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England and Wales Court of Appeal (Civil Division) Decisions |
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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Parkinson Engineering Services Plc v Swan & Anor [2009] EWCA Civ 1366 (21 December 2009) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2009/1366.html Cite as: [2009] EWCA Civ 1366, [2010] BPIR 437, [2010] Bus LR 857, [2010] PNLR 17 |
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ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
MR JUSTICE FLOYD
HC09C01190
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE LLOYD
and
LORD JUSTICE SULLIVAN
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PARKINSON ENGINEERING SERVICES PLC (in liquidation) |
Claimant Respondent |
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- and - |
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(1) JULIE SWAN (2) PETER YELDON |
Defendants Appellants |
____________________
WordWave International Limited
A Merrill Communications Company
165 Fleet Street, London EC4A 2DY
Tel No: 020 7404 1400, Fax No: 020 7404 1424
Official Shorthand Writers to the Court)
Peter Shaw and Joseph Curl (instructed by Moon Beever) for the Respondent
Hearing date: 1 December 2009
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Crown Copyright ©
Lord Justice Lloyd:
Amendment after the end of the limitation period
"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."
"(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."
The claim under section 212
"(1) This section applies if in the course of the winding up of a company it appears that a person who –
(a) is or has been an officer of the company,
(b) has acted as liquidator, administrator or administrative receiver of the company, or
(c) not being a person falling within paragraph (a) or (b), is or has been concerned, or has taken part, in the promotion, formation or management of the company,
has misapplied or retained, or become accountable for, any money or other property of the company, or been guilty of any misfeasance or breach of any fiduciary or other duty in relation to the company.
(2) The reference in subsection (1) to any misfeasance or breach of any fiduciary or other duty in relation to the company includes, in the case of a person who has acted as liquidator or administrator of the company, any misfeasance or breach of any fiduciary or other duty in connection with the carrying out of his functions as liquidator or administrator of the company.
(3) The court may, on the application of the official receiver or the liquidator, or of any creditor or contributory, examine into the conduct of the person falling within subsection (1) and compel him –
(a) to repay, restore or account for the money or property or any part of it, with interest at such rate as the court thinks just, or
(b) to contribute such sum to the company's assets by way of compensation in respect of the misfeasance or breach of fiduciary or other duty as the court thinks just.
(4) The power to make an application under subsection (3) in relation to a person who has acted as liquidator or administrator of the company is not exercisable, except with the leave of the court, after that person has had his release."
"In my judgment, Mr Wilson's submissions [for the liquidator] on this point do not pay sufficient regard to the significance of the fact, made clear by the authorities, that section 212 is procedural in nature. The true significance of that fact is that the section merely provides an alternative means, in terms of procedure, of enabling the company, to which the defaulting director's duty was owed, to obtain recompense from the director for his breach of duty. If the liquidator chooses to name himself as the formal claimant in lieu of the company, his claim is by application, or (as appropriate) originating application, in the liquidation rather than by a claim form under CPR Part 7. The procedure is not available if it is intended to make someone other than a director (or other person falling within section 212) liable for the wrong to the company, for example a claim against a non-director (along with a director) for having conspired to harm the company; in such a case or where other claims not within section 212 are brought against a director, for example a straightforward claim in debt, the claim must be brought by the company. In each case, however, in substance the claimant is the company; the relief which is granted under section 212(3) is for the repayment, restoration or accounting (to the company) of the money or property of the company or for a contribution to be made "to the company's assets by way of compensation" for the wrong in question. ... there is only a single cause of action, that of the company. All that section 212 does is give to the liquidator, if he wishes, the right to bring the claim in his own name."
The issues on the appeal
Could the judge allow the liquidator to be substituted for the company?
"Thus if, in the case of an intended defendant, the plaintiff gets the right description but the wrong name, there is unlikely to be any doubt as to the identity of the person intended to be sued. But if he gets the wrong description, it will be otherwise."
"In principle we can see no reason why permission should not be given both to substitute a claimant under CPR rule 19.5 and to add new claims that fall within CPR rule 17.4(3). What is not permissible, however, is to rely on the new claims in order to assist in demonstrating that the action has been brought in the name of the wrong party."
"It would be contrary to principle for the court to grant permission to amend the claim merely to reflect a change in capacity as that would not enable the claimant to proceed to judgment."
The exercise of discretion
"… I think that this is a case in which a reasonable litigant could be said to be justified in bringing litigation. Mr Hough … said that I should also take into account the delay in bringing these proceedings in the absence of any real explanation for that delay. I have taken that factor into consideration, but in the end it has not persuaded me this is not an appropriate case for the court to grant permission."
"7. … I would for myself be surprised if a party who has properly alleged the facts on which he maintains a cause of action could, under the CPR, be entirely non-suited by his failure to adopt the correct procedure in bringing his claim. It seems to me that the purpose of requiring a party to set out his case at the outset is to ensure that he can allege sufficient facts on which to base his claim. If he does so and if he makes an error in the procedural manner in which he brings the case before the court, the court will normally allow him to bring the case in the proper way. So if the liquidator, instead of bringing the proceedings in the liquidation had for some reason issued the proceedings by way of a Part 7 claim and wished to have then transferred to the Companies Court to proceed under section 212 I would be inclined to think that that was possible subject, of course, to the other points that are made."
Disposition
Lord Justice Sullivan
Lord Justice Sedley