Dee Holdings Limited & Anor v Benson Mazure LLP & Anor

Permission to amend a statement of case is discretionary and must be exercised consistently with the overriding objective. An amendment should be permitted where it allows the real dispute to be adjudicated, but only if it is properly formulated, sufficiently particularised, coherent and has a real prospect of success. Delay and the need for finality are relevant prejudice factors.

A claim may be struck out where, even assuming the pleaded facts to be true, it discloses no legally recognisable claim, is incoherent, or leaves the opposing party unable to understand the case and respond. A claimant alleging breach of fiduciary duty must plead how the breach caused the loss claimed. The court will not require defendants to reconstruct a vague or internally inconsistent case by inference or guesswork.

Renewable Energy Holdings Ltd applied to amend its particulars of claim against Benson Mazure LLP and Daniel Belsham. The claim arose from legal and management services connected with the acquisition and operation of a waste-to-energy business.

The pleaded claims concerned an alleged conflict of interest relating to a mortgage securing a third-party loan, an alleged failure to advise on security for loans advanced to the business, and the alleged misregistration of additional land. The first claimant discontinued its claims. The defendants opposed amendment and applied to strike out the remaining claimant’s case under the Civil Procedure Rules 1998. The central issue was whether the proposed pleading disclosed a coherent and legally recognisable claim with adequately pleaded breach, causation and loss.

1. The application to amend was refused in substance and the defendants’ application to strike out was granted. Further amendment limited to removing the discontinued claimant’s case was no longer relevant.

2. Under CPR 17.3, permission to amend is discretionary and is governed by the overriding objective in CPR 1.1. The court must balance the applicant’s prejudice if permission is refused against finality and the prejudice to the respondent if permission is granted. Delay is a relevant factor, although it was not independently decisive here.

3. The proposed pleading had to be properly formulated, sufficiently particularised and readily understandable, and had to show a real prospect of success. The same merits and coherence considerations informed the strike-out application under CPR 3.4.

4. The conflict claim failed to identify a coherent breach or causal connection. The pleading alleged that the defendants caused a mortgage to be entered into while also alleging that the relevant parties had no knowledge of it and that no fraud or dishonesty had been pleaded. It did not explain how either acting for the borrower or failing to disclose the conflict caused the mortgage, or the claimant’s loss.

5. The security claim did not adequately plead the loans allegedly made by the claimant to the operating company, the defendants’ knowledge of those loans, or how taking security would have prevented or reduced the loss. The additional land claim was incoherent and vague, particularly as to the alleged wrong and causation.

6. The third iteration of the pleading remained vague, confused and internally inconsistent. It would cause the defendants unreasonable difficulty in understanding and answering the case. The claim was therefore struck out.

First-instance decision. No appellate history was stated in the judgment.