GBM Minerals Engineering Consultants Ltd v GBM Minerals Holdings Ltd (2015)
The court granted a claimant and a defendant permission to amend their pleadings seven weeks before trial. It emphasised that the circumstances of their case, involving alleged dishonesty and permission to issue proceedings for contempt, were almost unique. Trial dates set down in the Technology and Construction Court would very rarely be vacated, and only on the most compelling grounds.
The claimant and the defendant sought permission to amend their pleadings shortly before a trial date.
The claimant company had entered into a contract to provide consultancy services to the defendant company. The contract sum was approximately £1.9 million. In its original particulars of claim, the claimant asserted that over the course of two years the contract was varied by way of 17 "variation orders" signed by its owner/director (S) and by the chief executive of the defendant company (L). The effect of the variation orders was to increase the contract sum to over £10 million. L subsequently left the defendant's employment. The defendant discovered that the variation orders had not been made contemporaneously, but had been created by S and L after the event. In GB Minerals Holdings Ltd v Short  EWHC 1387 (TCC),  T.C.L.R. 7the defendant obtained permission to bring proceedings for contempt against S following the trial of the instant action. In the instant action, shortly before the pre-trial review in September 2015, the claimant applied for permission to amend its particulars of claim to remove reference to the variation orders by stating instead that the contract had been varied "from time to time". The defendant applied to amend its defence and counterclaim to include a claim to recoup secret payments of several million pounds allegedly made by S to L. The payments had come to light following disclosure in March 2015 of over 56,000 documents. The trial was due to take place seven weeks after the pre-trial review.
(1) Ordinarily, the court would not entertain amendments that threatened the trial date, CIP Properties (AIPT) Ltd v Galliford Try Infrastructure Ltd EWHC 1345 (TCC), 160 Con. L.R. 73 applied. The amendments proposed by the defendant were very late. They were close to the trial date and also late in terms of the effect that they would have on trial preparation. There was potentially severe prejudice to each party by reason of the amendments (see paras 21-22 of judgment). (2) No criticism could be laid at the defendant's door for failing to discover, prior to a reasonable time after disclosure, that the material was important, but the defendant's application was late. A letter from the claimant's solicitors seeking to explain the payments was relevant. It was also relevant that the defendant's proposed amendments were sufficiently tightly drawn and focused. The defendant's allegations were of serious and dishonest conduct. There would not only be extraordinary prejudice to the defendant if they were not allowed, but it could result in a wholly unjust result in the proceedings if the defendant was shut out from arguing those points. There was a further unusual reason to justify permitting the amendments; the permission to bring proceedings for contempt was granted on the express basis that the instant proceedings would be heard first. The scope of that enquiry would encompass the circumstances in which S and L came to create the variation orders. The potential existence of payments between those parties was inextricably woven into that scenario. It could place the trial judge in a virtually impossible position if he could not consider those payments. The defendant's proposed amendments should be permitted (paras 23-28). (3) The claimant's proposed amendments might not be sufficiently tightly drawn. The use of the phrase "from time to time" demonstrated a desire to retain flexibility that might not be appropriate so close to trial. However, the lack of particularisation in the pleading was not fatal to permission to amend being given. To deny the claimant permission to withdraw its reliance on the variation orders would amount to an insistence that the claimant continue with a case predicated on documents that were falsely created. That would not be sensible or appropriate. The claimant's amendments should be allowed and the claimant was ordered to respond to the defendant's request for further information (paras 22, 31). (4) Seven weeks was not sufficient time for the claimant to prepare properly for trial, with the other tasks that had to be accomplished, and deal with the new case on secret payments as well. Given the seriousness of the allegations, neither the claimant nor S ought to be put under unfair pressure by having insufficient time to deal with these points. The existing trial date should therefore be moved (paras 30). (5) The instant case should not be taken as encouraging or permitting late amendments or applications to adjourn trials. The instant case was very unusual and had almost unique features. Trial dates set down in the Technology and Construction Court would very rarely be vacated, and only on the most compelling grounds (para.33).