Bonham & Anor v Fishwick & Anor

On 16^th October 2006 Mr Justice Kitchin gave judgment (“the Judgment”) in an action between Toby Bonham as First Claimant and Michael Steele and Jennifer Bonham, the Claimants in these proceedings (“the Claimant Trustees”) as Second and Third Claimants against Blake Lapthorn Linnell (“Blake Lapthorn”) a firm of solicitors as First Defendant and David Fishwick and Vere Fenner the Defendants in these proceedings (“the Defendant Trustees”) as Second and Third Defendants. In fact by the time Mr Justice Kitchin came to give judgment in those proceedings (“the 2004 Proceedings”) the claim against Mr Fenner had been struck out. The claim in the 2004 Proceedings was against the Defendant Trustees as former trustees of a settlement made by Toby Bonham in 1989 (“the Bonham Settlement”) to make good to that settlement the costs which they had incurred in pursuing two sets of proceedings on behalf of the Bonham Settlement which costs had been paid out of its assets. In the result, for the reasons set out in the Judgment, Mr Justice Kitchin dismissed the claim.

These proceedings were commenced on 17^th July 2006. I have had to deal with a series of applications in these proceedings. Having disposed, as far as I could, of some of those applications I reserved judgment on two of the applications by the Defendant Trustees to strike out, or alternatively to stay pending payment of certain costs orders, the Claimant Trustees’ claims as present trustees of the Bonham Settlement for damages or other compensation for breach of trust, against them as former trustees. Between paragraph 18 and 119 of his judgment Mr Justice Kitchin sets out a description of the “complicated background” of the case he had to decide. That background is also the background of the present proceedings and these applications and I gratefully adopt his description of it. I will, however, relatively briefly, set out those of the background facts which directly concern the issues before me.

The Defendant Trustees and the Claimant Trustees were successively, the trustees of the Bonham Settlement of which Toby Bonham was the settlor on 9^th November 1989 and by which he settled shares to which he claimed to be beneficially entitled in Montpelier Properties Ltd (“Montpelier”). At the time this company held not only properties but was the owner of the well-known auction house Bonhams. The circumstances of the making of the Bonham Settlement are set out between paragraphs 40 and 55 of the Judgment. Simultaneously the Defendant Trustees charged 146,660 shares in Montpelier, as security for advances to be made by a Mr Pinhorn to the settlement, which were to be sold and the proceeds of sale of which the trustees were to use for the purpose of paying off Toby Bonham’s outstanding indebtedness. At the same time the Defendant Trustees granted to Mr Pinhorn an option to purchase the 146,660 shares in Montpelier (“the First Option”) at a certain price which option was capable of being exercised up to which ever was the later of 9^th May 1993 and a date three months after the date upon which the entirety of the advances made to Toby had been repaid to Mr Pinhorn. The making of the First Option is described at paragraph 59 of the Judgment and at paragraph 60 of the Judgment is described a Transfer Agreement whereby Toby Bonham agreed to transfer into the Bonham Settlement a parcel of 42,771 shares in Montpelier.

On 14^th January 1998 the Defendant Trustees commenced an action against Toby Bonham and his sister Eve to transfer to them 32,266 shares in Montpelier which he was alleged by them to be bound to do pursuant to the arrangements made in 1989. The proceedings were opposed and in the course of them Toby Bonham, as part of his defence served in May 1998, contended that the First Option was void because it resulted in a clog on the equity of redemption under the charge granted by the Defendant Trustees over the shares in the Bonham Settlement in favour of Mr Pinhorn. These proceedings have become known as the “Bonham-Cozens Proceedings” and I will hereafter refer to them under that name. They were in due course settled upon terms that a part only of the shares in question were to be transferred by Toby Bonham into the Bonham Settlement.

The “clog on the equity” defence depended on a decision of the House of Lords in Samuel v Jarrah Timber & Wood Paving Corporation [1904] AC 323. The material ruling of the House of Lords is summarised in the first sentence of the head note of the report in that case as:-

That case involved a limited company which borrowed money upon the security of the debenture stock over which the lender was granted an option to purchase the stock.

