KMG International NV v Chen & Anor

Permission to amend pleadings is discretionary and must further the overriding objective. The court balances the injustice to the applicant if permission is refused against prejudice to the opposing party, other litigants and the administration of justice if it is granted.

Lateness is relative. The court considers the nature of the amendment, the explanation for its timing, the strength of the new case, and the consequential work required. A party seeking a very late amendment bears a heavy burden, particularly where the amendment may disrupt expert evidence or undermine assumptions on which an earlier forum decision was based.

The claimant brought proceedings concerning the alleged unlawful dissipation of assets and relied principally on a Dutch-law tort under article 6:162 of the Dutch Civil Code. The court had previously refused a forum challenge and had permitted expert evidence on Dutch law limited to the pleaded case that the defendants intended specifically to harm the claimant.

Shortly before trial, the claimant applied to amend its pleadings to advance an alternative liability case based on knowledge that the claimant might or would be prejudiced. It also sought to expand the scope of the Dutch-law expert evidence. The defendants applied to strike out substantial parts of the claimant’s expert report.

1. Amendment application refused. The court had to exercise its discretion in accordance with the overriding objective and balance the claimant’s prejudice if the amendment were refused against the prejudice to the defendants and other court users if it were allowed.
2. The proposed knowledge-based case was inconsistent with the case advanced on the earlier forum application. The earlier decision had proceeded on the basis that the claimant’s case was one of deliberate and specific intention to prejudice it, and that the Dutch-law issues were therefore unlikely to involve difficult or controversial questions. Although a successful forum challenge does not create an automatic bar to a later amendment, the earlier forum application was a relevant circumstance. It created potential unfairness because the fuller case might have affected the forum decision.
3. The application was also late. The claimant had previously said that knowledge was already part of its case, had declined to plead it when asked, and had recently stated that it did not intend to amend. No good explanation for the timing was established. The proposed amendment was made just over two months before trial and would require the defendants’ Dutch-law expert to reconsider his report, followed by an experts’ meeting and joint memorandum. The proposed timetable was unrealistic, and adequate time to respond was required.
4. The claimant’s possible prejudice was insufficiently evidenced. The court had no evidence that the alternative claim could not be pursued in the Netherlands. The balance therefore favoured refusal of permission.
5. The application to expand the expert evidence was consequently refused. Under Civil Procedure Rules 1998, rr 35.1 and 35.4, expert evidence must be restricted to what is reasonably required and to the field and issues for which permission was granted. The agreed order limited the evidence to liability based on an intention specifically to harm the claimant. The report addressed an alternative knowledge-based case outside that permission. A revised report was required because the objectionable material could not reliably be excised and the report could not refer to an expert for whom permission had not been granted.