Neutral Citation Number [2002] EWHC 126 (TCC)
IN THE HIGH COURT OF JUSTICE
TECHNOLOGY AND CONSTRUCTION COURT
BEFORE HIS HONOUR JUDGE BOWSHER Q.C.
BETWEEN:
TIME GROUP LIMITED
Claimant
and

COMPUTER 2000 DISTRIBUTION LIMITED
Defendant
and
IBM UNITED KINGDOM LIMITED
Part 20 Defendant
Case number: 	HT 01 59
Dates of hearing:	11, 18, 22, 23, 24 January,  2002
Date of Judgment:	4 February, 2002
For the claimant:	Andrew Hochhauser Q.C. with Alexander Hickey (Seymour Menzies, solicitors)
For the Defendants: Ian Mill Q.C. with Andrew Hunter (Morgan Cole, solicitors)
For the Part 20 Defendant: Nicholas Stadlen Q.C. with Robert Onslow (Freshfields Bruckhaus Deringer, solicitors)
JUDGMENT
1.	The complainants, Time (formerly known as Granville Technology Group Limited) are well known retailers of Personal Computers (PCs).
2.	The defendants, Computer 2000 (formerly known as Frontline Distributors Limited) are also well known as sellers and distributors of PCs. 
3.	The Part 20 defendants, IBM United Kingdom Limited (IBM) are well known wholesale suppliers of PCs. IBM are part of an American owned Group.
4.	This action, and some related actions, concern the supply of PCs known as Blue Lightning PCs supplied by IBM to Time and Computer 2000.
5.	The main applications before me are applications by Computer 2000 and IBM that the claim in this action by Time should be dismissed as an abuse of the process of the court. But there are also applications for specific disclosure of documents relating to the main application. Those latter applications are made by Time against Computer 2000 and by Time against IBM.
6.	The applications for specific disclosure were first opened before me on Friday 11 January, 2002 in the afternoon. Due to lack of time, I adjourned those applications and heard and decided one of them on Friday 18 January, 2002. The other of the two applications I adjourned to be heard by another judge. I was asked by Time to look at the disputed documents to determine the application but it was strongly represented to me that I would be prejudiced by looking at documents marked “without prejudice”. I made that order late in the morning. It was not until 4.30 pm that application was made to another judge to hear the application on the following Monday and he was not available on that day. It may have appeared at the beginning of the day on the Monday that there were no other TCC judges available but judges soon became available on the Monday due to last minute settlements but no application was made to one of them on the Monday. The main application came on for hearing on Tuesday 22 January and I took the initiative of finding another judge and suggested that junior counsel made the application for disclosure to him while Leading Counsel continued with the main applications. That judge pointed out that there was no formal application and no evidence in support and finally adjourned the application for lack of time. The application was not pursued further after 22 January. The main application continued on 22, 23, and 24 January, 2002.
7.	By way of introduction, it is necessary to consider a certain amount of history. In reviewing that history, I shall for the most part refer to the parties by their latest names even though those were not the names that they had at the time.
8.	The Blue Lightning PCs were manufactured by one of the companies in the IBM Group in 1992/1993.
9.	By an agreement dated 20 May, 1994, IBM sold 20,160 Blue Lightning PCs to Computer 2000 on the basis that Computer 2000 would be an exclusive distributor of Blue Lightning PCs in the UK.
10.	In August, 1994, Time, Computer 2000, and IBM all agreed that Time should take over as exclusive distributor of Blue Lightning PCs in the UK. IBM agreed to sell to Time and thereafter Time bought from IBM 27,576 PCs of which 20,252 were Blue Lightning PCs and Computer 2000 transferred to Time its surplus stock of 4,030 Blue Lightning PCs. So Time acquired 24,282 Blue Lightning PCs in all. The Blue Lightning PCs acquired by Time direct from IBM came in 3 batches. The Blue Lightning PCs acquired from Computer 2000 comprised the 4th batch.
11.	The computers contained in all 4 batches are identical with each other and all are alleged to have had the same 2 faults:
First, a chip associated with the mother board was allegedly defective.
Second, there was alleged to be a fault in the hard disk.
12.	In 1994/1995 Time and Computer 2000 received complaints from customers regarding the Blue Lightning PCs. Both sought compensation from IBM.
13.	On 5 June, 1996, Computer 2000 and IBM agreed to compromise Computer 2000’s claim for £240,394. The compromise included the following terms:
“Frontline (Computer 2000) undertakes and warrants that it will not at any time commence, advance, maintain or pursue any claim or assist or encourage a third party in any claim against the IBM companies in relation to the agreement or any similar agreements between IBM Companies and third parties.
Frontline shall keep the terms and existence of this deed confidential and shall not disclose any details to a third party unless under a legal or regulatory duty to do so.”
14.	Time did not reach a compromise at that stage.
15.	On 17th November, 1998, Time commenced proceedings in the TCC against IBM (the 1998 Action). Service of the writ was delayed for negotiations and it was served in April, 1999. 
16.	The 1998 action related only to the Blue Lightning PCs bought direct from IBM by Time. The action did not include any claim in respect of Blue Lightning PCs bought by Time from Computer 2000. Time and IBM were the only parties.
17.	The main complaint in the 1998 action was a design defect in the chipset of the Blue Lightning PCs. There was a subsidiary complaint regarding the hard disk. Both were pleaded as giving rise to breaches of contract due to lack of merchantability and lack of fitness for purpose.
18.	Various heads of damage were claimed in the 1998 action. However, much the largest head was for £10.5 million for “Loss of profit on lost sales” as set out in Schedule 2 to the Re-Amended Statement of Claim. As that Schedule shows, the claim is for loss of profit on 35,000 PC sales. That claim was not put as a claim in respect of a failure to sell the 20,252 Blue Lightning PCs bought direct from IBM. The claim is that Time’s business generally was damaged both by disruption to the work of Time’s staff and by damage to Time’s reputation by adverse publicity. In particular, it was said, many repeat orders were lost.
19.	On 4 August, 1999, at the first Case Management Conference in the 1998 Action, Judge Humphrey LLoyd Q.C. ordered that there should be a trial of Preliminary Issues as to two points taken by IBM in their Defence, concerning First, an exclusion clause and Second the identity of the contracting parties. In the present hearing, counsel for Time submitted that there was no point in joining Computer 2000 for the trial of those Preliminary Issues. There was no evidence that that was the reason for not joining Computer 2000 at the outset nor at that stage. Later events showed that it was not the reason for not joining Computer 2000.
20.	Those two points taken by IBM were later dropped and on 8 November, 1999, Judge Lloyd ordered a trial of Preliminary Issues on technical matters relating to the alleged defects. The hearing was set for May, 2000 later put off to 7 July, 2000.
21.	Computer 2000 had a clear interest in being joined in the 1998 action at that stage if not earlier because this trial of Preliminary Issues raised issues identical with issues raised in the current action with which I am concerned. Computer 2000 did not know about the 1998 action so they could not apply to be joined.
22.	In January, 2000, IBM disclosed some documents that Time says showed that IBM and its parent company knew before the contracts between IBM and Time and Computer 2000 that the Blue Lightning PCs contained a defective chip and that hence representations made by IBM were fraudulent. In making the current application, IBM deny fraud, and whether representations were or were not fraudulent is not an issue in these applications. Time suspected that IBM’s parent company, IBM Corporation (IBM US) was directing IBM.
