17 March 2021
Under Construction - Q2 2021 – 5 of 5 Insights
In this recent TCC case, the court allowed the owner of several tower blocks to make late amendments to its Particulars of Claim, after the expiry of the limitation period, to introduce a new claim that the contractor was in breach of contract for using a cladding system that incorporated combustible cladding boards. This was on the basis that the new claim arose out of substantially the same facts as were already in issue.
As a matter of procedure, the court also considered that a new claim should not be raised in a Reply.
The dispute concerned allegations of breaches of contract and of negligence against the contractor, Mulalley, in relation to defects at tower blocks in Hampshire, UK. The contractor had carried out refurbishment works, including the design and installation of the cladding, at the tower blocks under a design and build contract dated January 2005. Practical completion of the works had between achieved between December 2006 and April 2008.
In late 2019, proceedings were issued by the current owner, Martlet, just prior to the expiry of the twelve-year limitation period. The owner sought damages of £8 million for remedial works required to the cladding and for a "waking watch" required pending completion of those works. The specific allegations, likely prompted by increased scrutiny following the Grenfell Tower tragedy in 2017, related to various defects in the fire barriers; a failure properly to fix the insulation boards to the external walls; and a failure properly to repair the existing substrate.
In its Defence, the contractor admitted certain breaches, but claimed that those breaches were not causative of the remedial works because the owner was liable and required under the Regulatory Reform (Fire Safety) Order to replace the combustible expanded polystyrene (EPS) cladding.
The owner argued in its Reply that the contractor remained liable since the contractor's use of combustible EPS insulation in the cladding failed to comply with the contract (the EPS case).
In these proceedings, the contractor sought to strike out the EPS case on the basis that it raised a new claim which should have been dealt with in the Particulars of Claim, and was now out of time.
The owner opposed the strike out, and in the alternative, sought permission to amend its Particulars of Claim to include the EPS case.
There were two issues before the court:
On the first issue, the court struck out the EPS case. The EPS case was a new claim and should have been added by an amendment to the Particulars of Claim.
On the second issue, the court was satisfied that although the limitation period had expired, permission to amend the Particulars of Claim could be granted as the EPS case arose out of the same facts or substantially the same facts as those already in the statements of case. The owner's claim had always been concerned with both design and workmanship and the design of the cladding system albeit that there would now have to be a focus on the use of EPS boards.
Late amendments to Particulars of Claim, after the expiry of the limitation period, are at the discretion of the court and are likely to be heavily contested. Although the owner was successful in this application, claimants in a similar position must be prepared to show that any new claim arises out of substantially the same facts as are already in issue.
by Rebecca May