Millharbour Management Ltd & Ors v Weston Homes Ltd & Anor

Under CPR Part 19.6, representative proceedings require the representative and represented persons to have the same interest when the claim is begun. The requirement must remain ascertainable during the proceedings. It is assessed by reference to the particular facts, including whether the parties share the relevant causes of action, liability issues and loss. Differences affecting individual cases do not necessarily defeat representation if they arise from generic issues or can be protected by directions governing enforcement. Once the threshold is met, the court retains a discretion, guided materially by the overriding objective, cost and time savings, and protection against individual defences, including limitation. A representative order may be limited by subject matter and date.

The claim concerned alleged construction defects in a large residential development. The claimants sought an order under CPR Part 19.6 allowing two named leaseholders to represent other leaseholders who were not parties. One proposed representative covered original purchasers, and the other covered subsequent purchasers. The proposed representative claims were limited to damages for remedial works organised by the management company and recovered through service charges.

The defendants argued that the represented leaseholders did not have the same interest because their contractual and statutory causes of action differed, defects affected different flats, and individual defences, including limitation, might arise. The central issues were whether the threshold requirement was met and, if so, how the court should exercise its discretion.

1. Representative threshold. The court held that CPR Part 19.6 requires the representative and represented persons to have the same interest in the claim when proceedings are begun. It must also be possible during the proceedings to identify whether a person qualifies for membership of the represented class. The issue is fact-sensitive and may be assessed by reference to the pleaded or proposed case.
2. Meaning of same interest. Applying The Duke of Bedford v Ellis [1901] AC 1 and the later authorities, the relevant persons must share a common interest and common grievance, and the relief must in its nature benefit all of them. Different legal causes of action do not necessarily prevent representation where the claims concern the same defects, causes of action and loss, and the likely defences are generic.
3. Individual differences and safeguards. The fact that some flats are unaffected by particular defects, or that particular defences may apply, does not automatically defeat representation. Such issues may be determined generically or protected through directions that restrict enforcement of the judgment against persons to whom a successful individual defence applies. The judgment may also be directed not to bind, or not to be enforced against, a represented person.
4. Discretion. Once the threshold is established, the court has a discretion whether to permit or continue representative proceedings. The overriding objective, saving cost and time, the practical burden of joining numerous parties, adequate particularisation, security for costs, and protection against individual defences are relevant. Limitation may be addressed by fixing the date from which the representative capacity operates.
5. Application. The two proposed representatives and the relevant non-party leaseholders had the same interest in the limited claims for remedial-work costs. The order was therefore made from 7 December 2010, when the representative claim was lawfully introduced by amendment. The order did not extend to other financial or legal claims, and defendants remained entitled to rely on limitation defences arising by that date.