The Supreme Court – FS Cairo (Nile Plaza) LLC v Lady Christine Brownlie
Following the Jackson reforms and the decision in Andrew Mitchell MP v News Group Newspapers Ltd  EWCA Civ 1537, the courts are now charged with balancing proportionality of costs and fairness to all parties.
This is borne out in the recent case Hague Plant Ltd v Hague and others  EWHC 568 (Ch), where the court held that proportionality of cost and reasonable allocation of court resources tipped the scale in favour of refusal to accept amendments.
Key fact of the application
Hague Plant Ltd v Hague was in essence a dispute about a family business involving allegations of breach of fiduciary duty on the part of one of the family members who was a director of the claimant company. An opposed application to re-amend the particulars of claim came before His Honour Judge Behrens. The application was made almost three years after the original letter before action and some two and a half years since proceedings had been issued, with the original particulars of claim running to a mere 8 pages. However, the claim had not progressed beyond amended particulars of claim, amended defence and an extensive request for further information. Since the issue of proceedings, there were no less than thirteen interlocutory applications involving seven days of court time. The proposed re-amended particulars of claim was 65 pages long and comprised 104 separate paragraphs and 35 pages of appendices. It not only sought to elaborate on existing causes of action, but also to introduce additional ones.
Judge Behrens refused the application on grounds of proportionality and proper use of the courts’ resources. He said (at paragraph 55): “I have come to the clear conclusion that this application to re-amend is disproportionate in the sense that it would not lead to the litigation being conducted at proportionate cost and would lead to further extensive judicial time being expended at the expense of other litigants.”
According to CPR 17.1(2), a party may amend his statement of case at any time either with the written consent of all the other parties or with the permission of the court. In the case of the latter, pre-Jackson, the prevailing judicial philosophy was that amendments to pleadings should be permitted “so that the real dispute between the parties can be adjudicated upon provided that any prejudice to the other party caused by the amendment can be compensated for in costs, and the public interest in the administration of justice is not significantly harmed”, (Peter Gibson LJ in Cobbold v Greenwich LBC (9th August 1999); CA (Civ Div)). However, the climate has changed since then with greater emphasis on the question of proportionality.
In Mitchell, the Master of the Rolls cited with approval the High Court Master’s “robust” judgement, including the passage “[j]udicial time is thinly spread, and the emphasis must, if I understand it correctly, be upon allocating a fair share of time to all as far as possible”. Following that, despite their overall discretion to allow an application to amend a statement of case, judges may reject an application in order to be fair to other litigants.
CPR Practice Direction 17 provides that a party applying for an amendment will usually be responsible for the costs of and arising from the amendment. Such an order is invariably made when granting permission to amend a statement of case. In the case of Hague Plant Ltd v Hague, the court was of the view that despite the value of the claim being substantial, the costs to date were “very substantial” and “very substantial further costs will be incurred if the Defendants have to plead to the new allegations”. Judge Behrens appears to have taken the view that the claimant should not be permitted extensively and substantively to re-amend its Particulars of Claim since the potential costs flowing from the amendments, when viewed together with the costs already incurred, would be disproportionate to the claim. Surely, however, if the applying party is willing to pay such costs and it is believed that the amendments are indispensable, then that should be given weight in the decision-making process.
The answer probably is that the willingness to meet the costs and belief in the indispensability of the amendment is not enough. The success of the application to amend hinges on the unearthing of the “real dispute” between the parties and the strength of the new case.
Unearthing the real dispute
Judge Behrens was highly critical of the drafting of the proposed amendment which he thought was overly lengthy and lacked precision. He referred to CPR 16.4 which requires that the particulars of claim should include a concise statement of the facts upon which a claimant relies. He cited a passage from the judgment of the Court of Appeal in McPhilemy v Times Newspapers,  3 All ER 775, in which Lord Woolf MR pointed out that the need for extensive pleadings had been reduced but that they were still required “to mark out the parameters of the case that is being advanced by each party. In particular they are still critical to identify the issues and the extent of the dispute between the parties. What is important is that the pleadings should make clear the general nature of the case of the pleader.”
In Hague Plant Ltd v Hague, the court found that the amended Particulars of Claim misconstrued the real dispute. For the most part, the judge agreed with the Defendant’s criticism that the amended Particulars of Claim constituted “a rambling, narrative pleading which conspicuously and comprehensively misstates D’s position, in material respects, and then seeks to draw conclusions by a false syllogism from false premises.” The judge analysed a number of the proposed amendments to explain why he was disallowing the application relying upon the reasonable prospect of success test, set out in CPR Part 24. It follows that, if the issues are obscured by the amendments and there is no reasonable prospect of success, then an injustice would be done, not only to the other party, but also to other litigants, in allowing such an application.
Judge Behrens concluded that, having regard to the time that had passed and the work that had been done, this was a late application to amend.
Whilst it may not be possible to confidently predict how the court will approach applications to amend particulars of claim post-Jackson and post-Mitchell, lessons can be learned from the current case:
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