SAVINGS AND INVESTMENT BANK LTD. v FINCKEN [2001] EWCA Civ 1639

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
CHANCERY DIVISION
Lightman J.
[2001] EWCA Civ 1639Case No Case No: CHANI/2001/0646/A3Venue Royal Courts of Justice, Strand,, London, WC2A 2LL, Tuesday 6 November 2001
Between
SAVINGS AND INVESTMENT BANK LTD.AppellantFINCKENRespondent
Before
Lord Justice Peter GibsonLord Justice Robert WalkerLord Justice KeeneMiss Elizabeth Gloster Q.C. and Mr. David Ashton (instructed by Messrs D J Freeman of London for the Appellant)Mr. Adrian Francis (instructed by Messrs Radcliffes (incorporating Jay Benning & Peltz) of London for the Respondent)Date 6 November 2001

LORD JUSTICE PETER GIBSON:

The

[1]main issues to which this appeal gives rise are(1) whether a proposed amendment to a claimant's pleading after the expiry of the limitation period is a claim involving a new cause of action for limitation purposes, and(2) whether the right to rescission of a contract induced by a fraudulent misrepresentation has been so clearly lost through the affirmation of the contract that summary judgment can be given dismissing the claim for rescission.[2]The claimant, Savings and Investment Bank Ltd. ("SIB"), an Isle of Man bank, was wound up on 2 August 1982 heavily insolvent. It claimed that it was owed some £19 million by the defendant, Kenneth Fincken. In February 1988 it issued proceedings against Mr. Fincken for the recovery of that money. On 13 October 1988 he entered into a Deed of Settlement with SIB, but defaulted on an obligation undertaken thereunder. By a second Deed of Settlement on 25 July 1990 again he undertook specific obligations, but again defaulted and a bill of exchange for some £19 million which he delivered to SIB was dishonoured on presentation.[3]On 8 April 1991 SIB brought bankruptcy proceedings against Mr. Fincken. Those proceedings were dismissed on 25 July 1991 on a technical ground. SIB appealed. On 9 December 1991 Mr. Fincken swore an affidavit of means ("the Affidavit") for the purpose of those proceedings. To it he exhibited a statement ("the Statement") of his personal assets, liabilities and business interests at that date, which information he thereby declared was true. The assets so declared included his home, Field House, in Chalfont St. Giles, Buckinghamshire, but no other real property, and, under "Investments and Collections", two Aya shotguns for which he gave a value of £2,500, but no other guns and few other assets.[4]On 6 May 1992 a third Deed of Settlement ("the Deed") was made between, amongst others, SIB, its liquidators and Mr. Fincken. Reference was made in recital (8) to the Affidavit. Cl. 1 contained a definition of "assets" in wide form and the following definition of the adjective "material":
"worth £5,000 or more either alone or together with other assets"
. Cl. 2 contained the following warranty:
"Mr. Fincken warrants that in the affidavit he has made full disclosure of all material assets worldwide beneficially owned by him or in which he has an interest whether alone or jointly with others …."
[5]By cl. 3 Mr. Fincken agreed that, if he was in breach of cl. 2, then at SIB's option he should transfer to SIB his interest in the undisclosed assets or he should pay to SIB the value of those assets. By cl. 6 SIB agreed to discontinue its bankruptcy appeal. By cl. 8 it was agreed that the Deed was made in full and final settlement of all claims between SIB, its liquidators and Mr. Fincken.[6]In 1997 three informants approached SIB seeking to sell to the liquidators information on Mr. Fincken's beneficial ownership of some £12 million of assets other than those which he had disclosed. In April 1998 the liquidators were informed that Mr. Fincken in the summer of 1991 had purchased a property known as Field House Barn for £25,000. Other information about other assets was also provided by the informants.[7]The liquidators, having carried out their own investigations after receiving this information, issued a writ in the Queen's Bench Division on 1 May 1998, very shortly before the expiry of 6 years from the date of the Deed. By the writ SIB claimed against Mr. Fincken(1) an order for the transfer of any asset retained by Mr. Fincken in breach of the Deed pursuant to which he warranted that he had made full disclosure of all material assets beneficially owned by him, and(2) alternatively or additionally, damages for breach of the Deed. Thus at that stage the only claims were in contract.[8]The writ was not served immediately. Its validity was renewed twice. On 16 April 1999 Ian Kennedy J. gave SIB leave to add a second defendant, Bradenham Holdings Ltd. ("Bradenham"), on the basis that it was Mr. Fincken's alter ego and had received assets from Mr. Fincken, and to amend the writ to claim(a) in the alternative to an order for the transfer of undisclosed assets, an order for the payment of the value of the assets, and(b) damages for deceit in respect of the misrepresentation in the Statement which induced SIB to enter into the Deed. He granted SIB an injunction restraining Mr. Fincken from, amongst other things, disposing of certain undisclosed assets.[9]On 19 April 1999 the writ was served on Mr. Fincken. On 4 June 1999 the Statement of Claim was served. After setting out the warranty in the Deed, it was pleaded in para. 13:
"In breach of the warranty …. Mr. Fincken failed to disclose material assets"
. Particulars of the breach are then given. They included non-disclosure of cash in two undisclosed Swiss bank accounts, shares in Bradenham, land and buildings consisting of Field House Barn and two other properties, the lease of certain shooting rights and certain assets subject to a Guernsey settlement made by Mr. Fincken in 1995.[10]It was pleaded that by its writ SIB elected to have transferred to it all the undisclosed assets and that, if such transfer was not possible, by its solicitors' letter dated 15 April 1999 to Mr. Fincken it elected to have paid to it the value of the undisclosed assets.[11]It was also pleaded that Mr. Fincken by the Statement had represented that the information given in the Statement was true and that thereby he had induced SIB to enter into the Deed which otherwise it would not have done, but that the representation was false by reason of Mr. Fincken's ownership of the undisclosed assets particularised in para. 13 of the Statement of Claim and was made fraudulently. Particulars were then given of the allegation of fraud. SIB by the prayer claimed:(1) an inquiry as to what material assets Mr. Fincken had failed to disclose;(2) an order for the transfer to SIB of all such undisclosed assets;(3) further or alternatively, an order for the payment of the value of the undisclosed assets;(4) further or alternatively, damages for breach of contract;(5) further or alternatively, damages for deceit.[12]On 12 June 1999 SIB applied to amend the Statement of Claim to plead negligent misrepresentation in the alternative to fraudulent misrepresentation and, alternatively to its other claims, rescission of the contract contained in the Deed. On 23 June 1999 Mr. Fincken and Bradenham applied to strike out the Statement of Claim. Both applications were heard by Wright J. On 30 July 1999 he refused to strike out the Statement of Claim (save for the reference to the lease of the shooting rights as an undisclosed asset) and he allowed the amendments sought by SIB. He also directed the transfer of the action to the Chancery Division.[13]Mr. Fincken and Bradenham then appealed to this court. They sought to set aside Wright J.'s dismissal of their application to strike out and his allowance of the amendments to the Statement of Claim. However we are told that no argument was directed to the amendment claiming recission, and the order made by this court on 29 October 1999 left Wright J.'s order on that undisturbed. The form of the Amended Statement of Claim which this court ordered to stand included the rescission claim. In his judgment (with which Laws L.J. and Jonathan Parker J. agreed) Morritt L.J. pointed out that there was no contractual or other right to the inquiry that SIB sought and that, in relation to all but one of the assets which SIB pleaded were material undisclosed assets, SIB's case was insufficient to sustain its claim. The references in the Amended Statement of Claim to those assets were therefore struck out. The claim against Bradenham was struck out. The one asset referred to which was not struck out was Field House Barn.[14]In the course of argument counsel for SIB referred, as he had done before Wright J., to a claim by SIB that Mr. Fincken had failed to disclose shotguns which he owned other than the two Aya guns. That claim had not been pleaded, but SIB nevertheless sought to rely on it. Morritt L.J. described that as a "wholly new" allegation. A belated application by SIB at the appeal hearing to reamend its pleading was refused on the grounds that Mr. Fincken was entitled to put in evidence dealing with the merits of the claim, and SIB could apply for leave in the ordinary way.[15]SIB then applied to Deputy Master Bartlett for permission to reamend the Amended Statement of Claim to plead non-disclosure of several other shotguns. One of the informants, Robin Syrett, had on 14 June 1999 told the liquidators that Mr. Fincken had owned a valuable shotgun which had been left as security with Mr. Syrett and for which Mr. Syrett had obtained a valuation of £15,000. At Mr. Syrett's suggestion SIB made enquiries of the local police who keep a register of guns registered in their area. They revealed that in 1991 and 1992 Mr. Fincken had had 8 shotguns registered on his shotgun certificate, only one of which was an Aya. They included a Boss 20 bore ("the Boss"), which was the gun to which Mr. Syrett made reference. SIB asked for permission to plead, as further particulars of the allegation that Mr. Fincken failed to disclose material assets in breach of the warranty, his non-disclosure of the Boss and 6 other specified shotguns. It also asked for permission to plead allegations relating to Mr. Fincken's ownership of the Boss and of the 6 other guns as further particulars of the allegation of fraudulent misrepresentation.