England and Wales Court of Appeal (Civil Division) Decisions

IN THE HIGH COURT OF JUSTICE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEENS BENCH DIVISION COMMERCIAL COURT
HONOURABLE MR JUSTICE BEATSON
2009 FOLIO 430

		Royal Courts of Justice Strand, London, WC2A 2LL
		30/07/2010

Lord Justice Rix :

1. The issue in this application for permission to appeal is concerned with the substitution of a party under CPR 19.5 on the ground of mistake.
2. The claimant, Lockheed Martin Corporation ("Lockheed") commenced its proceedings, towards the end of a six year limitation period, on 28 August 2008. Its claim arose out of a global settlement agreement reached with the London Market Insurance Companies ("LMIC") on 29 August 2002. This agreement was called the Settlement and Release Agreement or "SAR". The total sum agreed in settlement was US $124 million. However, Lockheed has received only some $103 million out of this settlement. This is partly due to insolvency on the part of some of the underwriters. However, $8.124 million of the unpaid balance is said to be due to the fact that the corresponding policies together with the names of the company underwriters in question had been lost over time, and could not be identified at the time of the settlement. The policies in question go back to a period before 1993, indeed it would seem that they date from 1946 to 1990. The SAR allowed 90 days for payment. It is therefore accepted for present purposes that limitation expired on 26 November 2008. Plainly, the issue of a claim form on 28 August 2008, one day short of six years after the date of the SAR itself, was done to protect the claim against the expiry of the limitation period.
3. The claim as originally made on issue of the claim form was brought against Willis Group Holdings Limited ("Holdings"). The logic of the claim, as generally endorsed on the claim form, lay in professional negligence against insurance brokers for having failed to maintain proper records of those subscribing to the missing policies. The policy records, including the placement slips, have apparently been lost or mislaid. The claim form said:

"The claim is for professional negligence arising from the Defendants' broking of insurance policies on behalf of the Claimant and its predecessors in interest prior to 1993. The Defendants owed duties of care to the Claimant including a duty to maintain evidence of the terms, conditions and subscribing market to the policies of insurance to enable the handling of claims made by the Claimant under the said policies, and the collection of such sums from the subscribing market as may be payable by reason of a settlement of any claims."

At the time of issue Lockheed was unable to particularise loss further than saying it was the difference between the unpaid total of $21 million and the amount which was due from the insolvent companies. Moreover, it was unable to distinguish between the liabilities of two separate broking groups which it named as defendants. The Willis group was one, and the other was the Marsh group. Thus the second defendant named in the claim form was Marsh Limited. We are not here concerned with the position of Marsh Limited.

4. Lockheed had four months to serve its claim form. In the period after its issue Lockheed continued to try to obtain from agents for the LMIC access to relevant documents which would enable Lockheed to particularise its claim. Lockheed's evidence before the court is to the effect that it was in mid August 2008 that it instructed its London solicitors, Scanlan & Co, to evaluate its claim. Two broking houses were then identified as being responsible for the placement of the relevant insurance policies, namely, as stated above, the Willis and Marsh groups. While investigations were pending the claim form was issued to protect Lockheed's position. By mid October 2008 Scanlan & Co had established contact with Navigant Consulting, the agent of London Market Services Limited, with whose help Lockheed hoped to be able to identify the relevant policies. This necessitated recalling from storage allocation materials brought into existence at the time of the SAR from which it was hoped that the unknown policies could be identified. However, that did not prove possible, as necessary authorities for disclosure were not forthcoming. This led to difficulties in production of Lockheed's particulars of claim. Apart from this account, no explanation has been forthcoming about the circumstances in which it was only in mid-August 2008 that Lockheed gave its instructions to Scanlan & Co to investigate the claim.
5. Against the background of these continuing difficulties for Lockheed in particularising its claim, and with the four months for service of the claim form running out, Lockheed served its claim form on Holdings on 19 December 2008. It did so at the Willis Building at 51 Lime Street. The claim form came that day into the hands of Ms Marie Bolton-Jones, an in-house solicitor employed by Willis Limited ("Limited") who also works for Willis Group Limited ("Group"). The legal department in which she works provides legal advice to all Willis companies except those in the USA or Bermuda. I will give further details about Group and Limited, but in essence Group is the principal holding company in the UK, and Limited is the principal broking company within the UK operation. In her evidence, Ms Bolton-Jones explains that Holdings is the ultimate holding company for the Willis group, and that it is a Bermudan company quoted on the New York stock exchange. It is not an English company. It cannot be served in England other than by consent, and to serve it with English proceedings in Bermuda requires the leave of the English court. Moreover, it only came into existence in 2001, well after the underlying events in question.
6. Ms Bolton-Jones spoke to Michael Scanlan of Scanlan & Co on the telephone on the same day, 19 December 2008. She explained the position about Holdings, and said that she was not authorised to accept service of the claim form on behalf of Holdings.
7. On 22 December Lockheed applied to amend the claim form and obtained the order of Master Fontaine permitting it to do so. The amended claim form deleted reference to Holdings and instead named Group and Limited. The application was made under CPR 19.5(3)(a) (see below), without notice.
8. On 24 December, the amended claim form was re-served on the substituted companies, Group and Limited, at the Willis Building and came again into the hands of Ms Bolton-Jones.
9. On 31 December 2008, Group and Limited applied to set aside the order of Master Fontaine. By his judgment and order dated 9 June 2009, Mr Justice Beatson granted that application, set aside Master Fontaine's order, and dismissed the claim. This is the renewed application for permission to appeal from that disposal.
10. When the claim form was served, or purportedly served, on Holdings on 19 December 2008, the complaint came out of the blue so far as the Willis group as a whole was concerned. There had been no previous correspondence with any Willis group company. It also follows from the dates set out above that at the time of service any other claim arising out of the SAR had already been time barred.

