England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CENTRAL LONDON COUNTY COURT
(HIS HONOUR JUDGE GREEN QC)

		Royal Courts of Justice Strand London WC2 Tuesday, 14th May 2002

1. LORD JUSTICE RIX: Mrs Susan Vincent, the appellant, was employed from 8 September 1990 to 31 March 1994 by the respondents, Servite Houses Limited ("Servite"), a housing charity, as a nightcare practitioner in a home for physically and mentally handicapped patients. She earned about £9,600 a year. The work involved a certain amount of heavy physical work, such as lifting patients. As part of the terms of her contract of employment she was made a member of the Servite Permanent Health Insurance Scheme. This appeal is about whether Mrs Vincent has a good claim against Servite for unpaid benefit under that scheme.
2. On 13 February 1992 Mrs Vincent slipped on a patch of butter on a floor at work and injured herself. She has never done any work since. She was born on 13 April 1951 and was at the time of her injury nearly 41. That was over ten years ago. On 31 March 1994 Servite wrote to Mrs Vincent terminating her employment with immediate effect on the ground of her ill-health and giving her four weeks pay in lieu of notice. Up until that date, and indeed for several months thereafter until 7 July 1994, Servite paid Mrs Vincent a monthly benefit payment under the scheme, amounting to half her salary. That payment was made as part of the payroll and continued to be paid as such even after Mrs Vincent's dismissal. The benefit ceased only because Servite's insurers under the scheme, UNUM Ltd, refused to make any further payments. The insurers did so on the ground that they did not accept that Mrs Vincent was indeed unable to resume her normal work at Servite. The oddity was that in Servite's letter to Mrs Vincent of 31 March 1994 Servite assured Mrs Vincent that the insurers had accepted her claim under the scheme. Still it is not suggested that that letter was negligent or even inaccurate.
3. In October 1994, over two years later, Mrs Vincent commenced a personal injury claim against Servite in the Clerkenwell County Court. She claimed that Servite had been negligent and that that negligence had caused her injuries. Her provisional schedule of special damages referred to loss of earnings down to 31 March 1994, which was accepted as the last day of her employment. No credit was given for the scheme benefit paid. Her loss of earnings was said to be continuing.
4. In its defence Servite denied damages generally. No counter schedule of loss and damage was ever served. More than four years later, on 15 March 1999, Mrs Vincent's personal injury claim was settled for £10,000. The consent order stated that the settlement sum "represents damages for pain, suffering and loss of amenity." As a result Servite was required, pursuant to the provisions of the Social Security Recovery of Benefits Act 1997, to make a payment to the Compensation Recovery Unit ("CRU"). Servite challenged CRU's original certificate of recoverable benefits and succeeded in reducing the sum (as this court has been told by counsel) required to be paid from some £70,000 to a final figure of £43,052.42.
5. At the time of that settlement nothing was said or agreed - and nothing had for many years been said - about the possibility of Mrs Vincent making a separate claim against Servite for benefit under the scheme. The matter had been left back in June 1996 with a letter from Mrs Vincent's solicitor to Servite's insurance brokers under the scheme which had concluded with a reference to "any subsequent court proceedings". But as of March 1999 there had been nothing on Mrs Vincent's side to indicate that she was planning to make any claim against Servite under the scheme.
6. As it happens, Mrs Vincent had received legal aid support for bringing such a claim under a certificate dated 25 August 1995, but it was not until 6 March 2000 that Mrs Vincent brought her claim for benefit under the scheme. The claim was brought in debt for unpaid instalments of benefit from July 1994 to the date of the proceedings and a declaration was sought in respect of Servite's continuing liability. The judge held that Mrs Vincent's claim failed. Servite called no evidence. On the facts the judge found (and indeed it was not disputed) that Mrs Vincent was incapacitated from following her pre-accident occupation, but he also found that she was capable of obtaining less strenuous employment, earning at least £4,800 a year, the value of any benefit under the scheme, which at its maximum was set at 50 per cent of her previous salary with Servite.
7. In these circumstances he held that her claim failed on the following grounds: (1) He held that the scheme, as incorporated in Mrs Vincent's contract, only provided for benefit on an "any occupation" basis, not on a "normal occupation" basis. Since Mrs Vincent was not totally incapacitated from following any occupation her claim failed in contract. (2) He held that Mrs Vincent's claim that Servite was estopped from declining liability on the grounds of her ability to perform other work, by reason of Servite's letter of 31 March 1994, which told her that her claim had been accepted by the insurers, failed. (3) He held that Mrs Vincent's claim in any event failed for abuse of process in the light of her personal injury claim and its settlement in March 1999. Each of those grounds has been challenged on appeal.
8. I will begin with the grounds relating to the terms of Mrs Vincent's contract with Servite. The terms of that contract are to be found, depending upon the submissions placed before this Court, in one or more of several documents. The underlying contract is to be found in a document headed "Standard Contract of Employment", from which it is necessary to refer to only two paragraphs, those numbered 3 and 12:

