Morgan Est (Scotland) Ltd v Hanson Concrete Products Ltd

Under CPR Part 19.5, a party may be added or substituted after limitation has expired where the limitation period was current when proceedings began and the amendment is necessary. A mistake may concern the description of the person entitled to sue, even where that description identifies a different legal entity. The court must distinguish a mistake as to the intended party from a mistake merely as to the claimant’s legal rights. Pleading assignments which show how an existing contractual claim became vested in the proposed claimant does not create a new claim for CPR 17.4(2). The discretion should ordinarily be exercised where the mistake was genuine, the defendant was not misled, and the application was made promptly after discovery of the error.

The claimant sought permission to add Miller Civil Engineering Ltd as first claimant and Morgan Est PLC as third claimant after the limitation period had expired. The existing claimant, Morgan Est (Scotland) Ltd, had formerly been Miller Civil Engineering Services Ltd. The contractual rights had passed from Miller Civil Engineering Ltd to that company and subsequently to Morgan Est PLC.

The application therefore required the court to decide whether the proposed amendment fell within CPR Part 19.5, whether joining Morgan Est PLC was in substance substitution, whether pleading the assignments amounted to a new claim under CPR 17.4(2), and whether the discretion should be exercised despite the defendant’s accrued limitation defence.

1. Jurisdiction under CPR Part 19.5. The court adopted the approach in Parsons v George [2004] EWCA (Civ) 912. The relevant question is whether the intended claimant can be identified by a description sufficiently specific to the case. The description of the person holding the contractual right to sue was sufficient. The mistake therefore fell within CPR Part 19.5(3)(a), notwithstanding uncertainty as to whether the immediate error was that the existing claimant was the contracting party or that it held the right to sue.
2. Addition and substitution. Section 35(6) of the Limitation Act 1980 distinguishes addition from substitution, and CPR Part 19.5 must be read accordingly. Joining Morgan Est PLC was, in substance, substitution. Morgan Est (Scotland) Ltd had assigned away its rights and could not successfully maintain the claim, while its retention as a claimant was required only for the procedural purpose of joining the assignor.
3. Assignments and new claims. Pleading the assignments did not add or substitute a new claim under CPR 17.4(2). The contractual claim remained the same; the proposed amendment merely explained how it had become vested in Morgan Est PLC. The issue whether Morgan Est PLC had already claimed a remedy therefore did not arise.
4. Discretion. The court considered the balance identified in Parsons v George: the defendant’s loss of an accrued limitation defence had to be weighed against the injustice of refusing correction of a genuine mistake. There was no misleading of the defendant, no inordinate delay after proceedings were issued or after the error was raised in the defence, and no reason to doubt that the mistake was genuine.
5. Order. Leave was granted to add Morgan Est PLC as third claimant, add Miller Civil Engineering Ltd as first claimant, retain Morgan Est (Scotland) Ltd as second claimant, and amend the particulars of claim to plead the assignments.

First-instance decision. No appellate history is stated in the judgment.