TJD Trade Ltd v Bam Construction Ltd
| Jurisdiction | England & Wales |
| Judge | Jason Coppel |
| Judgment Date | 26 May 2022 |
| Neutral Citation | [2022] EWHC 1285 (TCC) |
| Docket Number | Case No: HT-2020-000479 |
| Court | Queen's Bench Division (Technology and Construction Court) |
[2022] EWHC 1285 (TCC)
Jason Coppel QC
(sitting as a Deputy High Court Judge)
Case No: HT-2020-000479
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT (QBD)
Royal Courts of Justice
Rolls Building, London, EC4A 1NL
Faisel Sadiq (instructed by J Garrard & Allen) for the Claimant
Thomas Lazur (instructed by Browne Jacobson) for the Defendant
Hearing date: 29 April 2022
This judgment was handed down by the Judge remotely by circulation to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be 10:30 on Thursday 26 th May 2022
Jason Coppel QC:
Background
The Claimant applies to amend its Particulars of Claim pursuant to CPR 17.1(2)(b).
The Claim as currently pleaded is for damages for breach of contract and may be summarised as follows:
i) In February 2014, the Claimant bought Technology House, Ampthill Road, Bedford MK42 9QG (“the Property”).
ii) The Claimant intended to convert the Property from offices to residential accommodation and to construct a two-storey roof extension across the top of the Property.
iii) At the date of purchase the Property benefitted from changes to the planning regime whereby there were permitted development rights for conversion to residential use, but any conversion had to be completed by 30 May 2016. Conversion or alteration to the external appearance of the building would, however, still require planning permission for the necessary physical alterations to the Property.
iv) The Claimant contracted with the Defendant on 29 October 2014 for the Defendant to carry out a feasibility study for the roof extension, produce the documents that would need to be submitted to the local planning authority (Bedford Borough Council) to obtain the necessary planning permission for the redevelopment and have those planning documents ready for submission by the end of December 2014.
v) The Claimant relies on express contractual terms, an implied contractual term to the effect that the Defendant would carry out any necessary amendments to the planning documents once prepared and also the duty to perform its obligations with reasonable skill and care which was implied into the contract by s. 13 of the Supply of Goods and Services Act 1982 (see §§24–26 and 27 of the Particulars of Claim).
vi) The Defendant breached the contract by (a) providing negligent advice as to the feasibility of the proposed roof extension, (b) failing to produce the necessary planning documents by the end of December 2014, (c) negligently producing planning documents that were defective such that Bedford Borough Council refused to validate them and (d) by subsequently refusing to correct the errors which had been made in the planning documents.
The Defendant defends the Claim on various grounds. It contends, inter alia, that its advice as regards the feasibility study was not negligent, that it was not required to produce the planning documents by the end of December 2014, that it in any event did so and that any failure to do what was necessary within the necessary timeframe was the fault of Aeromark Ltd (“Aeromark”) a company associated with the Claimant's Director Ms Marks, with whom the contract had in fact been concluded. The Defendant argues further that the planning documents it produced were not defective, but if they were then this was Aeromark's fault.
As the Claim is currently pleaded, the Claimant claims damages in the amount of £822,190, made up of professional charges for producing new planning documents and for fresh advice on the feasibility of the proposed extension, additional consultancy fees and (predominantly) the increased cost of construction attributable to delay in the redevelopment project, plus interest.
The Claim was issued on 21 December 2020.
By the proposed amendment, the Claimant seeks to claim further losses arising out of an alleged loan agreement which it says it had entered into with Ms Marks. According to Ms Marks, giving evidence on behalf of the Claimant in support of the application, she and the Claimant concluded a loan agreement on 21 February 2014 whereby she would make available to the Claimant a facility of £5,500,000 to be used for the purchase of the Property and redevelopment costs. It is alleged that the loan agreement provided, inter alia:
i) The Claimant would pay Ms Marks interest at 1% per month on any sums it actually drew down.
ii) The Claimant would pay Ms Marks interest at 0.5% per month on any sums made available for drawing down but not in fact drawn down.
iii) Interest would compound daily on both sums.
iv) The Claimant would pay Ms Marks a management fee of £15,000 per month.