The rules

11. It is convenient at this point to set out three rules. The first, CPR 19.5 is the one which governs the present dispute. The second, CPR 17.4, is a rule which covers a closely related subject-matter. It will be necessary to bear in mind the relationship between these two rules, and their differences in language. The third was the former rule from the era of the Rules of the Supreme Court, RSC Ord 20, 5. Recent authority has said that the present rules have to be understood in the light of the former rule and the jurisprudence decided under it: see para 30 below.
12. CPR 19.5 provides as follows:

"(1) This rule applies to a change of parties after the end of a period of limitation under -

(a) the Limitation Act 1980…

(2) The court may add or substitute a party only if –

(a) the relevant limitation period was current when the proceedings were started; and

(b) the addition or substitution is necessary.

(3) 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;

(b) the claim cannot properly be carried on by or against the original party unless the new party is added or substituted as claimant or defendant…

(Rule 17.4 deals with other changes after the end of a relevant limitation period)."

13. CPR 17.4 provides as follows:

"(1) This rule applies where

(a) a party applies to amend his statement of case in one of the ways mentioned in this rule; and

(b) a period of limitation has expired under –

(i) the Limitation Act 1980…

(2) The court may allow an amendment whose effect will be to add or substitute a new claim, but only if the new claim arises out of the same facts or substantially the same facts as a claim in respect of which the party applying for permission has already claimed a remedy in the proceedings.

(3) The court may allow an amendment to correct a mistake as to the name of a party, but only where the mistake was genuine and not one which could cause reasonable doubt as to the identity of the party in question…"

14. RSC Ord 20, 5 used to provide:

"(2) Where an application to the Court for leave to make the amendment mentioned in paragraph (3), (4) or (5) is made after any relevant period of limitation current at the date of issue of the writ has expired, the Court may nevertheless grant such leave in the circumstances mentioned in that paragraph if it thinks it just to do so…

(3) An amendment to correct the name of a party may be allowed under paragraph (2) notwithstanding that it is alleged that the effect of the amendment will be to substitute a new party if the Court is satisfied that the mistake sought to be corrected was a genuine mistake and was not misleading or such as to cause any reasonable doubt as to the identity of the party intending to sue or, as the case may be, intended to be sued…

(5) An amendment may be allowed under paragraph (2) notwithstanding that the effect of the amendment will be to add or substitute a new cause of action if the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the action by the party applying for leave to make the amendment."

15. These rules have all been made under the rule making power granted and restrictions imposed by section 35 of the Limitation Act 1980, which provides:

"(1) For the purposes of this Act, any new claim made in the course of any action shall be deemed to be a separate action and to have been commenced…

(b) in the case of any other new claim, on the same date as the original action…

(3) Except as provided by section 33 of this Act or by rules of court, neither the High Court nor any county court shall allow a new claim within subsection (1)(b) above, other than an original set-off or counterclaim, to be made in the course of any action after the expiry of any time limit under this Act which would affect a new action to enforce that claim…

(4) Rules of court may provide for allowing a new claim to which subsection (3) above applies to be made as there mentioned, but only if the conditions specified in subsection (5) below are satisfied, and subject to any further restrictions the rules may impose.

(5) The conditions referred to in subsection (4) above are the following –

(a) in the case of a claim involving a new cause of action, if the new cause of action arises out of the same facts or substantially the same facts as are already in issue on any claim previously made in the original action; and

(b) in the case of a claim involving a new party, if the addition or substitution of the new party is necessary for the determination of the original action.

