Amendment of claim out of time

January 25th, 2022 by James Goudie KC

In Mullaley v Martlet Homes Ltd (2022) EWCA Civ 32 a claimant was permitted to amend its claim out of time under CPR r.17.4 so as to include an allegation that the defendant’s use of combustible cladding material for tower block refurbishment breached a design and build contract. In considering whether such a new cause of action arose from “the same facts or substantially the same facts” as those which the defendant had put in issue in its defence, some limited flexibility is allowed for a claimant to rely on new facts or matters beyond those pleaded in the defence in order to allow for expansion, elaboration or

explanation. The defendant had acted as the design and build contractors to conduct refurbishment work at the towers between 2005 and 2008.  The works included the design and installation of external cladding, for which the defendant used combustible polystyrene (EPS) insulation boards.  Following the Grenfell fire, the claimant discovered major fire safety defects in the towers. It issued its claim just as the contractual limitation period was about to expire. The particulars of claim alleged that the defendant’s design and workmanship breached various contractual obligations. The defendant filed a defence denying those allegations and asserting the cladding system had complied with building regulations at the time of the refurbishment, so that the need for remedial work was caused by the introduction of new requirements after Grenfell rather than any breach of contract on their part.  The claimant sought permission to amend the particulars of claim to plead that even if the defendant was right regarding causation, it remained liable because using combustible EPS insulation boards in cladding was a design fault which breached various clauses in the design and build contract (“the selection of combustible EPS insulation claim”). The defendant objected that those amendments involved a new cause of action which was statute-barred because it did not arise out of the same or substantially the same facts as had been pleaded in the original particulars of claim.

It was held that the selection of combustible EPS insulation claims was a new cause of action.  Any proposed amendment had to be considered by reference to the same or substantially the same facts as were already in issue, including those set out in the defence. However, some limited flexibility was provided. It would be contrary to principle and overly restrictive to suggest that the amended claim could be allowed only when it sought to add nothing at all to that which was pleaded in the defence.

Here, the new claim arose out of the same or substantially the same facts as were already in issue.  The case was always a claim in which it was said that the cladding system in general, and the EPS insulation in particular, was defective and had to be replaced in its entirety.  The selection of combustible EPS insulation claim merely identified a further reason for the replacement of the cladding system. It might require a further element of investigation beyond that required by the original particulars of claim, but that supplemented the existing investigation.  Further, the claim flowed naturally from the way in which the defence had been pleaded. Because the defendant had chosen to put particular facts in issue in defending itself, there could be no unfairness in allowing the claimant to turn those matters back to the defendant.  The amendment was permitted under CPR r.17.4.

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