England and Wales High Court (Technology and Construction Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		31/01/2007

Judge Richard Havery Q.C. :

1. This is an application to amend the particulars of claim after the expiry of a period of limitation. The claimant is the tenant of a building known as the Compass Centre, which was constructed in 1992 and 1993 at Heathrow Airport. The developer and landlord was Heathrow Airport Limited ("the landlord"). The Compass Centre has a considerable area of glazed curtain walling, and incorporates horizontal brise soleil glass louvres at various heights on the outside of the building which are supported by metal outriggers. The louvres and outriggers were constructed by the defendant and/or its subsidiary, Harmon Contract UK Limited ("Harmon", now dissolved), pursuant to a trade contract entered into between the landlord, the defendant and Harmon. The defendant is based in Minneapolis, Minnesota, U.S.A. The claimant contends that the defendant provided a collateral warranty in its favour in respect of those works.
2. A number of failures of glass fins on the Compass Centre have occurred. The claimant contends that those failures were caused by poor workmanship in the installation of the louvres. The claimant has erected netting around the building as a temporary measure to prevent falling glass from causing injury. Tenders have been obtained for permanent remedial works. The claimant claims from the defendant the cost of temporary and permanent remedial works as damages for breach of the collateral warranty.
3. In the particulars of claim the collateral warranty has been misidentified. The amendments sought are designed to correct that error. There is no change to the terms of the duty alleged to have been breached by the defendant, to the breaches alleged, or to the loss and damage claimed (save for a correction to the figures). No objection is taken, or could reasonably be taken, to the amendment of the figures. There are also two trivial proposed amendments, one of clarification and one to correct an obvious typographical error, with which I need not concern myself.
4. The defendant, together with Harmon, entered into three trade contracts with the landlord, one of which included the curtain walling works which are the subject of the claim. The three trade contracts were:

3200, dated 13^th October 1992, in respect of the curtain walling works;

3250, dated 4^th November 1992, in respect of cladding to link walls, atria and end walls;

3270, dated 19^th March 1993, in respect of core cladding works.

In respect of each trade contract, it was intended that the defendant and Harmon would enter into a collateral warranty with the claimant. The mistake in the particulars of claim is that the collateral warranty to trade contract 3270 is pleaded instead of the collateral warranty to trade contract 3200. The claim as pleaded relates specifically to the curtain walling works and no amendment is sought in respect of the works identified.

5. The claim was issued on 19^th September 2005. It is common ground that the date of practical completion of the curtain walling works was 19^th November 1993, and that time started to run on that day. There is a dispute whether the period of limitation is six years or twelve years, though that dispute is not for resolution on the hearing of this application.
6. The provisions relevant to amendment of a claim after the expiry of a period of limitation are section 35 of the Limitation Act 1980 ("the Act") and Part 17.4(2) of the Civil Procedure Rules ("CPR"). Section 35(2) provides, so far as relevant

In this section a new claim means…..any claim involving…..the addition or substitution of a new cause of action…..

Part 17.4(2) provides

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.

The meaning of "new claim" in CPR 17.4(2) is that given in section 35(2) of the Act.

7. In Letang v. Cooper [1965] QB 232, 242 Diplock L.J. said

A cause of action is simply a factual situation the existence of which entitles one person to obtain from the court a remedy against another person.

That is not to say that any amendment necessarily involves the pleading of a new cause of action. The context in which Diplock L.J. made his remark was quite different from the question of amendment. It was the question whether a claim for unintentional trespass to the person, which requires negligence to be alleged and proved, differed from a claim in negligence. He held that it did not. He said at p.243

…..when, since 1873, the name of a form of action is used to identify a cause of action, it is used as a convenient and succinct description of a particular category of factual situation which entitles one person to obtain from the court a remedy against another person……

If A., by failing to exercise reasonable care, inflicts direct personal injuries upon B., it is permissible today to describe this factual situation indifferently, either as a cause of action in negligence or as a cause of action in trespass…..no procedural consequences flow from the choice of description by the pleader…..They are simply alternative ways of describing the same factual situation.