"3 Your specific terms and conditions of employment (including certain provisions relating to your working conditions) are those appropriate to your job and grade. Reference to them is contained in this contract and in the Association's Staff Handbook ("The Handbook") a copy of which is attached. The terms and conditions set out in the Handbook shall apply unless inconsistent with the terms as set out here.

...

12 OTHER CONDITIONS

The basis for calculating the accrued holiday pay, provisions relating to absence because of incapacity, and the conditions with which you must comply if absent for employment are set out in the Handbook."

9. The handbook is a lengthy document of some 80 or so pages which begins with this preface:

"Any member of staff commencing work with a new organisation is bound to feel a certain degree of apprehension about what precisely is involved. The purpose of this Handbook is to try to explain in more detail than is possible at an interview, the terms and conditions under which you are employed within Servite Houses. Your contract incorporates the basic terms and conditions of your employment. The Staff Handbook supplements your contract and should be kept carefully with it."

10. The handbook deals with the subject of the scheme under reference 3.6. The provisions there are headed: "Permanent Health Insurance Scheme" and comprise one page of the handbook. I should refer to those provisions in full:

"Eligibility

All permanent staff, working at least 16 hours per week, under the normal retirement age (65 for both women and men) are automatically included in the Servite Houses Ltd Permanent Health Insurance Scheme.

The Scheme Itself

The scheme is intended to provide staff with benefits should they become unable to continue to carry out their normal occupation, because of illness or as a result of an accident.

An employee may be required to complete a health questionnaire or to undergo a medical examination prior to admittance to the scheme. It will not normally be necessary to pay any contribution to the scheme, but if any special terms are needed as a result of the medical questionnaire or examination, these will be explained. All new employees receive a copy of the Permanent Health Insurance leaflet when they join the Association.

Benefits payable

In the event of "total disablement" - where an employee is no longer able to carry out his/her normal duties and is unable to undertake any other occupation - the benefit payable will be 50% of gross salary.

The benefit will commence after 13 weeks of continuous disability and will continue until the disability ceases or the employee reaches normal retirement age whichever is earlier.

In the circumstances, where a claim for benefit is made an employee will be notified of any evidence of health which is required. This will usually take the form of a questionnaire, but a medical examination may be required in some cases.

Payment of claims shall be subject to such information and medical evidence as the Insurers of the Scheme (NEL Permanent Health Insurers Ltd) may require.

Any member of staff requiring further information on the Scheme should, in the first instance, contact the Management Accountant."

11. It will have been observed that in the third paragraph of those provisions reference is made to a leaflet given to employees at the time when they join. Mrs Vincent was given such a leaflet. The leaflet, whose title page refers to "Servite Houses Limited Permanent Health Insurance Scheme" is a document of three pages which provides more detail about the scheme than is contained in the handbook. The leaflet begins as follows:

"This leaflet briefly describes the above Scheme, which is designed to continue your salary in part, in the event of illness or injury preventing you from following your occupation for a prolonged period.

The Scheme is governed by Rules, a copy of which may be inspected by members.

The entire cost of the Scheme is borne by the Company.

DEFINITIONS

'Incapacity' means that you are totally incapacitated through illness or injury from following your normal pre-incapacity occupation, provided you are not following any other occupation except where a partial benefit is payable."

12. The leaflet refers to other definitions and terms and includes paragraphs dealing with eligibility, amount of benefit, duration of benefits and other matters. The paragraph dealing with amount of benefit includes the following:

"If Incapacity obliges you to follow a different and less well paid occupation or return to your normal occupation on a part-time basis, a partial benefit will be paid proportionate to the loss of earnings."

13. The paragraph headed "Duration of Benefits" provides:

"Benefits under the Scheme cease upon recovery, death or when you reach age 65, whichever is the earliest."

