Trust claim over Swiss bank account barred by res judicata
The Chancellor, Sir Julian Flaux, today struck out a claim alleging that the founder of the Sekonda watches business had secretly instructed one of his sons, the defendant, to hold monies in a Swiss bank account on trust for his other son, the claimant: Margulies v Margulies  EWHC 2843 (Ch).
The primary basis for strike-out was that the claimant had previously litigated the same claim in proceedings issued in 1997, which had been struck out by Carnwath J in 1998. His decision was upheld in March 2000 by a unanimous Court of Appeal (Nourse, Auld and Tuckey LJJ). The appeal had been argued over three days by Mr Terence Etherton QC (for the claimant) and Mr Geoffrey Vos QC (for the defendant).
Although the claimant argued that his present claim was different from the one advanced in 1997, the Chancellor held that the new claim was entirely subsumed within the 1997 claim and so was barred by cause of action estoppel.
Alternatively, the Chancellor held that the critical first step that would need to be established by the claimant was that the parties’ father had manifested an intention to create a trust. This was the same issue as the Court of Appeal had decided against the claimant. Accordingly, the new claim was barred by issue estoppel, and nothing relied upon by the claimant came close to amounting to special circumstances that would render the issue estoppel unjust.
In the further alternative, the Chancellor held that the new claim could and should have been brought within the 1997 proceedings and so was an abuse of process.
Finally, the Chancellor also held that, like the 1997 claim, the new claim had no real prospect of success and so, had it not been struck out, the defendant would be entitled to summary judgment.
Conall Patton KC appeared for the successful defendant, leading James Gardner of Twenty Essex, instructed by Peters & Peters Solicitors LLP.
The judgment is found here.