The claimant, Interface, was a manufacturer/supplier of carpet tiles. Interface’s client, a Swiss bank, wanted carpet of a particular shade of grey (perhaps an appropriately anonymous choice of colour for a Swiss bank) with which to adorn its headquarters in Zurich. In 2007 Interface commissioned Premier, who were carpet dyers, to dye the carpets the requisite colour. Premier obtained the ingredients to make the dye from Airedale. The carpets were manufactured and dyed and then installed in Zurich.
The carpet was laid in a sunny office where strong light played upon it. By 2010 the colour of the carpet had changed from a pleasingly discreet grey to an alarmingly conspicuous green. In 2013 a technical report identified the cause of the colour change as one of the component dyes used in the mix not being colour-fast. Interface sued Premier for breach of contract. Premier settled Interface’s claim for £575,000. Premier then brought a Part 20 claim against Airedale for breach of contract. In 2014, Premier sought to amend its Part 20 Particulars of Claim to add a further claim against Airedale in negligence for failing to tell Premier that dye manufactured using the ingredients supplied would not be colour fast. The issue was whether the proposed new claim in negligence was statute-barred. The Court held that it was.
Premier argued that a contingent loss is not enough to start the limitation clock ticking in a claim of negligence. When it supplied the carpet to Interface in 2007, no-one was suggesting that there was anything wrong with it. Any loss caused by its supply could only therefore have been contingent. That could well have remained the case forever but for the fact that the carpet was laid in a sunny spot as a result of which its lack of colour fastness was revealed over time. The Court agreed that a contingent loss would not start the limitation clock ticking. But it held that Premier had suffered an actual loss on the day that it supplied the carpet to Interface in 2007 because, by supplying a defective carpet and thereby becoming a contract-breaker, Premier had diminished its own contractual rights against Interface.
Further, held the Court, Premier could not rely on section 14A of the Limitation Act because it had constructive knowledge by 2010 that there was a problem with the carpet and the three year period allowed under section 14A had already expired.
In the end, the Court rescued Premier’s claim by exercising its discretion under CPR 17.4(2) to allow the new claim to be added to the existing one because it arose out of similar facts.
The case illustrates how dangerous are the limitation traps for the unwary. It was not until 2013 that the cause of the problem was ascertained. But by then both the 6 year primary limitation period and the extended limitation period under section 14A had either already expired or were about to expire. If it had not been for the fact that Premier had an existing claim against Airedale to which this new claim could be added pursuant to CPR 17.4, it appears doubtful that the Court would have allowed the new claim to be brought at all.
As always, the moral of the story is that unless the proposed claim is manifestly within time, it has to be issued urgently or a standstill agreement reached with the defendant.