GE Money Home Lending Ltd & Anor v HC Wolton & Sons Ltd (t/a Wolton Chartered Surveyors)

Under CPR 19.5, substitution after expiry of limitation is permissible only where the proceedings were started within time and the substitution is necessary. A mistake must concern the name of the intended party, rather than the identity of a different party. The description in the claim form must identify the intended party, and the defendant must have been able to appreciate that party’s true identity despite the error. Where the defendant learns the true identity only after limitation has expired, the court will generally refuse the amendment unless special factors justify it. The appellate court may interfere with a case-management discretion where material evidence was wrongly excluded or the reasons are insufficient.

The defendant appealed against a District Judge’s order substituting GE Money Mortgages Limited for GE Money Home Lending Limited as claimant in a professional-negligence claim concerning a mortgage valuation. The claim form had been issued shortly before expiry of limitation, but named the wrong group company and also misstated the property. The correct lender was identified only after limitation had expired. The District Judge allowed substitution under CPR 19.5 and permitted amended pleadings. The central issues were whether the error was a mistake as to name or identity, whether the defendant knew or should have known the true claimant’s identity, and whether the substitution should be allowed.

1. The appeal was allowed. The substitution of GE Money Mortgages Limited as claimant was refused and, pursuant to Part 24 of the Civil Procedure Rules 1998, the claim was struck out.
2. The court applied the guidance in Adelson v Associated Newspapers [2008] 1 WLR 585. The relevant distinction is between an error of identification and an error of nomenclature. A mistake as to name may be established where the claim form contains a description which identifies the intended party but gives it the wrong name.
3. The claimant’s solicitor had made a genuine mistake and would have issued proceedings in the name of GE Money Mortgages Limited had the mistake been appreciated. However, the claim form did not sufficiently identify that company. The valuation report referred generally to the group and its subsidiaries, and the pre-action correspondence incorrectly identified GE Money Home Lending Limited as the lender.
4. The defendant did not know the true identity of the intended claimant at any relevant time. The correct identity became apparent only after limitation had expired. Applying the principle, approved in Adelson, that the discretion is likely to be exercised against amendment where the correct party was unaware of the claim until after expiry, there were no special factors justifying substitution.
5. The District Judge should have admitted the documentary evidence concerning the earlier correspondence, or adjourned the application to permit a response. The High Court was entitled to reconsider the discretionary decision because the evidence before it was fuller and the District Judge’s reasons did not sufficiently disclose the basis of the discretion exercised.
6. It was unnecessary to determine the separate challenge concerning amendment of the property description.

• High Court (Chancery Division): appeal allowed against the order of DJ Glentworth dated 21 January 2010. Substitution was refused and the claim was struck out.