England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM REDDITCH COUNTY COURT
(HHJ GEDDES)

		Royal Courts of Justice Strand London, WC2
		3 November 2004

1. LORD JUSTICE BUXTON: This is an appeal from an order of a district judge, upheld by His Honour Judge Geddes, relating to the construction and application of Rule 19.5(3)(a) of the Civil Procedure Rules. That rule, which is to be read with section 35 of the Limitation Act 1980, deals with the addition or substitution of a party in an action after the expiry of the limitation period. The main rule provides that the court can only add or substitute a party if the relevant limitation period was current at the time when proceedings were started and the addition or substitution is "necessary". Rule 19.5(3)(a) with which we are directly concerned then goes on to say:

"The addition or substitution of a party is necessary only if the court is satisfied that-

(a) the new party is to be substituted for a party who was named in the claim form in mistake for the new party."

To explain how that arises in the present case it is necessary to say something about the background.

2. The claimant is Miss Kesslar. In August 1997 a firm of partners called Kundert and Co. acted for Miss Kesslar in the conveyance to her of the property in which she resides. The partners at that time in the firm of Kundert and Co. were Mr Kundert and a lady who was then called Miss Roughley. She has subsequently married and is now Mrs Daniels, but I hope it will not be discourteous if for the sake of clarity I continue to refer to her as Miss Roughley. In August 1998, Kundert and Co. were acquired, if that is the right expression, by the firm of solicitors who are the respondents to this appeal and who were named in the proceedings from which this appeal comes. From 1998 onwards the letterhead of the firm of Moore and Tibbits described the firm as "Moore and Tibbits (incorporating Kundert and Co.)" and also, though irrelevantly to these matters, another firm. Neither Mr Kundert nor Miss Roughley ever became partners in the firm of Moore and Tibbits.
3. In September 2002 Miss Kesslar had occasion to approach the firm of Moore and Tibbits about a dispute that had broken out with one of her neighbours with regard to access to her garage. I should say now that the nature of Miss Kesslar's complaint in the proceedings with which we are concerned was that Miss Roughley had acted negligently in and about the conveyance of the property, so that she had not secured the necessary access to the garage, nor indeed secured security for Miss Kesslar in that garage. It is important to emphasise that those issues have not been tried; they are still at the stage of allegation. This case is not about Miss Roughley's actual liability but about the procedural matters attending the case that Miss Kesslar wishes to bring in respect of her alleged negligence.
4. We do not know for certain why Miss Kesslar approached Moore and Tibbits about this matter, save that it seems very likely that she had got to know in some way or other that they were indeed the successors of the solicitors who had acted for her in 1997. She made it clear that it was because of Miss Roughley's actions that she was writing to Moore and Tibbits because on 30th September 2002 she wrote them a letter that, according to her, succeeded a number of unsuccessful attempts to progress the matter over the telephone, that letter starting:

"In 1997, Andrea Roughley on my behalf dealt with the conveyancing and legal aspects of the purchasing of the above property. I am now undergoing a neighbour dispute ... I believe that the conveyancing was not dealt with correctly."

5. On 15th October 2002, Messrs Moore and Tibbits replied to Miss Kesslar saying that they had written to the solicitors who had acted on the other side in that conveyance. They said that the matter was now in the hands of the senior partner of Moore and Tibbits and he would be in touch with Miss Kesslar when a response was received.
6. We do not know what happened immediately thereafter. However, satisfaction was not obtained by Miss Kesslar. She went to other solicitors, the solicitor who represents her in this action, a Miss Pack. Miss Pack wrote to the senior partner of Moore and Tibbits on 28th May 2003 saying that she had been consulted by Miss Kesslar:

"... with regard to Kundert and Co's conduct of her instructions to act for her in connection with the purchase of the property ... I am instructed that Miss Andrea Roughley was the solicitor acting and that the practice of Kundert and Co. was subsequently incorporated into your firm ...

It is abundantly clear that, at the time of your instruction in June 1997, you were on notice that the garage was included in the sale and that it was approached via a shared access from Latimer Road."

Various further complaints were made, setting out why it was said that the matter of the garage and access had not been suitably dealt with, and then Miss Pack said:

"... it is already apparent that your firm's negligence has serious and far-reaching financial implications for my client."