[16]Mr. Fincken opposed that application primarily on the ground that SIB was seeking to add a new cause of action after the expiry of the limitation period. SIB was content to argue only that the amendments did not involve the addition of a new cause of action; it did not seek to contend that the amendments could be allowed on any other ground. The Deputy Master referred to three authorities: Steamship Mutual v Trollope & Colls (1986) 33 BLR 77, Darlington Building Society v O'Rourke [1999] PNLR 365 and Paragon Finance v DB Thakerar & Co [1999] 1 All ER 400 . The Deputy Master found particularly helpful the observations of Millett L.J. in Paragon at p. 405. Millett L.J. (with whom Pill and May L.JJ. agreed) quoted the classic definition of a cause of action given by Brett J. in Cooke v Gill (1873) 8 CP 107 at 116: ""Cause of action" has been held from the earliest time to mean every fact which is material to be proved to entitle the plaintiff to succeed, - every fact which the defendant would have a right to traverse." (Millett L.J. emphasised the words "which is material to be proved.") Millett L.J. continued a little later: "…. only those facts which are material to be proved are to be taken into account. The pleading of unnecessary allegations or the addition of further instances or better particulars do not amount to a distinct cause of action. The selection of the material facts to define the cause of action must be made at the highest level of abstraction. "[17]The Deputy Master considered the facts material to the causes of action advanced by SIB and said that they did not include the specification of particular undisclosed assets. His first impression of the case looked at in the round was that what SIB was seeking to do was fairly to be described as the addition of another instance of non-disclosure rather than to make a new claim.[18]A second ground of opposition to the amendments was that the claim in relation to the shotgun had insufficient prospects of success to justify the grant of leave to amend. Mr. Fincken in a witness statement admitted that he owned three of the seven guns referred to in the amendments and that in the Statement he was wrong to say that he owned two Aya guns. He claimed not to own four of the guns referred to in the amendments,, including the Boss which he said he had purchased in 1987 as a gift for his son. He said that it was sold on 20 October 1996 for £4,500. He also said that three other guns also belonged to his son. The Deputy Master found that the question of the ownership of the four guns could only be resolved at a trial and that there was ample material from which a judge could properly conclude that the Boss was worth more than £5,000 in 1991 and 1992. But he thought that the position in relation to the other guns was quite different. SIB had never alleged that the six guns, other than the Boss, which were the subject of the amendments either individually or taken together were worth more than £5,000 and there was nothing in SIB's evidence to contradict Mr. Fincken's assertion that their maximum value was less than £2,500. The Deputy Master saw no realistic prospect of it being proved that their value exceeded £5,000. He considered an argument by SIB that all the guns were in a collection worth at least £15,000, but he rejected that, saying that he saw no justification for describing the guns as a collection in any meaningful sense, that they were a disparate group of guns and that there was no evidence that any of them had a greater value in combination with any of the others or that any valuer would value them together rather than separately. He therefore did not allow the amendments so far as they relate to the guns other than the Boss.[19]Finally the Deputy Master considered whether, in the exercise of his residual discretion, to refuse to allow the amendment relating to the Boss, but concluded that it would be wrong to deny SIB the opportunity to put forward its case on that.[20]Mr. Fincken had, a little earlier, applied under CPR Part 24 for summary judgment against SIB on its rescission claim and also for the trial of two preliminary issues. The Deputy Master on 16 October 2000 dealt with both of those applications. I need say nothing on the latter application other than that it was refused, as his decision on that is not challenged. I confess that I am a little surprised that objection was not taken to the application relating to the rescission claim, given that the making of the amendment to include a rescission claim had been opposed before Wright J., that it was one of the subjects of the appeal from him to this court, and that the rescission claim was left in the Amended Statement of Claim which this court ordered to stand. Whilst it is true that there was no argument on the point in this court, the argument which has been put forward on Mr. Fincken's Part 24 application could have been, but was not, advanced[21]It was also argued for Mr. Fincken before the Deputy Master that the claim for rescission should be dismissed as having no real prospect of success, because the contract in the Deed had been affirmed and SIB had irrevocably elected not to rescind it. The argument on rescission was based primarily on the fact that in the writ and statement of claim the remedies under the contract in clause 3 of the Deed were claimed and also on the letter from SIB's solicitors dated 15 April 1999 to Mr. Fincken. In that letter the solicitors repeated SIB's election to have the undisclosed assets transferred to it, and said that, if that were not possible, SIB elected to have transferred to it the value of the undisclosed assets. They expressly reserved the right to claim damages for breach of warranty and/or fraudulent misrepresentation, but did not reserve the right to rescind.