Court dismisses application for substitution in construction dispute

High Court dismisses application for substitution in construction dispute

The High Court, presided over by Jonathan Acton Davis KC, dismissed an application for substitution of the claimant in a complex construction dispute involving Mr Benjam Goldkorn, MPA (Construction Consultants) Ltd, and Kazu Restaurants 1 Ltd. The case, heard in the Technology and Construction Court, revolved around procedural issues and the standing of the parties involved.

The judgment, handed down on 20th March 2025, followed an earlier decision on 24th February 2025, where the court had refused an application related to the proceedings. The application sought to substitute Kazu Restaurants 1 Ltd, currently in liquidation, as the claimant, arguing that it was necessary for the continuation of the claim against MPA.

Mr Goldkorn, represented by John Brisby KC and Karl Anderson, had initially pursued the claim, but complications arose due to the liquidation status of Kazu Restaurants and the procedural intricacies of the assignment of claims. The court had to consider whether the substitution was permissible under CPR 19.6, which governs changes of parties after the expiration of a limitation period.

The court found that while the substitution might have been technically feasible, it was not justified under the circumstances. The liquidator of Kazu Restaurants, Mr Ian Yerrill, had initially disavowed any intention to pursue the claim, which led to a trial of preliminary issues that could have been avoided had the substitution been sought earlier.

Jonathan Acton Davis KC noted that the conduct of the parties, particularly the delay in seeking substitution, was a significant factor in the court's decision. The court emphasised the importance of timely applications and the need to avoid unnecessary litigation, which could prejudice other court users and increase costs.

The judgment highlighted the doctrine of Henderson v Henderson, which prevents parties from raising claims or defences in later proceedings that should have been addressed earlier. The court found that the application for substitution was an abuse of process, as it sought to revisit issues already determined in the preliminary trial.

The court also addressed the issue of costs, awarding them on an indemnity basis against Mr Goldkorn and Kazu Restaurants, reflecting the court's view that their conduct was sufficiently out of the norm to warrant such an order.

This case serves as a reminder of the procedural complexities in construction disputes and the necessity for parties to act promptly and in accordance with court rules. The decision underscores the court's discretion in managing cases and the importance of adhering to procedural requirements to ensure fair and efficient resolution of disputes.

Learn More

For more information on construction disputes, see BeCivil's guide to Resolving Construction Disputes.