England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QBD (Bristol Mercantile Court)
HH Judge Jack QC sitting as a Judge of the High Court

		Royal Courts of Justice Strand, London, WC2A 2LL
		Wednesday 17 May 2000

SIR CHRISTOPHER SLADE:

The two defendants in these proceedings appeal, with the permission of the Judge, from an order of His Honour Judge Jack QC made in the Bristol Mercantile Court on 10th December 1999, by which he gave the respondent claimant permission to amend her statement of claim. He made this order some days after he had delivered a judgment finally dismissing her action and had made an order accordingly, though that order had not yet been perfected. Perhaps the most important questions raised in the appeal are whether having regard to the Civil Procedure Rules 1998 ("the CPR"), he had the jurisdiction to make the second Order and, if so, how his discretion should have been exercised.

The first defendant ("the liquidator") is a partner in the second defendant firm. In 1992 he was liquidator to Mosaic Management Consulting Group Limited ("Mosaic"). On 8th December 1992, Mosaic, acting by the liquidator, the liquidator himself and the claimant executed an Agreement and Assignment ("the Agreement"). The Agreement recited that by an earlier agreement Mosaic had appointed the claimant as consultant in the field of applied industrial psychology, inter alia, to design and develop a series of new products to be used in the fields of performance appraisal, staff selection, personnel assessment and development. It further recited that the ownership of such products and all the intellectual property rights therein were vested in Mosaic. The final recital (F) stated :

"The Liquidator acting on behalf of the Company has agreed with the Purchaser for the sale of the Assessment Library materials which were part of the products referred to in recitals A and B above including copyright in such materials to the Purchaser upon the terms and conditions herein contained"

Clause 1 defined "The Assessment Library" as meaning "the Assessment and Development Centre Materials Library " being a set of pre-designed exercises which are designed for use in assessment centres and development centres".

Clause 2.1, so far as relevant, read as follows:

"In consideration of the sum of ..........(£5000) now paid by the Purchaser to the Company (receipt of which the Company acknowledges) the Company acting by the Liquidator hereby assigns to the Purchaser the copyright and all other rights of a like nature conferred under the laws of the United Kingdom and all other countries of the world in and to the materials comprising the Assessment Library absolutely....."

Clause 3 provided:

"The Liquidator has entered into this Agreement as agent for and on behalf of the Company and shall incur no personal liability whatsoever....."

The Agreement by its express terms thus comprised only a sale of intellectual property and no sale of physical property. It is the claimant's case that some paper copies of material in the Assessment Library (" the Copies") were taken away from Mosaic by a third party, Mr Murray, who was a competitor of the claimant and had purchased certain other materials from Mosaic by an agreement concluded with the liquidator at about the same time.

There followed a dispute about the ownership of the Copies. This was ultimately resolved on 26th April 1993 by the Copies being handed to the claimant. She says that she suffered substantial loss and damage, quantified in the region of £500,000, because the copies were in the hands of a competitor for some four months and their ostensible uniqueness was thereby compromised, so as to destroy their practical, and thence their real, value.

The claimant threatened proceedings soon after return of the Copies, but did not issue them until 30th September 1998, some five and a half years later and shortly before the expiration of the limitation period. By that time she had obtained legal aid. Her claim as set out in her statement of claim was for damages for negligence and breach of contract.

On 9th July 1999 the appellants applied for summary judgment under Part 24 of the CPR on the basis that the liquidator did not incur personal liability under the Agreement and owed no duty to the claimant for the type of loss suffered.

The Part 24 application was heard at Bristol by His Honour Judge Jack QC. The claimant's counsel told him that legal aid had been approved for leading counsel but expressly declined to ask for an adjournment. During the hearing, the Judge asked whether a claim in conversion had been considered by the claimant's legal advisers. Her counsel, however, without ruling out the possibility of a subsequent application for permission to amend her pleading, so as to include this additional cause of action, expressed the view that such a claim would face difficulties because only physical goods, not copyrights, were capable of being the subject of a claim in conversion.

The Judge reserved his judgment on the Part 24 application.

On 14th September 1999, the parties' solicitors received a draft of the Judge's proposed judgment. In it, he explicitly repeated his previous implicit invitation to the claimant's legal advisers to apply for leave to amend her statement of claim. His conclusion was expressed thus:-

"Dr Stewart's advisers may wish to consider whether she can recover any of the loss she alleges by means of a claim in conversion as I have outlined. But the claim as it is at present formulated is bound to fail."

In this draft judgment, the Judge thus stated his conclusion that the claimant's claims based on breach of contract and negligence were demurrable, but left open the question whether she might succeed in avoiding summary judgment against her by an application to amend her statement of claim, so as to include a claim in conversion.

The claimant's legal advisers did not accept this invitation. They made no application to amend her statement of claim between the receipt of this draft judgment and 24th September 1999, the date fixed for its formal handing down.

At the hearing on 24th September 1999, before beginning to discuss the terms which his formal order should contain, the Judge asked the claimant's counsel:-

"Can I get clear with you whether you are pursuing the idea of a claim in conversion?"

This question was answered by an unqualified "No". The Judge accordingly directed that the first provision of his order should be:

"Action be dismissed as against both defendants"

Towards the end of the colloquy on that day, 24th September, the Judge observed:

"Then I think I should add at the end of the judgment just something recording the fact that after delivery of the judgment I was told that the claimant did not wish to pursue a claim in conversion. Then the thing is complete rather than floating around."

The final version of the Judge's judgment received by the parties' solicitors on 29th September 1999 contained a newly added, last sentence to this effect.

Following receipt of the final version of the judgment, the claimant, who, as already stated, had obtained legal aid for consulting leading counsel before the hearing of 9th July 1999, availed herself of that legal aid. On 22nd October 1999, having received his advice, she applied for permission to amend her statement of claim to plead a claim for conversion of the Copies in substitution for the claims in negligence and breach of contract. It is common ground that by that date any new claim in conversion would have been statute-barred.

Also on 22nd October 1999, the order made by the Judge on 24th September was sent to the court by the appellant's solicitors for stamping and issue. There was then correspondence as to whether it should be issued. The Judge resolved that matter by directing that pending the hearing of the claimant's application the order should not be issued. If it had been issued, the Judge would on any footing have had no further jurisdiction in the matter and the claimant's only way forward would have been by way of appeal.

The claimant's application to amend was heard by the Judge on 5th November 1999, when it was made clear on behalf of the claimant that the only explanation for her change of course was that the advice of newly instructed leading counsel differed from the advice previously given to her. The Judge reserved judgment. A draft of his judgment was received by the parties' solicitors on 29th November 1999 and handed down on 10th December 1999. The Judge gave the claimant permission to amend her pleading as sought, but ordered her to pay the appellants' costs of her application and gave them permission to appeal. There has been no appeal from his judgment of 24th September 1999.

The issues.

Mr Salzedo for the appellants has in substance made four principal submissions in support of their appeal from the Judge's order of 10th December 1999:-

(A) First, the Judge, having delivered the final version of his judgment on 24th September 1999 and having made an order dismissing the action accordingly, had exhausted all his functions to perform and had no jurisdiction to reopen the matter by giving the claimant permission to amend her pleading: "("Issue (A)")"

(B) Alternatively, if the Judge had such jurisdiction, he misdirected himself in principle in the exercise of his discretion in reopening his previous order on the facts of the present case and this court should exercise the discretion by declining to reopen it and refusing the claimant permission to amend her pleading: "("Issue(B)")."

(C) Further or alternatively, the Judge had no jurisdiction to permit the amendment of the pleading so as to introduce new and otherwise statute-barred claims for rectification and conversion having regard to section 35 of the Limitation Act 1980 ( "the 1980 Act") and Rule 17.4 of the CPR : "("Issue (C)").

