Quayle v Rothman Pantall & Co (a firm)

When permission is sought to add a limitation-barred cause of action, the court asks whether the proposed claim arises out of the same or substantially the same facts as a claim for which relief has already been sought. The court does not conduct a mini-trial on limitation, but considers whether the defendant has a reasonably arguable limitation defence. A continuing professional duty may provide a realistic basis for avoiding a limitation objection where the retainer continued throughout the relevant period. An amendment correcting a genuine mistake in the defendant’s name may be allowed after the limitation period has expired where the mistake creates no reasonable doubt about the party’s identity. A protective claim may be retained separately where consolidation could complicate a possible appeal.

The claimant alleged that the defendant accountants had negligently or contractually failed to advise him about the availability of business asset taper relief. He sought permission to re-amend his particulars of claim to add claims concerning advice and restructuring transactions between 2002 and 2005, and to plead a continuing duty to review earlier advice.

A second, protective action had been issued against Rothman Pantall LLP rather than Rothman Pantall & Co. The claimant applied to amend the defendant’s name, consolidate the two actions and progress them together. The defendant opposed the amendments on limitation and new-cause-of-action grounds and sought dismissal of the second action.

1. The court granted permission for the substantive amendments. The proposed claims were prima facie new causes of action and, considered independently, were arguably statute-barred. However, they arose out of the same or substantially the same facts as the existing claims. The defendant’s retainer and advice throughout 2002 to 2007 formed one continuing factual context, and it was artificial to isolate the 2004 events from the surrounding advice.

2. The relevant limitation question was determined when the amendment application was heard and decided, not when it was issued. The court did not conduct a mini-trial. It asked whether the defendant had a reasonably arguable limitation defence. Where that threshold was met, the ordinary course was to refuse amendment and leave the claimant to bring fresh proceedings, unless the same-facts test was satisfied.

3. The pleaded continuing duty to review earlier advice had a real prospect of success, having regard to Midland Bank v Het Stubbs and Kemp [1979] Ch 384. It therefore supplied a sufficient basis for rejecting the limitation objection to that aspect of the amendments.

4. Applying Paragon Finance v VB Thakerer & Co [1999] 1 All ER 400, Smith v Henniker-Major [2003] Ch 182, Darlington v O’Rourke James Scoffield & McCarthy [1998] EWCA Civ 1664 and Aldi Stores Ltd v Homes Buildings Plc [2003] EWCA Civ 1882, the comparison was made between the essential facts in the existing and proposed pleadings. The amendments satisfied the statutory and procedural same-facts requirement.

5. The amendment to the second claim form was allowed. The erroneous naming of Rothman Pantall LLP was a genuine mistake. The circumstances created no reasonable doubt as to the intended defendant, and the claim form had been amended before service. The amendment was permissible under CPR 17.4(3), alternatively CPR 19.5(3)(a) and (b).

6. The defendant’s application to dismiss the second action was dismissed. The actions were not consolidated because a successful appeal might require them to be separated, but the judge directed that they should be prepared and heard together at the fixed October trial, subject to appropriate further pleadings and directions.

First-instance decision. No appellate history is stated in the judgment.