Chatsworth Investments Ltd v Cussins (Contractors) Ltd

JurisdictionEngland & Wales
JudgeLORD JUSTICE SACHS,THE MASTER OF THE ROLLS
Judgment Date17 October 1968
Judgment citation (vLex)[1968] EWCA Civ J1017-2
CourtCourt of Appeal (Civil Division)
Date17 October 1968
Between:
Chatsworth Investments Limited
Plaintiffs Respondents
and
Cussins (Contractors) Limited
Defendants Appellants

[1968] EWCA Civ J1017-2

Before:

The Master of the Rolls (Lord Denning),

Lord Justice Sachs and

Lord Justice Idgeri

In The Supreme Court of Judicature

Court of Appeal

Appeal of Defendants from Order of Mr, Justice Cooke on, 4th July, 1958.

Mr. R. A. lac CHURLS, Q. C. and Mr. DAVID SULLIVAN (instructed by Messrs. Paisner & Co.) appeared on behalf of the Plaintiffs, Respondents.

Mr. G.B.H. DILLON, Q.C., and Mr. D.K. KEATING (instructed by Messrs, Victor lilschon & Co.) appeared on behalf of the Defendants, Appellants.

THE MASTER OF THE ROLLS
1

In 1960 a company called Chatsworth Investments Ltd. were the owners of land in New castle-on-Tyne. They were proposing to put up a building on it. They entered into a contract with a building firm called Cussins (Contractors) Ltd. to do work oh the structural frame of this building. The contract carried with it the implied term that the work was to be done with reasonable care and skill. Cussins (Contractors) Ltd. did some of the work themselves, and put out other parts of it to sub-contractors. The building was finished In 1962 and was named Newgate House.

2

Then in August 1963 the contractors, Cussins (Contractors) Ltd., assigned all their assets to another company called Gustavus Bailey (South Shields) Ltd., and that company undertook to discharge all the liabilities of Cussins (Contractors) Ltd, That was all very fine. But confusion was immediately produced, because the assignee company, Gustavus Bailey (South Shields) Ltd., at once changed its natae to Cussins (Contractors) Ltd., the name of the assignors. And the assignors changed their name to something else. So there Was an assignee company which took the selfsame name as the assignor company, Cussins (Contractors) Ltd. It was obvious that everyone thereafter who was dealing with the company would think it was the selfsame company throughout with no change of identity. That is the cause of all the trouble.

3

A few years later cracks and defects began to appear in the building. Chatsworth Investments Ltd. were minded to sue for damages in respect of it. So they sued Cussins (Contractors) Ltd. thinking that that company was the company which had made the contract. On the 11th August, 1966, they issued a writ. On the 12th July, 1967 they served the writ, and they put in a statement of claim. Five months later, on the 8th January, 1958, Cussins (Contractors) Ltd. put in a defence sayings "You have got the wrong defendant." They said: We are not the people with whom you contracted in 1960, although we bear the selfsame name. We are a different company. we did not take over until 1963. We took an assignment of the assets and we agreed todischarge the liabilities. But we did not make that contract with you". On the face of it, that looked like a complete defence. To overcome the difficulty, Chatsworth Investments Ltd. applied for leave to amend their claim. They wished to allege that there was a novation whereby this second company; if I may call it so, Cussins (Contractors) Ltd. (No. 2), made a new agreement with them to take over and to be responsible to the plaintiffs for the liabilities of Cussins (Contractors) Ltd, (No. 1). They said that this novation was to be Implied from all the circumstances of the case. The defendants objected to the proposed amendment. They said that the alleged novation was too tenuous and was wanting in particularity. There is nothing in this objection. It would be very easy to infer a novation from the circumstances of this case.

4

But the defendants took a more serious point. They said that the claim was statute barred against this second company, Cussins (Contractors) Ltd. (No. 2)s at the time the amendment was sought. The application to amend was made in April 1968. The negligent work was done in 1961 an early 1962. So more than six years had elapsed.

5

There used at one time to be a rule of practice (which was laid down by Lord Esher in Weldon v. Neal ( (1887) 19 Q.B.D. 394, at page 395) that amendments should not be allowed if they would prejudice the rights of the, opposite party as existing at the date of this amendment. In particular, they should not be allowed so as to allow a plaintiff to set up a cause of action which would otherwise be barred by the Statute of Limitations.

6

In order to overcome that rule of practice, Mr. MacCrlndle for the plaintiff submitted to us an argument which was accepted, we are told, by Mr. Justice Cooke. He argued that, when there was a novation of a debt or liabilities, the cause of action against the defendant was not on the original debt or liabilities but on the new contract contained in the novation. So that Statute did not begin to run until the date of the contract of novation. That is, in this case August 1963. so that the causeof action would not be barred at the date of the amendment in April 1968. That argument seems at first sight attractive, but I do not think it is right. Much must depend on the terms of the agreement for novation. The party who is taking over the previous debts and liabilities say agree to take them over on the terms; I will not take over those which are already statute barred, nor am I to be deprived of the benefit of the statute in respect of those where time is already running, Indeed, I rather think that, when a novation is not express, but is to be inplied from the circumstances, the inference is usually that the party takes over the debts and liabilities but with the benefit of the Statute of Limitations.

7

Alternatively Mr, MacCrindle submitted that the Court has power under the new Rules to permit an amendment, even though it does deprive the defendant of a defence under the Statute of Limitations, In this I think he is right. The Courts in former times fettered themselves by the rule of practice in Weldon v. Meal which was applied rigidly and strictly. Any amendment was disallowed if it would deprive the defendant of a defence of the Statute of Limitations, But that rule of practice was found to work injustice in many cases. The new Rule of in 2, Court Order 20, Rule 5...

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