(6) The addition or substitution of a new party shall not be regarded for the purposes of subsection (5)(b) above as necessary for the determination of the original action unless either –

(a) the new party is substituted for a party whose name was given in any claim made in the original action in mistake for the new party's name; or

(b) any claim already made in the original action cannot be maintained by or against an existing party unless the new party is joined or substituted as plaintiff or defendant in that action."

The mistake

16. We are not here concerned with an amendment to correct the name of a party under CPR 17.4(3). Such an amendment is apparently concerned with mere misnomers, where the correct party has been sued, but has been inaccurately described: see Gregson v. Channel Four Television Group [2000] CP Rep 60 at para 18 (May LJ) and para 29 (Gibson LJ). We are concerned with CPR 19.5 and the substitution or addition of one party for another. It follows under section 35(6)(a) of the 1980 Act and CPR 19.5(3)(a) that Lockheed must at least satisfy the court that the original party (Holdings) was named in mistake for the new defendants (Group and/or Limited). As this court said in Adelson v. Associated Newspapers Ltd [2007] EWCA Civ 701, [2008] 1 WLR 585 at para 55 –

"It is clear from this language that the person who has made the mistake must be the person responsible, directly or through an agent, for the issue of the claim form. It is also clear that he must be in a position to demonstrate that, had the mistake not been made, the new party would have been named in the pleading."

In other words the mistake has to be causally relevant. But for the mistake, the new party would have been named. What is Lockheed's evidence as to this mistake?

17. First, it is established that the person whose mistake is in question is that of Mr Scanlan, as he explains in his first witness statement of 22 December 2008. Secondly, he explains that his intention, on behalf of Lockheed, had been to name the appropriate holding company of the Willis group. Thus he states:

"2… A number of insurance brokers were responsible for the placement of the policies. As a result of a consolidation…in the insurance industry, following a series of acquisition and mergers, Willis Faber & Dumas Limited and Stewart Wrightson Limited were consolidated into Willis Limited, which is a subsidiary of Willis Group Limited, itself, the product of a number of consolidations.

3. Willis Group Holdings Limited appears to be the quoted vehicle on the New York Stock Exchange. The above mentioned companies are wholly owned subsidiaries…

7. As noted above the new holding company for the Willis Group, as they refer to themselves, is Willis Group Holdings Limited…

8. On Friday the 19^th of December 2008 at 14.35 I served the Claim Form…Later that afternoon I [phoned] Willis and asked to be put through to their Litigation Department and was put through to Ms Marie Bolton-Jones, who advised me that she was a senior lawyer at the Willis group. She informed me that service was ineffective because Willis Group Holdings Limited was a Bermudian company. I was surprised at her comments because I believed the Claimant had correctly named the appropriate holding company.

9. I immediately undertook several searches, both at Companies House and I reviewed the Willis group web site…

10. My searches revealed that the First defendant [Holdings] had been misnamed. The Claimant [sc Defendant] should have been named as Willis Group Limited. This mistake is entirely understandable given the contents of the web site, which consistently refer to Willis Group Holdings and gives the impression that this Company is the principal company for the Willis Group. The web page does not refer to the fact, which I now accept, that this company is a Bermudian company…At no stage did the Claimant intend to issue proceedings against the Bermudian company. It intended to issue against Willis Group Limited, the senior UK company. My searches also reveal that Willis Limited should be named as a Defendant as they are the direct successor to Willis Faber & Dumas Limited and Stewart Wrightson Limited."

18. I have emphasised in italics the critical explanation of Lockheed's mistake. It intended to claim against the principal or senior holding company of the group's UK broking operations. As Mr Scanlan said: "The [Defendant] should have been named as Willis Group Limited…It intended to issue against Willis Group Limited, the senior UK company". By mistake, Lockheed had named the Bermudan ultimate holding company whose function it was to be the quoted vehicle on the New York Stock Exchange, but which was divorced from the UK operations.
19. There is of course a difficulty about this explanation, in that Lockheed's claim form refers to broking companies as being the professional bodies which owed to Lockheed the duties there relied on. That is why, in the final sentence quoted from Mr Scanlan's first witness statement above, he refers to Willis Limited (as successor to Willis Faber & Dumas Limited and Stewart Wrightson Limited) as being an additional party also included in the amended claim form. However, as Lockheed has made clear in its appeal documents for this court, there is no longer any attempt to support its application to amend under CPR 19.5 in respect of the addition of Limited. It has therefore accepted, and does not appeal against, the judge's view that in any event there was no mistake which encompassed an intention to sue Limited. The judge said:

"42…I am prepared to assume for the purpose of this application that the claimant made a mistake as to name rather than identity. That does not, however, include Willis Limited. That is not a holding company. It is a trading and broking company. Mr Scanlan's first statement makes it clear that there was no intention to sue Willis Limited at the time the claim form was issued. It was only after 19 December that the claimant appreciated that proceedings ought to be brought against Willis Limited as the "successor" to Willis Faber & Dumas and Stewart Wrightson, although it is not in fact the successor to Willis Faber, but it is Willis Faber & Dumas under a different name."

