Case No: HT-03-269
Neutral Citation Number: [2004] EWHC 3264 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: Thursday, 21st October 2004

Before :

HIS HONOUR JUDGE TOULMIN CMG QC
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Between :

	Mersey Docks Property Holdings Ltd & ors	Claimant	
	- and -		
	Birse Construction Lrd & 4 Orsy	Defendant	

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MISS F. SINCLAIR (instructed by Fox Williams) for the CLAIMANTS
MR. P REED (instructed by Kennedys) for the FIRST DEFENDANT
MR. G. HOLLAND (instruted by Squire & Co) for the SECOND DEFENDANT
MR. D. TURNER (Halliwell Landau) for the THIRD DEFENDANT
MR. A. WILLIAMSON QC (Fishburns) for the FOURTH DEFENDANT
MR. R. COPLIN (CMS Cameron McKenna) for the FIFTH DEFENDANT
Hearing dates : Tuesday, 21st October 2004
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Judgment
HIS HONOUR JUDGE TOULMIN CMB QC:

1.   This is the claimant's application for permission to amend the Particulars of Claim to include the claims identified in A to D of the schedule to the order at the case management conference of 18th June 2004.  The draft amended Particulars of Claim amount to a substantial reorganisation of the Particulars of Claim.  Some of the defendants allege that the allegations amount to new causes of action which are time-barred.

2.   Paragraph 1 of the schedule to the order of case management identifies the following issues to be considered at this hearing:

		"1.   Do the facts and matters set out in the draft amended Particulars of Claim and are identified in Schedule A thereto or any of them, add or substitute a claim involving a new cause or causes of action within the meaning of the Limitation Act and/or CPR Rule 17.4?

		2.   If the answer to issue 1 is yes, in relation to all or any of the facts and matters set out in the draft amended Particulars of Claim and identified in Schedule A, does the new cause or causes of action arise out of: 

			(a) the same facts or substantially the same facts as are already in issue on any claim previously made in the action,

			(b) the same facts or substantially the same facts as a claim in respect of which the claimants have already claimed a remedy in the proceedings.

		3.   Should the claimants be permitted to amend the Particulars of Claim so as to include the facts and matters set out in the draft amended Particulars of Claim and identified in Schedule A or any of them?"
Schedule A refers to paragraphs 31 (iv), (v) and (vi) and 34 (iii), (vi) and (vii), 34 (iv) and 34 (vi)(iii) of the draft amended Particulars of Claim.

3.   The claim arises out of a fire at a cold storage and distribution centre at Spade Lane, Hartlip, Sittingbourne, Kent, that on 4th August 1997, as a result of which the building owner and tenant suffered losses estimated at about £16.5 million.  

4.   The plant was constructed in 1995/1996.  Birse Construction Limited (Birse) were the head contractors, and the other defendants were subcontractors.  The second defendants, Broadway Malyan, were a firm of chartered architects.  The third defendants, Fordham Johns, were the consulting civil structural and highway drainage engineers.  The fifth defendants, Frank Graham, practised as consulting engineers.  The fourth defendant,
Kilgour, is temporarily out of the action, but was an architect retained at the relevant time by Sheerness.  

5.   The defendants contend that various parts of the draft amended Particulars of Claim should not be permitted by reason of the Limitation Act 1980 and CPR Part 17.4.

6.   There was at the start of the hearing, also a more general objection that, as a matter of good case management, I should not permit, as a matter of discretion, any of the amendments.  I shall deal with the question of discretion after considering the Limitation Act defences.

The Law.

7.   Section 35 of the Limitation Act 1980 (the Act) provides in so far as is relevant to this application:

		"35(1) For the purposes of this Act, any new claim made in the course of any action shall be deemed to be a separate action and to have been commenced:-

			(a) in the case of a new claim made in or by way of third party proceedings, on the date on which those proceedings were commenced; and

			(b) in the case of any other new claim, on the same date as the original action.

		(2) In this section a new claim means any claim by way of set-off or counterclaim, and any claim involving either --

			(a) the addition or substitution of a new cause of action; or

			(b) the addition or substitution of a new party;

		(4) Rules of court may provide for allowing a new claim to which subsection 

(3) applies [other than an original set-off or counterclaim] ....but only if the conditions specified in subsection (5) below are satisfied, and subject to any further restrictions the rules may impose.