14. Nothing is there said about benefits ceasing upon the termination of employment. Finally, "The Scheme Rules", which had been referred to expressly as such in that leaflet, is a much more detailed document running with its title page and various addenda to some eight pages. The title page refers to the Permanent Health Insurance Scheme and all the contents behind that title page are then headed "Rules" of that scheme. Those rules set out the details of the scheme in full.
15. The rules contain, to start with, a detailed definition clause defining, among other things, the insurer, the meaning of "employee", "member", "service" and "occupation". Rule 2, headed "Eligibility for Membership" states that:

"Once admitted to membership Employees will remain in membership for so long as they satisfy the above stated requirements except as provided under the Cessation of Membership Rule."

"Benefit" is defined in Rule 3, the first few paragraphs of which I need to quote:

"(a) Full Benefit

A full benefit of 50 % of Salary shall be payable to a Member within the provisions of these Rules following the Deferred Period and during such time before Terminal Date as Incapacity is admitted by the Employer and the Insurer.

(b) Reduced benefit

A proportionately reduced benefit shall be payable where full benefit would have been paid but for the adoption by the Member of a different and less well paid occupation or the Member returning to his Occupation on a part-time basis with medical consent. The reduced benefit will be that proportion of the full benefit that loss of earnings calculated on the total earned income after Incapacity bears to Salary immediately before Incapacity."

16. Incapacity is defined in Rule 5 as follows:

"Incapacity shall mean a Member being totally incapacitated through illness or injury from following his occupation and not following any other occupation except as provided under the proportionate benefit provisions of Rule 3."

17. Rule 7 states that: "The whole of the Scheme will be borne by the Employer." Rule 9 states that:"Payments under this Scheme are a continuance of salary." Rule 10, headed: "Cessation of Membership" provides as follows:

"An Employee will cease to be a Member:-

(a) on reaching the Terminal Date, or

(b) on leaving Service, or

(c) on death."

18. It is not disputed on this appeal that if the terms of the handbook prevail then the judge was entitled to find that the definition of total disablement, in the fourth paragraph of reference 3.6 in the handbook, rendered the scheme an "any occupation" scheme. Nor is it disputed that if the terms of the rules or even the leaflet prevail, then the scheme is a "normal occupation" scheme with provisions for reduced benefit as and when a member performs some other work. What is disputed is the question of which document or documents incorporate the terms of the contract between Mrs Vincent and Servite.
19. Mr Simon Edwards, who has appeared on behalf of Mrs Vincent, submits that the reference in the handbook to the scheme, or to the leaflet, either directly or indirectly incorporates the rules of the scheme and takes precedence over anything inconsistent. Mr Edward Pepperall, who appears on behalf of Servite, submits that neither the scheme itself (that is to say the rules), nor the leaflet, are in terms incorporated in the handbook; but that even if they were it must be the terms of the handbook which prevail over any inconsistent terms in the rules or the leaflet. For relevant purposes, the inconsistency in question is between the "any occupation" provision of the fourth paragraph of the handbook and the "normal occupation" provisions of the leaflet and the rules.
20. In my judgment the handbook incorporates the terms of the scheme and it is those terms which prevail. On the basis that that is so, Mr Edwards has not submitted that the Rules' terms as to cessation of membership and the significance of those terms (no mention of which was made in the handbook) fail, for that reason, to be incorporated into the contract. I conclude that the handbook incorporates the terms of the scheme and it is those terms which prevail for the following reasons. First, the scheme is introduced in the handbook under its full title "Permanent Health Insurance Scheme" and is thereafter referred to in the handbook, with possibly some exception, as the "Scheme". Such references, in my view, are obviously intended to be to a fully worked out scheme. The references are, in fact, a reference to the rules which constitute the scheme and to which the leaflet itself refers expressly. Secondly, the handbook is plainly not intended to be a complete record of the scheme. The reference to the leaflet, and in the last paragraph of the handbook's provisions to "further information on the Scheme", show, as will have been obvious to a reader and is the fact, that there is more to the scheme than a single page in the handbook can set out. Thirdly, it is unrealistic, even fanciful, in my opinion, to suppose that the true intention of the contract of employment was to incorporate a half-baked, incomplete, inconsistent and inaccurate gloss of the scheme.
21. Fourthly, it is true that normally provisions in an incorporated document, which are inconsistent with or repugnant to provisions in the incorporating document, make way for the primary provisions of the incorporating document. That reflects Mr Pepperall's submission. But in this case, that maxim of construction is constrained and contradicted by two special factors. One is the factor already mentioned, that the clear intention of the handbook is that the rules of the scheme as a whole are incorporated so as to provide a complete insight into a scheme which can only be briefly glossed in the handbook. Secondly, however, there is the important factor that on the critical subject matter of the definition of incapacity, the handbook itself contains two inconsistent provisions in its second and fourth paragraphs, to which reference can be made.
22. In those circumstances it is only by considering the full terms of the scheme that that inconsistency can be properly resolved. It may be true, as the judge held, that if one was limited to the terms of the handbook alone and had no other assistance to resolve the inconsistency, then that resolution would be in favour of the fourth paragraph rather than the second paragraph. Where, however, the handbook refers to the scheme itself, as well as to the leaflet, then it seems to me that the proper way of resolving that ambiguity is by reference to the full terms of the scheme. A normal rule of incorporation is that you write out the full terms of the incorporated document in the incorporating document. When that is done it becomes clear that the inconsistency contained in the second and fourth paragraphs of the handbook has to be resolved in favour of the precise and more accurate definitions contained in the scheme itself.
23. On that basis Mr Edwards accepts, as I have mentioned already, that the scheme's provisions about membership and legal service are part of the contract and therefore that, subject to the issue of estoppel, Mrs Vincent ceased to be entitled to benefit on the termination of her employment on 31 March 1994. He accepts that on the basis of the previous decisions of this court in Bastick v Yamaichi International Europe Limited (15 January 1993, unreported) and in Brompton v AOC International Limited [1997] IRLR 639. At paragraph 15 of that latter report Staughton LJ said:

"We were not asked to depart from that decision [ie Bastick] even if it is open to us to do so."

24. The same may, therefore, be said on this occasion. Although it was not relevant to the decision in Brompton, which was for other reasons in the employee's favour, Staughton LJ at the end of his judgment referred to an implied term pleaded as follows:

"It was an implied term of the plaintiff's contract with the first defendants, implied in order to give business efficacy thereto, that the first defendants would not after the plaintiff became entitled to receive benefit under the terms of the scheme terminate the contract or otherwise cause the plaintiff to cease to be a member of the scheme."

25. Staughton LJ said:

"There is a good deal to be said for such a term, which has the support of Sedley J in Aspden v Webbs Poultry & Meat Group (Holdings) Ltd [1996] IRLR 521 and was not before the court in Bastick's case."

26. However, no case has been advanced in the present proceedings by reference to any such implied term.
27. I pass therefore to the second ground of appeal upon which Mrs Vincent has to succeed as well if she is to win her appeal and that is the ground of estoppel. That ground arises out of the letter of 30th March 1994, to which I have already briefly referred. It is necessary to set out, in further detail, some of that letter. It begins by referring to a telephone conversation, or perhaps more than one conversation, with Mrs Vincent, to whom it is written. The letter, which was signed by the Personnel Manager of Servite, continues, for relevant purposes, as follows:

"You have now been absent from work, due to sickness absence, since February 12th 1992.

Since that date, the Association has made a claim on your behalf through its Permanent Health Insurance Scheme.

The insurers of the scheme (UNUM) have accepted your claim.

When we spoke I informed you that, in a situation where a claim was accepted, UNUM have given us the authority to terminate that individual's contract of employment with the Association.

Once this happens, you will then be issued with a 'Personal Permanent Health Insurance Policy' directly from UNUM.

Additionally, instead of your monthly benefit being paid to you, through Servite, it will now be paid to you directly by UNUM. Again, this will be paid directly into your own bank account."

28. The estoppel pleaded, contained in Mrs Vincent's reply, is as follows:

"By a letter dated 30th March 1994 the Defendant formally terminated the Claimant's employment. In that letter the Defendant represented that they had their insurer's authority to terminate the Claimant's employment as the Claimant's claim had been accepted by them. Thereby the Defendant impliedly represented that the dismissal of the Claimant would have no effect on the Claimant's continuing right to receive payment under the scheme. The Claimant relied on that representation by failing to take any step to appeal against the dismissal or to complain to an industrial tribunal concerning the same."