23.	On 11 April, 2000, Time amended its Particulars of Claim against IBM, but in the words of a written submission made by an attorney for Time in later proceedings in the US, “deliberately chose not to allege fraud against IBM UK or IBM US”.
24.	In an affidavit sworn in those later proceedings in New York, Mr. Mohsan, the Managing Director of Time described his thinking in January and February, 2000. He said:
“I considered bringing proceedings against IBM Corporation in early February 2000. At that stage I retained my current New York counsel – Mendes & Mount – and asked them to consider the form of any claim against IBM Corporation.
During early 2000, I realised that I had been tricked into buying what I had been told were leading edge PCs. I then conducted further enquiries which led me to believe that IBM US directed IBM UK to sell the chips with known defects. Thereafter I intended to pursue IBM Corporation for pecuniary damages as a result of their fraud. Only when I was sure that I could settle the UK action and still retain the right to pursue IBM Corporation in New York did I agree to allow my lawyers to sign the UK Settlement agreement.”
25.	Mr. Hope, the In-house counsel for Time, whose evidence was adopted by Mr. Mohsan, said that the reason for not joining Computer 2000 as a defendant at the outset of the 1998 action was that the outcome was uncertain and Time did not want to increase the costs by joining a party that did not know about the defects. In the view of Mr. Hope and Mr.Mohsan, the documents disclosed in January 2000 together with some documents obtained from the manufacturers of the chip (a company referred to as FTDI) and disclosed by Time in February 2000, substantially increased Time’s prospects of success. Mr. Hope’s evidence in that regard and his explanation for not joining Computer 2000 now that Time thought that the outcome was much more likely to be favourable was as follows:
“All of these matters are relevant to the circumstances of the present case against Frontline. They amount to clear evidence in support of Time's case that the PCs were defective and there was a known risk of problems when used in conjunction with software that utilised the DMA chip in a particular way. These circumstances once known to Time in about February 2000 made and make it difficult for Frontline to gainsay the problems with the PCs in the way that IBM had consistently denied them prior to and during the original proceedings.
By the stage that Time had discovered this relevant evidence, the trial of the preliminary issues was listed for hearing in May 2000. Even though the trial was subsequently re-listed for hearing on 10th  July 2000, it was far too late to bring in Frontline in time for the trial. The trial date would have been lost, taking pressure off IBM, and there was potential for removing the focus and direction of the litigation.
Moreover, Time considered that there was greater chance of settlement with Frontline in later proceedings, if either it had proved its case against IBM first, or if the case against IBM was out of the way. Although Time would probably not have been able to tell Frontline what its terms of settlement were, the very fact that Frontline would know that the case had been resolved to avoid the matter going to trial would be a strong indication that Frontline might have difficulty in avoiding liability because IBM had felt the need to settle the case.”
26.	The evidence of Mr. Mohsan and his US attorney concerning their thinking about bringing proceedings against the US parent company, together with other later events to which I shall refer, show that Mr Mohsan’s thinking about joining Computer 2000 was even more devious than was suggested by Mr.Hope.
27.	If the 10 July 2000 date had been vacated, it is likely that the trial of the Preliminary Issues would have been restored at an early date after that.
28.	On the Friday before the trial of the Preliminary Issues relating to technical matters was due to start, Friday 7 July, 2000, Time and IBM settled the 1998 action for £6 million. That sum was paid on Friday 21 July, 2000.
29.	The written agreement of settlement between IBM and Time included the following:
“IBM will pay, within 15 days after the execution of this Agreement. and Time will accept £6,000,000 in full and final settlement of all claims by Time and its affiliated companies against IBM of whatever nature, whether or not yet asserted, wherever they could be brought relating to the facts and matters in the Proceedings including, in particular, the three contracts for the sale of personal computer systems dated 27 May 1994, 15 August 1994 and December 1994.
Subject to any obligations of law, the existence and terms of this settlement agreement shall remain confidential between the Parties and their legal advisers.”
The initials IBM were defined in the agreement as referring to IBM UK. In the affidavit in the US proceedings to which I have referred, Mr. Mohsan said that if IBM had requested a release in favour of IBM US he would not have settled for such a term.
30.	Having paid substantial sums to the companies to whom they had sold Blue Lightning PCs in full and final settlement of their respective claims, IBM thought that as far as they were concerned that was an end of the matter, but they were mistaken.
31.	On 24 July, 2000, (the Monday after the Friday on which they received the payment of £6m. from IBM) Time sent to Computer 2000 a letter before action on Time’s headed notepaper signed by Time’s In-House Legal Counsel , Mr. Richard Hope.
32.	On 14 August, 2000, Time issued proceedings valued at £2.2 million against Computer 2000. Oddly, those proceedings were issued in the Central London County Court. They were transferred to the TCC.
33.	On 16 August, 2000, Time issued a complaint in the United States District Court, Southern District of New York against International Business Machines Corporation (IBM US) the parent company of IBM UK. In that action, Time claimed US $54 million. Time alleged that IBM US had continued to market Blue Lightning PCs knowing that they contained a defective chip and in doing so made fraudulent misrepresentations. The complaint alleges that Time became aware of the fraud in January 2000. Those proceedings were the proceedings contemplated by Mr. Mohsan in the discussions he had with his New York counsel in February 2000. The US action relates to all 4 batches of Blue Lightning PCs, both those acquired direct from IBM and those acquired from Computer 2000.
34.	The American proceedings have been dismissed by the New York Court on the ground of forum non conveniens. Other points taken to dispute jurisdiction, including the settlement agreement, have not been decided.
35.	One of the points taken in IBM’s Notice of Application was that Time was prevented by its settlement agreement from bringing these proceedings. It was submitted on behalf of IBM that the settlement with Time of “all claims against IBM of whatever nature” “relating to the facts and matters” in the 1998 action does bar the present action. The claim in this action, it is said, plainly does relate to those “facts and matters”. In the conduct of the 1998 action, the solicitor for IBM asked for documents relating to the computers bought by Time from Computer 2000 so that he could try to separate out the damage that might have flowed from those computers from the generality of the loss alleged by Time. Moreover, in the Particulars of Claim in the current action, at paragraph 62, express reference is made to the 1998 action albeit no claim is made for damages in respect of it. It is also submitted that this is a “claim of whatsoever nature” against IBM because, although in the first instance the claim had to be directed at Computer 2000, the intended purpose was that IBM should be joined as Part 20 Defendants thus making it a claim against IBM. For that argument to succeed, it is necessary for IBM to demonstrate that Mr. Mohsan had that intention. In that regard it is necessary to consider evidence that also relates to more general allegations of abuse of process of the court.
36.	Mr.Hochhauser Q.C. submitted that on its true construction the settlement agreement did not prevent Time from taking proceedings against Computer 2000. He compared the settlement agreement with Time with the settlement agreement with Computer 2000. He also cited the decisions in Cape v. Dalgleish v. Fitzgerald (unreported) 15 November, 2000; Jameson v. CEGB [2000] 1 AC 455; and Heaton v. Axa Equity & Law [2000] 3 WLR 1341 at 1369 to 1371. In those cases, old law was restated, that where there are successive contracts, an agreement by A to release B from further liability does not release C unless the agreement says so, though the case is different where one joint tortfeasor is released. Those decisions do not assist in deciding whether the construction for which counsel for IBM contend is correct.
