First Personnel Services Ltd v Halfords Ltd

Late amendments should be allowed where they are materially prompted by an opponent’s late disclosure of documents that ought to have been disclosed earlier, provided the proposed case is capable of proper pleading and the resulting case-management consequences can be addressed. The court must balance the history and explanation for the amendment, prejudice to each party, prejudice to other litigants, clarity and particularity of the pleading, and the efficient use of judicial resources. A disclosure breach does not give the applicant an automatic entitlement to amend. Where the amended issues cannot fairly be tried immediately, directions including a split trial and further evidence may be appropriate.

First Personnel Services Ltd supplied temporary agency workers to Halfords Ltd. First Personnel claimed unpaid invoices and transfer fees. Halfords defended the claim and counterclaimed for alleged overcharges, relying on representations, contractual terms, negligence, restitution and a possible Quistclose trust.

Shortly before the listed trial, First Personnel disclosed Tempaid payroll and charging data. Halfords applied to re-re-amend its defence and counterclaim, introducing or expanding claims concerning pay rates, holiday pay, National Insurance, management fees and fixed charge rates. First Personnel resisted on grounds including lateness, inadequate pleading, lack of evidence, prejudice and the need for relief from sanctions.

The amendment application was allowed, subject to the draft pleading being recast to make positive and sufficiently particular assertions rather than tentative statements.

1. The Tempaid data fell within standard disclosure under CPR 31.6. Its non-disclosure was a significant breach, although there was no finding of bad faith.
2. The late disclosure materially impeded Halfords’ ability to identify, quantify and plead its counterclaims. Other sources were incomplete, partial, unreliable or incapable of showing what had actually been paid.
3. The contractual reimbursement case and related Quistclose trust argument were not plainly untenable and should not be summarily excluded at the amendment stage.
4. The court applied the modern approach to late amendments, balancing lateness, explanation, prejudice to both parties and other litigants, pleading clarity, and limited judicial resources. The usual procedural rigour had to be assessed in the context of the late disclosure that caused the need for amendment.
5. A split trial could be appropriate because determination of the composite-rate issue might make extensive analysis of the Tempaid data unnecessary. The precise scope and timing were left for further argument.