Seele Austria GmbH & Co Kg v Tokio Marine Europe Insurance Ltd

A claim under a property insurance policy is constituted by the insured loss together with any contractual threshold or deductible that must be exceeded before liability arises. Where liability is assessed separately for each item of insured property, the identity of that property may be an essential part of the cause of action.

A pleading that substitutes a claim concerning different insured property may therefore introduce a new claim, even where both claims arise from the same project and involve broadly similar categories of cost. Under the Limitation Act 1980 and the Civil Procedure Rules, such an amendment is permissible only where the statutory conditions are satisfied. The court may refuse permission where the new claim is late, changes the factual case, causes limitation prejudice and would require disproportionate investigation.

The claimant sought indemnity under a combined construction insurance policy for access damage allegedly incurred in repairing defective windows at a building project.

Following earlier proceedings, the Court of Appeal held that each window constituted a separate occurrence for the policy deductible and that the claimant could recover access damage costs, but not the cost of rectifying defective windows. The claimant initially pleaded a claim concerning 18 stone-clad windows on the north and east elevations. In its Reply, it advanced a different claim concerning 31, later 26, brick-clad windows on the south and west elevations.

The issue was whether the Reply introduced a new claim, whether it arose from the same or substantially the same facts as the existing claim, and whether the court should permit an amendment after the likely expiry of the limitation period.

1. The Reply introduced a new claim. The original claim concerned access damage relating to 18 specified stone-clad windows. The proposed claim concerned 26 different brick-clad windows. The contractual deductible was £10,000 per window, so the claimant had to establish recoverable damage exceeding that amount for each relevant window. The deductible was therefore an inherent ingredient of the cause of action, and the identity of each window was material.
2. The new claim did not arise from the same or substantially the same facts. Although the claims shared background facts concerning the building contract, the policy, defective windows and alleged access costs, the insured property, location, extent of completed work, access operations, timing, allocation of costs and evidence differed materially. Both analysis and overall impression led to that conclusion.
3. Under CPR 16 PD 9.2, the Reply could not contradict or be inconsistent with the earlier pleading. The Reply was liable to be struck out under CPR 3.4(2)(c). Section 35 of the Limitation Act 1980 and CPR 17.4(2), as interpreted in Goode v Martin, required the new claim to arise from the same or substantially the same facts as facts still in issue. The earlier facts relating to the 18-window claim were no longer in issue in that sense.
4. The court had no discretion to allow the amendment once that statutory condition failed. In any event, permission would have been refused. The defendants had an arguable limitation defence, the claimant had delayed despite possessing the relevant documents, the case had repeatedly shifted, memories and attribution evidence had deteriorated, and the proposed claim would cause disproportionate expense and prejudice. The limitation statutes were intended to provide repose.
5. The Reply was struck out, permission to re-amend was refused, and the action was dismissed because the claimant conceded that no maintainable claim remained in respect of the 18 windows.

The proceedings began in the Commercial Court. After a trial before Field J, the claimant’s claim under the policy was rejected.

The Court of Appeal allowed the substantive appeal in part. It held that access damage costs were indemnifiable, but rectification costs were not, and that the £10,000 deductible applied separately to each window. The present court treated that decision as determining the relevant retained liability and considered the claimant’s subsequent pleading amendments.