8. Nevertheless, it is clear from the authorities that an amendment which does not take a claim out of the category "breach of contract", say, may still be a new claim or a new cause of action within the meaning of section 35 of the Act and the meaning of Rule 17.4(2) of the CPR. For example, in Savings and Investment Bank Ltd. v. Fincken [2001] EWCA Civ 1639 Peter Gibson L.J. said

31…..In building dispute cases where defects in the work done are alleged, it may be a nice question whether the addition by amendment of a further defect in breach of the same duty is not the addition of a new cause of action, as was held by this court in Idyll Limited v Dinerman Davison and Hillman [1971] 1 CLJ 284, or is such an addition as was held by another division of this court on somewhat similar facts in Steamship Mutual.

But even substantial additions to damages claims can be held to involve no new cause of action. Peter Gibson L.J. went on:

33. Keene L.J. in the course of the argument before us posited the case of the ordinary Sale of Goods Act warranty that a car is of merchantable quality. A defect in the gearbox is discovered and breach of warranty is pleaded by the purchaser. Subsequently a further defect, say, in the transmission, is discovered. It is hard to believe that to amend to plead the further defect is the addition of a new cause of action.

…..

38……In the Idyll case at p.297 Davies L.J. referred to an example given by Megaw L.J.:

Suppose a personal injuries action is brought and there is a claim for damages in respect of not very serious injuries, and then subsequently epilepsy develops arising out of the injuries which the plaintiff received in the accident. Could it possibly be said that to amend the particulars of personal injuries by adding a claim in respect of the epilepsy would be to introduce a new cause of action? Of course it would not.

The fact that a serious illness, as compared with the not very serious injuries pleaded earlier, is pleaded by amendment cannot transform what is otherwise plainly not a new cause of action into a new cause of action.

9. In Paragon Finance v. D.B.Thakerar & Co. [1999] 1 All ER 400, 405 Millett L.J. said

The pleading of unnecessary allegations or the addition of further instances or better particulars do not amount to a distinct cause of action. The selection of the material facts to define the cause of action must be made at the highest level of abstraction. [Emphasis added].

In Savings and Investment Bank Ltd. v. Fincken the claim was for damages for breach of a warranty, contained in a deed, that a list of assets was complete. Peter Gibson L.J. treated the description of the breaches as particulars, or at any rate as matters below the highest level of abstraction. He said:

30.....To define the cause of action the non-essential facts must be left out of account as mere instances or particulars of essential facts. That is what I understand Millett L.J. to have meant by stating that the selection of material facts must be made at the highest level of abstraction.

.....

32.....The material facts are no more than (1) the giving of the warranty by Mr. Fincken and (2) the breach of that warranty..... non-disclosure of [a particular item not originally pleaded] was a mere further instance or particular of how the warranty was breached by non-disclosure.

It is notable that Peter Gibson L.J. referred simply to the giving of the warranty and not to the identity of the document by which it was given. In Darlington Building Society v. O'Rourke [1999] PNLR 365, 370, C.A., Sir Iain Glidewell, with whom Waller and Nourse L.JJ. agreed, said that where a claim was based on breach of duty, whether arising from contract or in tort, the question whether an amendment pleaded a new cause of action required comparison of the unamended pleading with the amendment proposed in order to determine (a) whether a different duty was pleaded; (b) whether the breaches pleaded differed substantially; and where appropriate (c) the nature and extent of the damage of which complaint was made. He did not mention the identity of the contract, if any, in that context.

10. Mr. Stansfield submitted that the identity of the contract was not part of the cause of action, though its relevant terms were. The way he put it was that the duty and the breach, but not the contract, were part of the cause of action. Mr. Tager submitted that the identity of the contract was an essential part of the cause of action. He accepted that the date of the contract was not a necessary part of the cause of action though it might be necessary to plead it in order to identify the contract. I observe that before 1873, whilst in a claim arising out of a contract it was necessary to plead either the full consideration or that it was under seal, and in each case the relevant parties and terms, it was not necessary to identify the contract or even to state whether it was oral or in writing.
11. Mr. Tager relied on the decision of the Court of Appeal in Hall v. Meyrick [1957] 2 Q.B. 455. He relied in particular on the following passage (p.477) from the judgment of Hodson L.J.:

The effect of that amendment is to substitute the allegation that there was a separate retainer of the solicitor by the plaintiff as an alternative to the joint retainer which had originally been alleged. The point at once emerges that, if a separate contract is alleged between the plaintiff and the solicitor, that is an entirely new contract, a different contract from that which was originally pleaded, and, having regard to the lapse of time, the defence of the Statute of Limitations is, on the face of it, available to the defendant if he so chooses.

