Swain-Mason and Others v Mills & Reeve LLP
| Jurisdiction | England & Wales |
| Judgment Date | 2011 |
| Date | 2011 |
| Court | Court of Appeal (Civil Division) |
Practice - Pleadings - Amendment - Late amendment - Claimants applying at start of trial for permission to re-amend particulars of claim - Approach to be adopted on application for permission to make very late amendment - Whether amendment to be allowed - Whether court to determine appeal against decision on application to amend pleadings on basis of material which had been before judge only
Although there is no inflexible rule that a very late amendment to plead a new case, not resulting from some late disclosure or new evidence, can only be justified on the basis that the existing case cannot succeed and the new case is the only arguable way of putting forward the claim, the court should be less ready than in former times to grant a late application to amend a pleading. A heavy onus lies on a party seeking to make such an amendment to justify it, as regards his own position, that of the other parties to the litigation and that of other litigants in other cases before the court. If a very late amendment is to be made, the amending party is obliged to put forward an amended text which itself satisfies to the full the requirements of proper pleading. From the moment that the amendment is made the opponent must know the amended case which he has to meet with as much clarity and detail as he is entitled to under the rules (post, paras 72, 73, 116, 117).
In principle a court considering an appeal against a decision on a late application to amend a pleading ought to approach the exercise of the discretion on the basis of the material which was before the judge, and normally nothing else. However, later events, or material coming to light or put in evidence later, might be relevant to show that the judge was under a misapprehension as to the position as it was when he made his decision (post, paras 102, 116, 117).
The following cases are referred to in the judgment of Lloyd LJ:
Clarapede & Co v Commercial Union Association (
Cobbold v Greenwich London Borough Council (unreported) 9 August 1999; [1999] CA Transcript No 1406,
Cropper v Smith (
Gale v Superdrug Stores plc [
R v Gough [
Savings & Investment Bank Ltd v Fincken
Woods v Chaleff (unreported) 28 May 1999; [1999] CA Transcript No 979,
Worldwide Corpn Ltd v GPT Ltd (unreported) 2 December 1998; [1998] CA Transcript No 1835,
The following additional case was cited in argument:
Bolitho v City and Hackney Health Authority [
The following additional cases, although not cited, were referred to in the skeleton arguments:
Arab Monetary Fund v Hashim (No 8) (
Bristol & West Building Society v Bhadresa & Co [
Hunter v Chief Constable of the West Midlands Police [
Ketteman v Hansel Properties Ltd [
Locabail (UK) Ltd v Bayfield Properties Ltd [
McPhilemy v Times Newspapers Ltd [
Pierre Fabre SA v Ronco Teleproducts Inc [
Royal Brompton Hospital NHS Trust v Hammond (No 5)
Sinclair Investment Holdings SA v Carlton Ellington Cushnie
Southwark London Borough Council v Kofi-Adu
Swain v Hillman [
WX Investments Ltd v Begg (Fraser, Part 20 defendant)
Walbrook Trustees (Jersey) Ltd v Fattal
Yuill v Yuill [
APPLICATIONS for permission to appeal
By a claim form and particulars of claim issued in March 2009 and amended in May 2010 the claimants, (1) Claire Swain-Mason, David Jonathan Berry and Neil Gordon Kirby (qua executors of Christopher J Swain, deceased), (2) Claire Swain-Mason, (3) Abby Swain, (4) Gemma Swain and (5) Christa Swain, brought proceedings against the defendant solicitors, Mills & Reeve LLP, seeking damages in negligence. On 24 November 2010, for reasons handed down in a reserved judgment on 6 December 2010, Peter Smith J granted the claimants’ application made at the beginning of the trial for permission to re-amend the particulars of claim, subject to a requirement to put in evidence to support their amendments and the defendants being entitled to apply to have the amendments disallowed once they had seen the evidence. On 3 December 2010 the claimants filed the evidence required by the judge’s order. The defendants applied for the amendments to be disallowed and for summary judgment under CPR 24 on the claim as originally pleaded. On 10 December 2010 the judge refused the defendants’ applications. He refused permission to appeal.
