Aldi Stores Ltd v Holmes Buildings Plc

An amendment adds a new claim for limitation purposes only if it adds or substitutes a new cause of action. A further head of loss does not become a new cause of action merely because its amount and causal connection require separate proof.

Where liability under several warranties flows from the same allegedly negligent advice to enter a contract requiring those warranties, an amendment claiming the additional liabilities may particularise further loss arising from the existing cause of action. If an amendment duplicates a claim in pending proceedings, permission depends on whether it would abuse the court’s process or otherwise cause injustice. Correcting an earlier procedural error is not, without more, an abuse.

Holmes Buildings plc entered a design-and-build contract after obtaining engineering advice from WSP. The contract required Holmes, when nominated, to give warranties to occupiers of the development. Structural settlement led Aldi, B&Q and Grantchester to make claims under the contractual arrangements.

In Aldi’s proceedings, Holmes brought a Part 20 claim against WSP for an indemnity. It later sought to amend that claim to include its potential liabilities to B&Q and Grantchester. The amendment could affect WSP’s limitation defence in separate pending proceedings concerning B&Q.

His Honour Judge Bowsher refused permission, treating the additional liabilities as new causes of action and taking the timing of the application into account. The central questions on appeal were whether the amendments added new claims under section 35 of the Limitation Act 1980 and CPR 17.4(2), whether any new claims arose from substantially the same facts, and whether permission should be granted.

1. Appeal allowed unanimously. Lord Justice Dyson held, with Lady Justice Hale and Lord Justice Auld agreeing, that the proposed amendments did not introduce new causes of action. They merely added further heads of loss arising from the existing allegation that WSP negligently advised Holmes to enter the building contract.

2. A new remedy or head of damage is not a new claim under section 35 of the Limitation Act 1980 unless it involves the addition or substitution of a new cause of action. The amendments alleged neither a new duty nor a new breach. Although Holmes had to prove that its liabilities to B&Q and Grantchester were caused by WSP’s negligence, separate proof of causation for each item of loss did not create separate causes of action.

3. The essential reliance was Holmes’s reliance on WSP’s advice when entering the building contract. That contract obliged Holmes to execute warranties for parties nominated by the employer. The later warranties therefore flowed from the same allegedly negligent advice and did not add discrete facts completing new causes of action. Gordon v JB Wheatley & Co [2000] Lloyd’s Rep PN 605, concerning voluntary transactions following general advice, was distinguishable.

4. Alternatively, any new claims arose from the same or substantially the same facts for section 35(5) and CPR 17.4(2). The retainer, alleged breach and building contract were common to all three liabilities. The limited additional facts concerning the particular warranties and resulting loss did not prevent the required substantial overlap.

5. Where a party seeks to add a claim already made in other pending proceedings, permission does not turn on whether amendment is necessary to place the controversy before the court. The relevant questions are whether amendment would abuse the court’s process or otherwise cause injustice. Holmes’s attempt to correct an earlier procedural error involved no impropriety, harassment or oppression.

6. Because the amendments added no new claim, WSP had no accrued limitation defence capable of constituting prejudice. Even on the alternative basis, the absence of abuse or other prejudice justified permission. The amendments were allowed, with costs of the appeal and below payable to Holmes, subject to detailed assessment if not agreed.

1. Court of Appeal (Civil Division): The appeal was allowed unanimously. The proposed amendments were permitted because they added heads of loss rather than new causes of action. Alternatively, they arose from substantially the same facts and permission was justified.

2. High Court, Queen’s Bench Division, Technology and Construction Court: His Honour Judge Bowsher refused the amendment application. He regarded the proposed liabilities as new causes of action and treated the earlier opportunity to amend as relevant to discretion. No citation is stated.