Donovan & Anor v Grainmarket Asset Management LLP

Permission to make a very late amendment is discretionary and must be determined by balancing the applicant’s prejudice against the prejudice to the opposing party and other court users. The overriding objective is central. Where the amendment could have been advanced earlier, requires completed stages of the litigation to be revisited, lacks a good explanation, or threatens the trial timetable, the burden on the applicant is particularly heavy. The applicant’s own failure to plead the case earlier reduces the weight of refusing permission. A reply must answer the defence; it cannot introduce a new claim or new relief. A claim for a partnership account must therefore be pleaded in the particulars of claim and supported by appropriate relief.

The claimants sought permission to amend their pleadings shortly before a five-day trial. Their existing case concerned contractual payments and, alternatively, a quantum meruit. The proposed amendments introduced a primary case that the first claimant and the defendant had formed a partnership within the meaning of the Partnership Act 1890, together with a claim for a partnership account.

The defendant opposed the substantive amendments. It relied on the need to revisit disclosure, witness evidence and expert evidence, and on the proximity of the fixed trial date. The claimants accepted that the partnership case could have been advanced earlier, but attributed the delay principally to the instruction of new junior counsel. The court also considered whether references to partnership in the reply could support a claim for partnership relief.

1. Late amendments. The application was made only weeks before trial and the proposed partnership case could have been pleaded from the outset. It was therefore very late. Allowing it would require the defendant to revisit disclosure, factual evidence and expert evidence, because the partnership characterisation involved substantially different legal and evidential analysis. This amounted to substantial prejudice.
2. Explanation and trial timetable. The explanation based on the instruction of new counsel was weak. Fresh consideration of possible arguments by new counsel was not a good explanation for delay. The imminent trial increased the prejudice caused by the amendment, even though the defendant preferred not to seek an adjournment. The lack of clarity concerning partnership shares, terms, scope, dissolution and the treatment of later projects was an additional factor against permission.
3. Balancing exercise. The court applied the discretionary approach summarised in Quah Su-Ling v Goldman Sachs International [2015] EWHC 759 (Comm) and CIP Properties (AIPT) Ltd v Galliford Try Infrastructure Ltd [2015] EWHC 1345 (TCC). The claimants’ prejudice if unable to advance their preferred case was relevant, but was reduced because it resulted from their own delay. Balancing all the circumstances, permission for the opposed amendments was refused.
4. Reply. A reply must be responsive to a defence and cannot raise a new claim for new relief. Under Practice Direction 16 – Statements of Case, paragraph 9.2, the references to partnership in the reply could not provide a proper basis for determining that a partnership existed or for granting a partnership account. The court made that observation without striking out the passages, since no strike-out application had been made.

First-instance decision. No prior appellate decision is stated in the judgment.