Weston v Gribben & Anor [2006] EWCA Civ 1425

[2006] EWCA Civ 1425

Case No A3/2006/2051

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

MR JUSTICE LIGHTMAN

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Date 2 November 2006

Before

LORD JUSTICE SEDLEY

LORD JUSTICE LLOYD

LADY JUSTICE HALLETT

Between

ROGER JAMES WESTONAppellant

(1) JOHN GRIBBENDefendant

Mark Warwick (instructed by Cartwright Cunningham Haselgrove & Co) for Appellant

Robert Jay QC and Adam Robb (instructed by the Treasury Solicitor) for Respondent

Hearing Hearing date: 24th October 2006

Judgment

[1]This judgment is given on an appeal and cross-appeal arising from an order of Lightman J made on 1st September 2006. In the claim Mr Roger Weston seeks to recover compensation for the loss of property interests which he claims he owned in Spain and of which he was deprived by what he says was a fraudulent scheme at the hands of a number of people in Spain. His claim relates, or related, to three separate properties. One is known as the Dominion Beach property; that is the one which is relevant to these appeals. A second was a property in Barcelona, owned by a company controlled by Mr Weston. The third was a berth at Puerto Banus; that asset was owned by Mr Weston directly. He alleges that, as part of the fraudulent scheme, a document in Spanish was prepared, purportedly made and signed by him, but it was a false document to which his signature was forged. His purported signature was notarised in London by Mr John Gribben who is, or was, a notary authorised to act in Scotland but not in England. The notarisation by Mr Gribben was confirmed by the issue of an apostille by the second defendant, the Foreign and Commonwealth Office. It is said that this should not have been done because it should have been apparent to the FCO that Mr Gribben was not authorised to act as a notary in England and that if this had been spotted the apostille should and would not have been issued. It is then said that without the apostille the documents could not have been acted on in Spain and the fraudulent scheme could not have been carried through. Those allegations give rise to issues of fact which will fall for resolution at the trial, now fixed to be heard on and after 5th February 2007 before Lightman J.

[2]The Dominion Beach property was at all material times in the legal ownership of a Spanish company, Grass Inversiones SL (“Grass”). Mr Weston was its sole administrator or director. Part of the purpose and effect of the fraudulent scheme was to remove him from that office and to allow a different person to operate as the director of Grass. Mr Weston took proceedings and other steps in Spain with a view to avoiding or mitigating the effects of the fraudulent scheme. He was unable to prevent the disposal of the Dominion Beach property or the berth, though he was able to recover the Barcelona property and he was also able, by 2004, to secure his own reinstatement as the sole administrator of Grass.

[3]The applications before the judge, and in turn the appeals before us, turn on the fact that the proceedings brought in this jurisdiction were commenced by Mr Weston whereas the legal owner of the Dominion Beach property was Grass. The judge had to consider an application by the FCO made on 13th July 2006 to strike out the claim in respect of the Dominion Beach property, and applications by Mr Weston to re-amend the particulars of claim and to join Grass as an additional Claimant.

[4]By his order the judge struck out Mr Weston’s claim against the FCO in respect of the Dominion Beach Property leaving him in the action only to the extent of pursuing the separate claim in respect of the berth. He dismissed the application to re-amend but he did allow the application to join Grass as a second claimant, though only to the extent of enabling Mr Weston to maintain a claim based on an alleged beneficial interest owned by him under a trust of which Grass is alleged to have been a trustee. As a condition of the amendment, a number of orders were made as regards costs including a requirement that Grass give security for costs.

[5]The judge gave permission to appeal to the FCO against the order providing for Grass to be added as a claimant but did not give permission to appeal in any other respect against his order. The FCO did not pursue its appeal within the prescribed time, taking the position that it would not pursue such an appeal unless Mr Weston sought to challenge the aspects of the order that were unfavourable to him. Mr Weston did seek to appeal and accordingly the FCO now seeks an extension of time to pursue its appeal. It was not in dispute that an extension of time should be granted for that purpose. Mr Weston seeks to appeal against the judge’s order so far as it limits the basis on which Grass has been joined. He seeks to achieve a position in which Grass can pursue a claim for the whole of the loss rather than only a proportion corresponding to any beneficial interest that he is able to establish that he had. The applications for permission to appeal on one side and an extension of time on the other side were ordered to be heard on notice with the appeals to follow immediately, because at that time the trial was due to start on 6th November. As before the judge, Mr Weston was represented by Mr Mark Warwick and the FCO by Mr Robert Jay QC leading Mr Adam Robb. Both Counsel presented to us admirably economical and well-focussed submissions on each aspect of the appeals.

Factual background

[6]The facts alleged by Mr Weston in respect of the Dominion Beach property are, in summary, these. Dominion Beach is an area on the seashore between Marbella and Estepona in Spain. An agreement was made to buy the property in December 1996 and the sale was completed with Grass as the purchaser on 14th March 1997, Grass having been incorporated in February for that purpose. Mr Weston says that he was approached in about December 1996 by a Mr Harding who was one of a consortium of four individuals concerned with the acquisition, with a view to him investing in the property. Before the completion of the purchase, he came to an agreement with the consortium under which he would pay the balance due on completion together with the taxes and costs that were then due, in return for acquiring a two-thirds interest in the site, leaving the consortium with the balance of one third, they having found the site and paid the ten per cent deposit. Grass was incorporated on the 10th February 1997, two members of the consortium of four being its administrators or directors at the outset. One of them, Mr Mattiessen, wrote to Spanish lawyers on 4th March 1997, as owner of all the shares in another company, La Esperanza International SA, stating that the capital of that company was owned as to 67% by Allied European Holdings Ltd (AEH) and as to 11% by each of himself and two other individuals, each of whom together with himself were members of the consortium. AEH is a company belonging to Mr Weston. La Esperanza owned all of the shares in Grass. Mr Weston says that this letter is accurate in part but inaccurate in identifying AEH rather than himself as the person entitled. It seems to follow that he would be entitled to 67% of the shares in La Esperanza and in that way to an indirect two-thirds interest in the shares in Grass. He says, however, that he was to have a direct interest in the Dominion Beach property, having himself provided the purchase money.