(D) Further or alternatively, if he had such jurisdiction, he misdirected himself in principle in the exercise of his discretion in permitting such amendment on the facts of the present case and this court should exercise the discretion by refusing such permission: "("Issue(D)")."

Issue (A)

For many years it has been accepted that a judge who has given judgment has the power to reconsider his conclusion and in effect reverse his own decision provided that the order recording his earlier decision has not yet been formally completed. A number of the authorities illustrating this principle were collated by Neuberger J in Charlesworth - v - Relay Roads Ltd (in liquidation) [2000] 1 WLR 230. Another leading case in which the existence of this jurisdiction was accepted, by the Court of Appeal, is Re Barrell Enterprises [1973] 1 WLR 19 which was apparently not cited to Neuberger J in the Charlesworth Case.

However, it appears that there is no authority binding on this court which establishes that this jurisdiction ("the Barrell jurisdiction") has survived the introduction of the CPR., which, as stated in Rule 1.1(1), are a "new procedural code with the overriding objective of enabling the court to deal with cases justly". Mr Salzedo cited the decision of this court in Biguzzi v Rank Leisure Plc [1999] 1 WLR 1926 as authority for the proposition that the CPR. is a self-contained code and earlier authorities are no longer generally of any relevance once the code applies: (see ibid. at p. 1934 per Lord Woolf MR). He referred us to CPR. Part 40.7(1) which provides:

"A judgment or order takes effect from the date when it is given or made or such later date as the court may specify."

No such later date was specified in the Judge's order of 24th September 1999. Accordingly, it was submitted, that order took effect on the day when it was made and, once it had taken effect, the Judge had exhausted all his functions and had no jurisdiction to entertain any further application in the case, in particular an application to amend pleadings.

The claimant's application to amend her pleadings was expressed to be made under Part 3.1 of the CPR. which lists the court's general powers of management and provides by sub-paragraph (7) that:

"A power of the court under these Rules to make an order includes a power to vary or revoke the order."

In my judgment this Rule, read by itself, gives little assistance to the claimant because it does not specify the circumstances in which the power to vary or revoke an order exists.

I accept that it is possible that the Barrell jurisdiction falls to be regarded as a rule of practice rather than law and was capable of being abrogated by the introduction of the CPR. Nevertheless, I am satisfied that there is nothing in the CPR. which obliges us to hold that it was so abrogated and that we should not reach any such conclusion. On the contrary, the jurisdiction, if very cautiously and sparingly exercised, in my judgment serves a useful purpose, fully in accord with the overriding objective of enabling the court to deal with cases "justly", as particularised in Rule 1.1 of the C.P.R.

Neuberger J. in Re Blenheim Leisure (Restaurants) Ltd (No 3) The Times 9th November 1999 gave some helpful examples of cases where the jurisdiction might justifiably be invoked before the order in question was drawn up:

"a plain mistake on the part of the court; a failure of the parties to draw to the court's attention a fact or point of law that was plainly relevant; or discovery of new facts subsequent to the judgment being given. Another good reason was if the applicant could argue that he was taken by surprise by a particular application from which the court ruled adversely to him and that he did not have a fair opportunity to consider".

It is to be observed that in all these instances, if the court had no power to reconsider its order before it was drawn up, the only remedy open to the party prejudiced would be by way of appeal from the order. Though on such hypothetical facts an appeal would itself have a good chance of success, common-sense suggests that in such cases the Judge who made the order should himself have the power to vary it before the appeal procedure has to be set in motion, with the likelihood of exposing all parties to far greater expense and delay than an application to the court of first instance. Consistently with the existence of the Barrell jurisdiction, RSC Order 59r.4(1) provides that the time for appeal from a decision of the High Court begins to run from "the date on which the judgment or order of the court below was sealed or otherwise perfected". Up to that date, in my judgment, the Barrell jurisdiction continues to subsist, though, as I will explain later, the discretion thereby conferred on the court is in my judgment severely restricted. I would therefore decide Issue (A) in favour of the claimant.

Issue (B)

The substantive relief sought by the appellants' application of 9th July 1999 was "an order that......judgment be entered for the First and Second Defendant against the Claimant with costs, pursuant to CPR Part 24.2 because the Claimant has no real prospect of succeeding against the First and Second Defendant and there is no other reason why there should be a full trial of the Claimant's claim against them"

Mr Anthony Mann QC for the claimant in the present case reminded us of, and strongly relied on, the well-established practice referred to in the notes to the Supreme Court Practice 1999 at para. 18/19/1. In a case where the court is faced with an application to strike out a pleading on the grounds that it is demurrable, before delivering judgment striking out the pleading, it will frequently show indulgence to the respondent by giving him the opportunity to save the action by amendment of his pleading, if it considers that a non-demurrable amendment is possible. Mr Mann submitted that this was effectively what happened in the present case. It makes no material difference, he contended, that the application to amend was made after, rather than before, the Judge had delivered his formal judgment and had made an order for dismissal of the action accordingly.

I cannot agree with this submission, which overlooks the fundamental difference in the principles applicable in a case where the argument before a judge is still open and continuing and a case where he has actually delivered judgment. In a case where the application to amend is made before delivery of judgment, the court has a wide discretion to permit amendment in the interests of justice, and, even at a late stage, will be disposed to exercise that discretion in favour of the applicant, subject to an appropriate order as to costs, if it considers that this is necessary to dispose of all the true issues arising between the parties. If the application is made after judgment, however, the situation is quite different because the applicant is then obliged to invoke the Barrell jurisdiction.

Since there must be some finality in litigation and litigants cannot be allowed unlimited bites at the cherry, it is not surprising that, according to the authorities, there are stringent limits to the exercise of the discretion conferred on the court by the Barrell jurisdiction. In that case itself, Russell LJ, delivering the judgment of the Court of Appeal, said (supra at p.23-24) :

"When oral judgments have been given, either in a court of first instance or on appeal, the successful party ought, save in the most exceptional circumstances, to be able to assume that the judgment is a valid and effective one."

Russell LJ went on to say (at p.24):

"The cases to which we were referred in which judgments in civil courts have been varied after delivery were all cases in which some most unusual element was present."

This principle must apply a fortiori where the judgment is a formal written judgment in final form, handed down after the parties have been given the opportunity to consider it in draft and make representations on the draft. The principle recognises that the doing of justice requires justice to both parties in litigation, not merely one.

At least until the coming into force of the CPR, the Barrell decision would have been clear authority, binding on this court, for the proposition that only in exceptional circumstances can it be proper for a judge to exercise his discretion under the relevant jurisdiction to vary a previous order of his once such order has been made. It may be that now, having regard to the CPR and what was said as to their effect in the Biguzzi case, the Barrell decision is no longer strictly binding authority. Nevertheless, all the considerations which led the court to decide as it did in that case in my judgment still apply. They are in my judgment not merely consistent with, but also a proper application of the overriding objective of enabling the court to deal with cases justly as stated in Rule 1(1) of the CPR, having regard to all the various factors that fall to be taken into account, by virtue of Rule 1(2), in dealing with cases justly. In the present case, in my judgment, we therefore have to look to see whether in November 1999 there existed exceptional circumstances sufficient to justify the judge in exercising the Barrell jurisdiction.

The judge himself said:

"It is clear that where the court has heard argument on a point [my emphasis added] and made a decision it will be exceptional that it will allow it to be reopened."

