SEELE AUSTRIA GMBH & CO KG V TOKIO MARINE EUROPE INSURANCE LTD (NO 3)

[2009] EWHC 2066 (TCC), Queen's Bench Division, Technology and Construction Court, Mr Justice Christopher Clarke, 6 August 2009

Insurance (property) - Limitation of actions - Addition of new cause of action - Running of limitation period - Limitation Act 1980, section 35

Seele entered into a contract to design, procure and install roof glazing at a project in Paternoster Square, London. The work included the installation of "punched windows" in the spaces between vertical load bearing concrete columns and horizontal concrete floors. Following installation, cladding was inserted between the windows by a subcontractor. The windows once installed were found to have leaked, and it proved necessary to strip the cladding in order to resolve the problem with the installation of the windows. The employer sought damages of £1,237,709.48 representing the cost of removing the cladding and also loss by way of delay. Seele was co-assured under a Contractors' All Risks policy which provided an indemnity against loss damage or liability with respect to "The whole of the works whether permanent or temporary including materials incorporated or to be incorporated therein and other things the property of the Insured or for which they are responsible". A claim form was issued in June 2006. In initial proceedings, Seele Austria GmbH & Co KG v Tokio Marine Europe Insurance Ltd [2008] Lloyd's Rep IR 739, the Court of Appeal held by a majority that Seele was entitled to an indemnity for access costs, ie, intentional damage necessarily caused to the works in order to make good a defect which posed a threat to the works as a whole. However, it further ruled that Seele bore a £10,000 deductible for the damage caused by replacing each defective window, because there was no single event which could be said to unify the defects to each window and thus no basis for aggregation. In subsequent proceedings, Seele Austria GmbH Co v Tokio Marine Europe Insurance Ltd (No 2) [2009] BLR 261 Seele sought to amend its pleadings to argue that the problems were the result of bad design rather than bad workmanship, it being common ground that bad design was a single event which would carry only one deductible. Coulson J refused the amendment on the basis that the workmanship v design issue had been determined in favour of workmanship by the trial judge, and could not be reopened. Even if that was wrong, the matter had been determined by the Court of Appeal. Accordingly there was an issue estoppel. Alternatively, if there had not been a determination by the trial judge or Court of Appeal, the assured was estopped from raising this issue at the present stage because it could and should have been raised in the earlier proceedings. Coulson J did, however, allow Seele to amend its case so that it could claim access costs, the costs of delay and other working costs. In the present case in May 2009 Seele again sought to amend its pleadings, by identifying different windows and basing its claim on a per window deductible. The court ruled that a new claim had been made, that the limitation period had started to run when the damage occurred (no later than January 2003) and that under section 35 of the Limitation Act 1980 a new claim could not be allowed outside the limitation period.