Benjam Goldkorn v MPA (Construction Consultants) Ltd & Anor

Under CPR 19.6, substitution after expiry of the limitation period remains discretionary, even where the statutory conditions for substitution are satisfied. The court must apply the overriding objective and consider all relevant circumstances, including the applicant’s conduct, delay, prejudice, cost and effect on other court users.

Substitution may also be refused as an abuse of process where a party could and should have advanced its claim earlier, and allowing the application would render earlier proceedings pointless and unfairly prejudice the opposing party. Conduct sufficiently outside the norm may justify indemnity costs.

This was the second judgment in proceedings concerning a claim by Mr Goldkorn against MPA. Following the first judgment, Kazu Restaurants 1 Ltd, the second defendant, applied under CPR 19.6(3)(b) to be substituted as claimant.

The limitation period was accepted to have expired by the time of the application. It was common ground that the claim could not properly continue by Mr Goldkorn unless Kazu 1 was substituted, but there was a dispute about whether the relevant limitation period had been current when the proceedings began. The court also considered the applicant’s delay, the parties’ prior positions and whether the application was abusive.

1. Application refused. The court refused Kazu 1’s application for substitution under CPR 19.6(3)(b), exercising its discretion against the applicants. Costs were awarded against Mr Goldkorn and Kazu 1 jointly and severally on the indemnity basis.
2. CPR 19.6 permits substitution only where the relevant limitation period was current when proceedings were started and substitution is necessary. Even if those conditions are satisfied, the opening words confer a discretion to refuse the application. That discretion must be exercised in accordance with the overriding objective, including consideration of cost, delay, prejudice, the applicant’s conduct and the interests of other court users.
3. The court found that the Liquidator’s change of position was not a material change caused by the first judgment. The need for Kazu 1 to carry on the claim resulted from the PM Appointment and its interpretation. The Liquidator and Mr Goldkorn could have adopted the relevant position from the outset, which would have avoided the preliminary issues hearing.
4. The application was independently refused as an abuse of process under the doctrine of Henderson v Henderson, as explained in Johnson v Gore-Wood. Kazu 1 could and should have brought any claim against MPA earlier. MPA had prepared for and incurred the cost and delay of the preliminary issues on the basis that a successful defence would conclude the litigation. Allowing substitution would make that process pointless and would cause manifest prejudice and unfairness.
5. The limitation issue was not determined because it was unnecessary to do so. The court considered that, if further proceedings were brought, the issue might require fuller argument.