Bleasdale & Anor v Forster [2011] EWHC 596 (Ch)

Case No HC09C00813[2011] EWHC 596 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 16/03/2011
Before
MR JUSTICE HENDERSON
Between
(1) KATHLEEN VERONICA BLEASDALEClaimants(2) JOHN CARISSClaimantDEBORAH JANE FORSTERDefendant
Mr Tom Leech QC and Mr George Hayman (instructed by Goodman Derrick LLP) for ClaimantsMr Jonathan Nash QC and Mr Paul Marshall (instructed by Reynolds Porter Chamberlain LLP) for DefendantHearing Hearing date: 9 March 2011
JudgmentApproved Judgment on Amendment Application

Introduction

[1]At the adjourned case management conference on 9 March 2011 I heard argument on an application by the claimants (Ms Bleasdale and Mr Cariss) to amend their particulars of claim. This is my ruling on the application.[2]The background to the case is briefly described in the judgment which I handed down on 2 March, dismissing an application by the defendant (Ms Forster) for summary judgment in her favour on the allegations of fraudulent misrepresentation made against her by the claimants: see Bleasdale and Cariss v Forster [2011] EWHC 416 (Ch). I will not repeat that material in my present judgment, but will take it as read.[3]The main purpose of the proposed amendments is to plead an alternative case in relation to the first investment in SPTL by Ms Bleasdale in August 2007; and at this stage it is those amendments on which I will concentrate. The claimants’ existing, and primary, case is that Ms Bleasdale was fraudulently induced to make the first investment by untrue representations, made to her both in writing and orally, by Ms Forster, to the effect that SPTL had already concluded a £750,000 contract to supply the tag to Southern Cross. The claimants do not seek to modify or depart from that primary case in any way. The object of the amendments, in a nutshell, is to plead an alternative case based on Ms Forster’s own evidence of what she said to the claimants in July 2007. The claimants deny that Ms Forster’s version of events is correct, but, in case it were to be accepted by the trial judge, they wish to be in a position to argue that it too was untruthful, that its falsity must have been known to Ms Forster, that it was material to their decision to invest, and that it induced them to do so.[4]It will already be apparent that the proposed amendments involve an averment by Ms Bleasdale, albeit on an alternative basis, that she was induced to make the first investment by a representation which she denies was ever made to her. Whether it is possible, either in law or in logic, for a claimant who complains of fraudulent misrepresentation to adopt such an apparently self-contradictory stance is one of the questions to which the application to amend gives rise. It is partly because I wished to reflect on it that I decided to reserve my judgment, even though a prompt decision is clearly needed with the start of the trial window less than three weeks away.[5]The application to amend is strongly opposed by Ms Forster, who is now represented by leading counsel (Mr Jonathan Nash QC) as well as junior counsel, Mr Paul Marshall, who appeared for her on the summary judgment application. The grounds of opposition are both substantive and procedural. The substantive grounds include the point on inducement which I have already mentioned, and also a prior question whether the alleged representations are in fact a fair reflection of Ms Forster’s evidence in her witness statement (which was signed by her on 2 November 2010). The procedural grounds focus, in particular, on the very late stage at which the application to amend is made: consent to the amendments was first sought, without any prior discussion or warning, in a letter from the claimants’ solicitors dated 28 February 2011. The principles which the court should follow when faced with a very late application to amend have recently been restated by the Court of Appeal in Swain-Mason and others v Mills & Reeve [2011] EWCA Civ 14, judgment in which was handed down on 20 January 2011.

