DR ROHIT KULKARNI v GWENT HOLDINGS LIMITED & Anor.

A written statement in a skeleton argument may constitute an admission under CPR rule 14.1 where it accepts the truth of the opponent’s claimed entitlement, even if made to narrow issues on an interim application. Withdrawal of an admission is governed by a broad, non-hierarchical discretion. The court must weigh every factor in Practice Direction 14 paragraph 7.2, all the circumstances and the overriding objective.

Relief from forfeiture cannot be refused summarily merely because the forfeited interest was not created by the same contract, or because the breach was deliberate, where those issues depend on disputed facts or the proper characterisation of the contractual provision.

The claimant and Gwent Holdings Limited were shareholders in St Joseph’s Independent Hospital Limited and had entered into a shareholders agreement. In a skeleton argument on the claimant’s earlier summary-judgment application, Gwent accepted that specified relief would follow if the claimant succeeded. Gwent later pleaded, in the alternative, a claim for relief from forfeiture and applied under CPR rule 14.1(5) to withdraw the earlier statement.

The court had to decide whether the statement was an admission and, if so, whether permission should be granted for its withdrawal. It also considered whether the proposed claim for relief from forfeiture was unarguable or incapable of succeeding as a matter of law.

1. Admission. Paragraph 67 of Gwent’s skeleton argument was a written admission for CPR rule 14.1 purposes. It accepted the truth of the claimant’s entitlement to the relief set out in the draft order if the summary-judgment condition was satisfied. The statement was not merely an averment, because nothing remained to be proved about the entitlement it accepted.
2. Relief from forfeiture. The court could not determine summarily that the proposed claim was unarguable. Vauxhall Motors Ltd v Manchester Ship Canal Co Ltd [2020] AC 1161 did not decide that the proprietary or possessory interest had to be created or transferred by the contract containing the forfeiture provision. The contrary observations in The Scaptrade and Sport International Bussum BV v Inter-Footwear Ltd were dicta. Whether clause 7.1(d) was a primary obligation or a secondary provision added by way of security depended on the contractual and factual background. Whether the pleaded conduct was a deliberate breach likewise required factual determination; deliberate meant knowing breach for this purpose.
3. Withdrawal. The discretion under CPR rule 14.1(5), informed by Practice Direction 14 paragraph 7.2 and the overriding objective, has no threshold test and no prescribed hierarchy between the factors. The court must weigh the grounds for withdrawal, conduct, prejudice, procedural stage, prospects of success and the interests of justice in the circumstances of the individual case. The fact that a point could have been raised earlier does not automatically make withdrawal an abuse of process.
4. Gwent’s admission was inadvertent, made before a defence had been filed and in the context of narrowing the issues on the summary-judgment application. The claimant faced real prejudice because the apparent certainty of relief was lost, but he had not shown reliance causing otherwise irrecoverable expenditure or a changed position. Gwent faced substantial prejudice if prevented from advancing relief from forfeiture in a claim concerning a valuable shareholding. The balance favoured withdrawal, while any attempt to raise the point on appeal remained for the appeal court.
5. Order. Gwent was permitted to withdraw the admission in paragraph 67 of its skeleton argument.

The claimant’s earlier summary-judgment application was dismissed by the High Court in Dr Rohit Kulkarni v Gwent Holdings Ltd [2022] EWHC 1368 (Ch) . Permission to appeal, with a rolled-up appeal hearing if permission were granted, was directed by Joanna Smith J. This judgment concerned Gwent’s application to withdraw its later admission; whether Gwent could raise relief from forfeiture on any appeal remained for the appeal court.