BACK TO BASICS WITH PLEADINGS: PROPORTIONATE LITIGATION AND BREVITY ESSENTIAL ON APPEALS
“Pleadings are intended to help the Court and the parties. In recent years practitioners have, on occasion, lost sight of that aim. Documents are drafted of interminable length and diffuseness and conspicuous lack of precision, which are often destined never to be referred to at the trial, absent some dispute as to whether a claim or defence is open to a party, being overtaken by the opening submissions. It is time, in this field, to get back to basics.” Christopher Clarke L.J.
In Hague Plant Ltd -v- Hague  EWCA Civ 1609 the Court of Appeal set out, in strong terms, the need for pleadings to be concise and for interlocutory applications, and appeals, to be conducted in a proportionate manner. It provides an important lesson for anyone responsible for drafting pleadings, or conducting interlocutory applications or appeals.
The claimant appealed a decision to refuse it to amend its Particulars of Claim. One major reason for that refusal was that the form and style of the proposed amendments failed to comply with the primary requirement of pleadings and the amendment should not be allowed on proportionality grounds.
THE KEY FINDINGS
1. Appeals on interlocutory matters should be conducted in a proportionate manner.
2. Statements of case should be concise and comply with the rules of pleading.
3. The judge was correct not to allow the proposed amended particulars of claim on several grounds, including the style of their drafting and proportionality.
Lord Justice Briggs gave the first judgment.
- This is an appeal against the Order of HHJ Behrens, sitting as a judge of the Chancery Division in the Leeds District Registry, made on 5th March 2014 whereby, save for a small number of agreed items, he refused permission to the claimant (and appellant in this Court) Hague Plant Limited (“HPL”) to re-amend its Particulars of Claim in these proceedings alleging dishonest breach of fiduciary duty and dishonest assistance against the defendants (and respondents to this appeal) Martin Hague (“Martin”), Jean Angela Hague (“Jean Angela”), and their wholly owned company MHH Contracting Limited (“MHH”).
- Notwithstanding that this is an appeal against a discretionary case management decision, it has been litigated on a truly grand scale. Skeleton arguments by both sides in excess of forty pages were deployed, and no less than nineteen lever arch files of documents (for each member of the Court) were lodged. The appeal took a full two days of hearing and more than a full day’s pre-reading for each member of the Court. It is likely that hundreds of thousands of pounds of costs have been incurred on this appeal, and even larger sums for the preparation and hearing of the application before the Judge.
- It is not, at least initially, the function of this Court to re-examine de novo the detailed merits of an appealed case management application. That task arises in this Court only if it decides both that the first instance decision cannot stand, and decides to re-exercise the judge’s discretion afresh. This Court’s first task is to determine, on a much narrower basis, whether the case management decision under appeal can be impugned. In Walbrook Trustee (Jersey) Limited v Fattal  EWCA Civ 427, at paragraph 33, Lawrence Collins LJ said this:
“These were case management decisions. I do not need to cite authority for the obvious proposition that an appellate court should not interfere with case management decisions by a judge who has applied the correct principles and who has taken into account matters which should be taken into account and left out of account matters which are irrelevant, unless the court is satisfied that the decision is so plainly wrong that it must be regarded as outside the generous ambit of the discretion entrusted to the judge.”
I would add that, in the context of the increased focus of the overriding objective upon the proportionate conduct of litigation, and the ever-increasing need to husband limited court resources so as fairly to allocate them among all litigants, there is a real need to conduct appeals about case management decisions with economy and, wherever possible, brevity. I have constructed this judgment with the same objectives in mind. It will be sufficient to explain my reasoning to the parties, even though it omits an extended description of the background, the litigation and the draft pleading under review, for all of which readers unfamiliar with this litigation will need to consult other documents, and in particular the judgment under appeal.
