judge's view, they were inconsistent with a claim made by the defendant against the first Third Party, Rodney Hancock, in his personal capacity in an earlier action ("the Preston action"). 

Introduction

	The appeal raises the question in what circumstances a court may strike out as an abuse of process on the ground of inconsistency an action between parties and on issues different from those in an earlier action.  Is inconsistency enough in the absence of special circumstances or, for example, must there be some additional factor such as dishonesty or a collateral attack on the earlier judgment to render the inconsistency an abuse?.

	Mr Seddon's claim in the Preston Action was against Mr Hancock, an accountant, for damages for negligence and/or an indemnity in respect of a failed investment which Mr Hancock had advised him to fund by taking a mortgage loan of £120,000 from the plaintiff, the Bradford & Bingley Building Society ("the Bradford").  Mr. Seddon claimed a total of £163,000, representing that principal sum, incurred interest and a further and earlier mortgage loan, all of  which he maintained Mr Hancock's investment client had agreed to discharge.  Mr Hancock admitted liability under the indemnity for £120,000 and did not traverse the allegation of negligence.  Mr Seddon entered judgment for the admitted sum and Mr Hancock was given unconditional leave to defend as to the balance.  
	Mr Seddon was unable to enforce the judgment against Mr Hancock as the latter had no money and it was pointless proceeding with the balance of the claim against him.  However, as a result of all this, he owed the Bradford over £180,000, and when the Bradford instituted proceedings against him for possession of his mortgaged home and recovery of that sum, he sought by these third party proceedings to revive the unsatisfied claim against Mr Hancock and to include in it two of his partners, Mr Walsh and Mr Rhodes.  He expressed the third party claim in broader terms than his claim in the Preston action.  He sought against all three an indemnity against or contribution towards his liability to the Bradford and damages in respect of their failure to indemnify him and/or in negligence and/or for misrepresentation. 

	The broad question is whether this second claim falls foul of the well established principle in Henderson v. Henderson (1843) 3 Hare 100, that a party should, save in special circumstances, bring forward his whole case in one go and not subsequently seek to re-open the same subject matter by reference to claims against different persons and/or in respect of different issues.  

The Facts

	The history of the matter giving rise to the two actions is as follows.  In 1990 Mr Seddon owned a house subject to a mortgage loan of £38,000 from the plaintiff, the Bradford.  The three Third Parties were chartered accountants and partners practising as a partnership in the name of "Hancocks".  The firm was, in addition, an agent of the Bradford.  

	According to Mr Seddon's pleaded claim in the Preston action, in October 1990, Mr Hancock advised him to borrow more money from the Bradford, secured by a further mortgage on his house and to pass it to him, Mr Hancock, for investment with a client.  Mr Hancock said that the return on the investment would be made by the investment client within 3 years and would consist of repayment of the entire sum, payment of Mr Seddon's current commitments on his existing mortgage borrowing of £38,000 and the  complete discharge of that borrowing.  In reliance on that advice and also on a "personal indemnity" given to him by Mr Hancock, Mr Seddon, in October and November 1990 obtained two mortgage advances from the Bradford of a total of £120,000, and passed them to Mr Hancock for investment.  

	Unfortunately, Mr Hancock or his investment client did not produce the return and he and his fellow partners seem to have run into financial difficulties.  In February 1991 they dissolved their partnership.  On 19th March 1992, in response to a letter before action from Mr Seddon's solicitors, Mr Hancock wrote acknowledging the investment money that Mr Seddon had placed with him, stating "I did tell Mr Seddon at the time the loan originated, that I would hold myself personally responsible". 

	In March 1992 Mr Seddon commenced the Preston action against Mr Hancock claiming £163,000 or damages for negligent advice, an indemnity against any liability to the Bradford and a declaration of an entitlement to an indemnity. Although the statement of claim, in paragraph 1, averred that Mr Hancock was a chartered accountant, the pleading made no averment one way or another as to whether he was acting as a partner of the firm, Hancocks, in giving the advice and indemnity.  However, in paragraph 4, specifying the negligent advice, and paragraph 6, pleading Mr Hancock's written acknowledgment in March 1992 of the indemnity, Mr Seddon alleged that:
	"The Defendant gave such advice in the further context of his personal indemnity as hereinafter set out."

	"The said indemnity is acknowledged by the Defendant in writing by his letter to the Plaintiff's solicitors of 19th March 1992. ... the Plaintiff in particular relies upon the acknowledgment therein that 'I did tell Mr Seddon at the time the loan originated that I would hold myself personally responsible."

	Mr Hancock, by his defence, admitted liability to indemnify Mr Seddon to the limit of £120,000, namely the total of the two 1990 mortgage loans, of which he claimed to have paid £9,340, leaving a balance outstanding of £110,660, and did not deny that his advice had been negligent as alleged.  On 27th May 1992 a District Judge, on the strength, it appears, of Mr Hancock's admission as to the indemnity, ordered judgment for Mr Seddon for that sum and gave Mr Hancock unconditional leave to defend as to the remainder of the claim.  

