Allegation that failure to warn of outstanding dilapidations claim caused company to take burdensome underlease – Company owner seeking to add claim of personal loss resulting from joining as guarantor – Whether such claim out of time – Whether time running from date of commitment or later date – Whether amendment never the less permissible under County Court Rules
In August 1987 Coolrise Ltd, a company owned solely by the plaintiff, retained the defendant solicitors to advise in relation to the purchase of a franchise which required the company, inter alia, to take an underlease of certain premises. After committing itself to the franchise, Coolrise learned that the superior landlord had served a schedule of dilapidations and would not grant a licence unless the schedule was complied with. The company, having spent £12,000 on compliance, took a grant of the underlease on February 3 1989 at which date the plaintiff joined as guarantor. The business foundered and on January 28 1993 the plaintiff, suing as assignee of the company, issued proceedings against the defendants to recover the £12,000 alleging a negligent failure to warn the company about the outstanding schedule. On March 31 1995, nearly six years and two months after the grant of the underlease, the plaintiff applied to amend his particulars of claim by adding two heads of loss sustained by him personally: the first, £34,650, as guarantor of the lease, the second, £2,500, as guarantor of the company’s indebtedness to its bank, both losses allegedly caused by the same failure to warn. The application was refused as being out of time. The plaintiff appealed contending that the judge had erred: (a) in holding that the six-year limitation period ran from the date of giving the respective guarantees; alternatively (b) in refusing to exercise his discretion under CCR Ord 15, to add what would otherwise be a stale claim where such claim arose out of substantially the same facts as the unamended claim.
Held The appeal was dismissed.
1. As the claims were framed in negligence rather than breach of contract, the relevant starting date was the occurrence of damage, ie the loss which, if proven, would entitle the plaintiff to more than nominal damages: see DW Moore & Co Ltd v Ferrier [1988] 1 WLR 267. The principle to be drawn from that case, and from Forster v Outred & Co [1982] 1 WLR 86, was that such a loss was sustained by the very incurring of a liability, albeit a contingent one, as judicial assessment would inevitably be for more than a nominal figure. In this respect the liability of a guarantor did not differ from that of the mortgagor considered in Forster (supra). It could not therefore be argued that the loss was deferred until the plaintiff was called upon to pay.
2. Though the additional claims alleged the same wrongdoing, they related to a different victim and to consequences quite different from those which befell the company. The judge was accordingly entitled to find for the purpose of CCR Ord 15 that the facts were not substantially the same.
Alan Masters (instructed by David Gouldman & Co) appeared for the appellant; Robert Pearce (instructed by EDC Lord & Co) appeared for the respondent.
