Legal Watch - Property Risks & Coverage - Issue 6

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  • Legal Watch:Property Risks & CoverageJune 2014

    Issue 006

  • In This Issue:

    Welcome new colleagues

    Re-amendment of claim not permitted

    A brief post Mitchell update

    Relief from sanctions late service of witness

    evidence

    Consequential losses can be recovered under the

    Riot (Damages) Act 1886

    Landowners duty where her tree fell onto railway

    line

    Contact UsIf you would like any further information on the cases or articles featured in this issue, please contact:

    Nathan Rehbock

    T: 0207 469 6242

    E: njr@greenwoods-solicitors.com

    Marise Gellert

    T: 0207 469 6249

    E: msg@greenwoods-solicitors.com

    IntroductionThanks this month go to Nathan Rehbock for his article on Co-

    operative Group Ltd v Birse Developments Ltd & Ors.

    The post Mitchell debate continues and once again, we could

    fill an entire issue with cases on relief from sanctions. Instead

    we have provided a brief post Mitchell update and featured

    one particularly interesting case, Gordon v Fraser (No.1),

    where relief was granted in respect of witness evidence on the

    first morning of the trial.

    We also look at the landmark Court of Appeal decision on

    consequential losses under the Riot (Damages) Act 1886 (see

    Mitsui Sumitomo Insurance Co (Europe) Ltd & 5 Ors v Mayors

    Office for Policing & Crime below) and the case of Stagecoach

    South Western Trains Ltd v Kathleen Hind & Andrew Steel

    which looks at the duty owed by a neighbouring landowner in

    respect of a tree that fell onto a railway line.

  • Welcome new colleagues

    Daniel Carter

    Dan comes to Greenwoods Property Risks & Coverage

    Group with substantial experience of subrogated recoveries,

    having acted for some of the countrys biggest household

    insurers across all perils but with particular experience of

    complex litigation claims involving fire and subsidence.

    He has dealt with parties ranging from sole traders to

    international companies and councils throughout the

    country.

    Lori McConnachie

    Lori began her legal career in 2005 as a paralegal in a national

    insurance litigation firm, where she went on to undertake

    her professional training. She qualified as a solicitor in 2012.

    Lori has experience in defending property damage claims,

    advising on coverage issues and pursuing subrogated

    recoveries on behalf of insurers. She has a particular interest

    in disputes arising in the construction industry.

  • Re-amendment of claim not permittedIn the case of Co-Operative Group Ltd V (1) Birse

    Devlopments Ltd (In Liquidation) (2) Stuarts Industrial

    Flooring Ltd (In Administration) (3) Jubb & Partners (A Firm)

    [2014] EWCA Civ 707 the appellant company (A) appealed

    against a refusal to permit re-amendment of its claim against

    the respondent company (R) for damages for breach of

    contract concerning allegedly defective concrete floors in

    its warehousing facility.

    ...it was not fair, reasonable or accurate to characterise the new case as arising out of substantially the same facts as already had been pleaded.The Court of Appeal held that the circuit judge had been

    correct to refuse the re-amendment of the claim where it

    was not fair, reasonable or accurate to characterise the

    new case as arising out of substantially the same facts as

    already had been pleaded.

    FactsA contracted with R to design and build two large

    warehouses and an office block at As distribution centre.

    Two years after completion A issued a claim for breach of

    contract, asserting that the internal concrete floors were

    defective and that the floors did not meet the required

    standards set out in the contract because they were below

    the required thickness and were suffering from heave. The

    cost of repairing the defects was estimated to be 381,000.

    A later discovered that the steel fibre content of the concrete

    floors was substantially less than required and the floors

    were in danger of collapse. As a result, A replaced the floors

    at a cost of 2.5 million. As earlier application to amend its

    claim to include an allegation of reduced steel fibre content

    was refused because it introduced a new cause of action.

