Kay and Brummer v Cuby [2008] EWHC (Adm) 25 June

The first claimant, Sidney Cuby, sought permission to re-amend the particulars of claim to allege a breach of duty owed by the defendant accountants (BKB) to himself in a personal capacity. The original claim related only to a retainer between the accountants and Berkeley Seymour Property Finance Ltd (BSPF), of which Mr Cuby was the controller and principal shareholder and the second claimant, Finsbury, was also a shareholder. The application was made outside the relevant limitation period and was therefore only permissible under CPR 17.4 if the new cause of action arose from the same facts or substantially the same facts as were already in issue in the original action.

The judge allowed the amendment, upholding the Master’s decision below. The original statement of case had stated:

“The Defendant ..has been responsible for advising the company in relation to all taxation issues that may affect the company, its directors and shareholders …. The Defendant has been fully aware of the structure of BSPF and its close relationship with the Second Claimant and the Rock Settlement and the position of Mr Cuby in the Second Claimant”.

As the judge put it, “given such a clear indication of the claimed relevance of the broader position of the related entities to the advice given, I agree with the Master that it is artificial to place an impenetrable partition between Sidney Cuby telephoning BKB for advice as to the effect of the proposed dividends on the shareholders on the one hand, as opposed to those known to BKB to have a wider beneficial interest on the other”.

Comment: although the outcome in this case seems to be fairly obvious given the breadth of the reference to the defendant accountants’ relationship with the company and its shareholders in the original particulars of claim, it is not always the case that the facts relevant to the new cause of action – here breach of a duty to advise the controller of the company about his personal tax position – will be sufficiently canvassed to satisfy CPR 17.4. The accountants relied upon a passage in Del Grosso v Payne & Payne in which Maurice Kay LJ said that the claimant could not move from one account of what was said at a meeting to another very different account and therefore assert that it was still a dispute about what was said at the meeting. The judge in the present case was more influenced by Senior and Senior v Pearson and Ward in which, although the claimant’s claim against his solicitor originally focused upon a single conversation, amendments were allowed which involved an examination of the whole of the retainer relationship over a long period. In the present case, however, what was permitted was an amendment to introduce a new cause of action on the ground that it concerned “the same set of professional client/accountant relationship”. This indicates that attempts by defendant professionals and their insurers to resist amendments outside the limitation period are likely to fail where the amendments concern the scope of the retainer or seek to rely upon wider duties owed to existing parties to the action.