Crane Bank Limited and Others v DFCU Bank Limited and Others

A party may rely on a third-party report to plead that it was prepared, supplied, and capable of influencing a decision-maker, without alleging that its conclusions are true. A pleading which incorporates extensive report conclusions as factual allegations must identify clearly the facts said to be proved and give fair notice of the case to be met. Ambiguous incorporation of lengthy reports may obstruct orderly preparation for trial and is liable to be refused. Permission to amend is governed by the overriding objective. The court must address pleading defects, merits, and case-management consequences, balancing prejudice where appropriate. Questions concerning the admissibility, evidential status, or weight of such reports are generally matters for trial unless they can properly be resolved at the amendment stage.

The claimants, including Crane Bank Ltd and significant shareholders, brought substantial claims concerning the Bank of Uganda’s statutory management and receivership of Crane Bank and the transfer of most of its assets and liabilities to DFCU Bank Ltd. DFCU applied at a case management conference for permission to amend its defence by relying on two PricewaterhouseCoopers reports.

The proposed amendments referred to the reports both as evidence that a regulator could reasonably have relied on them and, potentially, as sources of factual allegations that their conclusions were correct. The claimants objected principally that the reports were unavailable at some relevant dates, were incorporated ambiguously and extensively, and would disrupt trial preparation. The central issue was whether permission should be granted for the amendments.

1. Disposition. Permission to amend was partly granted and partly refused. DFCU could plead the existence and terms of the PricewaterhouseCoopers reports, and that a regulator would have been entitled to regard them as credible and draw consequences from receiving them. It could not, through the proposed wording, incorporate the reports’ conclusions as factual allegations which it positively intended to prove.
2. Pleading principles. A pleading must give clear notice of the primary facts relied on. It should be concise, coherent and sufficiently particularised, while avoiding evidence and unnecessary detail. The distinction between primary fact, proper particulars and evidence is pragmatic, but a pleading must define a case worthy of consideration at trial. The court applied the overriding objective to the amendment application, considering pleading defects, merits and case-management disruption, and balancing prejudice where that was appropriate.
3. Application to the reports. The proposed incorporation of many pages of reports, covering numerous allegations over several years, created dangerous ambiguity. It was unclear whether DFCU alleged merely that the reports reached particular conclusions or that those conclusions were true. That ambiguity deprived the claimants of fair notice and risked an unmanageable and disruptive trial. The court therefore refused permission for the passages introduced by the words indicating that the reports included specified matters and for the associated sub-paragraphs.
4. The court allowed a separate factual allegation concerning non-performing loans. It also allowed cross-references to the reports where their permissible meaning was confined to reliance on the reports by a regulator. The court declined to rule at the amendment stage on the reports’ admissibility, the effect of any restriction under Ugandan law, or their evidential weight. Those matters, including possible hearsay use, were for the trial judge.