	Mr Seddon had difficulties in enforcing payment of the judgment debt.  He clearly considered that to proceed with the remainder of his claim against Mr Hancock would be to throw good money after bad.  He appears to have taken the view that he would have a better chance of recovery against two of Mr Hancock's former partners, one of whom was Mr Walsh, and to have taken steps to obtain legal aid to join him and another former partner named Sutcliff as defendants in the Preston action. He did not, in the event, join them, possibly because he was unable to obtain legal aid to fund the continuance of the action against them. 

	That piece of litigation was overtaken by the Bradford's institution in February 1994 of these proceedings against Mr Seddon for possession of his house in respect of the mortgage debt arising from the three loans, which, with principal and interest, then amounted to £183,887.07.  Mr Seddon served a defence, alleging that the two later loans had been undertaken on Mr Hancock's advice for the benefit of the firm of Hancocks or one of their clients and that, on 24th August 1990, the firm had agreed in writing to guarantee the repayment of the three mortgage loans and/or to indemnify him against liability to the Bradford in respect of them.  The Bradford, by its Reply, admitted that Mr Hancock, Mr Walsh and two other partners of Hancocks had given that written guarantee.  

	In September 1995 Mr Seddon issued the Third Party Notice in this action seeking as against Messrs Hancock, Walsh and Rhodes: first, an indemnity against or contribution towards liability to the Bradford and damages in respect of their failure to indemnify him and/or in negligence and/or for misrepresentation.  His pleaded case against them, unlike that against Mr Hancock in the Preston action, made plain that he was alleging that Mr Hancock, in advising and giving him the indemnity, had acted on behalf of the partnership.  So far as material it read:
	"1.	You [the Third Parties' firm] ... had been accountants retained by the Defendant and inter alia by a company Limefarm of which the Defendant was a director and shareholder

	2.	You at all material times held an agency for and  on behalf of the Plaintiffs.

	3.	You (acting in particular by Rodney Clifford Hancock) advised the Defendant to enter into the loan[s] ... and/or advised and/or represented and/or agreed that you would be entirely responsible ... for repayment of all monies due ... and/or agreed to indemnify the Defendant against any liability ... [under the loans] and/or to guarantee payment of all said loans within three years from October 1990 by the client to whom the benefit of the new loan was to be given. ...

	5.	The said advice and/or representation were negligent ...

	6.	... the said representation was untrue and/or made negligently and/or made known [sic] the same was false and/or you have acted in breach of your agreement to indemnify and/or guarantee all payments otherwise due from the Defendant to the Plaintiffs ...". 

	At the hearing of the Third Parties' application to strike out the third party claim as an abuse of process Mr Seddon sought to rely on two documents which had only come to light on discovery in the present action.  The first, which had been disclosed by the Bradford, was the written guarantee by Hancocks of 24th August 1990, purportedly signed by Mr Hancock and Mr Walsh and two partners of the firm other than Mr Rhodes, and addressed to the Bradford in the following terms:
	"	We would confirm that the mortgage advance applied for by above mentioned is for use in his business for short term finance.

		We, Messrs Hancocks, guarantee the repayments due under the terms of this advance"

Mr Walsh disputed the authenticity of this document.

	The second document, which had been disclosed by Messrs Walsh and Rhodes, was a deed of dissolution of the partnership dated 21st February 1991 and signed, inter alios, by them and Mr Hancock, indicating that a liability of £96,000 to Mr Seddon was or was potentially a partnership obligation for which the partners had to made provision in the deed and in respect of which Mr Hancock indemnified them. 
 
	Messrs Walsh and Rhodes, by their defence, denied that they had ever personally acted for Mr Seddon or as his agent or that any of the alleged advice or the indemnity which Mr Hancock may have given to him had been given as a partner in the firm.  They averred that Mr Seddon's claims in the Preston action had been  against Hancock in his personal capacity.  In an amended defence they also maintained that Mr Walsh had not, or had not knowingly, signed the 24th August 1990 guarantee.  

	I pause here to mention two features.  The first is that that guarantee ante-dated by some two months the October 1990 advice and agreement to indemnify upon which Mr Seddon had relied in his claim in the Preston Action. The second is that Mr Seddon's third party claim against all three Third Parties in this action is wider than his claim against Mr Hancock in the Preston Action; in particular, it includes a claim for misrepresentation in addition to the claim for negligence and in respect of the indemnity.  

Summary of the judgment below	

	Judge Kershaw found, as a matter of construction of the pleadings and of the judgment in the Preston action that: 1) Mr Seddon's claim and the order were that Mr Hancock had acted personally in giving the indemnity and the advice, that is, that only he undertook liability under it;  and 2) the third party claim against Messrs Walsh and Rhodes was inconsistent with that claim and order.  He said that the effect of those findings was that the third party claim did not fall precisely within the Henderson rule because Mr Seddon had not previously made any claim against Messrs Walsh or Rhodes.  However, he was of the view that the opinion of the Privy Council in Yat Tung Investment Co. Ltd. v. Dao Heng Bank Ltd [1975] AC 581 was authority, and that dicta of Drake J in North West Water v. Binnie & Partners [1990] 3 All E.R. 547, were persuasive authority, for the proposition that there can be abuse of process by reference to what had been alleged in previous proceedings between different parties, certainly when the proceedings ended in judgment. 

