Dispute Resolution analysis: Judge Phillips, sitting in the Mercantile Court, dismissed an application by the claimant to amend the claim form, after expiry of the limitation period, to correct the name of the claimant. On appeal the Court of Appeal confirmed that, as provided in CPR 17.4(3), where there is a genuine mistake as to the name of a party—and not one which would cause reasonable doubt as to the identity of the party in question—the judge has discretion to allow the amendment. However, the Court of Appeal reiterated that in its ordinary course as appellate court, it would not disturb such a discretionary case management decision of a first instance judge.
Best Friends Group and another v Barclays Bank plc [2018] EWCA Civ 601
What are the practical implications of this case?
This case demonstrates that applications to correct a mistake of party name under CPR 17.4(3) should be made promptly as soon as the mistake is discovered. In addition, when seeking to establish that a genuine mistake has been made, evidence from the party concerned will often be necessary to demonstrate how the mistake came about.
The Court of Appeal also re-iterated its stance as an appellate court reviewing discretionary case management decisions—that it will not disturb such decisions unless the judge is shown to have erred in principle or reached a conclusion that was plainly wrong.
What was the background?
Mr Bennett ran a number of veterinary practices and was the owner and controller of a company called Best Friends Veterinary Group (BFVG) which ran some of the practices. In 2006, and again in 2008, Mr Bennett in his own name entered into interest rate swap transactions with Barclays Bank (the Bank) in his own name. A claim against the Bank was issued on 20 November 2014 for compensation for consequential loss with the claimant named as ‘Best Friends Group’. The limitation period for the 2006 swap expired on 15 September 2012 and for the two 2008 swaps, on 2 December 2014. It was accepted that there had been a mistake and that Mr Bennett should have been named as the claimant. It was not until September 2016 that those advising Mr Bennett belatedly realised that they would need to make an application under CPR 17.4 to correct the name of the claimant outside the limitation period. Prior to this, and in an attempt to correct the mistake, the claimant had issued an application under CPR 19.5 to add Mr Bennett as a claimant and had made allegations of deliberate concealment by the Bank, which were not ultimately pursued.
CPR 17.4(3) involves a three-stage test:
1) as the mistake genuine;
2) as it a mistake which would not have caused reasonable doubt as to the identity of the claimant; and
3) if those questions were answered in favour of the applicant, should the court exercise its discretion in favour of the applicant.
Judge Phillips concluded that there wasn’t a genuine mistake, dismissing the claimant’s submission that the intention had been that Mr Bennett should be the claimant, and the use of 'Best Friends Group' was an honest and genuine mistake by his adviser, who was unaware of the existence of a company with a similar name, BFVG. The second stage of the test was also not satisfied, with there being some doubt as to the true identity of the claimant, there being references to ‘Best Friends Group’, which was similar to BFVG, and due to the fact that the particulars of claim sought damages which were suffered by BFVG and not by Mr Bennett.
Judge Phillips confirmed that, had it been necessary to consider the third stage, he would not have exercised his discretion in Mr Bennett’s favour since there had not been a prompt application to correct the mistake and the claimant has undertaken a series of convoluted processes to maintain and justify its actions, including making a serious allegation of deliberate concealment which was not in the end pursued. In addition, the claimant’s actions had caused months of delay, incurring a huge amount of unnecessary costs.
The claimant appealed against the order of Judge Phillips.
What did the Court of Appeal decide?
The Court of Appeal agreed with Judge Phillips as to the first two stages of the test that:
1) there was insufficient evidence to conclude that there was a genuine mistake, and
2) assuming that if a genuine mistake had been made, it was such as to cause reasonable doubt as to the identity of the party in question.
In doing so, the Court of Appeal noted that there was no evidence from the person who might have been expected to give it – Mr Bennett, who was the person who would best know how his business was conducted.
As to the third stage of the test, the Court of Appeal agreed that the judge was rightly concerned by the delay in making the application, noting that instead of making a prompt application to amend the claim form, the claimant had made an unwarranted allegation of deliberate concealment.
The Court of Appeal therefore affirmed the order of Judge Phillips and considered that the judge had made a discretionary decision at a case management hearing based on an evaluative judgment of the relevant facts which was ‘clear and comprehensive’.
The Court of Appeal reiterated that, in its ordinary course as appellate court, it would not disturb such a decision, and referred to the most recent authoritative restatement of this well-established approach by Lord Sumption JSC in Barton v Wright Hassall LLP [2018] UKSC 12.