On 27^th October 1998 the Second Defendant through Blake Lapthorn took counsel’s advice and a conference was held with counsel Mr Peter Griffiths. He subsequently wrote an opinion. Mr Griffiths advice is dealt with in the Judgment between paragraphs 83 and 93. Suffice it for the purpose of this judgment to say that Mr Griffiths was inclined to say that the “clog on the equity” defence had merit. Messrs Blake Lapthorn were not impressed with Mr Griffiths’ advice and sought the advice of Mr Tom Dumont. He gave advice in a series of conferences and phone calls which are described in the Judgment between paragraphs 94 and 97 culminating in a written opinion of 10^th September 1999. I was shown a copy of this opinion. In it, having contrasted the Samuel case with the decision of Arden J in Pye v Ambrose [1994] NPC 53, the opinion continues at paragraph 4 as follows:-

At paragraph 11 Mr Dumont considered whether the Defendant Trustees could enter into a fresh option not linked to a mortgage but concluded that this route was not possible on two grounds. The first ground was that there was no power under Clause 2 of the Bonham Settlement to do this. So far as material that Clause provides:-

It was Mr Dumont’s view that that Clause permitted the trustees “to grant options immediately after receiving shares, as directed by Mr Bonham. No fresh option, granted almost ten years after the shares were transferred, where Mr Bonham is contesting the original option could ever be within the trustees’ power.”

The second ground was that “in granting the option the trustees would be acting not for the benefit of their beneficiaries, but for Mr Pinhorn” such action would therefore be a clear breach of trust.

Mr Dumont concluded that the trustees should apply for summary judgment against Mr Bonham to recover one of the tranches of shares which he had undertaken to transfer to the Bonham Settlement. His conclusion being that “the shares ought to be transferred to the trustees and charged as security for those loans, whatever the arguments are about the option.”

On 16^th September 1999 Mrs Williams of Blake Lapthorn wrote to Mr Pinhorn with copies to the Defendant Trustees as follows:-

On 18^th July 2000 the Defendant Trustees entered into an agreement with Toby Bonham and Mr Pinhorn settling the Bonham-Cozens Proceedings against Toby. As set out in the Judgment in paragraph 104: “in summary, Toby acknowledged his indebtedness to Mr Pinhorn in respect of sums the subject of the 1989 arrangements; agreed that 146,660 shares [of Montpelier] were the subject of an option in favour of Mr Pinhorn; acknowledged that all his shares were charged to Mr Pinhorn….” The paragraph then sets out further detailed provisions of the agreement. As described in paragraph 119 of the judgment the Defendant Trustees discontinued the Bonham-Cozens Proceedings against Toby Bonham’s sister Eve on 7^th March 2001.

On 16^th October 2000 a sale was agreed of so much of the assets of Montpelier as represented that company’s auction business to a third party purchaser. Before that sale there had been a reorganisation of the business of Montpelier so that the auction business became the property of a subsidiary called Heri Limited and the properties became vested in a property holding company, Hodie Limited. On the 28 September 2000 the Defendant Trustees entered into a further option agreement (“the Second Option Agreement”) which, as the recitals to the agreement make plain, was necessary in order to persuade Mr Pinhorn to consent to the proposed sale. At Clause 2.2 the parties acknowledge “that the original option remains in full force and effect save that upon completion of the reconstruction the rights and the obligations of the Trustees and Mr Pinhorn set out in Clauses 3 to 21 (inclusive) of the Original Option shall be substituted by the rights and obligations of the parties set out in this agreement.” The agreement then continues at Clause 3 to grant to Mr Pinhorn an option to purchase shares in each of the transferee companies. No limit of time is placed on his right to do so.

On 17^th October 2000 the sale of Heri Limited having been completed realising rather more than 8 million pounds the Defendant Trustees received rather more than 2.5 million pounds for their interest in that company. They were thus able on 17^th October 2000 to repay Mr Pinhorn’s loans to the Bonham Settlement and also to pay him £742,392.92 representing the value of his option rights under the Second Option.

