Willmott Dixon Holdings Ltd v Karakusevic Carson Architects LLP & Ors

Issuing proceedings to protect limitation rights is not, by itself, an abuse of process. Abuse arises where the claimant has no known basis for a claim and issues proceedings merely to gain time in the hope that a viable claim will emerge.

The relevant question is whether, when proceedings are issued, the claimant can identify the essence of the claim and set it out at least in rudimentary form. A claim need not be fully particularised, provided its general nature is known and the claimant genuinely intends to pursue it while gathering material for proper particularisation. The court principally assesses the position at issue, although later events may provide evidence of that position.

Willmott Dixon Holdings Ltd sought damages from its architect and other defendants in connection with alleged defects at a residential development. Its Claim Form alleged that the employer, the London Borough of Hackney, had identified defects and intended to pursue Willmott Dixon, which in turn claimed losses from the defendants to the extent caused by their breaches, negligence, contribution or default.

The first defendant applied to strike out the Claim Form as an abuse of process. The issue was whether Willmott Dixon had issued proceedings merely to stop limitation running while waiting to discover whether it had a claim, or whether it already knew the essential nature and contractual basis of the claim despite the absence of full particulars.

1. Application dismissed. The Claim Form was not an abuse of process and the application to strike it out was dismissed.
2. The governing distinction, drawn from Nomura International plc v Granada Group Ltd and USAF Nominee No. 18 Ltd v Watkin Jones & Son Ltd, is between issuing proceedings without any known basis for a claim and issuing proceedings where the general nature of the claim is known but detailed particulars remain to be established.
3. It is abusive to issue proceedings merely to forestall limitation while waiting to discover whether a claim exists or what its basis may be. By contrast, proceedings may properly be issued where the claimant believes it has a claim, can state its general nature, and intends to pursue it while gathering material for particularisation.
4. The decisive question was whether Willmott Dixon knew the essence of its claim when the Claim Form was issued. It did. The claim was for damages for breach of contract. The relevant contractual obligations included reasonable care and skill, warranties concerning compliance with the Building Regulations and an indemnity relating to breaches of the design and build contract. The alleged defects, particularly the fire-safety defects, had been identified in preceding correspondence.
5. The fact that the Claim Form was expressed in general terms did not make it abusive. It was sufficient for KCA to understand the generality or essence of the claim, which could properly be particularised later. The correspondence stating that Willmott Dixon might pursue KCA reflected the contingent nature of liability to the employer, not an absence of intention to pursue the claim.
6. The court assesses abuse principally at the time proceedings are issued. Subsequent events cannot cure an abuse existing at issue, but they may provide relevant evidence of the claimant’s position at that time. The later issue of the employer’s claim reinforced, rather than created, the conclusion that Willmott Dixon had not issued proceedings speculatively.