Compass Group v Hobart Manufacturing Co Ltd

The distinction between adding and substituting a party is material. Under the Civil Procedure Rules 1998, Part 19.2(2)(a) may be used to add a claimant where this is desirable to resolve the matters in dispute, even though the proposed claimant is not a successor to the existing claimant’s interest. The court may then order the existing claimant to cease being a party under Part 19.2(3). At the joinder stage, the applicant need establish only a prima facie case. Disputed details of title and loss should ordinarily be tried in the main action. Further evidence may be admitted on appeal where this secures a just and economical result.

A restaurant was substantially damaged by fire after a fat fryer supplied by Hobart allegedly overheated. Compass brought claims against Hobart in contract, misrepresentation, breach of statutory duty and negligence. Hobart disputed liability, limitation and Compass’s title to sue.

Mr Justice Garland refused applications to add or substitute Travel Rest and Little Chef as claimants and struck out Compass’s unamended claim. The findings that Compass’s contractual claim was time-barred, that it was not a contracting party, and that it had no title to sue in tort were not appealed. The issue before the Court of Appeal was whether Travel Rest could be added as claimant in a tort action, and whether the application had to proceed by substitution rather than addition.

Appeal allowed. Lord Justice Mantell gave the leading judgment. Sir Swinton Thomas and Lord Justice Kennedy agreed.

1. The court rejected the view that the application could only be made by substitution. Although Part 19.2(4) addresses substitution where the existing party’s interest or liability has passed to the new party, Part 19.2(2)(a) was also available. At the time of the application there was an existing claimant, and the court could add Travel Rest if this was desirable for resolving all matters in dispute. The court could then order Compass to cease being a party under Part 19.2(3).
2. The literal reading of the Civil Procedure Rules 1998 was consistent with their purpose. The rules should be applied in a manner that achieves justice between the parties economically. The fact that Compass was an inappropriate claimant did not prevent the court from considering an addition application before disposing of Compass’s claim.
3. The Court of Appeal admitted two further witness statements under Part 52, rule 11. Although the explanation for their lateness was unimpressive, admitting the evidence promoted a just result and saved time and expense. The evidence indicated that Forte UK had held a leasehold interest and operated the restaurant at the relevant time.
4. At the joinder stage the applicant needed to establish only a prima facie case. The remaining uncertainty about the precise interest in the premises and the identity of the person who suffered the loss were matters for trial in the main action, not grounds for refusing joinder. Travel Rest could therefore be added as claimant. The court indicated that it would be inclined to remove Compass under Part 19.2(3), although the pleadings required further consideration.

The appeal was allowed with the costs below and on the appeal payable by the appellant, subject to detailed assessment.

• First instance: Mr Justice Garland refused applications to add or substitute Travel Rest and Little Chef as claimants and struck out Compass’s unamended claim.
• Court of Appeal (Civil Division): allowed the appeal to the extent that Travel Rest could be added as a claimant in the tort proceedings.