- It is evident that the Judge himself paid full regard to the requirements of economy and brevity in formulating his own reserved judgment, in which he dealt with the extensive submissions and documentation with admirable focus in a mere seventeen pages. For this he was taken to task in the appellant’s Grounds of Appeal for having, in various respects, failed to give adequate reasons. In that respect he was in my view entitled to take account of this dictum of Griffiths LJ in Eagil Trust Co Limited v Pigott-Brown  3 All ER 119, at p. 122:
“I cannot stress too strongly that there is no duty on a judge, in giving his reasons, to deal with every argument presented by counsel in support of his case. It is sufficient if what he says shows the parties and, if need be, the Court of Appeal the basis upon which he has acted…”
- The main reason for the Judge’s refusal of permission to re-amend was that, taken as a whole, the draft pleading was:
“disproportionate in the sense that it would not lead to the litigation being conducted at proportionate cost and would lead to further extensive judicial time being expended at the expense of other litigants.”
In slightly more detail, he concluded that the draft pleading was constructed in a style which failed to comply with the primary requirement of a pleading, namely that it should include a concise statement of the facts upon which the claimant relies, so as to clarify rather than obscure the issues: see McPhilemy v Times Newspapers  3 All ER 775, at p. 793. Large parts of it consisted of detailed citation of the first defendant’s position as set out in previous litigation between the parties, in disclosure, transcripts, pleadings, witness statements and Part 18 information, and all in a document five times longer than the original Particulars of Claim, including much which, because it was merely responsive to the Re Amended Defences, could perfectly well have been included in a Reply.
- These conclusions were, in essence, about the form and style of the draft pleading rather than its detailed content in terms of the matters alleged. The judge’s conclusion that, taken as a whole, the draft should not be permitted, on proportionality grounds, did not of itself prohibit the claimant from seeking to re-plead all or part of the underlying content in a different way, and indeed the claimant has applied for permission to re-plead parts of that content by an application which has been stayed, pending this appeal, but which is in due course to be heard by the Vice-Chancellor Norris J.
- Nonetheless, in later parts of his judgment, the judge did address specific parts of the content, and made rulings to the effect that no form or style of pleading of those parts could be permitted, either because they were, on a summary judgment test, bound to fail, or (in one instance) because they amounted to an abusive collateral attack upon findings in a judgment resolving earlier litigation between the same parties or their privies. The appellant accepts that, unless successfully appealed, those separate parts of the judge’s conclusions would prevent those aspects of the substance from being re-pleaded, even though the judge’s conclusions about them do not appear in the Order under appeal, which merely dismisses the application to re-amend, save where items were allowed by consent. The appellant’s thirteen Grounds of Appeal therefore address both the proportionality decision about the form and style of the draft pleading, and the specific conclusions about parts of its substance. In this judgment I shall, without slavishly following the numbered order of those Grounds, nonetheless deal first with proportionality, and then with the specific matters of substance. But it is first necessary to say a little about the background.
THE COURT OF APPEAL’S DESCRIPTION OF THE DRAFT PLEADING
The draft Re-Amended Particulars of Claim
- It is unnecessary for me to give a comprehensive description of the content of the re-amendments in issue. It is succinctly summarised in seven categories in paragraph 4 of the judgment below, and that summary has not been criticised during this appeal. More importantly for present purposes, the draft pleading extends to 104 paragraphs, plus the prayer, spread over 65 pages. It is, viewed as a whole, a completely new pleading in which, after only one page of text, those parts of the original Particulars of Claim which had not been crossed out appear only intermittently. Were it to be permitted, it would require the defendants completely to re-plead their Defences. Mr. John Randall QC for the second defendant (who undertook the burden of the response to this appeal for all the defendants) said that, if permitted, it would also re-open a fresh battle royal under Part 18.