Having referred to the Barrell decision and Re Blenheim Restaurants Ltd (No 3) (supra) the Judge continued:

"I consider, however, that what I am being asked to do is of a different nature to the situations which were mainly in mind in those cases. I am not being asked to reconsider my primary decision, namely that the statement of claim as it stood had no real prospect of success. I am being asked to reconsider a consequence of that decision, namely the dismissal of the action. That would be inappropriate if leave to amend is to be given, just as it is appropriate if it is not. It is, as it were, a matter of mechanics. I think that the history which I have set out is something to be taken account of in weighing whether, insofar as it is a matter of discretion, leave to amend should be given. Amendment is covered by Part 17 of the C.P.R. Part 17 does not contain any express provision as to the court's general power to allow amendments. It is, of course, subject to the overriding objective set out in Part 1. The Court's aim must be to do justice between the parties in the circumstances before it. In my view, cases decided under the Rules of the Supreme Court as to the exercise of the court's discretion as to leave to amend will generally remain relevant. I consider that in particular the court should generally allow an amendment which is necessary to allow the real dispute between the parties to be determined where the other party can be compensated in costs and there is no other factor which would make the amendment unjust"

I would accept the general principles stated in the last of these paragraphs from the judge's judgment, if it is read in isolation from the facts of the present case, that is to say as applying to a case where the court has not yet delivered judgment. I cannot, however, agree with the analysis contained in the previous paragraph. The Judge apparently regarded his "primary decision" as having been one that the claims in contract and negligence had no real prospect of success. That was indeed the case at the time when he sent out the draft of his proposed decision on 14th September 1999 and the idea of a claim in conversion was, to use the judge's words' still "floating around". But, by the time he delivered his judgment in its final form, the situation had altered in a very material respect. The claimant having declined to avail herself of his invitation to amend her statement of claim by including a claim in conversion, the Judge's primary decision had to be and was that her claim should be dismissed as against both defendants; and in my judgment he misdirected himself in regarding his primary decision as having been anything other than that. The last extract quoted above from the colloquy at the hearing on 24th September 1999 shows quite plainly that, by the end of that hearing, both the Judge and the claimant's counsel contemplated and intended that the idea of a claim in conversion should be "floating around" no longer and that the matter should be "completed" by the Judge by dismissal of the action.

Against this background, I cannot for my part regard the Judge's "primary decision" point as reflecting exceptional circumstances justifying him in reopening his order of 24th September 1999. This was not a case where the judgment and order of that date took the parties by surprise or where a new point of possible significance had occurred to one of the parties (or the Judge himself) after judgment had been delivered. On the contrary, the relevant point had been in the minds of the Judge himself and the parties at very latest from 9th July 1999 onwards. From that date onwards, the claimant's legal advisers had been given a number of opportunities to take the point and had declined them all. The only new circumstance that arose after 24th September 1999 was that newly instructed leading counsel advised the claimant that the point should after all be taken. It is understandable that the Judge may have felt some sympathy for the claimant for the predicament in which she then found herself. In my judgment, however, her change of mind after receiving such advice did not constitute exceptional circumstances sufficient to justify the Judge in exercising the Barrell jurisdiction. A contrary decision would mean that courts would be wide open to applications to revoke their judgments before they had been perfected simply because a party, who had expressly abandoned a point before judgment, thereafter wished to have the opportunity to reopen it after receiving new legal advice. I cannot think that this would accord with the "overriding objective" of the CPR

For these reasons, with all respect to the Judge's very careful judgment, I consider that he erred in principle in exercising the Barrell jurisdiction in favour of the claimant. Since on that footing it falls to this court to exercise that discretion, I would for my part exercise it in favour of the appellants and decide Issue (B) in their favour accordingly.

Issue (C)

If my judgment on Issue (B) is correct, this appeal will have to be allowed on that ground and the further issues do not arise. Nevertheless, in deference to the able arguments on Issue (C) advanced to us on both sides, I shall attempt to deal with them.

The claims for rectification and conversion were statute-barred under the 1980 Act by the time when the Judge gave permission to amend the statement of claim. In cases where the limitation period has expired under the 1980 Act. CPR Part 17.4(2) provides that:

"the court may allow an amendment whose effect will be to add or substitute a new claim, but only if the new claim arises out of the same facts or substantially the same facts as a claim in respect of which the party applying for permission has already claimed a remedy in the proceedings."

This wording is derived from section 35 of the 1980 Act which by sub-section (2), defines a "new claim" as including "any claim involving .......the addition of a new cause of action" and, by sub-sections (4) and(5) imposes similar restrictions "in the case of a claim involving a new cause of action".

The first question that arises in the present context is whether either or both of the proposed amendments of the statement of claim relating to rectification and conversion involved "the addition of a new cause of action".

I gratefully adopt the Judge's summary of the statement of claim both as originally drafted and as proposed to be amended:-

Paragraph 1 pleads the original agreement with the company whereby the claimant developed "the Library Assessment Materials".

Paragraphs 2 and 3 plead the appointment of the liquidator.

Paragraphs 4 and 5 plead that it was agreed by an offer made by fax and its acceptance that the claimant should buy all the subject matter of the first agreement including the copyright. This is consistent with it being alleged that the physical materials were included..

Paragraph 7 first sets out recital (F) from the agreement of 8 December, which referred to agreement for the sale of the Assessment Library Materials including copyright. The recital is consistent with the inclusion of physical materials. Paragraph 7 next pleads paragraph 2.1 of the agreement of 8 December, which is the nub of the agreement and assigned "the copyright in and all other rights of a like nature....in and to the materials comprising the Assessment Library". Paragraph 2.1 of the agreement refers expressly only to the copyright.

Paragraph 8 pleads payment to the liquidator.

Paragraph 9 pleaded alleged terms of the agreement which cannot stand following my first judgment.

By paragraph 10 it is proposed by amendment to plead that it was the common intention of the parties that, as evidenced by recital (F), the Assessment Library Materials were included in the agreement and clause 2.1 should be rectified. The same amendment was before the court on 16 July 1999, but did not feature in submissions.

Paragraph 11 pleaded, inter alia, that the liquidator owed a duty of care to the plaintiff to ensure that inter alia the Assessment Library and all intellectual property rights in it were transferred to the claimant. This cannot stand following my first judgment.

Paragraph 12 pleads that the liquidator purported to sell and transfer the Assessment Library Materials to Mr Murray.

Paragraph 13 did plead that the liquidator acted in breach of his duty of care. It is now proposed by amendment to plead conversion. The same particulars are relied on. There is no paragraph 14.

Paragraphs 15 and 16 plead the recovery of the Materials and damage.

It is proposed to add to the prayer a claim for rectification and damages for conversion."

Paragraph 5 of the claimant's reply, which was apparently not relied on in argument before the Judge and seems to have been included in support of the claim in negligence, read as follows:

"Further or alternatively the plaintiff avers that the continuing common intention of the parties up to the time the Agreement was signed, as evidenced by the words of recital, was that the Assessment Library materials were included in the Agreement and the Plaintiff is entitled to have Clause 2(1) of the Agreement rectified accordingly."

The meaning of the phrase "cause of action" was recently considered in Paragon Finance plc v D.B. Thakerar & Co. [1999] 4 All ER 400 by Millett LJ who (at p.405) cited with approval the definition offered by Diplock LJ in Letang v Cooper [1965] 1 QB 232 at pp 242-243:

" A cause of action is simply a factual situation the existence of which entitles one person to obtain from the court a remedy against another person."

The relevance of the claim for rectification is that, in order to establish a good claim for conversion, the claimant had to plead and in due course prove that at the time when the Copies passed into the hands of Mr Murray she had the immediate right to possess them. For this purpose she had sufficiently to plead that the property in the Copies had passed to her under the Agreement.

