[2025] EWHC 1680 (KB)

Limitation. CPR r.17.3 The Judge decided at para. 22 that the new claim “is statute barred”. On the pleadings, whilst the earliest invoices were from August 2015, they ran through to 2022. The hearing below was in August 2024. 6 years before the hearing was August 2018. Patently, there were ongoing invoices for rent and maintenance from August 2018 to mid 2022. Taking into account the undisputed fact that DWP benefits were paid into the hands of the Claimant until 2017 or 2019 it is not unreasonable to infer that the Claimant was paying itself for accommodation and maintenance for DB until the account was transferred. Also, I note that between November 2020 when the claim was issued and June 2022 when DB was taken onto medical care again. a further approximately £25,000 of rent and maintenance is claimed to have accrued and was unpaid. Therefore, a large part of the sums claimed were not limitation barred. For those sums the Judge should have assessed that part of the application on the basis of the factors relevant to CPR r.17.3 not CPR r.17.4, but he did not do so. Had the Judge done so I consider that the only proper result would have been to allow the amendment so as to enfranchise the parties to address the real issue between them and to allow justice to be done. If the Defendant was under a duty to pay for DB’s accommodation under S.117, when they chose to place DB in the Claimant’s accommodation with 24 hour supervision and care, those facts could affect the implied terms in the contract, the unjust enrichment claim and the new claim. As to timing, the application and the hearing took place before the CCMC, before evidence had been served, before disclosure and long before trial. It is difficult to discern any meaningful prejudice to the Defendant, other than the need for more disclosure relating to the S.117 decisions which they made and to address them in witness statements, but that is hardly prejudice, it is answering the new case. The Judge did not state what prejudice he found other than the Defendant’s assertion that they would need to join an NHS body. I consider that the Judge was distracted by that red herring in the Defendant’s submissions on the need to sue one or more NHS CCG and how difficult that would be. The Defendant admitted that it owed the S.117 duty. Whether anyone else owed it contemporaneously was not the point. That might have allowed for a claim for contribution which would have assisted the Defendant in offsetting its liability, but I do not consider that there is any real prejudice arising from within that submission. In any event, the Defendant could have brought the NHS in by third party proceedings long ago to cover their share of the care being paid. They chose not to do so. There was no evidence put before the Court that it would be difficult to work out who to sue if that is what the Defendant decided to do, that was merely an assertion. In my judgment a decision under CPR r.17.3 was either not made at all or, if made and unexpressed, was wrong. Permission should have been granted for the new cause of action in relation to invoices from August 2018 onwards.

Limitation, CPR r.17.4. Dealing first with the decision that this was a new claim. Only the pleading relating to the alleged liability to pay for accommodation under S.117 was a potentially new claim. The rest of the amendments were factual or updating. Within the new claim, for those invoices issued after August 2018, and the amendment relating to S.117, the issue of whether it was a new cause of action was irrelevant because that is not a triggering requirement in CPR R.17.3. Dealing now only with the early invoices, issued before August 2018, and the decision on whether S.117 was a new cause of action, this was admitted at the hearing and was in any event a value judgment by the Judge. He weighed the factors and decided that the S.117 pleading raised a new cause of action and hence a new claim. The Respondent asserts that the Appellant approached the application on the basis that it was a new cause of action at the hearing below. I have not been shown the skeletons or a transcript but I consider that the Judge’s decision on “new cause of action” was not wrong in relation to the invoices between August 2015 and August 2018. The Appellant did not press this sub-ground of appeal.

The next issue which the Judge decided was that the new cause of action did not arise from the same or substantially the same facts (paras. 25-27). On this I consider that Mr Butler’s points are powerful. There were many common facts and matters which related to the old causes of action and the new one. None of these were mentioned in the judgment. These included: (1) DB’s substantial medical needs due to his mental health condition; (2) DB’s substantial, 24 hours per day, need for care which was provided at the Defendant’s expense by the Claimant at Radnor House; (3) DB’s supervised accommodation needs at Radnor House, provided at the Defendant’s request by the Claimant. (4) DB’s need to have his benefits put into the control of others, so his benefits payments were initially received by the Claimant and then transferred to the Defendant between 2017-2019. (5) The fact that the Defendant did not pay the Claimant for DB’s accommodation after August 2015. (6) The alleged unjust enrichment involved in the Defendant receiving DB’s housing benefit and maintenance benefits and keeping them, despite knowing that they were not entitled to do so if DB needed them and the Claimant had properly supplied them. (7) The agreed fact that the Defendant operated under a duty to provide “aftercare services” to DB from the admitted date of 2019 onwards. (8) The dispute between the parties as to the scope of the S.117 duty and whether it covered accommodation in the Defence and the Reply. The only difference in the facts and matters introduced by the new “cause of action” is the legal argument over the scope of the Defendant’s liability arising from the scope of the S.117 duty and that will be in play at trial in any event. This legal argument will be based on the facts relating to the scope of DB’s medical, nursing, therapy and care needs. Disclosure of DB’s medical records will be required for the old causes of action and will be needed for the new. The Defendant’s records of their internal decisions on DB’s needs (including the FACE assessments) were relevant to the new cause of action for the invoices which are not limitation barred and will be relevant for the limitation barred invoices. The Court will need to examine the Defendant’s internal documents on the decisions it made on DB’s needs and its own responsibilities. (9) Finally, I take into account that because much of the new cause of action should have been allowed in because it was not limitation barred, so most and probably all of the evidence and legal argument will be covered in any event at the trial for the invoices from August 2018 onwards. The limitation barred invoices do not add much to the work which the Defendant will have to do in any event. Therefore, in my judgment the Judge fell into error when he ruled that the new cause of action did not arise from the same or substantially the same facts.

