A consumer who succeeded before the UK Supreme Court in an action against a retail store and a bank claiming damage to his creditworthiness, but who failed to win the damages he sought, has had a second action dismissed by the Inner House on the basis that no new issues had been raised.

Lady Paton, Lord Drummond Young and Lord Malcolm agreed that the sheriff and sheriff principal at Aberdeen correctly upheld the plea of res judicata by HSBC Bank in an action by Richard Durkin, seeking total damages of more than £600,000, made up of legal expenses incurred in a previous action together with the additional cost of buying a family home since the events in question, something he claimed to have been unable to do as a result of the wrongs committed.

In 1998 Mr Durkin had bought a laptop computer at a PC World store, with the aid of a credit agreement, but returned it the next day because it did did not have an internal modem, which he had expressly required. The store refused to cancel the credit agreement and the lender insisted on payment, and subsequent default proceedings along with notice to credit reference agencies.

In the previous litigation, against the store and the lender, Mr Durkin, having claimed £250,000, was awarded £116,500 in the sheriff court, comprising £8,000 for injury to general creditworthiness and the remainder for loss of opportunity to buy a property in Spain. The Court of Session found that the evidence did not support any breach of duty of care and reversed that decision, revising the findings in fact. On Mr Durkin's further appeal, the Supreme Court held there had been a breach of duty of care, but that by statute it could not interfere with the revised findings and only the £8,000 could be awarded (click here for report).

Aggrieved by this outcome, Mr Durkin raised the present action against the lenders' successors, this time categorising the wrongful acts not as negligent misstatement but as malicious and deliberate falsehood (or defamation), intentional harm, and fraud or fraudulent misrepresentation. Rather than the contracts having been validly rescinded, it was said they had never existed (a case the Supreme Court had refused to allow to be pled before it).

Lord Malcolm, delivering the opinion of the court, said it was "clear that the new action is an attempt to relitigate matters decided adversely to the pursuer in the previous action, plus an added claim for reimbursement of legal expenses incurred in the course of those proceedings". The latter claim was plainly irrelevant, because the Supreme Court had ruled on how those expenses were to be dealt with.

Regarding the damages claim, the recategorising of the alleged wrongful act (the issuing of the wrongful default notices to the credit reference agencies) "does not change the essential issue in dispute, nor the nature of the action". The same applied to the offer to prove that the contracts never existed.

"In any event," he continued, "even had the new case been introduced [in the previous action], it would not have changed the result." This was because the causal link between the wrongful act and the losses claimed, beyond the £8,000, had not been proved by the evidence led.

The judge concluded: "Whether attributable to negligence or to a fraudulent and/or malicious desire to harm the pursuer, the fact is that the court is now being asked to reverse the determination in the first action as to the extent of the recoverable losses caused by the bank’s conduct. Mr Durkin’s opportunity to recover damages for that matter arose in the first action."

He observed further: "It is likely that Mr Durkin will find it difficult to reconcile himself to this decision; but if he reflects on how he would react had he enjoyed complete success in the Supreme Court and then faced a new action seeking restoration of the decision of the Inner House, he might understand the rationale of our law on res judicata." 

Click here to view the opinion of the court.