“(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) 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 them and their interest or liability has passed to the new party.”
“if the Court is satisfied that the mistake sought to be corrected was a genuine mistake and was not misleading or such as to cause any reasonable doubt as to the identify of the person intending to sue or, as the case may be, intended to be sued.”
“The difficulties in drawing the distinction, however, seem to me to be at least three. The first is that the distinction between what counts as an error of fact and one of law can itself be elusive. Second, even where the distinction can in principle be drawn with reasonable clarity, there may be considerable practical and evidential difficulty in identifying the precise nature of the mistake made by the person responsible for preparing the claim form – not least because the mistake may often have arisen as a result of the failure of that person to give the matter any proper thought. The third difficulty is that it is not clear why it should matter which type of mistake was made. There is no obvious rationality in drawing a distinction between mistakes of fact and mistakes of law any more than there is in other contexts, such as the recovery of money paid under a mistake where a similar distinction has been abolished or questioned in recent years.”
“The original action, asserting the company’s claim against the former administrators, cannot be determined without the substitution of the liquidator whereas if brought by the liquidator under s.212 it can. Without that substitution it could only, and would be bound to be, determined in favour of the defendants because of the s.20 defence. The claim would be struck out, because of that defence, and it could not be decided on its merits, either way, as the proceedings stand. In terms of the rule, it cannot be carried out by the original party, the company, whereas it can be maintained and carried on if the liquidator is substituted.”
“The starting point under the Act and the rule … is whether the substitution is necessary for the determination of the original proceedings or, in other words, whether the original claim could not be maintained or properly carried on without the substitution. It must be necessary for the maintenance of the existing action, not for the assertion of a new action.”
“Here the original claim was liable to be struck out, as it has indeed been, because of lack of standing, but I see no good reason to regard the reason for the striking out as being a critical distinction between that case and this. I would also reject the contention that the cause of action is not the same because of the identity of the claimant. Sometimes the identity of the party might be, indeed often it might be, a vital distinction, but here Mr Irwin plainly asserted the company’s cause of action and asserted it on behalf of the company, just as the substituted liquidator did in the Parkinson Engineering case. So the cause of action is identical; it is already pursued for the benefit of the company, but it is doomed to failure because of the lack on Mr Irwin’s part of the necessary locus standi. It seems to me that it is possible and appropriate for the court to exercise its discretion under rule 19.5 to allow the joinder of the company so as to assert the relevant claims.”
“The principle which I derive from these two decisions of the Court of Appeal is that the court has power to order substitution under section 35(6)(b) andCPR 19.5 (3)(b) if: (1) a claim made in the original action is not sustainable by or against the existing party; and (2) it is the same claim which will be carried on by or against the new party.”
“if the original claims had asserted negligence in the provision of professional services by the firm, they would have been the same claims as those which are now pursued. The only difference would have been that the claimants were no longer contending that the LLP was liable in law for the acts alleged. Substituting the firm because that contention was abandoned would seem to me to be equivalent in its effect to the substitution of the liquidator for the company in the Parkinson Engineering case … and of the company for the administrator in the Irwin case.”
“In all such situations, of which death is only the most striking, it seems self-evident that any existing proceedings, properly constituted within the limitation period, should be allowed to continue for or against the party to whom the relevant right or obligation has been transferred in law, and that this should be permitted whether the transfer occurs before or after the expiry of the limitation period.”
“It would be outside the scope of the Act of 1980 to alter the law relating to the former kind of substitution, which involves no question of limitation.”
“The reason for distinguishing between them is not far to seek. When a case of “substitution” arises under Ord.15, r.7, no new cause of action is introduced. No question can arise, therefore, of the defendant having a limitation defence by reason of the introduction of a new claim at that stage: there may or may not already be a limitation defence by reason of the date when the writ was issued.The Limitation Act 1980 simply does not apply when one party is substituted for another in order to proceed with the same claim or cause of action as before. There is, therefore, no scope for the operation of section 35.”
“The principle which I derive from these two decisions of the Court of Appeal is that the court has power to order substitution under section 35(6)(b) andCPR r 19.5 (3)(b) if: (1) a claim made in the original action is not sustainable by or against the existing party; and (2) it is the same claim which will be carried on by or against the new party.”
“97. Applying this test to the facts of the present case, it is common ground that the claims made in this action were unsustainable against the LLP. The first requirement was therefore satisfied. However, the second requirement was not satisfied, as the claims which the claimants sought to carry on against the firm were not the same claims as were made against the LLP. I have concluded earlier that the claims originally made against the LLP alleged that the LLP had been negligent in auditing the accounts of the second claimant and providing administrative and fiduciary services during the relevant period. In contrast, the claims asserted against the firm after the claimants had realised their mistake alleged that the firm (and not the LLP) acted as auditor and provided the relevant services. The new claims, therefore, allege different facts and are not identical to the original claims. 98. My conclusion on this issue would have been different if I had agreed with the master’s view as to the nature of the mistake made by the claimants when they issued the proceedings against the LLP. As mentioned earlier, on the master’s view the claims were originally brought against the LLP on the basis that the firm had provided the relevant services but in the mistaken belief that the LLP had taken over the liabilities of the firm. If I had accepted that analysis of the claims, then I would also have agreed with Master Fontaine that the requirements ofCPR r 19.5 (3)(b) were met in this case. That is because, if the original claims had asserted negligence in the provision of professional services by the firm, they would have been the same claims as those which are now pursued. The only difference would have been that the claimants were no longer contending that the LLP was liable in law for the acts alleged. Substituting the firm because that contention was abandoned would seem to me to be equivalent in its effect to the substitution of the liquidator for the company in the Parkinson Engineering case [2010] Bus LR 857 and of the company for the administrator in the Irwin case.”
“it is the task of the judiciary to identify from the statutory language and the purpose of each amending enactment the balance that that enactment has endeavoured to strike and to apply the enactment accordingly. It is emphatically not the function of the judges to try to strike their own balance, whether as a response to the apparent merits of a particular case or otherwise.”