On timing, the application to amend was made after the pleadings closed but before the CCMC. Evidence had not been exchanged, disclosure had not been started and the trial had not been listed. It cannot fairly have been characterised as a late application, so the stricter approach described by Carr J in Quah Su-Ling is not engaged.

Furthermore, the new cause of action was added in response to the admission by the Defendant that the duty in S.117 rested on them and applied to DB and his placement with the Claimant at Radnor House. Whilst the new cause of action should have been pleaded when the Claim Form was issued, there is no requirement to plead law, there is only a requirement to plead facts and matters. The words “duty of care owed to DB” were used in the Claim Form so, in my judgment, S.117 was potentially presaged but not made explicit.

What is the relevance of the Defence when considering an amendment application for a new cause of action which is (in part) out of limitation? Guidance was given on this is in Goode v Martin [2001]EWCA Civ. 1899; 3 All ER 562. In a personal injury case arising from an accident on a yacht the Claimant had no recollection due to a head injury. The defendant pleaded facts relating to how the accident occurred in the defence and the claimant sought to amend to plead: “well on those facts you were negligent anyway”. Brooke LJ ruled at para. 36 and 46-47 that:

“36.

It is commonplace that the claimant must not be impeded in her right of access to a court for the determination of her civil rights unless any hindrance to such access can be justified in a way recognised by the relevant Strasbourg jurisprudence (for the general principles, see Cachia v Faluyi [2001] EWCA Civ 998 at [17] [20], [2001] 1 WLR 1996). All she wants to do is to say that even if the accident happened in the way Mr Martin says it happened, he was nevertheless negligent for failing to take appropriate steps, as an experienced yachts master, to protect her safety as a novice sailor. She does not want to rely on any facts which will not flow naturally from the way Mr Martin sets up the evidential basis of his defence at the trial.”

…

“46.

Mr Ralls contended that we should interpret CPR 17.4(2) as if it contained the additional words "are already in issue on". It would therefore read, so far as is material:

The court may allow an amendment whose effect will be to add a new claim, but only if the new claim arises out of the same facts or substantially the same facts as are already in issue on a claim in respect of which the party applying for permission has already claimed a remedy in the proceedings." (Emphasis added).

This would bring the sense of the rule in line with the language of the 1980 Act, which is the source of the authority to make the rules contained in CPR 17.4. 47. In my judgment it is possible, using the techniques identified by Lord Steyn in R v A, to interpret the rule in the manner for which Mr Ralls contends. In this way there would be no question of a violation of the claimant's Article 6(1) rights, and the court would be able to deal with the case justly, as we are adjured to do by the Civil Procedure Rules. I would therefore permit the amendment and allow the appeal. A case management conference should be heard at an early date with a view to setting a timetable for an early trial after all the delays that have recently occurred.”

As Coulson LJ commented in Mulalley at paras. 59-60, no new facts were pleaded by the claimant in Goode. There is a parallel with the current appeal here. The Claimant pleaded no new facts in this part of the rejected application to amend relating to S.117 for invoices from before August 2018. Instead, the Claimant pleaded that on the facts, in law, the Defendant’s duty was wider than they accept and encompassed a duty to pay for accommodation and maintenance. The Judge considered this issue in paras. 22-23 of the judgment but ruled that it did not assist the Claimant and relied on the first instance judgment of Pepperall J on Martlett v Mulalley [2021] EWHC 296, at para 20. However, that paragraph does not deal with this issue. It deals with the legal requirement to plead new claims in the Particulars of Claim, not the Reply. The judgment in the Court of Appeal did deal with the effect of the application to amend arising from the defence at paras. 55-61 and cited Goode. I must take into account the requirement of the European Convention on Human Rights, Art 6 (the right to a fair trial) as directed by Brooke LJ in Goode, and will do so when deciding whether the Judge was wrong to exclude the new claim.