Promptly, on 29th May, that is to say the next day, Moore and Tibbits replied to Miss Pack saying:

"Thank you for your letter of 28th May. We confirm that our insurers have been informed."

7. The next thing that appears to have happened was that Miss Pack wrote a lengthy formal letter of claim, a etter before action under the professional negligence pre-action protocol, in which the complaints made in the informal letter before action were expanded upon, and from which it was clear that the complaint continued to be in respect of what had been allegedly done or not done by Miss Roughley. Having set out the history to some extent in her first paragraph, Miss Pack then said this:

"In short, the claim is for negligence in carrying out the conveyance resulting in a number of problems."

8. On 17th July 2003 the firm instructed on behalf of Moore and Tibbits' insurers, Messrs Browne Jacobson, wrote to Miss Pack saying that they were taking instructions with regard to the suspension of the limitation period. Again nothing seems to have come of that. It is important that at no time did either Messrs Moore and Tibbits, or their insurers, or their insurers' solicitors take the point that they now insist on in this appeal, that Messrs Moore and Tibbits had nothing to do with what had happened in 1997; Miss Roughley never became a partner of that firm; it was not their responsibility to answer for what she did; and that if Miss Pack and her client had a complaint they should hunt down Miss Roughley and Mr Kundert, wherever they may now be, and sue them. That was unfortunate, because I have no hesitation in saying that the objective appearance of the correspondence, and that which I have little doubt that Miss Pack would have drawn from it, was that Moore and Tibbits were, if not accepting responsibility for Miss Roughley, certainly not making plain that they were a different firm from her. That is of importance because when appreciating the imminent arrival of the end of the limitation period, or at least the arguably imminent arrival of that period, Miss Pack caused counsel to draw the pleadings in this case. They were intituled in the following form: "Miss Beverly Kesslar (claimant) v Moore and Tibbits (incorporating Kundert and Co) (a firm)." Now there is no doubt at all that that would be apparent to anybody to be a claim using the facility provided by Order 81 of the Rules of the Supreme Court, still operative, against a firm of solicitors in respect of their conduct as such. It was made plain in the body of the pleading that this was intended to be what I might call a straightforward and orthodox solicitors negligence claim in which, in order to ensure that all the partners are impleaded, one sues in the name of the firm rather seeking to name those who in fact were partners at the date when the cause of action arose. That is a very obvious course for a claimant, and the reason why there is that rule in Order 81 is perfectly simple: that it would be very unreasonable in many cases to expect a claimant to have to fish around to find out who had been partners in a particular firm at a particular date. It is also important, for the purposes of an issue which arises later, to make clear, which of course is very clear, that the responsibility of partners in respect of an act of negligence is not vicarious. Rather, it springs from, and is a burden that matches, the benefits that English law gives to those who wish to practise in partnership.
9. This action, as I have said, was intituled against Moore and Tibbits (incorporating Kundert and Co). But the substance of it, made plain in the pleadings, was that the complaint was about what had been done or not done by Miss Roughley. It read as follows:

"1. The Defendants were at all material times a firm of solicitors carrying on business as such for reward from premises at 11a Jury Street, Warwick, CV34 4EH under the title Kundert and Co."

I pause there. The address given was the address of Kundert, as I understand it; it was never the address of Moore and Tibbits. It was then alleged that they held themselves out as being skilled and competent and so forth, a purely formalistic form of pleading. Paragraph 2:

"2. In or about June 1997 one Angela Roughley, a partner in the firm Kundert & Co, now the Defendants, for and on their behalf, accepted instructions from the Claimant to act for reward in undertaking the contractual and conveyancing aspects of the Claimant's then proposed purchase..."

Then in paragraph 3 standard implied terms were alleged in that agreement, but prefaced by this statement:

"3. It was an implied term in the aforesaid agreement or alternatively it was the duty of the Defendants their servants or agents ... "

and then they set out the conventional duties of a solicitor. The rest of the pleading devotes itself firstly to an account of what had happened in 1997, complaining about difficulties about the conveyance; and secondly, to an account of the loss and difficulty caused to the claimant by what she says had gone wrong.

