Ali v Siddique

A party seeking to amend its pleading at trial bears a heavy onus to justify the application. The court must balance the need to determine the real issue justly against prejudice to the opposing party. It should consider the precision of the proposed amendment and the explanation for delay, and should give the opponent a proper opportunity to assess the draft before ruling. In a negligence claim concerning entrusted cheques, the claimant must first establish a prima facie case of carelessness before an evidential burden shifts to the defendant. Intervening fraud may break causation where the defendant was not responsible for the intermediary’s decision to use the fraudster and, absent the fraud, the money would have been transferred.

The claimant sued for money connected with two signed cheques intended to transfer funds from England to Bangladesh. At trial, Mr Recorder Rawlings permitted a late amendment introducing a negligence claim, found a duty of care, breach and causation, reduced damages for contributory negligence, and awarded judgment of £13,397 including interest, with 60% of the claimant’s costs.

The defendant appealed against the amendment, the refusal to call a further witness, the findings on duty, breach and causation, the reduction for contributory negligence, and costs. The central issues were whether the late amendment caused procedural unfairness and whether the negligence findings could stand.

The Court of Appeal allowed the appeal. The application to adduce further evidence was dismissed because the evidence could have been obtained with reasonable diligence for trial and was not likely to have an important influence on the result.

1. Late amendment. The court must consider both the need to determine the real issue justly and the prejudice to the party facing the amendment. Relevant matters include the precision of the draft and the explanation for delay. A party seeking a very late amendment bears a heavy onus: Swain-Mason v Mills & Reeve [2011] EWCA Civ 14, [2011] 1 WLR 2735. The Recorder erred by granting permission in principle without seeing a properly formulated draft or allowing the defendant a proper opportunity to consider it. The amendment introduced a fundamentally different case and made relevant evidence, including evidence from Mr Khan, important. The Recorder should have reconsidered the amendment after the evidence and refused it.
2. Negligence. Although the amended pleading was insufficiently specific, the court assumed for the purposes of the appeal that taking possession of the cheques involved responsibility to exercise reasonable care and to ensure that persons receiving them were reliable. The claimant nevertheless had to establish a prima facie case of negligence before any evidential burden shifted to the defendant. The evidence did not show that the defendant was careless in passing the cheques to Mr Khan, or that Mr Khan or the payees were dishonest or unreliable.
3. Causation. The fraud of Mr Chowdhury broke the causal connection. The evidence supported the inference that, without the fraud, the money would have been transferred, and there was no basis for treating the defendant as responsible for Mr Khan’s decision to use Mr Chowdhury. The court therefore did not need to determine the remaining arguments concerning contributory negligence and costs.

• Court of Appeal (Civil Division): Appeal allowed. The application to adduce further evidence was dismissed. [2015] EWCA Civ 1258.
• Bradford County Court: Mr Recorder Rawlings awarded the claimant £13,397 including interest and ordered the defendant to pay 60% of the claimant’s costs. The Court of Appeal held that the late amendment should have been refused and that the findings on breach and causation were flawed.