[7]Mr Weston then says that later in 1997, for reasons which it is unnecessary to describe, a further agreement between him and the consortium resulted in their giving up all interest in the site and him becoming the sole administrator or director of Grass. He says he acquired the interest of the group in the site “held via shares in La Esperanza”. That agreement was in writing and is dated 11 August 1997. The Spanish original and a translation are in the appeal bundles. The parties were Mr Weston and the four individual members of the consortium. The agreement recorded that Mr Weston paid certain amounts of money to the four members of the consortium in return for the investment and profits achieved in the company Grass. The four members of the consortium recognise and admit that they no longer form part of, or have any shares or links with, Grass, and that the only shareholder is Mr Weston or the companies which he represents, and they recognise the same in respect of the Panamanian company, La Esperanza.

[8]The Dominion Beach site was developed and Mr Weston says it became very valuable. He puts a figure of £12 million on its value at the point when it was the subject of the fraudulent scheme.

[9]As for the fraud which he said was practised on him, he says that it proceeded as follows. A certificate was prepared purporting to record that a general meeting of Grass was held at its registered office in Estepona on 21st September 1998 at which a resolution was passed for Mr Weston to be replaced as director by Mr Juan Piñol Bonastre. The certificate was prepared and notarised by a Spanish notary, Sr Manuel Pendas. Then another certificate was prepared and dated 19th October 1998, apparently signed by Mr Weston, confirming that he had received due notice of the resolution of the general meeting that he had ceased to hold office as sole administrator or director of Grass. This was also notarised by Sr Pendas in Spain and Mr Weston’s signature, which purports to have been placed on the document in London on 19th October 1998, was notarised by the first defendant. On 6th November 1998 the authenticity of the first defendant’s certificate was affirmed by the FCO by apostille number 583666. With this certificate and other documents it is said that Mr Bonastre was able to become registered at the Mercantile Registry in Spain as the sole administrator of Grass. In January 1999 the Dominion Beach property was transferred to a newly incorporated company which became registered as owner and then in February 1999 it was transferred on to another company called Tenedora which in turn became registered. Mr Weston’s attempts in the Spanish courts to recover the Dominion Beach property failed, on the basis that it had been acquired in good faith and for value. Thereby, Grass and he had irretrievably lost the property.

The claims against the second defendant

[10]Mr Weston brought proceedings against Mr Gribben and obtained judgment in default but it appears that Mr Gribben is uninsured and has no assets so that judgment is worthless in itself. If Mr Weston is to recover any worthwhile compensation it is from the FCO.

[11]The FCO’s acts were first questioned on behalf of Mr Weston by Spanish lawyers in 1999. At that stage, in a strikingly understated letter, the FCO accepted that the apostille had been issued in error, for which it apologised. In July 2003, English solicitors wrote on behalf of Mr Weston to the FCO asserting that he had suffered losses by reasons of the FCO’s misfeasance in public office in respect of the issue of the apostilles. In the letter, the basis of the claims in respect of the Dominion Beach and the other properties was described as follows:

“It further follows that your actions in attaching these apostilles were grossly negligent and but for this negligence, the said losses would not have occurred. In any event, you are liable for the losses caused to our client. These losses were significant. The translated copies of the four powers of attorney indicate the nature of the transactions and the losses which flowed directly from your actions. In particular, documents 1 and 2, related to the control of 28 properties at the Dominion Beach Resort, Estepona, Spain. These were transferred away from our client’s control and the properties were lost for good. These apartments were legally owned by Grass Inversiones S.L., a Spanish registered company, of which our client was Director. It thus followed, that the apparent necessary authorisation by our client and relinquishing of his position as Director, through the said notarised documents, was provided to enable third parties to place the properties out of our client’s control. Our client had invested, as trustee, significant sums in the said development. The loss of these properties was, accordingly, directly caused by your action in notarising the powers of attorney. Further, the property owned by our client through his company, Allied European Holdings, namely calle Corcega Num. 284, primer piso, Barcelona, registered at the Property Register, number 15 of Barcelona, under number 408-N, was transferred out of his control. This property was eventually recovered by only after our client incurred considerable legal expenses. Furthermore, a berth at Puerto Jose Banus, number 157, owned by our client, was transferred out of the control of our client and lost to him for good.”

[12]The Treasury Solicitor answered on behalf of the FCO denying liability for misfeasance and also any liability for negligence, if that were asserted, including a general denial of any duty of care. Further correspondence led nowhere.

[13]On 15th October 2004, the same solicitors issued a claim form on behalf of Mr Weston suing Mr Gribben, the FCO and another party now irrelevant to the proceedings. The claim form gives the briefest possible details of the claim as being negligence and/or misfeasance on the part of the second defendant, its servants or agents. The claim form was issued about three weeks within the limitation period running from the date on which the FCO issued the apostilles.

[14]The claim form appears to have been served with particulars of claim at the beginning of February 2005. In the particulars of claim at paragraph 1, Mr Weston’s position as the director of Grass was asserted, and at paragraph 2 Grass’ ownership of the Dominion Beach Property was stated. Paragraph 3 is somewhat puzzling in its terms. It is as follows:

“The original purchase of Dominion Beach had been made by the claimant as trustee through the Grass.”

