Challenge to amendments to group claims based on limitation have failed (Viegas and others v Cutrale and another and Sanches and others v Cutrale and another)

Articles
24 Aug 2023

Dispute Resolution analysis: Complex applications, challenging amendments to group claims adding significant numbers of Claimants in circumstances where an arguable limitation defence has been raised have failed. The amendments to the claims have been allowed.

Viegas and others v Cutrale and another and Sanches and others v Cutrale and another [2023] EWHC 1896 (Comm)

What are the practical implications of this case?

This is a significant judgment in relation to the circumstances in which parties may be added to claims prior to service where the Defendant has an arguable defence based on limitation. Despite some dicta in subsequent authorities, Chandra v Brooke North (a firm) [2013] EWCA Civ 1559 remains good law. The Court should refuse permission to amend only where the Defendant does not have an arguable case on limitation which would be prejudiced by the new claim. This includes (and may be confined to circumstances in which the operation of section 35 (1) of the Limitation Act 1980 would or may give the Claimants an advantage by reason of the doctrine of relation back. If, as here, there is said to be a limitation defence which applies to the whole claim (both original and amended), the doctrine does not apply and no prejudice is caused to the defence by the addition of the new claim. The judgment also offers interesting guidance on the circumstances in which a challenge under r. 17.2, CPR may be brought outside the prescribed 14-day period and also the effect of the death of Claimants, both on their ability to bring claims originally and for their claims to be pursued by their personal representatives.

What was the background?

This judgment concerns cartel claims brought by orange farmers domiciled in Brazil. The Defendants, the estate of Mr Cutrale snr and Mr Cutrale jnr were, during the relevant period, directors and shareholders of the Brazilian undertaking, Sucocitrico, a producer of orange juice. One set of proceedings, the “Viegas Claim” was originally issued on behalf of 170 Claimants. It was then amended prior to service to add further Claimants, bringing the total Claimants to 1,495 individuals, 21 companies and one foundation. Another, the “Sanches Claim” was issued on behalf of 30 individuals and one company. It has never been amended. The Defendants challenged the jurisdiction of the High Court in respect of these claims. Upon the failure of that challenge, they applied, pursuant to CPR r.3.4(2) to strike out these amendments and to disallow the amendments under r.17.2. The applications were based on a number of grounds, including that the claims (both the original claims and those sought to be added by amendment) were time barred and had been since 2009, that the amendments sought to add claims by persons who were deceased when the claims were issued, that claims were purportedly brought by the representatives of deceased persons who had failed to obtain English grants and that claims had been brought without the informed consent of the relevant Claimant.

What did the court decide?

Contrary to arguments raised by the Defendants, the fact that they had raised a jurisdiction challenge did not impliedly extend the time for making an application under r.17.2 from the usual 14 day period. The Defendants could have made an application under r.17.2 and make that application conditional upon the jurisdictional challenge, however, they failed to do so. They required relief from sanctions having failed to meet this deadline and that application for relief from sanctions was refused after applying the Denton test. On the limitation issue, the Court was required to consider carefully the wording of section 35 of the Limitation Act 1980, the decision of the Court of Appeal in Chandra v Brooke North (a firm) [2013] EWCA Civ 1559 and a number of authorities subsequent to it. The Defendants argued that the authorities subsequent to Chandra had removed a previous requirement that prejudice be shown to be caused to the Defendants where they had an arguable limitation defence in respect of a new claim. The Court did not accept that this was the effect of those recent authorities. Because the position of the Defendants was that all claims were time barred, the doctrine of relation back did not apply and no prejudice would arise to the Defendants in allowing the new claims to be added. The Court therefore had a jurisdiction to allow the amendments, notwithstanding what was accepted to be an arguable limitation defence. The Court exercised its discretion in favour of allowing the amendments. Claims brought by deceased persons were a nullity. As a result, where an original claimant was deceased when the claim was issued, they could not be substituted under Part 17, CPR. Claims could only be brought by personal representatives who had obtained a grant under English law.

Case details

  • Court: High Court of Justice, Business and Property Courts of England and Wales, Commercial Court (KBD)
  • Judge: Dame Clare Moulder DBE (sitting as a Deputy High Court Judge)
  • Date of judgment: 24 July 2023

Article by Phillip Patterson – first published by LexisNexis.

Author

Phillip Patterson

Call: 2008

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