	In considering whether the third party claim was an abuse of process, the Judge said that he should look at all the circumstances and proceed with caution before preventing Mr Seddon from pursuing his third party claim.  He found that the August 1990 guarantee, even if genuine, and the deed of dissolution of the Hancocks partnership added nothing to Mr Seddon's case since they did not bear on the question whether, in giving the October 1990 indemnity, Mr Hancock had acted as a member of the firm or in a personal capacity.  Nor did they change the fact that he had previously claimed against Mr Hancock in his personal capacity, not as a member of his firm.  He held, seemingly on the basis of his initial finding of inconsistency,  that the third party claim was an abuse of process and, therefore, struck it out. 

The Submissions

	Mr Michael Black, QC, submitted that, though the judgment in the Preston action was based on Mr Hancock's admission that he had given Mr Seddon a personal indemnity and owed him £110,660, thereunder, there was nothing in the pleadings or the judgment inconsistent with Mr Seddon's third party claim that Messrs Walsh and Rhodes were jointly and severally liable under it and/or were guilty of negligence or misrepresentation. 	

	As to the Judge's apparent reliance on a broader principle than estoppel, namely abuse of process independent of its strict rules, Mr Black accepted that it may be an abuse of process to re-litigate the same issues in a subsequent action even where the parties are different or where the duty owed to different persons may be different. He referred to observations of Lord Diplock in Hunter v. Chief Constable of the West Midlands Police [1982] AC 529, HL, at 536c-d, and of Drake J in North West Water, despite the latter's characterisation of the principle in play "as a broader approach to a plea of issue estoppel".  However, he submitted that the jurisdiction should be exercised with great care and suggested the following guidelines.  First, the court should be satisfied that there is no real or practical difference between the issues in the new action and that already decided and the evidence which may properly be called on them in the new action; per Drake J in North West Water.  Second, there must be more than simple re-litigation, for example, a collateral attack on the previous decision, see Hunter and per Kerr LJ and Sir David Cairns in Bragg v. Oceanus Mutual Underwriting Association (Bermuda) Ltd. [1982] 2 Lloyds 132, at 137 and 137-8 respectively, or some dishonesty or other bad faith; see per Stephenson LJ in Bragg at 139 and per Stuart-Smith LJ in  Ashmore v. British Coal Corporation [1990] 2 QB 338, CA, at 352e. Third, it is for the person alleging abuse of process "to show some special reason why it is so"; per Sir David Cairns in Bragg, at 138. 

	He submitted, applying those criteria, that the Judge wrongly held as a matter of construction that the third party claim was inconsistent with the claim and judgment against Mr Hancock in the Preston action because: 1) there was no issue in that action as to whether Mr Hancock gave advice or the indemnity in his personal capacity or as a partner of Hancocks; 2) the averment of "personal" responsibility in paragraph 4 of the statement of claim in the action was capable of being construed as distinguishing it from the normal professional obligations of an adviser rather than to confine it to him, and paragraph 6 merely rehearsed his acknowledgment of personal responsibility for the indemnity without making a positive case as to its nature; 3) Mr Hancock, in admitting that he had given the indemnity, did not aver in what capacity; 4) the judgment did not touch the issue; 5) it is the principal issue in the third party claim; and 5) in any event, the judgment was based only on the indemnity and there were no grounds for striking out any other allegations in the third party claim.  

	Mr Black maintained, therefore, that there was no inconsistency between the two claims.  He said that, at worst for Mr Seddon, the claim in the Preston action and the order on which it was based were ambiguous, and the Judge should not have summarily struck out the third party claim, especially in the light of the recently obtained, and previously unobtainable, documentary evidence suggesting that Hancocks regarded the indemnity as a partnership matter, and/or without further evidence of the surrounding circumstances as an aid to construction.  Finally, he submitted that even if there is an inconsistency between the two claims, the third party claim is not a collateral attack on the judgment in the Preston action, nor is it in bad faith and there is no other additional element or, per Sir David Cairns in Bragg, "special reason" to make it an abuse of process.

	Mr Mark Halliwell, for Mr Walsh, and Mr Philip Raynor, QC, for Mr Rhodes, submitted that it was an abuse of process: 1) not to sue all persons concerned with the same subject matter of the litigation at the same time, unless to do so was not reasonably practicable;  2) to raise in subsequent proceedings matters which could and should have been litigated in earlier proceedings; and 3) to make in subsequent proceedings allegations inconsistent with those in a previous action giving rise to a judgment in that action, especially where, as here in the case of Mr Hancock, the same defendant is involved.

	They submitted that all three propositions are satisfied in the circumstances of this case. Had Mr Seddon wished to sue both Mr Hancock and his partners in the Preston action, it would have been reasonably practicable for him to have done so, and he should have done so. Had he wished to assert in that action that his claim against Mr Hancock was a partnership liability, he should have done so instead of electing to sue him in his personal capacity. And the Judge rightly held that his allegations in the two proceedings were inconsistent and, therefore, an abuse of process.  

	As to the new documentary evidence, they submitted that it cannot assist Mr Seddon on the issue of inconsistency since his case in the third party claim appears to be that he knew from the start that Mr Hancock had undertaken liability to him as a partner of Hancocks.  As to any further oral evidence of surrounding circumstances as an aid to construction, Mr Seddon did not seek to adduce any before Judge Kershaw and it is difficult to see how it could have assisted him. 

