Service charge: Whether a tenant was estopped from bringing a second claim relying on facts raised in an earlier claim (Moorjani v Ivor Court Freehold Ltd, 2019)

Where a tenant has already had an argument dismissed by the First-tier Tribunal, can the tenant later rely on the same facts in separate proceedings?

The background

In Moorjani v Ivor Court Freehold Ltd [2019], the lessee of a flat at Ivor Court in London had brought a claim against the freeholder in 2011, disputing service charges which were demanded in respect of works carried out to the common parts of the building. At trial, the First-tier Tribunal found that there had been no breach of covenant and the service charges were due.

In 2018, the lessee joined with three other lessees to bring a claim in the High Court for damages against the previous freeholder, Durban Estates Limited, and the subsequent freeholder Ivor Court Freehold Ltd which was joined into the action as a second defendant. The cause of action still related to the disrepair of common parts, the subject of the lessee’s earlier claim.

The freeholder applied to strike out the claim, arguing that the lessee was barred from making a second claim as a result of the earlier FTT judgment.

The decision

The High Court agreed with the freeholder and the lessee’s claim was struck out, finding that the tenant was estopped from bringing the claim. Relying on substantively the same cause of action, the lessee’s argument had already been rejected by the FTT and to bring the claim again in the High Court was an abuse of process.

In its judgment, the Court stresses the importance of openness between the parties where the claimant considers bringing a new claim which may relate to an earlier claim, albeit where there may be different causes of action, to minimise the risk of a finding of abuse of process.

Advice and action for landlords

Reassuring for landlords and property management companies in particular, this case confirms that, where a judgment has already been handed down in respect of a cause of action, the tenant in all but the most unusual circumstances, will not be permitted to bring a second claim on the same grounds.