Fibula Air Travel Srl v Just-Us Air Srl

Under Civil Procedure Rules 1998, Part 17.1(2), permission to amend requires consideration of prospects of success, the overriding objective, prejudice, and, where relevant, delay. A point is issue-estopped only if it was actually decided and was necessary or fundamental to the earlier decision. An assumption about an unpleaded background fact is insufficient. Henderson abuse requires a broad, merits-based assessment of whether later reliance misuses the court’s process. A defence to an unadjudicated counterclaim may therefore be permitted even though related arguments could have been raised in an earlier summary judgment application. The position differs where the same issue was pleaded, argued and decided, and newly obtained evidence could reasonably have been obtained earlier.

Fibula sought permission to amend its Reply and Defence to Amended Counterclaim in proceedings arising from an aircraft wet-lease agreement. Its claim for return of a security deposit had previously been dismissed on summary judgment by HHJ Pelling. Permission to appeal and to adduce fresh evidence was refused by Males LJ.

Just-Us’ counterclaim for approximately €5 million remained outstanding. Fibula sought to raise defences based on the alleged failure of a successful audit, failure to obtain contractual aviation approvals, frustration of the lease, and credit for furlough payments. Just-Us relied on cause of action estoppel, issue estoppel and Henderson abuse.

1. Amendment discretion. Permission under Civil Procedure Rules 1998, Part 17.1(2), required consideration of the proposed defences’ prospects of success, the overriding objective, prejudice, and the reasons and consequences of delay.
2. Estoppel principles. Cause of action estoppel prevented Fibula from attempting to revive its dismissed claim for recovery of the deposit. Issue estoppel required an issue to have been actually decided as a necessary or fundamental step in the earlier decision. The court could examine the judgment, pleadings, evidence and argument to identify what had truly been decided. HHJ Pelling’s assumption that the audit had been passed was only a background assumption on an unpleaded matter, not an adjudication giving rise to issue estoppel.
3. Henderson abuse. The court had to adopt a broad, merits-based approach and ask whether reliance on the proposed matter would misuse or abuse the process. It was relevant that the earlier summary judgment application concerned only Fibula’s claim, whereas the counterclaim had not been addressed. Fibula was defending a substantial counterclaim rather than seeking to reopen its lost claim.
4. Permitted amendments. The Audit Defence and Approvals Defence had realistic prospects of success. Neither had been pleaded or argued as an issue in the earlier application, and neither was subject to issue estoppel. In the circumstances, allowing them was not abusive. Permission was granted to amend to plead both defences.
5. Refused amendments. The Frustration Defence relied on the same events and substantially the same argument previously pleaded, argued and rejected, including alleged supervening illegality. Issue estoppel applied, and the additional evidence could reasonably have been obtained earlier. The defence would in any event have had no reasonable prospect of success. The Furlough Defence also had no realistic prospect because no sufficient link was shown between furlough payments and Fibula’s contractual liability. Permission to raise both defences was refused.

1. High Court (Circuit Commercial Court): permission to appeal from the earlier summary judgment decision had been refused by Males LJ, and permission to adduce fresh evidence had also been refused. The present court granted permission to amend in respect of the Audit Defence and Approvals Defence, but refused permission in respect of the Frustration Defence and Furlough Defence.