At para. 29 of the Judgment, the Judge determined that the prospects of success for all of the S.117 cause of action amendment were poor. He based this on Afework. There was no analysis of the level of medical, nursing or care required by DB for his paranoid schizophrenia when he did so. He did not mention the FACE assessment. He relied on Mostyn J’s ruling that ordinary accommodation was not covered by the S.117 duty but made no reference to para. 19 of the judgment in which guidance was given on accommodation which would be included in the duty. It will be a matter for the trial judge to decide whether Radnor House and the services provided to DB there constituted “ordinary” accommodation or not. Mostyn J held that S.117(2) is engaged vis-à-vis accommodation if the Claimant proves that: (1) the need for accommodation was a direct result of the reason that DB was detained in the first place (“the original condition”); and (2) the requirement was for enhanced specialised accommodation to meet needs directly arising from the original condition; and (3) DB was placed in the accommodation on an involuntary (in the sense of being incapacitated) basis arising as a result of the original condition. The fact that the Court has found that DB lacks capacity to litigate is relevant here. If those 3 steps are satisfied then the Claimant will come within Mostyn J’s criteria. That will depend on the medical notes and perhaps expert medical evidence. I consider that the Judge was wrong to hold that the prospects of success were poor on the evidence, including the FACE assessment before him.

When considering the factors in CPR 1.1 and the overriding objective, within the scope of CPR 17.4, I take into account that the Judge did not list or mention the common factual issues, did not interpret the guidance in Goode correctly, did not take into account that a substantial amount of the claim was not limitation barred and did not put enough weight on the early stage of the action at which the application was made. Nor did the Judge give weight to the ECHR and the need for the parties to get to the root of one of the main issues at trial. He was distracted by the submission, made without evidence, that the Defendant would need to bring Third Party proceedings, and by his view that the new claim had poor prospects. For these reasons I consider the decision was wrong and I grant the appeal on ground 1.

G2: the decision to refuse relief from sanctions. The Judge refused relief giving the reasons in paras. 10-14 of the judgment. The sanction imposed by CPR r.3.14, for failing to file a costs budge on time, is that the budget is restricted to fees only and no costs can be recovered under the budget. The Judge recognised that is harsh and refused relief reluctantly. Relief may be applied for under CPR r.3.9(1).

“Relief from sanctions

3.9

(1) On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order, the court will consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need –

(a)

for litigation to be conducted efficiently and at proportionate cost; and

(b)

to enforce compliance with rules, practice directions and orders.

(2)

An application for relief must be supported by evidence.

General power of the court to rectify matters where there has been an error of procedure

3.10

Where there has been an error of procedure such as a failure to comply with a rule or practice direction –

(a)

the error does not invalidate any step taken in the proceedings unless the court so orders; and

(b)

the court may make an order to remedy the error.”

Rule 3.9 was considered in Denton. I am only concerned with limb 3 of the three stage test set out in Denton. Guidance was given in paras. 36-38, and 41-43 of the judgment of LJ Vos MR as follows:

“36.

But it is always necessary to have regard to all the circumstances of the case. The factors that are relevant will vary from case to case. As has been pointed out in some of the authorities that have followed Mitchell, the promptness of the application will be a relevant circumstance to be weighed in the balance along with all the circumstances. Likewise, other past or current breaches of the rules, practice directions and court orders by the parties may also be taken into account as a relevant circumstance.

37.

We are concerned that some judges are adopting an unreasonable approach to rule 3.9(1). As we shall explain, the decisions reached by the courts below in each of the three cases under appeal to this court illustrate this well. Two of them evidence an unduly draconian approach and the third evidences an unduly relaxed approach to compliance which the Jackson reforms were intended to discourage. As regards the former, we repeat the passage from the 18th Implementation Lecture on the Jackson reforms to which the court referred at para 38 of its judgment in Mitchell: “[i]t has changed not by transforming rules and rule compliance into trip wires. Nor has it changed it by turning the rules and rule compliance into the mistress rather than the handmaid of justice. If that were the case then we would have, quite impermissibly, rendered compliance an end in itself and one superior to doing justice in any case”.

38.

It seems that some judges are approaching applications for relief on the basis that, unless a default can be characterised as trivial or there is a good reason for it, they are bound to refuse relief. This is leading to decisions which are manifestly unjust and disproportionate. It is not the correct approach and is not mandated by what the court said in Mitchell: see in particular para 37. A more nuanced approach is required as we have explained. But the two factors stated in the rule must always be given particular weight. Anything less will inevitably lead to the court slipping back to the old culture of non-compliance which the Jackson reforms were designed to eliminate.”