The Principles

	The starting point is the well-known dictum of Sir James Wigram in Henderson at 115:
	"... 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." [my emphases]

	In my judgment, it is important to distinguish clearly between res judicata and abuse of process not qualifying as res judicata, a distinction delayed by the blurring of the two in the court's subsequent application of the above dictum.  The former, in its cause of action estoppel form, is an absolute bar to re-litigation, and in its issue estoppel form also, save in "special cases" or  "special circumstances"; see Thoday v. Thoday [1964] P181, CA, per Diplock LJ at 197g-198g, and Arnold v. NatWest Bank Plc [1991] 2 AC 93, HL.  The latter, which may arise where there is no cause of action or issue estoppel, is not subject to the same test, the task of the court being to draw the balance between the competing claims of one party to put his case before the court and of the other not to be unjustly hounded given the earlier history of the matter.  (Though, see as to issue estoppel the following indicators of its equitable and possibly more flexible application:  Carl-Zeiss-Stiftung v. Rayner & Keeler Ltd. [1967] 1 AC 853, per Lord Reid at 417C-E and per Lord Upjohn at 497C-E;  Tebbutt v. Haynes [1981] 2 All ER 238, CA, per Lord Denning MR at 242h;  and Arnold [1989] Ch. 63, per Sir Nicholas Browne-Wilkinson V.-C. at 69H-70A.)
 
	Thus, abuse of process may arise where there has been no earlier decision capable of amounting to res judicata, either or both because the parties or the issues are different, for example, where liability between new parties and/or determination of new issues should have been resolved in the earlier proceedings, or where there is such an inconsistency between the two that it would be unjust to permit the later proceedings to continue.  The first of those examples is an adaptation of Sir James Wigram V-C's inclusion in the principle of res judicata of a requirement that a party should be bound by what he and the court has not done before as well as what they have done. However, his words are now more notable as a source of the doctrine of abuse of process, rather than an exact definition of what may constitute res judicata.  The move towards this began in 1947 with Somervell LJ in Greenhalgh v. Mallard [1947] 2 All E.R. 255, CA, when he said, at 257: 
	"... res judicata for this purpose is not confined to the issues which the court is actually asked to decide, but covers 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."

	Although the courts have continued to speak of the rule variously as res judicata in "its wider sense" (per Lord Kilbrandon in Yat Tung at 590a), or not in a "strict" or "true" sense (per Stuart-Smith LJ in Talbot v. Berkshire County Council [1994] QB 290, CA, at 296D-E), it is quite distinct from res judicata which, save in special circumstances in the case of issue estoppel, is an absolute bar to re-litigation.  Thus, Lord Wilberforce, delivering the opinion of the Board in Brisbane City Council v. A-G [1979] 411, said, at 425F-G, that "[i]ts true basis" is abuse of process,

 	"and it ought only to be applied when the facts are such as to amount to an abuse: otherwise there is a danger of a party being shut out from bringing forward a genuine subject of litigation."

Sir Thomas Bingham MR, as he then was, has recently underlined the distinction in Barrow v. Bankside [1996] 1 WLR 257, CA, at 260b:
	"The rule is not based on the doctrine of res judicata in a narrow sense, nor even on any strict doctrine of issue or cause of action estoppel.  It is a rule of public policy based on the desirability, in the general interest as well as that of the parties themselves, that litigation should not drag on for ever and that a defendant should not be oppressed by successive suits when one would do.  That is the abuse at which the rule is directed."

Different Parties

	In my view, it is now well established that the Henderson rule, as a species of the modern doctrine of abuse of process, is capable of application where the parties in which the issue is raised are different from those in earlier proceedings. Indeed, it is inherent in Sir James Wigram V-C's reasoning that, as a general rule, all persons who are to be sued should be sued at the same time and in the same proceedings where such a course is reasonably practicable, and whenever it is so and is not taken then, in an appropriate case the rule may be invoked so as to render the second action an abuse.  See  e.g., Yat Tung; Bragg;  North West Water; MCC Proceeds Inc. v. Lehman Bros. International (Europe) [1998] 4 All E.R. 675, CA; and per Potter LJ in Morris v. Wentworth-Stanley CA (unreported) 4th September 1998.  In Bragg Kerr LJ said, at 137:
	"... it is clear that an attempt to relitigate in another action issues which have been fully investigated and decided in a former action may constitute an abuse of process, quite apart from any question of res judicata  or issue estoppel on the ground that the parties or their privies are the same."

See also per Sir David Cairns and Stephenson LJ at 138-9 and 139 respectively.

	Equally, the rule may in an appropriate case apply to a plaintiff who could and should have pursued his claim in an earlier action against the same defendant; see e.g. Ashmore and Johnson v. Gore Wood & Co., 12th November 1998, CA (unreported).
C (A Minor) v. Hackney LBC [1996] 1 WLR 789, CA, was another such a case.  But there, the court was rightly concerned on its facts to emphasise that the mere fact that the plaintiff could more conveniently have joined in the earlier action against the defendant did not render her claim an abuse of process.  However, Simon Brown LJ, with whom Saville and Butler-Sloss LJJ agreed, said in the course of his judgment, at 793B-D and 794c-e, that the Henderson rule, which he described as "an extended application of the res judicata doctrine", could not apply to someone not a party to the earlier proceedings. He justified that view, notwithstanding the decision of the Privy Council in Yat Tung, on the basis that in reality, though not formally, that case concerned actions between the same parties.  Save for Yat Tung and Ashmore, the latter of which he distinguished on the facts, he did not refer to the other authorities in which the courts have recognised the possibility of "Henderson" abuse of process notwithstanding that the parties in the two actions are different.  

