“FAILING TO SEE THE WOOD FOR THE TREES” AND LATE APPLICATIONS TO AMEND PLEADINGS : GROARKE –V- FONTAINE CONSIDERED
Groarke –v- Fontaine  EWHC 1679 (QB) centred on a Road Traffic Accident that happened in November 2009. The central issue on appeal was whether a late application to amend the defence to plead contributory negligence should have been allowed. The application was heard on the morning of the trial and refused by the trial judge. The defendant appealed.
THE PROCEDURAL HISTORY
- Proceedings were issued in July 2012.
- The defendant served a defence, denying responsibility for the accident.
- On the 4th November 2013 the defendant wrote to the claimant suggesting that the defendant’s case was that, in the alternative there was a high level of contributory negligence on the part of the claimant.
- The defendant made an application to amend their defence to include allegations of contributory negligence. Their application was heard on the morning of the trial, but this was refused and judgment was entered against the defendant on a full liability basis.
- The Defendant appealed.
THE PRINCIPLES TO BE APPLIED
Sir David Eady (sitting as a High Court judge) began by outlining the principles to be applied to the appeal, including the relevance of the Mitchell principles:
- The merits of the proposed appeal have to be determined not only in the light of the amendments to the CPR in April 2013 but also with the benefit of guidance contained in later appellate decisions, such as Mitchell v News Group Newspapers Ltd  1 WLR 795, Durrant v Chief Constable of Avon and Somerset Constabulary  EWCA Civ 1624 and Chartwell Estate Agents Ltd v Fergies Properties SA  EWCA Civ 506. In the latter case, at , Davis LJ described the decision in Mitchell as being “of the utmost importance”. The context was the approach to be adopted in relation to relief from sanctions under CPR 3.9, but the policy considerations and the guidance given resonate more widely and are relevant to the conduct of civil litigation generally.
- In particular, it is necessary over a whole range of case management decisions for judges to bear in mind not only the need to determine issues justly and fairly, as between the parties themselves, but also in doing so the imperatives that litigation should be conducted efficiently, economically and with due regard to the potential impact on court resources and indeed other litigants or court users. It is, however, (and always has been) the case that the court needs to take into account all the circumstances of the particular case in question and that decisions are accordingly likely to be fact-sensitive. It is necessary, therefore, when considering earlier authorities (whether at first instance or on appeal) to distinguish between statements of principle or the terms of general guidance, on the one hand, and their application, on the other hand, to the facts of the particular case. That important distinction is illustrated, by way of recent example, in the remarks of Laws LJ in the Chartwell case at . Such problems have reappeared over the years both before and after the advent of the CPR. (One remembers how they used to trouble advocates and judges in the context of the former jurisdiction to strike out for want of prosecution.) Yet the difficulties are largely unavoidable for the reasons explained by Davis LJ in the same case at -. It remains the position that judges have to apply judgment, or exercise an element of discretion, in the light of the individual facts – which means that there cannot always be one correct answer to the problems posed.
- Even so, the courts have tried to reduce the opportunities for uncertainty, or inconsistency of approach, by resort to general phrases of admonition such as, for example, that we are in a new era of “zero tolerance” or “no nonsense”. Yet, as Davis LJ reaffirmed in Chartwell, at , “… the courts do not exist for the sake of discipline”. (To similar effect Lord Phillips observed in NML Capital Ltd v Republic of Argentina  2 AC 495 that procedural rules should be the servant and not the master of the rule of law.)
- The possibility for time-consuming appeals or satellite litigation is also mitigated to some extent by warnings that appellate tribunals “will not lightly interfere with a case management decision and will support robust and fair case management decisions”: see e.g. the remarks of Davis LJ in Chartwell at . (This is in some ways analogous to the reluctance of the Court of Appeal (Criminal Division) to “tinker” with lawful sentences imposed in the Crown Court.) The fact remains, however, that even decisions that are undoubtedly “robust” may sometimes yet be wrong.
THE CORRECT TEST TO BE APPLIED: APPEALS
He then went on to consider the circumstances in which the decision of a judge can be overturned:
- Decisions can be overturned on appeal if a judge has taken into account irrelevant matters or failed to address relevant material. Even where this is not the case, however, it is possible for a decision to be categorised as “wrong”. An appeal should not be allowed, however, merely because the appellate tribunal might have given greater weight or emphasis to one or more relevant factors. Nevertheless, it must follow if a judge can be “wrong”, despite only taking into account relevant factors, and not ignoring others, that he/she may, in having reached a “wrong” conclusion, have been misled in the decision-making process by not giving appropriate weight to certain factors en route. That was an essential element in the unsuccessful argument of the appellants in Chartwell, for example: see at .