10. Paragraph 11 sets out the particulars of negligence, some of them formal, some of them ad hoc to this case, alleging again that they were particulars of the negligence of the defendants. That claim form was served on 21st August. On 26th August the limitation period expired. On 4th September Messrs Browne Jacobson wrote to Miss Pack and to the court saying:

"Our client is disputing the fact that they are the correctly named defendants."

And they took out an application to strike out the claim as against Moore and Tibbits.

11. In response, quite apart from adducing various defences to that claim, to which I shall have to come later, Miss Pack took out the summons which is the subject of this appeal, to substitute Mr Kundert and Miss Roughley as defendants to the extant action that she had against or impleading Messrs Moore and Tibbits. She had to take that course rather than start new proceedings because by this time the limitation period had expired or at least may have expired.
12. Some concern has been expressed in the course of these proceedings about the fact that Miss Pack was not put on notice of the mistake and therefore the alleged insufficiency of the claim until after the limitation period had expired. I, for my part, would accept that that was not any deliberate act on the part of those advising the respondents, it was merely something that occurred. But it has to be put in the context of the fact that between 28th May 2003 and 4th September 2003, when it was plain that Miss Pack complained against and sought recompense from Messrs Moore and Tibbits, it was never put to her, as in my judgement it should have been, that in fact the proper defendants was not Moore and Tibbits but the individuals who had been the partners in Kundert and Co. Had that step been taken, none of the difficulty and trouble and expense that this appeal has caused would have occurred.
13. That was the background against which the District Judge had to consider the application under Civil Procedure Rule 19 to substitute new defendants. We have had the benefit, which the District Judge (in what was, if I may be permitted to say so, a careful judgment) did not have, of recent authority in this court, which has been carefully put to us this morning. Had the District Judge seen that it is possible that he would have taken a different view. The Circuit Judge who upheld the District Judge equally did not have the benefit of this authority, his judgment effectively simply agreeing with that of the District Judge.
14. The two recent cases that are important in this connection are Horne-Roberts v SmithKline Beecham [2002] 1 WLR 1662 and Parsons v George [2004] EWCA Civ 912, which was reported in The Times Law Reports on 28th July 2004. I would venture to say in passing, as I shall explain, that Horne-Roberts is a leading case, and it is unfortunate that the judgment of this court is not referred to in the notes in the Civil Procedure White Book attached to paragraph 19.5(3)(a). There the court does have the benefit of the judgment at first instance of Bell J which, as we shall see, was upheld by this court in Horne-Roberts; but it would have been more helpful in reading the papers if we had known about Horne-Roberts in this court.
15. The facts of Horne-Roberts when compared with our facts were, in my view, striking. The claimant was a person who complained that he had been injured by being injected with the MMR vaccine. It was held that it had always been the intention of the claimant and those advising him to sue the maker of a particular batch of that measles vaccine, which was identified as 108A41A. However, those acting for Mr Horne-Roberts mistakenly thought that the manufacturer of that vaccine had been the well-known chemical firm SmithKline Beecham, and that is why the case is intituled Horne-Roberts v SmithKline Beecham plc. In fact, however, the manufacturer had been the equally well-known company Merck and Co. When that came to light, outside the limitation period, the claimant applied to join Merck in the action he had originally brought against SmithKline Beecham.
16. In the leading judgment Keene LJ addressed the question as to whether section 35 of the Limitation Act and part 19.5 of the Civil Procedure Rules permitted the substitution of a party in a case where the mistake relied on had been more than a simple misnomer. In the case before him, as we have seen, the mistake was as to a fact -- that is to say who had manufactured the material complained of. Keene LJ first of all quoted an observation by May LJ in the unreported case of Gregson v Channel 4 Television Corporation 11th August 2000, where May LJ said this:

"Rule 19.5 applies where the application is to substitute a new party for a party who was named in the claim form in mistake for the new party. By contrast, rule 17.4(3) applies where the intended party was named in the claim form but there was a genuine mistake as to the name of the party and no one was misled. As Mr David Foskett QC, sitting as a Deputy High Court Judge, said in International Distillers and Vintners Ltd v Hillebrand and Others:

'Part 19.4 [now 19.5] deals with cases where the Claimant mistakenly names the wrong party as Defendant. Part 17.4 deals with cases where the Claimant misnames the Defendant.'"

