Co-Operative Group Ltd v Birse Developments Ltd & Ors

Amendments may be permitted where they rely on already pleaded breaches, even if they claim substantially increased damages or total replacement costs. A later pleading is a new cause of action where it introduces a distinct contractual duty, materially different facts and consequences, as occurred with the alleged inadequate steel-fibre content. Existing defects may nevertheless be relied on causatively to justify replacement, provided the claimant gives clear particulars of the decision to replace, including when, why, how and by whom it was made. A claim for the reasonable cost of remedying pleaded defects remains arguable even where the claimant has undertaken wider replacement works for additional reasons.

The claimant sought permission to re-amend its particulars of claim and schedule of loss in ongoing construction proceedings concerning defective warehouse floor slabs. The Court of Appeal had previously refused an amendment alleging that inadequate steel-fibre content constituted a new cause of action requiring complete replacement of the slabs. The claimant now sought to rely on previously pleaded complaints, including inadequate thickness and defective joints, to justify replacement costs, together with further particulars of miscellaneous defects and an alternative claim for the reasonable cost of partial replacement.

The issues were whether the proposed amendments impermissibly circumvented the Court of Appeal’s decision, whether the miscellaneous matters were sufficiently particularised, and whether the alternative damages claim was legally arguable.

1. Effect of the Court of Appeal decision. The earlier decision concerned a proposed new cause of action based on inadequate steel-fibre content, namely a systemic defect said to prevent the floors accommodating their full design load. It did not preclude reliance on already pleaded defects, including inadequate thickness, defective joints and absence of sawn joints.
2. Causation and amendment. It was reasonably arguable that loss could be caused by several factors, only one of which constituted a breach by a particular defendant. It was also reasonably arguable that replacement could be justified as a reasonable course resulting from several pleaded breaches. Permission was therefore granted in principle to plead that the existing defects caused or contributed to the decision or need to replace the slabs. The claimant had to particularise how, why, when, on what basis and by whom the replacement decision was made, supported by key contemporaneous documents.
3. 70 kN requirement. The contractual specification had always been pleaded. Its loading requirement could be relevant to determining the thickness necessary for contractual compliance, and the amendments did not necessarily introduce a new claim. The claimant had, however, to explain precisely how the requirement related to the pleaded defects and breaches.
4. Miscellaneous amendments. Amendments concerning inadequate thickness and its alleged causes, and potentially defective joints, were permitted only subject to further particularisation. The proposed complaint about floor levels, and other unclear allegations concerning the bespoke double-joint system, were not permitted without proper explanation.
5. Alternative damages. The claim for the reasonable cost of partial replacement remained reasonably arguable. The principles that damages compensate actual loss and should not provide a gratuitous benefit did not necessarily exclude recovery where complete replacement also remedied established breaches. The amendments were allowed subject to the stated caveats and further drafting requirements.

The judgment records that the proceedings had previously been considered by HHJ Judge Stephen Davies and by the Court of Appeal. The Court of Appeal refused permission for an amendment based on the alleged inadequate steel-fibre content as a new cause of action. This judgment held that the Court of Appeal’s decision did not prevent reliance on previously pleaded defects to support a replacement-cost claim.