National Westminster Bank Plc v Rabobank Nederland

Permission to introduce a late amendment depends on the overriding objective and the fair conduct of the trial. The court may permit clarification or limited new allegations where the necessary additional evidence can be obtained without material disruption. It may refuse a new cause of action where it requires substantial additional factual or expert investigation, risks delaying or dislocating the trial, and could reasonably have been pleaded earlier.

A claim under section 2(1) of the Misrepresentation Act 1967 and a claim for negligent misstatement under the Hedley Byrne principle may require materially different factual enquiries. Their factual overlap does not make them substantially co-extensive for case-management purposes.

Rabobank sought permission to rely on a Misrepresentation Statement of Case in substitution for, and partly amending, its existing defence and counterclaim in proceedings concerning alleged misrepresentations by National Westminster Bank in connection with financing provided to Yorkshire Food Group.

The proposed statement contained claims in fraudulent misrepresentation, negligent misrepresentation under section 2(1) of the Misrepresentation Act 1967, and negligent misstatement at common law. The application was determined on written submissions shortly before the scheduled trial. The central questions were whether the proposed allegations were new and, if so, whether justice and proper case management required permission for them to be introduced at that stage.

1. The application was granted in part and refused in part. Rabobank could rely unconditionally on Section A of the Misrepresentation Statement of Case, except for Misrepresentations 7, 8 and 9. Those allegations could be introduced only subject to specified efforts to obtain supplemental witness evidence and related directions.

2. Rabobank could rely on Section B, concerning negligent misrepresentation under section 2(1) of the Misrepresentation Act 1967, subject to the same restrictions concerning Misrepresentations 7, 8 and 9. The court deliberately postponed questions concerning the intrinsic merits of the claims until trial.

3. Section C, which introduced a claim for negligent misstatement under the Hedley Byrne principle, was refused. Although there might be factual overlap with the section 2(1) claim, the enquiries were materially different. Section 2(1) required investigation of the representor’s appreciation of the meaning conveyed, intended reliance, belief in its truth, and the reasonableness of that belief. A Hedley Byrne claim required investigation of the circumstances said to establish a duty of care, including any voluntary assumption of responsibility, and whether the representor ought to have appreciated the inaccuracy.

4. The proposed common-law claim would require substantial additional enquiries of factual and expert witnesses, risk prolonging the trial, and potentially interfere with the court timetable. It could have been pleaded no later than June 2005, and no later-discovered facts justified the delay. Permission would therefore be contrary to the overriding objective in CPR 1.1 and inconsistent with the court’s case-management powers under CPR 1.4.

5. The order was amended to reflect the conditional permission and the exclusion of the common-law negligent-misstatement claim. Each party was to bear its own costs of preparing the written submissions and considering the judgment.

First-instance decision on an interlocutory paper application. No earlier appellate decision is stated in the judgment.