	In my respectful view, it was not necessary on the facts nor open to Simon Brown LJ as a matter of law to distinguish Yat Tung as he did.  Lord Kilbrandon, giving the opinion of the Board, expressly included, at 590a-b, as part of the Board's ratio for the inapplicability of res judicata "in its narrower sense" and its applicability in "a wider sense" of abuse of process, the fact that one of the parties in the later action had not been a party in the earlier.  I also venture to suggest that Simon Brown LJ's reasoning, in not distinguishing clearly between res judicata and abuse of process independent of the former's strict limits, is against the flow of modern jurisprudence in this Court. 

"Re"-litigation and "additional elements"

	In my judgment, mere re-litigation, in circumstances not giving rise to cause of action or issue estoppel, does not necessarily  give rise to abuse of process.  Equally, the maintenance of a second claim which could have been part of an earlier one, or which conflicts with an earlier one, should not, per se, be regarded as an abuse of process. Rules of such rigidity would be to deny its very concept and purpose. As Kerr LJ and Sir David Kerr emphasised in Bragg, at 137 and 138-9 respectively, the courts should not attempt to define or categorize fully what may amount to an abuse of process; see also per Stuart-Smith LJ in Ashmore, at 352.  Sir Thomas Bingham MR underlined this in Barrow, stating, at 263b, that the doctrine should not be "circumscribed by unnecessarily restrictive rules" since its purpose was the prevention of abuse and it should not endanger the maintenance of genuine claims; see also per Saville LJ at 266d-e. 

	Some additional element is required, such as a collateral attack on a previous decision (see e.g. Hunter; Bragg, per Kerr LJ and Sir David Cairns at 137 and 139 respectively; and Ashmore), some dishonesty (see e.g. Bragg, per Stephenson LJ at 139; and Morris, per Potter LJ at pp. 13 and 14 of the transcript;), or successive actions amounting to unjust harassment  (see e.g. Manson v. Vooght, CA (unreported) 3rd November 1998, per May LJ at page 16 of the transcript). 
  
	In MCC Mummery and Pill LJJ (Hobhouse LJ dissenting) held that an attempt to re-open a pleaded claim not pursued in an earlier action against a different defendant was an abuse of process.  Mummery LJ, who gave the leading judgment, did not expressly refer to any additional element.  However, there were "additional elements" on the facts.  The claimant had for practical purposes abandoned the material claim in the first action, and the issue of title on which it would have turned in the second action against a different defendant claiming through the original defendant had been determined in the first action; and see Hobhouse LJ dissenting at 704e-g.   

	In Morris the plaintiff made a third claim against a party whom he had released from two earlier claims, conduct which the Court characterized as an election and the breach of it by bringing a further action, a species of fraud.  Potter LJ, with whom Mantell LJ agreed, expressly held, albeit obiter, that such election was "an additional factor" rendering the action an abuse of process.  

	Mr Raynor and Mr Halliwell characterised Mr Seddon's conduct here as one of election from which he ought not to be permitted to resile, namely an election in the Preston action not to sue Mr Hancock as a partner or Messrs Walsh and Rhodes at all.  Mr Halliwell cited  Khan v. Golecha International Ltd. [1980] 2 All E.R. 259, CA, and Scarfe v. Jardine (1882) 7 AC 345.  However, those cases are clearly distinguishable.  The former was one of issue estoppel where the plaintiff unsuccessfully sought to re-open against the same party an issue on which, in a previous action, he had failed and on which he had consented to the dismissal of his appeal. The latter was an attempt to sue a former partner of a firm in respect of partnership liability after having sued the current partners and, upon their bankruptcy, having proved against their estate.  The House of Lords held that, on the facts, the plaintiff had necessarily been put to an election because either the current partners or the former members were potentially liable, but not all of them.  That is not the case here, where, depending on the matter of construction of the pleadings and order in the Preston action, the claim in it against Hancock was not necessarily mutually exclusive with that against him and his two partners in the third party claim. 

"Special circumstances"

	It follows from what I have said that, in a case of "re"-litigation falling short of res judicata, the onus should be on the person alleging abuse of process to establish it, that is, what makes the further litigation an abuse.  That was the view of Sir David Cairns, with whom Stephenson LJ agreed, in Bragg; and it is consistent with the approach of Kerr LJ in that case and with other judicial pronouncements, of the need for flexibility in the exercise of this jurisdiction. Sir David said, at 138-9:
	"	I do not accept the proposition ... that when an issue has already been decided in proceedings between A and B it is prima facie an abuse of the process of the Court for B to seek to have the issue decided afresh in proceedings between himself and C and that in such circumstances there is an onus on B to show some special reason why he should be allowed to raise the issue against C.