[22]The Deputy Master on the facts had no doubt but that SIB at April 1999 had elected to affirm the contract. But he said that it was common ground that an apparent affirmation is not binding on a party unless it is made with knowledge of all the material facts. He noted SIB's submission that by virtue of the amendments the non-disclosure of the Boss had become a material fact and he recited the evidence that SIB knew nothing about that non-disclosure until June 1999 and only had full knowledge of all the material facts at an even later date. He rejected the submissions for Mr. Fincken that SIB, having decided against rescission when alleging non-disclosure in relation to millions of pounds of assets, would have changed its mind because of the non-disclosure of the Boss. He said that a party is entitled to make his decision whether or not to affirm in the light of all the facts, and that even if SIB was prevented from relying on any misrepresentation other than that relating to the Boss, it was entitled to rescind on the basis of that alone. Mr. Fincken's application was therefore dismissed.[23]With the leave of the Deputy Master Mr. Fincken appealed against the decision to permit the amendment relating to the Boss, and against the decision rejecting Mr. Fincken's application for summary judgment on the rescission claim by SIB. SIB cross-appealed against the Deputy Master's rejection of its application to include in the Amended Statement of Claim references to Mr. Fincken's non-disclosure of the six guns other than the Boss referred to in the proposed amendments.[24]The appeals came before Lightman J. In his judgment given on 22 February 2001 the judge allowed both appeals. On the question of amendment the judge said this:
"10. To answer the question whether or not an amendment constitutes the addition of a new cause of action (as the Darlington case establishes) it is necessary to examine the duty alleged, the nature and extent of the breach alleged and the nature and extent of the damage claimed. In this case the duty (of disclosure and to tell the truth) is the same as in the Amended and the Re-Amended Statement of Claim. The difference lies in the breaches of duty alleged (the addition of a further breach in respect of the Gun) and in the relief claimed, for not only is the specific and monetary relief different but the claim to rescission now rests on two alternative bases, namely non-disclosure of the Barn and non-disclosure of the Gun. The newly introduced plea of non-disclosure of the Gun is, as it seems to me, a quite distinct cause of action from the plea of non-disclosure of the Barn: the factual matrix may be similar and the duty the same, but the causes of action are distinct. There are cases when the reliance on different facts alleged to constitute a breach may make a decision difficult (in the language of Sir Iain Glidewell [in the Darlington case]) and involve (in the language of May LJ in the Steamship Mutual case) matters of degree, and in those cases an appellate court must show extreme caution in interfering with the reasoned decision of a lower court, but I do not see any question of difficulty or degree arising in this case. The guidance afforded by Millett LJ (contrary to the view of the Master) is in my view in no way inconsistent with this approach. The critical question for this purpose is identifying the degree of abstraction to which he refers. Mr Ashton for the Bank submits that the degree of abstraction goes so far as the characterisation of the cause of action (i.e. "a claim for breach of warranty" or "misrepresentation") whilst Mr Francis for Mr Fincken submits that it extends so far only as the necessary constituents of the cause of action (i.e. duty and breach alleged and relief claimed in respect of that breach). In my view Mr. Francis is correct. 11. It appears to me that in this case the Master has misdirected himself in law. It was not merely open to him to hold that the amendment might add a new cause of action: in law he could properly hold nothing less. I am reassured in reaching this conclusion by the consideration that this view alone gives effect to the clear language of section 35 prohibiting the addition of a new (separate and distinct) cause of action and the observation of Morritt LJ (whether or not specifically directed at the issue raised under section 35 of the 1980 Act) that the addition constituted a wholly new allegation."