		(5) The conditions referred to in subsection (4) above are the following --

			(a) in the case of a claim involving a new cause of action, if the new cause of action arises out of the same facts or substantially the same facts as are already in issue on any claim previously made in the original action..."

8.  Part 17.4 of the Rules applies to amendments of statements of case after the end of the limitation period and follows the guidance in the Act.  Part 17.4(2) is the material provision.  It provides:

		"(2) The court may allow an amendment whose effect will be to add or substitute a new claim, but only if the new claim arises out of the same facts or substantially the same facts as a claim in respect of which the party applying for permission has already claimed a remedy in the proceeding."

9.  The precise meaning of 17.4(2) is in issue in this case.  No-one has been able to find an authority directly in point on the question of whether or not the claim referred to relates to that party to which the amendment relates, or to any party in the proceedings.

10.   There are in law three separate questions:

		a.  Does the proposed amendment plead a new cause of action?

		b.  Does the new cause of action arise out of the same facts or substantially the same facts as a claim in which the party applying for permission has already claimed a remedy in the proceeding?

		c.  Under CPR Part 1.2(b) the court has a discretion to allow or disallow amendments in giving effect to the overriding objective, provided that it does so in a manner compatible with  the Convention rights set out in Schedule 1 of the Act (Human Rights Act 1998, Section 3(1)).

11.   The general question "What is a new cause of action?" was answered by Diplock LJ in Letang v. Cooper [1965] 1QB 232, where he said,

		"A cause of action is simply a factual situation, the existence of which entitles one person to obtain from the court a remedy against another person."
12.  In Steamship Mutual Underwriting Limited v. Trollope & Colls Ltd [1986] 6 CLR 11, page 36, May LJ said,

		"In the light of the definitions of a cause of action already referred to, I do not think one can look only at a duty on a party, but one must look also to the nature and extent of the breach relied on as well as the nature and extent of the damage complained of, in deciding whether as a matter of degree a new cause of action is sought to be relied on.  The mere fact that one is considering what are, as it is said after all, only defects to the same building, does not necessarily mean in any way that they are constituents of one and the same cause of action.”
         
13.  In Steamship Mutual at pages 33 and 34, May LJ canvassed the argument that one possible test would be whether a plea of res judicata would succeed in subsequent proceedings.  My understanding is that while this might be a useful cross-check in certain circumstances, it is not a definitive test.  The test is whether the issues realistically before the court in the hypothetical second action, were before the court in the hypothetical first action.

14.   In Savings & Investment Bank v. Finken [2001] EWCA (Civ 1639) the Court of Appeal considered what facts could be taken into account in considering whether the new cause of action arose out of the same facts or substantially the same facts as an existing claim.  It reinforced the decision in Paragon Finance v. Thakerar [1999] 1 AllER 400, page 405, where Millett LJ emphasised that,

		"only those facts which were material to be proved could be taken into account."
15.  In paragraph 30 of his judgment, Peter Gibson LJ said,
		"As I see it, the exercise which is required is the comparison of the pleading in its state before the proposed amendment, and the pleading in its amended state.  What must be examined is the pleading of the essential facts which need to be proved.  To define the cause of action, the non-essential facts must be left out of account as mere instances or particulars of essential facts.  That is what I understand Millett LJ to have meant by stating that 'the selection of material facts must be made at the highest level of abstraction'."
16.  I should also bear in mind paragraph 22 of the judgment of the Court of Appeal in Hemmingway v. Smith-Rodham [2003] EWCA (Civ 1324) which quotes the dictum of Hobhouse LJ,

		"The policy of the section is that if factual issues are in any event going to be litigated between the parties, the parties should be able to rely on any cause of action which substantially arises from those facts."
17.  In relation to the question of construction, I should also bear in mind the decision in Goode v. Martin [2002] 1 ALL ER 620, where the Court of
Appeal construed Part 17.4(2) with the words "as are already in issue" between the words "same facts as" and "a claim in respect of which."