- As to allowing amendments, it seems that the well known judgment of Peter Gibson LJ in Cobbold v London Borough of Greenwich, 8 August 1999, still applies. Accordingly, the current position was summarised by Hamblen J in Brown v Innovatorone Plc  EWHC 3221 (Comm), at :
“As the authorities make clear, it is a question of striking a fair balance. The factors relevant to doing so cannot be exhaustively listed since much will depend on the facts in each case. However, they are likely to include:
(1) the history as regards the amendment and the explanation as to why it has been made late;
(2) the prejudice which will be caused to the applicant if the amendment is refused;
(3) the prejudice which will be caused to the resisting party if the amendment is allowed;
(4) whether the text of the amendment is satisfactory in terms of clarity and particularity.”
THE DEFENDANT’S ARGUMENTS
The defendant argued that the district judge had been “plainly wrong” to have refused permission to add contributory negligence. The defendant had lost the opportunity to reduce his liability (and the District Judge had noted that he would have found the defendant 2/3 liable had contributory negligence been an issue.) The claimant had, as a result, obtained a “windfall”.
THE CLAIMANT’S RESPONSE
The claimant contended that the decision was a case management decision and the court should not interfere. It was a reasonable conclusion to reach in light of the facts and factors to be taken into account.
THE DISTRICT JUDGE’S REASON FOR REFUSING PERMISSION TO AMEND THE DEFENCE
- It is against that background that I should focus on the District Judge’s reasoning. It is clear that a heavy burden lay on the Defendant to persuade the court to grant permission: see e.g. Swain Mason v Mills & Reeve  1 WLR 2735. All the circumstances need to be taken into account. One factor to which the District Judge clearly gave weight was that of earlier failings on the Defendant’s part to comply with court orders or directions. I need to remember, of course, that he was not, on 8 November last year, being asked to extend time in respect of those directions or to grant relief from sanctions under CPR 3.9. The earlier failures were not directly relevant to the application for permission to amend the defence. The nexus between them is by no means obvious, at least to me, and those failures are really to be classified as background (or past “form”). I do not understand “zero tolerance” of such breaches necessarily to extend to the penalising of litigants in relation to later and separate applications which the court would otherwise be inclined to grant. I must be careful to avoid discipline for discipline’s sake and to consider the application strictly, against the public policy objectives identified in Mitchell and similar cases, in order to see whether they would in any way be advanced (or alternatively frustrated) by refusing it.
- I turn to the factors identified by Hamblen J in Brown. It is already clear why the amendment was sought late. Counsel spotted the pleading omission just before trial and advised an amendment. The District Judge thought that the application should have been made in writing and supported by evidence. It is to be noted that this was the only context in which the possibility of an adjournment of the trial was contemplated – to enable such steps to be taken. Since the Judge was told by counsel why it was being made late, there would have been nothing to gain by merely having it confirmed in a witness statement. That would be a waste of time and money. There was some debate as to whether an application for an amendment is in fact required to be notified in writing, which is unfortunate since it should have been made clear beyond doubt by the wording of the CPR. Even if it is, however, there is no doubt that the District Judge had power to dispense with any such formality if circumstances required: CPR 23.3(2).
- What of the prejudice to the Applicant if it was refused? That is obvious. He would lose the opportunity of reducing his liability by an appropriate percentage.
- Was there any countervailing prejudice to the Claimant? I find it hard to see that there was. If such an amendment had necessitated an adjournment, that would have made a significant difference. There would have been additional cost and further delay in achieving a resolution. To an extent, it could have been mitigated by ordering the Defendant to pay the costs thrown away, but there could still be the potential for continued stress and anxiety on the Claimant’s part (depending, of course, on the facts of the particular case). Moreover, court time would arguably have been wasted and other litigants potentially disadvantaged. But it is clear that an adjournment was not required. The District Judge was able to go on and determine the issue of liability on the evidence available to him (and indeed, as it happened, to make a judgment also on contribution, albeit obiter). It is difficult to see what further evidence would be required to determine the issue of contribution, given that the Defendant had already set out his case that the Claimant’s driving was responsible for the accident. The court would have to determine, on the issues as they stood at 8 November, to what extent (if any) the Claimant’s driving could be criticised. Although no doubt the pleading could and should have said that it “caused or contributed to the accident”, that would not in practice have widened the scope of enquiry. Since no adjournment was required, and the Claimant’s counsel was ready to defend his driving in the light of the already available evidence, I cannot see that he would have been prejudiced by the amendment.
