Chandra & Anor v Brooke North (a firm) & Anor

Where a proposed amendment adds a new claim after limitation has expired and does not arise from the same or substantially the same facts, permission should be refused if the defendant has a reasonably arguable limitation defence. The court should not finally determine disputed limitation facts on an ordinary amendment application.

Once a claimant has served particulars of claim on a defendant, those particulars define the ongoing claim against that defendant. A broadly drafted claim form cannot then be used to avoid the restrictions on new claims in Limitation Act 1980 section 35.

BPC Hotels Ltd and Mr and Mrs Chandra brought solicitors’ negligence claims arising from advice given during a hotel development and related personal guarantees. Their original particulars alleged negligent advice concerning emergency funding in 2003.

After a related Chancery judgment, they sought to add claims that the solicitors should have protected them against the consequences of contractual step-in provisions and should have negotiated an exit arrangement with the bank. Judge Thornton allowed the amendments and held that the extended limitation period under Limitation Act 1980 section 14A applied: Chandra v Brooke North [2013] EWHC 417 (QB).

The solicitors appealed. The central questions were whether they had a reasonably arguable limitation defence and whether the amendments could instead be justified by the breadth of the original claim forms.

1. Appeal allowed. The proposed amendments added new causes of action which did not arise from the same or substantially the same facts as the original claims. That conclusion was not challenged on appeal.

2. Applying Welsh Development Agency v Redpath Dorman Long Ltd [1994] 1 WLR 1409, an amendment application is not ordinarily a trial of disputed limitation issues. If the defendant has a reasonably arguable limitation defence, permission to add the new claim should be refused. The claimant may instead issue separate proceedings, in which the limitation issue can be tried without the relation-back effect of Limitation Act 1980 section 35(1).

3. The High Court had wrongly made definitive findings on section 14A and declared that the new claims were in time. The Chandras knew the contractual arrangements, the solicitors’ allegedly deficient advice, and the bank’s case in the Chancery proceedings. They also had extensive specialist legal advice. It was therefore properly arguable that their date of knowledge under section 14A(5) preceded 15 November 2008.

4. The amendments could not be saved by the original claim forms. Following Steamship Mutual Underwriting Association Ltd v Trollope and Colls (City) Ltd, once particulars have been served on a defendant, the court compares those particulars with the proposed amendment. The claimant cannot rely on a broad claim form to evade section 35. The Chandras’ claim form was in any event confined to the May 2003 guarantees.

5. In re L (children) did not confer a residual discretion to permit time-barred amendments that failed the statutory same-facts condition. The amendments and re-amendments, including those against the successor firm, were refused; prior permissions and the limitation declarations were set aside. The transfer to the Technology and Construction Court remained in force.

• Court of Appeal (Civil Division): Allowed the solicitors’ appeal. It refused the amendments and re-amendments, set aside any earlier permission and set aside the declarations on limitation.

• High Court, Queen’s Bench Division: Judge Thornton had permitted the amendments and re-amendments and declared that they were brought within section 14A of the Limitation Act 1980: Chandra v Brooke North [2013] EWHC 417 (QB).