Mr Mann QC submitted on her behalf, first, that the Copies were specific goods in which the title would have passed on the making of the Agreement by virtue of Sale of Goods Act 1979 section 18 rule 1 and, secondly, that this point of construction was adequately pleaded by the statement of claim in its original form. Whether or not the first submission is well founded, I cannot accept the second. I agree with the Judge's view that the claim for rectification was a new claim. In this court, further reliance was placed in this context on paragraph 5 of the reply. In my judgment, however, the inclusion of this paragraph in the reply (which was itself issued outside the limitation period on 26th March 1999) cannot prevent the application for amendment of the statement of claim, so as to include a claim for rectification, from involving the introduction of a new claim for the purpose of the 1980 Act.

The Judge expressed more doubt as to whether the claim for conversion involved a new claim, saying " it can be suggested that the plea was open, under the old Rules at least, on the pleading as it stood, because the acts relied on for negligence are the same as those now relied on for conversion". In the light of the definition of a "cause of action" cited above, I would accept that the absence of any explicit reference to "conversion" in the pleading would not by itself mean that the pleading contained no such plea. The pleading, however, contained no averment of one fact essential to the founding of a claim for conversion, namely that the property in the Copies had passed to the claimant under the Agreement. With whatever indulgence this pleading is read, I do not think it could be said to include any such averment by necessary implication. I therefore conclude that both the claim for conversion and the claim for rectification involved new causes of action.

On this footing, Mr Salzedo raised an interesting argument which had not been ventilated before the Judge. Section 35(5) of the 1980 Act requires that "the new cause of action arises out of the same facts or substantially the same facts as are already in issue on any claim previously made in the original action". In his submission, the words "as are already in issue" can only mean that the facts must be in issue at the date of the permission to amend; in the present case, where judgment had already been given on the existing claims, there were no facts in issue at the time of the permission to amend, so that the jurisdiction conferred by Rule 17.4 of the C.P.R could not arise. He supported this argument by reference to (inter alia) the judgment in Lloyds Bank v Rogers, The Times 24th March 1997 of Hobhouse LJ, who explained the policy of the section as being that "if factual issues are ' in any event" [emphasis added] going to be litigated between the parties, the parties should be able to rely upon any cause of action which substantially arises from those facts."

I am not persuaded by this argument. In Fannon v Backhouse 30th July 1987 Lexis, this court considered and rejected a submission that the words "as are already in issue" in the context of section 35(5) refer only to facts which are in dispute. Nourse LJ said:

"However, it seems to me that that is to put altogether too narrow a construction on [the 1980 Act]. It would be ridiculous to suppose that it was intended that the satisfaction of the condition should depend on whether the additional facts were denied, not admitted or admitted on the pleadings, as the case might be. I think it clear that the words "in issue on" mean "material to" or the like."

At the time when the Judge made his order of 10th December, there were many facts material to the claims (for breach of contract and negligence) previously made in the original action. Accordingly, this new point raised on behalf of the appellants cannot by itself be regarded as having operated to deprive him of the jurisdiction to permit amendment.

It is, however, still necessary to consider whether the conditions referred to in section 35(4) were satisfied, that is to say whether the new causes of action for rectification and conversion arose out of the same facts or substantially the same facts as were "in issue on any claim previously made in the original action". The Judge held it was plain that the claim for conversion satisfied this condition. As to the claim for rectification,

he pointed out that this involved the introduction of a new allegation in the statement of claim, that is to say the common intention of the parties. But, he said:

"That had...already been reflected in the pleading of the agreement made by the acceptance of the prior fax and in the pleading of recital (F). So in my view the claim for rectification does arise out of substantially the same facts as already pleaded."

Mr Salzedo referred us to a number of cases dealing with the court's jurisdiction to order rectification of a written agreement. The relevant principles are well known . For present purposes it may suffice to summarise them by saying that, as essential preconditions to the obtaining of this relief, the claimant has to show, first, some outward expression of accord or evidence of a continuing common intention objectively manifested before the written agreement was concluded and, secondly, that, through a mistake common to both parties, the form of the written agreement itself does not accord with such common intention: (see for example Britoil Plc v Hunt Overseas Oil Inc. & Others (unreported C.A. case decided on 25.5.94, at p.20 per Hobhouse LJ). Thus, it was said, the "actual subjective intentions" of both parties before the Agreement was concluded would be put in issue. This I doubt. I would, however accept that at least any pre-contract correspondence or discussions showing what were the true intentions of the parties would for the first time become relevant if the claimant were permitted to amend paragraph 10 of her pleading by alleging that it was the continuing common intention of both parties that the "copies" should be included. On the other hand, without any reference to a plea of rectification, it would have been open to the claimant to adduce evidence as to the circumstances surrounding this commercial contract, so as to enable the court to put itself in the position of the parties when construing it. The probability is that such evidence would have covered substantially, albeit not all, the same ground as would have been covered in presenting the plea for rectification. I would accordingly hold that the Judge was right in finding that the claim for rectification satisfied the conditions set out in section 35(4) of the 1980 Act.

The position as regards the claim for conversion is more straightforward. The only material fact essential to establish the claimant's claim for conversion and not explicitly included in the original pleading was the allegation that the property in the Copies passed to the claimant on the execution of the Agreement, thereby giving her the right to possession of them. In these circumstances the Judge was in my opinion right in holding that that the claim for conversion arose out of the same facts (or substantially the same facts) as those originally pleaded.

If it were relevant, I would therefore have decided Issue (C) in favour of the claimant.

Issue (D)

The jurisdiction conferred on the court to allow an amendment whose effect will be to add a new claim for the purpose of the 1980 Act is of a discretionary nature, as is shown by the presence of the word "may" in the relevant provisions. Mr Salzedo advanced a number of reasons, beyond those referred to under Issue (B) above, for submitting that the Judge erred in principle in permitting the amendment. These submissions included in effect the following:-

(1) The appellants could not be adequately compensated in costs for the amendment, since the claimant, who is legally aided, is impecunious.

(2) The original transaction was handled on behalf of the liquidator by Ms Charlotte Halsall. Her evidence would be crucial in the claim for rectification, on which the claim for conversion depends. She is no longer employed by his firm and, after this long lapse of time, her memory as to the details of the relevant negotiations is likely to have become dim.

(3) After this length of time, the chances of a fair trial of the new issues would in any event be slender.

(4) Both the new claims are weak and would have little chance of success, particularly in the case of the rectification claim, because of the claimant's laches.

If the application to amend had been made before the Judge had delivered his judgment, these points might have given rise to some difficult questions, even though the onus falling on the appellants, in seeking to persuade this court that there were sufficient grounds for interfering with the exercise of the Judge's discretion, would, in that situation, have been quite a heavy one. Since, however, I have already concluded that the Judge erred in the exercise of his discretion in permitting the amendment for the reasons given under Issue (B) above, I do not think it will be helpful to prolong this judgment by dealing with the issue of discretion on a different hypothesis. As I have already stressed, entirely different principles in my judgment apply to a case where an application to the court for permission to amend a pleading is made after judgment from those which apply in a case where it is made before judgment- and a fortiori where the possibility of an amendment has been extensively considered and canvassed before judgment.

Conclusion

For the reasons given, I would allow this appeal. I would set aside the Judge's order of 10th December, 1999, refuse the claimant permission to amend her statement of claim and dismiss her action as against both the appellants. I would like to add that I have been much assisted by the oral and written arguments of counsel on both sides.

LORD JUSTICE CLARKE:

The facts have been set out by Sir Christopher Slade. I do not therefore need to repeat them. I shall consider the issues under the same four heads as he has done.

Issue (A)

This issue raises the question whether the judge had jurisdiction to give the claimant permission to amend her statement of claim after having orally made an order dismissing the action. I agree that he did have jurisdiction, but since my reasoning is not quite the same as that of Sir Christopher Slade I set it out shortly.