- One argument raised by Mr Seed is that the Claimant, had he known in advance of the plea of contributory negligence, might have reacted differently to earlier offers of settlement. It seems to me that there are two answers to this. First, the Judge would not have been told about these and would not therefore have taken them into account. Secondly, if an earlier amendment would have affected the Claimant’s conduct, that could have been reflected at the end of the trial on the issue of costs. For example, if the Judge decided that the Claimant should recover only two-thirds of his loss, and that an equivalent sum had been offered prior to trial, the Defendant’s delay in applying to amend could be held against him on costs (if thought appropriate).
- As to the “text” of the amendment (drafted by Ms Hobhouse just before trial), it was clear and in standard form. It contained no surprises and, moreover, was consistent with the case already advanced in the Defendant’s pleading and witness statement.
- What, then, was the justification for refusing the admittedly late amendment? As Peter Gibson LJ had observed in Cobbold, amendments in general ought to be allowed so that the real dispute between the parties can be adjudicated upon. I thus need to ask why it was just and fair that contributory negligence should be shut out and the Claimant thereby obtain (at least potentially) the “windfall” to which Ms Hobhouse objects. No doubt, at least in theory, the Defendant could launch satellite litigation against his solicitor, after the outcome is known, in order to recover the difference by reason of the failure to spot the pleading omission. But that would hardly be conducive to the efficient administration of justice, the saving of costs, or the interests of other litigants.
- Was it appropriate to refuse the amendment merely by way of punishing the Defendant for his late service of the witness statement or list of documents? I hardly think so. There might have been separate sanctions imposed in respect of those failures if thought significant but, since it was by 8 November water under the bridge, I can see no reason why they should come into play as a bar against amendment. That would be discipline for discipline’s sake only. The Defendant had not been penalised in any other respect (e.g. by not being permitted to rely on evidence served late).
- Reference was made to the service of an allocation questionnaire after 4.00pm on the due date and also to a pre-trial checklist served similarly after 4.00pm. If either of these lapses is to be treated as a reason for refusing an amendment and allowing the Claimant (potentially) to receive a windfall, it would surely be to elevate technicality over substance.
- I recognise that courts should nowadays be less willing to grant late amendments than in the past, but that consideration will generally come into play when the amendment in question will entail (as it often does) an adjournment, additional cost and/or stress to those involved. I apprehend that in the current climate courts will be less indulgent when such consequences would come about and less tolerant of them. Where an amendment can be made, however, without any such consequences, or any significant inconvenience to anyone, the requirements of fairness and justice do not need to be valued any the less or to be compromised merely for the sake of discipline or the marking of disapproval.
CONCLUSION: THE APPEAL WAS ALLOWED
- The District Judge (like myself) was doing his best to apply the relevant principles, as expounded in the recent authorities, to the facts of this case. Having considered his reasons, however, my own respectful conclusion is that in examining the trees he ultimately failed to see the wood. In so far as he balanced the potential prejudice to the Claimant against that to the Defendant, the exercise yielded the wrong outcome. I believe that justice and fairness required that the amendment should have been allowed so that “the real dispute” between the parties could be adjudicated upon. It is true that the burden was on the Defendant to establish not only that this objective was desirable but also that it should, in the particular circumstances, prevail. I can see, however, no good reason why it should not. There was no countervailing prejudice to the Claimant. In particular, there was no need for any adjournment, any further delay or additional cost. The court was able to accommodate the issues of causation (including those relevant to contribution) on the appointed trial date and (whether it was appropriate to do so or not) the District Judge actually stated what his conclusion would have been on contributory negligence. Thus no court time would have been wasted or court resources diverted. Correspondingly, no other court users would have been inconvenienced. The only concrete result of the District Judge’s refusal was that, at least on his (obiter) finding, the Claimant was to gain a windfall payment unjustly.