The proposed amendments

[6]I will begin by setting out the paragraphs in which the alternative misrepresentations are pleaded: “17A. In paragraph 58 of her Defence Ms Forster denies making the representation pleaded in paragraph 17 (above). In paragraph 107 of her witness statement dated 2 November 2010 she states that she gave the following explanation to Ms Bleasdale and Mr Cariss between 13 and 16 July 2007: “I explained the background to the Southern Cross pilot, which included reaching in principle an agreement with John Murphy for a £750,000 contract. However, I also went on to describe in detail how John Murphy had sought to get more and more for the same price, and how [SPTL] had ultimately concluded that it could not agree to John Murphy’s terms. I did, however, consider Southern Cross to be a valuable potential customer, and that the door was open to go back to John Murphy in the future”. 17B. The Claimants will invite the Court to reject this evidence. However, if the Court accepts this evidence, then on her own case Ms Forster expressly represented to Ms Bleasdale and Mr Cariss that the Southern Cross pilot had resulted in an agreement in principle between Southern Cross and SPTL for SPTL to sell the Tag to the value of £750,000 to Southern Cross. 17C. By making the representation pleaded in paragraph 17B (above) Ms Forster also impliedly represented to Ms Bleasdale and Mr Cariss that Southern Cross had not withdrawn from the agreement in principle to which she was referring and remained willing to honour that agreement. 17D. Further, if the Court accepts Ms Forster’s evidence as pleaded in paragraph 17A (above) she expressly or impliedly represented to Ms Bleasdale and Mr Cariss that although terms had not been agreed and remained subject to negotiation she believed Southern Cross to be a valuable potential customer and that the door was open to go back to John Murphy in the future. 17E. By making the representation pleaded in paragraph 17D (above) Ms Forster also impliedly represented to Ms Bleasdale and Mr Cariss that she had reasonable grounds, alternatively some grounds, for the belief pleaded in that paragraph.” “I explained the background to the Southern Cross pilot, which included reaching in principle an agreement with John Murphy for a £750,000 contract. However, I also went on to describe in detail how John Murphy had sought to get more and more for the same price, and how [SPTL] had ultimately concluded that it could not agree to John Murphy’s terms. I did, however, consider Southern Cross to be a valuable potential customer, and that the door was open to go back to John Murphy in the future”.[7]Particulars of falsity of the above representations are then pleaded in a new paragraph 20A:
“PARTICULARS OF FALSITY (1) The Southern Cross pilot had not resulted in an agreement in principle between Southern Cross and SPTL for SPTL to sell tags to the value of £750,000 to Southern Cross. The particulars under paragraph 20 (above) are repeated. Further, in paragraph 59 of her Defence dated 2 October 2009 it is pleaded: “The prospect of a contract with Southern Cross had been “dead” from April [2007]”
. Ms Forster signed the statement of truth at the foot of the Defence. Accordingly, the express representation pleaded in paragraph 17B (above) was untrue. (2) Alternatively, if the Southern Cross pilot had resulted in such an agreement in principle, Southern Cross had withdrawn from that agreement and made it clear that it did not intend to honour it. Again, the particulars under paragraph 20 (above) are repeated. In the alternative to (1) above, therefore, the implied representation pleaded in paragraph 17C (above) was untrue. (3) In the light of the facts and matter pleaded in the particulars of falsity under paragraph 20 (above) Ms Forster did not believe the express or implied representation pleaded in paragraph 17D (above) and had no reasonable grounds, alternatively no grounds at all, for making that representation. Accordingly, the implied representations pleaded in paragraph 17E (above) were also untrue.”[8]It is then pleaded in paragraph 22(1A) and (1B) that Ms Forster could not have honestly believed any of the alternative representations, and the question of inducement is dealt with as follows in a new paragraph 23(4):
“Even if the Court rejects the primary case of Ms Bleasdale and Mr Cariss (as pleaded in paragraph 17 above) it is their alternative case that the representations made by Ms Forster (as pleaded in paragraphs 17A to 17E above) induced them to enter into the Loan Agreement, the Share Purchase Agreement and the Share Transfer and to make the payments pleaded above. It is for Ms Forster to show not only that Ms Bleasdale and Mr Cariss would have entered into those agreements and made those payments if she had not made those representations but also that they would have entered into those agreements and made those payments if she had told the truth. They will say that they would not have done so if they had known that there was no order from Southern Cross and that there was no contract or commitment from Southern Cross (and in fact Southern Cross had ruled out a contract): see paragraph 33 of Ms Bleasdale’s witness statement dated 5 November 2010 and paragraph 27 of Mr Cariss’s witness statement also dated 5 November 2010.”