- A singular feature of the draft pleading (and unprecedented in my experience) is the extraordinary extent to which it recites or summarises what is said to be Martin’s or Jean Angela’s case about the matters in issue, as it has developed over time, by reference to submissions and evidence in Hague 1, and to pleadings, Part 18 responses and witness statements prepared for summary judgment and strike-out hearings in Hague 5. In paragraph 69 of his judgment, the judge identified no less than 47 examples of this process. But the sheer number of examples does not sufficiently describe the sense of bewilderment and confusion experienced by a reader of the pleading as a whole. So far from being a concise statement of the primary facts relied upon in support of the claim, it comes across as a rambling narrative of the supposed twists and turns of the defendants’ case about the matters in issue, serving no apparent purpose, and obscuring, rather than clarifying, the claimant’s own case.
- I am, thus far, doing no more than describing my impression of the draft pleading upon reading it for the first time, although it largely coincides with the judge’s own impression, after hearing extensive argument: see paragraphs 66 to 73 of his judgment. I shall in due course address the submissions about this extraordinary process, to the extent necessitated by dealing with the Grounds of Appeal to which I now turn.
MITCHELL WAS PROPERLY CITED IN THIS CONTEXT
The judge referred to the Mitchell decision when making his decision to refuse permission to amend. In particular paragraph 17 of the Mitchell judgment.
“Cases are usually important to the parties but if such considerations weighed too heavily one would be unable to implement the objectives of the new rules. One would be unable to prevent some claims from taking unfair amounts of judicial resources away from other claims at the very moment when it is common knowledge that budgetary constraints may lead to fewer judges in the courts, and to reduced non-judicial resources to operate those courts.
Judicial time is thinly spread, and the emphasis must, if I understand the Jackson reforms correctly, be upon allocating a fair share of time to all as far as possible and requiring strict compliance with rules and orders even if that means that justice can be done in the majority of cases but not all.”
The Court of Appeal rejected the claimant’s arguments that Mitchell was about relief from sanctions and wrongly cited.
- In my judgment that criticism is misplaced for two reasons. The first is that Master McCloud’s dictum, approved by the Court of Appeal, was a general description of the profound effect of the Jackson reforms, and the consequential amendment of the overriding objective, in tempering the traditional dedication of the courts in case management towards achieving perfect justice between particular parties by the need to allocate to those parties no more than a fair share of the court’s limited resources. This principle appeared in the CPR from the outset, and its application is by no means limited to cases of breach of the rules, Practice Directions or Orders. It has for example been applied by this court in connection with the need to encourage parties to engage with proposals for mediation or other forms of alternative dispute resolution: see PGF II SA v OMFS Company 1 Limited  EWCA Civ 1288, at paragraph 27. It was specifically applied in the context of late amendment in Swain-Mason and ors v Mills & Reeve LLP  EWCA Civ 14, at paragraph 70.
- Secondly, the criticism is misplaced because a primary reason for the judge’s rejection of the draft pleading was that it conspicuously failed to comply with the fundamental rules of pleading, in particular the rule that particulars of claim should contain a concise statement of the facts relied upon for the purposes of clarifying the issues between the parties: see paragraph 70 of the judgment and Part 16.4(1)(a).
The Court of Appeal upheld the judge’s decision that amendment should not be allowed because it was “late”. The proposed amendment would substantially re-case the claimant’s case.
- The judge’s main reason for refusing permission to amend upon proportionality grounds was, as I have sought to explain, mainly based upon his apprehensions about the further, duplicative and otherwise unnecessary work to which they would expose the defendants, and the knock-on consequences in terms of increasing the weight, cost and duration of the trial, and of further case management ahead of it. Mr. Parker submitted that the judge was not entitled to reach that conclusion without a detailed analysis of the extra work which would be required: see Ground 4. I emphatically disagree. Not only did this judge have many years’ experience in case management and trying litigation of this kind. He had the unique advantage of having tried Hague 1 and being heavily engaged in the case-management of these proceedings, including the contested application for permission to re-amend the Defences. A judge is, in my view, perfectly entitled to apply both his general and particular experience to these questions without spelling out, in analytical detail, the reasons for his conclusions about the increased cost and burden, both to the parties and the court, threatened by a substantial proposed re-amendment. Furthermore, it strikes me as obvious that a quintupling in the length of Particulars of Claim, all of which would need to be pleaded to in Re-Re-Amended Defences, would threaten just such increases in work, length and cost, even if significant parts of the re-pleaded material could be found within Part 18 exchanges, existing Defences, or statements and transcripts in earlier proceedings.