[15]Dealing with the other assets it was alleged that Mr Weston was Chairman of AEH, and that AEH was at all material times the legal owner of the property in Barcelona, and in paragraph 6, that Mr Weston was the owner of the berth at Puerto Banus. Then the pleading deals with the notarial status of Mr Gribben and the relevant legislation and the responsibilities of the FCO. It alleged the acts of Mr Gribben in sealing and stamping four documents of which the most material one (for present purposes) is that which I have already described, and the particulars of claim then allege a duty of care to the claimant on the part of the first defendant to ensure that any document purportedly signed by the claimant was indeed signed by him. Breach of that duty was then alleged. In turn, the issue of the apostilles was alleged, and it was alleged that the FCO knew at the time, or ought to have known, that it could not authenticate the signature of Mr Gribben and his capacity to notarise the documents. It was then alleged that, by using the documents, steps were taken in Spain as a result of which the Dominion Beach property was transferred away from the claimant’s control and lost for good. At paragraph 27 it was alleged that the loss to the claimant was caused by the negligence of Mr Gribben. At paragraph 28 it was alleged that the loss to Mr Weston was caused by the misfeasance in public office of the FCO, its servants or agents. The particulars given under paragraph 28 included assertions in paragraphs (7), (8) and (9) identifying the claimant, being a person whose assent to the document was confirmed by the signature and whose name appears at the end of each document, as being a person in respect of whom it was clear that steps could be taken on the basis of those documents which would be likely to cause loss or otherwise adversely affect his interest. In that and other ways he was asserted to be an identifiable or foreseeable likely victim of misfeasance on the part of the FCO. At paragraph 29 it was alleged that the losses to the claimant were caused by the negligence of the FCO. Particulars were given under that head which did not relate to the position of Mr Weston. There was, at that stage, no allegation of a duty of care owed by the FCO to Mr Weston. In paragraph 30 Mr Weston alleged that he had suffered loss and damage, starting with the loss of the Dominion Beach property put at £12 million and then the loss of the berth. (He has now dropped the claim he made originally about the Barcelona property.)

[16]The FCO served a defence denying liability which we have not seen. In October 2005, the FCO applied to strike out the particulars of claim on the basis of the lack of any causal connection between the acts alleged against them and the loss. That application came before Peter Smith J in December 2005 and was dismissed in a judgment delivered on 20th December. He pointed out in the course of the hearing that there was no allegation of a duty of care owed by the FCO to Mr Weston. Without objection Mr Weston amended the particulars of claim to fill that gap by alleging a duty of care on the part of the FCO owed to him in relation to the issue of the apostilles, as the alleged signatory on the document in question. That is a new paragraph 22.2 in the amended particulars of claim.

[17]A case management conference was held on 24th June 2006, heard by Lightman J. At that time Mr Weston was acting in person. The judge raised the question whether Mr Weston was the right person to be claiming in respect of the Dominion Beach Property, rather than Grass. The hearing was adjourned and Mr Weston instructed new solicitors, who are still acting for him. Eventually, the FCO issued its strike-out application that came before the judge, and Mr Weston his application to re-amend asserting in paragraph 3.2 of the draft re-amended particulars of claim that Mr Weston “brings this claim on his own behalf to recover the loss of his beneficial interest in the Dominion Beach Properties”.

[18]Eventually, the applications came on effectively on 29th August 2006. In the meantime Mr Weston had applied for permission to add Grass as an additional claimant and to re-amend in different terms. By the proposed re-amendment Grass would sue for recovery of the whole loss in respect of Dominion Beach, and Mr Weston for two thirds of the loss on the footing that he had a two thirds direct beneficial interest in the property. In respect of the application to add Grass he relied on CPR rule 19.5(3)(a) and (b). Mr Weston made a witness statement in support of this application on 3rd August 2006. What he said in that statement about the fact that the claim had been brought in his own name and the reason why Grass should be joined is in paragraph 18, as follows:

“It has now been explained to me that the FCO contend that (if it is liable at all) the party who should be suing the FCO is Grass. When this case began I understood that, as sole administrator of Grass, I could sue on its behalf in my name. Regrettably, I was mistaken. In the circumstances I have authorised my own solicitors to act on behalf of Grass, and to apply for permission to join Grass as a claimant. I wish Grass to claim all of the losses that it sustained. I understand that there is an argument that I cannot bring any claim in my own name for losses that I might have sustained as a beneficial owner of any part of the Dominion Beach Properties. If this is so then I seek to recover 100% of the loss of the Dominion Beach Properties in the name of Grass.”

The judgment

[19]Following argument on 29th August, the judge reserved judgment to 1st September, though Mr Warwick and Mr Jay were unable to be there on that occasion. On that day the judge handed down a written judgment and then heard argument as to the form of the order. In paragraph 4 of the written judgment, the judge said that there was no sufficient basis for a claim by Mr Weston as pleaded and the question was whether the deficiency could be made good by amendment and by adding Grass as a second claimant. As to the viability of Mr Weston’s assertion that he had a beneficial interest amounting to two thirds of the property he said that he saw serious problems in the way of his proving that but considered that they were not insuperable and that there was a sufficient prospect of success to allow the amendment to be made. But he went on to say this:

“6. I do not however think that Mr Weston’s claim to a beneficial interest entitles him to maintain this action. The relevant legal duties relied on, if established, can only have been owed to Grass, the legal owner of the Properties, and there is no basis or justification for maintenance of the claim by Mr Weston as a beneficiary under the trust alleged by him. I therefore hold that Mr Weston cannot maintain this action in right of his alleged beneficial interest in the Properties: such a claim requires joinder as a claimant of Grass.”

