Benkel v East-West German Real Estate Holding & Anor

The court’s power to join a party under CPR r 19.2 is discretionary. The applicant must first satisfy one of the independent threshold conditions in r 19.2(2)(a) or (b), and must then show that joinder is desirable in the concrete circumstances of the case. Desirability is assessed by reference to the overriding objective, including expedition, fairness, proportionality and cost. A factual connection between the proposed claim and existing proceedings is insufficient where the proposed issue is separate and need not be determined to resolve the existing dispute. A late application which threatens an established trial date, particularly where the delay is attributable to the applicant, may properly be refused.

The claimant, acting as trustee in bankruptcy, brought proceedings concerning alleged interests in German property and corporate assets. He applied for evidence to be taken in Germany and separately sought to join Mr Dikautschitsch as an additional defendant. The proposed joinder was based on a proposed claim that Mr Dikautschitsch held interests in JURAG Chemnitz GmbH & Co KG on trust for the bankrupt estate.

The existing proceedings concerned the interests held by the current defendants, including an interest held by East-West Real Estate Germany GmbH in JURAG. The defendants opposed joinder, relying on the absence of the required connection, the availability of Mr Dikautschitsch as a witness, and the likely disruption and delay to a trial already fixed for February 2021.

1. Evidence application. The criteria under the Taking of Evidence Regulation were satisfied. The proceedings were civil or commercial, the request was directed to a competent court in Germany, and the evidence was intended for use in the English proceedings. An order was therefore made for evidence to be taken from the two proposed witnesses.
2. Applicable approach to joinder. CPR r 19.2(2)(a) and (b) provide independent routes to joinder. The court must identify the relevant limb, determine whether its conditions are satisfied, and then exercise an overall discretion. Satisfaction of a threshold condition does not make joinder automatic.
3. Connection. The proposed JURAG Issue was factually related to the existing claims but was not itself in issue. The existing proceedings required determination of the defendants’ interests, not Mr Dikautschitsch’s separate interests. Any overlap in evidence was insufficient to establish the necessary connection under CPR r 19.2(2).
4. Desirability and case management. The court treated case-management considerations as central. The claimant had had ample opportunity to seek joinder earlier, including at the February 2020 case management conference. Joinder would probably cause a substantial delay, require further case management, and jeopardise the fixed trial date. The defendants were already subject to a proprietary injunction and receivership, so delay caused real prejudice.
5. The benefit of determining the additional JURAG Issue in the same proceedings did not outweigh the prejudice and disruption. Applying the overriding objective in CPR Part 1, the court refused joinder. The claimant’s application under CPR r 19.2(2) was dismissed.