- It follows from what I have set out thus far that, in my view, the challenge to the judge’s conclusion that, viewed as a whole, the proposed Re-Amended Particulars of Claim should not be permitted otherwise than where consented to, entirely fails. I turn therefore to the discrete items of substance about which the judge made specific rulings.
OBSERVATIONS OF CLARKE L.J.
- I agree. The appellant’s case is that the trading arrangements made by the respondents in respect of MHH and HPL require justification and that the respondents have given different and contradictory explanations of what they were about, each of which was unsatisfactory in itself. They have, therefore, sought to include in the amended pleading an extensive history of what the respondents are said to have said or pleaded in a variety of documents and how they have changed their position. Their aim is to get the respondents to state in an amended defence their case in relation to each matter averred and on what is said to be their change of position. They contend that this will enable (a) the respondents to know the case of dishonesty which they have to meet; and (b) the Court and the appellants to know in advance of trial what the respondents’ response is.
- The resultant pleading, for which permission was sought, is unworkable. Particulars of Claim must include a concise statement of the facts on which the claimant relies: CPR 16.4. (1) (a). But they need not, and should not, contain the evidence by which they are to be proved or the opposing party’s pleadings or admissions. Whilst it may be appropriate in some circumstances to rely, as proof of dishonesty, on the fact that the defendant’s account of his position requires explanation and that he has given several different accounts, all unacceptable, this can and should be done in a concise way, referring to documents (but not necessarily quoting in extenso) which makes clear what is the issue. The pleading cannot be used as the first draft of an opening or a delineation of points for cross examination.
- In the present case the form and content of the proposed amendment is wholly disproportionate. It will not assist the judge in understanding the gist of the case. The inevitable request for further and better information and the response thereto, no doubt after yet another interlocutory battle, would exacerbate the position. A re-re-amended defence would, in all probability, be inordinately long and involve setting out the respondents’ disagreement with the appellant’s summaries of the respondents’ position, arguments about the context in which things were said or what was meant by them, and the addition of qualifying or supplementary material of the same kind as is referred to in the proposed new Particulars of Claim. The resultant combination of Particulars of Claim and of Defence, with accompanying particulars, would be unmanageable.
- Pleadings are intended to help the Court and the parties. In recent years practitioners have, on occasion, lost sight of that aim. Documents are drafted of interminable length and diffuseness and conspicuous lack of precision, which are often destined never to be referred to at the trial, absent some dispute as to whether a claim or defence is open to a party, being overtaken by the opening submissions. It is time, in this field, to get back to basics.
THE JUDGMENT BELOW
The judgment at first instance has been considered on this blog before.
- The Mitchell criteria and amending pleadings a new case to consider.
- The judgment at first instance is available on Bailli
OBSERVATIONS ON THE PROPOSED AMENDED PLEADING MADE BY THE JUDGE AT FIRST INSTANCE
The Court of Appeal adopted many, if not all, of Judge Behren’s criticisms of the proposed amended Particulars of Claim. It is worthwhile reading the paragraphs of the judgment at first instance specifically referred to in the judgment of HH Judge Behrens.
“10 The Style of the Pleading
- Under CPR 16.4 the Particulars of Claim must include a concise statement of the facts on which the Claimant relies. In McPhilemy v Times Newspapers  3 All ER 775 Lord Woolf MR, commented, at 793:
“The need for extensive pleadings including particulars should be reduced by the requirement that witness statements are now exchanged. In the majority of proceedings identification of the documents upon which a party relies, together with copies of that party’s witness statements, will make the detail of the nature of the case the other side has to meet obvious. This reduces the need for particulars in order to avoid being taken by surprise. This does not mean that pleadings are now superfluous. Pleadings are still required to mark out the parameters of the case that is being advanced by each party. In particular they are still critical to identify the issues and the extent of the dispute between the parties. What is important is that the pleadings should make clear the general nature of the case of the pleader. This is true both under the old rules and the new rules….As well as their expense, excessive particulars can achieve directly the opposite result from that which is intended. They can obscure the issues rather than providing clarification.”
