Dr James Charles Dixon and Another v Radley House Partnership (A Firm)and Others
| Jurisdiction | England & Wales |
| Judge | The Honourable Mr Justice Stuart-Smith |
| Judgment Date | 17 October 2016 |
| Neutral Citation | [2016] EWHC 2511 (TCC) |
| Docket Number | Case No: HT-2015-000407 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 17 October 2016 |
[2016] EWHC 2511 (TCC)
The Honourable Mr Justice Stuart-Smith
Case No: HT-2015-000407
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Tom Owen (instructed by BPL Solicitors Limited) for the Claimants
Ms Krista Lee (instructed by DWF LLP) for the First Defendant
Mr Daniel Goodkin (instructed by Beale & Company Solicitors LLP) for the Second and Third Defendants
Hearing dates: 20 September 2016
Introduction
The Defendants apply to amend their Defences to plead limitation. On normal principles I would expect to allow the amendments if they had any real prospects of success at trial. For the reasons set out in this Judgment, the amendments as drafted have no prospects of success and I refuse permission to amend. The applications generated over 1250 pages of documents, much of which related to the procedural chronology which I summarise below. At the heart of the applications lies a dispute about the consequences that follow when a Claimant fails to proffer the correct fee for the issuing of proceedings.
The summary answer to the dispute, in a case where it is not alleged that a Claimant's failure to proffer the correct fee is abusive procedural conduct, may be split into two periods:
i) In the period between (a) when the Claimant submits the claim form and proffers the inadequate fee and (b) when the Court issues proceedings, the failure to proffer the correct fee will prevent the conclusion that the action has been "brought" for the purposes of the Limitation Act 1980 before the moment that the Court issues the proceedings; but
ii) Once the Court issues the proceedings, the mere fact that the fee proffered by the Claimant and accepted by the Court (a) is less than should have been proffered and accepted for the claim identified in the Claim Form or (b) becomes so because of a subsequent increase in the quantum of the claim advanced in the proceedings does not prevent the action from being "brought" for the purposes of the Limitation Act 1980 when it is issued by the Court.
The Factual Background
The Claimants own and live in a house in Hambledon in Hampshire. In and from 2007 they wanted to carry out substantial refurbishment of their home. To that end they engaged the First Defendant ["RHP"] in October 2007 to act as architect and the Second Defendant ["CRA"] in November 2007 as M&E Consultants. I understand the Third Defendant to be the principal or guiding light of CRA. I shall refer to the Second and Third Defendants collectively as CRA unless it is necessary to distinguish between them. The refurbishment of the house did not go smoothly, with the result that CRA's appointment ended on 3 June 2009 and RHP's appointment ended on 18 March or 1 April 2010. For the purposes of these applications I assume that the cause of action in contract or tort underlying any claim that the Claimants might have against CRA and RHP would have accrued, at the latest, on the date of conclusion of their respective retainers.
The Claim against RHP
On 23 December 2010 solicitors acting for the Claimants wrote a Pre-Action Letter of Claim to RHP. The letter alleged that RHP had negligently advised that it would be more economical for RHP to charge on an hourly basis rather than on the basis of a percentage of the cost of the works. The letter alleged that the difference between the fees the Claimants would have had to pay RHP adopting a percentage-based calculation and the fees they actually paid on the hourly basis of calculation was £35,894.78 inclusive of VAT and it claimed that sum as damages for misrepresentation. For the purposes of RHP's application I assume that any cause of action accruing in relation to that misrepresentation claim would have accrued not later than the date on which the Claimants retained RHP on terms providing for fees calculated on an hourly basis, i.e. on or about 27 October 2007. RHP does not submit that it accrued before then.
The Pre-Action Letter of Claim also made generalised assertions that RHP had acted in breach of contract and negligently in the performance of its services during the course of its retainer. The letter said that rectification of defects and completion of the project was being undertaken using another architect and that full particulars would be provided "in due course". The letter continued (at [25]):
"In the meantime, and on the basis that the Claimants reserve the right to provide further particulars, the Claimants contend that in breach of contract and negligently [RHP]:
…
25.7 Failed to administer the building Contract so as to achieve speedy and economical completion of the works;
25.8 Certified monies as due to the contractor without exercising any reasonable skill and care to ascertain the value of the works carried out and materials supplied;
25.9 Failed to inspect and/or supervise the works properly or at all"
The letter then asserted (at [26]) that:
"The Claimants have thereby suffered loss and damage, including but not limited to the overpayment of fees in the sum of £35,894.78 (inc VAT)."