The correct approach to late applications to amend

[9]In Worldwide Corporation Limited v GPT Limited and another [1998] EWCA Civ 1894, unreported, the Court of Appeal (Lord Bingham LCJ, Peter Gibson LJ and Waller LJ) upheld the refusal of Moore-Bick J in the Commercial Court to permit amendments to the claim in the first week of a five week trial. The purpose of the amendments was to claim a quantum meruit for services rendered, as an alternative to the existing claim for breach of contract. In refusing permission to amend, the trial judge rejected a submission that an amendment should be allowed at almost any time provided the other party could be compensated in costs. The Court of Appeal agreed, and said this:
“We are doubtful whether even applying the principle stated by Bowen LJ [in Cropper v Smith (1884) 26 Ch.D. 700 at 710-711] the matter is as straightforward as [counsel] would seek to persuade us. But, in addition, in previous eras it was more readily assumed that if the amending party paid his opponent the costs of an adjournment that was sufficient compensation to that opponent. In the modern era it is more readily recognised that in truth the payment of the costs of an adjournment may well not adequately compensate someone who is desirous of being rid of a piece of litigation which has been hanging over his head for some time, and may not adequately compensate him for being totally (and we are afraid there are no better words for it) “mucked around” at the last moment. Furthermore, the courts are now much more conscious that in assessing the justice of a particular case the disruption caused to other litigants by last minute adjournments and last minute applications have also to be brought into the scales.”
[10]Those comments were of course made in the context of a trial that had already started, and where if the amendment was allowed there would have to be a further delay in the trial, or at least an unexpected increase in its duration.[11]In a later passage in the judgment of the court, under the heading “Approach to last minute amendments”, the Court also said this:
“Where a party has had many months to consider how he wants to put his case and where it is not by virtue of some new factor appearing from some disclosure only recently made, why, one asks rhetorically, should he be entitled to cause the trial to be delayed so far as his opponent is concerned and why should he be entitled to cause inconvenience to other litigants? The only answer which can be given and which, [counsel] has suggested, applies in the instant case is that without the amendment a serious injustice may be done because the new case is the only way the case can be argued, and it raises the true issue between the parties which justice requires should be decided. We accept that at the end of the day a balance has to be struck. The court is concerned with doing justice, but justice to all litigants, and thus where a last minute amendment is sought with the consequences indicated, the onus will be a heavy one on the amending party to show the strength of the new case and why justice both to him, his opponent and other litigants, requires him to be able to pursue it.”
[12]The passages from Worldwide which I have quoted were expressly endorsed by the Court of Appeal in Swain-Mason, where the leading judgment was delivered by Lloyd LJ (with whom Elias LJ and Patten LJ agreed). Lloyd LJ continued as follows at [72]:
“72. As the Court said [in Worldwide], it is always a question of striking a balance. I would not accept that the court in that case sought to lay down an inflexible rule that a very late amendment to plead a new case, not resulting from some late disclosure or new evidence, can only be justified on the basis that the existing case cannot succeed and the new case is the only arguable way of putting forward the claim. That would be too dogmatic an approach to a question which is always one of balancing the relevant factors. However, I do accept that the court is and should be less ready to allow a very late amendment than it used to be in former times, and that a heavy onus lies on a party seeking to make a very late amendment to justify it, as regards his own position, that of the other parties to the litigation, and that of other litigants in other cases before the court. 73. A point which also seems to me to be highly pertinent is that, if a very late amendment is to be made, it is a matter of obligation on the party amending to put forward an amended text which itself satisfies to the full the requirements of proper pleading. It should not be acceptable for the party to say that deficiencies in the pleading can be made good from the evidence to be adduced in due course, or by way of further information if requested, or as volunteered without any request. The opponent must know from the moment that the amendment is made what is the amended case that he has to meet, with as much clarity and detail as he is entitled to under the rules. 74. The Worldwide Corporation decision was made under the RSC, not the CPR, which only came into force some five months later, but it seems to me that it reflects the tenor of the CPR, which was no doubt in the minds of the judges, who will have been very familiar with the terms of Lord Woolf’s reports that led to the reform of the rules …”
[13]In paragraph [82] Lloyd LJ added the further point that an application for late amendment needs to be supported with evidence about why the application is being made at such a late stage.[14]The only other principle I need to mention is that an application to amend will be refused if it is clear that the proposed amendment has no realistic prospect of success. The test for this purpose is the same as on an application for summary judgment.

