The Mayor and Burgesses of the London Borough of Croydon v Oasis Community Learning

When limitation is in issue, an amendment application under CPR 17.4(2) requires a sequential four-stage analysis. The court asks whether the amendment is arguably out of time, whether it introduces a new cause of action, and whether that cause of action arises from the same or substantially the same facts as the existing claim. Only then does any discretion to permit the amendment arise.

The comparison must identify the essential facts at a high level of abstraction at stage 2, but must examine the likely factual investigation and evidence at stage 3. A challenge to a different decision, taken at a different time and for different alleged reasons, may therefore constitute a new cause of action even where the same duties and relief are relied upon.

The claimant, as administering authority of the London Borough of Croydon Pension Fund, sought unpaid secondary contributions from the defendant, an employer in the Local Government Pension Scheme. The defendant sought to amend its defence and counterclaim concerning the allocation of assets and liabilities when two academies converted from maintained schools.

The existing pleadings challenged the later adoption of the Method B approach. The proposed amendment alleged that a different, proportionate transfer of deficit approach had been adopted for two earlier conversions and that the process was unlawful because of irrelevant considerations, an improper purpose and inadequate deliberation. The claimant opposed the amendment on limitation and cause-of-action grounds.

The central questions were whether the amendment was time-barred, whether it introduced a new cause of action, and whether it arose from the same or substantially the same facts already in issue.

1. The application to amend was dismissed, except to the extent already consented to by the claimant. The defendant remained free to issue a new claim, with limitation to be determined in those proceedings.

2. The four-stage approach in Re One Blackfriars Ltd applied. It was reasonably arguable that the proposed amendment was out of time. The allegations concerned possible breaches of fiduciary and public law duties arising from the claimant’s role as administering authority and quasi-trustee. It was also reasonably arguable that section 21(3) of the Limitation Act 1980, or section 2 applied by analogy through section 36, was engaged.

3. The proposed amendment introduced a new cause of action. The decision challenged in relation to the earlier conversions was different from the decision concerning Method B. The fact that the claimant owed the same duties, and that the defendant sought the same relief, did not determine the issue. The relevant essential facts included the different decision, the considerations taken into account and the alleged purposes and procedural defects.

4. At stage 3, the amendment did not arise from the same or substantially the same facts. It would require investigation of the 2010 decision-making process, including the role of the actuary and the claimant, which was outside the factual enquiry required by the existing pleadings. Similarity or overlap in the alleged unfairness of the resulting allocation was insufficient.

5. The amendment therefore failed at stage 3. The stage 4 discretion did not arise. The court did not determine definitively the applicable limitation period, the precise boundary between public law and fiduciary duties, or the ultimate merits of the proposed allegations.