Further light on this point is thrown by the judgment of Parker L.J. at p.480:

Mr. Phillimore also strongly relied on paragraph 6 of the statement of claim, which is in these terms: "The defendant further negligently failed to advise the plaintiff or the deceased, as it was his duty to do, that both the said wills would be revoked by their marriage". He said that the words in that paragraph were sufficient to cover the claim as now presented. I think it is clear from that that it must be read with paragraph 2 of the statement of claim. The basis of the claim is contract, and the only contract pleaded of which paragraph 6 is alleging a breach is the joint retainer in paragraph 2. If that were not clear of itself, it seems to me that the very wording of paragraph 6 makes it clear, because the duty which is said to be broken is a duty to advise the plaintiff herself of the fact that both wills would be revoked. That duty could only arise under a joint retainer.

Thus whilst it is true that permission to amend was refused on the ground that it was sought to allege a new contract by way of amendment, the duties under the two contracts were relevantly different. The new contract, in the words of Hodson L.J., was "an entirely new contract, a different contract". I do not regard Hall v. Meyrick as authority for the proposition that pleading a new contract is necessarily pleading a new cause of action.

12. Mr. Tager also relied on the decision of Park J. in Alliance & Leicester PLC v. Pellys, unreported, 9/7/99. That was an application to amend a statement of claim after the expiry of a period of limitation. In section H, paragraph 1 of his judgment Park J. said

A&L seeks to assert a new duty. It wishes to plead that contractual duties were owed by Pellys to A&L under the express terms of a contractual document, namely A&L's Notes for Solicitors. This has not been pleaded before. It seems to me clearly to assert a new cause of action, and it arises from facts newly pleaded—the existence and contents of the written Notes for Solicitors. In my judgment it is an amendment for which permission cannot be given.

It is not clear from that passage whether the new duty was different from the old. Park J. earlier in his judgment described the remarks of Sir Iain Glidewell mentioned in paragraph 9 above as valuable general guidance. I do not regard the passage relied on by Mr. Tager as qualifying that guidance.

13. Mr. Tager submitted that the difference between the principal facts raised in the original statement of case and the principal facts sought to be raised by way of amendment were so different that the proposed amendment pleaded a new cause of action. Those principal facts in the existing pleading were, he submitted:

(a) the 3270 trade contract had been duly executed;

(b) the curtain walling works were incorporated in and formed part of the 3270 trade contract; and

(c) there was a 3270 warranty, duly executed as a deed between the defendant and the claimant, which by its terms expressly related to the 3270 trade contract and gave rise to contractual duties and obligations enforceable by the claimant against the defendant in relation to the design and installation of the curtain walling works.

He submitted that the principal facts sought to be raised by way of amendment were

(a) the curtain walling works were designed, manufactured and installed pursuant to the 3200 trade contract, dated 13^th October 1992;

(b) the defendant delivered a collateral warranty duly executed as a deed (i) before 26^th April 1993 and/or (ii) on 20^th October 1993 in respect of the 3200 trade contract; and

(c) although the alleged 3200 warranty had not been properly completed, the front cover of the relevant collateral warranty identified the curtain walling works as being the subject of that collateral warranty.

I regard those differences as being well within the category of particulars, and certainly below the highest level of abstraction appropriate for present purposes.

14. Mr. Tager also submitted that the proposed amendments raised new issues of fact arising out of the fact that the copies of the 3200 warranties of April and October 1993 provided by the claimant to the defendant were blank in relation to the identity of the relevant trade contract and the attestation and were unsigned. Those new issues were:

(1) whether each of the warranties had the form of attestation relied on when it was supplied to the defendant for sealing;

(2) whether each of the warranties was duly sealed by the defendant;

(3) whether, and if so when, each of the warranties was delivered to the claimant;

(4) what was the wording of each of the warranties, including the form of attestation, when it was delivered;

(5) the law of Minnesota in 1993 as to its requirements for the execution of deeds by a Minnesotan corporation;

(6) whether, in the case of each of the warranties, the defendant complied with those requirements.

Mr. Tager submitted that those facts represented a claim based on a new cause of action. In my judgment, they relate simply to particulars. At all events, they are not at the highest level of abstraction.

