Paul Derek Burton and Another v Jonathan Rae Bowdery and Others
| Jurisdiction | England & Wales |
| Judge | Master Clark |
| Judgment Date | 16 February 2017 |
| Neutral Citation | [2017] EWHC 208 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: HC-2015-000790 |
| Date | 16 February 2017 |
[2017] EWHC 208 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Master Clark
Case No: HC-2015-000790
Toby Boncey (instructed by DR Solicitors Ltd) for the Claimants
Imran Benson (instructed by Ozon Solicitors) for the Third Defendant
Hearing date: 25 January 2017
Judgment Approved
Applications
This is my judgment in two applications by the third defendant ("D3"), Christopher Attwood Messenger (formerly trading as Messenger & Company), who was joined to this claim by the order dated 9 September 2016 of Deputy Master Lloyd ("the joinder order"). The first application dated 14 September 2016 ("the set aside application") seeks to set aside the joinder order. The second application dated 11 October 2016 seeks a declaration that the court has no jurisdiction to try the claim and to set aside service of the Amended Claim Form and Amended Particulars of Claim. I have doubts about whether the second application is necessary and as to its jurisdictional basis; but both sides were agreed that the two applications stand or fall together.
Claim, parties and the background to the application
The main claim to which D3 has been added is for breach of an agreement ("the agreement") to sell a property called Lane End Cottage in Bracknell, Berkshire. The claimants are the buyers. The first and second defendants (respectively "D1" and "D2", collectively "D1–2") are the sellers. The agreement was entered into by an exchange of contracts in the usual way on 20 November 2009. D3 was the conveyancing solicitor who acted or purported to act on behalf of D1–2 in the transaction, and in particular in the exchange of contracts.
Before issuing the claim, the claimants' solicitors wrote to D3 asking him to confirm that he had acted for both D1 and D2 in the sale of the property. In an email dated 23 December 2014, D3 stated
"I confirm that I signed the Contract on behalf of both Buyers with their authority."
The claim was issued on 5 March 2015. In her Defence dated 7 April 2015, D2 denied that she was a party to the agreement and denied that D3 had authority to act on her behalf.
This caused the claimants' solicitors to write on 3 May 2016 a formal pre-claim letter to D3, alleging that he was in breach of his implied warranty of authority to act on D2's behalf. There was no response. The claimants personally wrote to D3 on 19 May 2016; and the claimants' solicitors wrote to D3's professional indemnity insurers on 23 May 2016 seeking clarification of whether he admitted that he had not been instructed by D2.
Solicitors acting on behalf of the PI insurers, Ozon Solicitors ("Ozon"), replied with a holding letter on 26 May 2016. On 22 July 2016 those insurers were intervened upon by the Financial Services Commission in Gibraltar, and Ozon wrote to confirm this on 3 August 2016. However, neither D3 or Ozon ever replied to the pre-claim letter.
The joinder application was issued on 2 September 2016, and the court listed it for hearing. Although the application notice identifies D3 as a party to be served, it is unclear whether this was done. D1–2 consented to the joinder order. The Deputy Master approved it on paper without enquiring whether D3 consented, and vacated the hearing on 12 September 2016.
The set aside application is made under CPR3.1(7) (the court's power to vary an order). Both sides were agreed that this hearing should be treated as a full rehearing of the joinder application, with D3 entitled to put forward all the arguments he could have put forward if that application had been heard by the Deputy Master (by analogy with the guidelines in Chandra v Brooke North (A Firm) [2013] EWCA Civ 1559 at para 60).
Joinder – relevant principles
The procedural rules governing joinder of parties are found in CPR Part 19.
CPR 19.2 provides:
"(2) The court may order a person to be added as a new party if –
(a) it is desirable to add the new party so that the court can resolve all the matters in dispute in the proceedings; or
(b) there is an issue involving the new party and an existing party which is connected to the matters in dispute in the proceedings, and it is desirable to add the new party so that the court can resolve that issue."
This application falls within CPR 19.2(2)(b).
