Summary

A claimant who had repeatedly sought confirmation as to the identity of the correct defendant from a company in the same group, but had received no reply on that issue from the defendant's solicitors during a period of almost three years, was entitled to amend its claim to add the correct defendant and a declaration that the limitation period did not begin to run until the date of receipt of the defence.

Facts

The claimants (C) sought a declaration that their claims which accrued against the first defendant (D1) before November 14, 2006 were not time-barred.

C sought compensation from D1 for an alleged continuing nuisance by an odour caused by rendering operations from January 1, 2005 until December 24, 2006. In September 2009 C's solicitors had indicated to the second defendant (D2) that they acted for local residents who wished to pursue a remedy against the operator of the factory in question. That letter made it clear that the allegation of nuisance went back a number of years and asked for confirmation of the correct defendant. C’s solicitors received no reply to that or subsequent correspondence. In 2010 C discovered that D2 had been incorporated in April 2006 and issued an application against D2 for pre-action disclosure, again making it clear that the subject matter of the claim related to the period which included 2005. In ensuing correspondence, D2's solicitors failed to indicate when D2 had become responsible for the site. C issued proceedings against D2 alone on December 23, 2010. A group litigation order was issued in 2011. In an amended claim form dated October 31, 2012, C pleaded the successive operation of the site by D1 from a date prior to January 1, 2005 until December 24, 2006 and by D2 from December 25, 2006 until April 30, 2011. In its defence, submitted in July 2012, D2 asserted that it had operated the site from "about the end of 2007". That error was repeated in subsequent documents. D1 pleaded that any claims which were said to have accrued against it before November 14, 2006, namely the date on which D1 accepted that it was deemed to have been served with the amended claim form, were statute-barred.

C contended that (1) D2 was estopped from denying that it had operated the site throughout the period since January 1, 2005; (2) D2 had deliberately concealed a fact relevant to C's right of action, namely that D1 had operated the site until December 23, 2006; (3) the court should exercise its discretion under CPR r.19.5 to permit the addition of D1 as defendant.

Held

(1) If C's estoppel argument were to succeed, it would provide C with a cause of action against D2 in respect of the period between January 1, 2005 and December 25, 2006 where none previously existed and there had been no legal relationship between the parties. Moreover, since D2 was not incorporated until April 4, 2006 it would provide that cause of action against a company which did not even exist for most of the period concerned. To accede to C's submissions on that point would be to permit estoppel to be used as a sword rather than a shield, Pacol Ltd v Trade Lines Ltd (The Henrik Sif) [1982] 1 Lloyd's Rep. 456 considered (see paras 71, 77 of judgment). (2) Concealment of facts relevant to the cause of action pursuant to the Limitation Act 1980 s.32(1)(b) might be in the form of non-disclosure as well as active concealment. On the evidence, C did not know that any claim for damages for nuisance during the period 2005 to 2006 should be directed against D1. It was illogical to infer that they did know that fact but chose nevertheless to proceed against D2 instead. There had been active misrepresentation by D2 which caused C to believe that D2 was the correct and only defendant for the whole of the relevant period. From the outset, C had specifically sought confirmation that they had correctly identified the defendant to be sued but had received nothing from D2 to identify D1 as the party responsible for the site for a significant part of the claim. A close collaboration could be inferred between D1 and D2 as members of the same group. Thus, the conduct of D2 positively led C to believe that D2 was the only appropriate defendant. Moreover, the failure of D2 to inform the court at the time of the group litigation order that D1 was responsible for the site in 2005 to 2006 was a serious breach of duty under CPR r.1.3. Accordingly, the period of limitation for C's claim against D1 did not begin to run until C could with reasonable diligence have discovered that it was the appropriate defendant between January 1, 2005 and November 14, 2006. The earliest date on which they could have done so was on receipt of the defence in July 2012 (paras 81, 84-92, 99). (3) It was known to both D1 and D2 that C wanted to sue the company responsible for the operation of the site from January 1, 2005. A mistake as to whether that company was D1 or D2 at a particular time could properly be regarded as a mistake as to name rather than as to identity. Therefore, the addition of D1 was an amendment which came within CPR r.19(5)(3)(b). Alternatively, it would come within r.19(5)(3)(a). It was consistent with the overriding objective of dealing with the case justly to permit the amendment (paras 108-112).

Judgment for claimant in part