37.	I accept the submissions made on behalf of IBM with regard to the settlement agreement. This action does “relate to the facts and matters” in the 1998 action. It concerns the same model of computer and the same alleged defects. Time bought computers from both IBM and Computer 2000 in compliance with the arrangements to transfer the distributorship. To assess the damages in the current action, it will be necessary to consider the same disruption of Time’s business as would have fallen for consideration in the 1998 action if it had not been settled. It will also be necessary to hear evidence concerning the settlement of the 1998 action. This is a “claim against IBM of whatever nature”. Whether it is a claim against IBM by Time or only a claim against IBM by Computer 2000 is a matter to be considered in the light of all the evidence that I have read. When the action began it was on its face only a claim against Computer 2000 but IBM submit that on the evidence that has since come to light it was in truth an action brought to make a claim against IBM. I shall review that evidence, but I say at once that I accept that submission.
38.	Mr. Nicholas Stadlen Q.C. on behalf of IBM submitted that even if Time were not restricted by contract in this way, Time should, in the circumstances of this case, be prevented by the court from proceeding with the action against Computer 2000. Mr. Stadlen submits that Time held back from proceeding with the US action until satisfied that the settlement with IBM did not prevent Time from proceeding against IBM US and that is relevant because Time did the same thing in the action against Computer 2000.
39.	Mr. Stadlen, like Mr. Mill on behalf of Computer 2000, submits that from the outset of this action and earlier, Mr. Mohsan has always intended that this action should be simply a means of extracting more money from IBM. It is said on behalf of IBM and Computer 2000 that Mr. Mohsan believed that after initial resistance IBM would be too embarrassed to allow a complaint about Blue Lightning PCs to come to court. Time could not sue IBM direct in respect of the Blue Lightning PCs bought by Time from Computer 2000, but Mr.Mohsan determined to get money for those PCs from IBM through Computer 2000. I accept those submissions. They are supported by the evidence before me including the witness statements of Mr. Mohsan and other witnesses that were filed on behalf of Time.
40.	It has been said that Mr. Mohsan used Computer 2000 as a pawn to get at IBM. Mr. Mohsan denies that, saying that Computer 2000 throughout acted independently and on their own legal advice. There is a certain amount of word-chopping here about what is meant by a “pawn”. I agree that Computer 2000 did throughout act on their own legal advice. But Mr. Mohsan from the outset encouraged Computer 2000 to do what he wanted, and they did do what he wanted, by joining IBM as Part 20 defendant to this action. In order to proceed with that Part 20 claim, Computer 2000 allege, prompted by Mr.Mohsan, that the settlement agreement between Computer 2000 and IBM should be rescinded because before the sale of the Blue Lightning PCs IBM knew that a chip in the motherboard was defective and made representations about them that they knew to be false alternatively which they made negligently as to whether they were true or false.
41.	The evidence is to be found both in contemporary documents and in conversations between representatives of Time and Computer 2000.
42.	Time’s letter before action dated 24 July 2000 included the following:
“Whilst we are not able to provide you with copies of documents disclosed by IBM in connection with other proceedings (to which both IBM and Time Group Limited were parties), we are able to supply you with a copy of the papers provided to us by FTDI, the designers of defective DMA chip. As you can see from these papers, it is clear that the defect in the word count register was identified in 1993 - over a year before the contract between you and Time and, moreover, the IBM commissioned FTDI to develop a fix to the defect in the word count register. The fixed chip had the reference number 82C3480XMVL (the XMVL chip). Remarkably, however  the XMVL chip did not find its way into the Blue Lightning PCs, notwithstanding the fact that the XMVL chip went into production from August 1993.
Whilst we appreciate that you operated at all times in complete ignorance of the deception practised by IBM, the fact of the matter is that our claim in respect of the 4,030 PCs must be directed in the first instance to you, the party from whom we acquired the PCs. We must leave it to you to pursue any claim over against IBM should you wish to go down that route.”
Those passages about deception were in no way relevant to Time’s then proposed action against Computer 2000 since that action lay simply in contract. But the passages were a clear hint as to how to join IBM in the proceedings and pass the claim on to them despite Computer 2000’s settlement agreement with IBM.
43.	The original claim form in this action also alleged that IBM knew of the defect before selling the Blue Lightning PCs , and Particulars of Claim substituted on 4 June 2001 spelt out in greater detail that Time had been misinformed by IBM before buying the Blue Lightning PCs.
44.	Shortly after the letter before action and before the issue of proceedings against Computer 2000, Mr.Mohsan spoke on the telephone to Mr. Tiltman, the General Manager of Credit of Computer 2000. Mr. Tiltman said of that conversation:
“It is my recollection of events following receipt of a letter from Time Group advising us of their intention to take legal action against us and prior to the issue of the writ, I had a telephone conversation with Tahir Mohsan in which he advised me that this was a business issue and he hoped it would not affect our existing trading relationship. Time Group were still a customer and utilising their account and credit line. He explained to me that it was not Computer 2000 that he wished to seek redress from but IBM. He felt IBM were at fault but for legal reasons he had to take action against us. This he said would force IBM to take responsibility. It was an amicable conversation and Tahir Mohsan was at pains to make it clear he did not have an issue with Computer 2000”.
In response to that evidence, Mr, Mohsan said:
“Mr Tiltman correctly says in his witness statement that Time's action against Frontline was a business issue and that for legal reasons, Time had to take action against Frontline to seek redress in respect of the Blue Lightning PCs sourced from Frontline. I emphasised that although Time had contracted with Frontline, it did not blame Frontline, but that it was IBM's fault and IBM should take responsibility for it.”
45.	Mr.Mohsan was more explicit in a telephone conversation with Mr. Anthony Taylor, Finance Director of Computer 2000, very shortly after the letter before action. In a witness statement, Mr.Taylor said:
“I have no doubt whatsoever that Time has brought these second proceedings in order to make an additional recovery from IBM, and that it has used C2000 as a “Pawn” in its attempt to pursue IBM. Time's managing Director, Tahir Mohsan has made this absolutely clear to me both in telephone conversations and in correspondence. Details of this are as follows.
My first telephone phone call with Mr. Mohsan was very shortly after the letter before action. In this phone call, Mr. Mohsan told me that Time was going to issue proceedings against C2000, but that it had no interest in making any recovery from C2000. The call was amicable and Tahir was almost apologetic for having imposed the litigation on C.2000. He told me that C2000 should bring Third party proceedings against IBM as IBM would then agree to pay to get rid of the litigation.”
46.	As to that telephone call, Mr. Mohsan did make a small challenge to the words used, but he confirmed that he said that he hoped that Frontline would not suffer financially and that Frontline should look to IBM for reimbursement. Mr.Mohsan said:
“I have had several conversations with Tony Taylor. At no time in any of those conversations have I said that Time is not interested in making a recovery of damages from Frontline. Indeed Time's only recourse in these proceedings is to make a recovery from Frontline: it cannot recover from IBM, only Frontline can make a recovery from IBM. I did say to Mr Taylor that I hoped Frontline should not suffer financially as a result of the proceedings and that Frontline should look to IBM for reimbursement.”