18.  The Court of Appeal had to consider the law afresh after the Human Rights Act 1998 had come into force.  In Aldi Stores v. Holmes Buildings [2003] EWCA (Civ 1882), the leading judgment was given by Dyson LJ.  In relation to question (a), he reaffirmed Diplock LJ's definition of cause of action in Letang v. Cooper.  He also affirmed the existing law in relation to the second question.  He said that,

		"whether or not the cause of action arose out of the same or substantially the same facts was essentially a matter of impression in borderline cases, although in others it must be a question of analysis."
19.  Dyson LJ went on at paragraph 31 of the judgment to consider the question of discretion.  He reaffirmed the general principles governing the courts' approach to an application to amend pleadings set out by Bowen LJ in Cropper v. Smith (1884) 26 CLD 700 at 710-11, which has been cited on many occasions:

		"It is a well established principle that the object of courts is to decide the rights of the parties, not to punish them for mistakes they make in the conduct of their cases, by deciding otherwise than in accordance of their rights... I know of no kind of error or mistake which if not fraudulent or intended to over-reach the court, ought not to be corrected if it can be done without injustice to the other party.  Courts do not exist for the sake of discipline, but for the sake of deciding matters in controversy, and I do not regard such amendment as a matter of favour or grace... It seems to me that as soon as it appears that the way in which a party has framed its case will not lead to a decision of the real matter in controversy, it is as much a matter of right on his part to have it corrected if it can be done without injustice, as anything else in the case is a matter of right."
20.  Dyson LJ went on to cite the passage in Clampede v. Commercial Union (1883) WR 262 at 263, where Brett MR said,

		"There is no injustice if the other side can be compensated in costs."
21.  At paragraph 37 of his judgment, Dyson LJ said that,
		"there was no neat all embracing definition of what constituted an abuse of process,"
but the broad principle was encapsulated in Lord Diplock's statement in Hunter v. Chief Constable of West Midlands Police [1982] AC 529, 536.  Lord Diplock said that,

		"the power to strike out, which any court of justice must possess to prevent misuse of its procedure, in a way which although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right thinking people."
22.  The defendants have taken account of Dyson LJ's judgment in Aldi Stores, but say that the Civil Procedure Rules require the court to consider all the amendments within CPR Part 3.1(2)(m), which empowers the court to,

		"(m) take any step or make any other order for the purpose of managing the case and furthering the overriding objective."
23.  CPR Part 1.4 requires the court to manage cases with the overriding objective.  The defendants contend that active case management in the context of this case, requires the proposed amendments to be considered with great care.  Originally they wished to argue, in the course of this summons, that the amendments should be refused as a matter of discretion on these grounds.

24.  However, in the course of the hearing, they set out what was a compromise proposal, and since in general terms that is the approach which I propose to follow, I do not propose to say more, except at the end of this judgment, in relation to the question of discretion.  I shall therefore not make rulings on the individual items on the question of discretion, but I will indicate at the end of the judgment what seems to me to be the appropriate way forward.

The Facts.

25.  This summons that permission to allow amendments to the Particulars of Claim should be refused, arises, as I have already said, out of litigation resulting from a fire on 4th August 1997 at a cold storage and distribution centre at Spade Lane, Hartlip, Sittingbourne, Kent.  The claim is a complicated one. 

26.  I have already identified the defendants.  I should now identify the claimants in the Particulars of Claim.  The first claimant, Wakeley, provided storage, grading, packaging and distribution facilities for the fruit industry.  By an agreement dated 3rd December 2001, its assets and liabilities were transferred to the second claimant, Sheerness Cool Stores Limited (Coolstores).  The third claimant, Sheerness, is a subsidiary of the fifth claimant, Mersey Docks.  By an agreement dated 23rd November 2001, the assets and liabilities of Sheerness were transferred to the fourth defendant, Mersey Docks Property Holdings Limited (Holdings).

27.  In the proposed amended Particulars of Claim, Holdings is the first claimant.  It has contracts under seal with Birse and Frank Graham.  These claims are therefore not statute barred and do not come within the Limitation Act.  Wakeley and Sheerness do not have contracts under seal, and the claims against them are made in tort.  

28.  The original claim is that by a contract dated 1st September 1995, Sheerness engaged the first defendant, Birse, to design and construct the storage centre.  In the Particulars of Claim, (paragraph 9) it is alleged that Birse gave various collateral warranties to Sheerness.  The other defendants are alleged to be Birse's subcontractors.  Paragraph 9 sets out the terms of Birse's warranty between Birse and Wakeley, relating to the exercise
of care and skill in design, selection of goods and materials, workmanship, et cetera.