20. The judge was therefore prepared to assume that Lockheed had made a genuine and causally relevant mistake in naming Holdings, and failing to name Group (but not so far as concerned Limited). In terms of the primary test which has been adopted as to the meaning of "mistake" in this context, he was, it seems (see his paras 43/44), prepared to assume that that was a mistake as to name rather than identity: see The Sardinia Sulcis [1991] 1 Lloyd's Rep 201, which developed this test of "mistake" for the purposes of Ord 20, r 5. There, the name/identity distinction was formulated in these terms (per Lloyd LJ at 207):

"In all these cases it was possible to identify the intending plaintiff or intended defendant by reference to a description which was more or less specific to the particular case."

That test appears to have been considered by this court in Adelson as also applicable to Part 19.5(3), on the basis that it had been applied in previous post-CPR authorities: see Adelson at para 56. Lord Phillips of Worth Matravers CJ, giving the judgment of the court in Adelson, himself described the "mistake" which Ord 20, r 5 (and thus in due course CPR 19.5(3)) envisaged as "one of nomenclature, not of identification" (at para 33). Thus Lockheed, through Mr Scanlan, had intended to sue Group, the main English holding company. It had not intended to sue Holdings. Neither had it intended to sue Limited, for it did not intend to sue an operational broking entity. There is neither appeal nor cross-appeal from those findings.

A second requirement: whether the mistake was misleading to the other party etc.

21. The judge imposed a second jurisdictional requirement for the operation of CPR 19.5(3), namely that the intention to sue the true intended party, here Group, should have been reasonably apparent "to the other party", so that the mistaken naming of Holdings was not misleading. Thus the judge said (at para 44):

"This takes us to the second limb of the test: whether the mistake was misleading to the other party. Did it cause reasonable doubt as to the identity of the party who is intended to be sued?"

He referred to this second test again at para 54:

"Accordingly, although I accept that the claim was mistaken, the test under CPR Rule 19.5 requires that the true identity of the person intended to be sued must have been apparent to the other party, although the wrong name was used…"

22. In applying this second requirement, the judge appears to have been acting on the basis that this was a further ingredient of the overall Ord 20, r 5 test, applied or expounded in The Sardinia Sulcis, which continued to apply to CPR 19.5, and which he had earlier in his judgment quoted in the following terms:

"19…The court [in Adelson] had regard to the predecessor of CPR, Rule 19.5, Ord 20 r 5, because (see paragraph 47 of the judgment) the court considered that the new rules were intended to replicate the provisions of Ord 20 r 5. In paragraph 27 of the judgment Lord Phillips stated that the wording of Ord 20 r 5 suggests that the following requirements must be satisfied before an amendment can be made under that rule:

"The wording of Ord 20, r 5 suggests that the following requirements must be satisfied before an amendment can be made under that rule: (i) A mistake must have been made. (ii) The mistake must be genuine. (iii) The mistake must not have been misleading or such as to cause any reasonable doubt as to the identity of the person intending to sue or, as the case may be, intended to be sued."...

21…Lloyd LJ [in The Sardinia Sulcis at 205/6] stated:

"The court must be satisfied (1) that there was a genuine mistake, (2) that the mistake was not misleading, (3) that the mistake was not such as to cause reasonable doubt as to the identity of the person intending to sue, and (4) that it would be just to allow the amendment.""