The 2004 Proceedings were commenced by Toby Bonham against Blake Lapthorn and the Defendant Trustees on 16^th June 2004. On 10^th May 2005 the Defendant Trustees retired as trustees and were replaced by a Mr Stewart Moore the Claimants’ solicitor and a Mr Anthony Jackson.

On 21^st June 2005 Messrs Ralph Davies who were acting for the claimant in the 2004 Proceedings and act for the Claimant Trustees in these proceedings wrote to Mr Fenner. Having set out the events leading up to the payment to Mr Pinhorn of the sum of £742,392.92, continued:-

In their defence to the 2004 Claim the Defendant Trustees pleaded the provisions of Clause 17 of the Bonham Settlement as conferring upon them a defence to the claim. That Clause provides as follows materially to this judgment:-

On 26^th January 2006 Messrs Ralph Davies served a re-amended particulars of claim in the 2004 Proceedings. By the proposed amendments at paragraphs 54.1 to 57 the claimant pleaded that the payment of £742,392.92 constituted a breach of trust by the Defendant Trustees because it was paid pursuant to an option agreement which was unenforceable because it operated as a clog on the equity of redemption of the Bonham Settlement Trustees.

On 13^th February 2006 Mr Stewart Moore resigned as a trustee of the Bonham Settlement to be replaced by Georgina Elvin. On 13^th March 2006 Mr Jackson and Miss Elvin retired as trustees of the Bonham Settlement to be replaced by the Claimant Trustees.

On 10^th April 2006 the 2004 Proceedings came before Deputy Master Lloyd for directions. He had a number of applications with which to deal, two of which were relevant to the application before me.

The first relevant application was an application by Mr Fenner to strike out the claim against him on the grounds that Clause 17 of the Bonham Settlement Trust Deed conferred on him a defence which was not circumvented by the claim as pleaded, alternatively, summary judgment against the claimant on the ground that there was no reasonable prospect that the claim would succeed against him because of the existence of that Clause.

Mr Wilton, who appeared for Mr Fenner before me as well as before Deputy Master Lloyd, referred the Deputy Master to a number of authorities to some of which I was also referred. The conclusions of the Deputy Master are summarised in the following extracts from his judgment:-

The second relevant application was for permission to further amend the particulars of claim to include a claim for damages for breach of trust arising, amongst other matters, from the fact that the Defendant Trustees had authorised the payment of £742,392.92 to Mr Pinhorn pursuant to an option agreement void, or arguably void as being a clog on the equity of redemption of the trustees of the Bonham Settlement. The Deputy Master’s conclusion on this application is set out at paragraph 73 of his judgment as follows:-

The 2004 Claim went to trial between 12^th and 26^th July 2006 when Mr Justice Kitchin reserved judgment. The present proceedings were commenced on 17^th July 2006. On 16^th October 2006 Mr Justice Kitchin delivered judgment in the 2004 Proceedings with the result that I have already outlined. On 31^st October 2006 Mr Justice Kitchin made various orders consequent on his judgment. Amongst those orders were orders that the claimants in the 2004 Proceedings, Toby Bonham and the Claimant Trustees, were to pay Mr Fishwick’s costs of the action to be assessed on a standard basis, but with a payment of £130,000 on account, and an order that to the extent that Mr Fishwick does not recover his costs from the claimants they were to be assessed on the indemnity basis and paid out of the assets of the Bonham Settlement. Mr Fenner’s costs of the claim, which had been struck out against him, were to be assessed on the indemnity basis and paid out of the Bonham Settlement. His costs of what were referred to as “the additional claims” included in the 2004 Proceedings were to be paid by Toby Bonham on the standard basis but to the extent not recovered from him they were to be assessed on the indemnity basis and paid out of the Bonham Settlement.