    The proposed new breach of contract claim contained a

    summary of the basis for [As] complaint that the slab was

    insufficiently thick in places. The only complaint of that

    nature was that the slab was below the design thickness of

    150mm, being only 112mm thick in places. It was common

    ground that the specification contained neither an explicit

    requirement that the concrete slab be of 150mm thickness,

    whether with or without tolerance, nor any reference to

    design thickness as such. However, a clause in the contract

    called for the ground floor concrete slab to reliably deliver

    a pallet racking leg load of 70kN/leg and that would only

    be met on the basis that the floor met the design intent of

    150mm thickness (less tolerance). The crux of the complaint

    was thus that the thickness of the floors was insufficient to

    meet the loading requirements specified in the clause.

    The trial judge did not consider that the proposed re-

    amended particulars of claim sought to add a new cause

    of action but he declined to permit the amendment on

    discretionary case management grounds.

    The appealR contended that:

    1. The trial judges exercise of his discretion should be

    upheld but in any event the proposed re-amendment

    was impermissible because it sought to rely on a new

    cause of action not arising out of substantially the same

    facts as were already in issue for the purposes of the

    Limitation Act 1980 s.35 and CPR r.17.4(2); and

    2. The new claim which A sought to rely on was

    substantially the same as that the Court of Appeal had

    already held to be a new claim falling outside the

  • category of those which could be added after expiry of

    the limitation period.

    The Court of Appeal held that all that was in substance new

    or different about the second proposed re-amendment was

    the assertion, contrary to the case previously advanced and

    contrary to the concern expressed in the contemporaneous

    documents, that in fact the lack of fibre was not and would

    never have been a separate, free-standing feature which

    would, of itself, have compromised the ability of the slab to

    withstand the racking leg load requirement. Thus the new

    proposed pleading was, in substance, the case previously

    proposed to be advanced, merely shorn of any complaint

    regarding fibre content. The factual substratum of the original

    allegations was cracking of the concrete slabs, damaged

    edges and localised areas of insufficient thickness, which

    were said to require patchwork repair at costs of about

    380,000. The new claim was of a systemic defect affecting

    the entirety of the floor slabs, which required the replacement

    of the whole floor and it was not fair, reasonable, or accurate

    to characterise that new case as arising out of substantially

    the same facts as were already in issue.

    The Court of Appeal held that in the circumstances, it

    was unnecessary to express any view upon the manner in

    which the trial judge had exercised his discretion to refuse

    permission to amend.

    CommentWhat this judgment demonstrates is that the courts will

    allow quantitative but not qualitative amendments. Whilst

    As counsel submitted that the essential character of As

    complaint was unchanged and it was simply that the number

    of areas thought to be thin had been found to be greater

    than first thought, the court held that the amendments were

    qualitative, not quantitative, or at the very least, a difference

    in degree which amounted to a difference in kind.

  • A brief post Mitchell updateThe Court of Appeal, including Master of the Rolls, Lord

    Dyson and Lord Justice Jackson last week heard three

    conjoined cases concerning relief from sanctions. They

    will attempt to use the cases to clarify the position on the

    enforcement of the new compliance rules and provide

    definitive guidance on when to grant relief from sanctions

    following Mitchell v News Group Newspapers Ltd [2013]

    EWCA Civ 1537.

    The three cases are:

    Decadent Vapours Ltd v Bevan & Ors an application

    for relief where a case was struck out for the late

    payment of court fees

    Denton & Ors v TH White an appeal against relief

    from sanctions being granted for a party that served six

    witness statements late, requiring the adjournment of a

    hearing

    Utilities TDS Ltd v Davies where the court will decide

    whether two trivial breaches aggregate so as to become

    one significant breach

    Such is the concern about the decisions and their knock on

    effect that the Law Society and Bar Council have intervened

    in the cases, on the basis that the respective professions

    have an interest in the case. They are calling for a clarification

    of the Mitchell criteria to avoid further satellite litigation and

    to enable parties to actively work together to bring a case to

    trial, rather than focus on catching each other out.

    We will report further