23. In considering this second ingredient, therefore, the judge visited the evidence of Ms Bolton-Jones to the effect that it was not obvious to her which company or companies Lockheed intended to sue. Thus the claim form suggested that Lockheed's complaint was really against an English broking company, but it was not certain which.
24. On behalf of Lockheed, Mr Jeffrey Gruder QC submitted, first, that this second alleged requirement was an overhang from the specific language of Ord 20, r 5, and was not replicated in CPR 19.5, nor required by section 35 of the Act; and secondly, that in any event, such a requirement could not be applied subjectively, and was at most an objective test. On behalf of Group, Mr Dougherty accepted that the test was an objective test, and went far, as I understand him, to accept that it was not so much a formal requirement as an element within the overall exercise of discretion.
25. In the event, as will appear below, we decided this case on the basis, which was both fundamental and a matter which went critically to our discretion, that Lockheed had identified no cause of action against Group. Since the judge had assumed, in Lockheed's favour, that it had made a mistake, and that assumption was not in issue, our decision ultimately was not explicitly concerned with the jurisdictional requirements of CPR 19.5. Indeed, we only called on Mr Dougherty on the question of the judge's second requirement, and we did even that only after announcing our decision. We were, however, concerned that the judge may have erred in promoting his second requirement in the way that he did.
26. What follows under this heading, therefore, is undoubtedly obiter only. However, the judge's decision at first instance has been noted in Civil Procedure at the end of 19.5.7, albeit as a "fact-specific" case, and the issue about the second requirement is not free of difficulty.
27. The language of Ord 20, r 5 was that there had to be not only a genuine mistake, but also that the mistake was "not misleading or such as to cause any reasonable doubt as to the identity of the party intending to sue or, as the case may be, intended to be sued". That wording plays no part in section 35(5)(b) or (6), which only requires that there be a mistake and that the addition or substitution of a new party should be "necessary" for the determination of the original action. The new rule, now found in CPR 19.5(2)(b) and (3), goes back to the original wording of the section. However, section 35(4) had authorised rules of court to subject the statutory test "to any further restrictions the rules may impose".
28. Following the replacement of the RSC by the CPR, the question arose, for present purposes, as to the usefulness of prior authority on Ord 20, r 5. In an early case dealing with the CPR, Gregson v. Channel Four [2000] CP Rep 60 May LJ said (at para 16) that the CPR is a new procedural code and there was no basis for supposing that the new rules "were intended to replicate, or for that matter not replicate" the former rules. In Morgan Est v. Hanson Concrete [2005] EWCA Civ 134, [2005] 1 WLR 2557 this court (Jacob and Hooper LJJ) followed that approach and did not consider itself bound by the Sardinia Sulcis test (what I might call the "wrong name not wrong identity" test), even if earlier CPR decisions of this court had been prepared to extend the CPR test of "mistake" at least as far as that test, which has been called generous.
29. In Adelson, however, this court (which included Jacob LJ) departed from its previous views and said that Morgan Est should not be followed. It said the same about Weston v. Gribben [2006] EWCA Civ 1425, [2007] CP Rep 10, which had adopted the same approach as Morgan Est (see Adelson at paras 22, 52 and 56).
30. In Adelson this court reviewed the history of Ord 20, r 5 and of section 35 of the Act. It appears that Ord 20, r 5 dates back to 1965 and thus precedes section 35, which made a new appearance in the 1980 Act following the Law Commission's 21^st Report on Limitation of Actions (Cmnd 6923). Lord Phillips said (at para 23 of Adelson):

"That report, published in… 1977, referred to Ord 20, r 5(3), at para 5.16 and commended its wording and the result that it achieved. The report recommended that the law should be changed in a number of respects to allow the addition of parties in order to validate a claim and Brooke LJ drew attention to these in Martin v Kaisary (No 1) [2006] PIQR P 58. In general, however, the report made it plain that the committee did not recommend any relaxation of the restrictive effect that the Limitation Act 1939 had had on the grant of permission to amend pleadings out of time."

That was why Lord Phillips went on to say:

"26. In the light of this history when interpreting the provisions of the Civil Procedure Rules in respect of the substitution of parties, which closely follow the relevant parts of section 35 of the 1980 Act, it is necessary to have regard to the jurisprudence in relation to Ord 20, r 5."

31. Lord Phillips' conclusion is in terms of "have regard to", and that is entirely understandable. It is less certain that Lord Phillips meant that CPR 19.5 must be construed as though it still contained all the language of Ord 20, r 5, especially when it is borne in mind that CPR 17.4(3) does reflect, but CPR 19.5 does not maintain, the Ord 20 r 5 language "and was not misleading or such as to cause any reasonable doubt as to the identity of the party intending to sue or, as the case may be, to be sued". Thus CPR 17.4(3) ends with similar, but not identical words – "and not one which could cause reasonable doubt as to the identity of the party in question": to which Lord Phillips himself drew attention at the end of para 44 of Adelson. We, however, are concerned with CPR 19.5, not with CPR 17.4(3).
32. There are a number of strands going either way. Thus at certain points of the judgment in Adelson, it would appear that "the test in The Sardinia Sulcis" embraces not only the distinction between a mistake as to name and a mistake as to identity but also the requirement that there should not be any reasonable doubt as to the identity of the person intending to sue or intended to be sued: see paras 38/39. Moreover, at para 47 of Adelson Lord Phillips says:

"As we have explained, contrary to what May LJ thought, there is good reason to believe that the new rules were intended to replicate the provisions of Ord 20, r 5. In the next three [post CPR] decisions to which we refer the court acted appropriately in having regard to the jurisprudence relating to Ord 20, r 5."