[25]The judge then turned to the rescission claim. He said that the Deputy Master had rejected Mr. Fincken's application on the basis that having allowed the amendment, there would in any event be a continuing claim to rescission in respect of the misrepresentation relating to the Boss. The judge therefore held that because he had disallowed the amendment, he had to consider the application anew on its merits. He noted a concession on behalf of SIB that the facts of affirmation pleaded by Mr. Fincken in para. 16 of his Re-Amended Defence were true and, subject to one qualification, established the defence of affirmation. That paragraph recited SIB's knowledge of the facts material to its claims since August 1997, the fact that SIB by its writ as amended on 16 April 1999 had sought to enforce the contract, the fact that SIB sought an interlocutory injunction on 16 April 1999 based on its contractual entitlement, and the letter of 15 April 1999. The qualification was that SIB in April 1999 did not know of the non-disclosure of the Boss and the other guns. The judge referred to an argument for SIB that the Limitation Act 1980 barred only Mr. Fincken's remedies and not his rights. The judge rejected that argument, holding that what Mr. Fincken had to establish to succeed on the issue of affirmation in respect of Field House Barn was full knowledge of the facts relevant to affirmation in respect of that particular non-disclosure and that there was no need to establish full knowledge of any fact going beyond that limit. He added the comment that it was scarcely credible that the knowledge of the existence of the Boss and the other guns could in view of their minimal value in the context of the claims made by SIB have had any significant effect on its decision. The judge therefore gave summary judgment to Mr. Fincken on the rescission claim.[26]The judge refused SIB permission to appeal but such permission was given by Aldous L.J. Amendment relating to the Boss[27]Miss Gloster Q.C. for SIB submits that the judge erred in law in holding that SIB's proposed amendment involved a new cause of action. She argues that the relevant causes of action accrued on 6 May 1992 when the Deed was made and the warranty given. The warranty was one as to existing facts which were in reality untrue, so that the warranty was broken then and there. The facts which were material to be proved to entitle SIB to succeed were the same when one compares the Amended Statement of Claim after this court's earlier decision with the proposed Re-Amended Statement of Claim, the non-disclosure relating to the Boss being no more than a further instance or further particulars of the breach of contract and of the fraudulent misrepresentation. She relied on the general wording of the writ both in its original and extended form as sufficiently defining the cause of action.[28]Mr. Francis for Mr. Fincken submitted that the judge was right for the reasons he gave. He further relied on the judgment of Morritt L.J. as being supportive of the view that it was not enough to plead the breach of warranty or mis-representation by the non-disclosure of material assets without pleading which assets had not been disclosed and that it was a new allegation to claim that the Boss was an undisclosed asset of Mr. Fincken. He said that the court should take into account the disparity of facts and issues in the case before and after amendment and he argued that the new issues and the facts which needed to be proved if the amendment in relation to the Boss were permitted showed that the amendment involved a new cause of action. He referred us to the statement by Colman J. in Goode v Martin [2001] 3 All ER 562 at p. 568 of the purpose of the qualification to the power to give permission to amend (viz. if the claim arises out of the same or substantially the same facts as a claim for which a remedy is claimed). That purpose Colman J. said was to avoid placing a defendant in the position where after the limitation period had expired he has to investigate facts and obtain evidence of matters which are completely outside the ambit of and unrelated to those facts which he could reasonably be assumed to have investigated for defending the amended claim.[29]I start with s. 35 Limitation Act 1980. This prohibits the making of a new claim after the expiry of any time limit under that Act which would affect a new action to enforce the claim. A new claim is defined so far as relevant as meaning the addition of a new cause of action. That is not defined in the Act, but it is common ground that "cause of action" has the meaning given in Cooke v Gill.[30]As I see it, the exercise which is required is the comparison of the pleading in its state before the proposed amendment and the pleading in its amended state. I do not think that it assists to look at the endorsement on the writ (see Steamship Mutual at p. 97 per May L.J.). What must be examined is the pleading of the essential facts which need to be proved. To define the cause of action the non-essential facts must be left out of account as mere instances or particulars of essential facts. That is what I understand Millett L.J. to have meant by stating that the selection of material facts must be made at the highest level of abstraction. Thus, to take the example provided by the facts in Letang v Cooper [1965] 1 QB 232 discussed by Millett L.J. at p. 405, the facts material to be proved to constitute the cause of action for trespass to the person did not include whether the trespass was intentional or unintentional.