Colliver v Papworth & Anor

On an application to amend, permission should be refused only where the proposed amendment has no real prospect of success. The court should not conduct a mini-trial where the issue depends on contested evidence or mixed fact and law. Withdrawal of an admission requires an assessment of all the circumstances, including the factors in CPR 14 and the overriding objective.

A release is construed by ordinary contractual principles. Context is important, including where the release is said to cover unknown or fraud-based claims. There is no absolute rule that such claims can be excluded only by express reference to fraud. Whether the release is effective may require factual determination at trial.

The claimant brought claims concerning the sale of his shares in Integrated Support Systems Ltd, alleging fraudulent misrepresentation and breach of fiduciary duty. The defendants sought permission to amend their defence to plead, first, that a binding agreement had been reached in February 2010 and, secondly, that a 2010 deed and general release barred the claims.

The claimant opposed the amendments, alleging withdrawal of an express admission concerning the February agreement and an implied admission concerning the release. The central issues were whether the proposed amendments had a more than fanciful prospect of success and whether, having regard to CPR 14 and the overriding objective, the defendants should be permitted to withdraw the admissions.

1. Prospects of success. The proposed amendments met the low threshold applicable on an amendment application. An amendment should be refused only where it is clear that it has no real prospect of success. The court must reject an inherently implausible or self-contradictory case, but should not determine contested factual issues or conduct a mini-trial. Where the issue depends on evidence or mixed questions of fact and law, the threshold will ordinarily be met if the case cannot confidently be described as fanciful or entirely without substance.
2. Construction of the release. Releases are construed according to ordinary contractual principles. The court must consider the language used and the factual context in which the release was given. The authorities did not establish an absolute rule preventing a release from excluding fraud-based or unknown claims unless fraud was expressly mentioned. Whether the release covered the pleaded claims required factual inquiry. The fiduciary-duty claim, as pleaded, was arguably a non-fraudulent claim and was not necessarily incapable of being excluded by the release.
3. Withdrawal of admissions and discretion. Permission to withdraw an admission is governed by CPR 14 and requires consideration of all the circumstances, including the grounds for withdrawal, the parties’ conduct, prejudice, the stage of proceedings, prospects of success and the interests of justice. The proceedings were procedurally at an early stage: there had been no CCMC, disclosure, witness evidence or trial date. The amendments would not create significant additional evidential or procedural prejudice.
4. Disposition. The balance favoured permitting the defendants to withdraw both the express admission concerning paragraph 6 and the implied admission concerning the release. Permission to amend was granted, subject to a further amendment making paragraph 29 consistent with the amended paragraph 6. Consequential matters were deferred.

First-instance decision. The judgment determined the defendants’ application for permission to amend and deferred the claimant’s related application and consequential matters.