Sollitt v D J Broady Ltd.

Permission to withdraw an admission is a matter of judicial discretion. The court must consider all the circumstances and balance the prejudice to each party if the admission is withdrawn or allowed to stand. There is no general rule that an admission made by mistake should be withdrawn unless serious prejudice to the other party is shown. Prejudice may include the loss of opportunities to protect a claimant’s position, investigate insurance or assets, seek an interim payment, negotiate settlement, or join another defendant. The party responsible for the mistaken position may bear substantial responsibility for the resulting prejudice.

The claimant was injured by an excavator operated by an employee of the company then known as D J Broady Ltd. Owing to a corporate name change, proceedings were issued against a different company bearing that name. Solicitors instructed on its behalf admitted the driver’s employment and primary liability.

After the true corporate position emerged, the Recorder refused to permit withdrawal of the admissions and held the appellant company jointly and severally liable with the correct defendant. The appellant challenged the refusal, arguing that the admissions had been made by mistake and that the claimant suffered no additional prejudice.

1. Appeal dismissed. The solicitors had actual authority to make the admissions. If they lacked actual authority, they had ostensible authority because the appellant held them out as authorised to act on its behalf.
2. The discretion to permit withdrawal of an admission is general. All the circumstances must be considered, and the court must balance the prejudice to each party if permission is granted or refused. Gale v Superdrug Stores Plc [1996] 1 WLR 1089 provided valuable guidance, but did not establish a rule of law requiring withdrawal unless serious prejudice would otherwise result.
3. The appellant’s prejudice was the burden of an adverse judgment which would not have arisen had the true facts been addressed earlier. That prejudice was substantially self-created.
4. The claimant had suffered, or might reasonably have suffered, serious prejudice because the admissions and failure to disclose the corporate position lulled him into believing that he had a solvent defendant admitting liability. He consequently lost the opportunity to preserve assets, investigate insurance, negotiate settlement, seek an interim payment, or join the excavator driver.
5. Although the Recorder had not expressly balanced the competing prejudice in the correct manner, the Court of Appeal considered that a proper review would have led to the same conclusion. The refusal to withdraw the admissions was therefore upheld. The respondent was awarded the costs of the appeal.

• Court of Appeal (Civil Division): dismissed the appeal from the Kingston upon Hull County Court and left the order on the stay undisturbed.
• Kingston upon Hull County Court: refused withdrawal of the admissions, added TD Broady Investments Ltd as a second defendant, and held the two companies jointly and severally liable for the damages.