Bilta (UK) Limited (in liquidation) & Ors. v Royal Bank of Scotland Plc & Anor.

Permission to amend pleadings may be refused even where the proposed case is arguable and sufficiently clear. The court must consider the timing of the amendment, the explanation for delay, and the prejudice to the opposing parties, particularly where trial is imminent. Substantial new allegations are not rendered formal merely because related material appears in expert evidence, witness statements or the defence. Pleadings must identify the material facts and the case to be met; they must not become evidence or a running commentary. Allegations of dishonesty require proper particularity, including the factual basis for the alleged knowledge or awareness. Amendments may be permitted where they elucidate an existing pleaded case and cause minimal prejudice, subject to adequate pleading of knowledge. An uncertain or unparticularised allegation of a dishonest scheme will be refused.

The claimants, companies in liquidation acting by their liquidators, brought dishonest assistance claims and alternative claims under section 213 of the Insolvency Act 1986 against the defendants concerning alleged VAT fraud in spot trading of EUAs. Shortly before a six-week trial, they sought permission to re-amend their particulars of claim.

The proposed amendments concerned new trading patterns, further particulars of already pleaded trading patterns, the defendants’ anti-money-laundering policies, and an allegation that EUAs had been recycled through a trading carousel. The central issue was whether the late amendments were sufficiently clear and properly pleaded, and whether the resulting prejudice justified refusing permission.

1. Outcome. The application was allowed only in part. Amendments elucidating already pleaded trading patterns were permitted, subject to proper pleading of the traders’ knowledge. New trading-pattern allegations, the anti-money-laundering plea, and the unparticularised trading-carousel allegation were refused.
2. In considering an amendment, the court should ask whether it has a real prospect of success, is sufficiently clear and precise, has a clear connection with the case, and pleads material facts rather than evidence. The later the amendment, the more carefully the court must assess disruption and prejudice. Lateness may justify refusal even where arguability, clarity and materiality are established.
3. The fact that related matters appear in expert reports, witness statements or a defence does not permit a claimant to introduce an entirely new case. An expert report will rarely make it obvious that an unpleaded point is being advanced. A general traverse in a reply also does not convert a disputed defence point into a new allegation in the particulars of claim.
4. In a dishonest assistance claim based on trading patterns, the claimant must distinguish between the alleged fact of the pattern and the defendants’ knowledge or appreciation of it. Bare assertions of awareness are inadequate where the allegation is materially in issue. The defendants must have a fair opportunity to address new knowledge allegations with their witnesses and evidence.
5. Anti-money-laundering policies may be relevant if knowing non-compliance is capable of supporting an inference of dishonesty in the trading. They do not, without such a nexus, establish dishonesty in another aspect of the business. The proposed plea was uncertain in scope and too late, creating real and uncompensable prejudice.
6. An allegation that EUAs were recycled through a trading carousel had not been properly or fully particularised. The defendants could not understand the case they had to meet, so that amendment was refused.

First-instance ruling on an application for permission to re-amend the particulars of claim. No earlier decision is stated in the judgment.