Seele Austria GmbH Co v Tokio Marine Europe Insurance Ltd

On an application to amend, a party may not reopen an issue already determined in earlier proceedings or at an earlier stage of the same action. Issue estoppel may apply where the issue was litigated, decided and necessary to the cause of action. Alternatively, raising an issue which could and should have been raised earlier may constitute Henderson abuse, assessed through a broad merits-based examination of all the circumstances.

Amendments should ordinarily be allowed where the proposed case is properly arguable and prejudice can be compensated in costs. The court should not conduct a premature trial of disputed insurance-law issues on an amendment application. Permission may nevertheless be conditional on adequate particulars and supporting information.

The claimant sought indemnity or damages under a project insurance policy after defective glazing works at St Martin’s Court. Earlier proceedings before Field J concerned liability issues under the policy. Field J dismissed the claim: [2007] EWHC 1411 (Comm). The Court of Appeal reversed the principal liability decision but held that workmanship deficiencies affecting each window represented separate occurrences and did not arise from one event: [2008] EWCA Civ 441.

After the action was transferred to the Technology and Construction Court, the claimant sought amendments alleging that most defects arose from design rather than workmanship and revising its quantum claim. The defendant sought to prevent the design amendments by issue estoppel or Henderson abuse, and opposed the quantum amendments on insurance-law and pleading grounds.

1. Design amendments refused. The issue whether the defects were attributable to design or workmanship had been raised on the pleadings and addressed in evidence before Field J. His findings, read with the parties’ cases, established that the defects were essentially matters of workmanship. The issue was also addressed and determined by the Court of Appeal, whose reasoning treated poor workmanship as the underlying cause and rejected the single-event argument.
2. Issue estoppel therefore applied. The deductible or retained liability was an inherent element of the claimant’s claim because the claimant had to establish liability exceeding the amount it had retained. The earlier determination consequently concerned an ingredient of the cause of action. The fact that the proposed reopening arose in the same proceedings did not create a special circumstance on these facts.
3. Alternatively, the proposed case was barred as Henderson abuse. Even if the issue had not been determined, it could and should have been raised before Field J and the Court of Appeal. The claimant controlled its pleadings, evidence and submissions, and allowing a new case would unfairly and oppressively require the defendant to relitigate a liability issue after the earlier hearings.
4. Quantum amendments allowed. Third-party access costs and, in principle, supervision costs were arguable under the Court of Appeal’s decision. It was inappropriate on an interlocutory application to determine finally whether delay costs constituted consequential loss, how the phrase “in respect of” operated, or whether mixed causes required apportionment. Those questions might require factual evidence and were potentially affected by the outstanding permission to appeal.
5. The claimant was required within 28 days to particularise each component of the access-cost and supervision claims, provide supporting documents, and identify its case on dominant cause, apportionment, delay costs and parallel working. Consequential matters, including costs, were left for separate determination if not agreed.

• Court of Appeal: Field J’s judgment was reversed on the principal policy-liability issue in [2008] EWCA Civ 441 . The Court of Appeal held that workmanship deficiencies to each window represented separate occurrences and did not arise from one event. Other quantum-related issues were left for determination at the damages stage.
• High Court (Technology and Construction Court): Design amendments refused on issue-estoppel and Henderson-abuse grounds. Quantum amendments allowed subject to provision of particulars and supporting information.