[31]Where by an amendment a duty or obligation is pleaded which differs from the duty or obligation pleaded in the original pleading, there is likely to be a new cause of action (see Darlington at p. 370 per Sir Iain Glidewell). In building dispute cases where defects in the work done are alleged, it may be a nice question whether the addition by amendment of a further defect in breach of the same duty is not the addition of a new cause of action, as was held by this court in Idyll Ltd. v Dinerman Davison & Hillman [1971] 1 CLJ 284, or is such an addition as was held by another division of this court on somewhat similar facts in Steamship Mutual . In such cases the fact that the work in question is done over a period and the damage occurs at different times may in particular circumstances assist in identifying the addition of a new cause of action.[32]But the present case is altogether more simple. Take the claim in contract. The material facts are no more than(1) the giving of the warranty by Mr. Fincken and(2) the breach of that warranty. True it is that SIB could not succeed on that claim without proving a specific breach in that some specific asset was not disclosed. I respectfully disagree with the Deputy Master to the extent that he thought that unnecessary. The pleading in respect of Field House Barn shows that on 6 June 1992 not all material assets were disclosed. But the subsequent discovery of a further undisclosed asset does not alter the fact that the warranty was breached on 6 June 1992. I agree with the Deputy Master that the non-disclosure of the Boss was a mere further instance or particular of how the warranty was breached by non-disclosure.[33]Keene L.J. in the course of the argument before us posited the case of the ordinary Sale of Goods Act warranty that a car is of merchantable quality. A defect in the gearbox is discovered and breach of warranty is pleaded by the purchaser. Subsequently a further defect, say, in the transmission, is discovered. It is hard to believe that to amend to plead the further defect is the addition of a new cause of action. So also in the present case.[34]As for the claims in tort, they are based on fraudulent, alternatively negligent, misrepresentation. The essential elements to be proved in a claim of deceit are these:(1) a representation made to the claimant by the defendant;(2) the falsity of the representation;(3) that the misrepresentation was material and was intended to and did affect the mind of the claimant;(4) the alteration by the claimant of his position in consequence;(5) that the misrepresentation was fraudulent;(6) damage. All those elements save (5) must be proved in a claim of negligent misrepresentation.[35]Miss Gloster submits that the essential facts pleaded in the proposed Re-Amended Statement of Claim do not materially differ from the essential facts pleaded in the Amended Statement of Claim in relation to the claims in tort. The representation is the same, the averment of its falsity is only changed by a further instance being given, the materiality of the misrepresentation and its effect and the alteration of SIB's position in consequence are the same, the averment that the misrepresentation was fraudulent is further particularised by reference to the Boss, and the damage is the same, viz. that SIB, by entering into the Deed, did not enforce its rights against Mr. Fincken. I agree with Miss Gloster.[36]The judge's decision appears to have been based to a large extent on taking into account the remedies sought. I respectfully disagree with that approach which seems to me inconsistent with the agreed meaning of a cause of action as denoting a factual situation. I agree with the views expressed by Auld L.J. to the like effect in Lloyds Bank plc v Rogers [1999] 3 EGLR 83 at p. 85 H – L when holding that the addition of a claim for a new remedy was not the addition of a new cause of action. However it is right to note that Evans L.J. at pp. 87H – 88A reached a different conclusion on the facts of that case, though he acknowledged at p. 87L that to claim different relief may not affect the cause of action.[37]The earlier appeal to this court from the order of Wright J. did not involve any consideration of whether the allegations of breach of warranty and misrepresentation in respect of the various undisclosed assets were separate causes of action in relation to each such asset. It is not surprising that this court insisted on an application being made for leave to plead the allegations relating to the seven guns so that Mr. Fincken could know what was the case he had to meet. I attach no significance for the present case to the description by Morritt L.J. of the allegations as "wholly new" as he was not considering a limitation point.[38]Nor can I accept Mr. Francis's submission that in deciding whether the amendment involves the addition of a new cause of action the court should consider what issues and facts would arise in proving or resisting the allegation relating to the Boss. In the Idyll case at p. 297 Davies L.J. referred to an example given by Megaw L.J.:
"suppose a personal injuries action is brought and there is a claim for damages in respect of not very serious injuries, and then subsequently epilepsy develops arising out of the injuries which the plaintiff received in the accident. Could it possibly be said that to amend the particulars of personal injuries by adding a claim in respect of the epilepsy would be to introduce a new cause of action? Of course it would not."
