Ferand Business Corporation & Ors v Maritime Investments Holdings Ltd & Anor

Permission to amend pleadings or adduce evidence very late will ordinarily be refused where it threatens the trial date, lacks a good explanation, or causes material prejudice to the other parties and court users. The applicant bears a heavy burden. The proposed amendment must satisfy the requirements of proper pleading and identify the case to be met with precision. Prejudice caused by the applicant’s own failures attracts limited weight. The caution applicable to negative declarations does not displace the principles governing late amendments or late evidence. The same considerations apply where additional evidence is intermingled with irrelevant or non-responsive material.

The proceedings concerned claims for declarations and damages arising from alleged breaches of a stockholder agreement. Shortly before a four-day trial, the second defendant applied for permission to re-amend its defence and counterclaims and to rely on two further witness statements from Captain Frangos.

The applications were opposed by the claimants and by the first defendant, which advanced a related claim. The proposed amendments raised new factual and legal issues, including a new fraud case, and would have required further investigation, evidence and potentially disclosure. The central questions were whether the lateness was justified, whether the amendments were properly pleaded, and whether the additional evidence should be admitted without vacating or disrupting the trial.

1. Disposition. The application to amend and the application to rely on Captain Frangos’s second statement were dismissed. Permission to rely on his third statement was refused and dismissed.
2. Applications threatening the trial date are very late. The applicant bears a heavy burden to demonstrate the strength of the proposed case and why justice requires permission. Lateness may itself weigh heavily against permission and may provide an overwhelming reason for refusal. The applicant must give a good explanation for the delay. The court must balance prejudice to the applicant against prejudice to the opposing parties, disruption to the trial, wasted costs and the interests of other court users. Prejudice caused by the applicant’s own failures attracts limited weight. These principles, drawn from Swain-Mason and Others v Mills and Reeve [2011] EWCA Civ 14, CIP Properties (AIPT) Limited v Galliford Try [2015] EWHC 1345 and Quah Su-Ling v Goldman Sachs International [2015] EWHC 759 (Comm), were applied.
3. The second defendant had no good explanation. The proposed matters could and should have been pleaded earlier. A change of counsel and alleged impecuniosity did not justify the delay. The proposed amendments would have vacated the trial, caused substantial prejudice and failed to identify with precision the case that the first defendant had to meet. They therefore failed the requirements of proper pleading.
4. The second witness statement was also inadmissible at that stage. Much of it could have been included earlier, supported amendments that had been refused or withdrawn, or was irrelevant to the pleaded cases. Responsive material was intermingled with non-responsive material, leaving the opposing parties to determine what was relevant and for what purpose.
5. The general caution applicable to negative declaration claims did not override the law and practice governing very late amendments or evidence. Responsibility for material not being before the court because of the applicant’s delay rested with the applicant. The trial was directed to continue within the compressed timetable set out in the judgment.