The 52 Occupiers of the Ceramic Works v Bowmer & Kirkland Ltd & Anor

The Claimants apply, by way of application notice dated 11^th August 2020, to join B & K Building Services Limited as a Defendant to these proceedings, conceding that the current First Defendant, Bowmer & Kirkland Limited, has been incorrectly joined.

The application notice on its face applies in the alternative, under both CPR rr. 17.4 and 19.5, it not being in issue that the primary limitation period expired prior to the making of the application, but in reality the application is pursued by way of substitution, rather than amendment, and the Court heard helpful submissions from counsel for the Claimants and for the proposed substituted

The Court benefited from a 488 page .pdf bundle which incorporated both sides’ skeleton arguments and a number of authorities were supplied for the

The hearing was conducted by MS Teams (video) pursuant to CPR PD51Y in the context of the ongoing pandemic.

The Claimants rely upon the witness statements, in the bundle, of Anthony Willis and Suzanne Wood, a witness summary of Lucy Williams and the witness statements of Lucy Williams, all of the Claimants’ solicitors, Brabners

B & K opposes the application and relies upon the witness statements of Neil Frankland, a partner with Mills & Reeve LLP (“M & R”), Bowmer and

I shall refer to bundle pagination thus [x].

These proceedings arise out of a JCT form of contract, entered into between Collent Property Limited and B & K, for the construction of 52 residential and 8 commercial units at the address cited in the title of these proceedings, the works having been completed on or around 4^th April 2014.

An intention to make a claim against B & K was asserted by Brabners on behalf of the Claimants on 18^th January 2019 by preliminary notice of defective works, alleging breach of duty arising by way of the Defective Premises Act 1972 and by way of a general duty of care owed to the Claimants. The losses were (and remain) estimated at £1.8 million.

Matters proceeded, M & R notifying Brabners of their instruction by B & K on 29^th August 2019 and a site inspection taking place on 3^rd December 2019. In January 2020 Mrs Wood joined Brabners and she reviewed the file on 14^th January. At this time, M & R were pressing for a letter of claim and Mrs Wood drafted a letter in response dated 6^th February 2020 [76 – 81] annexing

This reference was repeated in the letter of claim dated 10^th March 2020 [85 – 113], also drafted by Mrs Wood.

Mrs Williams prepared the Claim Form [116] on 26^th March 2020, inserting the current First Defendant into it and the claim was issued.

On 1^st April 2020 Mr Willis, on behalf of the Claimants, served an application, referring in the claim title to the current First Defendant, upon M & R, asking for a stay of proceedings and directions (prior to the service of proceedings) [126], [122-124] to enable compliance with the Pre-Action Protocol for Construction and Engineering Disputes, which application was granted by me on paper by way of the Order of 8^th April 2020 [372-373], staying the claim until 16^th June 2020.

Also on 8^th April 2020, M & R responded to the letter of claim [128-130].

The Order of 8^th April was served on M & R on 9^th April 2020 [131] and Mr Frankland responded by way of an email on 14^th April 2020 [134].

The issue of subrogation was then explored in further correspondence in May

M & R responded by way of a short letter dated 11^th June 2020 [146] requesting service of the claim form first, which stance was pressed in subsequent email correspondence up to 19^th June 2020 [147-156].

Brabners issued a further application for a stay dated 25^th June 2020 [161-166] including a proposed direction for service of the claim form by 30^th June 2020, which consequential Order was made by me on paper and issued by the Court on 26^th June 2020 [171-172]. Brabners served the Order and the Claim Form [170].

The next correspondence from M & R was a letter dated 31^st July 2020, sent by email at 4.34pm [173-174], contending (correctly) that the current First Defendant was not involved in the dispute and precipitating this application.

I note the following as relevant provisions of CPR r. 19.5

“Special provisions about adding or substituting parties after the end of a relevant limitation period

19.5

(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; …”

It is also apparent that the potential exercise of the Court’s power under this rule engages consideration of the exercise of discretion.

