Hassan Kadhim Ali v Amar Hussain

The application was for permission to re-re-amend the Claimant’s Particulars of Claim. The court applied the overriding objective and the settled principles governing amendment of pleadings, in particular the need to balance prejudice to the respondent against injustice to the applicant and the requirement that proposed new allegations be arguable and have a real prospect of success where they introduce new causes of action.

The Deputy Master allowed a number of limited and clarifying amendments but refused others where the proposed changes were inconsistent with earlier pleaded positions or Part 18 responses, unsupported by evidence, legally misconceived, lacking particularity, or had no real prospect of success. The court declined to permit broad new causes of action (including novel company claims by the companies themselves and proprietary estoppel against persons without relevant proprietary title), refused a claim for equitable compensation for the pleaded losses, and refused to add allegations that would be vague or legally nonsensical (for example, that removal as director removed share ownership, or the use of the phrase "among other things" to shore up inadequately pleaded legal bases). The court ordered that the Claimant pay the costs caused by the permitted re-re-amendments and directed a consequentials hearing for further cost orders.

Background and parties

This is a first-instance application by the Claimant for permission to re-re-amend his Particulars of Claim in a property and trust dispute between the Claimant and multiple defendants including the first defendant Amar Hussain and several companies in whose names properties are registered. The Claimant alleges he is the beneficial owner (sole or partial) of several properties registered in defendants’ names and seeks a range of proprietary remedies and monetary reliefs.

Nature of the application and relief sought

• The application dated 13 March 2024 sought permission to re-re-amend the Re-Amended Particulars of Claim served in 2022 to add or clarify factual and legal allegations including (among other things) allegations about share ownership, obligations owed by the first defendant as agent or trustee, derivative/beneficiary’s claims by the Claimant on behalf of the companies, proprietary estoppel claims in respect of multiple properties, and claims for equitable compensation.

Procedural posture

The claim was issued in December 2021. There has been no Case Management Conference, no trial date, and no universal order for disclosure or witness statements. There have been interlocutory proceedings earlier in the dispute, including a refused interim injunction in July 2021 (Joanna Smith J) and orders following Part 18 applications. The present application follows multiple previous iterations of the pleading and after the filing of a Defence and counterclaim.

Issues for decision

• Whether each category of proposed re-re-amendment should be permitted, having regard to the overriding objective, prejudice, lateness, prior pleadings and sworn Part 18 responses, whether the amendment introduced a new cause of action and whether it had a real prospect of success.
• Whether certain types of relief were legally available on the pleaded facts (proprietary estoppel against defendants without proprietary title; equitable compensation for the losses pleaded; beneficiary derivative claims without joinder of other beneficiaries).
• Whether costs orders (including conditional or "unless" orders) were appropriate as a condition of permitting amendments given the Claimant’s history of late payment of costs).

Court’s reasoning and disposition

The Deputy Master weighed the degree of delay and prior non-compliance against the lack of any trial timetable and the absence of later-stage procedural steps. He applied authorities on amendment of pleadings and the “real prospect” threshold for new allegations. Amendments that were internally inconsistent with earlier pleaded cases and sworn Part 18 answers, unsupported by evidential particularisation (for example Companies House entries not evidenced), or which sought to create causes of action with no tenable legal basis were refused. The court refused:

• proposed changes asserting the Claimant became sole shareholder of Autotrade in 2012 (contradicted earlier Part 18 responses and unsupported);
• an entirely new company-side cause of action (paragraph 18AA) and a beneficiary’s derivative claim premised on it;
• proprietary estoppel claims against a defendant who had no asserted proprietary interest in the land; and
• a claim for equitable compensation for the pleaded losses where those losses were not losses of the character recoverable for fiduciary breaches.

Conversely, the court permitted a number of clarifying amendments, permitted allegations that the Companies House records were purportedly altered and that those alterations were unlawful (subject to limits), allowed certain particulars about the management agency relationship in respect of 187 Brent Crescent, permitted a revised prayer for declaration and specific performance in respect of a written agreement of 28 May 2020, and allowed a limited pleading that duties to account were owed in respect of 172 Brent Crescent (subject to restricting the pleaded duties to duties to account). The court ordered the Claimant to pay the costs caused by the permitted re-re-amendments and reserved further consequential cost directions for a dedicated hearing.

Permission to re-re-amend was granted in part and refused in part. The court permitted a number of clarifying and consequential amendments (including limited elaboration of the agency/managerial duties in respect of 187 Brent Crescent, permissive allegations about Companies House changes being unlawful, a declaration and specific performance claim tied to the 28 May 2020 agreement, and a restricted duty-to-account pleading for 172 Brent Crescent), but refused material proposed additions that were inconsistent with earlier pleaded case or Part 18 responses, unsupported by evidence, legally misconceived (including proposed paragraph 18AA, broad company claims, proprietary estoppel against defendants without an interest in the land, and a claim for equitable compensation for the pleaded losses). The court’s reasons emphasised the overriding objective, the need to avoid mini-trials on amendment applications, the real-prospect-of-success threshold for new causes of action, and the necessity for adequate particularity and evidential support.