SERVICE OF THE CLAIM FORM – ERRORS AND PROBLEMS 6: YOU’RE SUING THE WRONG PARTY: THE LAW OF AMENDMENT AND MISTAKE CONSIDERED

This is the sixth time we have looked at the judgment in Occupiers of Samuel Garside House v Bellway Homes Ltd & Anor [2024] EWHC 1579 (KB). Technically speaking we are not looking at issues relating to service of the claim form but the problems that arise when the claimant has sued the wrong defendant.  This, however, highlights the problems that are caused when proceedings are served very late. Mistakes can be made, and once the limitation period has expired, it is much more difficult to rectify the situation.

“it also seems to me that there is considerable force in Mr Frampton’s criticisms of the way in which the Claimants have sought to advance this application and the absence of any evidence as to how it came about that SARL were named, who was the person responsible for SARL being named, and what was actually intended by the relevant decision-maker(s). There is also Mr Frampton’s argument to the effect that as the Claimants were told that SRL were the correct entity, they may be taken to have deliberately rejected that and chosen to sue SARL and insist that it was the entity in question.”

THE CASE

The claimants brought an action for damages following a serious fire at a block of flats.  There are two defendants.  Various extensions of time for service of the claim form were agreed.  The Master found that the claimants had failed to serve the claim form properly in accordance with the order extending time, he also rejected the claimants’ argument that an extension of time had been agreed. The claimants were also refused “relief from sanctions” in relation to their failure to serve properly. However the defendants had not made any application under CPR Part 11 to dispute jurisdiction.  This meant that, despite the claimants’ failures, the proceedings were still in existence.  However one of the Defendants SARL, had been wrongly sued, the claimant should have sued SRL.

THE JUDGMENT ON LIMITATION

The claimant argued that the court could grant an amendment to correct the name of the defendant. The defendant argued that it could not. Having reviewed the law relating to amendment and “mistake” the Master determined that the issue required further consideration and should be heard at the same time in relation to other applications relating to late service of the claim form and particulars of claim.

The Second Defendant

1. 1. Mr Frampton for SRL and SARL contends that the Claim has been brought against SARL when it should have been brought against SRL. He resists the Claimants’ application to amend the name of the Second Defendant to that of SRL. He contends that:

(1) The Claim has been brought against SARL, and the Claimants are seeking a true substitution of a new defendant rather than a re-naming of an existing defendant

(2) There has actually been no service of “the Second Defendant” at all. As I have held, the CPR6.7 confirmation of authorisation of MB to accept service was only given in relation to SRL and service thus only took place (out of time) on SRL. He submits that SARL is the present Second Defendant and there has been no service upon it and therefore no service on “the Second Defendant”

(3) An amendment is required; and such is only possible if the Claim is not to be disposed of absolutely on jurisdictional or similar grounds against all the existing defendants, as, if that is the case, there will be nothing to amend

(4) The Claim has been or may have been brought within the primary limitation periods of the common-law non-personal injury claims and of the personal injury claims; but that those primary limitation periods (in relation to adult claimants) have or may have now expired

(5) For there now to be an amendment to substitute SRL for SARL would result in adult claimants obtaining an impermissible limitation advantage prohibited by CPR17.4(2) and 19.6(3) and section 35 of the 1980 Act

(6) Accordingly, if the Claim is not simply to be struck-out (on jurisdictional or failure to serve Particulars of Claim in time grounds), any substitution of SARL for SRL, as well as any addition of adult claimants, should only be on what are known as “Mastercard” (a reference to Mastercard v Deutsche [201]7 EWCA Civ 272 and see also Libyan v King [2020] EWCA 1690 and DR Jones v Drayton [2021] EWHC 1971) terms being that all the claims against SARL and/or the claims of the new adults should be deemed only to be brought as at the date of the ultimate order (and not relate back to the issue of the Claim Form as would otherwise be the case under section 35 of the 1980 Act).

1. 1. Mr Sawtell for the Claimants essentially accepts this analysis except that he contends that the amendment sought as to the name of the Second Defendant is a permissible amendment within CPR17.4(3) (and section 35) because it is the correction of “a mistake as to the name of a party” where “the mistake was genuine and not one which would cause reasonable doubt as to the identity of the party in question.” He would contend that it is truly SRL which has been sued, and obvious that the claim was intended to be brought against SRL so that all that is involved is a correction of name rather than substitution of a new entity, but otherwise that SRL can be substituted for SARL if, indeed, it is SARL which is the entity which has been sued. I do not think that he is contending that the matter was in some way resolved by the November Order (which referred to SARL as being the Second Defendant and was signed by MB “for Sheppard Robson”).