Discussion

[15]The proposed alternative case is based solely on paragraph 107 of Ms Forster’s witness statement, which is quoted in full in the new paragraph 17A. On the strength of this evidence, and this evidence alone, it is alleged that Ms Forster made representations:(a) that the Southern Cross pilot had resulted in an agreement in principle between Southern Cross and SPTL for SPTL to sell the tags to the value of £750,000 to Southern Cross (paragraph 17B);(b) that Southern Cross had not withdrawn from that agreement in principle, and remained willing to honour it (paragraph 17C);(c) that although terms had not been agreed and remained subject to negotiation, she believed Southern Cross to be a valuable potential customer and that the door was open to go back to John Murphy in the future (paragraph 17D); and(d) that she had reasonable, or alternatively some, grounds for that belief (paragraph 17E).[16]The first question, it seems to me, is whether it is properly arguable, on the basis of Ms Forster’s own evidence, that she did indeed make all or any of those representations. The evidence to support them has to be found in her evidence, because the claimants’ primary case is that her version of events in paragraph 107 has to be rejected. They cannot therefore find any direct support for the pleaded representations in anything that they accept or aver Ms Forster said to them.[17]It is relevant to note, at this point, that paragraph 107 appears in a section of Ms Forster’s statement headed “Comment on the allegations made against me in relation to the Southern Cross position”. It does not purport to be a full account of her version of events, but rather the first part of her comments on the claimants’ allegation that she told them, in the course of conversations between 13 and 16 July 2007, that SPTL had a £750,000 contract with Southern Cross. For Ms Forster’s full account of what happened between those dates it is necessary to go back to the previous section of her statement, running from paragraphs 63 to 105, and, in particular, to her account of a telephone conversation which she had with Ms Bleasdale on 14 July.[18]Ms Forster’s account of this telephone conversation is as follows:
“70. Kate rang me again on Saturday 14 July 2007 and asked various questions about the Tag product features and benefits, which I answered. 71. I told her all the up to date events which had occurred regarding the anticipated TIG Licence agreement and my concerns that this would not happen due to what the Original Investors had done to the Company. She said that she could not believe what they had done by going behind the board’s back to use this deal for their own purposes and attempt to trade their shares into the proposed newco. … 72. Kate then asked me questions about the pilot the Company had undertaken with Southern Cross. I explained that the Tag had worked (subject to a couple of software issues, which had been resolved), and that the laundry system at Edgeworth House had been greatly improved as a result – residents’ laundry was no longer getting routinely lost. I explained that the pilot had been paid for by Southern Cross at a cost of £10,000 for the pilot itself and £1,000 per year for the next four years. 73. I then explained that whilst we had originally shaken hands with John Murphy on rolling out the Tag across the group following a successful pilot, this had not in fact happened. I explained how we had originally reached agreement in principle on a price of £750,000 for 30 Tags per resident, but that after the pilot John Murphy had kept asking for more and more for the same price – 50 tags per resident, then 75, then more expensive training, and then he had wanted the price to include VAT as well. The result would have been a loss-making contract if we had accepted John Murphy’s terms, and the Company had decided not to do that. Kate indicated that she knew of John Murphy. 74. I explained to Kate that we had spoken to the five largest care home groups in the UK – BUPA, Southern Cross, Barchester, Anchor and Care Principles (who specialised in secure detention units). All five had shown serious interest. We had completed the pilot with Southern Cross and had an issue on price. Each of the other four had invited us to come back and talk to them once we had moved from our prototype to the final production model – hence we needed the funds to pay for the final product tooling to produce this. … 77. Kate asked about the details of the proposed TIG licence, and asked me to forward various documents in relation to it. I explained that we would not have been negotiating the TIG licence if we had the opportunity of selling the Tag ourselves, and we really only needed one order from one of the big care home groups. However, we had been unable to agree on price with Southern Cross, and the other large care home groups all wanted us to have the final production version ready, and the Company lacked the funds to reach final production.”