		On the contrary, I consider that it is for him who contends that the retrial of the issue is an abuse of process to show some special reason why it is so."

	I do not consider the references in the Henderson rule and in various modern authorities to the need for a "special" case or circumstances to justify litigating a matter that should have been litigated on an earlier occasion an obstacle to my interpretation of the law relating to abuse of process as distinct from res judicata.  To do so, it seems to me, would undermine the basis of the court's jurisdiction as it has developed, namely, to look for some element additional to mere "re"-litigation, to avoid restrictive rules and to be cautious before barring people from access to the courts - in short, as Lord Diplock and Sir Thomas Bingham emphasised in Hunter and Barrow respectively, to determine on the facts of the case whether the proceedings before the court are an abuse of process. 

	Indeed, a moment's thought shows that it is illogical to attempt to apply the "special circumstances" escape route applicable in the case of the near absolute bar of res judicata to the question - essentially one of judgment in particular circumstances - whether "re"-litigation is an abuse.  The difficulty of attempting to combine the two notions is apparent in the following valiant attempt to do so by May LJ in Manson v. Vooght CA (unreported) 3rd November 1998:
	"	... the use in this context of the phrase 'res judicata' is perhaps unhelpful, and this is not only because it is Latin.  We are not concerned with cases where a court has decided the matter; but rather cases where the court has not decided the matter, but where in a (usually late) succeeding action someone wants to bring a claim which should have been brought, if at all, in earlier concluded proceedings.  If in all the circumstances the bringing of the claim in the succeeding action is an abuse, the court will strike it out unless there are special circumstances.  To find that there are special circumstances may, for practical purposes, be the same thing as deciding that there is no abuse, as Sir Thomas Bingham MR came close to finding on the facts in Barrow.  The bringing of a claim which could have been brought in earlier proceedings may not be an abuse.  It may in particular cases be sensible to advance cases separately.  It depends on the circumstances of each case.  Once the court's consideration is directed clearly towards the question of abuse, it will be seen that the passage from Sir James Wigram V-C's judgment in Henderson is a full modern statement of the law so long as it is not picked over semantically as if it were a tax statute. 

	... Special circumstances may negative or excuse what would otherwise be an abuse.  But there may in particular cases be elements of abuse additional to the mere fact that the matter could and should have been raised in the earlier proceedings." 

	A modern application of the peculiarity of the "special circumstances" rule to res judicata may be found in the issue estoppel case of "Arnold. There, Lord Keith, with whom their other Lordships agreed, indicated a distinction between cause of action estoppel, where the bar is absolute, and issue estoppel, where exceptionally it may be relaxed.  He said, at 108f--9c: 
	"... there is room for the view that the underlying principles upon which estoppel is based, public policy and justice, have greater force in cause of action estoppel, the subject matter of the two proceedings being identical, than they do in issue estoppel, where the subject matter is different.  Once it is accepted that different considerations apply to issue estoppel, it is hard to perceive any logical distinction between a point which was previously raised and decided and one which might have been but was not.  Given that the further material which would have put an entirely different complexion on the point was at the earlier stage unknown to the party and could not by reasonable diligence have been discovered by him, it is hard to see why there should have been a different result according to whether he decided not to take the point, thinking it hopeless, or argue it faintly without any real hope of success.  In my opinion your Lordships should affirm it to be the law that there may be an exception to issue estoppel in the special circumstance that there has become available to a party further material relevant to the correct determination of a point involved in the earlier proceedings, whether or not that point was specifically raised and decided, being material which could not by reasonable diligence have been adduced in those proceedings.  One of the purposes of estoppel being to work justice between the parties, it is open to courts to recognise that in special circumstances inflexible application of it may have the opposite result ..."

	Now, if that is the approach to res judicata in its issue estoppel form, which seems to be much as Sir James Wigram V-C intended for it, it is open to question whether the Henderson rule, in its modern and wider application as a basis for abuse of process, should be shackled with a condition of "special" or "exceptional" circumstances before a court may permit a re-opening of the same or different issues by or against a different party.  The Board in Arnold did not need to deal with that. 

	Despite the growing recognition of the need to keep in mind the clear distinction between res judicata and other abuse of process falling short of it, the "special case" or "special circumstances" part of the Henderson rule lives on, if only in the rehearsal of the rule.  In Barrow Sir Thomas Bingham MR and Saville LJ, with whom Peter Gibson LJ agreed, referred to "special circumstances" and the argument of one of the defendants based upon it.  However, they based their judgments essentially on the main principle in Henderson, namely whether the plaintiff's action was in all the circumstances an abuse of process; see per Sir Thomas at 263d-264d and per Saville LJ at 266f-g.  I have already mentioned May LJ's struggle to reconcile the two different approaches in Manson v. Vooght and his observation that Sir Thomas came close in Barrow to deciding on the facts that a finding of special circumstances "may, for practical purposes, be the same thing as deciding there is no abuse". 