29. It may be observed, although I am not sure that it makes any difference to the merits of the arguments on this ground, that the estoppel considered by the judge below was there directed against the application of the "any occupation" term which he found had been contained in the parties' contract. It is now directed against the application of the leaving service term, found not in the handbook but in the rules.
30. In his submissions Mr Edwards argued that the effect of the representation was 'You are dismissed but that does not affect your Permanent Health Insurance Benefit.' It was a representation to the effect of 'Do not worry, you will be paid.'.
31. There is no case in negligence, misrepresentation or deceit. The case in estoppel is not put as a promissory estoppel. It is not put as an offer to make a new contract, for instance that if Mrs Vincent were to accept a termination of her employment and would further accept the insurers as her debtor rather than Servite, then Servite would warrant that payment by the insurers. It is put as an estoppel by representation: the representation is said to be the existing fact that benefit was accepted.
32. The difficulty to my mind, however, is that in truth the representation is not so much a statement of existing fact, or if it is it is merely a representation as to the fact that UNUM had accepted the claim and that representation is not said to be inaccurate or to found any claim in negligence or misrepresentation. In truth, however, the representation, even as argued by Mr Edwards, is an assurance as to the future and as to Mrs Vincent's rights.
33. The critical difficulty, moreover, goes beyond that still and is that nowhere in the letter is there any representation to the effect that Servite is accepting Mrs Vincent's claim or any liability to make continued payments in respect of it. On the contrary, the letter expressly refers to the fact that in the future the monthly benefit will be paid by UNUM and not by Servite. I am thinking of the words: "instead of your monthly benefit being paid to you, through Servite, it will now be paid to you directly by UNUM". Indeed there is nothing in the letter which reflects any acceptance on the part of Servite that it is other than a conduit through which payment is made by the insurers.
34. For these reasons it seems to me that it is impossible to find any clear or unequivocal representation of fact at all relating to Servite which would estop Servite from asserting some inconsistent fact as a defence to Mrs Vincent's claim. In my judgment, therefore, the plea in estoppel fails irrespective of any question relating to reliance or detriment. Nevertheless, I would briefly say that if a representation to found an estoppel had been made good, I do not think that Mrs Vincent would have failed because she was unable to meet what was recognised by Mr Pepperall himself as being the light burden of proving detriment. Mrs Vincent relied on Servite's letter, when she might have protested against her dismissal, particularly if it would lead to her losing her rights under the scheme, or she might have made a claim for wrongful dismissal. It is impossible, in my judgment, to conclude that any appeal by Mrs Vincent to her employers to reconsider the termination of her employment, in circumstances where that would, contrary to the terms of the letter, terminate her entitlement to any benefit, or any appeal to a Tribunal concerning her dismissal, would have borne no fruit. However the submission on estoppel does not survive to engage the question of detriment or reliance. It follows, therefore, that Mrs Vincent's claim and her appeal fails.
35. In these circumstances I can deal with the third ground of appeal relating to abuse of process relatively briefly, for it does not matter either way to the outcome of this appeal. It is common ground that, for present purposes at any rate, the leading principle relating to abuse of process, which goes back originally to the classic judgment of Sir James Wigram, Vice-Chancellor, in Henderson v Henderson 3 Hare 100, is now contained in the speeches of the House of Lords in Johnson v Gore Wood and Co [2001] 2 WLR 72. It is sufficient to cite from the speech of Lord Bingham of Cornhill at 90B/E as follows:

"The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all. I would not accept that it is necessary, before abuse may be found, to identify any additional element such as a collateral attack on a previous decision or some dishonesty, but where those elements are present the later proceedings will be much more obviously abusive, and there will rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party. It is, however, wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before."

