Construction works — Negligence — Damages — Claimant bringing proceedings towards expiry of limitation period — Claimant seeking to add alternative claim out of time — Whether court having power to allow new cause of action based on substantially same facts as pleaded by defence of any defendant — Application granted
The claimant was the freeholder of a property that was being developed as residential flats. It engaged the first defendant as the piling subcontractor and the second defendant provided structural engineering services. During the works, an adjoining property was damaged following three separate incidents, which were allegedly caused by the piling works. The claimant sought to recover its substantial losses from the defendants towards the end of the limitation period. Consequently, it did not have time to comply with the pre-action protocol. The claimant issued a claim for damages.
The particulars of claim alleged that the first and third incidents had been caused by the first defendant’s negligence and/or breach of contract and that the second incident had been caused by the actions of the second defendant. Both defendants denied liability, but the second defendant maintained that the second incident had been the first defendant’s responsibility. The claimant therefore applied for permission to amend its particulars of claim after the expiry of the limitation period to bring, inter alia, a new claim against the first defendant in respect of the second incident, adopting the matters pleaded by the second defendant in its defence.
Section 35(4) and (5)(a) of the Limitation Act 1980 provided that permission for a claim involving a new cause of action might be granted if it arose out of the same facts as were already in issue on any claim previously made in the original action. CPR 17.4(2) provided for an amendment in such circumstances.
In Goode v Martin [2001] EWCA Civ 1899; [2002] 1 WLR 1828, the Court of Appeal gave an expanded interpretation of CPR 17.4(2), holding that the court might allow an amendment to add a new claim, but only if it arose out of the same facts or substantially the same facts as were already in issue on the claim in respect of which the party applying for permission had already claimed a remedy in the proceedings. An issue arose as to whether the facts pleaded by one defendant, by way of defence to a claim, could be adopted by the claimant as the basis of a new claim against a second defendant after the expiry of the limitation period.
Held: The application was granted.
Section 35(5)(a) of the 1980 Act and the expanded version of CPR rule 17.4(2) gave the court a discretionary power to allow a claimant to plead a new cause of action based upon substantially the same facts as had been put in issue by the defence of a defendant, after the expiry of the limitation period. That interpretation followed naturally from the words of the expanded rule, as formulated by the Court of Appeal. It was not open to a first instance judge to put a gloss on the Court of Appeal’s formulation, or to insert words that would narrow its effect.
Section 35(5)(a) provided an exception to the limitation principle. Once particular facts had been put in issue in litigation and fell to be investigated, the claimant should be entitled to claim any appropriate remedy upon the basis of those facts. That justification was equally valid irrespective of whether those facts had been put in issue by either or both of the defendants. Furthermore, policy considerations applied with much less force to new claims based upon facts that the court was bound to investigate in any event: Lloyds Bank v Rogers unreported 20 December 1996, and Hemmingway v Smith Roddam (a firm) [2003] EWCA Civ 1342 applied.
Section 35(5), CPR 17.4(2) and the expanded rule merely gave the court a discretionary power to allow the pleading of new claims after the expiry of the limitation period if the threshold condition had been met. Whether amendments would be allowed depended upon the circumstances of each case. The court could and would protect a defendant against injustice by refusing permission to amend.
In all the circumstances, the balance came down firmly in favour of granting permission. The interests of justice required the claim against the first defendant in respect of the second incident to be heard at the trial of the other claims.
David Friedman QC and Benjamin Pilling (instructed by Nabarro Nathanson, of Sheffield) appeared for the claimant; David Sears QC (instructed by Berwin Leighton Paisner) appeared for the first defendant; Richard Wilmot-Smith QC (instructed by Fishburns) appeared for the second defendant).
Eileen O’Grady, barrister
