Al Nehayan v Kent

Permission to amend a statement of case may include permission to withdraw admissions where the substance of the proposed amendment necessarily challenges those admissions. The court must apply the overriding objective and consider the circumstances as a whole, including prejudice, the stage of proceedings and the prospects of success. Procedural rules are instruments for achieving justice, not technical obstacles. Amendments should generally be allowed where the real dispute can be determined and any prejudice can be compensated in costs. A party cannot later complain of procedural irregularity where its conduct at the relevant hearing indicated agreement to the amendment and it failed to seek protective conditions.

The claimant appealed against orders made by Master McCloud on 23 January 2014 and Master Eyre on 24 November 2014. The orders permitted the defendant to serve an amended defence and counterclaim alleging, among other matters, fiduciary duties, undue influence, misrepresentation and duress, and declared that separate permission was unnecessary to withdraw admissions made in the original pleading.

The claimant argued that the amendments required permission under CPR Part 17 and that withdrawal of admissions required a separate exercise of discretion under CPR Part 14. He also challenged the adequacy of the Masters’ reasons and raised jurisdictional objections. The central issue was whether the Masters’ orders involved serious procedural or other irregularity.

1. Appeal dismissed. Master McCloud’s order was properly understood as granting permission for the amended defence and counterclaim. Before the hearing, the defendant had warned the claimant that substantial amendments would allege fiduciary duties and challenge the validity of the Framework Agreement. The claimant’s solicitor objected only to transfer to the Chancery Division and gave the impression that amendment was agreed.
2. Although it would have been preferable for permission to be considered after the draft pleading was available, the circumstances justified the order. The claimant had failed to request protective conditions or reserve objections when the opportunity arose. His later conduct confirmed the parties’ understanding that permission to amend had been given.
3. Permission to withdraw the admissions was inherent in permission to advance an amended case alleging a fiduciary relationship and challenging the validity of the agreements. It was unnecessary for the Master to address each factor in CPR 14PD 7.2 expressly. The relevant considerations substantially overlapped with those under CPR Part 17, including prejudice, the stage of proceedings and prospects of success.
4. The approach was consistent with Sowerby v Charlton [2005] EWCA Civ 1610 and the overriding objective. Amendments should generally be allowed where the real dispute can be adjudicated and prejudice can be compensated in costs, as explained in Cobbold v London Borough of Greenwich. The present case was materially different from Cluley v RL Dix Heating [2003] EWCA Civ 1595, where the prejudice was incurable.
5. The claimant had shown no prejudice. The amendments were introduced at an early stage, no trial date had been fixed, and the claimant remained free to apply for summary judgment or strike out on the basis that the amended defence and counterclaim had no real prospect of success. The Masters’ orders were therefore fair, notwithstanding that the CPR had not been applied with complete precision.

• High Court (Queen’s Bench Division): Appeal against orders of Master McCloud dated 23 January 2014 and Master Eyre dated 24 November 2014 dismissed.
• Jay J refused permission to appeal. Warby J granted permission at a renewed oral hearing.