If permission to amend is granted, the further losses which the Claimant will claim as a result of the alleged loan agreement amount to approximately £730,000. In other words, the claim will almost double in value.
The amendment which the Claimant seeks to make to the Particulars of Claim has three components:
i) A new §17 would insert details of the alleged loan between the Claimant and Ms Marks.
ii) Additional text at the end of §20 would insert allegations that Ms Marks, speaking on behalf of the Claimant, informed a representative of the Defendant at a meeting on 3 October 2014 that the Claimant wanted to complete the development as soon as possible as it wished to minimise interest payable on loans and then refinance or sell flats in the Property to quickly repay the loans it had taken out. The significance of this amendment is that it will support the Claimant's contention that the Defendant had sufficient knowledge of the losses which would arise out of its agreement with Ms Marks to render those losses sufficiently proximate as to be recoverable under the second limb of Hadley v Baxendale (1854) 9 Exch 341 (damages “ as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it”).
iii) Amendments to §47(d) and (e), §48(c) to (e), and §49 would insert additional details of the Claimant's losses arising out of the alleged loan agreement.
Is the Claimant seeking to add a new claim?
The Defendant's primary response to the application is that the Claimant is seeking to add a new claim after the expiry of a limitation period and can only be permitted to do so in the circumstances prescribed by CPR 17.4:
“(1) This rule applies where –
(a) a party applies to amend his statement of case in one of the ways mentioned in this rule; and
(b) a period of limitation has expired under –
(i) the Limitation Act 1980; …
(2) The court may allow an amendment whose effect will be to add or substitute a new claim, but only if the new claim arises out of the same facts or substantially the same facts as a claim in respect of which the party applying for permission has already claimed a remedy in the proceedings.”
Rule 17.4 qualifies the discretion of the Court to permit an amendment to a statement of case pursuant to CPR 17.3.
The Defendant submits that (a) the Claimant is seeking to add a new claim for breach of contract, (b) (as is common ground), the limitation period for a breach of contract claim under s. 2 of the Limitation Act 1980 has expired, the relevant events having taken place in 2014–15, (c) the new claim does not arise out of the same facts or substantially the same facts as the claims currently pleaded, and (d) therefore the amendment falls outwith CPR 17.4 and cannot be permitted pursuant to CPR 17.3.
In my judgment, the proposed amendment does not seek to raise a new claim but rather to add a new head of loss allegedly flowing from the claim of breach of contract which is already pleaded.
There are a number of different judicial formulations of the litmus test for when a “new claim” is sought to be added or substituted, all of which are significantly easier to state than to apply. Hence, in Co-Operative Group Limited v Birse Developments Limited & Anr. [2013] EWCA Civ 474; [2013] BLR 383, Tomlinson LJ stated (§20):
“In the quest for what constitutes a “new” cause of action, i.e. a cause of action different from that already asserted, it is the essential factual allegations upon which the original and the proposed new or different claims are reliant which must be compared. Thus “the pleading of unnecessary allegations or the addition of further instances or better particulars do not amount to a distinct cause of action” — see Paragon Finance v Thakerar [1999] 1 All ER 400 at 405 per Millett LJ. “So in identifying a new cause of action the bare minimum of essential facts abstracted from the original pleading is to be compared with the minimum as it would be constituted under the amended pleading” — see per Robert Walker LJ in Smith v Henniker-Major [2003] Ch 182 at 210.”
There is a line of case-law dealing with how that test, and other similar formulations, should apply in a case where a claimant seeks to add a new head of loss which is said to arise out of an already pleaded breach of duty. Ordinarily, this will not amount to the addition of a new cause of action. In Berezovsky v Abramovich [2011] 1 WLR 229, Longmore LJ (with whom the other members of the Court agreed) stated:
“64. Thus the addition or substitution of a new loss is by no means necessarily the addition or substitution of a new cause of action. For a cause of action to arise in tort there must be a breach of duty which causes loss but it is permissible to add or substitute further losses if they all stem from an original breach of duty which has caused some loss. This happens every day in personal injury claims in which a loss of earnings claim may be added...
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