For my part, I do not think that decisions on the Rules of the Supreme Court ("RSC") by this or any other court are of any real assistance in deciding the extent of its jurisdiction since the coming into force of the Civil Procedure Rules ("CPR"). Such decisions are certainly not binding. The jurisdiction of the court now depends upon the CPR and not upon the RSC or cases decided under them. Rule 1.1(1) of the CPR expressly provides that the CPR are a "new procedural code with the overriding objective of enabling the court to deal with cases justly". In Biguzzi v Rank Leisure Plc [1991] 1 WLR 1926 Lord Woolf MR (with whom Brooke and Waller LJJ agreed) approved the following statements of the judge in that case:

… it is my firm belief that authorities decided under the old procedure should not be taken as binding or probably even persuasive upon this court, any more than looking back to the old rules to interpret the new should be so. This is a new regime.

and

… I very much doubt whether any of the old authorities can assist, although it is perfectly true, as counsel both pointed out to me, that in some of the later striking out cases, and I do not propose going through them for the reason I have just expressed, there were foreshadowings and expressions of view as to how things might be under the new order. I have to say that this court's view, after extensive training and a good deal of discussion and thought, is that the new order will look after itself and develop its own ethos and that references to old decisions and old rules are a distraction.

Counsel for the appellant sought to criticise those views, but Lord Woolf said at page 1932b:

However, I do not accept the criticisms of the judge with regard to his approach to the previous authorities. Indeed far from criticising the judge. I would commend his approach. The amount of time which the deputy district judge had to spend in his judgment examining the old authorities indicates the disadvantage of having to look back, as the judge said, "over your shoulder" at those authorities.

It follows, in my judgment, that the instant case should be decided not by the application of principles adopted in earlier cases including Re Barrell Enterprises [1972] 3 All ER 631 but by reference to the CPR.

By rule 40.7(1) of the CPR a judgment or order takes effect from the day when it is made, which in this case was the 24^th September 1999. Rule 40.3 then makes detailed provisions for the drawing up and subsequent sealing of the order. However, by rule 3.1(7):

A power of the court under these Rules to make an order includes a power to vary or revoke the order.

The original order sought by the defendants when they made their application under rule 24.2 was an order that judgment be entered in their favour. That is the order which the judge made orally on the 24^th September. The judge described what followed in this way:

The consequence of the judgment was that on 24 September I ordered that there should be an order dismissing the action and as to costs. I determined the wording of the order. On 20 October the claimant issued her application for permission to amend. It stated: 'The Claimant, having taken leading counsel's advice, now wishes to pursue the claim in conversion of the assessment library materials.' On 22 October the order made on 24 September was sent to the court by the defendants' solicitors for stamping and issue. There was then correspondence as to whether it should be issued. I resolved that by directing that pending the hearing of the claimant's application the order should not be issued. If it had been issued, the action would have been at an end and the claimant's only way forward would have been by appeal.

By "issued" I think that the judge must have meant sealed, at which time (as Sir Christopher Slade has observed) the time for appealing would have begun to run under rule 59.4(1), which is the old RSC order 59 rule 4(1) now scheduled to the CPR.

In these circumstances the order made orally by the judge on the 24^th September must I think have been an order within the meaning of rule 3.1(7) so that the court had power to vary it, at least until it was drawn up or sealed. It is not necessary for the purposes of this appeal to consider the difference (if any) for this purpose between the drawing up and sealing of an order. In the event the order was in effect varied because on the 10^th December the judge ordered that "the defendants do have judgment against the claimant on the statement of claim in its unamended form". That order was sealed on the 13^th December 1999.

In all the circumstances I agree that the judge had power to vary the order.

Issue (B)

This issue raises the question whether the judge misdirected himself in principle in the exercise of his discretion in reopening his previous order on the facts of the present case and, if so, whether this court should exercise its discretion by declining to reopen it and refusing the claimant permission to amend her pleading.

As I indicated above, it is my view that this question depends upon the application of the overriding principle to all the circumstances of the case. I agree with Sir Christopher Slade that Mr Mann's submission that it makes no difference to the exercise of that discretion whether the application was made before or after the judge orally announced his order to dismiss the action cannot be accepted. The fact that it was made after and not before he did so is to my mind an important factor in deciding whether to grant permission.

On the other hand, I respectfully differ from the suggestion that this court is bound by Re Barrell Entrprises to hold that permission to amend should only be granted in exceptional circumstances where the application is made after the order is announced orally but has not been drawn up and sealed. In deciding how to apply the overriding objective that factor is simply one consideration to be taken into account, albeit an important one. I am therefore unable to agree that we have to look to see whether in November 1999 there existed exceptional circumstances sufficient to justify the judge in exercising "the Barrell jurisdiction".

To take an example, if the application in this case had been made on the 25^th September, the day after the judge made his order, it surely could not have been said that it would not have been just to grant it merely on the ground that it was made a day late. There is to my mind no doubt that if the application had been made on the 24^th September, after the judge had handed down his judgment which contained his conclusions on the defendants' application under rule 24.2, but before he actually announced the order to dismiss the action, he would have granted it. The fact that it was made the next day would be just one of the matters to take into consideration in the exercise of the discretion.

Of course much would depend upon whether the defendants had acted on the judgment announced the day before. Thus in Re Barrell Enterprises Russell LJ, giving the judgment of this court, said at page 636f:

When oral judgments have been given, either in a court of first instance or on appeal, the successful party ought save in most exceptional circumstances to be able to assume that the judgment is a valid and effective one.

I entirely agree that if the successful party has assumed that the order or judgment is effective and acted on it that would be a powerful factor to weigh in the balance in his favour. That is not, however, the position on the facts here. In Charlesworth v Relay Roads Ltd [1999] 4 All ER 397 Neuberger J considered the problem in connection with the reopening of issues determined at a trial. He was not considering the matter under the CPR, but he said this at page 405d:

1. The court has jurisdiction to grant an application to amend the pleadings to raise new points and/or to call fresh evidence and/or to hear fresh argument.

2. The court must clearly exercise its discretion in relation to such an application in a way best designed to achieve justice.

3. The general rules relating to amendment apply so that (a) while it is no doubt desirable in general that litigants should be permitted to take any reasonably arguable point, it should by no means be assumed that the court will accede to an application merely because the other party can, in financial terms, be compensated in costs; (b) as with any other application for leave to amend, consideration must be given to anxieties and legitimate expectations of the other party, the efficient conduct of litigation, and the inconvenience caused to other litigants.

4. Quite apart from, and over and above, those principles, because it is inherently contrary to the public interest and unfair on the other side that an unsuccessful party should be able to raise new points or call fresh evidence after a full and final judgment has been given against him, it would generally require an exceptional case before the court was prepared to accede to an application where the applicant could not satisfy the three requirements in Ladd v Marshall.

5. Almost inevitably, each case will have particular features which the court will think it right to take into account when deciding how to dispose of the application before it.

6. The court should be astute to discourage applications which involve parties seeking to put in late evidence, but cases where new evidence is found after judgment is given and before the order is drawn up will be comparatively rare.

Those will no doubt be relevant considerations in considering the application of the overriding objective under the CPR to the facts of the particular case. I agree, for example, that after a full trial, the application of the overriding objective would be unlikely to lead to the conclusion that the losing party should be permitted to reopen the matter save in an exceptional case where the requirements of Ladd v Marshall were not met. However, all must depend upon the circumstances.

The question under this head is whether the judge misdirected himself in the instant case in reopening the matter. In my opinion he did not. The judge referred to the passage in Re Barrell Enterprises which I have quoted above and to a further decision of Neuberger J in Re Blenheim Leisure (Restaurants) Ltd (3), The Times 9^th November 1999, where he held that in relation to an interlocutory order the court should not reconsider it unless there were strong reasons. He gave examples such as a plain mistake by the court, the parties' failure to draw to the court's attention a plainly relevant fact or point of law and discovery of new facts after the judgment was given. To my mind those are simply examples. How the discretion should be exercised in any particular case will depend on all the circumstances.