The fact that a serious illness, as compared with the not very serious injuries pleaded earlier, is pleaded by amendment cannot transform what is otherwise plainly not a new cause of action into a new cause of action. The remarks of Colman J. in Goode v Martin were directed to the qualification in s. 35 (5)(a) Limitation Act 1980 and CPR 17.4 (2) and not to the prohibition against adding a new cause of action.[39]For the foregoing reasons therefore I would hold that the proposed amendment relating to the non-disclosure of the Boss does not involve the addition of a new cause of action. Amendment relating to the other guns[40]SIB also appeals against the judge's dismissal of its cross-appeal from the Deputy Master's refusal of its application to include in the Re-Amended Statement of Claim its allegations as to Mr. Fincken's non-disclosure of the other guns. The judge did not deal with this point in his judgment which, as he said, related only to the Boss. But the reasoning by which he reached the conclusion that the amendment in respect of the Boss could not be allowed also applied to the other guns.[41]Miss Gloster submits that in the statement "collection" was intended to convey its everyday meaning as a group of things collected and belonging together. It is also pointed out that in the draft Re-Amended Statement of Claim it is averred that the collection of shotguns was worth at least £15,000 and that the draft pleading was verified by a statement of truth.[42]I am unable to accept these submissions. In my judgment the Deputy Master was fully justified in holding for the reasons which he gave that the guns do not form part of a collection. There is no valuation of the guns individually. Accordingly I would dismiss SIB's appeal on that point. Affirmation[43]By reason of the conclusion I have reached on the amendment relating to the Boss, the question whether summary judgment should be given against SIB on its claim for rescission falls to be considered not on the basis considered by the judge but on the same basis as that considered by the Deputy Master. The question is whether the position on the facts and the law is so clear that the court can say that SIB has no real prospect of succeeding on the issue (CPR 24.2 (a)(i)).[44]Mr. Francis advanced a powerful argument to the effect that there has been an unequivocal affirmation of the contract contained in the Deed by SIB in its writ seeking remedies based on the continued existence of the contract. He also points to the letter of 15 April 1999 for its further reliance on contractual remedies without any reservation of the right to rescind, inconsistent as that is with the continued availability of rights under the contract. He argued that the fact that SIB did not know of the non-disclosure of the Boss at the time of the acts relied on for affirmation was immaterial because, he said, it was unreal to think that had SIB known of the non-disclosure of the Boss, an asset worth at most £15,000, it would not have affirmed the contract in the Deed when it was prepared to affirm the contract at a time it believed that there were other assets worth millions of pounds which Mr. Fincken had not disclosed. The judge, as I have noted, made a similar point. He further contended on the basis of the decision in Campbell v Fleming (1834) M & W 40 and Law v Law [1905] 1 Ch 140 that a person with a right to rescind a contract may be held to have affirmed the contract even if there are some material facts which he did not know at the time of the affirmation.[45]Miss Gloster submitted:(1) that for a right of rescission to be lost by affirmation the claimant must have full knowledge of all the material facts including knowledge of the right to choose between two alternative remedies and an unequivocal act or statement by the claimant making clear to the defendant that the claimant intends to pursue one of the remedies to the exclusion of the right to rescind;(2) that whether or not there has been an affirmation is a question of fact for trial;(3) that a party is not likely to have non-suited himself from claiming rescission merely because he has taken some steps which could be characterised as an affirmation particularly where the defendant has suffered no detriment;(4) that the principle that a party has to elect between alternative remedies is not a fixed principle but is based on common sense and equity;(5) that it is impossible to say from SIB's conduct between April 1999 and the notification given to Mr. Fincken in July 1999 of SIB's application to claim rescission that SIB had unequivocally affirmed the contract and given up its right to rescind that contract.[46]I intend no discourtesy to counsel when I say that I do not propose to deal with the rival submissions of law. It seems to me that Miss Gloster was right to stress that whether or not there has been an affirmation, given SIB's ignorance till after service of the Statement of Claim of the non-disclosure of the Boss, is essentially a question of fact for the trial judge to determine in all the circumstances of the case, and although I see very considerable force in Mr Francis's submissions, I do not think it can be said that SIB is wholly without any real prospect of success on this issue. Accordingly I would allow the appeal and restore the decision of the Deputy Master dismissing Mr. Fincken's application for summary judgment. LORD JUSTICE ROBERT WALKER.:[47]I agree.

LORD JUSTICE KEENE:

[48]I also agree.

Order

As minuted by Counsel. (Order does not form part of the approved judgment)

Cited in 15 later judgments

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