Martlet Homes Ltd v Mulalley & Co. Ltd

A claimant must plead every ground of claim in its Particulars of Claim. A Reply may introduce facts to refute a defence, but it cannot introduce a new claim establishing liability independently of the existing pleading.

After limitation has expired, a new cause of action may be added only if it arises from the same or substantially the same facts already in issue. Those facts include matters pleaded in the Defence. The rule is not confined to amendments requiring no additional facts. If the threshold is met, permission remains discretionary and requires a fair assessment of prejudice, including the potential loss of a limitation defence.

The claimant owned four high-rise towers relevant to the proceedings. It claimed damages for alleged defects in external cladding installed by the defendant under a design and build contract. The original Particulars of Claim concerned defects in fire barriers, fixings and the underlying substrate.

The Defence admitted some workmanship defects but alleged that they caused no loss because the combustible expanded polystyrene insulation would have required replacement following the Grenfell Tower fire in any event. The claimant responded by pleading in its Reply that the defendant's original use of that insulation was itself a breach of contract.

The defendant applied to strike out that alternative case as a new claim improperly introduced by Reply. The claimant alternatively sought permission to amend its Particulars of Claim after expiry of the limitation period. The court therefore determined whether the alternative case was a new cause of action, whether it arose from substantially the same facts already in issue, and whether permission should be granted.

1. The paragraphs introducing the alternative case were struck out. Every ground of claim must be pleaded in the Particulars of Claim. A Reply is optional and may properly refute a defence by alleging new facts, admitting or denying facts, or explaining why a defence fails. It cannot introduce a new claim by which the claimant seeks independently to establish liability. The prohibition in Practice Direction 16 is broader than the limited power to allow a post-limitation amendment under r.17.4 of the Civil Procedure Rules 1998 (paras 17–24).

2. The proposed allegation that using combustible expanded polystyrene insulation was itself a breach of contract constituted a new cause of action. The essential factual basis of the original fire-safety claim concerned gaps and inadequate fixings that compromised the fire barriers. The proposed case challenged the selection of the insulation material itself. The absence of a new duty or new head of loss did not prevent that material change in the essential factual basis from creating a new cause of action (paras 28–34).

3. For a post-limitation amendment, the court must ask whether the new cause of action arises from the same or substantially the same facts already in issue. Those facts are not confined to the Particulars of Claim and may include facts pleaded in the Defence. The approach established in Goode v Martin, [2001] EWCA Civ 1899, does not impose a further requirement that the claimant rely exclusively on the precise facts pleaded by the defendant or introduce no additional facts. Such a restriction appears neither in s.35(5) of the Limitation Act 1980 nor in the binding construction of r.17.4 (paras 35–47).

4. The proposed claim arose from substantially the same facts as the causation case pleaded in the Defence. That pleading put in issue the combustibility of the insulation, its post-Grenfell unsuitability for high-rise buildings, the resulting need for replacement, and whether that need caused the claimed losses. The statutory threshold was therefore satisfied (paras 45–47).

5. Permission to amend the Particulars of Claim was granted. The claimant had taken an unnecessary risk by failing to plead the alternative case initially, despite the issue having arisen in an earlier adjudication. Nevertheless, the defendant had prior notice of the issue, possessed relevant expert evidence, and had already needed to investigate the cladding design. The principal prejudice was the possible loss of a limitation defence. Balancing that prejudice against the claimant's loss of an opportunity to pursue the alleged wrongdoer, the court exercised its discretion in favour of amendment (paras 48–54).

not stated in the judgment.