29.  In paragraph 10 it is alleged that all the remaining defendants gave similar collateral warranties to both Wakeley and Sheerness.  The paragraph went on to contend that the design work should have been carried out with skill and diligence, and that subcontract works would comply with any specification in the building contract.

30.  In paragraph 12, it is alleged further and in the alternative, that it was an implied term of the contract and/or the collateral warranties, that the defendants would exercise reasonable skill and care in the design and construction of the premises. 

31.  It is alleged in paragraphs 14 and 15 of the Particulars of Claim that the severity and extent of the damage caused by the fire (which spread throughout the premises in one and a half hours) was caused by the breach of contract and/or negligence of the defendants. 

32.  Paragraph 15 identified as a particular of the general allegation, that it was the claimant's case that where applicable, the defendants breaches of contract and/or negligence, extended to a failure to warn the claimants of the potential consequences of the matters set out below.

33.  There then followed specific allegations in relation to fire curtains and fire walls.  Paragraph 15.(i) relates to the unsuitability of the curtains, and alleges that the fire walls should have been extended to roof height.  Paragraphs 15(ii) and 15(iii) are not relevant.  Paragraph 15(iv) alleges that the fire curtains were fixed to the underside of the roof sheeting by a metal angle which was of inadequate/insufficient strength, causing the fire curtain to collapse more quickly.  Paragraph 15(v) alleges that the compartment wall sandwich panels were secured by steel angles fixed with aluminium alloy rivets.  These rivets were unsuitable, in that they would have melted at an early stage of the fire, causing the compartment walls to collapse more quickly.  Paragraph 15(vii) alleges that the fire curtain material, used at the top of the compartment walls, was not of an adequate robustness and/or insulation and/or integrity, to be properly used as part of a compartment wall.

34.  The claimants allege that the allegation goes wider than the Particulars, and on a proper reading is an allegation that the fire walls were inadequate from bottom to top, so that they failed to stop the fire as they should have done.

35.  The Claimants argue that the draft amended Particulars of Claim does no more than endeavour, to set out the existing allegations of negligence and the obligations of the parties with much greater clarity and precision.  It is conceded by the claimants that the words "and its customers", must be deleted from the fourth line of draft 
paragraph 28.  

36.  Wider limitation objections were taken originally by various defendants to parts of paragraphs 31 and 34 of the draft amended pleading.  As I understand it, the objections are now confined to paragraph 34, although there are objections which are in one sense reserved in relation to the pleading in paragraph 31.  

Birse's objection on the draft amended pleading.

37.  There are contracts under seal between Holdings and Birse.  In respect of Holdings, the issue under the Limitation Act does not apply.  Birse originally took objection to paragraphs 31(iv) and (v) as well as paragraph 34(iv) of the draft.  It is accepted that paragraphs 31(1) to (iii) are similar to the relevant subparagraphs, in paragraph 15 of the pleading.  Birse offered a compromise in relation to paragraph 31.  That compromise was not, as I understand it accepted by the claimants.

38.  I shall therefore refer briefly to paragraph 31, but since I propose to exercise management powers in relation to the whole case along the lines proposed by the defendants, I shall not, as I have said, give a ruling on it specifically at this stage, subject to hearing any submissions at the end of the judgment.

39.  The relevant sections are as follows;

" Paragraph 31 (iv):

		"The fire curtain was fixed to the underside of the roof sheeting by steel angles.  The steel angles were not clad or otherwise treated so as to protect them against the distorting effect of fire, and so would provide inadequate support to the fire curtains under fire conditions."

Paragraph (v):

		"The steel angles fixing the top of the fire curtain to the underside of the roof were secured using aluminium alloy rivets rather than steel rivets.  Aluminium alloy rivets would melt at a much lower temperature than steel rivets, causing the fire curtain to collapse more quickly under fire conditions.  In this respect, construction of the fire curtain was not in accordance with the manufacturer's instructions."

