Co-Operative Group Ltd v Birse Developments Ltd & Ors

Whether an amendment introduces a new cause of action depends on a comparison of the essential factual elements of the existing and proposed claims. Further particulars or instances do not create a new cause of action, but a change in the essential factual basis does.

In construction claims, an allegation of a different breach of an existing duty is a question of fact and degree. A new allegation of systemic structural inadequacy, founded on a previously unpleaded contractual requirement and requiring wholly different remedial work, is a new cause of action. After expiry of the limitation period, it may be added only if it arises from the same or substantially the same facts already in issue under Limitation Act 1980 section 35.

The claimant, the leasehold owner of a distribution centre, sued the main contractor for defects in warehouse floor slabs under collateral warranties executed as deeds. The original claim alleged cracking, defective joints, inadequate slab thickness and related defects. It sought limited repair and replacement works.

After the limitation period had expired, the claimant sought to add paragraph 33A to its pleading. It alleged that testing had revealed insufficient steel fibre content throughout the slabs, so that they could not safely bear their specified pallet-racking load and required complete replacement. The High Court judge held that the amendment did not add a new cause of action, but alternatively held that it did not arise out of the same or substantially the same facts. The contractor and its subcontractor appealed.

1. Appeal allowed. Tomlinson LJ, with whom Rimer and Longmore LJJ agreed, held that proposed paragraph 33A pleaded a new and different cause of action. Permission to add it was refused.

2. A cause of action is identified by its essential factual basis. The court must compare the minimum essential facts alleged in the original pleading with those required by the amendment. New particulars of an existing allegation do not suffice, but an alteration in the essential factual features does.

3. The court accepted the useful distinction, reflected in Secretary of State for Transport v Pell Frischmann [2006] EWHC 2909 (TCC), between an unpleaded duty, a different breach of an existing duty, and damage to a different element of a construction project. The decisive inquiry remained one of fact and degree, focused on essential facts rather than a high-level description of the existing claim.

4. The original claim concerned separate, remediable defects in the slabs. Paragraph 33A alleged a systemic failure of the whole slabs: inadequate steel fibre content meant that the floors would probably fail under the specified 70kN racking-leg load and therefore required complete replacement. It relied on a previously unpleaded contractual capability, new facts concerning fibre content, and materially different loss. It was not a technical explanation of the existing defects.

5. The amendment also failed under Limitation Act 1980 section 35. The new claim would require substantial investigation into the original design, fibre content, structural adequacy, compliance with the load requirement, complete replacement, and consequential loss. Those matters were not already in issue. It therefore did not arise from the same or substantially the same facts.

6. The court disallowed paragraph 33A and invited the parties to agree consequential amendments to the order below. The proposed cross-appeal concerning costs did not arise.

• Court of Appeal (Civil Division): Allowed the contractor’s and subcontractor’s appeals. It reversed the order permitting the proposed re-amendment and disallowed paragraph 33A.

• High Court, Technology and Construction Court: His Honour Judge Stephen Davies held that paragraph 33A did not introduce a new cause of action. Alternatively, he held that it did not arise from the same or substantially the same facts already in issue.