It would have been understood by anyone reading the Pre-action letter that the Claimants considered that they may have a claim over and beyond the misrepresentation claim but were not yet in a position to articulate it further or more precisely. In particular, they were not in a position to quantify what, if any, loss or damage had flowed from the negligence or breach of contract that they identified in general terms in the letter. In its itemised letter of response, which was sent on 2 February 2011, RHP denied the allegations set out in [25] and [26] of the Pre-action Letter of Claim.
The Claimants prepared to issue proceedings against RHP and sent their draft claim form and a fee of £395 to the Bournemouth and Poole County Court so that they arrived at the Court on 25 October 2013. The Court had a backlog of cases as a result of which the proceedings were not issued until 7 November 2013. By a letter dated 19 November 2013, the Court wrote that the date on which the claim form is received by the Court "is the date used for the purpose of limitation." 25 October 2013 was less than 6 years after the cause of action for the Claimants' misrepresentation claim or any causes of action in tort or contract relating to the discharge of RHP's obligations under its retainer. 7 November 2013 was more than 6 years after the assumed latest date for the accrual of the cause of action for the misrepresentation claim and any cause of action in tort of contract that had accrued during the first ten days of RHP's retainer.
The content of the Claim Form is central to RHP's submissions on its application to amend. Under the heading "Brief details of claim" it stated:
"The Claimants' claim is for damages for breach of a written contract made between the Claimants and the Defendant on or about 27 October 2007 and/or breach of duty and/or negligence and/or misrepresentation and/or negligent misstatement on or about 12 October 2007 arising out of or in connection with the oral and/or written statements made by the Defendant its servants or agents, and in connection with the Defendant acting as architect for the Claimants in or about 27 October 2007 to 1 April 2010 for carrying out and/or supervision of the building works at [the Claimants' home], together with interest pursuant to Section 60 of the County Courts Act 1984."
Under the heading "Value" it stated:
"Payment of £35,894.78; Damages for breach of contract and/or Damages for negligence to be assessed; interest and costs."
In the boxes at the bottom of the front page of the claim form it stated:
It is common ground that a Court Fee of £395.00 was the fee that was required to be paid in respect of a money claim of up to (but not more than) £50,000.
| Amount Claimed | £35894.78 |
| Court Fee | £395.00 |
| Solicitor's Costs | to be assessed |
| Total Amount | £36289.78 |
On 24 February 2014, the Claimants served the Claim Form and their Particulars of Claim on RHP. The Particulars of Claim pleaded the claim in misrepresentation at [27]–[32]. From [82] it set out the Claimants' case on breach of duty under three headings: (1) cost control; (2) the supply and installation by the contractor of M&E Services; and (3) repudiation of the appointment by RHP. There is nothing to suggest that any of the three heads of claim arose in the first 10 days of RHP's retainer. The Particulars of Claim alleged (at [98]) that the Claimants had been obliged to engage a remedial works contractor to remedy the original contractor's works at a cost to the Claimants of £431,305 plus VAT of £84,389.53; and (at [100]) that the Claimants had incurred an additional cost of £75,589.00 plus VAT because of replacing RHP with another architect.
It has not been suggested that the claims advanced in the Particulars of Claim were not covered by the terms of the "Brief details of Claim" in the Claim Form. Despite (or perhaps because of) the fact that the Particulars of Claim were advancing a claim for damages way in excess of the sums claimed under the misrepresentation claim, RHP's solicitors wrote to the Claimants' solicitors on 12 March 2014 including the sentence: "We note that your Claim Form caps your clients' recoverable losses at £35,895." The letter also asked for an extension of time for service of the Defence. It did not raise any question of limitation. When the Claimant's solicitors replied to that letter on 21 March, they did not respond to the reference to capping of losses but...
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