Bank claiming possession of charged property – Claim including details of indebtedness but making no express monetary claim – Bank applying to amend so as to include monetary claim – Borrowers objecting that amendment would allow recovery of interest instalments otherwise statute-barred – Amendment allowed – Borrowers’ appeal dismissed
In order to provide security for borrowings by their family company from the claimant bank, the defendant married couple (the borrowers) created a charge over their property on 12 October 1990 and entered into certain guarantees on 25 May 1991. On 27 April 1992, by which time the indebtedness under the guarantee stood at £903,704, the bank issued county court proceedings for possession. The pleading made no money claim as such, but it did set out, inter alia: the terms of the charge; the making, on 9 August 1991, of a formal demand under the terms of the guarantee; the total indebtedness at the date of the claim; and the continuing accrual of interest at specified rates. The borrowers filed a defence, contending that the bank was in breach of a collateral undertaking not to resort to the securities so taken for at least two years.
On 6 May 1998 the bank applied to amend its particulars of claim by adding a claim for a money judgment for the repayment of about £1.5m, that being the total then alleged to be outstanding under the guarantee. The borrowers, fearing that the amendment would admit a claim to a substantial element of interest that would otherwise be statute-barred, resisted the application on grounds going to the operation of section 35 of the Limitation Act 1980. The judge allowed the amendment, holding that: (i) the amendment did not add “a new cause of action” and accordingly did not introduce a “new claim” within the meaning of subsection (2) of the section (the new claim issue); alternatively (ii) if it did involve such a claim, the new cause of action arose out of “the same or substantially the same facts” as those already in issue and accordingly the amendment could (and should) be allowed under the discretion conferred by subsections (4) and (5) and the provisions of RSC Ord 20 r 5(5) [see now CPR 17.4 (2)]. The borrowers appealed.
Held: The appeal was dismissed
1. The court was divided on the new claim issue. Auld LJ, relying on Letang v Cooper [1965] 1 QB 232 and Welsh Development Agency v Redpath Dorman Long Ltd [1994] 1 WLR 1409, agreed with the trial judge in holding that, since a cause of action was “simply a factual situation” entitling a party to a remedy, the bank was merely claiming a new remedy in respect of a cause of action that had already been sufficiently particularised. It was accordingly immaterial that there had been no prayer for monetary relief. Evans LJ took the view that, but for the further particulars given in support of the possession claim, it would have been “self-evident” that the amendment raised a different cause of action. The presence of those particulars did not assist the bank as they were included solely for the purpose of complying with county court rules regarding possession actions.
2. Treating the amendment as one involving a new claim to be considered under subsection 5 and the relevant rule, it was a matter of impression whether there was a sufficient overlap to make the proposed pleaded facts substantially the same as those already in issue: see per Glidewell LJ in Welsh Development Agency (supra) at p1418. The judge was entitled to hold that sufficient similarity was present. Moreover, there was no reason on the facts for disturbing the exercise by the judge of his discretion. While the apprehended loss of an accrued defence of limitation was a relevant consideration placing the burden of persuasion on the applicant, the loss of such a defence could not be determinative: see Hancock Shipping Co v Kawasaki Heavy Industries Ltd (The Casper Trader) [1992] 1 WLR 1025 and Lloyds Bank plc v Rogers unreported 20 December 1996.
Miles Croally (instructed by Alison Trent & Co) appeared for the defendant appellant; Simon Browne-Wilkinson QC and Jeffrey Chapman (instructed by Foot & Bowden, of Plymouth) appeared for the claimant respondent.
Alan Cooklin, barrister