…

“41.

We think we should make it plain that it is wholly inappropriate for litigants or their lawyers to take advantage of mistakes made by opposing parties in the hope that relief from sanctions will be denied and that they will obtain a windfall strike out or other litigation advantage. In a case where (a) the failure can be seen to be neither serious nor significant, (b) where a good reason is demonstrated, or (c) where it is otherwise obvious that relief from sanctions is appropriate, parties should agree that relief from

sanctions be granted without the need for further costs to be expended in satellite litigation. The parties should in any event be ready to agree limited but reasonable extensions of time up to 28 days as envisaged by the new rule 3.8(4).

42.

It should be very much the exceptional case where a contested application for relief from sanctions is necessary. This is for two reasons: first because compliance should become the norm, rather than the exception as it was in the past, and secondly, because the parties should work together to make sure that, in all but the most serious cases, satellite litigation is avoided even where a breach has occurred.

43.

The court will be more ready in the future to penalise opportunism. The duty of care owed by a legal representative to his client takes account of the fact that litigants are required to help the court to further the overriding objective. Representatives should bear this important obligation to the court in mind when considering whether to advise their clients to adopt an uncooperative attitude in unreasonably refusing to agree extensions of time and in unreasonably opposing applications for relief from sanctions. It is as unacceptable for a party to try to take advantage of a minor inadvertent error, as it is for rules, orders and practice directions to be breached in the first place. Heavy costs sanctions should, therefore, be imposed on parties who behave unreasonably in refusing to agree extensions of time or unreasonably oppose applications for relief from sanctions. An order to pay the costs of the application under rule 3.9 may not always be sufficient. The court can, in an appropriate case, also record in its order that the opposition to the relief application was unreasonable conduct to be taken into account under CPR rule 44.11 when costs are dealt with at the end of the case. If the offending party ultimately wins, the court may make a substantial reduction in its costs recovery on grounds of conduct under rule 44.11. If the offending party ultimately loses, then its conduct may be a good reason to order it to pay indemnity costs. Such an order would free the winning party from the operation of CPR rule 3.18 in relation to its costs budget.”

I take from the above that at stage 3 the Judge should consider all the circumstances including:

In paras. 11-13 the Judge ruled that the lack of promptness of the application was critical. He expressly relied on British Gas v Oak and Diriye. In British Gas the Defence was struck out because the Defendant failed to file its pre-trial checklist as ordered and so an unless order was made and the Defendant failed to comply with that as well. The trial was listed to start in a window opening 8 weeks later. In the Court of Appeal’s Judgment nothing was added, in relation to stage 3, to the guidance in Denton. I do not gain any new assistance from the ruling. The facts speak for themselves. The breach was serious, the case was close to trial and the Defendant breached an unless order.

In Diriye the civil procedure rules required a specific and crucial pleading (impecuniosity in a credit hire claim) which the Claimant did not provide. The case was under Fast Track directions and a trial date was fixed. An unless order was made requiring service of the amended pleading and disclosure of relevant documents by a specific date. The Claimant posted the amended pleading out after the 4pm deadline that day and it was sent by post requiring a signature. It was signed for 5 days later. The case was struck out under the unless order and relief was refused at first instance and on appeal. Coulson LJ explained in para. 58 that the effect on the ligation is relevant to the seriousness of the breach at stage 2 and at stage 3. A breach can be serious and have little effect or be serious and have a serious effect on the action (imperilling timetables for instance) and other litigation. At para. 65 Coulson LJ ruled that, at stage 3, the delay in making the application, despite the fact that the solicitors knew and acknowledged that they were in breach, was also a breach of the requirement for the need to act promptly in CPR PD23A para 2.7, especially in a case where a trial date had been fixed. The factual matrix of Diriye was different from the matrix before the Judge in this appeal. Firstly, it was an unless order. Secondly, the trial date was fixed and the timetable was set. Thirdly, the Claimant delayed applying for 2 months in the context of that set timetable. None of those facts applied in the appeal before the Judge. Whilst the guidance given was clearly binding on the Judge, the decision on the facts of Diriye did not set out a 2 month rule for applications for relief. The Judge appears to have taken the 2 months delay from Diriye as akin to a guideline, in para. 13 of the judgment.

No other factors for refusing relief were set out by the Judge. In my judgment the following factors were relevant and material factors which, where indicated below, should have been taken into account but were not.

Because relevant and material factors were not taken into account at stage 3, I consider that ground 2 is made out and the Judge’s order on the relief application should be set aside.