Adelson & Anor v Associated Newspapers Ltd.

Factual and Procedural Background

This appeal concerns an order made by Judge Tugendhat on 1 May 2007, which refused an application by the Claimants to join two further corporate claimants to an ongoing libel action. The application was made under CPR 19.5(2) and (3), which govern substitution rather than addition of parties. The libel action arose from an article published by the Defendant in a national newspaper in May 2005, which contained allegations affecting the reputation of the First Claimant and his corporate group.

The First Claimant is Chairman and Chief Executive of the Second Claimant, a holding company with several subsidiaries. The Claimants sought to join two subsidiaries (referred to as the Third and Fourth Claimants) to the action, arguing that the original claim mistakenly pleads causes of action for these subsidiaries under the name of the Second Claimant. The judge refused the application on the basis that the amendments sought involved new claims and no genuine mistake had been demonstrated under CPR 19.5(3).

The procedural history includes initial pleadings issued within the one-year limitation period for libel claims, correspondence before action, service of Defence and Reply, and an application to amend pleadings and join additional claimants after the limitation period had expired.

Legal Issues Presented

1. Whether CPR 19.5 permits substitution of parties where the original claim form named a party in mistake for another party, particularly in the context of corporate groups.
2. Whether the amendment sought constitutes substitution of parties or addition of new claims requiring a different procedural route.
3. The nature and scope of the "mistake" required under CPR 19.5(3)(a) to permit substitution after the limitation period.
4. The relationship and interpretation of CPR 17.4 and CPR 19.5 in relation to amendments involving new claims and substitution of parties.
5. The application and relevance of the Sardinia Sulcis test and authorities interpreting mistake as to name versus mistake as to identity of parties.

Arguments of the Parties

Appellant's Arguments

• The application was effectively a substitution of parties under CPR 19.5 rather than an addition, as the original claim mistakenly included the subsidiaries’ claims under the holding company’s name.
• A broad interpretation of "mistake" should be adopted to allow substitution, relying on prior case law such as Morgan Est v Hanson Concrete.
• Permission to amend to add new claims should also be granted under CPR 17.4(2), and this could be done concurrently with substitution.
• The Second Claimant had an independent cause of action, but the subsidiaries also had claims that were mistakenly pleaded under the Second Claimant’s name.

Respondent's Arguments

• The judge’s restrictive interpretation of CPR 19.5(3) was correct; the application involved adding new claims and parties, not mere substitution.
• The Claimants failed to establish a genuine mistake as required by CPR 19.5(3)(a); it was more likely a deliberate strategic decision to sue in the name of the Second Claimant.
• The amendment sought would alter the basis of the claim, which is not permitted under CPR 19.5 without proper application under CPR 17.4.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by clarifying that CPR 19.5 governs substitution of parties post limitation period, requiring that the party named in the claim form was named in mistake for the new party. The court applied the established jurisprudence distinguishing between mistake as to name (misnomer) and mistake as to identity. The generous Sardinia Sulcis test was adopted to interpret mistakes as to name.

The court rejected the Claimants’ reliance on Morgan Est, holding that it was wrongly decided and should not be followed. The court emphasized that a genuine mistake must be shown to have been made by those responsible for issuing the claim form, and that the mistake must be as to name rather than identity. It must be demonstrated that, but for the mistake, the new party would have been named in the claim form.

The court found that the Claimants failed to prove that the Second Claimant was named in the claim form in mistake for the Third and Fourth Claimants. The evidence did not establish how the mistake arose, nor that the persons responsible for the claim form were under any misapprehension about the corporate structure or roles of the companies. The judge’s reasoning that the Second Claimant was deliberately chosen was supported by the lack of evidence to the contrary.

Further, the court acknowledged the complexity of the Claimants’ position, noting that the Second Claimant might have an independent claim for damage to its reputation as a holding company. The proposed amendments involved new claims and causes of action, which could only be added under CPR 17.4, and no application had been made under that rule.

In sum, the court held that the application to substitute parties failed because the precondition of a genuine mistake as to name was not satisfied, and the amendments sought went beyond substitution to adding new claims.

Holding and Implications

The court's final decision is DISMISSED.

The Claimants’ appeal to join additional corporate claimants by way of substitution under CPR 19.5 was refused. The court held that the necessary precondition of a genuine mistake as to the name of the party named in the claim form was not established. The amendments sought involved new claims which required a different procedural route under CPR 17.4, which had not been pursued. The decision means that the original claim form stands as issued with the Second Claimant as the corporate claimant named.

No new legal precedent was set by this decision; rather, the court reaffirmed existing principles distinguishing mistake as to name from mistake as to identity and clarified the application of CPR 19.5 and CPR 17.4 in the context of substitution and addition of parties post limitation period.