47.	In the same witness statement, Mr.Taylor said:
“Following this phone call, I instructed Computer 2000’s solicitors to seek to mediate with Time. However, Time refused to mediate without IBM being made a party to the mediation”.
That statement is misleading if it is read as meaning that the first suggestion of the involvement of IBM in mediation came from Time. In a witness statement dated 10 January, 2002, Mr. Taylor clarified the matter. Correspondence shows that Mr. Taylor was considering Time’s suggestion that Computer 2000 should join IBM in the proceedings and it was he, Mr. Taylor, who suggested a mediation involving IBM and it was after he made that suggestion that Time agreed to a mediation but insisted that if there was to be a mediation all parties including IBM should be involved. IBM refused to get involved and Time let the matter drop. There were letters dated 9, 10, 21, 22 August and 14 September, 2000 passing between Computer 2000, Time and IBM on this topic.
48.	On 11 September, 2000, Mr. Mohsan telephoned Computer 2000 asking to speak to Mr. Taylor but instead spoke to Miss Sue Margetts, Mr. Taylor’s PA. She noted the conversation and transmitted her note to Mr.Taylor by e-mail as follows:
“Tahir from Time called with the following message:
He is concerned that our solicitor is not senior enough within Morgan Cole to handle the case. He feels she does not understand the dynamics of the case or appreciate the time constraints the case is under.
We must issue a writ against IBM as the case is now just over 6 years old and we are running out of time.
IBM have also sent a letter to Morgan Cole telling us to “go away”. Tahir needs to see this but our solicitor has not had instructions from us to let him see it.
Tony – Tahir would like you to escalate the case within Morgan Cole and arrange for the Writ to be issued.”
Mr.Mohsan challenged that summary of his telephone message only by saying that by the words, “escalate the case within Morgan Cole” he meant, put the case in the hands of someone more senior within Morgan Cole. Even with that meaning, which I accept, the message is clear that he wanted IBM to be brought into the action as a matter of urgency. If this had been a straightforward action against Computer 2000, Mr. Mohsan would have had no interest in seeing the letter from IBM nor would he have had any interest in IBM being joined as a party. Indeed, joining IBM as a party would inevitably increase the costs and would probably slow the action down.
49.	Mr. Taylor’s statement continues:
“Following this e-mail I spoke to Mr Mohsan by telephone. I cannot recall the exact date of the call but I remember Tahir once more made it very clear to me that he didn't want Computer 2000 to suffer financially due to this action, and that he had no choice but to include us in his attempt to recover monies from IBM. On several subsequent telephone conversations the exact dates of which I cannot recall Mr Mohsan made similar remarks and left me in no doubt that he did not want Computer 2000 to suffer any loss but his intention was to recover damages from IBM.”
50.	On 28 February, 2001, Computer 2000 showed their independence by issuing an application applying for an order that the claimants’ claim be struck out pursuant to CPR 3.4(2) on the grounds that “the Statements of Case disclose no reasonable grounds for bringing or defending the claim and the failure of the claimant to particularise the claim represents an abuse of the court’s process”.
51.	Citing Jameson v. Smith and Morris [2001] EWCA Civ 1264 counsel for Time relied on that application as one of his grounds for an application that Computer 2000’s present application should be struck out. I rejected Time’s application in that regard. In Jameson’s Case, the Court of Appeal was considering a case where the second application was an attempt to appeal from the decision on the first application. Here the second application is totally different from the first, and indeed in the first application the words “abuse of the court’s process” need not have been used at all. I will not repeat here the reasons I gave for rejecting other submissions made on behalf of Time at that stage.
52.	Computer 2000’s application to dismiss came before me on 4 May, 2001. I adjourned that application to 18 June, 2001. Before that return date, Time  repleaded its case and Computer 2000 accepted that in the circumstances it was not necessary to proceed with its application and withdrew it.
53.	On 4 May, 2001, Computer 2000 were clearly considering joining IBM as a Part 20 defendant because on that day Computer 2000 applied for an order that IBM, as a non-party, should make disclosure of certain documents. I ordered that notice of that application should be given to IBM and that that application also should be adjourned to 18 June, 2001. On 18 June, 2001 I made a provisional order that IBM should disclose certain documents with permission to apply to set the order aside and on 2 July, 2001 I rejected IBM’s application that my order should be set aside.
54.	At about this time, between the hearings in May and July 2001, Time through their solicitor Mr. George Menzies made a further attempt to persuade Computer 2000 to join IBM. Mr. Menzies spoke on the telephone to Mr. Andrew Gass, the Vice President of the Northern Region of Computer 2000. Mr.Menzies and Mr.Gass had met earlier on an unrelated matter. Mr.Gass in a witness statement said that Mr.Menzies said that:
“he wanted me to speak to Computer 2000 to advise them that Time had no real interest in pursuing a legal case against Computer 2000, but rather were using it in order to win moneys from IBM. He also stated that he was aware of the existence of an agreement between Computer 2000 and IBM …. that potentially limited the actions that Computer 2000 could take against IBM, but that he felt that Time and Computer 2000 acting together could circumvent this.”
Mr.Menzies responded to that evidence with a statement that broadly agreed with Mr.Gass. He said:
“I asked him if he was prepared to speak to Frontline to facilitate a meeting between Time and Frontline for a discussion of how to progress the case. I said that Time considered IBM rather than Frontline was to blame and Time had no real complaint about Frontline's conduct but would like an opportunity to explain its case to Frontline, in particular to explain the complex evidential basis on which Frontline might be able to join IBM as a third party. I explained to Mr Gass that, in my view, rather than attack Time, Frontline would be better advised if it directed its energies against IBM. I suggested that if Frontline involved IBM there was an opportunity to find a solution whereby Frontline might not be ultimately left out of pocket. This seemed to me to be a perfectly legitimate and proper proposal to make.”
In his second witness statement, made after the opening submissions, Mr. Menzies said:
“I make this 2nd witness statement in order to clarify my 1st  witness statement. It has been said in submissions made by IBM's Counsel that because my 1st  witness statement did not specifically deny the words attributed to me in Mr Gass's statement that I must be taken to have agreed that I used those words. This is incorrect. For the avoidance of doubt I did not say that Time had "no real interest in pursuing a legal case against Computer 2000" but were "using it in order to win monies from IBM' nor did I say that "Time and Computer 2000 acting together could circumvent" the agreement between IBM and Computer 2000. Those words are not mine and I did not use them. What 1 actually said in my conversation with Mr Gass is set out in my 1st  witness statement”.
I accept what Mr.Menzies says in his second witness statement, but I also accept that Mr.Gass was accurate in his statement of the impression that that the conversation made on him, though he may not be word perfect in his account. It is clear from the first statement of Mr. Menzies that:
(a)	Time did not want Computer 2000 to suffer financially.
(b)	Time wanted Computer 2000 to join IBM as a third party.
(c)	Time wanted an opportunity to explain to Computer 2000 how to get round the Computer 2000 settlement agreement with IBM, which must have been the misrepresentation point.
