Voltaire Capital Holdings Limited & Ors v Eric Watson & Ors

Permission to bring a counterclaim after the defence requires the court to consider both its prospects of success and whether permission is justified under the overriding objective. A very late counterclaim faces a heavy burden. The applicant must give a satisfactory explanation for the delay and present a clear, properly particularised pleading at the hearing. The court must assess not only the additional procedural steps required, but also the impact on existing trial preparation and the integrity of the trial fixture. Serious allegations of fraud or dishonesty require distinct and sufficient particulars. A litigant in person remains subject to the Civil Procedure Rules and the overriding objective. Permission may be refused where the counterclaim is late, inadequately pleaded, lacks a real prospect of success, or would cause substantial prejudice and imperil the trial.

The claimants brought substantial civil fraud proceedings concerning investments in the Voltaire Group. The seventh defendant, Mr Gibson, applied for permission under CPR 20.4(2)(b) to bring six counterclaims concerning a 2016 restructuring, including estoppel, unlawful means conspiracy, transaction defrauding creditors, unjust enrichment, knowing receipt and constructive trust.

The application was made after pleadings, disclosure, factual and expert evidence, and trial preparation were substantially advanced. The trial was fixed for October 2026. Mr Gibson had previously been legally represented and had not advanced any counterclaim in his Defence or Amended Defence. The central issues were whether the proposed counterclaims had a real prospect of success and whether their introduction was compatible with the overriding objective.

The Counterclaim Application was dismissed. Mr Gibson was ordered to pay the claimants’ costs of and occasioned by the unsuccessful application, on the standard basis, summarily assessed if not agreed.

1. Under CPR 20.4(2)(b), permission was required because the counterclaims were sought after the Defence. The approach was the same as on an application for permission to amend under CPR 17.3. The court therefore considered both whether the proposed counterclaims had a real prospect of success and whether permission should be granted in the exercise of discretion under the overriding objective.
2. The court had to balance the injustice to the applicant if permission were refused against the injustice to the opposing party, other litigants and the court if permission were granted. Relevant factors included the reason for delay, prejudice to the applicant, prejudice to the respondent and the clarity and adequacy of the pleading.
3. The application was very late. The proposed counterclaims concerned matters known, or capable of being pleaded, years earlier. They were advanced after disclosure, witness statements, expert reports and active trial preparation. The explanation for delay did not bear examination. The fact that Mr Gibson was then a litigant in person did not excuse compliance with the CPR.
4. Allowing the counterclaims would require further statements of case, disclosure, factual and expert evidence, and additional trial preparation. There was no realistic timetable for completing those steps without serious prejudice to the existing parties and a real risk to the fixed trial. The overriding objective required the court to protect the parties’ ability to prepare and present the existing case fairly and proportionately.
5. The proposed pleadings were also inadequately particularised, particularly in relation to allegations of dishonesty, and lacked coherence. The claims were at best weak and did not have a real prospect of success. The court identified, among other matters, apparent limitation difficulties, reflective-loss problems, incoherent loss allegations and an implausible factual premise.