Then Keene LJ went on in paragraph 39 to say this:

"For my part, I can see that if one were approaching section 35(6)(a) of the 1980 Act free from authority, one might be tempted to see it as allowing no more than a change of name where, say, Peter Michael Jones has been named as the defendant whereas the true name of the defendant is Peter Martin Jones. The paragraph does place considerable emphasis on the word 'name'. Yet even confining oneself to the wording of the paragraph, it is clear that it is intended to go beyond merely correcting a misnomer. It is, after all, a provision which expressly allows the substitution of a new party for the original named party. Almost by definition such substitution could be said to involve a change in the identity of the party."

My Lord then referred to a number of previous authorities upon Order 20 Rule 5 which however, like our rule, depended on section 35 of the Limitation Act. He said that he found helpful the case of The Sardinia Sulcis [1991] 1 Lloyd's Rep 201 and at paragraph 41 of his judgment he quoted the observation of Stocker LJ, addressing the distinction between the identity of the party and the name of that party, when Stocker LJ said:

"If a solution to the problem is to be stated in terms of general application I do not feel I can improve on the test suggested by Lloyd LJ - can the intending plaintiff or defendant be identified by reference to a description which is specific to the particular case - eg landlord, employer, owners or shipowners?"

Basing himself on that, Keene LJ said in paragraph 43:

"In those circumstances, there seems to be force in [counsel's] submission to us that the claimant in the present case comes within section 35(6), because he always intended to sue the manufacturer of vaccine batch No 108A41A. The claimant wrongly named the manufacturer in his claim as Merck."

His Lordship then went on as follows in paragraphs 44 and 45:

"Instinctively one is reluctant to accept an interpretation of section 35(6) of the 1980 Act which might allow the substitution of a new defendant unconnected with the original defendant and unaware of the claim until after the expiry of the limitation period. Such a reaction initially led me to doubt the conclusion reached by Bell J. But on further consideration it seems to me that any potential injustice can be successfully avoided by the exercise of the court's discretion under section 35. It is perhaps not without significance that there is no appeal in the present case against the exercise by Bell J of his discretion...

I conclude therefore that the claimant always intended to sue the manufacture of the identified vaccine and that that is sufficient to give the court the power to substitute the true manufacturer under section 35 of the 1980 Act and CPR r 19.5."

That case, as I say, is striking because it substitutes or joins a completely new defendant who had no connection with the party originally impleaded.

17. That authority of course binds us. It was considered further, however, in the case of Parsons v George, already referred to, in the judgment of the court delivered by Dyson LJ. It is not necessary to go into the facts of that case but it is important to quote what Dyson LJ said about Rule 19.5(3)(a) generally. He said this at paragraph 41 of his judgment:

"The meaning of section 35(6)(a) of the 1980 Act and of CPR 19.5(3(a) was considered by this court in Horne-Roberts v SmithKline Beecham plc... As appears from paras 40-45 of the judgment of Keene LJ, the court adopted the test suggested by Lloyd LJ in The Sardinia Sulcis ... that the power to change a party after the expiry of a limitation period can be exercised where a party has been wrongly identified, but 'it was possible to identify the intending claimant or intended defendant by reference to a description which was more or less specific to the particular case'. Thus, for example, if it is clear that the claimant intended to sue his employer or the competent landlord, but by mistake named the wrong person, an application to substitute the person who in fact answers the description of employer or competent landlord would come within CPR 19.5(3)(a).

In other words, the court rejected the argument that CPR 19.5(3(a) is directed only at cases of misnomer in the strict sense, and adopted a more liberal approach such as that applied in Evans and Signet. That is the approach that should be adopted in the present case. The claimants always intended to sue the persons who answered the description of competent landlord, and named the defendants because they mistakenly believed that they answered that description."