- McPhilemy was followed in Mahon v Rahn  1 WLR 2150 at  where the Court of Appeal said that “under the CPR prolix pleadings are no longer encouraged”. Furthermore in Barnes v Handf Acceptance  EWHC 1095 (Ch) Peter Smith J quoted with approval at  the words of Fulford J:
“These amended proposed particulars of claim may be shorter, but they are nonetheless extraordinary in their discursive formulation and they reveal an idiosyncratic and wholly unhelpful structure. In essence they are so prolix, detailed and confusing in the way they are developed that the burden imposed on the respondents and the court in dealing with them would be wholly unreasonable. The length[y] process of unravelling, understanding, answering and adjudicating on them would defeat the overriding objective and would constitute an abuse of the process of the court. This proposed pleading would not allow the case to be dealt with expeditiously and fairly.
Hart J. indicated to the applicant that any proposed amendment should contain a concise statement of the facts on which he seeks to rely. These proposed amended particulars of claim do not begin to comply with such a clear and readily achievable indication. Further, this document does not in any sense lend itself to division between permissible and impermissible paragraphs. It would have been impossible for the learned Judge to dissect these proposed pleadings, allowing certain amendments while disallowing others.”
“a rambling, narrative pleading which copiously and comprehensively misstates Ds’ position, in material respects, and then seeks to draw conclusions by a false syllogism from false premises”.
- To my mind there is force in the criticisms. There are numerous places in the pleading where HPL seeks to set out what it contends is Martin’s position or cites what are said to be admissions by Martin or Jean Angela. [See for example paragraphs 12(6), 13(1), 16(2), 16(3), 16(4), 16(5), 17(a), 17(b), 19(3), 19(4), 19(5), 24, 26(1), 28(1)(i), 28(4)(i) and (ii), 31(1), 32(2), 33(1), 33(2), 33(6), 33(8)(b), 37(1), 38(1), 39(1), 49, 54(1), 55(2), 57(1),57(4), 58(3)(i), 60(3), 61(3), 61(4), 67(1) and (2), 68(1) and (2),70(1), 72, 73, 74, 76, 77, 80(1), 83(1), and 84(1)].
- In my view these assertions are not a concise statement of the facts relied on by HPL. They do not clarify the issues between the parties. They are in reality submissions (or matters for cross-examination) as to why the Court should accept HPL’s case on various issues or disbelieve Martin and Jean Angela.
- I also accept Mr Pipe and Miss Griffin’s submission (paragraph 2 of the joint written submissions) that the consideration of these allegations has involved the Defendants in a
“trawl through the historic claims between the parties and their privies, including disclosure, transcripts, pleadings and witness statements in order to understand and to get a measure of C’s extensive (mis)statement of what has happened and what has been said upon which the proposed amendments are founded and said to be justified.”
- When I put this to Mr Parker QC in the course of his submissions he submitted that the matters that were included were “primary facts” and that it was necessary to include them in the pleading so as to force Martin and Jean Angela to answer them in a Re-Re-Amended Defence. This was necessary because of the changes of position taken up by Martin and that it was necessary to know what his position is. He also made the point that he was seeking alternative relief that needed to be in the Particulars of Claim.
- I do not accept Mr Parker QC’s submission. In my view the matters are not “primary facts”. I do not accept that it is either appropriate or proportionate to include them in the Particulars of Claim (with the possible exception of a concise statement of the facts on which the alternative relief is claimed). I agree with Mr Pipe that it will be difficult for Martin and/or Jean Angela to plead to them. Furthermore I think it will tend to obscure rather than clarify the issues in the case.”