15. In the light of the above authorities, I accept the submission of Mr. Stansfield and reject that of Mr. Tager. In the particulars of claim as sought to be amended and in the existing particulars of claim the duties alleged are identical, the breaches are identical, and the damages claimed (apart from their quantification) are identical. It is only the identity of the document in which the warranty was contained that is sought to be amended, save for the trivial exceptions mentioned above. It is true that the duty arising under the warranty relating to the pleaded trade contract, 3270, is not the duty relating to trade contract 3200, but the latter is the duty already pleaded under the erroneous label 3270.
16. I conclude that the amendments sought to be made do not amount to the making or substitution of a new claim. Mr. Tager submitted that I should nevertheless not allow them because the claimant enjoyed no realistic prospect of success in relation to the new alleged contractual basis of the amended claim. It is true that the claimant does not have a duly executed copy of either the April or the October 3200 warranty. Mr. Tager also submitted that the claimant had no evidence that either of the warranties was ever delivered to it. That is as may be. Moreover, said Mr. Tager, the April 3200 warranty was plainly not accepted by the claimant. There was little or no realistic prospect of the claimant succeeding at trial on the necessary allegations that a 3200 warranty was sealed by the defendant and then delivered to the claimant. Having read the relevant correspondence and an opinion of Minnesotan counsel, I remain unpersuaded that the claimant has little realistic prospect of succeeding at trial, let alone such a remote prospect as would justify refusal to allow the amendment. I conclude that I have a discretion to allow the proposed amendments.
17. Mr. Tager submitted that in the exercise of my discretion I ought not to allow the amendments. He relied on these matters. First, the investigation of the making and terms of the warranties would have to go back to 1992. Second, the claimant had been aware of the defects in the curtain walling works since October 2001 at the latest, but did not seek to bring proceedings until the limitation period was close to expiry. Third, the defendant had offered the claimant a standstill agreement in May 2005, which the claimant had not accepted.
18. The claim form was issued on 19^th September 2005. In accordance with the pre-action protocol, Addleshaw Goddard LLP, the solicitors acting for the claimant, wrote a letter of claim on 2^nd February 2006 to Charles Russell, the solicitors acting for the defendant. That letter of claim substantially set out the matters pleaded in the existing particulars of claim, which were served on 7^th June 2006. Charles Russell responded to the letter of claim on 12^th April 2006, but it was not until 28^th June 2006 that they wrote to Addleshaw Goddard stating that the writer now understood for the first time that Harmon undertook three works packages, numbered 3270, 3200 and 3250. She expressed her understanding that the outriggers that were the subject of the claim formed part of the works package for contract number 3200. It is clear that both parties were somewhat in the dark about the events and documents relevant to the claim. It is unnecessary for me to decide whether either or both of the parties are to blame for that or, if so, to apportion blame. In my judgment, the claim ought not to be stifled. In the exercise of my discretion, I allow the amendment.
19. Mr. Tager asks for the costs incurred by the defendant in relation to an abortive application for summary judgment. He submitted that the defendant was entitled to those costs in any event since it was bound to succeed in relation to the claim as originally pleaded. The application was abandoned in consequence of the claimant's application to amend the particulars of claim.
20. On 6^th September 2006, the claimant served on the defendant a request for further information and disclosure, seeking a response by 18^th September 2006. The request for disclosure was for copies of the contracts referred to in the defence. The defendant but not the claimant was party to those contracts. Disclosure had been ordered by 15^th September, time not to be extended without the consent of the court. On that day, 15^th September, the defendant gave notice of an application for postponement of directions. Pending the hearing of that application, and notwithstanding the absence of permission from the court, and without the consent of the claimant, the defendant then declined to comply with the order for disclosure. Addleshaw Goddard wrote to Charles Russell on 21^st September objecting to the defendant's purported suspension of the directions, and observing that the apparent confusion between the parties as to the relevant contractual documents was a good reason for disclosure to take place in accordance with the order of the court. They asked for copies of the contracts referred to in the defence by return. They said that they could not respond to the substance of the defendant's application, since the defendant's witness statement did not inform them of either of the legal points which their counsel had identified. On the same day, Charles Russell replied saying that those points would be made in a separate application for summary judgment. The defendant's application for summary judgment was made on 24^th October 2006. On 25^th October the defendant served the contract documents relied on. On the same day the claimant served its draft amendments to the particulars of claim. Its application for permission to amend the particulars of claim was made on 10^th November.
21. It is clear that the claimant's application to amend could have been made earlier if the defendant had complied with the order of the court. In my judgment the defendant made its application for summary judgment prematurely in the circumstances. I decline to order the claimant to pay the costs of the defendant's application for summary judgment.