33. On the other hand, in reviewing the post CPR jurisprudence Lord Phillips does not advert to any express adoption of the Ord 20, r 5 language (in a CPR 19.5 case) and is confined to commenting variously on the situation in each case. Thus as to Horne-Roberts v. SmithKline Beecham plc [2001] EWCA Civ 2006, [2002] 1 WLR 1662, where the claimant first sued Merck and then successfully sought to amend to substitute SmithKline as the manufacturer of the drug of which complaint was made, Lord Phillips commented:

"49. It is not clear from the report whether the description of the defendant as the manufacturer of vaccine batch No 108A41A appeared in the pleading, although it is clear that Merck's solicitors were aware of it. Nor is it clear whether those acting for SmithKline were aware that a claim had been made erroneously naming Merck as defendant in respect of that batch number."

34. As to Parsons v. George [2004] EWCA Civ 912, [2004] 1 WLR 3264, where the claimant sued the wrong landlord and then successfully sought to substitute the right landlord, Lord Phillips said (at para 50):

"[Dyson LJ] observed that the solicitors who had been served were also acting for the landlord and must have understood that the claimants were intending to apply for a new tenancy from the competent landlord: paras 25, 41-42."

35. As to Kesslar v. Moore & Tibbits [2004] EWCA Civ 1551, [2005] PNLR 286, where the claimant erroneously sued the successor partnership (of a firm of solicitors) of which the complained of solicitor was not a partner, and successfully sought to substitute the defendant solicitor and her partner as defendants, Lord Phillips cited Buxton LJ's observation –

"The best source of 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."

and continued (Adelson at para 51):

"It is not clear from the report whether common insurers were involved, so that those representing R and K [the substituted solicitor defendants] were aware of the proceedings and of the mistake."

36. It seems to me that this is not a basis for making the judge's second requirement an additional formal condition of the CPR 19.5 jurisdiction. Moreover, there is nothing in Lord Phillips' "Conclusions" (at paras 55/57) to suggest that second requirement. On the contrary, Lord Phillips said this:

"57. Almost all the cases involve circumstances in which (i) there was a connection between the party whose name was used in the claim form and the party intending to sue, or intended to be sued and (ii) where the party intended to be sued, or his agent, was aware of the proceedings and of the mistake so that no injustice was caused by the amendment. In the SmithKline case [2002] 1 WLR 1662, however, Keene LJ accepted that the Sardinia Sulcis test could be satisfied where the correct defendant was unaware of the claim until the limitation period had expired. We agree with Keene LJ's comment that, in such a case, the court will be likely to exercise its discretion against giving permission to make the amendment."

37. Those comments suggest that what the judge called the second requirement is really an aspect of discretion. It may well be that, in many cases, the justice of the matter will militate against a successful application under CPR 19.5 unless the correct defendant has known about the complaint at some time before the limitation period has passed. However, even that cannot be laid down too firmly as a principle, as the SmithKline case itself demonstrates. For in that case, which this court in Adelson referred to and relied on without any note of disapproval, the claimant was allowed to substitute SmithKline for Merck, even though SmithKline is of course an entirely different organisation from Merck, it must be entirely irrelevant what Merck may have thought about the matter, and SmithKline could not have known anything about the litigation until service or shortly before service, and in any event after the expiry of the limitation period.
38. In SmithKline, the case for the new defendant which was rejected both at first instance (Bell J) and in this court was that the claimant always intended to sue Merck, even if his mistake was as to the identity of the manufacturer of the vaccine. Keene LJ considered The Sardinia Sulcis and other earlier jurisprudence as showing that the jurisdiction under Ord 20, r 5 and section 35 had always been wider than that submission would allow. He said:

"39…Yet even confining oneself to the wording of [section 35(6)(a)], 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."

39. Keene LJ went on to say this:

"44. Instinctively one is reluctant to accept an interpretation of section 35(6) 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 against SK.

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

Dame Elizabeth Butler-Sloss P and Hale LJ agreed.