1. 1. I note that the Court can under CPR19.6(4) authorise an amendment even if the “mistake” provisions do not apply by directing that a section 33 application to disapply the primary limitation periods in relation to a personal injuries claim should be dealt with at trial. However, that provision would not assist in relation to the common-law non-personal injury claims; and the simple solution (if Mr Sawtell is not correct on “mistake” and this Claim is not to be defeated altogether on jurisdictional or similar grounds) is to adopt the Mastercard course.

1. 1. As to the issue regarding the CPR and “mistake”, the parties have cited Cameron v BDW [2022] BLR 183 where at paragraphs 59-63 it was said:

“59. The leading case on this area of the law, The Sardinia Sulcis [1991] 1 Lloyds LR 201, also arose under the old Rules of the Supreme Court. In that case it was held that the name of a party could be corrected if the court was satisfied that:

a) there was a genuine mistake;

b) the mistake was not misleading;

c) the mistake was not such as to cause reasonable doubt as to the identity of the person intending to sue (or be sued);

d) it would be just to allow the amendment.

60. The older authorities were reviewed by the Lord Chief Justice in Adleson & Anr v The Associated Newspapers Limited [2007] 4 All ER 330 He summarised the principles, and confirmed the relevance of the Sardinia Sulcis test:

“43. These authorities have led us to the following conclusions about the principles applicable to RSC Order 20 rule 5.

i) The mistake must be as to the name of the party in question and not as to the identity of that party. Such a mistake can be demonstrated where the pleading gives a description of the party that identifies the party, but gives the party the wrong name. In such circumstances a ‘mistake as to name’ is given a generous interpretation.

ii) The mistake will be made by the person who issues the process bearing the wrong name. The person intending to sue will be the person who, or whose agent, has authorised the person issuing the process to start proceedings on his behalf.

iii) 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.

iv) Most if not all the cases seem to have proceeded on the basis that the effect of the amendment was to substitute a new party for the party named.”

61. Thereafter, having set out the subsequent authorities under r.19.5, Lord Phillips summarised the position under the CPR :

“55. CPR 19.5(3)(a) makes it a precondition of substituting a party on the ground of mistake that:

“The new party is to be substituted for a party who was named in the claim form in mistake for a new party”

It is clear from this language that the person who has made the mistake must be the person responsible, directly or through an agent, for the issue of the claim form. It is also clear that he must be in a position to demonstrate that, had the mistake not been made, the new party would have been named in the pleading.

56. The nature of the mistake required by the rule is not spelt out. This Court has held that the mistake must be as to the name of the party rather than as to the identity of the party, applying the generous test of this type of mistake laid down in Sardinia Sulcis. The ‘working test’ suggested in Weston v Gribben, in as much as it extends wider than the Sardinia Sulcis test, should not be relied upon.

57. Almost all the cases involve circumstances in which (i) there was a connection between the party whose name was used in the claim form and the party intending to sue, or intended to be sued and (ii) where the party intended to be sued, or his agent, was aware of the proceedings and of the mistake so that no injustice was caused by the amendment. In SmithKline, however, Keene LJ accepted that the Sardinia Sulcis test could be satisfied where the correct defendant was unaware of the claim until the limitation period had expired. We agree with Keene LJ’s comment that, in such a case, the Court will be likely to exercise its discretion against giving permission to make the amendment.”

62. In Adelson there was also an issue as to the corporate structure of the claimant group (because they were seeking to substitute one company within the group for another). The LCJ said:

“69. We have explained why Morgan Est should not be followed. If those responsible for the Particulars of Claim had knowledge of the corporate structure of the Las Vegas Sands Group and of the part played by each company in the group activities and deliberately decided to sue in the name of the Second Claimant alone, the fact that this decision may have been mistaken will not bring the case within CPR 19.5. To do this the Claimants must establish that those responsible for the Particulars of Claim were under a mistake as to the group structure or the roles played by the members of the group and, but for that mistake, would have included as claimants the Third and Fourth Claimants. This is the very minimum that they need to achieve if they are to have an arguable case that a mistake of name within the Sardinia Sulcis test occurred.

