Berezovsky v Abramovich

Permission to amend pleadings should be granted where the amendment permits effective adjudication, prejudice can be compensated in costs, and the public interest in efficient justice is not significantly harmed.

A claim relying on the limitation protection for fraudulent breach of trust must plead fraud explicitly. A new claim may be added under CPR 17.4(2) only where it arises from the same or substantially the same facts. This requires more than overlapping background facts: new factual investigations ordinarily prevent the test being satisfied. Commercial Court requests for further information should be focused on information reasonably necessary to answer the pleaded case.

The claimant sought permission under CPR 17 to amend claims arising from alleged dealings in Sibneft and RUSAL. The proposed amendments included claims for breach of trust, breach of fiduciary duty and an account of profits, alongside an existing claim based on intimidation.

The defendant opposed the amendments on limitation and pleading grounds and applied under CPR 18 for further information before serving a Defence. The central issues were whether the proposed claims were explicitly pleaded as fraudulent, whether they arose from the same or substantially the same facts as the existing claim, and what information was reasonably required at that procedural stage.

1. Amendment refused in its present form. The proposed amendments were not permitted, although the claimant remained free to bring a properly pleaded claim based explicitly and solely on fraud.
2. The ordinary approach is that permission to amend should be granted where all issues can be effectively adjudicated, prejudice can be compensated in costs, and the public interest in efficient administration of justice is not significantly harmed. The approach in Cobbold v Greenwich LBC [1999] EWCA Civ 2074 was adopted.
3. A claim of fraud must be explicit. This was necessary both for fairness and to prevent an amendment from permitting otherwise time-barred claims for non-fraudulent breach of trust or fiduciary duty. The proposed claim form did not adequately identify fraudulent breach of trust or fiduciary duty.
4. The limitation protection in section 21 of the Limitation Act 1980 could assist only if the relevant fraud or proprietary claim were properly pleaded. The court did not decide the possible application of foreign limitation law or the effect of section 35.
5. Under CPR 17.4(2), a new claim does not arise from the same facts if new facts must be added to prove it. The substantially-same-facts qualification is narrow and covers only minor differences, collateral matters, or matters not requiring a major investigation. The guidance in Society of Lloyds v Henderson [2007] EWCA Civ 930 and Giles v Rhind [2008] EWCA Civ 118 was applied.
6. The proposed trust claims required investigation of the existence and proper law of the alleged trust, the defendant’s status as trustee, and the scope of his duties. Those matters went beyond the facts necessary for the intimidation claim. A claim form must contain a concise statement of the nature of the claim under CPR 16.2.1(a); equitable compensation and references to beneficial ownership did not silently plead fraudulent breach of trust or fiduciary duty.
7. Requests for further information before a Defence should be relatively uncommon and should be limited to information reasonably necessary to enable the Defence to be prepared. The parties should exchange short, focused requests and responses, leaving any limited unresolved issues to case management if necessary.