[20]That decision is not challenged on these appeals and in any event seems to me to be correct. If any duty is owed by the FCO in respect of property interests arising from the facts alleged in the particulars of claim, it is owed to the legal owner of the property. For there to be a separate duty owed to the owner of a beneficial interest in the property would involve duplication of remedies. If there is a proper claimant on the basis of such a duty it is the legal owner.

[21]The judge then turned to the question of adding Grass as a claimant, the limitation period having expired. He referred to CPR rule 19.5 and to some recent cases. He then said this:

“The terms of CPR 19.5 should be applied with regard to the overriding objective and read as it stands unobscured by previous authorities. It is common ground that the relevant limitation period was current when the proceedings were started. I am satisfied that the claim by Mr Weston to payment of damages for the loss of the Properties cannot be carried on by Mr Weston in right of his beneficial interest without joinder of Grass as legal owner and that in these circumstances CPR 19.5(3)(b) gives the court jurisdiction to permit the addition or substitution of Grass.”

[22]The judge decided that, having a discretion, he would exercise it in favour of joining Grass as a claimant but on terms as to costs. He did not deal expressly with Rule 19.5(3)(a) but he must implicitly have rejected Mr Weston’s submission that that rule applied. Having handed down his written judgment he received submissions as to the terms and the form of the order. In the light of those submissions he held that the order should state explicitly that Grass’s role was only to assert a claim based on Mr Weston’s claim to have lost his two thirds beneficial interest in the Dominion Beach property. If Mr Weston could not prove such a beneficial interest then the whole claim in respect of the Dominion Beach property would fail. Thus the claim was to proceed on the basis of an assertion by Mr Weston that Grass had held the property on trust as to two thirds for him and that he had lost the value of that interest but that he could not assert a claim on that basis in the absence of Grass as trustee.

Amendment of claims after the limitation period: the rules

[23]If a claim form has been issued within a relevant limitation period, any claim added by amendment relates back to the date of issue. Thus, if the new claim is added after expiry of the limitation period for that claim, a limitation defence which would have been available in response to a newly issued claim form cannot be deployed. The rules about amending to add or change claims after the limitation period are therefore restrictive. There are three relevant rules, two of them derived from section 35 of the Limitation Act 1980. The section is as follows:

“35 New claims in pending actions: rules of court (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 clause of action; or b. the addition or substitution of a new party; and “third party proceedings” means any proceedings brought in the course of any action by any party to the action against a person not previously a party to the action, other than proceedings brought by joining any such person as defendant to any claim already made in the original action by the party bringing the proceedings. (3) Except as provided by section 33 of this Act or by rules of court, neither the High Court nor any county court shall allow a new claim within subsection (1)(b) above, other than an original set-off or counterclaim, to be made in the course of any action after the expiry of any time limit under this Act which would affect a new action to enforce that claim. (4) Rules of court may provide for allowing a new claim to which subsection (3) above applies to be made as there mentioned, 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; and b. In the case of a claim involving a new party, if the addition or substitution of the new party is necessary for the determination of the original action. (6) The addition or substitution of a new party shall not be regarded for the purposes of subsection (5)(b) above as necessary for the determination of the original action unless either – a. The new party is substituted for a party whose name was given in any claim made in the original action in mistake for the new party’s name, or b. Any claim already made in the original action cannot be maintained by or against an existing party unless the new party is joined or substituted as plaintiff or defendant in that action.” 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. a. the addition or substitution of a new clause of action; or b. the addition or substitution of a new party; 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; and b. In the case of a claim involving a new party, if the addition or substitution of the new party is necessary for the determination of the original action. a. The new party is substituted for a party whose name was given in any claim made in the original action in mistake for the new party’s name, or b. Any claim already made in the original action cannot be maintained by or against an existing party unless the new party is joined or substituted as plaintiff or defendant in that action.”

[24]The rules are 17.4 and 19.5, of which rule 17.4(2) is not derived from section 35. “17.4(1) This rule applies where –(a) a party applies to amend his statement of case in one of the ways mentioned in this rule; and

(b) a period of limitation has expired under – (i) the Limitation Act 1980; or (ii) the Foreign Limitation Periods Act 1984 or; (iii) any other enactment which allows such an amendment, or under which such an amendment is allowed. (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 proceedings. (3) The court may allow an amendment to correct a mistake as to the name of a party, but only where the mistake was genuine and not one which would cause reasonable doubt as to the identity of the party in question.” “19.5(1) This rule applies to a change of parties after the end of a period of limitation under – (a) the Limitation Act 1980; (b) the Foreign Limitation Periods Act 1984; or

(c) any other enactment which allows such a change, or under which such a change is allowed. (2) The court may add or substitute a party only if – (a) the relevant limitation period was current when the proceedings were started; and (b) the addition or substitution is necessary. (3) The addition or substitution of a party is necessary only if the court is satisfied that – (a) the new party is to be substituted for a party who was named in the claim form in mistake for the new party; (b) the claim cannot properly be carried on by or against the original party unless the new party is added or substituted as claimant or defendant; or (c) the original party has died or had a bankruptcy order made against him and his interest or liability has passed to the new party.” (a) a party applies to amend his statement of case in one of the ways mentioned in this rule; and (b) a period of limitation has expired under – (i) the Limitation Act 1980; or (ii) the Foreign Limitation Periods Act 1984 or; (iii) any other enactment which allows such an amendment, or under which such an amendment is allowed. (a) the Limitation Act 1980; (b) the Foreign Limitation Periods Act 1984; or (c) any other enactment which allows such a change, or under which such a change is allowed. (a) the relevant limitation period was current when the proceedings were started; and (b) the addition or substitution is necessary. (a) the new party is to be substituted for a party who was named in the claim form in mistake for the new party; (b) the claim cannot properly be carried on by or against the original party unless the new party is added or substituted as claimant or defendant; or (c) the original party has died or had a bankruptcy order made against him and his interest or liability has passed to the new party.”