18. Those authorities, in my judgement, give a simple answer to the present case. Miss Kesslar and her advisers always intended to sue in respect of Miss Roughley's mistake. The error that they made was to think that that alleged negligence on Miss Roughley's part was effectively impleaded by intituling the action against Moore and Tibbits (incorporating Kundert and Co)." In my judgement it is simple and straightforward that the latter party was named in the claim in mistake for the new party, Mr Kundert and Miss Roughley, which is now sought to be substituted for it. That really is the end of the matter.
19. However, Mr Wilton for the respondent in a clear and persistent argument says that it is not as simple as that. He relies on a significant part of the judgment of the District Judge to be found at pages 25 to 26 of our bundle. Having referred to other authority, to which I shall revert, the judge said this:

"In the instant case those representing Miss Kesslar have not mistaken the name or identity of the party to be sued, as they have known from the outset that Mr Kundert and Mrs Daniels were the relevant individuals. The mistake, as I have found it to be, relates to the legal liability of the partnership of Moore and Tibbits, and therefore goes to the capacity in which that firm is sued, not as to the identity of the tortfeasors. I am therefore bound to conclude that the mistake in this case is not within the proper meaning of 'mistake' for the purposes of CPR 19.5."

The judge then went on, after referring to the case of International Distillers and Vintners which was cited with approval by May LJ in the passage already read:

"In the case before me the mistake is not in relation to the correct business name to be applied to the former partners in the firm of Kundert & Co, but as to the legal liability of the existing partners in the firm of Moore & Tibbits. The nature of the mistake is clarified as such by the argument raised before me on behalf of the Claimant in relation to the liability of partners and those held out as partners."

20. Mr Wilton argued that cases in which the mistake is as to the legal liability of the person impleaded fall outside the limits of Rule 19.5(3)(a). The District Judge found that it was always intended to sue Moore and Tibbits but the pleader had been mistaken as to the nature of their liability. That was not enough to allow Rule 19.5(3)(a) to be invoked. For that view, the District Judge relied on the case of Ramsey and Maclaine v Leonard Curtis [2001] BPIR 389. That was a claim against two administrative receivers who happened to be partners in the defendant firm of Leonard Curtis. However, they did not act as such partners in the receivership because, as this court pointed out, it is not possible for a partnership to be an administrative receiver. The case was therefore quite different from an ordinary case such as our own of a breach of contract or negligence when acting as a solicitor, because by definition in so acting the solicitor acts as a member of his partnership.
21. The basis for the court's approach is to be found in various passages of the leading judgment of Henry LJ, first at page 396B, where Henry LJ said this:

"The claimants here sued the partnership in the erroneous belief that the partnership and the individual partners were liable as partners for the actions of the administrative receivers. They were not, and the rule is not there to correct that category of mistake."

Then at page 397B:

"Here it was intended that the partnership be the defendant. That was the claimants' solicitor's choice. He identified who he wished to sue: all the partners as partners. His error was as to their liability, and was not a mistake as to name."

I would wish to approach the suggestion made in this appeal that the judgment of this court in Ramsey can be generalised in the way argued for by Mr Wilton with some care. As I have said, the facts in Ramsey were very particular, and certainly were based upon an error as to whether partnership liability could arise at all in respect of the conduct complained of.

