KB-2025-001160 - [2025] EWHC 2369 (KB)

Mr Oudkerk also placed considerable reliance on Twinsectra Limited v Lloyds Bank Plc [2018] EWHC 672 (Ch) where Mr Jeremy Cousins QC, sitting as a Deputy High Court Judge, considered the principles of election, approbation and reprobation, and abuse of process. The context was a case in which the claimant company had obtained judgment in earlier proceedings against one of its directors on the basis that he had acted in breach of fiduciary duty in causing the company to enter into certain charges to secure a loan from the Bank. Damages had been awarded on the basis that the company was liable to the Bank. The company later brought proceedings against the Bank in which it contended that the charges were not valid because the director lacked authority to enter into them on behalf of the company. The Bank successfully applied for summary judgment on the basis that obtaining judgment against the director in the earlier proceedings meant that the claimant was precluded from contending, in subsequent proceedings, that the charges were not valid.

Mr Oudkerk drew particular attention to a passage from the judgment of Walker LJ (as he then was) in Oliver Ashworth (Holdings) Ltd v Ballard (Kent) Ltd [2000] Ch 12, which Mr Cousins cited at [45]. That passage included the following in relation to the distinction between election between inconsistent rights and election between inconsistent remedies:

“The distinction can of course be obscured by terminology: every remedy is in one sense a right, even if its grant is discretionary, but not every right is a remedy. The distinction is clear if "right" is used to indicate a substantive right such as entitlement to a leasehold interest or to the benefit of a contract. If a would-be purchaser is induced by a misrepresentation to enter into a contract, he has a choice (exercisable subject to familiar constraints) whether to treat himself as no longer bound by the contract, or to affirm it. In either case he will usually also be entitled to claim damages for any loss caused by the misrepresentation. That is an election between rights. If he chooses to affirm the contract and the other party defaults, the purchaser may sue for specific performance or for damages. That is an election between remedies. Normally election between remedies need not be made until judgment, and even then the election need not be final if specific performance is not in the event feasible. Sometimes, however, election between substantive rights and between procedural remedies will necessarily coincide. The most obvious example is in the law of landlord and tenant when a landlord decides not to claim that a lease has been determined by forfeiture; by that decision he necessarily also elects not to seek an order for possession of the demised premises." (emphasis added)

Affirming the Contract in the present case, submitted Mr Oudkerk, was analogous to failing to claim that a lease has been determined by forfeiture. Having done so, BISL could not then claim damages on the basis that the Contract would have been terminated prior to 22 February 2024.

Mr Oudkerk also relied on the following principle which Mr Cousins derived from the authorities at [72(i)] of his judgment, and I note [72(iii)] for completeness:

“(i)

Where an election has been made between rights, it cannot be retracted. Thus, where a contract has been affirmed by the innocent party, following repudiatory breach by the other party, the innocent party cannot later go back upon his affirmation. His decision stands, and so does the contract. For this purpose, election, whether intended or not, by an unequivocal act communicated to the other party, is conclusive; ..It is, therefore, possible for the making of a claim against one party, even though it does not proceed to judgment, to represent an unequivocal manifestation of an election between inconsistent rights which might affect a claim against another party;...” (emphasis added)…

(iii)

A claimant cannot have both alternative and inconsistent remedies. He must elect between them, when judgment is given, but need not do so before;…”

In Twinsectra, Mr Cousins held that there had been an election between inconsistent remedies when the company had entered judgment in the earlier proceedings against its director. There was also, at least at that point, an election between rights i.e. between the right to enter a judgment for the money sum against the director and the right to press on and challenge the validity of the charges. In addition to finding that there had been an irrevocable election by the company, he held that it had offended against the principle of approbation and reprobation, and had acted in abuse of process in the subsequent proceedings against the Bank as well.

I note that in Glencore Grain Ltd v Flacker Shipping Ltd (the Happy Day) [2002] 2 All ER (Comm) 896 Potter LJ provided a lucid explanation of the difference between unilateral waiver and waiver by election, and their relationship with estoppel. The former entails a unilateral decision by a party to waive an obligation under a contract. As for the latter:

“65.

So far as waiver by election is concerned, the basic proposition is that where two possible remedies or courses of action are to his knowledge open to X and he has communicated his intention to follow one course or remedy in such a manner as to lead Y to believe that his choice has been made, he will not later be permitted to resile from that position…” (emphasis added)

Potter LJ went on to say:

“68.

In relation to waiver, it is important to note certain features of the doctrine around which the submissions of the parties have revolved:

(1)

In order to demonstrate awareness of the right waived, it must generally be shown that X had knowledge of the underlying facts relevant to his choice or indication of intention...

(2)The court will examine any act or conduct alleged to be unequivocal in its context, in order to ascertain whether or not it is sufficiently clear and unequivocal to give rise to a waiver.....”