[25]Rule 17.4(3) is not based on the section. It replaces Rules of the Supreme Court Order 20 rule 5(3) which was devised to allow amendment after the limitation period in very limited circumstances, where a non-misleading mistake had been made in naming a party. Rule 17.4(2) is concerned with new claims rather than new parties. The authority for it is section 35(5)(a). Rule 19.5 is concerned with new parties, and is based on section 35(5)(b) and (6). It is the rule relevant to these appeals.

[26]Both rules 17.4(3) and 19.5 require that there should have been a mistake as to a party to the claim, whether claimant or defendant. Peter Gibson LJ in Gregson v. Channel Four Television Corporation

[2000] EWCA Civ 214

pointed out at paragraph 29 that the kind of mistake relevant under rule 19.5 is by no means so limited as that to which rule 17.4(3) applies:

“The circumstances are that a party has been named in the claim form in mistake for another person. Nothing more is said about the mistake, but it is clear from the rule as a whole that the relevant mistake is one necessitating a change of parties. By comparison and contrast with r. 17.4 (3) that mistake is not a mere mistake as to a name such as causes no reasonable doubt as to the identity of the party in question but is something more fundamental which can only be cured if a new party is substituted.”

[27]The terms of section 35(6)(a) require attention to be focussed, in relation to any proposed substitution or addition of a party, on the formulation of the claim made in the original action, and on the question whether a mistake has been made as regards one or another person who is named as a party to that claim. There may, therefore, to be a limit to the extent to which the provisions of rules 19.5(3)(a) and 17.4(3) can have cumulative effect.

[28]However, these reflections have taken me some way away from the scope of the submissions before us which were, correctly, directed (so far as Mr Weston’s appeal is concerned) at rule 19.5(3)(a) and the question of the mistake said to have been made which Mr Warwick contends brings the case within that rule.

The appeal by the FCO

[29]The rule relevant to this appeal is rule 19.5(3)(b). The difficulty with the judge’s order, taken with the reasoning in his judgment, is that it is designed to enable Mr Weston to assert a claim based on the loss of his alleged two thirds beneficial interest in the Dominion Beach Property, but that claim is based on a duty of care which the judge held does not exist. There is no point in Mr Weston trying to prove that he had a beneficial interest (rather than, for example, an indirect shareholding in Grass) or in the FCO challenging that assertion, when the beneficial interest, as the judge has held, is irrelevant to any duty of care owed by the FCO. I would therefore allow the FCO’s appeal on the basis that to allow Grass to be joined as an additional claimant was not justified, as the judge thought it was, by Rule 19.5(3)(b). This is not a case in which a claim based on a two thirds beneficial interest (itself a new claim first asserted in July 2006) cannot properly be carried on by Mr Weston unless Grass is added or substituted as claimant. The claim based on a two thirds beneficial interest cannot be carried on because the judge has held that it is bad in law.

[30]In those circumstances it is not necessary to consider whether the judge was right to conclude that Mr Weston had a sufficient prospect of being able to prove that he did have a beneficial interest. Like the judge, I can see serious difficulties in his way but it seems to me that the point is irrelevant. As the judge said, what might be a valid claim in law would be one on the part of Grass in its own right as legal owner of the Dominion Beach property. That would be a claim to compensation in respect of the loss of the whole property rather than only two thirds of it. I therefore turn to Mr Weston’s appeal, by which he seeks to have Grass allowed in to assert that claim.

Mr Weston’s appeal

[31]A claim on the part of Grass to compensation for the loss of the whole would be a new claim brought outside the limitation period. It could only be justified under CPR Rule 19.5(3)(a).

[32]Mr Weston cannot and does not say that he was mistaken as to the person who was the claimant. It must have been a conscious decision to sue in his own name, not in that of Grass. Rather he says the choice was made on a mistaken basis. He says that he wished to assert a claim by Grass and believed that as sole administrator, he was entitled to do so in his own name on its behalf. Mr Warwick argues that this is a mistake within the scope of rule 19.5(3)(a) and that because the claim was always for the full value of the Dominion Beach Property, it was a “mistake” for the claim to be brought by someone not entitled to assert such a claim.

[33]Mr Jay for the FCO argues otherwise. He points out that the three claims asserted at first were all put as personal claims, despite the fact that Mr Weston was only the legal owner of one asset, the berth. As regards the Barcelona property, AEH was the owner but not the claimant. The same was true correspondingly of Dominion Beach, where Mr Weston’s interest was identified, ineptly, as that of a trustee though presumably meaning as a beneficiary (as was clarified by further information given of the particulars of claim in July 2006). The claim is not put forward as a claim on the part of Grass brought by Mr Weston on its behalf as its director in his own name. Plainly, the loss which was asserted is said to be his loss in respect of his personal interest. That leads Mr Jay to assert that there was no mistake as to the identity of the claimant in respect of the claim asserted. Rather, he argues that this is a new and different claim, albeit based on the same causes of action, for an equivalent amount of loss and arising from similar facts, and that it was by no means a relevant mistake that led Mr Weston to bring the claim originally in his own name. In particular Mr Jay submits that tactical factors, such as the vulnerability of a claim by Grass for an order for security of costs, could have played a part in a deliberate if, in the end, unfortunate choice. He submits that it is not a case of substituting the name of Grass for that of Mr Weston in respect of any claim made in the original action but of asserting a new and different claim, albeit for the same quantum, vested in a different party. Equally and for that reason he submitted that it was not a case in which Mr Weston’s name was used in mistake for that of Grass.

