D&G Cars Ltd v Essex Police Authority

An amendment made after expiry of a limitation period introduces a new cause of action where it adds allegations of intentional wrongdoing and bad faith to a claim previously based on objectively unequal or discriminatory treatment. This remains so although the same statutory duty and operative act are alleged.

Facts relevant solely to defeating a pleaded defence may, however, be introduced by reply without constituting a new claim. Serious allegations of bad faith must be pleaded fully and precisely. Their scope must be confined to material genuinely relevant to the defence.

A vehicle-recovery contractor claimed that a police authority had unlawfully excluded it from a public procurement exercise following an incident involving the identity and disposal of a recovered vehicle. After disclosure, the contractor sought to amend its particulars of claim to allege that the authority had consciously favoured competitors, rigged the tender process and acted in bad faith.

Deputy Master Rose refused the amendments because they introduced a new claim after expiry of the three-month limitation period. Nicholas Braslavsky QC, sitting as a Deputy High Court Judge, dismissed the contractor’s first appeal. The contractor appealed again, contending that the allegations were further grounds for breach of the same duties of equal treatment and non-discrimination, or could be pleaded in reply to the authority’s defence of grave misconduct under regulation 23(4)(e) of the Public Contracts Regulations 2006.

1. By a majority, the appeal was dismissed. Leveson and Briggs LJJ held that the proposed amendments to the particulars of claim introduced a new cause of action. Patten LJ dissented on that issue.

2. The original claim concerned whether, viewed objectively, the recovered-vehicle incident justified exclusion for grave misconduct. The amendments advanced a substantially different case. They alleged deliberate preference for competitors, conscious bias, corruption and bad faith. An allegation of intentional wrongdoing gives the pleaded facts a different character and constitutes a new cause of action, even where the statutory duty and the operative act of exclusion remain the same. The approach in Paragon Finance plc v D B Thakerar & Co [1999] 1 All ER 400 was applied.

3. The new allegations admittedly did not arise from the same or substantially the same facts as the existing claim. Their introduction after expiry, or arguable expiry, of the relevant limitation period was therefore prohibited by section 35 of the Limitation Act 1980 and CPR 17.4(2). The contractor remained free to commence separate proceedings, subject to any limitation defence.

4. Leveson and Briggs LJJ nevertheless held that relevant allegations could in principle be pleaded in reply. A defence under regulation 23(4)(e) of the Public Contracts Regulations 2006 asserted both that the contractor had committed grave misconduct and that this was a reason for its exclusion. Facts showing that the stated reason concealed deliberate discrimination could therefore rebut that defence.

5. Material pleaded solely in reply cannot constitute a new claim. Serious allegations of bad faith must be pleaded fully and precisely, but only facts genuinely relevant to defeating the regulation 23(4)(e) defence may be included. Irrelevant or merely embarrassing material must be excluded. The existing draft reply was not sufficiently confined, so the question was properly left for a renewed application to the Master.

6. Patten LJ would have allowed amendment of the particulars of claim. In his view, the procurement legislation imposed a single duty, and exclusion was a single breach; the new allegations merely supplied further grounds for saying that the same exclusion was unlawful.

1. Court of Appeal (Civil Division): By a majority, dismissed the second appeal and upheld refusal of the proposed amendments to the particulars of claim. It indicated that relevant allegations could be pleaded by a properly confined amended reply. [2013] EWCA Civ 514

2. High Court, Queen’s Bench Division: Nicholas Braslavsky QC, sitting as a Deputy High Court Judge, dismissed the appeal from Deputy Master Rose.

3. High Court, Queen’s Bench Division: Deputy Master Rose refused permission to amend because the amendments introduced a new claim which did not arise from the same or substantially the same facts and would defeat an arguable limitation defence.