VALE S.A. v BENJAMIN STEINMETZ

Where claimants unequivocally admit that their claims were brought outside the limitation period, the court may enter final judgment dismissing the claims rather than permit discontinuance. This is appropriate where the admission itself entitles the defendants to judgment and dismissal provides materially greater finality or practical benefit. A late application to discontinue does not deprive defendants of that entitlement merely because the court has not formally determined the limitation issue. Where permission to discontinue is required, including because a freezing order or undertaking is in place, the court may refuse permission and dismiss the claims on the basis of the admission.

The claimants brought claims arising from a joint venture with BSGR. During a lengthy trial, they applied for permission to discontinue after accepting unequivocally that the claims had been brought outside the limitation period. Permission was required because a freezing order and related undertakings were in place. The court had to determine whether the appropriate disposal was discontinuance or dismissal of all claims on the basis of the admission.

1. Disposition. The claims were dismissed on the basis of the claimants’ unequivocal admission that they were time barred. The application for permission to discontinue was therefore refused formally, but the operative order was final dismissal of all claims against all defendants.
2. The admission was sufficient in itself to entitle the defendants to final judgment. Although claimants commonly discontinue without conceding the merits, that approach was unavailable where the application was expressly based on acceptance that the claims were outside the limitation period.
3. Dismissal was preferable to discontinuance because it created finality in the court and could provide a practical benefit to defendants in dealings with third parties, including banking relationships. The defendants were not to be placed in a worse position merely because the limitation issue had been conceded rather than determined by the court as a preliminary issue.
4. Where a claimant sought to discontinue before the court pronounced dismissal following an early determination that claims were time barred, a notice of discontinuance could, in an appropriate case, be set aside as an abuse so that the court could proceed to dismiss the claims. This was an additional observation and had not been decided as a preliminary issue in the present case.
5. Under Civil Procedure Rules 1998, r 38.2(2)(a), permission was required to discontinue because a freezing order was in force. The freezing order was discharged, but certain undertakings remained in place.