40. Thus in that case there was no requirement that the choice of Merck as defendant should not be misleading or should not give rise to doubt as to the identity of the party intended to be sued. How could the choice of Merck as defendant not be misleading? How could there not be reasonable doubt as to the party intended to be sued? Nevertheless, it could still be said that the solicitor for the claimant had correctly identified the batch number of the MMR vaccine of which complaint was made, which "should have indicated to him that it was an SK product. However, as a result of some mistake, he attributed it to Merck" (at para 3). The error only came to light about a year after proceedings had been served on Merck, when Merck's solicitors said that the batch number was most unlikely to correspond to a Merck batch number. By then the ten year limitation period had passed.
41. This is a difficult area of the law, but I would hazard the possible explanation that the Sardinia Sulcis test properly so-called does not, at any rate as it has survived in the new world of the CPR and the altered language of Part 19.5, embrace all the wording of the old rule RSC Ord 20, r 5, but is properly confined to the substantive test that it is possible to identify the intending claimant or intended defendant "by reference to a description which was more or less specific to the particular case" (per Lloyd LJ at 207, cited at para 20 above). That after all will ensure that the court can be satisfied that a genuine mistake has been made and that the mistake in question has caused the wrong party to be named.
42. It is only in this way that justice can be done to the fact that the language "and not one which could cause reasonable doubt as to the identity of the party in question" is now confined to Part 17.4(2), and is not to be found in Part 19.5. It is plainly not an inherent requirement of section 35. It is only in this way that SmithKline can survive as a correct application of the new Part 19.5. SmithKline was approved in Adelson, and binds us.
43. The rest is necessity and discretion. The test of necessity includes the requirement that "the claim cannot be carried on…unless the new party is added or substituted" (Part 19.5(3)(b)). The discretion remains implicit in the word "may" in the rule that "The court may add or substitute a party only if…" (Part 19.5(2)(a)).
44. The judge, having assumed in Lockheed's favour that it had made a mistake (the first element in the rule's requirement of necessity) did not go on to discuss necessity further, because he rejected Lockheed's application under his own second requirement, that the mistake must not be misleading to the other party or that the identity of the person intended to be sued must have been apparent, as well as under the rubric of discretion.
45. I would for my part, however, conclude that the judge erred in this respect. For the reasons discussed above, there is no further formal, jurisdictional, requirement that the mistake was not misleading to the other party or did not cause reasonable doubt as to the identity of the party intended to be sued. In particular, even if such a test had to be applied, it is not to be judged subjectively, such as by reference to the evidence of the other party, but objectively by the court.
46. Thus in this case, if everything had turned on whether the intention to sue the intended defendant to the proceedings had been reasonably brought to its notice by the claim form originally served, I would, other things being equal (which admittedly they are not), have wanted to be more circumspect about the effect of the proceedings being brought to the attention of Ms Bolton-Jones. In her position, she was, as I understand it, authorised to accept service or at any rate authorised to represent any company within the Willis group in the UK. Had it not turned out to have been the case that Lockheed's evidence showed that the intention was to sue the relevant holding company, and not a broking company, it might have been said that a fair reading of the situation as of original service of the claim form on 19 December 2008 would have been that Lockheed had intended to sue the main Willis broking company, viz Limited. That was because the claim form (see para 3 above) had said that the claim was for "professional negligence arising from the Defendants' broking of insurance policies…"; and Limited is, it seems, the successor to both Willis Faber & Dumas Limited and Stewart Wrightson Limited (see para 19 above). Ms Bolton-Jones gave evidence that the claim form suggested that Lockheed's complaint was really against an English broking company, but it was not certain which (see para 23 above). If the argument had got that far, I would have wanted to be cautious about the latter proposition and its significance for the purposes of the court's discretion. Ms Bolton-Jones accepted that the Willis company most commonly proceeded against in the UK was Limited, and the point emphasised by the judge, that she did not "know" who the intended defendant was when the claim form was received (see his para 51), seems to me not to bear the weight placed on it. Moreover, the judge was, for the reasons explained above, wrong to state that in all the cases considered in Adelson the party resisting substitution "knew who the intended party was" (the judge's para 52). As I have observed, that was not true of SmithKline.
47. For the same reason, I would have wanted in such circumstances to be cautious about the proposition that discretion would have needed to be exercised against Lockheed on the basis that this would have been a situation where the Willis organisation did not know of any claim against it until after time had run. It is true that, at the time of first service, limitation had expired (on 26 November 2008) and that there had been no earlier intimation of a claim. Nevertheless service had been effected within time of a claim form issued within time (although in both cases, only just). Had it been clear, for instance, that Lockheed's intention had been to sue the major Willis broking company (Limited), but by genuine mistake had sued the UK holding company (Group), there would have been something potentially unattractive about a major group like Willis claiming a particular difficulty about which particular broking company had been intended to be sued: especially where Lockheed might have been able to argue (and indeed it sought to argue) that it was the fault of the Willis broking companies of yesteryear that had caused the difficulty in the first place by not maintaining adequate records.
48. As it is, however, such arguments do not properly arise. Lockheed did not intend to sue a broking company, but a holding company, and there is no appeal in relation to the judge's refusal to substitute Limited. Moreover, the judge was entitled to say that matters had been left very late without any explanation whatsoever of why it was that things only started to happen in August 2008.

