Roberts v Gill & Co Solicitors and others

The Supreme Court dismissed the appellant's attempt to amend personal proceedings by a residuary beneficiary into a representative (derivative) claim on behalf of the estate. The court interpreted section 35 of the Limitation Act 1980 together with CPR 17.4 and CPR 19.5 to require that a derivative claim of this kind, in general, must include the personal representative as a party; an amendment which would have the practical effect of back‑dating a new representative claim so as to avoid limitation cannot be achieved by staged amendments. The court also held that the applicant had not shown the "special circumstances" which would justify a beneficiary bringing a derivative action in the trustee's place. The ruling turned on (1) the statutory scheme created by section 35 and the rules of court governing new claims and changes of capacity, and (2) the established equitable principle that beneficiaries may only sue in the place of trustees in special circumstances, with the trustees ordinarily joined in the litigation.

Background and parties:

• Mrs Alice Margot Roberts died in 1995 leaving residuary beneficiaries including her grandsons Mark Roberts (appellant) and John Roberts. John was granted letters of administration and, while acting as administrator, assented to and later sold land which the appellant says should have fallen into residue.
• The appellant issued proceedings in 2002 in his personal capacity alleging negligence by two firms of solicitors who had acted for the administrator; the estate's personal representative (Mr Sainter) was later appointed in 2000 and any claim by him was by then statute‑barred.

Nature of the application: The appellant sought to amend three years after expiry of the limitation period to pursue both his personal claim and a representative (derivative) claim on behalf of the estate, relying on the court's power to alter the capacity in which a party sues and on section 35 Limitation Act 1980 and the Civil Procedure Rules.

Issues framed:

• Whether the proposed amendment to a representative/derivative claim could be permitted after expiry of the limitation period in light of section 35 and the CPR;
• Whether joinder of the administrator as a party was necessary for the derivative claim and, if so, whether that necessity could be satisfied after an amendment changing the claimant's capacity;
• Whether "special circumstances" existed to allow a beneficiary to sue a third party in the trustees' place.

Procedural history: Proceedings began in Plymouth County Court (2002), were transferred to the Chancery Division, the deputy judge dismissed the amendment application (2007), the Court of Appeal considered the point ([2008] EWCA Civ 803; [2009] 1 WLR 531) and the case proceeded to the Supreme Court.

Court’s reasoning and conclusions:

• The court analysed section 35 of the Limitation Act 1980 and the relevant rules (RSC provisions and CPR 17.4, CPR 19.5). Section 35 treats a new claim made in the course of an action as commenced on the date of the original action but permits rules of court to allow new claims only subject to specified conditions (new causes of action must arise out of the same facts; addition of new parties must be necessary for the determination of the original action).
• The court accepted that an amendment changing capacity (to a representative capacity) is permitted by CPR 17.4(4) where the new capacity is one the party had when proceedings began or has since acquired; the representative claim here would be a new cause of action arising from the same facts so CPR 17.4(2) permitted amendment in principle.
• However, the derivative claim would, in practice, necessitate joinder of the administrator. Section 35 and CPR 19.5 require that a new party be added only where the limitation period was current at the original start and where joinder is "necessary" for the original action; the court held that the administrator must normally be joined and that the procedural device of staged amendments to avoid limitation would be an abuse and cannot be used to bypass these requirements.
• The court also held that the appellant had not established the "special circumstances" (such as collusion, insolvency, demonstrated refusal by the trustee to act) that equity recognises as justifying a beneficiary suing in the trustee's place.

Result: The appeal was dismissed because amendment to pursue the derivative claim was not permitted under the Limitation Act and CPR, and because special circumstances were not proved.

Appeal dismissed. The court held that section 35 of the Limitation Act 1980 and the Civil Procedure Rules (in particular CPR 17.4 and CPR 19.5) do not permit the appellant, by staged amendments, to convert his personal claim into a representative (derivative) claim so as to avoid limitation where joinder of the administrator is required; further, the appellant had not established the "special circumstances" that would justify a beneficiary suing in the trustee's place.

Proceedings began in Plymouth County Court (claim form issued 27 November 2002). The action was transferred to the Chancery Division where the deputy judge (Morgan J sitting as a deputy judge) dismissed the application to amend (4 April 2007). On appeal the Court of Appeal considered the points ([2008] EWCA Civ 803; reported [2009] 1 WLR 531) and reached conclusions on joinder and on whether special circumstances existed. The matter proceeded to the Supreme Court which delivered judgment on 19 May 2010 ([2010] UKSC 22).