On 16^th November 2006 the Claimant Trustees served their particulars of claim in these proceedings. In the course of the argument I suggested to Mr Wilson, who appeared for the Claimant Trustees, that he submit draft amended particulars of claim to include particulars of all matters which his clients intended to plead as entitling them to circumvent the provisions of Clause 17 as if the Defendant Trustees had filed a defence containing a plea that Clause 17 afforded them an absolute defence to the claim. This was done.

I will deal first with Mr Fenner’s application to strike out the claim against him. Mr Fenner basies this on three grounds. The first ground is that the proceedings were never properly served upon him. I have already dealt with this ground by rejecting it. The second ground is similar to that upon which he succeeded in striking out the claim against him in the 2004 Proceedings namely that the Claimant Trustees had not pleaded grounds to circumvent his defence under Clause 17 and were not capable of doing so or, alternatively, that he was entitled to summary judgment that the claim of the Claimant Trustees had no reasonable prospects of success in the light of the defence which Clause 17 gave to him. The third ground is that to prosecute the claim in these proceedings against Mr Fenner is an abuse of process within what is commonly referred to as the “Henderson v Henderson Principle”, namely, that this claim ought to have been brought forward in time to be included in the 2004 Proceedings and dealt with there.

I accept and gratefully adopt that Deputy Master Lloyd’s approach to the construction of Clause 17 based on the judgment of Lord Justice Millett in Bogg v Rapier [1989] 1 ITELR 267 in his judgment in the 2004 action which I have set out above. It is first necessary to determine the correct construction of the Clause 17. I also accept and gratefully adopt the Deputy Master’s construction of Clause 17 given at paragraphs 35, 39 and 40 of his judgment. Mr Wilson for the Claimant Trustees disclaims any intention to plead fraud against the Defendant Trustees. The allegation against Mr Fenner, as in the 2004 Proceedings, is that he was guilty of “wilful wrongdoing” i.e. “conscious and wilful misconduct” see Armitage v Nurse [1998] Ch 241 at 252E per Lord Justice Millet implying “knowing and deliberate breach of duty or reckless indifference” to the possibility of such breach. The inclusion of the word “individual” in the Clause must mean “that the trustee sought to be held liable must be personally at fault.”

Against that background I turn to consider the proposed amended Particulars of Claim and I start with a relatively minor point. Paragraph 34A pleads that “the foregoing breaches of trust constituted wilful and individual fraud or wrongdoing on the part of the Second Defendant Mr Fenner in that he committed them deliberately and/or recklessly, careless as to whether he was committing a breach of trust or not.” See also paragraphs 39A, 42A, 45A and 48A. As I understood the submissions of Mr Wilson on behalf of the Claimants, it is not intended to allege that the Defendant Trustees have acted fraudulently. It is intended to confine the allegation against them to an allegation of deliberate breach of trust short of fraud and so an allegation of “wilful and individual wrongdoing” within the provisions of Clause 17 of the Bonham Settlement. The allegation of fraud in paragraph 34A, and the further paragraphs referred to in this paragraph, should therefore in any event be struck out.

It seems to me that the amended Particulars of Claim proceed on two misapprehensions which are repeated throughout its provisions. Those misapprehensions are well illustrated by the “particulars of deliberate breach of trust” given under paragraph 34A in support of the allegation that the payment of £742,392.92 to Mr Pinhorn pursuant to the Second Option was a breach of trust because that option was unenforceable as being a clog on the equity of redemption of the Bonham Settlement Trustees under the rule in Samuel v Jarrah. In those particulars it is pleaded:-

The Second Defendant [Mr Fenner] had been advised by Caroline Williams of Blake Lapthorn as to the substance of the advice given by Thomas Dumont of Counsel in conference on 2^nd September 1999 and by an opinion dated 10^th September 1999 and by a memo dated 16^th September 1999 inter alia that:

An option granted at the time of a loan was void by reason of the rule in Samuel v Jarrah Timber and Wood Paving [1904] AC323

In the light of the decision of the House of Lords in Samuel v Jarrah Timber and Wood Paving [1904] AC323 the Original Option [the First Option] was void unless and until the House of Lords reversed the said decision.