There is no issue that r. 19.5(2)(a) is satisfied and therefore the Court’s task is to decide whether the substitution sought is necessary, on the grounds of mistake, and, if so, to consider whether to exercise its discretion to allow the substitution.

Firstly, Mr Owen points out that the current First Defendant is a non-existent entity, the only close approximation being Bowmer and Kirkland Limited (my emphasis), of the same company number as cited on the Claim Form, which, it is accepted, has no connection with the project forming the subject matter of the claim, and, to that extent, the inclusion of the current First Defendant has to be mistaken.

He relies upon the progression of the correspondence and the associated witness statement evidence, in explanation of both the existence of the mistake and how it came to be made, by highlighting the following in particular:-

Mr Owen then refers the Court to Leggatt J’s analysis of the jurisdictional test to determine necessity on the grounds of mistake in Insight Group v Kingston Smith [2012] EWHC 3644 (QB), which Mr Owen helpfully sets out in this way in his skeleton:-

“There are three requirements:

(1)

The person who has made the mistake must be the person responsible, directly or through an agent, for the issue of the claim form.

(2)

It must be shown that, had the mistake not been made, the new party would have been named.

(3)

The mistake must be as to the name of the party, applying the Sardinia Sulcis test. I.e. the mistake must be as to the name of the party rather than as to the identity of the party.

Mr Owen also prays in aid the decision of Fraser J in TRW v Indesit [2020] EWHC 1414 (TCC) where a similar approach to that requested here was adopted, arguably more generously, namely substitution was permitted where an assumption had been made as to the identity of the company to be joined as a claimant, in the absence of the contract which had been requested, which turned out to be erroneous, “there never having been any doubt as to which legal entity was intended to bring the proceedings as the Second

Mr Owen then moves to the exercise of the Court’s discretion, should the test be made out.

He suggests that this is an entirely appropriate case for discretion to be exercised in the Claimants’ favour. His theme is summarised at para. 65 of TRW, quoting this dictum of Leggatt J from Insight,

“The Court’s discretion should not be exercised in a way that amounts, in effect, to punishing a party for a harmless error of its legal representatives.”.

He makes an impassioned plea in support of what is said to be a young and able team of lawyers working under the pressures and constraints of lockdown who have had the potential ramifications of this error hanging over them, as a result of what he argues was a genuine and innocent mistake.

B & K, he urges, have not been misled in any way, when seen in the context of what had gone before and the developing approach of M & R over time, and as such, this is said to be the paradigm case for relief to be granted.

He points out, interestingly, that Mr Frankland has never identified at what point M & R became instructed by Bowmer and Kirkland and suggests it is highly likely to have been around 11^th June 2020 when the subtle changes in correspondence may be observed with the benefit of hindsight.

He contends that there is essentially no real prejudice on the merits as far as B & K are concerned, compared with significant prejudice to the Claimants who would be left with an action against their solicitors, which type of claim is notoriously harder to pursue on a number of bases.

Finally, he asks the Court to factor in apparent contributory conduct on the part of B & K, to include the failure to supply the contract and their tactical approach from 11^th June 2020 to 31^st July 2020.

Mr Quiney advances B & K’s case that the Court should conclude that the Claimants have not made a simple mistake as to the name of the party intended to be sued, but rather that the evidence of repeated “errors” shows that a proper choice was made to sue the existing First Defendant or similar.

He accepts that the mistake was made by those involved in preparing the claim form, and thus, it seems that the satisfaction of the first limb of the Insight test is not in issue.

He further accepts that prior to the early part of 2020, certainly in January and perhaps up to March, it “appeared Brabners were getting it right”, having properly identified B & K.

Mr Quiney then asks, rhetorically, why the “error” arose.