CPR 19.4 provides that once the claim form has been served, the court's permission is required to remove, add or substitute a party, notwithstanding that the claimant would not have required the permission of the court to bring a fresh claim against a new defendant. It is clear from CPR 19.4 that, unless the application is made under CPR 19.2(4) (substitution of a new party where an existing party's interest or liability has passed), the application to join must be made on notice in accordance with Part 23. This is confirmed by CPR PD19A, para 4, which provides that the application may (and implicitly, may only) be dealt with without a hearing where all the existing parties and the proposed new parties in agreement. This is no doubt because, in addition to case management issues that may arise as a result of the joinder, there may also be limitation issues of the type arising here.
Joinder where there are limitation issues
Section 35 of the Limitation Act 1980 ("the 1980 Act") provides, so far as relevant:
"(1) For the purposes of this Act, any new claim made in the course of any action shall be deemed to be a separate action and to have been commenced—
(a) in the case of a new claim made in or by way of third party proceedings, on the date on which those proceedings were commenced; and
(b) in the case of any other new claim, on the same date as the original action.
(2) In this section a new claim means any claim by way of set-off or counterclaim, and any claim involving either—
(a) the addition or substitution of a new cause of action; or
(b) the addition or substitution of a new party; and "third party proceedings" means any proceedings brought in the course of any action by any party to the action against a person not previously a party to the action, other than proceedings brought by joining any such person as defendant to any claim already made in the original action by the party bringing the proceedings.
(3) Except as provided by section 33 of this Act or by rules of court, neither the High Court nor the county court shall allow a new claim within subsection (1)(b) above, other than an original set-off or counterclaim, to be made in the course of any action after the expiry of any time limit under this Act which would affect a new action to enforce that claim.
…
(4) Rules of court may provide for allowing a new claim to which subsection (3) above applies to be made as there mentioned, but only if the conditions specified in subsection (5) below are satisfied, and subject to any further restrictions the rules may impose."
As can be seen, the section divides new claims into two categories: third party proceedings and other new claims. For limitation purposes, third party proceedings are deemed to have commenced on the date on which they were in fact commenced; there is no doctrine of "relation back" and no advantage in respect of limitation in bringing third party proceedings within an existing claim.
This may be contrasted with "other new claims". These, once added, do "relate back"; and are deemed to have commenced on the same date as the original action. They are thereby capable of defeating a limitation defence which would have been available to the defendant had the claim been brought as a separate claim. Section 35(3) therefore provides that subject to certain exceptions, the court may not permit these new claims to be added if they would have that effect i.e. claims sought to be added after the relevant limitation period has expired. Those exceptions (which have no application in this case) are set out in subsections (5) and (6).
Subsection (3) provides for rules of court to be made in respect of new claims within s.35(1)(b), but not for third party proceedings within s.35(1)(a).
CPR 19.5 is one of two rules (the other is CPR 17.4) made under s.35(3) and (4) of the 1980 Act. It provides, so far as relevant:
" Special provisions about adding or substituting parties after the end of a relevant limitation period
19.5
(1) This rule applies to a change of parties after the end of a period of limitation under –
(a) the Limitation Act 1980;
…
(2) The court may add … a party only if –
(a) the relevant limitation period was current when the proceedings were started; and
(b) the addition … is necessary.
(3) The addition … of a party is necessary only if the court is satisfied that –
[none of the exceptions apply in this case]
It is to be observed that CPR 19.5 goes beyond the requirements of section 35(3) of the 1980 Act, in that on its face it extends to all new claims, including third party proceedings; and is not confined to new claims other than third party proceeding. The rule also makes no provision for situations where it is unclear whether or not the limitation period has expired.
Where the new claim falls within s.35(1)(b), so that relation back applies, guidelines as to the court's approach are found in Chandra v Brooke North (A Firm) [2013] EWCA Civ 1559:
"66. If a claimant seeks to raise a new claim by amendment and the defendant objects that it is barred by limitation, the court must decide how to proceed. There are two options. First the court could deal with the matter as a conventional amendment application. Alternatively,...
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