The cases on rule 19.5(3)(a)

[34]The most recent decision of this court on the rule is Morgan Est (Scotland) Limited v Hanson Concrete Products Limited

[2005] EWCA Civ 134

. There a claim had been brought in contract by company B just before the expiry of the limitation period. Later it became clear that the contracting party had been company A, that the cause of action had been assigned by company A to company B, but that it had also been further assigned to company C before the issue of the claim form. Thus company B was evidently the wrong claimant. It applied to add companies A, as contracting party, and C, as assignee, and the judge made such an order under the rule. Jacob LJ reviewed a number of cases, decided both before and after the Civil Procedure Rules, concerned with this sort of problem. He pointed out that the somewhat similar provision of rule 17.4(3) about a mistake as to the name of a party is not derived from section 35 of the Limitation Act 1980, and should not be confused with the ambit of rule 19.5(3)(a), as had been done in some earlier cases.

[35]Jacob LJ considered in particular a case decided under the Rules of the Supreme Court, The Sardinia Sulcis

[1991] 1 Lloyd’s Reports 201

. He held at paragraph 35 that the test applied in that case might be relevant to rule 17.4 of the Civil Procedure Rules but did not set out the limits applying under rule 19.5. At paragraph 37 he said this:

“37. I conclude that the right approach is to apply the words of rule 19.5 without regard to The Sardinia Sulcis but with regard to the overriding objective, bearing in mind however that the limit of the rule must be the limit set by the empowering section, section 35 of the 1980 Act. Much the better approach is that set out in the Gregson case. Citation of old authorities under different rules simply obscures the debate. TheSardinia Sulcis should be allowed to sink back to the ocean bottom. It muddies thewaters.”

[36]Jacob LJ then applied rule 19.5 and in particular came to the question which arises in this case as well: was company B named in mistake for company A or company C? He answered the question on two alternative bases. The first is set out in paragraphs 40 to 43:

“40. There is no reason to construe “in mistake” restrictively. On the contrary it is important to remember that the source of the rule was the 1980 Act which had the obvious intention of liberalising the position from that under the Limitation Act 1939. Likewise the overriding objective of doing justice is likely to be undermined if one gets finicky about different sorts of mistake. The jurisdiction is for putting things right. 41. In the present case there was clearly a mistake about naming company B. The very form of the particulars of claim suggest that it was company A that was intended to be named: see Buxton LJ quoted in para [31] above. The rather meagre, muddled and second-hand evidence in support of the application by Mr Sayers does say this much: “It was the intention throughout to bring the claim in the name of the party holding the right to bring the claim ... At the date the proceedings were issued it was believed the correct claimant was B” 42. Assuming that was so it is a little difficult to see why the assignment to company B was not pleaded. A more logical view is that it was intended to name company A. But I do not think it matters - there was a clear mistake one way or another. Things can and should be put right by substituting A for B. There is no prejudice to the defendants. They are deprived of an unmeritorious defence arising solely from a blunder by the other side - that does not count as prejudice. 43. Mr Norris objected that if one says “I intended the claim to be by the party holding the right to the claim” one is using the wide test expressly eschewed by Lloyd LJ in The Sardinia Sulcis [1991] 1 Lloyd’s Rep 201. That may be so, but why does that matter if no one is prejudiced?” “It was the intention throughout to bring the claim in the name of the party holding the right to bring the claim ... At the date the proceedings were issued it was believed the correct claimant was B”

[37]Alternatively, he approved the reasoning of the judge below despite it being based implicitly on the test used in TheSardinia Sulcis: “44. Actually, however, I would, if necessary, hold that the case does fall within the Sardinia Sulcis test. I need say no more than that I think the judge was right when he said

[2004] EWHC 1778 (TCC)

at [17]: “There can be no doubt that the claimant and Kennedys [the solicitors] intended that the claimant should be that person [i.e. the person holding the right to sue.] One can describe that person in three ways: as the contracting party (an erroneous description), as the assignee of the contracting party, or as the person holding the right to sue the defendant under the contract. In Evans v Charrington & Co Ltd

[1983] QB 810

and Parsonsv George

[2004] 1 WLR 3264

, tenants were allowed to amend who had intended to sue particular persons who had been the relevant landlords. In my judgment, those actual decisions justify adopting the wider description of the intending claimant as the person holding the right to sue the defendant under the contract, as opposed to the narrower description as the contracting party or the assignee of the contracting party.”“ “There can be no doubt that the claimant and Kennedys [the solicitors] intended that the claimant should be that person [i.e. the person holding the right to sue.] One can describe that person in three ways: as the contracting party (an erroneous description), as the assignee of the contracting party, or as the person holding the right to sue the defendant under the contract. In Evans v Charrington & Co Ltd

[1983] QB 810

and Parsonsv George

[2004] 1 WLR 3264

[38]On that basis he held that company A should be substituted for company B. He also ordered that company C should be added but under a different provision in rule 19.5(3)(c).

[39]Thus the application of rule 19.5(3) has to be viewed in the statutory context of section 35(6) and of the overriding objective, and in the factual context of the nature of the claim made, the amendments sought to be made and the evidence as to the nature and the circumstances of the mistake which it is said was made in respect of the original claim.

