England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice The Strand London, WC2A 2LL
		13th November 2015

MR JUSTICE SINGH:

1. After I had delivered my oral judgment this morning on the defendant's applications, an application was made on behalf of the claimant to amend his particulars of claim. As I understand it, no previous notice had been given of that, but in any event those representing the defendant have been given some time and have been able to deal with the application to amend after a short adjournment.
2. The application to amend would have the following effect. Paragraph 13 of the particulars of the claim would be amended to include a further sentence:

"Furthermore, by reason of the conduct specified in paragraphs 10 and 11 herein, Messrs Nicholls, Bittar and Curtler acted in bad faith and it is properly to be inferred that the process, which was the subject of the misleading and untrue statements was equally carried out in bad faith."

Paragraph 19 would be amended to include a similar passage in relation to the process which related to the 2009 bonus award. It is not necessary to spell out its terms for that reason. Paragraph 20(2) would be amended in subparagraph (b) to add the words at the end in "breach of the document of fair dealing". It would also be amended to include a new subparagraph, given the letter (d):

"It is properly to be inferred from the conduct as set out at paragraphs 10, 11, 16 and 17 above and the inferences properly to be drawn there from as set out in paragraphs 13 and 19 above that the exercise of discretion in awarding the claimant the bonuses set out at paragraphs 9 and 15 above was irrational and/or perverse and/or demonstrated a lack of fair dealing in breach of the implied term of trust and confidence."

3. The power to amend is contained in CPR 17.1. My attention has fairly been drawn to the provisions of CPR 17.4 also because it is properly recognised on behalf of the claimant that at least part of this claim, that relating to the 2008 award, might be said to be outside the normal six year limitation period. Nevertheless, the court is invited to allow the amendments even and to the extent that they may be outside the limitation period.
4. Although the application has been made late in the day, it is submitted on behalf of the claimant that the court has power to allow such an amendment even at this late stage, although it is fairly recognised that the matter is within the court's discretion.
5. An example of where the Court of Appeal was prepared to exercise such a discretion has been drawn to my attention, name its decision in Cook v MSHK Limited [2009] IRLR 838. At first instance in that case, Burton J had struck out paragraphs 32.2 to 32.5 of the claim on the basis that the claimants had affirmed alleged repudiatory breaches of the contract and could not now claim for relief in respect of them. He allowed paragraphs 32.1 to 32.5 and 32.6 to proceed to trial. The defendant appealed against that decision, arguing that the judge should have struck out the entire claim. The claimants applied for permission to cross-appeal in relation to the other matters. The principal judgment was delivered by Rimer LJ.
6. As I understand it, both from the terms of the judgment and also from what Mr Hochhauser QC has informed me, he having appeared also in that case, what happened was that the Court of Appeal reserved its judgment and in the normal way circulated a draft of its judgment. As appears from paragraph 6 of Rimer LJ's judgment, an issue then arose which appeared not to have been addressed by the court in its draft judgment. Accordingly, there were further submissions, including a short further hearing. There was in that context an application made to amend the particulars of claim.
7. At paragraph 83 of his judgment, Rimer LJ noted that paragraph 32.6, as he interpreted it, does not allege the case that the judge at first instance and the claimants derived from it. Therefore this raised the rhetorical question "what is to be done?" He noted that no application for permission to amend was made at the hearing, even though the interpretation of paragraph 32.6 was expressly in question. On the other hand, in the course of the exchange of written arguments following the hearing, the claimants did belatedly seek permission to amend that paragraph if, contrary to their submissions, the court should disagree that it bore what was known in the case as the wider interpretation. For that, see in particular Rimer LJ's judgment at paragraph 73, contrast paragraph 74.
8. At the end of the day, as is clear from paragraph 86 of the judgment, Rimer LJ was not persuaded that it would be unjust to allow an amendment even at this stage. He observed that:

"The trial is some way off and the parties will have plenty of time to prepare for this issue. Whilst the adding of another string to the claimants' bow will obviously be unwelcome to Mr Cook, that by itself is no ground for refusing to permit the proposed amendment."

He continued:

"I do not accept that to allow it would be 'manifestly unjust'. In principle, I consider that, subject to the usual costs consequences of a permitted amendment, the claimants should be allowed to amend paragraph 32.6 so as to expand it to incorporate what I have referred to as the wider interpretation."

As Mr Hochhauser fairly accepts, each case depends on its own facts and the matter is one within the court's discretion.

9. In the circumstances of the present case, I am not prepared to exercise that discretion to permit this amendment to be made. First, I accept the submission made on behalf of the defendant by Mr Jeans QC that the general principle is that an allegation of bad faith should only be made on clear and cogent evidence. That is generally true with all pleadings, but it is particularly reinforced in the context of applications for late amendments, see the White Book for 2015 at volume 1, page 568 and the commentary at 17.2.6:

"Given the purpose of the statement of truth verifying an amendment ... a party will not be permitted to raise by amendment an allegation which is unsupported by any evidence and is therefore pure speculation or invention."

Reference is made to the decision in Clarke v Marlborough Fine Art (London) Limited [2002] EWHC 11.

10. It is instructive in my judgment, as Mr Jeans has submitted, to note that, although these amendments have been placed before the court at this late stage in draft form, no further evidence has been filed by the claimant. This leads me on to my second point. Again, I accept the submission of Mr Jeans that not only is there no evidence supporting the allegation of bad faith in relation to the process leading up to the decisions to make the awards for 2008 and 2009, and I stress that that has to be the relevant matter to which the bad faith would go, but the claimant himself has never deposed that he even believes that that process was tainted by bad faith. He certainly gives no such clear statement in the course of his lengthy witness statement dated 16 October 2015. As I have said, he has not deigned to assist the court by filing any further evidence in support of his now application to amend the pleadings expressly to assert bad faith in that process and I again emphasise that it is that process which is material for this purpose. I stress that it is not good enough, in my judgment, to have alleged, as he did in his original pleading and the evidence filed in support of that pleading, that there were misleading statements or even that lies were told to him in relation to post decision events.
11. I have already, in the context of my substantive judgment in this case, rejected the claimant's arguments, in particular his argument under what I earlier described as issue 2. I do not accept Mr Hochhauser's submission that there is implicit within an allegation of breach of an implied term as to rationality, which was the subject of issue 2, and that there is also embraced within that, an allegation of bad faith.
12. In accordance with my earlier judgment, if there is such an allegation to be made, it has to be set out in plain terms. That is what one would expect if these were judicial review proceedings and, as I have already said, there is a close analogy which the courts today draw between judicial review proceedings and this sort of case.
13. Finally for present purposes, I note that Mr Hochhauser has submitted to me that there is no difference in the factual landscape. He asks rhetorically could there have been any objection to allowing this amendment, if it had been at or around the time of the original pleading. I respectfully disagree with that submission. In my judgment there is a fundamental difference in the factual landscape which was invoked to support the original grounds, which I have dealt with at length in my substantive judgment and this late amendment. In particular, as I have stressed, the crucial difference is between alleging that there were lies told, for example, after the event and alleging that there was bad faith on the part of the defendant in the very process prior to and leading up to the relevant decisions to make bonus awards in respect of the years 2008 and 2009.
14. For all those reasons, this application is refused.