His answer begins by contending that it should not be seen to be anything to do with colloquial references to “Bowmer and Kirkland” or the lack of the building contract, as there was plenty of information available, see for example [194], the memorandum created by Mrs Wood in January 2020 and the concession by Mr Willis, see para. 12 [382] as to the identity of the correct

What the Court should find, he submits, is that Mrs Wood made a positive choice on 6^th February 2020 to identify the current First Defendant as being a better entity to sue and, as such, a positive choice was made, supported by the ignoring by the Claimants of the fact that M & R “kept pointing out” that they were representing a different entity, ie the presence of the headings of their letters referring to B & K as their client. The fact that that choice further turned into suing a non-existent entity should be seen, it is said, as no more than a slip of the pen, but that should not distract the Court from being persuaded that the Claimants intended to sue a different entity than B & K, which, it seems to me, must mean an inferred intention to sue “Bowmer and Kirkland Limited”.

He asks the Court to reject the evidence relied upon by the Claimants as to the factual background leading to the error, suggesting that Mrs Wood’s recollection is unsatisfactorily incomplete or contradictory, particularly when seen in the context of the reconstruction evidence of Lena Barnes of M & R [415-418] on the issue of the online searches.

The Claimants, argues Mr Quiney, inexplicably ignored red flags, for example, the name and address of B & K on the 2014 AmTrust “Builder

Similarly to his criticism of the evidence of Mrs Wood, he also criticises Mrs

Mr Quiney also defends any decision not to point out any apparent errors once M & R became aware of the contents of the claim form, it being entirely permissible to take whatever tactical advantage might fairly arise in such circumstances. If it becomes apparent that there may be or is a fundamental error leading to an easy defence, it would be wrong for the client to lose this.

Any issue as to the timing of the pointing out of the error, once the die is cast, is not relevant to the jurisdictional test, but only, perhaps, in terms of any exercise of discretion, submits Mr Quiney. As such he commends B & K’s narrative to the Court and contends that the jurisdictional test is not made out.

Should the Court reach the stage of considering exercising its discretion, Mr Quiney argues that this should not be exercised.

He serially criticises the Claimants for repeatedly falling into error, characterising this as a gross example which should not be forgiven. B & K through M & R were simply legitimately trying to protect their own interests “on the battlefield” or “in the competition” that is litigation. Sometimes, Mr Quiney submits, if a windfall presents itself, then it is right and proper to act in the client’s interests, whether or not this is the “gentlemanly thing to do”, in

The Court is also asked to weigh in the balance B & K’s suggestion that the claim is also a relatively stale one, it now being over three years since it was intimated, to the prejudice of B & K, remedial works having previously been done, despite the site inspection in December 2019. Against this, Mr Quiney suggests that the Claimant’s position is not as bad as is characterised by Mr Owen, namely there is still a claim against the architects and any claim against the solicitors will be subject to Brabners already having admitted their error, together with less chance of B & K being involved in terms of evidence.

I am entirely satisfied that the First Defendant was named in the claim form in mistake for B & K, within the meaning of CPR r. 19.5(3)(a) and that the substitution of First Defendant as sought in this application is accordingly necessary within the meaning of CPR r. 19.5(2)(b), for the reasons which follow.

The inclusion of the First Defendant within the claim form was as a result of the combined actions of the relevant employees of Brabners, as conceded by Mr Quiney (see para. 35 above).

B & K, it is not disputed, is the correct contracting party for the purposes of these proceedings and was squarely in Brabners’ sights up to and including the site inspection in December 2019 and into January 2020. But for the supervening alternative descriptions or names manifesting themselves in the documentation from January 2020, there is no sensible conclusion to be drawn other than that B & K as building contractor would have been named as the First Defendant. This part of the test is traditionally perhaps more easily scrutinised when Particulars of Claim are served, unlike in this instance, but the claim form itself [116], I accept, sufficiently manifests an intention to bring the claim, inter alia, against the entity responsible for alleged defective construction, which can only have been B & K. I also accept the other evidential references relied upon by Mr Owen at para. 60(2)(b) of his skeleton.