Paragraph (vi):

		"The shutters in the fire curtain section of the fire wall were fixed to the curtain by angled steel support brackets.  Aluminium alloy rivets were used to fix each shutter and its support brackets.  Those rivets were unsuitable for use in the construction of the fire curtain and would result in the fire curtain collapsing more quickly under fire conditions."
40.   Draft paragraph 34 alleges that the severity
and extent of the fire damage to the building and its contents, was caused by breach of contract and/or negligence on the part of the defendants.  Birse takes objection to paragraph 34(4) which alleges that:

		"Birse failed to appreciate and/or to warn Sheerness that the use of a fire curtain in this way created a risk that radiant heat would be transmitted to and ignite combustible panels on the western side of the wall on grid line C, in well under two hours."
41.  The claimants case is that none of the amendments, except paragraph 34, raise a new cause of action.  In relation to paragraph 34(4), they contend that it does raise a new cause of action, but the claim arises out of the same or substantially the same facts and matters as those already in issue in the proceedings.

42.  The issue in relation to paragraph 34(4) is whether it arises out of the same or substantially the same facts as those already pleaded.  Mr. Stuart QC helpfully summarised the point in oral argument as follows:

		"So what we are alleging is that they failed to do what they were required to do by the building contract, which was to get warranties from the subcontractors.  If and in so far as we do not recover from then, that is a consequence of the failure to provide these warranties.  So that is the case we are seeking to introduce."
43.  In seeking to make good the point, the claimants say the original points of claim included claims by Spade Lane for breach of a collateral warranty from Birse, and by Wakeley Brothers/Spade Lane, for breach of collateral warranties from Broadway Malyan and Fordham Johns (paragraph 10). 

44.  The claimants contend that the trial of these claims would involve resolution of the following facts:  first, whether the collateral warranties were executed; secondly, in what terms they were executed; thirdly, whether they were breached as alleged, and; fourthly, the consequences in factual and financial terms of the breaches.  The new claim against Birse would require consideration of the same facts.

45.  In relation to the new claim, they say that while it is clear that there will be a dispute as to whether Birse owed a duty of care to Wakeley Brothers or Spade Lane, it is difficult to see that substantially new facts would require investigation in order to resolve the dispute.  

46.  In response, Mr. Reed says that the statute is not intended to refer to the causes of action against all the defendants, but the cause of action against the particular defendant, i.e. Birse.  Facts against the other defendants are of no concern to Birse.  It does not have to plead to them and is not bound by them.

47.   He claims to rely on the approach of the Court of Appeal in Goode v Martin and Hemmingway v. Smith-Rodham, which although not decisive, Mr. Reed says supports his case.  Mr. Reed says that although the commentary in the White Book is not decisive, there are no policy considerations why a claimant should be entitled to rely on the facts in issue against other defendants.

48.   Mr. Reed rightly contends that whatever the answer to his first submission, the court in its consideration of whether the new cause of action is similar or substantially similar to the existing pleading, must be careful to exclude pleaded facts which are not relevant to support the claim.

49.   Mr. Reed says that there is no allegation with paragraph 9 to procure a collateral warranty.  He says that the differences between the two concepts is fundamental; one requires consideration of the exercise of due care and skill by Birse procuring a collateral warranty -- that exercise is different from the evidence that is required in relation to the existing paragraph 9.  The duty to procure a collateral warranty requires investigation of the scope of duty, which is different in relation to the failure to procure a collateral warranty as opposed to a breach of a collateral warranty.  The damage that flows, so it is said, is wholly different. 

50.   Mr. Reed notes that the breaches at paragraph 15 relate to design and workmanship allegations.  No facts and matters, he says, could be pleaded in relation to the failure to procure a collateral warranty.

51.  In reply, Mr. Stuart says that CPR 17.4 must be construed according to its precise wording, the result of which is that the court may allow an amendment whose effect will be to add or substitute a new claim, but only if the new claim arises out of the same or substantially the same facts as the claim in respect of which the party applying for permission has already claimed a remedy in the proceedings.  The words "in the proceedings" are important.  The rule could have said "against that party in the proceedings."  It did not do so.

52.  Having been greatly assisted by the submissions of Mr. Stuart and Mr. Reed, I conclude with considerable diffidence that CPR 17.4 should be construed in the wider sense contended for by the claimants.  It seems to me that the amendment arises out of substantially the same facts as claims which the claimant has made in the proceedings, and I propose therefore to allow the amendment subject to the issue of discretion which I shall deal with later in the judgment.

53.  I should emphasise that the issue of discretion is of the greatest importance particulary in relation to allowing draft amendments made on the basis that they arise out of claims made against other parties to the proceedings.

Broadway Malyan.