Any application to have the question of the validity of the Original Option determined by the House of Lords would have to be made prior to the receipt of the funds from any sale of the shares otherwise such an application would not be in the interests of the beneficiaries of the Bonham Settlement

In the circumstances that existed no granting of a new option could ever be within the Defendants’ powers as trustees of the Bonham Settlement and

Even if the granting of a new option were within the Defendants’ power as trustees of the Bonham Settlement, by doing so the Defendants would be acting not for the benefit of the beneficiaries of the Bonham Settlement but for the benefit of Mr Pinhorn and that by doing so they would be committing a clear breach of trust.

Notwithstanding the foregoing the Defendants purported to grant (and did grant) the New Pinhorn Option [the Second Option] in favour of Mr Pinhorn and made payments pursuant to it.”

The memo dated 16^th September 1999 was not in evidence. It is referred to in other documents but it has been lost and it is not possible to reconstruct what it said. I confess that I do not understand the point being made in paragraph (i)(c) but I do not think it affects this judgment.

It seems to me to be a misreading of the opinion of Mr Dumont of 10^th September that it was his view that the First Option was void and unenforceable because it constituted a clog on the equity of redemption of the Trustees for the time being of the Bonham Settlement. It is clear from the passages from that opinion which I have set out at paragraph 7 of this judgment that Mr Dumont was advising the Defendant Trustees that the “rule in Samuel v Jarrah” no longer represented the present law and that that case would almost certainly be overruled when the House of Lords next had an opportunity to do so. It follows that his advice was that, as the law stood at the time he wrote his opinion on 10^th September 1999 the First Option was not void but was enforceable. If its enforceability was challenged it might be necessary to take the case to the House of Lords before that challenge could be defeated but his advice was that it would be defeated.

The second misapprehension is that when Mr Dumont was dealing with the suggestion that a second option could, as at 10^th September 1999, be granted over the original 146,660 Montpelier shares, to replace the First Option on the assumption that it was unenforceable, that his conclusion that any such attempt would be outside the power conferred on the Trustees by the Bonham Settlement Deed and otherwise a breach of trust as being for the sole benefit of Mr Pinhorn and not the beneficiaries, was applicable to the grant of the Second Option in the course of the reorganisation of the Bonham companies in anticipation of the sale of the auction business. It is clear that the Second Option was granted over the newly-created shares in Heri Ltd and Hodie Ltd forthwith on their being issued in substitution for the Trustees’ previous holding of Montpelier shares. It is not in issue that as at October 2000, and assuming, as I have found, that the First Option was enforceable (and probably also by reason of his charge over the Montpelier shares which he had been given by the Trustees) Mr Pinhorn was in a position to obstruct the reorganisation of the Bonham companies necessary to effect the sale of the auction business through Heri Ltd to the purchaser.

Given that it must have been within the Trustees’ discretion to cooperate with a sale of the auction business provided that the consideration was adequate, (and it is not suggested that it was not), it cannot have been a breach of trust for them to grant the Second Option to Mr Pinhorn to open the way for such a sale to take place which would provide them with the money to repay the Trustees’ indebtedness to him.

It follows that the First Option, if Mr Dumont was correct as to its enforceability, and the charge given by the Trustees to Mr Pinhorn, would attach to the Montpelier shares acquired by the Trustees up to a number of 146,660 shares. In particular the First Option and charge would attach to the shares recovered as a result of the settlement of the Bonham-Cozens proceedings described above in paragraph 4 of this judgment.

It also follows that the fact that the Second Option was granted for an indefinite period, by contrast with the First Option, cannot have been a breach of trust if Mr Pinhorn was insisting, as I must assume he did, that the Second Option should have no limit on the time for its exercise. The fact that the First Option was subject to a time limit for its exercise does not lead to the conclusion that the Second Option should be subject to a similar time limit. They were independent transactions.