36. The submission of Mr Pepperall, which the judge accepted below, was that the earlier proceedings in the Clerkenwell County Court, ending in the compromise of March 1995, constituted the claim in the later proceedings for benefit under the scheme as an abuse of process within the rationale of that citation. It is accepted that the burden of proving abuse is on Servite, as Lord Bingham indicated at 90B. In my judgment abuse of process is not proved. I have in mind the following factors. First, the earlier cause of action in the tort of negligence is an entirely different cause of action. The cause of action in the present proceedings is in contract under the terms of the scheme. Secondly, it follows from that first fact that the conditions of liability in the two proceedings are different. In the first proceedings the conditions that had to be satisfied are those relating to the tort of negligence, including the requirement that the loss and damage must be caused by the negligence causing the personal injury involved. Once those conditions are fulfilled the claimant would, of course, be entitled to all the relevant damages flowing from the breach of duty. In the present proceedings, however, the conditions of liability are governed by the scheme and all that is necessary, for present purposes, is that Mrs Vincent should have suffered incapacity within the meaning of the scheme. She would then be entitled to a contractual benefit which might depending upon the extent of her incapacity and whether or not she did any work after her injury, be a full or reduced benefit.
37. It is true, of course, that the claim in the Clerkenwell proceedings, covering as it did loss of earnings before and after the termination of Mrs Vincent's employment, could in theory have yielded financial compensation which, to the extent of a maximum of 50% of her last salary, also have been reflected in the form of benefit payable under the scheme. However, granted that there cannot be double recovery as a result of subsequent proceedings, it is to be observed that in the present case it is clear from the terms of the Consent Order that there has been no recovery in respect of loss of earnings. Thus although the claim in negligence has been compromised, it has been compromised on terms that nothing was paid for loss of earnings.
38. The next factor I bear in mind is that Servite could have required its compromise to be on terms which would have embraced the contractual claim, even though that claim was not before the court. Servite knew about the possibility of such a claim, even if such a claim had slipped from sight during the course of the Clerkenwell proceedings. Certainly, however, at the time of the commencement of those proceedings, it had been a live issue.
39. Turning to the reasons given by the judge below for his finding in favour of Servite on this question of abuse of process, he considered the matter under five headings, the first three of which he considered counted in favour of Servite, while the other two did not. His first reason was that the present claim was a claim in damages replicating the claim in damages in the personal injury action, albeit being limited to a maximum of 50 per cent of loss of earnings involved. In my judgment the judge was mistaken about that. The claim in the present proceedings is in debt for the past and for a declaration for the future in respect of a contractual benefit. Secondly, he said that the defendant had no reason to anticipate the subsequent proceedings at the time of the compromise. He said:

"Nearly five years had elapsed between cessation of benefits in July 1994 and the compromise on 15 March 1999. However, I give only minor weight to this point because it behove the defendant's advisers to protect their client by appropriate wording of the compromise."

40. Therefore this element did not figure importantly in his final judgment. I would merely point out that, as I have already mentioned, although the matter may have slipped from sight, Servite did know about the possibility of such a claim.
41. Thirdly, and the last point in favour of Servite, the judge founded on the fact that in reality the claim for benefit was a claim for the loss of past and future wages resulting from incapacity caused by the accident. He said "that seems to me to smack of abuse of process." He therefore concluded, on the basis of those three points "though with some hesitation", that the claim was an abuse of process. He rejected two further points made by Servite: one was that account should be taken of the fact that Servite was a charity and that it was not insured to pay benefit. As to the matter of insurance, there is no evidence that Servite was not insured and, in principle, of course, it was backed by the insurance of Unum under the scheme. Fifthly and finally, the judge found that there was nothing in the point that Mrs Vincent's claim for past loss of earnings was compromised. The judge said:

"To my mind the difficulty with that argument is that the settlement of her claim, apportioned 100 per cent of the £10,000 to general damages with nothing for special damages... I do not see how it lies in the defendant's mouth now to complain that it may be losing a credit to which it is entitled in the action before me."