The requirement of necessity, and the inability of Lockheed to plead its cause of action

49. In my judgment this is Lockheed's ultimate difficulty, and the safest ground for refusing Lockheed permission to appeal. There is no jurisdiction to entitle Lockheed to substitute a new party out of time unless to do so is necessary. Necessity requires not only a mistake, which has been assumed in Lockheed's favour, but also the requirement that "the claim cannot properly be carried on…against the original party unless the new party is added or substituted as…defendant" (Part 19.5(3)(b)). What is the claim? It is said to be a claim against Group by reason of "professional negligence arising from the Defendants' broking of insurance policies on behalf of the Claimant and its predecessors in interest prior to 1992". The claim form spoke of "duties of care", including a "duty to maintain evidence of the terms, conditions and subscribing market to the policies of insurance to enable the handling of claims". It is very difficult to see how such duties can arise against Group, which is a holding and not a broking company. The question is whether particulars of claim have made the matter any more cognisable.
50. The first particulars of claim pleaded against Group and Limited stated that Group was the parent company of the Willis group which included Limited, and that Limited was the successor to Stewart Wrightson (Marine) Limited and Willis Faber & Dumas Limited, both Lloyd's brokers. Still other broking companies formerly within the group were identified. It was said that these broking companies had over the decades acted for Lockheed in placing policies and that as such they owed duties to assist in the collection and settlement of claims under the policies, and to maintain adequate records of the relevant transactions. Limited in particular "assumed responsibility to keep relevant records of the subscribing market and their respective subscription to and/or participation in the said Policies" (at para 11). They had broken such duties by failing to provide missing information to enable Lockheed to collect the unpaid balance of $8.124 million under the SAR. For these purposes, Group was joined in the allegations of duty and breach. Paragraph 5 stated:

"For the avoidance of doubt [Group] is sued by reason of its being the ultimate UK parent company of the above described Lloyd's brokers and all reference to [Group and Limited] should be taken to mean those persons within the Willis Group who, at the material time, acted as Lloyd's brokers for and on behalf of the Claimant."

51. More recently, amended draft particulars of claim have been served in the period between the judge's decision and this renewed application. In this document Limited has been deleted as a second defendant, and the claim is made against Group alone. All pleaded duties are now said to reside in Group alone. It remains the bald assertion that Group is "sued by reason of its being the ultimate UK parent of the above described Lloyd's brokers and all reference to [Group] should be taken to mean those parents within the Willis Group who, at the material time, acted as Lloyd's brokers for and on behalf of the Claimant, or who discharged responsibility within the Group for researching insurance records…The various individual brokerage companies were acquired over time and collectively constitute the Willis Group…" (paras 5/6). However, there is no explanation or guidance in the amended particulars as to why the various pleaded duties fall upon Group, as holding company, rather than on Limited, as the successor to the various Lloyd's brokers identified in the pleadings. It is not alleged that Group, as holding company, has adopted or assumed the responsibility of holding centralised records of all the Willis group's former or subsisting broking companies.
52. In these circumstances it is impossible to tell, even some eighteen months or so after issue of the original claim form, what is the basis of Group's alleged liability. Lockheed's primary difficulty in other words is in the formulation of its claim against Group. Without a proper cause of action against Group, it cannot be right to allow Group to become, especially after the limitation period has expired, a surrogate of Lockheed's claims against the broking companies within the Willis group: a fortiori where the principal broking company within the Willis group is Limited, as successor to previous broking companies within the group, and Lockheed has accepted that it is unable to substitute Limited for Holdings on the ground of any mistake.
53. In my judgment, therefore, this difficulty rebounds on Lockheed in a fundamental way. It cannot be necessary in the sense of Part 19.5(3)(b) to substitute Group for Holdings where Lockheed has no cause of action against Group any more than it did against Holdings. If it is not necessary to substitute Group for Holdings, then there is no jurisdiction to do so once the limitation period has passed, as it had by the time of Lockheed's application to substitute. A fortiori on the facts of this case it could not be right to exercise any discretion in favour of the substitution. It has therefore been unnecessary to consider the judge's alternative reason for rejecting Lockheed's claim to substitute as a matter of the court's discretion, namely by reason of the doctrine of abuse of process on the ground of Lockheed's inability at the time of issue of proceedings to formulate timely particulars of claim, applying Nomura International plc v. Granada Group Limited [2007] EWHC 642 (Comm) This is, however, where the judge perhaps came closest to our view which has found in Lockheed's inability to plead its claim against Group the quietus of its attempt to implead Group after the limitation period had passed. The difference is however that it was not so much Lockheed's inability at the time of issue of proceedings to make a timely formulation of its claim which has influenced us, as its total inability after all the time which has gone by to explain and state any cause of action against Group which goes further than merely to make Group a surrogate defendant for the broking activities of Limited or its predecessors.

Conclusion

54. In sum, for the reasons contained above, which differ somewhat from those of the judge, but similarly reflect the essential facts of the case which drove him to his conclusion, this renewed application for permission to appeal was refused. There was no real prospect of success for any appeal. However, given the discussion above, albeit obiter, of the judge's second requirement for the jurisdiction to substitute a defendant under Part 19.5, I would permit this judgment to be cited hereafter.

Lord Justice Wilson :

55. I agree.

Lord Justice Waller :

56. I also agree.