The need for caution

	A further pointer in the direction of requiring the party raising the issue of abuse to establish it, and against that of obligating the claimant to persuade the court that there are "special circumstances for his "re"-litigation, is the need for caution before striking out claims without a full hearing of their merits and demerits.  May LJ said in Manson v. Vooght , at p. 15, that "it is axiomatic that the court will only strike out a claim as an abuse after most careful consideration".  The following passage from Drake J's judgment in North West Water, at 561c-d is to like effect: 
	 "I find it unreal to hold that the issues raised in two actions arising from identical facts are different solely because the parties are different or because the duty of care owed to a different person is in law different.  However, I at once stress my use of the word 'solely'.  I think that great caution must be exercised before shutting out a party from putting forward his case on the grounds of issue estoppel or abuse of process.  Before doing so the court should be quite satisfied that there is no real or practical difference between the issues to be litigated in the new action and that already decided, and the evidence may properly be called on those issues in the new action."

The need for caution is equally important where the alleged abuse consists in advancing claims not raised in earlier proceedings or which are inconsistent with earlier claims.
The Judge's reasoning

	The Judge framed his conclusion, at page 8E of the transcript of his judgment, that "there can be abuse of process by reference to what has been alleged in previous proceedings", by reference to Lord Kilbrandon's words in Yat Tung, at 589g-590f, including his rehearsal and reaffirmation of the Henderson rule and its mitigation only by "special circumstances".  The basis of his finding of abuse of process was that Mr Seddon was trying to litigate issues which were inconsistent with those he had litigated before, and, seemingly only as an incidental part of that finding, that he was trying to litigate issues which he could have litigated before.  He did not expressly identify any circumstance in addition to the inconsistency that he found other than the "paper" possibility that, if the third party claim continued, Mr Hancock, notwithstanding his admission in the Preston action of personal liability, could claim indemnity or contribution from Messrs Walsh and Rhodes.  

	Having thus relied essentially on inconsistency, the Judge referred to the need for caution before shutting out a party from pursuing a claim and then moved straight on to consider whether the new evidence affected or could affect his decision whether to strike the claim out as an abuse of process by reason of that inconsistency.  This is how he put it, at pp. 9B-10C of the transcript of his judgment: 
	"... my conclusion is that the claim made in the present third party notice against Mr Walsh and Mr Rhodes is completely inconsistent with the claim made against Mr Hancock in the Preston action.

		I take the view as a matter of construction that the allegation against Mr Hancock in the Preston action was very clearly that he alone was liable as giving indemnity and as giving advice in the context of the indemnity which he gave and not merely that he alone was being sued.  The allegation was that only he  personally was liable.

	... it is all the worse in this case that the third party proceedings are against Mr Hancock as well as Messrs Walsh and Rhodes.

		Mr Hancock has not applied to set aside the third party proceedings against him, but nothing can be read into that because the reasons lie in practical realities rather than anything else.  But if the third party proceedings as now formulated against Hancock, Walsh and Rhodes are to continue  Mr Hancock would, on paper at least, be in a position to claim indemnity or contribution, probably contribution, from Messrs Walsh and Rhodes ... after admitting in the action brought against him in the Preston Registry that he alone was liable because that was the only allegation made.

		... I accept that where the allegation is abuse of process the court can, and indeed must, look at all the circumstances brought before it.  There is no automatic rule that to do this or that is an abuse of process.  The basis for striking out the claim is that it is abuse of the process to allow it to continue."

	The Judge accepted and adopted the "the general flavour" of Drake J's words in North West Water indicating the need for great caution before shutting out a party from pursuing a claim.  He then turned to the new evidence and, having expressed the view that it would not introduce any material difference between the two actions, continued and concluded his judgment in this way, at pp.12H-13A: 
	"	That does not seem to me to be the sort of evidence which, if accepted, would take this case out of the category of being an abuse of process by alleging something which, as I have said, is directly at variance to the way in which Mr Seddon has put the case previously.

		For those reasons I have reached the conclusion that the third party claim against Mr Walsh and Mr Rhodes are an abuse of process and should be struck out."

Conclusions

	The inconsistency, as the Judge regarded it, was between  Mr Seddon's pleading in paragraphs 4 and 6 of his particulars of claim in the Preston action as to the "personal" nature of Mr Hancock's indemnity and advice and that in his third party claim against the three partners, including Mr Hancock, in respect of the same matter.  In my view, that was a possible, but not a necessary, construction of the pleading and of the District Judge's order based on Mr Hancock's admission as to the indemnity.  The onus was on Messrs Walsh and Rhodes to establish that with sufficient cogency to give him jurisdiction to consider a strike out.  In my view, both the pleading and the judgment in the Preston action are arguably equivocal, particularly in relation to Mr Seddon's claim in negligence, as pleaded in paragraph 4 of his particulars of claim - "The Defendant gave such advice in the further context of his personal indemnity as herein set out" [my emphasis].  

	Further, not all the differences between the two claims were inconsistent one with another.  Some went simply to the Henderson point, namely: there are two new parties in the third party claim; the pleaded grounds of the Preston claim were in negligence and for an indemnity, whereas the third party claim includes misrepresentation as a further cause of action; and the judgment in the Preston action was seemingly only on the ground of the claimed and admitted indemnity, whereas in the third party action the two other issues of negligence and misrepresentation fall to be determined for the first time.  Subject to the question whether the pleadings and order in the Preston action left open the possibility of Messrs Walsh and Rhodes having joint responsibility with Mr Hancock for the indemnity, there is no clear previous adjudication on those matters.  

