Reaching the Limit: Problems with Limitation Periods, Amendments and Substitutions in Cameron Taylor Consulting Ltd v BDW Trading Ltd

Articles
02 Feb 2022

David Pliener and Tom Ames break down the Court of Appeal’s recent decision in Cameron Taylor Consulting Ltd and another v BDW Trading Ltd [2022] EWCA Civ 31.

Introduction

The Court of Appeal’s recent decision in Cameron Taylor Consulting Ltd and another v BDW Trading Ltd [2022] EWCA Civ 31 has confirmed the approach which the courts will take when dealing with amendments of claims under CPR 17.4, in circumstances where the limitation period for the amended claim has potentially expired.

Coulson LJ’s judgment confirmed the correct approach for the courts when a claimant argues that their case avoids the defendant’s limitation arguments was outlined in Welsh Development Agency v Redpath Dorman Long Ltd  [1994] 1 WLR 1409 and Chandra v Brooke North [2013] EWCA Civ 1559. Namely, if the defendant can show that it is at least reasonably arguable that the amendment may be statute-barred, then the court should not grant leave to amend, and a new claim form must be issued. In these circumstances, claimants must demonstrate that the defendant lacks such a reasonably arguable limitation defence.

Notably, the judgment also reiterated that when claims relate to defective building design, the last date on which a designer is responsible for a negligent act or omission is the date on which a relevant drawing design is incorporated into the building. Coulson LJ, in obiter remarks, also dealt with a secondary point on the substitution of parties when the wrong company in a group is named on the claim form by mistake.

The Facts

The proceedings arose on account of structural problems which BDW Trading (“BDW”) alleged they had discovered in a number of development projects. BDW first issued a claim form against AECOM with regards to a development in Croydon on 6th March 2020. On 17th March and 18th March 2020, the claim form was amended to add two further claims: against URS Corporation Ltd, and against Cameron Taylor Consulting (“CTC”) for a number of blocks in a West London development. Then, on 9th June 2020, BDW issued a further application to substitute Cameron Taylor One (“CT1”) for their sister company, CTC, on the claim form.

BDW’s claim concerned inadequacies in CT1’s structural design, and they made allegations of negligence by reference to a range of CT1’s design drawings, put together in around 2005. However, the 15 year ‘longstop’ for negligence claims outlined in s.14B Limitation Act 1980 resulted in a cut-off date, for the sake of limitation arguments, of 18th March 2005. Consequently, BDW indicated that they would constrain their claim against CT1 to structural drawings issued before 18th March 2005.

The Issues

CT1 and CTC were the only objecting appellants. The main issue before the Court of Appeal was the correct test in law to apply when amendments may be outside the relevant limitation period, and whether, according to that test, the 15 year limitation period in s.14B Limitation Act 1980 had at least arguably expired.

CTC submitted that, on analysis of the correct law and the design drawings themselves, there was an arguable case for expiry which prevented acceptance of the amendments. BDW submitted that their ‘constrained case’ (a case which made use only of design drawings issued after 18th March 2005) provided a complete answer to any allegations that the limitation period had expired.

Finally, although his comments on the issue were obiter once he had dealt with the first part of the appeal, Coulson LJ also had to answer a further question on the nature and extent of the analysis which the court should undertake on an application to substitute one defendant company for another, where the claimant states that they named the original company in error.

The Decision

Regarding the correct test to be used when s.14B Limitation Act 1980 is invoked, Coulson LJ first outlined the relevant authorities on limitation arguments and amendments. The starting point, he said, is Welsh Development Agency v Redpath Dorman Long Ltd, where Glidewell LJ stated that leave to amend “should not be given unless the plaintiff can show the defendant does not have a reasonably arguable case on limitation”. This guidance, originally designed for the Rules of Supreme Court, applies also to the CPR, as indicated by Jackson LJ in Chandra v Brooke North (a firm) and Anr.

Therefore, Coulson LJ concluded that if a defendant can show that it is reasonably arguable that a new claim introduced by amendment is statute-barred, leave to amend should not be given. The claimant must show that the defendant lacks a reasonably arguable limitation defence.

Coulson LJ explained that he thought BDW’s argument that their ‘constrained case’ avoided any limitation issues to be flawed for two reasons. Firstly, he stated that what matters is the last date or dates on which CT1/CTC were responsible for a negligent act to which BDW’s damage can be attributed. Pearson Education Ltd v The Charter Partnership Ltd [2007] EWCA Civ 130 is authority that the last specific moment, for limitation purposes, on which the relevant act or omission in negligent design claims took place is the moment when the defective design was incorporated into the building. In practical terms, this is the day on which the design drawing was issued to the contractor for construction purposes. Based on the evidence, Coulson LJ concluded that it was at least reasonably arguable that relevant drawings for this claim were issued before the limitation cut-off date of 18th March 2005. Furthermore, this was not a case where the claimants could point to any subsequent duty on the defendants to review the drawings after this date.