In this regard the judge said this:

I consider, however, that what I am being asked to do is of a different nature to the situations which were mainly in mind in those cases. I am not being asked to reconsider my primary decision, namely that the statement of claim as it stood had no real prospect of success. I am being asked to reconsider a consequence of that decision, namely the dismissal of the action. That would be inappropriate if leave to amend is to be given, just as it is appropriate if it is not. It is, as it were, a matter of mechanics. I think that the history which I have set out is something to be taken account of in weighing whether, in so far as it is a matter of discretion, leave to amend should be given.

Sir Christopher Slade has expressed the view that the judge erred in principle in that passage. I regret that I have reached a different conclusion because I do not think that the question is whether there were such exceptional circumstances as to satisfy the test in Re Barrell Enterprises, but the much broader question contained in rule 1.1(1) of the CPR.

As I see it, the judge correctly directed himself. He said, in the next passage in his judgment, after that which I have just quoted:

Amendment is covered by Part 17 of the CPR. Part 17 does not contain any express provision as to the court's general power to allow amendments. It is, of course, subject to the over-riding objective set out in Part 1. The court's aim must be to do justice between the parties in the circumstances before it. In my view, cases decided under the Rules of the Supreme Court as to the exercise of the court's discretion as to leave to amend will generally remain relevant. I consider that in particular the court should generally allow an amendment which is necessary to allow the real dispute between the parties to be determined, where the other party can be compensated in costs and there is no other factor which would make the amendment unjust.

The judge then considered the power to allow amendments after the expiry of the limitation period in rule 17.4 and the facts of the case, which are relevant under issues (C) and (D) below.

While (as stated earlier) I have serious reservations about the desirability of extensive reference to the very many cases decided under the RSC, I can see no basis for holding that the judge erred in principle in his approach to this case. He carefully took into consideration what he described as the history of the matter. That included both the fact that he thought that the conversion point might be a point open to the claimant and for that reason had suggested it in argument and in his draft judgment and the further important fact that he had been informed by the claimant's counsel on the day he handed down judgment that it was not intended to seek to amend to plead conversion. He thus had all relevant considerations in mind, including the fact that it was only after he had been given that information and announced the order that the application for permission to amend was made.

The judge has been criticised for drawing a distinction between this case and cases like Re Barrell Enterprises. I do not think that that criticism is justified. He was to my mind right to say that that what he was being asked to do was of a different nature from the situations which, as he put it, were mainly in mind in the earlier cases. He was being asked, not to revisit any of the questions which he had decided, but to allow the claimant to put forward a point which the judge thought might be open to her, but which had not yet been taken. The difference between the position on the 24^th September when the matter was discussed orally and the position on the 20^th or 22^nd October when the application was made was that the judge had indicated the order which he was making in the light of the concession and that just under a month had elapsed. There can I think be no suggestion of any prejudice to the defendants during that month. It was, in my judgment, open to the judge to hold that, if it was just to permit the amendment on the 24^th or 25^th September, it was also just so to hold on the 22^nd October.

I recognise that the position would have been different if the order had been sealed before the application is made. However, I do not think that that invalidates the exercise of the judge's discretion in this case because after an order is sealed the judge no longer has a discretion, whereas the order had not been sealed (or indeed drawn up) on the 22^nd October when the judge was asked to exercise his discretion.

I recognise also that it can be said that the claimant's legal advisers had been given every opportunity to take the conversion point, but had not done so, presumably on the basis that they had advised the claimant that it would not succeed and the claimant had accepted that advice, with the result that the judge was told on the 24^th September that an application for leave to amend would not be made. Those are of course relevant and important considerations, but the judge had them in mind when he exercised his discretion. Applications for permission to amend are often made because advice is taken from leading counsel, as occurred here, and it can often be said that amendments are necessary because of a mistake of the applicant's legal advisers. Those, too, are relevant considerations but, as the judge held, all depends upon the application of the overriding principle.

For these reasons I do not think that it can fairly be said that the judge misdirected himself. He had all relevant considerations in mind in deciding to reopen the matter. I would therefore decide issue (B) in favour of the respondent.

Issue (C)

This issue raises the question whether the judge had jurisdiction to permit the amendment so as to introduce new and otherwise statute barred claims for rectification and conversion having regard to section 35 of the Limitation Act 1980 and rule 17.4 of the CPR. I agree that the judge had jurisdiction to do so for the reasons given by Sir Christopher Slade and do not wish to add to them in any way.

Issue (D)

The questions under this head are whether the judge exercised his discretion to allow the amendment on wrong principles or, if not, whether he was plainly wrong to do so. If the answer to those questions is no, the appeal must fail. Mr Salzedo, however, submits that the answer to both questions is yes. As Sir Christopher Slade has indicated, Mr Salzedo's submissions included in effect the following:

1. The appellants could not be adequately compensated in costs for the amendment since the claimant, who is legally aided, is impecunious.

2. The original transaction was handled on behalf of the liquidator by Ms Charlotte Halsall. Her evidence would be crucial in the claim for rectification, on which the claim for conversion depends. She is no longer employed by his firm and, after this long lapse of time, her memory as to the details of the relevant negotiations is likely to have become dim.

3. After this length of time, the chances of a fair trial of the new issues would in any event be slender.

4. Both the claims are weak and would have little chance of success, particularly in the case of the rectification claim, because of the claimant's laches.

It is in my opinion important to consider the application in the context of the pleadings as the stood before the application. The judge considered them in detail, as has Sir Christopher Slade in the context of issue (C). It is not therefore necessary for me to do so. However, although, for the reasons given by Sir Christopher Slade under issue (B), I agree that the conversion and rectification cases were not pleaded in the statement of claim, the facts relied upon were essentially pleaded either in the statement of claim or the reply.

In order to establish conversion the claimant would have to show that on the true construction of the agreement, either in its original form or as rectified, the property in the physical materials, which like Sir Christopher Slade I shall call "the Copies", passed to her, that the defendant liquidator converted them by passing them to a third party and that the liquidator was personally liable for doing so. There seems to me to be little or no difficulty about the second and third of those requirements. As to the first the claimant's case under the agreement is based on recitals (A) to (C) and (F), the definition of "Assessment Library Materials" and clause 2.2 construed in the context of what are said to be the commercial probabilities.

Recital (F) recites that the liquidator, acting on behalf of the company, has agreed with the claimant for the sale of the "Assessment Library Materials" which were part of the products referred to in recitals (A) and (B). In clause 1 the "Assessment Library" is defined as the "Assessment and Development Centre Materials Library" and in recitals (A) and (B) the products are described as "a series of new products to be used in the fields of performance appraisal" and other fields which the claimant had been appointed to design and develop under an earlier agreement. It is recited in recital (B) that that earlier agreement also provided that Mosaic would become the "sole owner of such products and of all the intellectual property rights therein". By recital (C) it is recited that the ownership of such products and of all the intellectual property rights therein were now vested in the Company. It is said that recital (C) shows that a distinction is drawn between the products themselves and the intellectual property rights in them.

Thus it is said that in these circumstances recital (F) shows that it had been agreed that the products, including the "copyright in such materials", were being sold to the claimant. As I understand it, it is the claimant's case that the recitals show that it had been agreed that the sale included not only the copyright in the materials, but the materials themselves. Against that it is submitted by Mr Salzedo that clause 2.1 makes it clear all that was sold was "the copyright and all other rights of a like nature". I see the force of that submission, which would almost certainly be correct if attention were focused only on clause 2.1. However, clause 2.1 (which has been set out by Sir Christopher Slade) provides that the liquidator

hereby assigns to [the claimant] the copyright and all other rights of a like nature …. in and to the materials comprising the Assessment Library …

and clause 2.2 provides:

It is hereby agree that the assignment and sale only includes materials originally written by [the claimant] and does not include any rights to any developments made by the Company or Mosaic or the the (sic) performance management material developed by the Company or Mosaic.

