CHARLES RUSSELL SPEECHLYS LLP v BENEFICIAL HOUSE (BIRMINGHAM) REGENERATION LLP

Parties must plead the material facts establishing each cause of action. A general claim for payment does not ordinarily give adequate notice of an alternative case based on an implied retainer or quantum meruit. Where the opposing party objects, the court must identify the issues and determine whether the unpleaded case may proceed. If the departure might cause prejudice, an application to amend will ordinarily be required. The court may permit departure where the other party takes no point, where amendment is granted, or where doing so is just after the risk of prejudice has been addressed. A first-instance decision reached after allowing an inadequately pleaded alternative case may be set aside and remitted for retrial, particularly where the judge’s approach contributed to the failure to amend.

The claimant solicitors sought payment of fees for work undertaken for the defendant LLP between February and November 2016. The first-instance judge held that the written engagement terms covered work after 15 November 2016, but implied an agreement requiring payment at a reasonable rate for earlier work. Judgment was entered for the claimant, subject to detailed assessment.

The defendant appealed, arguing principally that the implied retainer had not been pleaded and that the trial had proceeded unfairly. The appeal also challenged interest and costs, but those grounds depended on the first ground.

The appeal was allowed on the pleading issue, and the matter was remitted for retrial before a different judge.

1. Pleadings and notice. CPR 16.4 required a concise statement of the facts relied on, and CPR PD 16 para 7.5 required particulars of claim based on agreement by conduct to specify the conduct relied on and by whom, when and where it occurred. The pleading did not identify an implied retainer or the material facts supporting it. The alternative case was therefore outside the pleaded issues.
2. Function of pleadings. Pleadings frame the limits of the action, define the issues, and give the opposing party advance notice of the case to meet. The court relied on Blay v Pollard [1930] 1 KB 628, McPhilemy v Times Newspapers Ltd [1999] 3 All ER 775, Boake Allen Ltd & others v HMRC [2006] EWCA Civ 25, Lombard North Central v Automobile World (UK) Ltd [2010] EWCA Civ 20, and UK Learning Academy Ltd v Secretary of State for Education [2020] EWCA Civ 370.
3. Unpleaded cases. If no objection is taken, the court may consider a case outside the pleading. If amendment is sought, it must be determined on its merits. If objection is taken and no amendment application is made, the judge must identify the issues and assess whether departure might cause prejudice. That threshold is low. A party who prepared for trial without notice of the new case may be unable to assess its factual and legal implications, evidence, disclosure, cross-examination, and submissions.
4. Application. The defendant was a litigant in person at trial and remained uncertain whether the claimant advanced an implied contractual retainer, quantum meruit, or unjust enrichment. The defendant had not been able adequately to test the alleged formation and terms of the implied retainer. This created procedural unfairness and a real risk of prejudice.
5. Disposition. The first-instance judge had erred in allowing the claimant to advance and succeed on the unpleaded implied-retainer case. Judgment for the defendant was not appropriate because the judge’s approach had contributed to the claimant’s decision not to apply to amend. The appropriate order was a retrial before a different judge. Grounds concerning interest and costs were not determined.

• Manchester County Court: HHJ Sephton QC entered judgment for the claimant following a finding of an implied agreement to pay a reasonable sum for pre-15 November 2016 work.
• High Court (Queen’s Bench Division): The appeal was allowed on the pleading and procedural-fairness ground. The matter was remitted for retrial before a different judge.