	The question then is whether the obtaining of that judgment arguably inconsistent with some, but not all, the allegations now made is an abuse of process in the circumstances.  In my view, there is nothing inherently abusive of process about making inconsistent or merely new allegations possibly resulting in different outcomes in different actions (though this may be affected by Rule 22 the new Civil Procedure Rules, under which a party must swear to the truth of his pleading).  It depends upon the circumstances, often whether some additional element is present.  Election is a possible element rendering a second claim an abuse.  But, in my view, to do so it should have been of such a nature that the two claims are mutually exclusive or impossible in law, as in Scarf v. Jardine, or of a formal or otherwise positive nature e.g. abandonment of or release of a party from an earlier claim, as in Morris, or the failure to pursue a pleaded claim in an earlier action as in MCC.  Otherwise every advertent inconsistency as to the party sued or the nature of claim made would be an abusive election.  

	I can see no circumstance here to justify treating as an abuse of process Mr Seddon's decision to sue and secure judgment against Mr Hancock on his admission of having given him an indemnity.  He may well have taken the view, given that admission, that it would be pointless and wasteful to encumber that litigation with other parties and other claims.  No doubt, the necessity only emerged later when his judgment against Mr Hancock proved unenforceable and he found himself on the receiving end of the Bradford's claim, requiring him to look to every possible means to protect himself. (see e.g. MCC per Mummery LJ's reason for differing from the court below at 694j and per Hobhouse LJ (dissenting) at 704a-g).  

	The Judge appears to have considered that inconsistency alone was enough to justify a finding of abuse unless it could be dispelled in some way by the new documentary material.  In my view, he should have been more hesitant before striking out the third party claim on a conclusion of inconsistency based on his construction of what were arguably equivocal pleadings and disposal by the court in the Preston action.   More importantly, he should have looked beyond the inconsistency that he found and should have considered whether Messrs Walsh and Rhodes had shown that it and the other differences between the two claims made the third party claim in all the circumstances an abusive process.  Perhaps he was misled by the mistaken notion, as I consider it in a case such as this, that where there is inconsistency or a new claim which could have been, but was not, made before, only Henderson "special circumstances" could prevent a strike-out for abuse of process.    

The new evidence

	Even if the Judge was entitled to find the third party claim a potential abuse of process on the basis of inconsistency and/or on the other differences in the two pleaded claims, should he have regarded the further documentary evidence that had come to light in the proceedings before him as a reason for allowing the matter to proceed to trial?   As I have said, in issue estoppel, one of the "special circumstances" for relaxing what is normally a complete bar to re-litigation is whether there is new material relevant to the correct determination of an issue in the earlier proceedings but which could not, by reasonable diligence, have been put before the court in those proceedings. 

	As to the purported written guarantee of Hancocks of 24th August 1990, the Judge assumed for the purpose of argument that it was authentic and had been signed, inter alios, by Mr Hancock and Mr Walsh, but dismissed its relevance in the following terms:
	"It is dated 24th August 1990.  That is two months before the alleged giving of advice and the alleged giving of an indemnity and it does not seem to me that that document, if genuine, could be of much, if any value, to make evident the proposition that in October Mr Hancock was acting as a member of a firm of accountants rather than, as Mr Seddon has previously alleged, in a personal capacity".

	As to the partnership dissolution deed, including the mention of the liability to Mr Seddon as a partnership or potential partnership liability and the accompanying indemnity of Mr Hancock to Messrs Walsh and Rhodes, the Judge said: 
	"... do references to liabilities or potential liabilities of the firm to Mr Seddon make evident that Mr Hancock was acting on behalf of the firm or had its apparent authority to do so when he gave alleged advice and the alleged indemnity?

		I do not see how those documents could make evident to Mr Seddon anything new.  He was well aware that Mr Hancock was a partner in a firm and carefully pleaded a claim against Mr Hancock on the basis that Mr Hancock was personally giving him an indemnity and giving him advice as to what he should do in the context of that indemnity."

	In my view, this new material suggesting a recognition by the partnership of its liability to Mr Seddon under the indemnity, which the Judge considered and dismissed as irrelevant to Mr Seddon's forensic change of tack, militated at least against the peremptory disposal of the claim by way of strike-out.  Proper caution required that the issue of abuse should be more fully examined with the possibility of more light being thrown on the matter in oral evidence, including that of Messrs Walsh and Rhodes.  Even if Mr Seddon had wrongly pleaded his case in the Preston action on the basis that only Mr Hancock was liable, it may be that, on full examination of this new material and the circumstances giving rise to it, his earlier confinement of the claim to Mr Hancock and his present claims against them will be better understood.  

	Accordingly, I would allow the appeal.

LORD JUSTICE WARD:    I agree.

LORD JUSTICE NOURSE:    I also agree.

Order:	appeal allowed with costs here and below;  Judge's order discharged and second and third Third Parties' applications to strike out the third party proceedings dismissed;  respondent second and third Third Parties' liabilities for costs postponed in accordance with regulation 127 of Civil Legal Aid (General) Regulations 1989 for such time as the court thinks fit;  legal aid taxation of second and third Third Parties' costs.   [Not part of approved judgment]