Summary

Although the terms of an assignment had been agreed, there had been no equitable assignment prior to the completion of a deed of assignment since the assignor had not given an outward expression of its intention to make an immediate disposition of the subject matter of the assignment.

Facts

On a trial of preliminary issues it fell to be determined whether an assignment by the second claimant company (Q) to the first claimant (F) of its rights of action against the defendants (E), Q's former solicitors and accountants, had taken place before F brought proceedings against E, and if not, whether F could amend his particulars of claim. F's claim alleged that E had negligently advised Q in relation to a purchase of shares. After Q went into compulsory liquidation, it agreed to assign its causes of action against E to F. F issued his claim form, and three hours later, a deed of assignment was completed. E challenged F's right to pursue the claim on the basis that the assignment had not taken place until after the claim form was issued. F contended that (1) there had been an equitable assignment before the claim form was issued because the terms of the assignment had been agreed and only the actual drafting had been done thereafter; (2) if not, he should be given leave to amend his particulars of claim to rely on the deed of assignment.

Held

(1) Although the facts indicated that the terms of the assignment had been agreed, there had not been an equitable assignment before the issue of the claim form as Q had not made an outward expression of its intention to make an immediate disposition of the subject matter of the assignment, Phelps v Spon Smith & Co (Preliminary Issues) (2001) BPIR 326 considered. The assignment was effected on completion of the deed. (2) The modern practice was to allow an amendment, the effect of which was to make good a defect in the claimant's title to sue, even though the event relied on did not arise until after the proceedings had been issued so that in strict law, the claimant did not have a cause of action at the time he issued his process, Maridive & Oil Services SAE v CNA Insurance Co (Europe) Ltd (2002) EWCA Civ 369, (2002) 1 All ER (Comm) 653 applied. Although F's proposed amendment substituted new claims, those claims arose out of substantially the same facts as F's existing claims for the purposes of the Limitation Act 1980 s.35(5)(a) and CPR r.17.4(2), Smith v Henniker-Major & Co (2002) EWCA Civ 762, (2003) Ch 182 applied. In any event, the deed of assignment was a fact already in issue on F's claims as part of E's defence. F sought to do no more than avail himself of E's pleaded assertion that his title to sue derived from the deed of assignment. Given that E would suffer no prejudice, it was appropriate to exercise discretion in favour of allowing the amendment.

Preliminary issues determined