I am singularly unpersuaded that there is any evidence to which any weight can or should rightly be attached that there was a conscious and deliberate, but erroneous, decision by the team at Brabners to change their focus away from B & K to Bowmer and Kirkland Limited, ultimately further erroneously named as Bowmer & Kirkland Limited, as I understand B & K’s position to be. To adopt this position, in my view, would be to fly in the face of the evidence in an attempted performance of an extreme form of mental gymnastics, which approach I roundly reject.

The best that can be said, in my view, in criticism of the evidence from the team at Brabners is that they do not have a precise or exact recollection of every step, but they are materially quite clear and persuasively so, in my judgment, that this was a pure and genuine error, which was not spotted. Further, the evidence does not support any contention that the error was repeated independently and suspiciously on countless occasions, but rather I find it was repeated on two or three occasions in February / March 2020 by the end of which time the claim form was issued and, at all material times during this period when the error was or ought to have been known to M & R, without relevant demur from the opponent. I am satisfied that each witness could not be clearer that no such deliberate decision was made, see the references at para. 62(2)(c)(vi) of Mr Owen’s skeleton.

In my judgment, there is not one scintilla of evidence in the documentation disclosed which might begin to found a suspicion that these witnesses were engaged in any sort of cover-up of a disastrous decision to “change horses”, which must be a consequential conclusion accompanying a finding of the sort contended for by Mr Quiney, nor anything in the evidence as a whole to sow the seeds of any theory that any sensible lawyer of the type instructed by the Claimants, knowing what the members of this team did up to and into January 2020, might begin consciously and deliberately to look elsewhere, other than to B & K for the building contractor defendant. This was ultimately, in my judgment, a “confusing of similar names” and a “perils of the use of shorthand” type of situation which fed on itself, leading to a genuine error as to the actual name of the intended building contractor defendant, spread as it

I utterly reject any characterisation by B & K that the error was positively or intentionally pointed out by M & R by means of their letter headings and thus consciously ignored by Brabners. This could not be further from reality in my judgment. The first time that it can legitimately be said that the error was actively pointed out was on 31^st July 2020. In my judgment, it is highly likely that M & R became alive to the error by 11^th June 2020, when they began to press for the service of the claim form, described by Mr Owen as the setting of a trap, and I find they were potentially on notice of it on 1^st April

As such, I now turn to considering whether I should exercise my discretion pursuant to CPR r.19.5(2).

I have equally no hesitation in so doing.

In my judgment, B & K through their solicitors, M & R, have been entirely apprised of the material factors throughout enabling them to defend this claim on the merits. They were aware that they were being pursued up to and including the site inspection in December 2019. They continued to respond, through M & R, in a material fashion, engaging with relevant issues, including enquiries as to the indemnity position arising in the subrogated aspect of the claim, from then until 11^th June 2020.

At some stage, it would seem, from the tenor of the submissions I have heard

The prejudice to B & K is, I conclude, minimal and, where material, ie anything which has accrued from June 2020 onwards, equally of their own making in deciding to take this point in the manner that they have.

Whilst there is no stricture within the Civil Procedure Rules 1998 for the parties to behave in a gentlemanly fashion, to use Mr Quiney’s word, the competitive and battlefield nature of civil proceedings must be seen to be tempered by the duty of the parties under r. 1.3 to help the Court to further the overriding objective and I am left pondering whether the type of battle engaged in here has been a proper use of both the resources of the Court and also of the financial resources of the parties, however much is at stake in these proceedings.

As such it would be entirely unjust for the Court to refuse to exercise its discretion. There was no material delay once the error with highlighted. I agree wholeheartedly with Mr Owen that this is a paradigm example of a situation where such discretion ought to be exercised and I give permission for the substitution sought accordingly.