The “particulars of deliberate breach of trust”, delivered under paragraph 34A of the Particulars of Claim, reads as follows:-

Once it is appreciated that if Mr Fenner had sought a copy of Mr Dumont’s opinion he should have understood that he was being advised that the rule in Samuel and Jarrah was no longer good law and thus the main basis for the attack on the First Option and also the Second Option was misconceived, and once it is appreciated that the Second Option was granted in pursuance of a wholly separate arrangement from that pursuant to which the First Option was granted, in my judgment, these pleaded particulars do not constitute sufficient particulars of “wilful and individual … wrongdoing” on the part of the Defendant Trustees to make good the claim for breach of trust pleaded in paragraph 34A in the face of the defence available to Mr Fenner under Clause 17 of the Bonham Settlement Trust Deed. In consequence it does not matter whether or not Mr Fenner was reckless in not acquainting himself with the contents of Mr Dumont’s opinion as alleged in the final part of paragraph 34A.

Between paragraphs 37 and 39A of the amended Particulars of Claim it is alleged that, even if the Second Option was valid, the Defendant Trustees acted in breach of trust by entering into it because, by doing so, they conferred on Mr Pinhorn rights as holder of the option which he did not, before its creation, have because the First Option was unenforceable as a clog on the Defendant Trustees’ equity of redemption of the Montpelier shares. In my judgment this pleading also fails to give sufficient particulars of “wilful and individual … wrongdoing” to meet a defence under Clause 17 of the Bonham Settlement Deed for the same reasons that I have found that the pleading under paragraph 34A fails.

At paragraph 42 of the amended Particulars of Claim it is alleged that in so far as the Defendant Trustees in July 2000 acknowledged that the First Option gave rise to a binding option over the Montpelier shares, the subject of that option, “it created a liability to pay sums to Mr Pinhorn under the [First] Option which in turn required the Defendants to grant the [Second] Option in replacement of the [First] Option upon a subsequent reconstruction of Bonhams Group Limited”. Once it is appreciated that Mr Dumont was advising that the First Option was enforceable this pleading must also fail on the same grounds.

At paragraph 45 of the amended Particulars of Claim it is alleged that, because at the time of the First Option the Defendant Trustees only held 114,394 Montpelier shares, the Defendant Trustees in entering into the July 2000 agreement, which acknowledged that 146,660 shares in Montpelier were held by them subject to a charge in favour of Mr Pinhorn and the First Option, were in breach of trust because to do so was beyond the powers of the Trustees in Clause 2 of the Bonham Settlement Deed. It is pleaded at paragraph 45(1) that “even if (which the Claimants deny) the [First] Option was valid, the terms of the Settlement Deed did not empower the Defendants to grant (or acknowledge) any option over the shares held by them on the trusts of the Bonham Settlement unless such option was granted forthwith upon transfer of the shares to the Defendants.” This pleading does not recognise that the relevant payment was made by the Defendant Trustees under the Second Option over Heri Limited shares granted pursuant to the reorganisation of Bonhams Group Limited.

Paragraph 45(2) of the amended Particulars of Claim pleads further that, “even if (which is denied by the Claimants) the terms of the Settlement Deed empowered the Defendants to create a binding obligation by acknowledging the validity of the [First] Option in respect of the shares which were not previously the subject of a then current option in favour of Mr Pinhorn, the purported acknowledgement of such option was manifestly contrary to the interests of the beneficiaries of the Bonham Settlement in that it created a liability to pay sums to Mr Pinhorn under the [First] Option which in turn required the Defendants to grant the [Second] Option upon the reconstruction of Bonhams Group Limited.”

The “particulars of deliberate breach of trust” under paragraph 45A read as follows:-

The Second Defendant had been advised by Caroline Williams of Blake Lapthorn as to the substance of the advice given by Thomas Dumont of counsel in conference on 2 ^nd September 1999 and by an Opinion dated 10 ^th September 1999 and by a memo dated 16 ^th September 1999 inter alia that:

The final allegation of breach of trust in the amended Particulars of Claim is made at paragraph 48 with particulars at paragraph 48A. It is here pleaded that it was “manifestly contrary to the interests of the beneficiaries of the Bonham Settlement that the Second Option was granted for an indefinite period by contrast with the time limits placed on the exercise of the First Option. Again it is not explained why the two option agreements were interdependent so as to make this follow. The Second Option agreement was made in the circumstances in which it was necessary, as part of a commercial arrangement to clear the way for the sale of the auction business. Unless it is being said that the terms of that sale, of which the grant of the Second Option to Mr Pinhorn for an indefinite period was a constituent part, was so plainly disadvantageous to the beneficiaries as to constitute the Defendant Trustees wilfully and individually guilty of wrongdoing in granting the Second Option pursuant to it, and it is not being so suggested, it seems to me that this pleading also fails to circumvent the defence available to the Defendant Trustees under Clause 17.

That is sufficient to dispose of Mr Fenner’s application and makes it unnecessary for me to consider whether these proceedings are an abuse of process in the sense that this claim should have been advanced in the 2004 Proceedings and bringing it by separate proceedings commenced on 17^th July 2006 amounts to harassment of the Defendant Trustees. Since the matter has been argued I will deal with it albeit briefly.

The substantial basis of the present claim is the suggestion that both the First and Second Options were unenforceable as clogs on the equity of redemption of the Trustees for the time being of the Bonham Settlement under the rule in Samuel v. Jarrah. It seems to me to be of importance that the application of the rule in Samuel v. Jarrah was raised by Toby Bonham in his defence in the Bonham-Cozens Proceedings in May 1998. The Claimant Trustees are the present holders of that office after a succession of retirements which I have set out above and one of them appears to be a member of the Bonham family. They took over as trustees on 13^th March 2006. It was soon after their appointment that the application was made to amend the claim in the 2004 Proceedings to include a claim against the Defendant Trustees raising substantially the same cause of action as is raised in these proceedings. As I have already described leave to amend to include such a claim was refused by Deputy Master Lloyd and I have set out the passage of his judgment where he ruled on the point. It seems clear from what he said that he did not have in mind the possibility that any attempt to renew the claim might be met by an argument that to do so would be an abuse of process. However there was no reason why that issue should have been raised in front of the Deputy Master and it does not appear to have been raised.

In Johnson v. Gore Wood and Co. 2002 [2AC1] at page 31 Lord Bingham defines “Henderson v. Henderson abuse of process.” Having said that the underlying public policy of the principle in such cases is the same as cause of action estoppel and issue estoppel, namely, that there should be finality in litigation and that “a party should not be twice vexed in the same matter” continues:-

In Basso v. Estry & others (unreported judgment 3^rd November 2005) Mr Mark Cawson QC, sitting as a Deputy Judge of this Court, held that:-

In my judgment this is a case where there was no justification for failing to include the present claim in the 2004 Proceedings sufficiently timeously for the issue to be dealt with in that action. There are unsatisfactory elements to the Claimant Trustees’ position in this litigation. They have not paid the costs that they were ordered by Mr Justice Kitchin to pay when their claims in the 2004 Proceedings were dismissed and he ordered an interim payment of £130,000. I have already pointed to the rapid change in the Trustees of the Bonham Settlement since the Defendant Trustees retired. It follows that I would strike out the Claim under this head also.

When the matter first came before me Mr Fishwick had confined his application to one for a stay of these proceedings until Mr Justice Kitchin’s costs order had been met by the Claimant Trustees or by Toby Bonham their co-claimant in the 2004 Proceedings. However the attractions of Mr Wilton’s arguments for Mr Fenner impressed themselves on Mr Atkins, for Mr Fishwick, at an early stage and he sought leave to amend his application to ask for the same relief as sought by Mr Fenner. Since there was no apparent difference in the positions of the two Defendant Trustees, which affected the argument, before me I gave permission for this to happen. This result means that I do not have to deal with the Defendant Trustees’ application for a stay.

For the reasons which I have set out, in my judgment, the Defendant Trustees are entitled to the relief which they seek save as to a stay.

It follows that the Claimants’ application, for a stay of execution on the costs order made against them in the 2004 Proceedings, will be dismissed.

I will discuss with counsel the form of the order which follows from my conclusions if that cannot be agreed.