Res judicata by merger—same facts, same parties, two claims? (Zavarco plc v Nasir)

Article summary

Dispute Resolution analysis: The doctrine of res judicata by merger states that where a claimant successfully obtains judgment on a cause of action, that cause of action ‘merges’ with the judgment and is extinguished. Merger therefore traditionally bars a successful claimant from bringing a second claim based on the same cause of action, eg, for further damages—all they can do is enforce the earlier judgment. In Zavarco plc v Nasir, Zavarco plc had successfully obtained a declaration that Mr Nasir’s shares had not been paid up, and that they were accordingly entitled to forfeit Mr Nasir’s unpaid shares. They subsequently brought a second claim against Mr Nasir purportedly ‘in debt’, for the sum that had been declared to be unpaid. Both claims relied on identical facts and the identical cause of action—non-payment of the shares. Nonetheless Birss J held that the second claim in debt could proceed, as it was based on a different ‘right’ to that determined...