22. But we do not need to pursue that question in our case. The District Judge's finding that the mistake was as to the legal liability of the partners in Moore and Tibbits was not in my judgement a finding of fact, but it was a matter of inference or deduction, and I say quite bluntly that I am unable to agree with it. It is plain from the correspondence and the terms of the pleading, which I have already set out, that the claimant always intended to sue in respect of the primary liability in negligence of Miss Roughley. Her error was to think that she could effectively do that by formulating the pleadings against "Moore and Tibbits". She was never disabused of that error over a period of four months until after she had finalised the pleadings.
23. It is true that after the error was pointed out Miss Kesslar's solicitor, somewhat desperately, though understandably, tried to deploy different arguments that might in her view lead to the partners in Moore and Tibbits in fact being liable themselves. For instance, she wrote a letter to the other side on 12th September 2003 referring to the fact that Moore and Tibbits was a successor practice in accordance with the Solicitors Indemnity Insurance Rules to that of MJ Kundert and Co, and that therefore the insured (that is to say Moore and Tibbits) was a proper party to that action. That assertion on her part was not correct. I have no doubt that it was deployed in an attempt to meet the proceedings that were currently on foot, not only to substitute Kundert and Co. as the defendants but also, on the other side, to strike out the whole action. The District Judge does not refer to that letter in terms or to any other part of Miss Kesslar's solicitors' assertions, but it is difficult to think that he was not influenced by the argument based upon such a letter, an argument that was repeated in this court. If he did allow himself to be so influenced I have to say that that was a course that he should not have taken. The best source for what the claimant actually intended is to be found in the points of claim. At most the error made there was in identifying the proper way of interpleading a person whom they had always intended to sue. The case in that respect is stronger than Horne-Roberts; and it falls well within the more expansive view of this rule that was stated by Dyson LJ in Parsons and George.
24. Mr Wilton very properly accepted that if we were not in his favour on the argument that he put forward as to error about the capacity in which a person was sued, then he could not resist the application to this case of the decision in Horne-Roberts. He also very properly accepted that if this court were of this view, as for my part I am, there could be no question of its exercising its discretion in order not to grant the relief that was sought.
25. Finally, reference was made on behalf of the claimant to Article 6 of the European Convention on Human Rights. It is not necessary to deal with that, in view of the finding that I make so far as domestic law is concerned. All that I would venture to say is that the approach proposed by Dyson in Parsons v George is well in line with the approach to limitation questions in the light of Article 6 that was suggested in the judgment in this court of Brooke LJ in Goode v Martin [2002] 1 WLR 1828.
26. I would therefore allow this appeal and make the order to substitute the parties that the District Judge and the Circuit Judge refused to make. I would add only one thing. When the single Lord justice gave permission for this appeal, he expressed some surprise that the appeal was being resisted by Messrs Moore and Tibbits who, on the case as put, had no apparent interest in whether or not Mr Kundert and Miss Roughley were impleaded in this case. It has now been made plain to us that, because of community of insurers, the matter is being promoted effectively on behalf of those two persons as well as the firm Moore and Tibbits, and we are told that Mr Kundert and Miss Roughley had agreed to that course being taken. They will of course therefore appreciate that they are bound by the judgment of this court. I would therefore allow the appeal.
27. LORD JUSTICE SEDLEY: A generation ago, Blain J, giving judgment in a long forgotten interlocutory matter, said that litigation was not to be conducted as if it were warfare. In those days the remark represented no more than a fleeting triumph of hope over experience. It is only with the introduction of the Civil Procedure Rules that the hopes of Blain J and many others like him have become reality. The Civil Procedure Rules are not, as at times the Rules of the Supreme Court seemed to be, a sort of Hague Convention regulating the worst excesses of warfare, which litigants were otherwise free to conduct as they saw fit. The overriding objective makes this plain. In support of its principal purpose of enabling the court to deal with cases justly, its first aim is to ensure that the parties are on an equal footing. The withholding by one party, until it is believed to be too late to do anything about it, of the fact that it is not the person whom the claimant manifestly intends to sue in my judgment runs counter to the overriding objective.
28. It is for these broad reasons, as well as for the specific ones spelt out by my Lord, that I agree that this appeal should be allowed, notwithstanding the carefully reasoned judgment of Deputy District Judge Morgan to the contrary.
29. Since I too wish to impute no intention, nothing turns on the fact that the omission here was that either of solicitors or of their insurers or of their insurance solicitors. But the effect of the defendant's silence about the status of MJ Kundert and Co. until the limitation period had expired was to let the claimant walk into a trap. It would only be if in this situation the law made the substitution of the correct defendant impossible that I would be prepared to dismiss this appeal. But the Act and Rules contain no such barrier. My Lord has explained why.
30. I would want to leave for future consideration whether there is in this field of law a material dichotomy of identity and capacity or of nomenclature and liability.
31. LORD JUSTICE LATHAM: I agree with both judgments that have been delivered.

ORDER: Appeal allowed; repayment of costs incurred and paid by the appellant in respect of the hearings on 29th September and 20th November 2003, taxed at £3,491.06, and 21st May 2004, taxed at £4,303.64, was ordered; respondent to pay appellant's costs of appeal assessed at £7,141.63.