56.	After the hearing on 2 July, 2002, having diverted Computer 2000’s first attack on Time’s case, Time made a yet more urgent attempt to persuade Computer 2000 to join IBM. After the hearing on 2 July, 2001, outside court, the solicitor to Time read out to solicitor and counsel for Computer 2000 a draft of a letter that he said was going to be sent by Mr. Mohsan to Computer 2000. The draft has since been reluctantly disclosed and is in the following terms:
“DRAFT LETTER
STRICTLY PRIVATE & CONFIDENTIAL
(NOT T0 BE SHOWN IN ANY CIRCUMSTANCES TO IBM)
TONY TAYLOR
WITHOUT PREJUDICE
SUBJECT TO CONTRACT
Dear Tony,
TIME V. COMPUTER 2000
Later today, our respective solicitors are appearing in court in an effort to secure access to evidence which will be helpful both to Computer 2000 and to Time. Needless to say, IBM are making every possible effort to put procedural obstacles in our way. Happily, however, our respective legal teams, both solicitors and Counsel are to the extent permitted by the Rules co-operating in seeking to resist IBM’s approach.
So as to make this approach easier and indeed to put it on a formal footing, I would like to propose that we enter into an agreement along the following lines:
1.	Time agrees that it will not seek to make any claim against Computer 2000 which is greater than Computer 2000’s recovery in its Part 20 proceedings against IBM.
2.	Computer 2000, in turn, undertakes to use its best endeavours, (which Time appreciates may not succeed) to pursue Part 20 proceedings against IBM using all available evidence and, in turn, agrees to co-operate with Time in terms of litigation tactics.
I, of course, appreciate that in advocating the above approach I am foregoing the prospect of making any recovery against Computer 2000 in the event that Computer 2000 is unsuccessful in joining IBM into these proceedings as a Part 20 Defendant or in the event that having joined IBM as a Part 20 Defendant, Computer 2000 is unsuccessful in those Part 20 proceedings. That is a risk, however, that I am prepared to take based on my belief that you will be successful both in joining IBM and in successfully pursuing Part 20 proceedings. In saying this, I do not expect IBM to wish to have a trial in any form which will introduce into the public domain its shady handling of the Blue Lightning issue. My experience of pursuing IBM in the past is that, after an enormous amount of bluff and bluster, they settle when the risk of publicity and public scrutiny becomes unavoidable. I have no doubt they will approach this particular piece of litigation in the same way. My risk is accordingly a minimal one and I hope therefore that the approach outlined above is one that we can both work within.

Yours sincerely,
Tahir Mohsan”
57.	A letter based on that draft letter was sent, but not in identical terms. Mr. Taylor in his witness statement said:
“These ‘phone calls culminated in a letter which Mr. Mohsan sent to me dated 10th July 2001. This letter was headed: “STRICTLY PRIVATE AND CONFIDENTIAL (NOT TO BE SHOWN IN ANY CIRCUMSTANCES TO IBM)”  it stated:
“Further to my recent telephone conversation, I would suggest the following:
1.	Time agrees that it will not seek to make any claim against Computer 2000 which is greater than Computer 2000’s recovery in its Part 20 proceedings against IBM.
2.    Computer 2000, in turn, undertakes to use its best endeavours, (which Time appreciates may not succeed) to pursue Part 20 proceedings against IBM using all available evidence and, in turn, agrees to co-operate with Time in terms of litigation tactics.”
Mr. Mohsan then continued with a paragraph in the same terms as the last paragraph of the draft letter and concluded:
“In order to move this forward, I require you to send me a letter back, without prejudice subject to contract, that strongly agrees with this in principle   “
Mr. Taylor continued:
“Needless to say, I did not send a letter back as requested by Mr Mohsan. This letter set down in black and white what Mr Mohsm had previously explained to me - i.e. that the purpose of proceedings against C2000 was to get a recovery from IBM not C20OO. Time was using the claim against C2000 as a tactic to drive IBM to the negotiating table and force it to pay further money to Time.
Needless to say, I regarded Mr. Mohsan's proposal as unacceptable. I did not respond to it in writing as requested. I had one further phone call with him in which I told him that C2000 would not enter such an arrangement.”
58.	Counsel for Time submits that the draft letter shows that the true purpose of the letter of 10 July, 2001 was a perfectly reasonable attempt to solicit co-operation in the face of what were described as IBM’s attempts to raise “procedural difficulties”.
59.	On the other hand, counsel for IBM and Computer 2000 submit and I agree that both the draft and the letter of 10 July, 2001 as sent together with what preceded them show that Mr. Mohsan from the outset had no interest in suing Computer 2000 unless Computer 2000 joined IBM in the proceedings and were successful against IBM. Mr. Mohsan relies on the fact that Computer 2000 did not accept the offer, but that does not help him or Time. The letter and its draft, together with the evidence of the telephone calls, reveal Time’s purpose in suing Computer 2000, namely to get IBM to settle a second time to avoid the embarrassment of appearing in court. Moreover the opening words of the letter itself, “Further to our recent telephone conversation …” link the letter with Mr. Mohsan’s recent telephone conversation and corroborate Mr. Taylor’s account of that and other telephone conversations. The letter of 10 July was plainly sent because Mr. Mohsan thought that Computer 2000 needed more encouragement to join IBM as a party to the action.
60.	In their opening submissions, counsel for both IBM and Computer 2000 criticised Mr. Hope’s witness statement. In particular, they pointed out that while Mr. Hope said that Time was entitled to sue IBM alone in the 1998 action without joining Computer 2000 he did not say why Time took that course. After those submissions, further witness statements were put in from Mr. Mohsan and his solicitor but neither in those statements nor in any other statement was it said why Time chose to sue IBM alone in the 1998 action.
61.	I put to Mr.Stadlen, and he agreed, that there may be circumstances in which it might be quite proper for a claimant to sue a defendant on the basis that the defendant would join a Part 20 defendant and the only effective recovery would be from the Part 20 defendant. For example, where there is a chain of contracts and the first defendant in the chain has no means to pay the claimant. Another example would be where a wife sues her husband who was the negligent driver of a car in which she was the passenger, intending to be recompensed by her husband’s insurers. But if there were nothing wrong with such a course it would be done openly and not under such headings as we saw to the letter of 10 July, 2001.
62.	The result of the course of action taken by Time is that both IBM and Computer 2000 have been prejudiced. 
63.	IBM have been prejudiced because, if Time had during the negotiations to settle the 1998 action revealed their intention to sue Computer 2000 with a view to pursuing IBM again, IBM would either have insisted on having a term in the settlement agreement excluding such a course or would have gone ahead on 10 July 2000 with a trial of the technical issues for which they were geared up. Instead, if this action proceeds, they will have to fight those technical issues and others at some time in the future, having paid substantial sums of money to avoid doing so in the past.
64.	Computer 2000 are prejudiced because:
(a)	A senior executive destroyed all Computer 2000’s relevant documents after the settlement with IBM after being assured by another senior executive that they would no longer be needed. Time say that they will provide documents to Computer 2000 but Computer 2000 do not know what additional relevant documents have been destroyed. There are classes of documents that Time will not be able to supply, for example complaints from customers.
(b)	By failing to join Computer 2000 as defendant to the 1998 action, Time gave itself a lead of 2 years in the preparation of documents, evidence and experts’ reports and if this action proceeds Computer 2000 will have to try to catch up long after the event.
