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Morgan Est (Scotland) Ltd v Hanson Concrete Products Ltd, Court of Appeal, 17 February 2005

28 February 2005
The issues

Amendment – Substitution Of Parties – Limitation – Tests To Be Applied

The facts

The Claimant, Morgan Est (Scotland) Ltd brought proceedings in respect of damages or defective pipe sections bought from the Defendants. The proceedings were brought at the very end of limitation. The Defendants by their defence that original contractor was another company and that they had never been in a contractual relationship such that they should be sued. The Claimant therefore sought permission to amend proceedings so that two new Claimants, Miller Civil Engineering Limited and Morgan Est Plc, be added to the sole original Claimant. That application was made after the end of the limitation period. The Judge permitted the amendment. The Defendant appealed to the Court of Appeal.

The decision

The previous lead authority in respect of pre CPR cases and the then applicable Order 20 Rule 5 was the test in the Sardinia Sulcis case. That test had been summed up as “the right description/wrong name test”. After the introduction of the CPR there had been a number of further cases most notably Gregson v Channel Four Television. In that case the Court of Appeal pointed out that the CPR was a new procedural code and that there was no basis for supposing that the new rules were intended to replicate the previous provisions.

The Sardinia Sulcis cases had re-appeared in two subsequent decisions. However, the Court had come to the clear conclusion that the Sardinia Sulcis test did not set the limits of Rule 19.5. It was devised for a wholly different rule.

The Court was not bound by the trinity of post CPR cases Horne-Roberts, Parsons and Kesslar in which these had been re-applied. It was not bound because each of those cases had made the fundamentally wrong assumption that the Sardinia Sulcis test was framed to apply a relevant rule and that no member of any of the Courts held explicitly that the limits of the rule were embodied by the test. Moreover the Sardinia Sulcis test did not take into account the overriding objective. The right approach therefore was to apply the words of Rule 19.5 without regard to the Sardinia Sulcis but with regard to the overriding objective. The Sardinia Sulcis should be allowed to sink back to the ocean bottom. The same applied to the application of Rule 17.4.

Thus in this case one had to go through a series of steps and ask the following questions:-

1. Had the limitation period expired (19.5(1))? – Yes.

2. Was the addition of the other parties necessary (19.5(2) (a))? – That depended on whether the Court was satisfied that the new party was to be substituted for a party named in the Claim Form in mistake for the new party.

3. Was the company named in mistake for either of the other companies? There was no reason to construe “in mistake” restrictively. On the contrary the source of the rule had been a limitation Act 1980 which had the intention of liberalising the position from its predecessor.

Moreover the overriding objection of doing justice was likely to be undermined in the Court got finicky about different sorts of mistake. The jurisdiction existed for putting things right. Here there had clearly been a mistake in the naming and the first of the two companies referred to in the amendment should be allowed to substitute the original Claimant. As to the second company which had the current beneficial ownership of the right to sue, it could and ought to be joined pursuant to the provision of 19.5(3) (c).

Appeal dismissed.

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