[40]In Morgan Est, whichever company was, or was to be, the claimant, the claim was the same. Each company had been entitled to sue on the contract at some time. Apart from, presumably, changing the particulars of claim to allege that company A had been the contracting party and that companies B and in turn C had taken assignments, no alteration would have been needed to the formulation of the claim in consequence of the amendment to change the claimants from company B to companies A and C. In TheSardinia Sulcis, which I use here purely for the purposes of illustration, also being a case concerning the wrong claimant, proceedings had been started in the name of the owner of the vessel but by then, unknown to the persons responsible for formulating the claim, the original owner had merged with another company and ceased to exist, and its successor should have been named instead of the original owner. Apart from alleging that process, no change would have been necessary to the formulation of the claim in order to substitute the correct claimant in place of the incorrect claimant.

[41]Cases in which the mistake is as to the defendant are more common. Among the cases cited in Morgan Est there are examples of unknown or overlooked transmission of title, such as Parsons v George

[2004] EWCA Civ 912

, where the tenant sued the original landlord but not the parties who had by then become entitled to the reversion. There are also examples of confusion between companies with similar names (for example Gregson) and a case where the mistake was as between two unconnected pharmaceutical companies, as to which of them was the manufacturer of the correctly identified batch of a vaccine which was said to have damaged the claimant: Horne-Roberts v Smith Kline Beecham PLC

[2001] EWCA Civ 2006

. In none of these cases would it be necessary to do more than change the name of the defendant and, where relevant, allege the devolution or transmission of the title, as in Parsons v George. No other change would need to be made to the formulation of the claim. That seems to me to be a process which is consistent with the words of section 35(6) which refer to the substitution of the new party “for a party whose name was given in any claim made in the original action”. Attention has therefore to be focussed on the “claim made in the original action” in relation to which the original party’s name is said to have been used by mistake for that of the party proposed to be substituted. As Sedley LJ suggested in the course of argument, it may be a convenient working test to ask whether you can change the identity of the claimant or, as the case may be, the defendant without significantly changing the claim. For my part that seems to me to be a sensible approach, consistent with the terms of the rule and in particular of the Act. In all of the other cases under the CPR to which our attention was drawn, this working test would have been answered in favour of substitution.

[42]Neither Counsel took issue with the test so proposed but each submitted that it should be answered in favour of his client. Mr Warwick stressed that the identity of Grass as legal owner has always been made plain in the pleading, that the claim arises from exactly the same sequence of events as is and always was alleged, that the same causes of action are relied upon, and that the claim is and always has been for the whole value of the Dominion Beach property.

[43]Mr Jay on the other hand draws attention to the respects in which the claim would need to be amended. If one ignores as inept the reference to a trustee in paragraph 3, or takes it as inverted, namely as showing that Grass was a trustee for Mr Weston, the only significance of that passage is that it would be unnecessary and irrelevant to a claim by Grass. In paragraph 22.2, added at the stage of the first amendment, a duty of care is alleged on the part of the FCO owed to Mr Weston as the alleged signatory on the document whose signature was purportedly authenticated by the first defendant as notary. At paragraphs 24-26 loss to Mr Weston is alleged in general terms and more particularly at paragraph 30. I have already referred to paragraphs 28 and 29 and in particular the identification of Mr Weston as a foreseeable victim within the scope of liability for misfeasance which ties in with the allegation of the duty of care at paragraph 22.2.

[44]As for the proposed formulation of a claim by Grass, the draft re-amended particulars of claim, as we have it, is complicated by the proposed assertion of a claim by Mr Weston on the basis of his supposed beneficial interest. If that is ignored for present purposes, then paragraph 3 becomes paragraph 3.1, and is clarified and simplified, and a new paragraph currently numbered 3.3 would identify Grass as bringing the claim as legal owner of Dominion Beach. As to the allegation of a duty of care, a new paragraph 22.3 would allege a duty of care owed to Grass “as a party named in the documents and as the legal owner of the Dominion Beach property”. That is clearly a different basis for a duty of care from that relied on in the present paragraph 22.2. The allegation of loss is changed but only, relevantly, so as to allege that Grass as well as Mr Weston has suffered the loss alleged. The allegation of misfeasance would be amended at paragraph 28 to refer to loss suffered by Grass as well as Mr Weston and by identifying Grass as well as Mr Weston as foreseeable victims of the misfeasance. In relation to the claim in negligence at paragraph 29, the allegation is that loss had been suffered by Grass as well as by Mr Weston in each case caused by negligence but there is no change to the negligence alleged.

[45]Thus the claim sought to be made by Grass is based on the same causes of action and the same loss, though now said to have been suffered by Grass rather than by (or as well as by) Mr Weston. The status of Grass which gives rise to the claim has already been mentioned in the particulars of claim at paragraph 2. The basis for the allegation of a duty of care owed by the FCO is different and the same goes for the basis on which an ability to sue for misfeasance is identified. It is therefore by no means so simple an amendment process as would have arisen in Morgan Est and the other cases cited. The duty of care has been reformulated significantly. Mr Warwick’s point that the matters proposed to be relied on are for the most part already mentioned in the particulars of claim is fairly made. That, however, is likely always to be the case because of the constraint imposed by section 35(5)(a) and CPR rule 17.4(2).

[46]The effect of that rule is that, in any case where the present question has to be addressed, there is bound to be at least a very substantial overlap between the facts on which the new claim is based and those on which the existing claim is based.