[19]It appears from this account that, although there was an initial agreement in principle with Southern Cross to proceed with a £750,000 contract, the project then foundered in the subsequent detailed negotiations, and SPTL decided not to proceed with it. If that is an accurate record of what Ms Forster said to Ms Bleasdale, I do not see how it can be alleged that Ms Forster represented to Ms Bleasdale, either expressly or implicitly, that there was an agreement in principle with Southern Cross still in place in July 2007 from which Southern Cross had not withdrawn. Since (on this version of events) Southern Cross had refused to accept the original offer, and wanted more and more improvements on it without any increase in the contract price, and since SPTL had refused to agree to those revised terms, it is obvious that the agreement in principle was to all intents and purposes dead, as Ms Forster pleads in paragraph 59 of her defence. Ms Bleasdale could not reasonably have gone away from the conversation, if that is indeed what Ms Forster said to her, with the impression that an agreement in principle was still on the table and ready to be implemented at a contract price of £750,000.[20]I will add, for what it is worth, that Ms Forster’s account of the negotiations in her statement appears to be broadly supported by the contemporary documents, as does the existence of an initial agreement in principle. I was taken through the relevant documents at the hearing, and do not need to set them out. It is enough to say that on 20 December 2006 Mr Murphy sent an email to Ms Forster saying:
“I refer to our recent conversations and I write to confirm … that we are prepared to move forward with the Stayput Tag System based on a total fixed cost of £150k each year on a 5 year term.”
By 18 January 2007, however, when Mr Murphy had reviewed draft heads of terms produced by SPTL, he said in a further email to Ms Forster:
“Therefore in total you are looking at charging an additional cost of £248,456.00 on the Fixed Cost of £750k, which equates to a 33% increase. I confirm that I am not prepared to move forward on the Heads of Terms that you have submitted.”
There matters appear to have rested until the end of March 2007, when Mr Murphy received a text message from Ms Forster asking him to return the contracts. Before doing so, he received a full review of the pilot scheme and consulted his senior colleagues. On 2 April he then sent an email to Ms Forster, which set out a number of serious concerns about the performance of the tag during the pilot, and continued:
“Having taken the views of my Senior Executive Team, we are now all of the opinion that the rising cost, in relation to the installation of the Stayput Tag System, the training, the scanners and the requirement for an investment of £750k and a further £345k, we believe that the £1 million would be better spent on providing other unique services in relation to the Ashbourne Senior Living brand. Therefore, I write to advise you that we will not be proceeding with the Stayput Tag System in any of the Ashbourne Senior Living or the Southern Cross portfolio. May I take this opportunity to thank you personally Debbie for the effort that you and your team have put in and wish you every success in developing the Stayput tag system.”
[21]On the basis of this last email, SPTL can have been left in no reasonable doubt that this was the end of the road so far as the agreement in principle for a £750,000 contract was concerned. It is true that, even on her own account, Ms Forster did not inform Ms Bleasdale of the uncompromising terms in which Southern Cross had terminated the negotiations. However, as I have already explained, the information which Ms Forster says she did give to Ms Bleasdale in the course of their telephone conversation on 14 July would in my view have been sufficient to make it clear that the agreement in principle was no longer viable. Ms Bleasdale cannot, therefore, have been induced to make her first investment on the strength of a representation that Southern Cross was still willing to proceed with the agreement in principle in its original form.[22]I now turn to the representations pleaded in the new paragraphs 17D and 17E, to the effect that Ms Forster considered Southern Cross to be a valuable potential customer and the door was still open to go back to Mr Murphy in the future. The immediate difficulty which this contention faces is that Ms Forster does not say in paragraph 107 of her statement that she communicated this belief to Ms Bleasdale during their conversations in mid July 2007. The final sentence of paragraph 107 reads most naturally as a statement of Ms Forster’s own state of mind, and as one of her comments on the allegations made against her. This impression is in my judgment strongly reinforced by two further matters. First, in her detailed narrative of the relevant events in the previous section of her statement, Ms Forster nowhere says that she communicated this view to either of the claimants. Secondly, the language of the final sentence of paragraph 107 echoes paragraph 65, where Ms Forster says in relation to her letter of 27 June 2007 to Ms Bleasdale (quoted in full in paragraph 5 of my earlier judgment):
“Whilst we had not been able to close the deal with Southern Cross in April 2007, it remained, in my mind, a prospect. We remained in regular contact with Southern Cross in relation to the after-sales service we were providing at Edgeworth House. I considered that the door remained open to return to John Murphy once we had been able to deal with the issues he had raised (principally price).”
