Birch v Beccanor Ltd

Late applications to amend pleadings or obtain relief from sanctions require a rigorous assessment under the overriding objective. The applicant must explain the delay and show why justice requires disruption to an existing trial date. The court must weigh the strength and clarity of the proposed case, the history of the default, and the prejudice to the opposing party and other court users.

A deliberate and unexplained failure to serve witness statements is a serious breach. Relief may properly be refused where the resulting trial can fairly proceed on the pleaded issues and the excluded party can bring any substantive claim separately.

The claimant sold the shares in a precision engineering company to the first defendant under a share purchase agreement. Deferred consideration became payable, but remained unpaid. The defendants relied in correspondence on alleged undisclosed cash sales of scrap and possible breaches of warranty, but did not plead a set-off, counterclaim, fraud or adequately particularised warranty claim.

After procedural directions had fixed a trial and required witness statements to be exchanged, the defendants applied shortly before trial to vacate the trial, amend the defence and bring a counterclaim, and obtain relief from sanctions for failing to serve witness statements. The central questions were whether those applications should be granted in the interests of justice and the overriding objective.

1. Applications to vacate the trial. The application was dismissed. The trial date resulted from the defendants’ failure to comply promptly with the court’s listing directions. They knew of the witness-availability problem well before applying and had delayed until shortly before trial. The existing pleaded issues could be tried without the unavailable witness.
2. Amendment and counterclaim. The court applied the balancing exercise described in Swain-Mason [2011] EWCA Civ 14 and Qua Sue Ling v Goldman Sachs [2015] EWHC 759. A very late amendment is not generally justified merely because it would enable the real dispute to be determined. The applicant bears a heavy burden of showing both the strength of the new case and why justice requires the disruption. The history of the proposed amendment, the prejudice to each party, the effect on the trial date and the wider interests of court users were material considerations.
3. The proposed amendments concerned matters known to the defendants since at least 2014. The later documents were additional evidence for a case that could already have been pleaded. The defendants had not explained the delay adequately, whereas allowing the amendment would deprive the claimant of the fixed trial and require him to meet a substantially new case. Permission to amend and to bring the counterclaim was therefore refused.
4. Relief from sanctions. Applying CPR 3.9 and the guidance in Denton [2014] EWCA Civ 906, the failure to serve any witness statement was a serious, deliberate and inexplicable breach. The rules remained subject to the justice of the case, but refusing relief was fair. The trial could proceed on the pleaded case, and any freestanding claim for fraud, deceit or breach of warranty could be brought separately if available.
5. All three applications were dismissed.