[47]In my judgment the amendments that would be necessary to the formulation of the particulars of claim, as they stood at the time of the hearing before the judge, would be too substantial to pass Sedley LJ’s test. I have in mind in particular the different basis that would have to be asserted for the duty of care owed by the FCO and the different formulation of the case in misfeasance. This is not, in my judgment, a case in which the substitution of Grass for Mr Weston can be made without significant alteration to the formulation of the claim to enable it to be asserted on behalf of Grass. I therefore consider that, unlike the position in the various previous cases cited to us, the substitution is not permitted by rule 19.5(3)(a). It would go outside the scope permitted by section 35(6)(a) in that it is not a substitution of Grass as one party for an existing party in respect of “any claim made in the original action”, but in respect of a materially different claim. On that basis Mr Weston’s appeal must fail. Though he did not express his reasons for it, the judge’s refusal to allow Grass to be joined so as to assert a claim to the whole of the Dominion Beach loss was correct.

[48]It is therefore not strictly necessary to consider the second question arising under rule 19.5(3)(a) which is whether a mistake had been made within the ambit of the rule. Nevertheless, that point having been the subject of submissions to us, I will express my view on it. It seems to me that on this point too Mr Weston’s appeal must fail.

[49]The case is rather different, in this respect as well, from Morgan Est and the other cases cited to us. The particulars of claim identify Grass and state correctly its position as the legal owner of the Dominion Beach property. Those responsible for formulating the claim were under no mistake as to the relevant facts concerning the identity, position and status of Grass, or the position of Mr Weston as its director, even if the formulation of the claim is confusing in some respects.

[50]I have already read what Mr Weston said at paragraph 18 of his witness statement as to his state of mind. The problem with that statement is that it does not fit with the terms of the claim as it was formulated. If his intention had been to put forward a claim by Grass but in his own name on its behalf as sole director, it seems to me clear that the particulars of claim would have been formulated differently. In particular, it would not have been relevant to allege anything about Mr Weston in relation to the company other than his status as administrator. A duty of care should have been alleged as being owed to Grass as owner of the property rather than as being owed to Mr Weston as signatory of the document. Grass should have been identified as a foreseeable victim of misfeasance as owner of the property, rather than Mr Weston as signatory of the document. Loss should have been alleged as suffered by Grass, not by Mr Weston, in respect of the Dominion Beach property, albeit that the amount of loss would have been the same amount. It does not seem to me that it is possible to read the particulars of claim and come to the conclusion that Mr Weston was seeking by that pleading to assert a cause of action belonging to Grass. It just does not fit. The proposition asserted in paragraph 18 of the witness statement is therefore not credible. Nor does that proposition fit with anything that had been asserted in the correspondence before the claim. Just as in relation to the Barcelona Property which belonged to AEH and in relation to the berth which belonged to Mr Weston himself, the claim was formulated and asserted as a claim on the part of Mr Weston personally. Taking up words used in Morgan Est at paragraph 41, one could not say that the very form of the particulars of claim suggest that it was Grass that was intended to be named. Grass was named as a separate, albeit relevant, entity but Mr Weston was identified as the person, quite distinct from Grass, who had suffered the loss and to whom the relevant duties were owed.

[51]Mr Warwick in his skeleton argument and his submissions said that, in any event, even if that statement in the witness statement was not accepted, since the claim was always for the entire value of Dominion Beach it was plainly a mistake to sue in the name of someone who could not bring such a claim and that that was a relevant mistake for the purposes of the rule. Certainly with hindsight it was a mistake to do so but it does not seem to me to follow that it was a mistake such as is referred to in the section or the rule. It may have been a conscious and deliberate tactical decision which proves in the event to have been a bad choice. That would not be a relevant mistake.

[52]If it were a relevant mistake it is difficult to imagine an incorrect decision that could not be overcome under the rule, subject to the constraints imposed by rule 17.4. Of course it can always be said, as Jacob LJ did in Morgan Est at paragraph 42, that to override a limitation defence only deprives the defendant of an unmeritorious defence arising solely from a blunder by the other side. But not all circumstances in which the wrong party is named necessarily arise from a blunder. It is true that there are aspects of the formulation of Mr Weston’s original claim which suggest a degree of ineptitude on the part of those then advising him. Nevertheless at that stage he and his advisers knew all the relevant facts and circumstances. At the time of the issue of proceedings it was open to him to cause Grass to sue, since by then he was again in control of it. He chose not to do so but rather to assert a personal claim for personal loss.

[53]Mr Warwick submitted that paragraphs 42 and 43 of Jacob LJ’s judgment, which I have quoted above, show that it is sufficient, and within the rule, for the party in question to say “I intended the claim to be by the party holding the right to the claim”. But that is not what Mr Weston said in his witness statement. He gave a specific explanation of the nature of the mistake, but one which is not credible. It does not seem to me that, in that situation, it is open to Mr Weston to assert, as Mr Warwick ingeniously sought to, that even ignoring the evidence there must nevertheless have been a relevant mistake.

[54]I do not accept that Mr Weston or his lawyers made the mistake that he seeks to describe in paragraph 18 of his witness statement. If he did not make that mistake, then there is no evidence before the court of what, if any, mistake he did make and no basis on which the case can be held to be within rule 19.5(3)(a), even if the case satisfied the test as to the nature of the claim, contrary to the view that I have expressed on that point already.

[55]For those reasons, though I would grant permission to appeal to Mr Weston, as well as an extension of time for appealing to the FCO, I would dismiss Mr Weston’s appeal and allow the FCO’s cross-appeal. The result of that is that the claim in respect of the Dominion Beach property falls out of the case and all that is left is Mr Weston’s claim in respect of the loss of the berth, in respect of which he has always been the right claimant.

[56]I agree.

[57]I also agree.