(c)	In evidence and early submissions, Computer 2000 also made a point that they may have been prejudiced in their ability to call the oral evidence of certain witnesses. That point was fairly effectively destroyed and was not mentioned in closing submissions for Computer 2000. However, it remains true that the evidence of witnesses is likely to have been dimmed and witnesses for Computer 2000 will not be able to refresh their memory from documents that were destroyed.
65.	Further, by failing to bring its claims against IBM and Computer 2000 together in one action in 1998, Time has impeded the administration of justice and made it probably impossible to do justice in this case. Each action has taken up a considerable amount of time in case management, first by His Honour Judge Humphrey Lloyd Q.C. (the 1998 action) and then in this action by myself. More importantly, I do not see how the damages for loss of sales can be assessed except by an apportionment between IBM and Computer 2000 and I do not see how that can be done without both parties being before the court in the same trial and considering the evidence regarding Time’s loss of sales that would have been brought in the 1998 action. Moreover, the settlement between IBM and Time introduced  further difficulty.
66.	The formulation of the action against Computer 2000 is very similar to the 1998 action. The alleged breaches are identical and the principal head of loss in both cases is “loss of profits on lost sales”. In the present action, the lost sales are said to have been 6000 as opposed to 35,000 in the 1998 action and Time asserts that this loss has not been recovered from IBM. If the claims were limited to the costs of recompensing individual customers or upgrading or scrapping individual PCs, I can understand that, if Time’s records were adequate for the purpose (and from what I have seen previously they are not) it might be possible to separate the claim against Computer 2000 from the claim against IBM. But the main claim is that both of them contributed to a general loss of business by Time due to distraction of Time’s staff and injury to Time’s reputation. If both claims were tried together one might try to make an overall assessment and then apportion in some way. But the position is now complicated by the two settlements, in particular the settlement with Time. What is it that Time has been paid for already? It was a broad brush settlement and I suspect that no one will be able to give a satisfactory answer to that question. One would have to consider how much of the £6 million related to loss of sales and how much related to other heads of claim.
67.	The governing principles of law are to be found in Henderson v. Henderson (1843) 3 Hare 100 as explained in more recent cases, particularly Bradford & Bingley Building Society v. Seddon [1999] 1 WLR 1482 and Johnson v. Gore Wood & Co. [2001] 2 WLR 72.
68.	So far as concerns the first submission made by the parties, the basic test is twofold:
(1)	could the issues raised in the second action have been raised in the first action?
(2)	should those issues have been raised in the first action?
69.	The answer to the first question is undoubtedly, Yes. Time accept that they could have joined Computer 2000 in the first action where so many issues overlapped with the second action. 
70.	Attention has therefore been concentrated on the second question, should the issues raised in the second action have been raised in the first?
71.	Time raise another point. Time submit that IBM has no locus standi to object to Time bringing the second action because Time did not sue IBM in the second action. Computer 2000 could have brought an independent action against IBM independently and, subject to the point about the settlement agreement with IBM, IBM could not have had such an action stayed as an abuse of process and would have had to litigate the same matter twice. However, that is not what happened. Time rely on a dictum of Sir Robert Megarry V-C to the effect that the rule in Henderson v. Henderson applies only when the parties to the two actions are the same.
72.	IBM take as their starting point in the authorities the speech of Lord Bingham in Johnson v. Gore Wood & Co. At page 82, Lord Bingham cited Henderson v. Henderson. Lord Bingham said:
“This form of abuse of process has in recent years been taken to be that described by Sir James Wigram V-C in Henderson v Henderson 3 Hare 100, 114-115.
“In trying this question, I believe I state the rule of the court correctly, when I say, that 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”.
Thus the abuse in question need not involve the reopening of a matter already decided in proceedings between the same parties, as where a party is estopped in law from seeking to relitigate a cause of action or an issue already decided in earlier proceedings, but, as Somervell LJ put it in Greenhalgh v Mallard [1947] 2 All ER 255, 257, may cover "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”.
A series of cases, mostly in recent years, has explored this form of abuse.”
Lord Bingham then went on to review a number of those cases. In the course of that review he said, at page 83:
“In Brisbane City Council v Attorney General for Queensland [1979] AC 411 the Privy Council expressly endorsed Somervell LJ's reference to abuse of process and observed, at p 425:
"This is the true basis of the doctrine 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."
Then at page 89 in the last paragraph Lord Bingham said:
“It may very well be, ….that what is now taken to be the rule in Henderson v Henderson has diverged from the ruling which Wigram V-C made, which was addressed to res judicata. But Henderson v Henderson abuse of process, as now understood, although separate and distinct from cause of action estoppel and issue estoppel, has much in common with them. The underlying public interest is the same: that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole. 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. As one cannot comprehensively list all possible forms of abuse, so one cannot formulate any hard and fast rule to determine whether, on given facts, abuse is to be found or not. Thus while I would accept that lack of funds would not ordinarily excuse a failure to raise in earlier proceedings an issue which could and should have been raised then, I would not regard it as necessarily irrelevant, particularly if it appears that the lack of funds has been caused by the party against whom it is sought to claim. While the result may often be the same, it is in my view preferable to ask whether in all the circumstances a party's conduct is an abuse than to ask whether the conduct is an abuse and then, if it is, to ask whether the abuse is excused or justified by special circumstances. Properly applied, and whatever the legitimacy of its descent, the rule has in my view a valuable part to play in protecting the interests of justice.”
73.	At page 91, Lord Bingham cited with approval the dictum of Sir Robert Megarry V-C on which Time rely with regard to Third Parties. Lord Bingham said:
“Two subsidiary arguments were advanced by Mr. Ter Haar in the courts below and rejected by each. The first was that the rule in Henderson v Henderson 3 Hare 100 did not apply to Mr. Johnson since he had not been the plaintiff in the first action against GW. In my judgment this argument was rightly rejected. A formulaic approach to application of the rule would be mistaken. WWH was the corporate embodiment of Mr. Johnson. He made decisions and gave instructions on its behalf. If he had wished to include his personal claim in the company's action, or to issue proceedings in tandem with those of the company, he had power to do so. The correct approach is that formulated by Sir Robert Megarry V-C in Gleeson v J Wippell & Co Ltd [19771 1 WLR 510 where he said, at p 515:

“Second, it seems to me that the substratum of the doctrine is that a man ought not to be allowed to litigate a second time what has already been decided between himself and the other party to the litigation. This is in the interest both of the successful party and of the public. But I cannot see that this provides any basis for a successful defendant to say that the successful defence is a bar to the plaintiff suing some third party, or for that third party to say that the successful defence prevents the plaintiff from suing him, unless there is a sufficient degree of identity between the successful defendant and the third party. I do not say that one must be the alter ego of the other: but it does seem to me that having due regard to the subject matter of the dispute, there must be a sufficient degree of identification between the two to make it just to hold that the decision to which one was party should be binding in proceedings to which the other is party. It is in that sense that I would regard the phrase 'privity of interest."'

On the present facts that test was clearly satisfied.

The second subsidiary argument was that the rule in Henderson v Henderson 3 Hare 100 did not apply to Mr. Johnson since the first action against GW had culminated in a compromise and not a judgment. This argument also was rightly rejected. An important purpose of the rule is to protect a defendant against the harassment necessarily involved in repeated actions concerning the same subject matter. A second action is not the less harassing because the defendant has been driven or thought it prudent to settle the first; often, indeed, that outcome would make a second action the more harassing”.