It is clear in the context of paragraph 65 that Ms Forster is describing her own internal state of mind, and I see no reason to attribute a different meaning to the similar language employed in paragraph 107.[23]I am therefore not satisfied, on the evidence as it now stands, that it is properly arguable that the representation pleaded in paragraph 17E was ever made by Ms Forster to Ms Bleasdale.[24]These conclusions are alone enough to explain why permission to make the proposed amendments must in my judgment be refused. So close to the trial date, the claimants must be held to the terms in which the amendments are pleaded, and Ms Forster must know precisely what is the new case she has to meet: Swain-Mason at [73]. Applying that approach, the amendments do not disclose an arguable case that the representations in question were ever made by Ms Forster.[25]In these circumstances it is unnecessary for me to deal with the other grounds of opposition advanced on Ms Forster’s behalf, and I will therefore confine myself to a few comments.[26]First, there is the question of self-contradiction mentioned in paragraph 4 above. My initial, instinctive reaction to it was to think that a claimant cannot properly advance a claim in misrepresentation where his primary case is that the representation in question was never made to him. How can a person claim to have been induced to act by a representation which he says was never made to him? Further reflection has satisfied me, however, that this is probably an over-simplistic way of looking at the matter. In general, a claimant is free to advance alternative claims, and there are circumstances in which a claimant may properly plead an alternative case which is based on the defendant’s version of what happened, even if that version is denied by the claimant. Further, the requirement to verify a statement of case with a statement of truth does not prevent this being done, for two reasons. First, it is always open to the court to dispense with verification by a statement of truth when a statement of case is amended: see CPR rule 22.1(2). Secondly, the requirement of a statement of truth does not necessarily prevent a party from advancing a case which depends on an allegation which he believes to be untrue, so long as there is a proper evidential basis for the allegation: see Binks v Securicor Omega Express Limited [2003] EWCA Civ 993, [2003] 1 WLR 2557, at [8]. As Maurice Kay J said in that case at 2562H:
“Moreover, I do not consider it objectionable in principle for a claimant to advance an alternative case based on material put forward by his opponent. In such circumstances it may be possible for him to append a statement of truth, suitably drafted, making it clear that whilst his primary case is not an assertion of the truth of his opponent’s account, if the court finds that to be the truth, he will seek to rely upon it as an alternative basis for liability.”
[27]So far as inducement is concerned, if there were a sufficient evidential foundation for the amendments, I am inclined to think that the claimants could then rely on the rebuttable presumption of inducement which arises once it is proved that a false statement was made which is material in the sense that it was likely to induce the contract: see Chitty on Contracts, 30th Edition, vol. I, para 6-036 and the cases there cited. Furthermore, the presumption is particularly strong where the misrepresentation was fraudulent: see Ross River Limited v Cambridge City Football Club Limited [2007] EWHC 2115 (Ch), [2008] 1 All ER 1004 at [241] per Briggs J. It is also relevant to bear in mind in this context that it is often difficult, if not impossible, for a claimant to analyse precisely why he entered into a contract in reliance on various statements contained in (for example) a company prospectus: see Arnison v Smith (1889) 41 Ch.D. 348 (CA) at 369 per Lord Halsbury L.C. (“You cannot weigh the elements by ounces”).[28]For these reasons I see no insuperable legal or logical obstacle to the proposed amendments, and I would not therefore have refused permission to amend on those grounds.[29]Nor would I have refused permission on the ground of delay. It is true that the claimants have had Ms Forster’s witness statement since early November, but her application for summary judgment was already outstanding, and had it succeeded I find it hard to imagine how the alternative case of fraudulent misrepresentation could have hoped to succeed. Accordingly I think it was reasonable for the claimants to wait until the determination of the summary judgment application before seeking permission to amend. The initial request for consent to the amendments was made on 28 February, only a day or two after my judgment on the summary judgment application had been circulated to the parties. Furthermore, it is hard to see what prejudice there could be to Ms Forster in allowing the amendments, given that they are based exclusively on her own evidence, and are focused on the events of a few days in July 2007 which will anyway be under close scrutiny in the context of the claimants’ primary case. I do not think that allowing the amendments would increase the length or complexity of the trial to any significant degree, and I am sceptical of the claims advanced on Ms Forster’s behalf that an extensive new factual investigation would then be needed, including a very detailed analysis of the relationship between SPTL and Southern Cross. However, I do not consider it profitable to pursue these issues, because they would only arise if Ms Forster had made the representations in question, and on the available evidence I do not consider that she did.[30]I would, however, add for completeness that I do not rule out the possibility of an application to amend being made, along similar lines, at trial once the evidence is complete. The advantage of leaving any such application to be dealt with by the trial judge is that it should then be clear precisely what Ms Forster’s version of events is, and the trial judge will be much better placed than I am to consider and give proper weight to arguments that it would be unfair to allow the amendments.