54.  Broadway Malyan takes a similar position to Birse in relation to draft paragraphs 31(v) and (vi).  It also takes objection to draft paragraph 34(vi)(iii).  Paragraph 34(v) provides the general allegation (to which objection is not taken):

		"(v) Completion of the building with all or any of the defects set out at paragraph 31 above, of which Broadway Malyan was or ought to have been aware, amounted to a breach by Broadway Malyan of its duties of care at common law to Sheerness and to Wakeley Brothers."
Subparagraph (vi) sets out specific allegations.  Subparagraph (iii) is as follows:
		"(iii) pending further disclosure by Broadway Malyan, the claimants do not yet know whether the defects complained of at paragraphs (v) and (vi) above (use of aluminium rather than steel rivets) were a defect in design or in construction..."

55.  Then appears the passage to which objection is taken:
		"If and to the extent that there were workmanship defects, Broadway Malyan ought to have identified those defects during their visits to site, alerted Birse to the same and warned that such use(s) of aluminimu rivets would compromise the integrity of the firewall under fire conditions.”
56.  This has been referred to as the workmanship allegation.  In the light of the exchange of skeleton arguments, Broadway Malyan maintains its opposition to the proposed amendments in so far as they relate to workmanship.  

57.  Broadway Malyan (BM) says that the pleaded case against BM is that BM was aware that the building was owned by Sheerness, and Sheerness intended to let the building to tenants, and that BM should have been aware that Sheerness would rely in BM to exercise skill and care in the performance of its appointment by Birse, specifically in the design of the building and the advice given to Birse in connection with that design.

58.  It is suggested that the former pleading, paragraph 12, was that the defendant would exercise reasonable care and skill in the design and construction of the building.  BM says that in relation to the generalised pleading at paragraph 12, that the defendant would exercise reasonable care and skill in the construction of the premises, the only fair way to read it is that the design allegation relates to the designers, and the construction allegation to the constructors, and therefore construction allegations in the original pleading could not be directed against BM.  BM further contends that even if that submission is rejected, the allegations now being made are not construction allegations, but a failure to visit, a failure to spot defects and alert Birse to defects.

59.  The third contention is that the amendment must be considered in relation to an existing claim and not an abandoned claim.

60.  In response, Mr. Stuart makes three points.  First, there is no new cause of action in relation to workmanship or design.  Secondly, you have to look at the original Particulars of Claim in order to reach a conclusion.  Thirdly, he makes a point on discretion.  His main point is that his clients are in the same position as the injured claimant in Goode v. Martin, who because of his injuries was unable to recall what had happened in the accident. 

61.   Mr. Stuart said that his clients are in a similar position in relation to the fire, and that CPR 17.4(2) should be interpreted to permit the court to allow an amendment whose effect will be to add a new claim, but only if the new claim arises out of the same facts or substantially the same facts are already in issue on a claim in respect of which the party applying for permission has already claimed a remedy in the proceedings.

62.   Mr. Stuart also contends that his clients do not know who designed the rivets -- either BM did the design wrongly, or failed to point out that the aluminium rivets had been wrongly designed.

63.   Mr. Stuart also contends that the original pleading alleges a warranty that BM would exercise reasonable care and skill in what they had to do in relation to the contract.  

64.  I do not accept BM's argument that paragraph 12 must be construed restrictively, so that design allegations are confined to designers and construction allegations to the contractors.

65.   Nor am I able to accept the argument that the allegations relating to a failure to visit, failure to spot defects and to alert Birse to defects, could not be inherent in allegations relating to the exercise of reasonable care and skill in design and construction of the building.  

66.  Even if I am wrong about this, I reach the further conclusion that if this is a new cause of action, it is one that arises out of the same facts or substantially the same facts as those that are already at issue in the claim, in respect of which the party applying for permission has already claimed a remedy in the proceedings.

Fordham Johns

67.  Fordham Johns does not advance any submissions in relation to the Limitation Act, but contends that the court should exercise its discretion to disallow any amendments against it.  It also contends that if the claimants fail against Frank Graham, they must also fail against Fordham Johns.  They support Birse's proposals in relation to further information and review of the case.

