Steenbok Newco 10 Sarl & Anor v Formal Holdings Limited & Ors

Permission to amend a statement of case is discretionary and must further the overriding objective. The court must balance the applicant’s ability to advance the proposed case against the prejudice, cost, delay and procedural unfairness caused to the opposing party. An amendment is very late where it threatens a fixed trial or requires significant steps in the litigation to be revisited. In that situation a heavy burden rests on the applicant to justify the amendment and demonstrate its strength.

A new representation, a new alleged wrongdoer, a materially different fraudulent scheme, or a new factual basis for liability will ordinarily constitute a new cause of action. After expiry of limitation, CPR 17.4 permits a new claim only where it arises out of the same or substantially the same facts already in issue.

The claimants sought permission to make extensive amendments to their Re-Amended Particulars of Claim shortly before a seven-week trial. The proposed amendments ran to 53 pages and introduced a different alleged unlawful scheme, new representations, additional alleged participants, new claims concerning the Talgarth Agreements, and substantial amendments to German and Austrian law claims.

The defendants opposed the application on grounds including lateness, prejudice, limitation, inadequate pleading, lack of real prospects of success and the need to revisit pleadings, disclosure, factual evidence and expert evidence. The central issues were whether permission should be granted under CPR 17.3 and, where limitation had expired, whether the amendments satisfied CPR 17.4.

1. Application dismissed. The proposed amendments were very late. They threatened the fixed trial and would have required an adjournment. That was an overwhelming reason to refuse permission.
2. The amendments would have required new rounds of pleadings, new disclosure issues and searches, re-review of existing disclosure, further factual evidence, further German, Austrian and potentially BVI law evidence, additional forensic accounting evidence, and revision of the trial bundle and case documents. Attempting those steps while preparing for trial would have denied the defendants substantive justice and placed the parties on an unequal footing.
3. The proposed amendments fundamentally changed the case. The Fraudulent Scheme was replaced by a materially different Unlawful Scheme involving new allegations of unlawfulness and additional alleged participants, including persons previously pleaded to have been innocent victims. The amendments also introduced new representations, new allegations against Paula King and a new basis for Formal’s liability, new claims concerning the Talgarth Agreements, and materially revised foreign law claims.
4. A new representation is a new cause of action where the representation is a material fact necessary to establish the claim. The identity of the representor and the factual basis of the alleged wrongdoing are also material. The proposed misrepresentation claims therefore did not arise out of the same or substantially the same facts as the existing claims.
5. Where CPR 17.4 applies, the relevant four-stage inquiry is whether the amendment is arguably out of time, whether it adds or substitutes a new cause of action, whether that cause of action arises out of the same or substantially the same facts, and whether the discretion to permit it should be exercised. The court found that the proposed new claims failed the new-cause and same-facts requirements. It was unnecessary to decide whether relation back applied to foreign-law claims.
6. The proposed late pleadings were also insufficiently particularised in several respects, including allegations of fraud, dishonesty, mental reservation and invalidity of the Talgar Agreements. Very late amendments must themselves contain a properly formulated and fully particularised case.
7. Permission was nevertheless granted for agreed deletions and withdrawal of specified averments, including deletion of the Wanchai fraud allegations. CPR 14.5 did not apply to withdrawal of averments in a claim.

First-instance decision on the claimants’ amendment application at a pre-trial review. No earlier decision in the same proceedings is identified in the judgment.