ABT Auto Investments Limited v Aapico Investment Pte Limited & Ors

Permission to make a late amendment requires the proposed case to have a realistic prospect of success and to be properly particularised. A short and sufficiently developed point of construction may be decided on the application, but a difficult or novel issue should ordinarily be left for trial. A very late amendment is one which threatens the trial date. The court must balance the applicant’s prejudice against prejudice to the opponent, disruption, additional cost, the explanation for delay and the need to define the issues clearly. Where an amendment introduces a novel construction of Regulation 18 of the Financial Collateral Arrangements No. 2 Regulations 2003, and raises inadequately particularised factual and valuation issues, the risk to the trial date and resulting prejudice may justify refusal.

The claimant guaranteed a loan made by the first and second defendants to the third defendant and charged its shares in the third defendant as security. Following default, the defendants appropriated the shares and valued them under the charge. The claimant sought permission to amend its particulars of claim shortly before trial to allege that Regulation 18(1) required valuation to take account of special purchaser value, and to plead equitable relief from forfeiture.

The defendants opposed the amendments on arguability, particularity and lateness grounds. The court therefore considered whether the proposed construction and relief were realistically arguable, whether the factual case was adequately pleaded, and whether permitting the amendments would threaten the trial date.

1. Realistic prospect of success. The proposed construction that Regulation 18(1) might require valuation to take account of special value was not fanciful. The issue involved a novel and ambiguous provision arising from an EU directive and required consideration of the statutory and legal context after the relevant facts had been established. It should therefore be left for trial.
2. The defendants’ reliance on the Privy Council’s observations in Çukurova Finance International Ltd v Alfa Telecom Turkey Ltd (No 3) [2013] UKPC 2 did not justify summary rejection. The observations were obiter, non-binding, concerned materially different contractual terms and circumstances, and expressed scepticism rather than a decided construction.
3. The proposed equitable relief from forfeiture claim also passed the realistic arguability threshold, since its viability depended on the Regulation 18 case. The proposed implied term did not. If Regulation 18 had the alleged effect, the term was unnecessary; if it did not, the term was neither necessary for business efficacy nor consistent with the express charge, applying Marks & Spencer Plc v BNP Paribas Securities Services Trust Co [2016] AC 742 at para 28.
4. The amendments were insufficiently particularised. They did not explain the factual basis for treating the defendants as special purchasers, their intention in retaining the shares, or the effect of costs and synergies on valuation. Proper determination would require further pleadings, disclosure, factual evidence and expert evidence.
5. The application was very late because the relevant issues had been apparent earlier and no adequate explanation for the delay was provided. With only four weeks before a substantial trial, permission would place the trial date at significant risk, disrupt preparation and increase costs. Those factors outweighed the claimant’s prejudice. Permission to amend was refused.
6. On costs, the defendants were successful, but their recoverable costs were reduced by 10 per cent for the unsuccessful arguability issues. Hourly rates and excessive time spent on evidence were also reduced on proportionality grounds.