It may be said that although clause 2.1 refers to assignment, which on its face may be particularly apt to describe "copyright and rights of a like nature", the use of the word sale in recital (F) and clause 2.2 shows that it had been agreed that the sale would extend to the physical products.

It seems to me that the claimant's case that property in the Copies as well as the copyright was intended to pass under the agreement is certainly arguable, as the judge plainly thought, without the necessity for rectification. Mr Mann QC asked rhetorically: why would the parties agree to include only the copyright and not the Copies? There may be a good answer to that question, but it is not one which it is appropriate to resolve on an application (let alone an appeal) of this kind. Moreover it appears to me that the essential facts required to establish conversion were alleged in the original statement of claim. In addition to the above, it was alleged that the claimant duly paid the agreed sum of £5,000 to the liquidator and that fact was expressly admitted in the defence. Clause 2.1 of the agreement begins by stating "in consideration of the sum of … £5,000 now paid by [the claimant] …". Thus the essential basis upon which it can be said that the property included in the sale passed to the claimant on the making of the agreement was alleged and it was further alleged in the particulars of negligence in paragraph 12 that the liquidator was negligent in failing to recover the Copies.

In paragraph 7(i) of the defence the defendants raised the very issue which arises or would arise for decision on the true construction of the agreement in a claim for conversion. It reads:

On its true construction, the subject matter of the Agreement and Assignment was certain "copyright and all other rights of a like nature", which does not include any tangible assets such as the documents and papers comprising the Assessment Library Materials and associated advertising materials.

That issue was thus raised by the defendants as long ago as the 26^th November 1998. In my judgment it can be fairly determined now, just as it could have been fairly determined then. Some limited evidence of background or factual matrix may be required now, just as it was then, but I see no reason why it should not be adduced now, just as it was no doubt contemplated by both parties that it would have been adduced then.

As to rectification, the plea of rectification was first raised on the 26^th March 1999 in paragraph 5 of the reply, which is in the same terms as paragraph 10 of the amended statement of claim. It reads:

Further or alternatively the Plaintiff avers that the continuing common intention of the parties up to the time the Agreement was signed, as evidenced by the words of recital, was that the Assessment Library Materials were included in the Agreement and the Plaintiff is entitled to have Clause 2(1) of the Agreement rectified accordingly.

The defendants were thus not taken by surprise by the rectification plea in October 1999 because it had been advanced earlier in response to their own plea that on its true construction the agreement did not include the Copies, which they regarded as relevant or potentially relevant to the case as originally pleaded.

In these circumstances it seems to me that it would be very unlikely indeed that any judge would have refused the application to amend the statement of claim which was made in October 1999 if it had been made in, say, March 1999 at the same time as service of the reply. In granting the application the judge said this:

In opposing the application Mr Salzedo relied on the position of Ms Charlotte Halsall. It appears that it was she who handled the transaction on behalf of the liquidator. She is no longer employed by Stoy Hayward. If she can be found, it may be difficult for her to cast her mind back to 1992 and her intention as to the physical materials. That would carry more force in the absence of the agreement based on the fax and the recital. Further, until the success of the application to strike out, her evidence was going to be required in order to answer the case in negligence. Mr Salzedo also referred by way of prejudice to the liquidator to my disallowance of costs incurred on the liquidator's side in preparing to resist an application to amend on 24 September following delivery of judgment. I disallowed those costs because there had been no indication from the claimant's side that such an application was going to be made.

As I see the claimant's case, it has always been at least a substantial part of it that, in broad terms, the liquidator let Mr Murray have the physical materials when he should not have done. That, in broad terms, is the case which she now seeks to advance. Her amendment comes very late in time. On the other hand the action has not yet advanced beyond statements of case. There is no bar in law to the amendments. Bearing in mind all the circumstances including the circumstance that if the order made on 24 September had been drawn up swiftly the only way forward would have been by way of appeal, I think it right to allow the amendment.

I see nothing wrong in principle with the judge's approach. It may be added that, as Mr Mann has observed, no attempt has apparently been made to contact Ms Halsall recently, so that there is no evidence that she cannot be found or that she would be unable to give helpful evidence. Moreover, the issue as to whether the agreement covered not only copyright but also physical materials was canvassed in correspondence at the very outset in January 1993. The judge had before him evidence from the liquidator and reached the conclusion that these matters can be fairly tried. I agree, although it was essentially a matter for him in the exercise of his discretion, with which I can see no basis upon which we could interfere.

I would only add this on the question of laches and costs. As to laches, I do not think that the question whether there was such laches is one which we should seek to determine now. It will be a matter for the trial judge.

As to costs, I accept Mr Mann's submission that the costs incurred in the action so far are not costs incurred as a result of the amendment, as was submitted by Mr Salzedo. Thus the costs which the claimant was ordered to pay the defendants as a result of the defendants' successful application, which was the subject of the judgment delivered on the 24^th September, are unconnected with the amendment and are thus irrelevant for present purposes. I am not persuaded that the defendants would not have had those issues determined, even if an application for permission to amend had been made earlier. The claimant has been ordered to pay the costs of and occasioned by the amendment permitted by the judge. Those costs seem to me to be unlikely to be very substantial and such that (if legal aid were ignored) the claimant would be unlikely to be unable to pay. They would have been payable whenever the application was made.

In my judgment the judge would have been entitled to give permission to make these amendments at any stage during the course of the action and I do not think that there is any proper basis upon which this court could properly interfere with the exercise of his discretion when he in fact exercised it in December 1999. In short I do not think that the appellants have discharged the heavy onus referred to by Sir Christopher Slade. On the contrary, I agree with the judge that the effect of the amendment will be to enable the claimant to advance what has been, in broad terms, her case from the outset, namely that she bought the physical materials as well as the copyright.

In all these circumstances, I would dismiss the appeal.

LORD JUSTICE ROCH:

I agree with Sir Christopher Slade that this appeal should be allowed for the reasons that he gives. As we shall be reversing the decision of his Honour Judge Jack QC and because Clarke LJ, whose judgment I have had the advantage of reading in draft, would uphold the decision, I shall state my reasons shortly.

The facts and history of this action are set out in the judgment of Sir Christopher Slade and I shall not repeat them. I shall consider the four issues that arise in this appeal in the same order as set out in the judgment of Sir Christopher Slade.

Issue A

I agree with Sir Christopher Slade and Clarke LJ that a Court has power to reopen its judgment or order in the period between delivery of judgment either by the judgment being spoken or handed down, and the date on which the judgment or order is sealed or otherwise perfected, when the time for appealing begins to run under Order 59 Rule 4 (1). This will be so although the effect of the judgment or order may be immediate on the judgment or order being spoken, where the Court does not specify that the judgment or order should take effect at a later date, see CPR Part 40.7(1).

The Court has power at any given time to correct an accidental slip or omission in a judgment or order, see Part 40.12 (1) of the Civil Procedure Rules. With that exception the Court has no power to vary or amend in respect of a judgment or order that it has made once the judgment or order has been sealed and time for appealing has commenced to run. If that judgment is a final judgment then it can only be altered by a Court hearing an appeal from it.