Frank Graham

68.  In so far as there are claims arising out of the contract under seal between Holdings and Frank Graham, the Limitation Act points do not arise.  Otherwise, Frank Graham claims that the proposed amendments at paragraph 31(iv) and (vi) and paragraph 34(x) are new causes of action which do not arise out of the same or substantially the same facts as those already pleaded.  34(x):

		"Frank Graham was or ought to have been aware of the defects at 31(iv) and (31(vi) listed above, in breach of his said obligations in contract and at common law to Sheerness and at common law to Wakeley Brothers."

		"(1) Frank Graham failed to report to Harris those features which represented changes in Birse's contractor proposals in respect of structures, and were defects in as much as they seriously compromised the fire resistance of the wall at grid line C.

		(2) Alteratively, the defect at paragraph 31(vi) represented poor workmanship which Frank Graham failed to observe on his site monitoring visits."

69.  The claimant says that Frank Graham makes two points, neither of which is well founded.  The first point is that in the Particulars of Claim there is an allegation of a contractual duty between Sheerness, one of the claimants, and Frank Graham, and also between Wakeley Brothers and Frank Graham.  On receipt of the documents, it appears that there was a single contract under seal between Sheerness and Frank Graham, and therefore the claimants narrowed their case in the proposed amendment.

70.  In addition, in the Particulars of Claim, the claimants allege tortious duties imposed on Frank Graham in respect of each of the defendants, to exercise reasonable skill and care in the design and construction of the building.  The defects alleged related to the fire wall at grid line C.  In the draft amendment, it is said that all that has happened is that particulars have been given of the duty to warn, that duty having been pleaded in the original Particulars of Claim.  

71.  Mr. Stuart QC for the claimants asks rhetorically,

		"Suppose we were to come along with the draft amendment, having lost on the original Particulars of Claim.  What would have been the result?"
72.  He suggests the answer would have been that the issue was res judicata and the proposed amendment would have been struck out.  The two passages which cause difficulty relate to the failure to report to Harris, as Sheerness employer's agent, defects in breach of its obligations in contract and at common law, and failure to observe poor workmanship.  Mr. Stuart asks rhetorically,

		"What is it about the new case which constitutes a new cause of action?"
73.  The allegation of poor workmanship is one which alleges that Frank Graham ought to have observed poor workmanship on site visits.  This may well amount to a new cause of action, on the basis that I have already discussed in the case of Broadway Malyan, although I have already indicated that I doubt whether it is a new cause of action.  Even if it is, in my view it arises out of the same or substantially the same facts as the claim in respect of which the claimant has already claimed a remedy in the proceedings.  

74.  I note that in its skeleton, Frank Graham's counsel says that discretion is likely to be the most important issue in relation to his case.  The note raises serious questions to be addressed as to the future conduct of the litigation by the claimant against this defendant, and I well understand the points which are made in that regard.

Discretion

75.  In the course of argument, I raised the question of the extent to which the issue of discretion could be introduced into this hearing.  I said that the purpose of the hearing was to enable the defendants to raise all objections in relation to allegations which they said raised new causes of action, including the argument that I should not exercise my general discretion in favour of the claimants to allow the amendments. 

76.  The claimants originally interpreted a previous order as debarring the defendant from raising questions of discretion.  This was not the intended consequence of the order.

77.   In the course of the hearing, the defendants said that they would not press for determination of the issues which they claim were matters of discretion, provided they had an opportunity to put together a request for information in relation to the proposed amended Particulars of Claim.  The claimant would respond to that request within a comprehensive pleading, which should be substituted for the existing Particulars of Claim.  The defendants would then have an opportunity to deal with that, after which the claimants would have an opportunity to serve a reply to the defendants.  

78.  I had hoped to complete my judgment by or soon after 25th August 2004.  Unhappily, this was rendered impossible by my domestic circumstances, and this has no doubt caused some delay.  I am satisfied that this approach is the right way forward, and I will hear the parties on the aspects of the case as to the precise orders that I should make.

79.  A large part of the problem in this case has been caused by the fact that all the documents were lost in the fire.  This has clearly hampered the claimants in their preparation of the case.  Nevertheless, the clamiants have now had a considerable time to assemble their case.  It is important that the case should be accurately pleaded, both in relation to facts and causation.  Two broad issues need to be addressed as a matter of urgency: (1) which are the parties that ought to be concerned with the action, and (2) what precisely are the issues that can properly be pleaded against them.  I propose that a time be set aside in the near future so that these matters can be considered in detail.