74.	I have extended the quotation from Lord Bingham’s speech to include Mr.Ter Haar’s second subsidiary argument because of Lord Bingham’s comment that the settlement of the first action would often make the second action the more harassing because that is what I believe has happened here. The settlements of the first action and of Computer 2000’s claim before action have made it the more difficult to disentangle the damages claims. But I return to the first point.
75.	Counsel for Time relies on the speech of Lord Millett in Johnson v. Gore Wood at page 118:
“There is, of course, no doubt that Mr. Johnson could have brought his action as part of or at the same time as the company's action. But it does not at all follow that he should have done so or that his failure to do so renders the present action oppressive to the firm or an abuse of the process of the court. As May L.J. observed in Manson v. Vooght [1999] BPIR 376, 387 it may in a particular case be sensible to advance claims separately. In so far as the so-called rule in Henderson v Henderson suggests that there is a presumption against the bringing of successive actions, I consider that is a distortion of the true position. The burden should always rest on the defendant to establish that it is oppressive or an abuse of process for him to be subjected to the second action.”

And at page 119, Lord Millett said:

“The rule in Henderson v Henderson 3 Hare 100 cannot sensibly be extended to the case where the defendants are different. There is then no question of double vexation. It may be reasonable and sensible for a plaintiff to proceed against A first, if that is a relatively simple claim, in order to use the proceeds to finance a more complex claim against B. On the other hand, it would 1 think normally be regarded as oppressive or an abuse of process for a plaintiff to pursue his claims against a single defendant separately in order to use the proceeds of the first action to finance the second, at least where the issues largely overlap so as to form, in Sir James Wigram V-C's words, at p 115, "the same subject of litigation".
Particular care, however, needs to be taken where the plaintiff in the second action is not the same as the plaintiff in the first, but his privy. Such situations are many and various, and it would be unwise to lay down any general rule. The principle is, no doubt, capable in theory of applying to a privy; but it is likely in practice to be easier for him to rebut the charge that his proceedings are oppressive or constitute an abuse of process than it would be for the original plaintiff to do so.”

76.	Two earlier decisions of the Court of Appeal were referred to by Lord Bingham without disapproval, namely Bradford & Bingley Building Society v. Seddon [1999] 1 WLR 1482 and C. v. Hackney London Borough Council [1996] 1 WLR 789.It was suggested in argument that those authorities are in conflict as to the law on abuse of process where different parties are involved. Indeed, in Bradford & Bingley Building Society at page 1492, Auld L.J. expressed some disapproval of the judgment of Simon Brown L.J. in the earlier case of C. v. Hackney London Borough Council. However, Mr. Mill Q.C. on behalf of Computer 2000 has shown that Simon Brown L.J. was dealing with a plea of res judicata and I am satisfied that, notwithstanding the comments of Auld L.J. there is no conflict between the statements of Simon Brown L.J. regarding the strict doctrine of res judicata and what was said by Auld L.J. regarding the wider concept of abuse of process of the court as it is now understood. The decision of Bradford & Bingley Building Society v. Seddon was not expressly disapproved by Lord Millett or any other member of the House of Lords in Johnson v. Gore Wood and is binding on me.
77.	In Johnson v. Gore Wood, Lord Bingham, with whom Lords Goff, Cooke and Hutton agreed, cited with approval passages from the judgment of Auld L.J. in Bradford & Bingley Building Society v. Seddon that made it plain that the Court of Appeal there decided that a second action against a defendant who had not been a party to the first action may in some circumstances be an abuse of the process of the court. After summarising the facts of Bradford & Bingley Building Society v. Seddon, Lord Bingham said at page 88:
“An application to strike out the third party claim was upheld by the judge and Mr. Seddon appealed. In the course of a judgment with which Nourse and Ward LJJ agreed, Auld LJ said, at pp 1490-1491:
"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 courts' subsequent application of the above dictum [of Sir James Wigram V-C in Henderson v Henderson Hare 100]. The former, in its cause of action estoppel form, is an absolute bar to relitigation, and in its issue estoppel form also, save in 'special cases' or 'special circumstances': see Thoday v Thoday [19641 P 181, 197-198, per Diplock LJ, and Arnold v National Westminster Bank plc [19911 2 AC 93. 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. 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. It may also arise where there is such an inconsistency between the two that it would be unjust to permit the later one to continue."

It is plain from that citation and in particular from the words in brackets in the last paragraph that Lord Bingham was approving the decision of the Court of Appeal in Bradford & Bingley Building Society v. Seddon that abuse of process may arise when the parties or the issues in the two actions are different. At page 1491, Auld L.J. spelt out his decision on this point in greater detail:
“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 to the proceedings 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 Investment Co. Ltd. v. Dao Heng Bank Ltd. [1975] A.C. 581; Bragg v. Oceanus Mutual Underwriting Association (Bermuda) Ltd. [1982] 2 Lloyd's Rep. 132; North West Water Ltd. v. Binnie  & Partners [1990] 3 All E.R. 547; M.C.C. Proceeds Inc. v. Lehman Brothers International (Europe) [1998] 4 All E.R. 675 and per Potter L.J. in Morris v. Wentworth-Stanley [1999] 2 W.L.R. 470, 481”

78.	I should add that when Sir Robert Megarry V-C in Gleeson used the words cited by Lord Bingham, he was considering a question of issue estoppel or res judicata and was not considering the wider issues of abuse of process of the court raised in Johnson.
79.	I find that as a matter of law it may be an abuse of the process of the court to bring a second action on issues related to issues that have already been raised in a prior action even where the defendant in the second action is not the same as the defendant in the first action.
80.	Even if I were wrong on that finding of law and the law is as submitted by counsel for Time, I would hold that this case is an exception to the rule for which counsel contends. Even in the estoppel case of Gleeson Sir Robert Megarry V-C, in line with previous authority, indicated that there might be an estoppel where the defendants are different “if there is a sufficient identity between the defendant and the third party”. On the facts of the present case there was such “sufficient identity”. Here the intention of Time was to make a claim in the second action against the very same defendants as were sued in the first action, but Time could only do that by the roundabout route of suing Computer 2000. This is not simply a case of a claimant first suing defendant A and then in another action suing defendant B who had nothing more than a trading relationship with defendant A as was the case in Gleeson.
81.	As a matter of procedure, counsel for IBM relies on CPR 3.4(2). That rule authorises the striking out of a statement of case if it appears to the court that the statement of case is an abuse of the court’s process. The Practice Direction under that Rule, 3PD paragraph 1.7 authorises a party to make application under CPR 3.4 if he believes that an opponents case has no real prospect of success. CPR Part 20.10 provides that a party on whom a Part 20 claim is served becomes a party if he is not a party already. Counsel for IBM submits that in this litigation, Time is plainly an opponent of IBM and therefore IBM is entitled to bring this application. I accept that that is correct as a matter of procedure, but that does not override the issues of substantive law with which I have already dealt.
82.	For all these reasons, I reject the submission that IBM has no locus standi to make its application.
83.	Before returning to the facts of this case, there are certain principles that should be restated as particularly relevant to this case:
(a)	The decision “should 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, focussing 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.” See per Lord Bingham in Johnson v. Gore Wood.
