Stewart v Engel

A court may vary or revoke an order after judgment but before it is sealed or otherwise perfected. That power survives under the Civil Procedure Rules 1998, notwithstanding that an order ordinarily takes effect when made.

The power must, however, be exercised sparingly. Finality and the successful party’s legitimate expectation that the judgment is effective are important parts of dealing with a case justly. Where a party has deliberately declined an available amendment before final judgment, a later change of legal advice will not ordinarily provide the exceptional or strong reason needed to reopen the order.

The claimant had bought copyright and related rights in assessment-library materials from a company acting through its liquidator. She alleged that physical copies of the materials were wrongly transferred to a competitor. Her original claims in contract and negligence were dismissed on a summary-judgment application.

Before judgment, the judge raised the possibility of conversion. The claimant declined to pursue it. After the dismissal order had been made but before it was sealed, she obtained fresh leading counsel’s advice and sought to amend to plead conversion and rectification. The proposed claims were otherwise time-barred.

The judge allowed the amendment. The defendants appealed, raising the court’s power to reopen the order, the proper exercise of discretion, and the effect of Limitation Act 1980 section 35 and CPR rule 17.4.

Appeal allowed by a majority of two to one. Sir Christopher Slade and Roch LJ held that the claimant should not have been permitted to revive the action by amendment after its dismissal.

1. The court had power to vary or revoke the dismissal order before it was drawn up or sealed. CPR rule 3.1(7) conferred that power. CPR rule 40.7(1), which made the order effective when made, did not remove it. The court therefore retained a limited pre-perfection jurisdiction reflected in Re Barrell Enterprises [1973] 1 WLR 19.

2. The majority held that finality imposed a stringent restraint on that jurisdiction. A party who has received a final written judgment, particularly after being invited to raise the very point later advanced, cannot ordinarily reopen the case simply because newly instructed counsel gives different advice. The judge wrongly treated the dismissal as a merely mechanical consequence rather than his final decision on the action. There were no exceptional circumstances or strong reasons justifying its revival.

3. The Court of Appeal therefore exercised the discretion afresh, set aside the order of 10 December 1999, refused permission to amend, and dismissed the action against both defendants.

4. On the further issues, which did not affect the result, the court agreed that rectification and conversion were new causes of action. It also held that the statutory same-facts condition was satisfied. In section 35, facts “in issue” meant facts material to the original claim, not only facts disputed on the pleadings. The proposed claims arose from the same or substantially the same material facts.

Clarke LJ agreed that the order could be varied before sealing, but dissented on discretion. He considered that CPR rule 1.1 required an assessment of all the circumstances rather than an exceptional-circumstances threshold, and would have dismissed the appeal.

• Court of Appeal: Allowed the defendants’ appeal, set aside the order permitting amendment, refused the amendment, and dismissed the action.
• Queen’s Bench Division, Bristol Mercantile Court: HH Judge Jack QC had dismissed the original claim on 24 September 1999, then, before that order was sealed, permitted an amendment on 10 December 1999 to introduce claims for rectification and conversion.