Summary

An order granting a company permission to amend its particulars of claim in a specified way had been mandatory, and the company was not entitled to revert to the unamended version of the particulars, especially as they contained allegations which the company had previously admitted were untenable.

Facts

The claimant company applied for relief from sanctions, and the defendants applied for the claimant's claim to be struck out.

The first defendant (D1) was a director of the third defendant company (D3), and had been a director of the claimant, which he owned alongside his siblings and mother. D3's shares were legally and beneficially held by D1 and the second defendant. The claimant and D3 had shared a site owned by D3 for waste processing and recycling. D1's siblings caused the claimant to bring the instant proceedings against the defendants, alleging that D1 had dishonestly breached fiduciary and director's duties. Part of the claimant's case had been that all its work had been as D3's subcontractor, so that D3 had been obliged to pay the claimant for all of it. However, at a preliminary issues trial the judge found that the claimant carried out some operations on its own account. He stated that the claimant should clarify its particulars of claim. The defendants served a CPR Pt 18 request for further information; the claimant did not answer it, stating that it intended to delete portions of its particulars, following which a reply would not be required. The claimant served draft re-re-amended particulars of claim, with numerous deletions from the previous version. The claimant stated that the deletions were made in light of the preliminary issues judgment, as some allegations had become untenable. The defendants agreed to the deletions. The judge ordered that minor amendments could be made to the particulars, but refused permission to include new or reformulated allegations of breach. He ordered that the claimant had permission to serve re-re-amended particulars only in the form outlined in an annex to the judgment, and that unless it replied to the Pt 18 request, the claim would be struck out. The claimant served re-re-amended particulars which retained some of the previously deleted passages as well as the allegations it had said were untenable. It replied to the information request; its statement of truth was wrongly worded, for which it applied for relief from sanctions. The defendants alleged that the replies were non-compliant and applied for the claim to be struck out. Before the instant hearing, the claimant indicated that it no longer relied on the re-re-amended particulars but wished to revert to the previous version from before the amendment application.

The claimant submitted that the order granting permission to amend had not required mandatory amendment.

Held

Mandatory nature of permission order - At the amendment hearing, the proceedings had been extant for six years and the claimant had not alighted on a satisfactory formulation of its claim. In the preliminary issues judgment, the judge had upheld the defendants' contentions regarding the claimant's business model, leading the claimant to regard its original formulation as untenable and to seek reformulation. The judge's intention had been to limit the trial to a determination of the issues which the claimant had not deleted as being hopeless in view of the preliminary judgment. The order's language was clear, unequivocal and mandatory. The annex setting out the form of pleading required to be served by a specified date put the matter beyond doubt. The accompanying judgment stated that the purported revival of sections deleted in the draft was "not permissible". All deletions had been proposed by the claimant and agreed by the defendants, and put before the court as being untenable. The order was mandatory and the claimant was obliged to serve a re-re-amended particulars of claim in the form of the order's annex. The claimant had breached the order, and had not applied for relief from sanctions for that breach. Its obligation to serve a pleading as ordered subsisted (see paras 64-74 of judgment).

Replies to request for information - If it had been necessary to decide, the technical defect in the statement of truth, even if it amounted to a breach of the unless order, was insufficiently serious to justify any sanction. It was minor, unintentional, and had been corrected without prejudice to the defendants. As for the substance of the replies, they did not render the allegations intelligible or justiciable, and did not enable the defendants to understand the case they were required to meet. It was meaningless to provide a list of all the claimant's topsoil, scrap, and deployment of men and equipment in purported particularisation of the claims, as in light of the preliminary issue judgment, the claimant could not allege that all materials and services were supplied to D3. The replies did not comply with the unless order's requirements. The claimant's approach was arguably an abuse of process. The provision of particulars that were inconsistent with the court's findings and with the case pleaded was a meaningless exercise. The claimant had not applied for relief from sanctions respecting the substance of the replies. The breach was manifestly significant, serious and without justification, such that relief would not be granted. If the permission order had not been mandatory, the allegations would have fallen to be struck out anyway (paras 82, 109-115).

Resultant order - Contrary to the defendants' submissions, it would be disproportionate to strike out the entire claim. The claimant was required to serve re-re-amended particulars of claim in the form specified in the order. If the required pleading was not served by the specified date, the whole claim would be struck out automatically with a costs order in the defendants' favour (paras 132-133).

Applications refused