By an appellant’s notice the defendants sought permission to appeal against the decisions of 24 November and 10 December on the grounds, inter alia, that (1) in considering the claimants’ application for permission to amend the judge when exercising his discretion had erred in law in adopting a now inappropriately relaxed approach to late amendment, and the application had been founded on an unclear proposed amendment which failed to comply with the obligation to make clear to the defendants what the claimants’ case was; and (2) in considering the defendants’ application to disallow the amendment, the judge, when exercising his discretion, had erred in law in analysing the amendment as including alternative and contradictory cases. The defendants applied to amend the grounds of appeal to add as a ground the real possibility or danger that the judgment had been biased against the defendants in arriving at his decision.
The facts are stated in the judgment of Lloyd LJ.
Mark Simpson QC and Marianne Butler (instructed by
Robin Mathew QC and Alexander Learmonth (instructed by
The court took time for consideration.
20 January 2011. The following judgments were handed down.
LLOYD LJ
1 We have before us appeals against two orders made by Peter Smith J, one made on 24 November 2010, in relation to which he gave his reasons in a reserved judgment handed down on 6 December 2010 [2010] EWHC 3198 (Ch), and the other made on 10 December 2010, in relation to which the judge gave an extempore judgment on that day.
2 The claim is for damages for negligence alleged on the part of the defendant solicitors. The issue before the judge was whether the claimants should be permitted to re-amend their particulars of claim, on an application made at the beginning of the trial. He granted permission to re-amend on 24 November, which would have been the second day of the trial, but subject to requiring the claimants to put in evidence to support their amendments by 3 December, and to the defendants being entitled to apply to have the amendments disallowed once they had seen the evidence. Evidence was duly filed and served on 3 December, and the defendants then applied to have the amendments disallowed. For good measure they also applied under CPR Pt 24 for summary judgment in their favour on the claim as originally pleaded. The judge rejected both of those applications. The first appeal is against the grant of permission to re-amend; the second is against the judge’s refusal of the application to disallow the re-amendments (which is therefore the other side of the same coin as the first appeal) and also against his dismissal of the application under Part 24.
3 I will start by summarising the underlying events which gave rise to the claim, and then record in outline the history of the proceedings, before coming in more detail to what happened during the hearings before the judge.
The underlying facts4 Mr Christopher Swain (“Mr Swain”) was a successful businessman who had built up, among other business interests, a corporate group headed by Swain’s International plc (“the company”), of which he owned just over 72% of the shares. He had four daughters, of whom two worked in the business. Each of the four daughters owned some 5·3% of the shares in the company. Most of the rest of the shares were held by an employee benefit trust.
5 By the beginning of 2007 Mr Swain spent most of his life in Thailand. He was 61 years old, and had a history of heart problems. During 2006 he had negotiated the principles of a management buy-out (“MBO”) under which his shares and those of his daughters were to be bought by a new company owned by members of the current management. Heads of terms had been agreed in November 2006 and the share purchase agreement (“SPA”) was under negotiation in detail with a view to completion on 31 January 2007. We are told that it was particularly complex, even by the standards of such transactions. The overall value of the consideration, partly in cash and partly in loan notes, was about £3·5 million. About £1m was represented by loan notes payable over ten years. The defendant firm was retained in June 2006 to advise on the transaction on behalf of Mr Swain and his daughters. It gave advice about the tax implications of the transaction by a long letter dated 4 January 2007. (This and other advice was given to all its clients, and when, for the sake of brevity, I refer to it, or to a hypothetical solicitor, as advising Mr Swain, it should be understood that the advice was or would have been also to his daughters.)
6 In the meantime the solicitors had advised on a clearance letter to be sent to HMRC in order to obtain an...
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