Barrowfen Properties Ltd v Patel & Ors (Judgment 4)

Permission to amend a pleading very late is discretionary. The court must balance the applicant’s prejudice if permission is refused against prejudice to the opposing party, other litigants and the administration of justice if it is granted. A heavy burden applies where the amendment risks disrupting a fixed trial, but lateness is relative and depends on the nature of the amendment, the explanation for delay and the consequences of allowing it. An amendment should be permitted where the new case has a real prospect of success and any resulting prejudice can be managed by evidence, procedural directions or costs.

The claimant alleged that its solicitor had breached fiduciary duties, assisted wrongdoing and acted deceitfully, causing delay to the development of a property and loss of rental income. The second defendant sought permission during the trial to re-amend its Defence. The proposed amendment alleged that the claimant had obtained a substantial increase in the property’s development value and was required to give credit for that benefit when assessing loss.

The claimant opposed the application on grounds of delay, lack of prospects of success and prejudice. The central questions were whether the proposed credit defence had a real prospect of success and whether the procedural consequences justified refusing permission.

1. Permission granted. The second defendant was permitted to re-amend its Defence. The claimant was also permitted to serve a supplementary expert report addressing the amendment, with further consequential evidence to be considered if necessary.
2. Applying the principles summarised by Carr J in Quah v Goldman Sachs International [2015] EWHC 759 (Comm), the court treated the relevant delay as approximately 20 days between the procedural review and the application. That delay was not, in itself, sufficient to justify refusal, particularly because the claimant had prior notice, expert evidence had not yet been exchanged in final form, and the trial timetable remained capable of adjustment.
3. The proposed defence had a real prospect of success. The authorities indicated that a benefit caused by the same breach or by the continuous transaction giving rise to the loss may require credit. The claimant’s own case was that the alleged breaches caused delay, made the original development scheme commercially unviable and led to adoption of the revised scheme. It was therefore properly arguable that the alleged breaches also caused the increased development value.
4. The court declined to decide at the amendment stage whether Fulton Shipping Inc of Panama v Globalia Business Travel SAU [2017] 1 WLR 2581 was distinguishable, or whether the valuation date and the claimant’s intention to retain the property prevented the credit. Those were matters for trial and closing submissions.
5. The prejudice identified by the claimant could be addressed by a supplemental valuation report, disclosure of relevant material and, if required, later directions concerning finance costs or additional evidence. The proposed amendment was therefore allowed, subject to any consequential costs order.