Carey Group Plc & Ors v AIB Group (UK) Plc & Anor (No 2)

Permission to amend a pleading may be refused where the proposed case has no real prospect of success. The court applies a test of reality, not probability, and may reject evidence that is inherently implausible, contradicted or unsupported by contemporaneous documents. A late amendment reversing a carefully pleaded and verified case requires a credible explanation. An alleged oral assurance cannot readily support rectification where no relevant mistake is pleaded. A written variation clause may prevent reliance on a collateral contract. A subsequent written contract inconsistent with an earlier assurance may show that the assurance no longer formed part of the parties’ legal relations.

The claimants sought permission to amend their Particulars of Claim after the court had decided to strike out their claim concerning the termination and review of an overdraft facility. The proposed amendments alleged an oral assurance that the facility would remain available until a specified review date, and advanced claims based on collateral contract, rectification and promissory estoppel.

The defendants opposed the amendment because the new case had no real prospect of success. The issue was whether the allegations were sufficiently credible to justify a trial despite their inconsistency with the claimants’ earlier pleaded case and the written facility agreement.

1. Application refused. Permission to amend was refused, and the Particulars of Claim and claim were struck out with costs.
2. Under CPR 24, the relevant criterion is absence of reality rather than probability. The court may reject evidence without a trial where it is inherently implausible, contradicted or unsupported by contemporaneous documents.
3. The proposed oral-assurance case was inherently implausible. The claimants had repeatedly pleaded and verified that the written Facility Agreement contained the whole bargain and provided for repayment on demand. They gave no credible explanation for changing that case after the issue had been expressly raised.
4. The new case also faced independent legal difficulties. The written agreement contained a clause requiring contractual changes to be made in writing and signed by authorised bank representatives. Such a clause served substantially the same purpose as an entire agreement clause. The proposed rectification claim pleaded no sufficient mistake as to the agreement’s contents.
5. The promissory-estoppel case was also subject to a substantial obstacle. The assurance was said to pre-date an agreement inconsistent with it, and the agreement was neither rectified nor supplemented by a collateral agreement. That supported the inference that the earlier assurance no longer formed part of the parties’ legal relations.
6. The decisive reason for refusing the amendment was that the proposed case was inherently implausible in the circumstances.

First-instance judgment. The judgment records an earlier strike-out decision in the same proceedings, but gives no citation for that decision.