In its recent judgment in WCI v Brown, the High Court has addressed a number of important points of law concerning the joinder of parties and the amendment of pleadings after the arguable expiry of a limitation period.
In the underlying claim, the claimant, WCI, seeks to sue as assignee of a cause of action originally vested in a different company, YZMA. It contends that the Defendant, a former director of YZMA, acted in breach of fiduciary duty by dishonestly appropriating YZMA monies for his own purposes. The claim was commenced on 15 June 2018.
In an earlier judgment dated 12 January 2023 (see here), the Court had held, accepting the Defendant’s contention, that (1) on a proper construction of the assignment agreement, the cause of action had in fact not been assigned to WCI; (2) a further assignment dated 9 October 2022, entered into in an attempt to overcome this defect, could not take effect as a legal assignment because of the rule in The Colombiana concerning notice requirements; and (3) WCI could therefore only maintain the present action only as an equitable assignee, not as legal assignee, for which it would need to apply for leave to (i) join the assignor as an additional party; and (ii) amend the Particulars of Claim to plead the October 2022 assignment.
Accordingly, WCI issued an application to add YZMA as a second claimant and to plead the October 2022 assignment. The Defendant opposed that application on the ground (among others) that it would deprive him of an accrued limitation defence and was barred by section 35(3) of the Limitation Act 1980, CPR 19.6 (alternatively, CPR 19.4(4), CPR 19.2(2) and CPR 17.4(2)).
In its judgment dated 23 June 2023, the Court refused the joinder/amendment application. The judgment contains a valuable discussion (albeit obiter) of two difficult points of law concerning post-limitation amendments and joinder:
The first concerns the test under CPR 19.6(2)(a) (‘the relevant limitation was period was current when the proceedings were started’) as to which the judgment notes, without resolving, a conflict between the test adopted in Jenkins v JCP Solicitors [2019] PNLR 21 and Slough Borough Council v SSE plc [2019] 4 WLR 161: see para 15.
The second concerns the test under CPR 19.6(3)(b) (whether the addition or substitution of a new party is ‘necessary’). As to this, the Defendant relied on Roberts v Gill [2011] 1 AC 240 to contend that there is no jurisdiction to permit an equitable assignee to join an assignor after the arguable expiry of the limitation period if the equitable assignment has not already been pleaded because the words ‘the claim’ in CPR 19.6(3)(b) are a reference to the claim as presently constituted (i.e., disregarding the proposed amendment to plead the equitable assignment). The Court observed that ‘not all of what is said in [the] authorities is necessarily reconcilable, which may in part be due to the “convoluted” drafting of section 35 of the Limitation Act’: para 13.
In the event, it was not necessary for the Court to decide whether there is jurisdiction to permit the joinder/amendment because it had ‘come to the firm view’ that the application should be refused as a matter of discretion (even if there is jurisdiction). The reasons for this included the fact that the loss of a limitation defence (by virtue of the ‘relation back’ rule in section 35(1) of the Limitation Act) is itself a form of prejudice, even if there is jurisdiction to permit the joinder/amendment, and that there had been ‘considerable delay on WCI’s part in pursuing the claim.
As a result, the Court refused the joinder/amendment application and held that ‘if the Claimant wishes to pursue proceedings against Mr Brown, then it will need to issue a fresh claim form’: para 36.
Niranjan Venkatesan acted for the successful defendant, instructed by Buckles Solicitors.
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