Other amendments

[31]The other proposed amendments are few in number, and in some cases uncontroversial.[32]There is no opposition to the proposed amendments to paragraphs 10, 11 and 41 of the particulars of claim, which correct a typographical error and clarify the movements of money in connection with Ms Bleasdale’s initial investment. I therefore grant permission for those amendments.[33]The remaining amendments are to the particulars of loss and damage in paragraph 51. A new paragraph (2A) appears to me to be consequential on the alternative case for which I have refused permission, and must therefore fall away with it. However, the proposed amendments to paragraphs (2) and (6) are unrelated to the alternative case, and are opposed.[34]Those paragraphs, with the proposed amendments underlined, read as follows:
“(2) Further, if Ms Forster had not made those representations, Ms Bleasdale would not have made the payments set out in paragraphs 11 and 12 and Mr Cariss would not have made the payments set out in paragraphs 26, 46 and 48 (above) or provided any further funding for SPTL or [Systems]. … (6) To date the Claimants have recovered none of the sums which they advanced to SPTL from [Systems] but they will give credit to Ms Forster for any sums which they recover from [Systems] prior to trial. Indeed, Mr Cariss and Ms Bleasdale have continued to fund [Systems] since the commencement of these proceedings without obtaining any return on either the First Investment or the Second Investment or the further funding which they have made to SPTL or [Systems]. Annexed to these Amended Particulars of Claim is a schedule of all loans and other payments made by them to fund those companies up until 31 January 2011. The total amount is £928,798.14 and theClaimants will claim this sum at trial (together with any additional sums to judgment).”
[35]To a large extent, the sums claimed in the annexed schedule are already in issue. In paragraph 106(5) of the points of defence to the unfair prejudice petition, dated 13 May 2010, it was pleaded that Mr Cariss had invested the sum of £760,880.13 in Systems, and that he was currently owed the total sum of £818,380.13 by SPTL and Systems. Mr Leech QC submits that the purpose of the proposed amendments to the particulars of claim is simply to incorporate and update the figures already annexed to the points of defence.[36]Mr Nash QC objects, on the basis that the proposed amendments include sums which the claimants have paid into Systems since the discovery of the alleged fraud, and therefore cannot have been influenced by it. Mr Leech’s answer to this is to rely on the recent decision of the Court of Appeal in Parabola Investments Limited v Browallia Cal Limited [2010] EWCA Civ 486, [2010] 3 WLR 1266, as authority for the proposition that a claimant may recover damages for fraud after the date of discovery of the fraud if he is still suffering the adverse consequences of the fraud, or if (in colloquial terms) he is still locked in to the transaction which he was fraudulently induced to undertake.[37]In my judgment it is a fair criticism of the proposed amendments, as they stand, that they do not articulate the basis upon which the claimants claim to be entitled to recover sums which they have invested in Systems since the date of discovery of the alleged fraud, and they do not give particulars of the facts and matters upon which they rely for that purpose. In my view the appropriate way to deal with this point is not to refuse permission to amend outright, but rather to give the claimants a short period (I have in mind seven days) within which to plead the necessary basis and particulars, and to adjourn the question whether or not to permit the amendment to the trial judge, if agreement cannot be reached in the meantime. That is accordingly the order which I propose to make.

Cited in 1 later judgment