Berezovsky v Hine & Ors

A late attempt to introduce a new cause of action will be permitted only where justice requires it, having regard to all litigants. The amending party bears a heavy burden where the amendment would delay the trial, cause substantial prejudice, require extensive new disclosure or disrupt existing case-management arrangements. A party may be refused permission even where the new case is arguable, particularly where the party has had ample opportunity to plead it and can pursue related claims elsewhere. Evidence relevant to the factual background may remain admissible, but reliance on the new case as the foundation of a cause of action may be excluded.

The court considered an application by Roman Abramovich to strike out parts of Boris Berezovsky’s response to a request for further information in the Commercial Court proceedings. The response sought, for the first time, to rely on an alleged bilateral joint venture between Berezovsky and Patarkatsishvili as the basis for a proprietary claim and alleged express, resulting or constructive trust against Abramovich.

The proceedings were case-managed jointly with related Chancery actions. The proposed issues had not formed part of the defined overlap issues and their introduction would have required substantial further disclosure and potentially affected the joint trial. The central question was whether the new case should be permitted to proceed at that late stage.

1. Application granted in substance. The court, Gloster J giving the judgment with the full agreement of Mann J, refused to allow Berezovsky to rely on an alleged bilateral joint venture, whether overarching or limited to the aluminium assets or RusAl, as grounding a cause of action against Abramovich.
2. The court treated the strike-out application as substantively raising the question whether permission to amend should be granted. The relevant considerations included abuse of process, obstruction of the just disposal of the trial and prejudice to another party.
3. Applying Worldwide Corporation v GPT Ltd [1998] EWCA Civ 1894, the court held that where a party has had many months to formulate its case, a late amendment carries a heavy burden. The court must balance justice to the amending party, the opponent and other litigants. The new case’s arguability was insufficient by itself.
4. The proposed amendment was introduced after several years of litigation and after earlier changes in the formulation of the claim. It would have required Abramovich to investigate a large body of disclosure, identify further evidence and prepare to meet issues central to the Chancery actions. The resulting disruption would have been substantial and would have undermined the carefully structured case management arrangements.
5. No serious injustice would result to Berezovsky from refusing the amendment. Existing claims concerning the aluminium assets and RusAl could continue, including claims based on the alleged 1995/1996 agreement, the use of Sibneft profits and the alleged Dorchester Hotel Agreement. Trust or proprietary remedies flowing from those existing claims could also be pursued.
6. The order would not prevent evidence about Berezovsky’s commercial relationship with Patarkatsishvili being given as background evidence. The precise scope of that evidence, and any consequential clarification of the existing proprietary claims, were left for the trial judge.