- This is an application for permission to extend time for service of the Particulars of Claim. The claim form was issued on 12 November 2012 but was not served at the time. It was served with effect from 12 March 2013, the very last day for service permitted by CPR 7.5(1).
- However, the Claimant did not serve the Particulars of Claim at the same time. Its solicitors thought, wrongly, that they had a further 14 days in which to do so. That was based on a mistaken reading of CPR 7.4(1) and (2). In fact, the long-stop deadline for service of Particulars of Claim is four months after the issue of the claim form: see CPR 7.4(2) and 7.5(1).
- The action is brought against ten defendants, two of whom (the “Miller defendants”) oppose this application. They do so because a fresh action against the Miller defendants would now be statute barred. Accordingly, if this application is unsuccessful that will be the end of the claim against the Miller defendants. The other defendants have agreed to a short extension of time for service of the Particulars of Claim.
- The Claimant was represented by Mr.Gordon Wignall, instructed by Shoosmiths, the Miller defendants were represented by Lord Marks QC, instructed by Weightmans.
- The Claimant is a property development and investment company registered in the Cayman Islands. The claim arises out of a residential development, known as Enterprise Square in Northampton. Architects’ plans, prepared by the First Defendant (“Space”), showed 171 parking spaces because it was a condition of the initial planning consent that there should be this number of parking spaces. The permission was for 152 residential units. Shortly after the initial planning permission had been obtained in February 2006 Space produced amended plans which “reconfigured the 171 spaces for the residential scheme”.
- By this time the Claimant had already made an offer to purchase the land on which the development would be built, subject to planning permission. By September 2006 the proposal was that the Claimant would purchase the land from the Fourth Defendant (“Realacre”), a company in which the Third Defendant (“MRPD”) was the majority shareholder. MRPD was in turn owned or controlled by the Fifth and Sixth Defendants, Mr.Willmott and Mr.Anderson. The Second Defendant (“MRPDS”) was a company which carried on business as architects and was owned or controlled by MRPD. Space appears to have been associated with MRPDS and it was anticipated that the architects that it employed who had prepared the drawings for the scheme would at some stage be transferred to the Second Defendant.
- The Claimant intended not only to purchase the land but also to acquire the right to use the drawings that had been prepared by Space, which were to form the basis for an application for detailed planning permission. It was a condition subsequent of the agreement to purchase the land that planning permission would be granted on the basis of the plans produced by Space.
- It appears to have been the intention of the parties that Space, or MRPDS, employing the architects that had formerly worked for Space, would be retained by the Claimant for the purpose of building the development. Space or Realacre subsequently granted the Claimant a non-executive licence to use the plans.
- On 7 September 2006 the Claimant exchanged contracts with Realacre for the sale of the land for the sum of £4.55 million. In a letter from Shoosmiths dated 28 February 2013 it was said that “The engagement of [the Second Defendant] as architects for the work to be carried out form one of the annexes to the [contract of sale]”. This appeared to suggest that the Claimant intended to engage the services of MRPDS from then on. However, Mr.Wignall told me that MRPDS was never in fact engaged by the Claimant.
- Be that as it may, detailed planning permission was granted in November 2006 for the erection of 155 residential units and completion of the purchase of the property took place on 22 December 2006. It is alleged that in about February 2007 the Claimant became aware that the supporting posts/pillars in the underground car park shown on the original plans were not of the size indicated on the amended plans and would not support the building. It is said that this resulted in the loss of about 30% of the parking spaces, with the consequence that the development could not be built in accordance with the planning permission. As a result, the Claimant alleges that the value of the property with the existing planning permission was worth far less than the sum that it had paid.
- In this action the Claimant holds the defendants responsible for that loss. The Miller defendants are Mr.Miller, an estate agent who acted for the Claimant, and the Tenth Defendant, being the firm of estate agents for whom Mr.Miller worked. The Particulars of Claim do not set out the terms of the retainer of the Miller defendants, or when they were engaged. There is no allegation that they had worked for the Claimant before this project.
- The Seventh Defendant, a Mr.Ungemuth, was a surveyor who, since about 1990, had worked with the Claimant, to whom he had identified and proposed building projects. By contrast, it is not alleged in the Particulars of Claim that Mr.Miller was a qualified surveyor, but it is said that he “… has a practical understanding as to the question of whether or not schemes prepared by architects and submitted for development are capable of being constructed”.
- In spite of the fact that the Claimant was fully aware in early 2007 that the development was not viable as a result of the problem with the design of the columns that were to support the building and that, as a result, it had sustained a substantial financial loss, it seems that it may not have instructed the solicitors until it approached Shoosmiths in September 2012. The evidence filed in support of the application did not contain a single word of explanation for this surprisingly long period of delay and no explanation was offered at the hearing.
- However, once instructed, Shoosmiths appear to have proceeded with reasonable expedition: they carried out money laundering checks, met their clients and took instructions, instructed counsel, and so on. They filed a claim form with the court on 31 October 2012, although it had to be amended with the result that the claim form was not in fact issued until 12 November 2012. On 28 February 2013 Shoosmiths sent each defendant a 14 page letter that was said to be in accordance with the Professional Negligence pre-action protocol and in which they set out the case against the various defendants.
The first case to come before the courts concerning a breach of deadline was considered in the case of Venulum Property Investment Ltd v Space Architecture Ltd  EWHC 1242 (TCC).
The facts and background of this important procedural case is set out below. In summay, the new Post April 2013 attitude to time limits and directions of the court are such that they are ignored by solicitors at their peril. This judgement will apply to both Claimant and Defendant solicitors but it may be distinguished by the fact that it was not just the Claimant solicitors that failed but also the Claimant itself when it failed to take action within a reaonable period of time.