Dana UK Axle Ltd v Freudenberg FST GmbH

Permission to amend pleadings shortly before trial should be refused where the proposed case has no real prospect of success. Even if it is arguable, the applicant must provide a proper explanation for delay. The court must assess the resulting prejudice and conduct the required discretionary balancing exercise, including the effect on trial preparation and the trial date.

Evidence supporting a late amendment may itself require permission and, where applicable, relief from sanctions. A party cannot rely on subjective evidence to establish contractual formation or incorporation of terms where the issue is determined objectively.

Freudenberg applied, shortly before an 11-day trial, to re-amend its Defence and introduce an alternative battle-of-the-forms case. It also relied on a late witness statement from Rudolf Bott, without making a separate application for permission or relief from sanctions.

The proposed case asserted that, if a new contract had been formed in 2012 or later, Freudenberg’s terms and conditions had been incorporated through invoices and delivery notes. Dana opposed the application, relying on the lateness of the proposed case, the inadequacy of the supporting evidence and the prejudice that would result to trial preparation.

The issues were whether the proposed amendments had a real prospect of success, whether Freudenberg had adequately explained the delay, and where the balance of prejudice lay.

1. Application dismissed. Permission to re-amend the Defence was refused, and permission to rely on the Bott Statement was also refused.
2. The court adopted and applied the principles identified in Quah Su-Ling v Goldman Sachs Limited [2015] EWHC 759 (Comm). The proposed amendments had no real prospect of success. They mischaracterised Dana’s pleaded case and witness evidence, relied in part on an undisclosed 2011 purchase order, gave no adequate explanation for the contractual effect of a post-dated invoice, and depended on inadequate hearsay evidence concerning the posting and receipt of invoices.
3. Contract formation and incorporation of terms are assessed objectively. Subjective views or understandings expressed by a witness do not determine that issue.
4. Freudenberg had not provided a good explanation for advancing the amendment so late. The relevant documents had long been available, the pleaded case concerning incorporation had remained materially unchanged, and the proposed alternative case could have been investigated and pleaded earlier.
5. Even if the amendments had been arguable, the application would still have been refused. Allowing it would have required consequential amendments, further factual investigation, supplemental evidence, further expert consideration and potentially jeopardised the trial date. That prejudice to Dana outweighed Freudenberg’s prejudice in losing the opportunity to advance the new case.

The parties were invited to agree the terms of the consequential order.