42. Despite submissions to the contrary I think that the judge was entirely correct in that view.
43. In summary, therefore, the reasons given by the judge for his somewhat hesitant conclusion of abuse of process turn out to be either mistaken or, in my judgment, comparatively weak and I cannot find, in these circumstances, looking at them as a whole, what I would regard as unjust harassment or a misuse or abuse of the process of the court. Of course, the claim for benefit could have been raised in earlier proceedings. Perhaps it would even have been better if it had been but that by itself, as Lord Bingham has said, does not make the later proceedings necessarily abusive. Therefore for those reasons this ground of appeal succeeds, but it does not assist Mrs Vincent, whose appeal, for the reasons which I have already given, must, in my judgment, be dismissed.
44. LADY JUSTICE ARDEN: I agree. I wish to add some observations of my own on the abuse of process issue as this is one of the first opportunities that this court has had to consider this issue since the decision of the House of Lords in Johnson v Gore Wood [2001] 2 WLR 72 and because we are differing from the judge on this issue.
45. By its amended defence served in May 2001 Servite alleges that Mrs Vincent is estopped from claiming damages in respect of the provision of permanent health benefits. On this issue the onus is on Servite. There is no doubt that Mrs Vincent could have raised the present claim in her earlier personal injury proceedings, but there is nothing in the pleadings in that action to show that it was an issue in those proceedings, even though the payments under the scheme should have been a deduction from her claim for loss of earnings and for loss of future earning capacity.
46. The judge gave three reasons which have been summarised by Rix LJ. First he said that the claim in the present action was virtually indistinguishable from the claim for future losses in the personal injury action. I agree with what Rix LJ has said about that, though I would add that the judge was right to reject an argument that the only relief that the appellant could seek in this action by way of enforcing the term for future payments was by way of declaration. It was, in my judgment, open to claim damages for the repudiation of the promise to pay such benefits. Secondly, the judge gave some weight, although he described it as slight weight, to the fact that Servite had no reason to believe that there was future litigation. He gave this matter slight weight because Servite had never asked for complete relief from the obligation to pay benefits as it could have done. Thirdly, the judge relied on the fact that the claim for health benefits stemmed from the same accident. He rejected other claims of Servite which I need not mention as they have already been mentioned by Rix LJ.
47. For my own part I accept that the principles have already been set out by Rix LJ, and they are to be found in the passage which he has cited from the speech of Lord Bingham of Cornhill in Johnson v Gore Wood. The majority of the House of Lords, namely Lord Goff, Lord Cooke of Thorndon and Lord Hutton, agreed with the speech of Lord Bingham on this issue.
48. Turning to the application of those principles to the present case, I accept that Mrs Vincent would have to have given credit for permanent health benefits if the action for personal injuries had been proceeded with. She could moreover have added the claim for breach of the term that permanent health benefits should be paid to her, but such a claim would have to have been separately formulated as Rix LJ has said. In particular it was essentially a claim for breach of the employment contract which occurred in July 1994 and was continuing. The payments had stopped by the time that she started her personal injury action. However, the fact that she could have brought the claim within those proceedings is not, in my judgment, enough. That is clear from the speech of Lord Bingham and from the citation which Rix LJ has already given. As I have explained, there was no reference in the evidence to permanent health benefits and moreover there is no evidence that the parties sought to compromise the permanent health benefits claim in the settlement they reached in the first action. The fact is that the parties had conducted separate correspondence about Mrs Vincent's claim for permanent health benefits. That correspondence involved different issues and different parties because insurance brokers were involved. That series of correspondence underscores the fact that the parties were approaching a claim for personal health benefits quite separately.
49. The second important matter, so far as I see it, is that Servite never asked for any confirmation that the claim had been abandoned when the compromise was reached in the personal injury action. As Rix LJ has explained, Servite clearly had known that a claim might be made. It was probably put off its guard by the fact that the separate correspondence, to which I have referred, had been fizzled out in 1996. Thirdly, there is no question or suggestion that there was any concealment by Mrs Vincent's advisers, or that they in any way misled Servite into believing that the claim would not be made.
50. Fourthly, in my judgment some weight should be attached to the fact that Servite did not raise the abuse of process issue until May 2001. Mr Simon Edwards, for the appellant, did not seek to rely on this point, but it is important to note that by May 2001 the trial date had been fixed and was shortly upon the parties. In February 2001 the court had ordered the case come on for trial in June 2001. Mr Edwards Pepperall, who appears for Servite, explained that until about May 2001 he was unaware of the settlement in the personal injury action. So be it, but I do not consider that that is a sufficient explanation. On the contrary, it indicates that Servite did not consider that the new claim in the present action was an abuse. For those reasons that matter ought, in my judgment, to count in the scales against Servite.
51. I should mention some of the points which were raised in the Respondent's notice. The first point was that it would be impossible to tell what permanent health benefits had, in fact, been paid, and whether any future benefits were in fact taken into account in the compromise in the earlier action. I agree with Rix LJ that Servite must abide by the terms of the settlement which show that the sum agreed to be paid was in respect of pain and suffering. Accordingly it is unnecessary to extract any figure for the permanent health benefits because none was involved in that settlement.
52. The next two points concerned the fact that Servite is a charity which had to defend two actions and the fact that the Respondent may not be insured in respect of this further claim. Mr Pepperall did not attach much weight to those points, in my view rightly. If it were a sufficient matter that Servite had to defend two actions of course this sort of issue would always result in an action being struck out. As regards the other matter the question of whether or not Servite would have an indemnity in these proceedings, there was no evidence.
53. Accordingly I agree with Rix LJ's conclusions and, in particular, that contrary to the view taken by the judge, this action was not an abuse of process.
Order: Appeal dismissed with costs subject to public funding assessment