Investment Bank PSC v Ahmad Mohammad El-Husseini & Ors

Permission to make a very late amendment should be refused where the resulting pleading, disclosure and evidence cannot be completed fairly without losing a fixed trial date. The applicant bears a heavy burden to justify the delay, the strength of the new case and why justice requires the amendment.

Where an arguably time-barred amendment adds a new cause of action, the court may permit it only if it arises from the same or substantially the same facts already in issue. New allegations of intentional wrongdoing ordinarily constitute a new cause of action. Fraud, dishonesty, bad faith, knowledge and notice must be distinctly and sufficiently particularised.

Five weeks before a four-week trial, the claimant bank sought permission to make approximately 143 further amendments to its particulars of claim. Seventy-seven were opposed. They sought, among other matters, to expand the factual basis of claims under section 423 of the Insolvency Act 1986, add a US$15 million claim against the sixth defendant and allege that she had notice of the first defendant’s purpose.

The defendants contended that the amendments were very late, partly time-barred, inadequately pleaded and incapable of fair preparation without losing the trial date. The principal issues were whether the amendments should be permitted under the general amendment discretion and whether the limitation regime in section 35 of the Limitation Act 1980 and CPR 17.4 barred the Tahnoon and Medstar amendments.

1. The application concerning all 77 opposed amendments was dismissed. The amendments were very late because they threatened the fixed trial date and could have been advanced much earlier. Their determination would require amended pleadings, new disclosure, factual evidence, foreign-law evidence and, in some instances, valuation evidence. Those steps could not be completed fairly before trial. That was an overwhelming reason for refusal: paras [84]–[89], [187].

2. The bank had not discharged the heavy burden of explaining its delay, demonstrating the strength of the proposed cases or showing that justice required the amendments. Much of the relevant material had been available since 2021 or 2022. Any prejudice caused by the inability to advance the amendments was therefore substantially attributable to the bank’s own conduct: paras [86]–[93].

3. The Tahnoon amendments introduced a new factual basis for the statutory purpose required by section 423(3) of the Insolvency Act 1986. They replaced reliance on specific claims considered or brought in and after 2017 with allegations concerning unspecified future proceedings feared from late 2016. The defendants had an arguable six-year limitation defence, and the new case did not arise from the same or substantially the same facts. Section 35(3) of the Limitation Act 1980 therefore barred the amendments: paras [105]–[120].

4. The proposed Medstar claim against the sixth defendant was admittedly a new cause of action. It sought monetary relief concerning an alleged US$15 million transfer, attracted an arguable six-year limitation period and depended on numerous new facts. CPR 17.4(2) was not satisfied: paras [147]–[157].

5. Reliance on section 32 of the Limitation Act 1980 did not make the limitation defences unarguable. The bank supplied no evidence showing when reasonable diligence would have revealed the relevant facts. Following Potter v Canada Square Operations Ltd [2023] 3 WLR 963, deliberate concealment under section 32(2) required subjective knowledge that the conduct amounted to a breach of duty: paras [114]–[118], [149]–[152].

6. The Medstar and knowledge amendments were also inadequately formulated. Alternative factual scenarios were pleaded without a discernible positive case. Allegations capable of amounting to forgery, sham, dishonesty, bad faith, knowledge or notice were ambiguous and lacked the required primary facts and particularity: paras [158]–[161], [171]–[182].

The judgment was given at a pre-trial review in proceedings commenced in July 2021. The judgment records earlier jurisdiction, summary judgment, security for costs, pleading and disclosure applications. It also records default judgment against the first defendant on 13 January 2023 and various subsequent enforcement-related orders. No appellate history is stated.