Secondly, Coulson LJ held that the causative consequences of the allegedly defective drawings were held to be critical to s.14B. Coulson LJ observed that BDW were trying to argue for a constrained version of their claim which used only a reduced number of CT1/CTC drawings, but that the scope of their damages should be unaffected despite this reduction. The court thus determined that attempts by BDW to constrain their case to later drawings undermined the causative element of their claim.

Consequently, the Court of Appeal overturned the first instance decision and refused permission for the amendments, causing the claim against CT1/CTC to fall away.

Given the claim against CT1/CTC had fallen away, Coulson LJ’s remarks on the second part of the appeal, which concerned the substitution of parties, were delivered on an obiter basis. The comments concerned the application of CPR 19.5(3)(a): that the substitution of a party is necessary only if the court is satisfied that the new party is to be substituted for a party who was named in the claim form “in mistake” for the new party. Coulson LJ restated that the correct tests were outlined in The Sardinia Sulcis [1991] 1 Lloyds LR 201 and Adelson & Anr v Associated Newspapers [2007] 4 All ER 330. According to The Sardinia Sulcis, the name of a party could be corrected if the court was satisfied that:

  1. There was a genuine mistake;
  2. The mistake was not misleading;
  3. The mistake was not such as to cause reasonable doubt as to the identity of the person intendending to sue (or be sued);
  4. It would be just to allow the amendment.

Furthermore, according to Lord Chief Justice Phillips in Adelson & Anr, “the mistake must be as to the name of the party in question and not as to the identity of that party”, and “the true identity of the person intending to sue and the person intended to be sued must be apparent to the latter although the wrong name has been used”. Lord Phillips also stated that the person who made the mistake must be able to demonstrate “that, had the mistake not been made, the new party would have been named in the pleading”.

In the light of these tests, Coulson LJ held that there had been a genuine mistake as to the name of CT1 (as opposed to their identity) on the part of BDW’s solicitor, who had acted on information he had been given by BDW themselves. Coulson LJ rejected CT1’s submission that it was impossible for the court to say that it was a mistake of nomenclature rather than identity without examining the information given by BDW. Crucially, Coulson LJ observed that BDW knew who they intended to sue: the engineering company responsible for the design. As a result, but for the mistake, BDW would have sued CT1.

Commentary

For practitioners, Cameron Taylor Consulting is a sobering reminder that, unless the limitation position is clearcut (or something can be agreed with the other side), the only safe way to introduce amendments is by issuing a new claim. The question which the court must ask – and which practitioners should ask before they submit amendments – can be formulated as follows: ‘is it reasonably arguable that the date of the act or omission that is alleged to constitute negligence, and to which the damage is alleged to be attributable, occurred outside the limitation period?’. If the answer is ‘yes’, then the court will reject the amendment and a new claim form must be issued.

Regarding the starting point for the limitation period for claims against designers for a defective building design, Cameron Taylor Consulting restated the principle in Pearson Education Limited v The Charter Partnership Ltd [2007] EWCA Civ 130. Practitioners should consider the date on which the design drawing was issued to the contractor for construction purposes as the appropriate starting point, or be able to point to something which occurred later such as to put the designer on notice that a review was required.

It is also worth noting that, separate to the process defined by CPR 17.4, there is another option available to the court when a claimant seeks an amendment: allow the amendment, subject to resolving the limitation point at a later date, or allow the claimant to accept that the new claim only relates back from the date of amendment. This ‘Mastercard’ approach (named after WM Morrison v Mastercard [2013] EWHC 3271) was presumably not available here in the light of the decision in DR Jones Yeovil Ltd v Drayton Beaumont Services Ltd [2021] EWHC 1971 (TCC). In this recent High Court case, it was stated that the ‘Mastercard’ option was only permissible where the defendant accepts, or the court decides, that there cannot be a reasonably arguable limitation defence to the entirety of the proposed amendment. Although this constraint to the ‘Mastercard’ approach applied in the present case, practitioners should remain aware of this alternative approach to amending their claims.

The obiter comments on substitution are relevant for practitioners as they reiterate the test which parties must satisfy if the court is to accept a substitution: there must be a genuine mistake as to the name of the party, not as to their identity. Parties who hope to use such a mistake on a claim form to their advantage may wish to take heed of Coulson LJ’s words on the issue at [72]:

“The construction industry is bedevilled by the frequent changes of nomenclature of the myriad companies, with frustratingly similar names… it is not, in my view, something of which the companies themselves can seek to take advantage in circumstances like this, where it was quite apparent to them why a Cameron Taylor company had been named as a defendant in respect of the allegations about the engineering design.”

This is based on an article first published on LexisPSL on 25th January 2022.

Author

David Pliener

Call: 1996

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