(b)	The categories of abuse of process are not closed: per Lord Diplock in Hunter v. Chief Constable of the West Midlands Police [1982] AC 529 at 536D, and per Stuart-Smith LJ in Ashmore v. British Coal [1990] QB 338 at 352D, and per Sir David Cairns in Bragg v. Oceanus Mutual [1982] 2 Lloyds Rep 132, 137, 138-139.
(c)	It is serious matter to dismiss an action for abuse of process of the court.
(d)	However, when abuse is revealed, the court has a duty, not a discretion, to dismiss the action: per Lord Diplock ibid.
(e)	There is no presumption against successive actions in contract raising similar issues. There are cases where it is perfectly proper to bring successive actions for breach of contract raising similar issues against different parties: per May L.J. in Manson v. Vooght [1999] BPIR 376 at 387 – 388.
(f)	There are cases where it is perfectly proper to bring an action against a defendant intending that the only effective recovery shall be from a third party joined by that defendant.
(g)	The onus of proof of abuse is on the party alleging abuse of the process of the court: per Lord Bingham in Johnson v. Gore Wood at page 90.
(h)	There is a public interest in finality in litigation including the public interest in efficiency and economy in the conduct of litigation: ibid.
84.	As to the facts, Counsel for Time submitted:
“It is accepted that Time could have included Frontline in the original proceedings in 1998 but it is submitted that it was entitled to take the view that there were legitimate reasons for not pursuing Frontline at that time. These were:
1)	Frontline and IBM were separate suppliers and did not need to be sued together. Time was not keen on having to fight two suppliers together.
2)   	Time took the view that the case against IBM on the motherboard or DMA defect was one where IBM knew about its product in a way that Frontline could not. Time believed that there was a motherboard defect but knew relatively little about its nature, but IBM asserted that it was a software incompatibility problem. There was a risk that Time could be proved wrong when disclosure against IBM took place. It was unattractive to sue Frontline at that time until the motherboard defect became clearer with the risk of having to pay Frontline's costs as well as IBM'S;
3)	The case on the DMA defect developed and only properly emerged by the end of  January/February 2000. Until then it was not known that IBM had discovered the defect which was acknowledged by manufacturer of the DMA chip, had ordered a revised chip to be made, but then took a risk in selling the defective chip in PCs sold to OEM customers such as Frontline and Time. Nor did Time know until then that IBM put out an official statement that misleadingly asserted that the problem was to do with recent games rather than accept that one of the PC components was defective. When this evidence emerged it became clear that Time had a strong enough case to warrant proceedings against Frontline;
4)	By that time, it was too late to join Frontline in time for the preliminary issue to be held in May, and subsequently re-listed for July. It would mean losing the date for the trial of that preliminary issue, potentially removing the focus of  the litigation on a point of substance which was likely to result in a finding of liability against IBM and taking the legitimate pressure off IBM to settle the case earlier rather than later.
5)	It was considered that a separate claim against Frontline might be easier to settle once the IBM claim was out of the way and if IBM had settled that might be a warning signal to Frontline that IBM’s case had been weak.”

85.	That argument by counsel for Time and by Mr.Mohsan in his witness statements is based on an underlying assumption that Time wanted to recover one set of damages from IBM and another set of damages from Computer 2000. But I reject that assumption. Time wanted to recover two sets of damages from IBM, either directly of indirectly. For that reason I reject those submissions. In any event, the extra costs of joining Computer 2000 pale into insignificance in relation to the sums in issue in this action. Moreover, even if one were to accept the rest of the argument, the possibility of losing the trial date in July is of little importance when set against the stated intention of Time to use a decision of the court to which Computer 2000 was not a party, but in which Computer 2000 could have been invited to participate, to bring pressure to bear on Computer 2000 to settle. The July trial could almost certainly have been relisted for October, 2000.
86.	My finding that Mr. Mohsan intended by this action to seek a further payment from IBM, taken together with the construction that I have put on the settlement agreement between IBM and Time leads to the conclusion that Time is barred by contract from pursuing this claim in addition to what I have said about abuse of the process of the court.
87.	It has been said that by their long delay in issuing this application Computer 2000 acquiesced in these proceedings and should not be allowed to have them dismissed. In this connection, Counsel for Time relies on a passage in the speech of Lord Bingham in Johnson v. Gore Wood at page 93:
“[The defendant’s] failure to strike out over a long period of time is potent evidence not only that the action was not seen as abusive at the time but also that, on the facts, it was not abusive. The indicia or true abuse are not so obscure that an experienced professional party, advised by leading counsel …, will fail to recognize them”.
In the case before me, Computer 2000 is not a professional party and I do not know when leading counsel was first instructed on their behalf, but they have throughout been advised by very competent solicitors and junior counsel and the point is the same.
88.	However, the delay is explained by the third witness statement of Miss Tonge, solicitor for Computer 2000. In that witness statement she explained that Time’s case was initially pleaded in such vague terms that Computer 2000 did not know what it was about. That was, of course, compounded by the destruction of their documents. It was not until 4 June 2001 that a comprehensible case was presented, after an application to the court. Moreover, before applying to the court to dismiss fro abuse of the process of the court, Computer 2000 needed to know what were the previous proceedings referred to in the letter before action. Computer 2000 had to apply to the court for permission to inspect the court file in the previous proceedings and that permission was granted on 19 June, 2001 and documents were disclosed after that date. Time and IBM did not release to Computer 2000 a copy of the settlement agreement between them until 16 November, 2001. In the circumstances, although they might have issued their application about two weeks earlier, they can hardly be blamed for the rest of the delay.
89.	It is a very serious matter to stop any litigation, but I have no doubt that in this case it is the right thing to do. The totality of the evidence shows that the conduct of actions brought by Mr. Mohsan has been tricky and devious. He has sought so to engineer court procedures as to pressure IBM into making further payment by way of settlement when IBM thought that they had achieved finality of settlement on payment of large sums of money. He thought that he could achieve that by presenting them with the prospect of further embarrassment by the prospect of exposing them to trial in open court. I consider that the conduct of Time has been an abuse of the process of the court. I add one matter that does not form part of my reasoning for reaching this conclusion. I am comforted in the conclusion that I have reached by the consideration that on previous occasions when I have considered this action in detail I have formed the view that the damages alleged are highly speculative and difficult to prove.
90.	Finally, I should say something about the unresolved application by Time for further disclosure of documents for which IBM and C2000 claim privilege and they also say that the documents are irrelevant to this application. Mr. Hochhauser Q.C. for Time said in relation to the application for further disclosure that he “reserved his position”. Time and those representing them suspect that the documents may show some collusion of a discreditable nature between IBM and C2000. Quite apart from the unsatisfactory form of that application and the lack of evidence in support of it, it has to be said that even if those documents did disclose some form of collusion, that would not affect the public interest that this action should be dismissed.
ORDER:
1.Claim and Part 20 claim dismissed.
2.Claimant to pay the costs of the defendant and Part 20 defendant of the claim and Part 20 Claim such costs to be the subject of detailed assessment on an indemnity basis.
3.Claimant to make interim payments on account of costs in the sums of £50,000 to the solicitors for the defendants and £100,000 to the solicitors for the Part 20 defendants by 4 p.m. on 25 February, 2002.
4. Permission to appeal on the merits. Permission to appeal on costs refused.