70. The Particulars of Claim were settled by junior counsel, who no longer represents the Claimants, and a declaration of truth was signed on behalf of the Claimants by a member of Salans. No evidence has been adduced to show that there was a mistake on the part of Salans or counsel as to the roles played by the claimant companies, but for which mistake the Third and Fourth Claimants would have been joined in the action.”

63. Reference was also made to Insight Group Limited & Anr v Kingston Smith (A Firm) [2012] EWHC 3644 (QB) ; [2013] 3ALL ER 518. In that case, again taking up the point that X may deliberately have sued Y even though it knew that the relevant services had been provided by Z, Leggatt J (as he then was) said:

“57. In order to decide whether the claimant’s mistake can be regarded as one of name rather than description, it is thus necessary to distinguish between the following two possible cases:

(1) The claimant sues the LLP in the mistaken belief that the LLP provided the services which are said to have been performed negligently, failing to recognise that the services were provided by the former partnership and not the LLP.

(2) The claimant knows that that the services were provided by the former partnership but mistakenly believes that the LLP is legally liable for the negligence of the earlier firm.

The court has the power to grant relief in case (1) but not in case (2).”

1. 1. Mr Frampton contends that:

i) The Claimants were told by MB’s letter of 14 January 2021 that they acted for SRL, and that MB corrected the draft standstill agreement from SARL to SRL to make it even more clear that the correct defendant was SRL

ii) The Claimants have provided no witness evidence (beyond a reference to the draft standstill agreement correction being made by MB in Section 10 of the 23 August 2023 Application Notice as to how or by whom the asserted “mistake” came to be made.

1. 1. Mr Sawtell contends that:

i) It was obvious throughout that the Claimants’ intention was to sue the actual architects, and that they had simply overlooked the various references of MB to SRL, and where MB did not correct the Claimants’ continued references to SARL expressly except in the correction to the draft standstill agreement

ii) There is no real prejudice in terms of any real misapprehension on the part of SRL or SARL as to what the Claimants intended

iii) This is actually a CPR19.6(3) case rather than a CPR17.4(2) case where the additional requirements of “genuine mistake” etc. are not prescribed.

1. 1. I can see that there is potential force in Mr Sawtell’s argument that a genuine mistake was made by someone within the process of drafting the Claim Form. The clear intention was to sue the architects, notwithstanding that the Claimants had been told that it was SRL which was the relevant architect corporate entity. However, it also seems to me that there is considerable force in Mr Frampton’s criticisms of the way in which the Claimants have sought to advance this application and the absence of any evidence as to how it came about that SARL were named, who was the person responsible for SARL being named, and what was actually intended by the relevant decision-maker(s). There is also Mr Frampton’s argument to the effect that as the Claimants were told that SRL were the correct entity, they may be taken to have deliberately rejected that and chosen to sue SARL and insist that it was the entity in question.

1. 1. Again, I am hesitant to decide questions of this nature where the jurisdictional and similar matters technically come first. This is all the more so as if the Claim is not struck out as against the First Defendant, but were to be struck out as against the Second Defendant, there would remain an extant Claim to which there would be jurisdiction to add a further party (e.g. SRL), if appropriate, but only on the basis that the Claim as against them would be deemed to have been commenced only on the date of their addition to it (i.e. an equivalent consequence to a Mastercard order albeit on a different underlying basis). While I could, in theory, decide whether or not the present Second Defendant is actually SRL (and not SARL), to do so could inhibit my ability to reach decisions on the various permutations which arise in this case and cause difficulties were there to be an appeal. I think that these matters can best be argued and taken together.

1. 1. It also seems to me that it is in accordance with the overriding objective in these circumstances, where there is to be a further hearing in any event, for the Claimants to be given an opportunity to correct asserted deficiencies in their evidence, and all the more so where the matter has been allowed on the last occasion to proceed on written submissions alone rather than a second oral hearing. Any prejudice to SARL and SRL can be dealt with by a costs order should that turn out to be appropriate.

1. Having weighed up all the matters together, I conclude that it would be in accordance with the overriding objective to adjourn this aspect to the further hearing which is going to take place in relation to the other matters. The parties should liaise as to directions with regard to the filing of any further evidence.