Court of Appeal
Published May 25, 2007
Dunwoody Sports Marketing v Prescott
Before Lord Justice Lawrence Collins and Lord Justice Toulson
Judgment May 17, 2007

The court had power to order substitution of a new party for an existing party or joinder of a party to an action after judgment had been given.

The Court of Appeal so held, allowing in part the appeal of the defendant, Nicholas Prescott, against the default judgment of Mr Justice Simon (unreported [2006] EWHC 2306 (QB)) granting an injunction and awarding damages to the claimant, Dunwoody Sports Marketing, on its claim for breach of restrictive covenants in a partnership agreement. Mr Prescott in person; Mr David Cavender for Dunwoody.

LORD JUSTICE LAWRENCE COLLINS said that the partnership had been transferred to a company. The company applied for the substitution of the company for the partnership as a party after judgment was given.

Rule 19.2(4) of the Civil Procedure Rules provided that the court could order a new party to be substituted for an existing one if the existing party’s interest had passed to the new party, and it was desirable to substitute the new party so that the court could resolve matters in dispute in the proceedings.

The court’s permission was required; the application for permission could be made by an existing party or a party who wished to become a party; and where the existing party’s interest had passed an application for an order for substitution of a new party could be made without notice but had to be supported by evidence: see rule 19.4(1),(2),(3).

There appeared to be no Court of Appeal decision on whether a new party could be substituted for an existing party after judgment.

Under Order 15 of the former Rules of the Supreme Court, it was held that substitution could be effected after judgment: see the Court of Appeal decision in Ord v Belhaven Pubs Ltd ([1998] BCLC 447), Stroud and Swindon Building Society v Stalp (unreported March 27, 1997), a decision of Lord Justice Phillips on a leave application in relation to Order 5, rule 11 of the former County Court Rules, and Mercer Alloys Corporation v Rolls Royce Ltd ([1971] 1 WLR 1520), a decision on the court’s inherent jurisdiction to order substitution.

It had been doubted whether there was a similar power in relation to joinder under rule 19.2 of the Civil Procedure Rules because the power was in relation to “matters in dispute in the proceedings” and there were no such matters following judgment: see Kooltrade Ltd v XTS Ltd (unreported, December 10, 2001).

In his Lordship’s judgment, the power under rule 19.2 in relation to joinder and substitution existed after judgment as well as before: see C Inc plc v L ([2001] 2 Lloyd’s Rep 459) and The Selby Paradigm ([2004] 2 Lloyd’s Rep 714).

Lord Justice Toulson agreed.

Solicitors: Boodle Hatfield.

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