Issue B

The power of a Court to reopen, whether by revocation or variation, its judgment or order must be exercised sparingly in my judgment, if it is to be exercised in accordance with the overriding objective of the CPR. The overriding objective of the new Code is to enable a Court to deal with a case justly, see Part 1.1 (1). In dealing with a case justly, as in discharging its duty to manage a case, the Court must bear in mind expense, the financial position of each party, the desirability of ensuring the parties are on an equal footing and that cases should be dealt with quickly and efficiently, which includes dealing with as many aspects of the case as the Court can on the same occasion., see CPR Part 1.1(2)(a)(b) and (d), and 1.4(2)(i) and (1).

The judge in his judgment at page 3 of the transcript accepted that the jurisdiction of a Court to reopen a judgment or order which it has delivered but which has not yet been drawn up was discretionary; a discretion to be used in special cases. The judge said:

"It is clear that where the Court has heard argument on a point and made a decision, it will be exceptional that it will allow it to be reopened."

The judge then went on to cite a passage from the judgment of Russell LJ in Re. Barrell Enterprises (1972) 3 All ER 631 at 636F:

"When all judgments have been given, either in a court of first instance or on appeal, the successful party ought save in the most exceptional circumstances to be able to assume that the judgment is a valid and effective one."

His Honour Judge Jack went on to cite a judgment of Neuberger J. in Re, Blenheim Leisure (Restaurants) Ltd No.3 reported in The Times 9 November 1999 that a Court should not reconsider an interlocutory order it had made unless there were strong reasons.

It has to be borne in mind that the reason why his Honour Judge Jack was being asked to reopen his order of 24 September 1999 that "the action be dismissed as against both Defendants", was that between that date and 20 October 1999 when the Claimant applied for leave to amend her statement of claim the Claimant had consulted leading counsel. There must have been reasons which ran counter to an application for leave to amend to plead the fresh cause of action in conversion being made. The judge had raised the question of amendment to plead conversion twice with junior counsel for the Claimant and had been told that a decision had been taken not to seek leave to amend because the view was that the agreement and assignment of 8 December 1992 did not operate to pass ownership of any physical property to the Claimant. It was not suggested that a new piece of evidence or information had emerged between 24 September 1999 and 20 October 1999 relevant to the question of amendment or that the Claimant, if so advised could not have put forward the amendment prior to the judge hearing the Defendant's application to strike out the action or during the judge's hearing of the Defendant's application to strike out the action.

It is clear that His Honour Judge Jack did not consider that there were either exceptional circumstances or strong reasons which justified his reopening the order that he made on 24 September 1999. The judge went on to say at page 3 of the transcript:

"I consider, however, that what I am being asked to do is of a different nature to the situations which were mainly in mind in those cases. (referring to the cases in Re. Barrell Enterprises and Re. Blenheim Leisure (Restaurants) Ltd (No. 3)). I am not being asked to reconsider my primary decision, namely that the statement of claim as it stood had no real prospect of success. I am being asked to reconsider a consequence of that decision, namely the dismissal of the action. That would be inappropriate if leave to amend is given, just as it is appropriate if it is not. It is, as it were, a matter of mechanics. I think that the history which I have set out is something to be taken into account in weighing whether, insofar as it is a matter of discretion, leave to amend should be given."

In this passage the judge is directing himself that his decision to reopen by revocation or variation the order he made on 24 September 1999 should turn on his decision whether he should exercise his discretionary power to allow the Claimant to amend her statement of claim. In short the judge has looked at those matters relevant to an exercise by him of his power to grant an amendment and has directed himself that he was not required, in addition, to see whether this was a case in which it was appropriate for him to reopen a judgment he had pronounced and an order that he had made. Consequently the judge has not asked himself whether there were exceptional circumstances or strong reasons for him to take the unusual course of reopening his earlier decision.

In my opinion the judge was wrong to say that what he was being asked to do was of a different nature from the situations in the two cases referred to in his judgment. The judge was doing two things: he was revoking the order that flowed from his oral judgment, namely that the Claimant's action was to be dismissed. The judge, in my view, misdirected himself when saying that that order still stood because the Claimant's action as originally pleaded was still being struck out. The reality was that the Claimant's action was being given the kiss of life after it had been pronounced dead on 24 September 1999. To allow a moribund action to be resuscitated cannot be a matter of routine. The matter cannot be looked at simply as a question of exercising a discretion to grant leave to amend. This must be so where a judge has pronounced judgment in favour of the Defendants on a statement of claim, particularly where, as in this case, the judge has specifically enquired of the Claimant's counsel during the hearing of the Defendants' application that the action be dismissed and again when judgment was pronounced if such an amendment has been considered and was going to be sought and has been told that it has been considered and it has been decided not to seek such an amendment. Such an application must be subject to a more stringent test than would an application for leave to amend made during the hearing of the Defendants' application and prior to judgment being given. The question is how that greater stringency is to be expressed? It is clearly not satisfactory for the Claimant to be allowed to wait to see the outcome of the Defendants' application and then, if the judge decides in the Defendants' favour, to apply for an amendment. There must be some satisfactory reason for failure to apply for the amendment at the proper time. The proper time is either before the Defendants' application is heard or during the hearing of the application.

In Charlesworth v Relay Road Ltd (1999) 4 All ER 397 at 405D Neuberger J. considered the problem of reopening issues determined at a trial, and formulated six principles. Those are set out in the judgment of Clarke LJ. Neuberger J. in his third principle thought that the fact that the other party could be compensated in costs did not mean that an application to reopen an issue or raise a new issue should be for that reason alone granted. In this case, the evidence indicates that the Claimant is not able to compensate the Defendants in costs either for the costs of the Defendants' successful application or for the costs of the action up to 24 September 1999, unless the Claimant were to succeed and recover substantial damages. This does not seem to have been a matter weighed in the balance by His Honour Judge Jack.

In the fourth principle formulated by Neuberger J. it is said:

"It would generally require an exceptional case before the Court was prepared to accede to an application (to reopen an issue or to raise a new issue) where the Applicant could not satisfy the three requirements in Ladd v Marshall."

The Claimant's application was made under Part 3.1 of the Civil Procedure Rules, that is to say the Claimant accepted that her application involved the variation or revocation of the order made on 24 September 1999. It also clearly involved the raising of a new issue. I would adopt the approach of Neuberger J. in that case and apply it to the circumstances of the present case. There was a full and final judgment given against the Claimant. There is no suggestion that the application of 20 October 1999 came about because of the emergence of new evidence or new information. The Court should require the party seeking to reopen the full and final judgment to demonstrate that it is an exceptional case or that there are strong reasons for doing so. The Claimant did not begin to do that. Consequently the application should have been refused.

The matter can be tested by considering the position that would have arisen had the order of the judge of 24 September 1999 been perfected prior to 20 October 1999. The Claimant would then have had to appeal to this Court. There would have been no ground on which the judgment spoken by the judge or the order that the judge made could have been appealed other than by the Claimant seeking to persuade this Court that she should have leave to amend her statement of claim despite the decision taken when the matter was before the judge that no such application would be made. Were such an application to be made to this Court, even by an advocate as persuasive as Mr Mann QC, I cannot see this Court granting it or allowing the case to be reopened.

For those reasons and the reasons given by Sir Christopher Slade I would allow this appeal on the basis that the judge misdirected himself in the way I have attempted to identify and, that the discretion should be exercised by this Court. For the reasons I have endeavoured to give this Court should exercise its discretion by refusing to revoke or vary the judge's order of 24 September 1999.

In the light of my conclusion on issue B, it is not necessary for me to deal with issue C or issue D save to say that I agree with and gratefully adopt the observations of Sir Christopher Slade on those issues.

Order: Order as per judgment. Appellants to have their costs of the action and costs of the appeal. Respondent's liability postponed to be assessed in accordance with reg 127 of the Legal Aid Regulations (General Regulations); Legal Aid Taxation in Respect of Respondent's costs. (Order does not form part of the approved judgment)