VE Vegas Investors IV LLC v Evelyn Partners LLP & Ors

Strike-out is a draconian remedy and should be used only where the pleading defect cannot be dealt with fairly by amendment or another proportionate case-management measure. A claimant may plead reliance on categories of potential purchasers rather than identify every individual falling within those categories, provided the case is sufficiently intelligible for the defendants to understand and answer it. The court should assess whether the pleaded case is plainly unarguable, not conduct the detailed factual evaluation reserved for trial. Inconsistencies within replies to requests for further information may justify amendment, but do not necessarily warrant striking out the underlying claim.

The claimant brought claims concerning alleged breaches of duty by its former professional advisers and the former administrators of Ve Interactive Limited in connection with the marketing and sale of the business. The defendants applied under Civil Procedure Rules 1998, rule 3.4(2)(a) and (b), to strike out parts of the particulars of claim, replies to requests for further information, and lists of alleged potential purchasers.

The application principally challenged the claimant’s reliance on categories of potential purchasers and its assertion that the defendants should have identified each, or the vast majority, of the persons on its list. The central issues were whether the case was inadequately or inconsistently pleaded and whether it disclosed reasonable grounds or obstructed the just disposal of the proceedings.

1. The application was not determined by striking out the claim. The court applied the principles governing Civil Procedure Rules 1998, rule 3.4(2)(a) and (b), including the need to treat strike-out as a last resort and to consider proportionality.
2. The claimant was entitled to rely on descriptive categories of potential purchasers. It was required to identify specific individuals or entities on whom it relied, but it was not required to identify every individual within an identified category. The trial judge could determine, with the assistance of expert evidence, whether the categories were appropriate and whether identified persons fell within them.
3. The expression “vast majority” lacked specificity. However, that deficiency did not make the case plainly unarguable or require strike-out. The defendants understood the categories relied upon and the factual issues could be addressed at trial.
4. The first and second parts of the claimant’s reply to request 3 were inconsistent. The court therefore allowed a short period for amendment. The assertion that the claimant was not obliged to plead whether every listed person should have been identified was also liable to be removed or amended if the first sentence remained.
5. The third sentence of the reply, stating that proper performance might have led to the identification of further potential purchasers beyond those named, was not strikeable because it was implicit in reliance on categories.
6. The information sought by request 4 had already been provided. The pleaded case identified the relevant categories, the information said to be obtainable, the alleged means of identification, and the relevant date. References to individuals appearing both in the schedule and the later list could remain, as the duplication was an oversight rather than a substantive defect.