Tchenguiz & Ors v Thornton UK LLP & Ors

A statement of case must concisely plead the material facts needed to formulate the cause of action or defence. It should not include evidence, unnecessary narrative, argument or rhetoric. In the Commercial Court, the page limit and other requirements in the Commercial Court Guide are important case-management requirements, not optional guidance.

Where there is flagrant non-compliance, retrospective permission may be refused. The court may strike out the defective pleading, require a compliant re-pleading and disallow the costs of preparing it. A party cannot rely on its own failure to seek permission, or on the opponent’s lack of objection, as a reason to excuse the breach.

The claimants alleged that the defendants had conspired unlawfully to induce the Serious Fraud Office to investigate them by making statements which the defendants did not believe to be true.

The particulars of claim were 94 pages long and had been served without prior permission, despite the 25-page limit in the Commercial Court Guide. They contained extensive narrative, evidential material, allegations and rhetoric before reaching the operative allegations. The claimants subsequently sought retrospective permission.

The court considered whether the pleading should be permitted to stand, whether it should be re-pleaded, and whether the costs of drafting it should be disallowed.

1. The claimants’ application for retrospective permission was refused. Leggatt J struck out the particulars of claim, disallowed the costs of drafting them, and required fresh particulars of claim of no more than 45 pages, compliant with Appendix 4 of the Commercial Court Guide, within 21 days.

2. Statements of case must plead concise material facts necessary to formulate a cause of action or defence. They must not plead background facts, evidence, arguments, reasons or rhetoric. These requirements identify the matters to be proved at trial and help control litigation costs.

3. The particulars flagrantly breached those requirements. Their 94 pages included unnecessary narrative and repeated assertions of fraud and dishonesty, while the material allegations and particulars began only much later. The serious nature of an allegation did not justify repetition or prolixity.

4. The court rejected the contention that a shorter pleading would inevitably generate a request for further information under Civil Procedure Rules 1998, Part 18. A proper pleading could state the alleged false statements, the occasions on which they were made, and the particulars supporting alleged knowledge, without the unnecessary material.

5. The absence of an objection from the defendants, and a consent order extending time for the defence, did not authorise disregard of the court’s procedure. Nor could the claimants rely on delay caused by their own failure to seek permission. In light of Standard Bank PLC v Via Mat International Ltd [2013] EWCA Civ 490, flagrant disregard of pleading requirements warranted adverse costs consequences.

High Court (Commercial Court): first-instance procedural ruling. The judgment refers to a consent order extending the time for service of the defence, but holds that it did not approve the length of the particulars of claim.