In Clarkson v Future Resources FZE & Ors [2022] EWCA Civ 230 the Court of Appeal upheld a judge’s decision not to allow the defendants permission to withdraw an admission.  It is an important reminder of the quality of the information needed when a party applies to withdraw from an admissions, further the judgment emphasises the importance of the statement of truth. A party who signs a statement of truth needs to explain why the document was not correct.

“… it is fundamental to an application of this kind that the judge is given a full and frank explanation of how things have gone wrong, and the basis on which the admission is to be withdrawn.  This should include how the admission came to be made in the first place and the grounds upon which the applicant seeks to withdraw the admission, including whether or not new evidence has come to light which was not available at the time of the admission.”


The action was a dispute in relation to funds used to purchase property, and the subsequent litigation. The claimant asserted that some of the defendants had received sums that had been advanced. This receipt was initially admitted in the defence. The defendants then sought to amend the defence to put receipt of the sums in issue. The judge refused the defendants’ application to withdraw. The defendants appealed to the Court of Appeal. That part of the appeal was unsuccessful.


The Court of Appeal noted that no evidence had been put in to support the application to withdraw from admissions. The defendants relied on one letter that, it was said, the judge had overlooked. However that letter raised more questions than it answered and did not provide the material that was necessary to support the application.

31.The application to withdraw the admissions arose in the following way.  Particulars of Claim were served on 12 July 2019 in the London proceedings, and were amended on 7 October 2019.  The relevant part of the Amended Particulars of Claim alleged (at paragraph 22) that Richard Luxmore procured certain payments from FundingSecure’s client account and (among other things) that sums totalling about £4m were wrongly dissipated by means of “Category 2 Advances” to Mr Clarkson and/or his associates.  The particulars at paragraph 22.4 included allegations at sub-paragraphs 4 and 7 that: (4) £124,000 was advanced to Colin Boswell; and (7) £860,000 was advanced to John Unsworth.
32. The Defence of the MC defendants, originally pleaded by Neil Berragan of counsel, and the subsequent Amended Defence pleaded by Stephen Cogley QC, responded to the allegations made by Asertis, including those particular allegations as follows:
“26. As to the Particulars under paragraph 22.4:
(1) The MC Defendants admit receiving loans of £3,840,380, but dispute payments identified on annotated Annex 2A totalling £529,104.48.
(2) …
(3) …
(4) It is admitted that the MC Defendants are liable for a payment of £124,000 to CB via his solicitors. …
(7) It is admitted that the MC Defendants are liable to repay £860,000 paid to JU at his order by way of loan. …”
Although substantial amendments were made to parts of the pleaded Defence in the Amended Defence, no amendments were made to the paragraphs just quoted.  By paragraph 26(4) and (7) the two relevant MC defendants admitted liability for £984,000.
33. Mr Clarkson and each of the MC defendants (including in particular, Mr Boswell and Mr Unsworth) signed a “Statement of Truth” dated 18 October 2019, in each case stating, “I believe that the facts stated in this Defence are true”.  In the Statement of Truth to the Amended Defence, signed and dated 19 May 2020, by Mr Clarkson, John Unsworth and Colin Boswell, in addition to confirming that the facts stated in the Amended Defence were true, they each stated: “I understand that proceedings for contempt of court may be brought against anyone who makes, or causes to be made, a false statement in a document verified by a statement of truth without an honest belief in its truth.”
34.Asertis applied for summary judgment on 2 October 2020 pursuant to CPR 14.3 against Mr Clarkson and the MC defendants in the London proceedings, among other things based on the admissions made at sub-paragraphs (4) and (7) as set out above.  The application was supported by a witness statement (also dated 2 October from Mr Simon Brew of TWM Solicitors LLP, the solicitors acting for Asertis).  This referred expressly to the admission of liability for £984,000 in paragraphs 26(4) and (7).  There was no immediate response from Mr Clarkson and/or the MC defendants to this application, and no prompt (or indeed, any) contention that the admissions had been made in error.
35. Instead, more than three months later, Taylors wrote to TWM Solicitors by letter dated 22 January 2021 stating that they had noticed a “small number of minor errors in the Amended Defence”.  They enclosed a Re-Amended Defence and requested consent to various amendments including an amendment to correct the admissions at paragraphs 26(4) and (7) to reflect that Mr Clarkson alone was liable for these two payments.  Consent was not given.  By an application notice dated 26 January made by Taylors under CPR 17(2)(b), permission to serve a Re-Amended Defence was sought.  The application was not supported by any evidence but asserted within the body of the notice that, “The amendments are confined to the correction of errors, together with the clarification of the admissions” made by various defendants including Mr Boswell and Mr Unsworth.  No explanation was given as to how or why the admissions were made, and how or why they were now regarded as made in error.
36. By letter dated 3 February 2021, (the letter relied on as providing the necessary full and frank explanation) Taylors acknowledged that the withdrawal of an admission is governed by CPR PD 14 paragraph 7.2 (though no application had been made under CPR 14.1 (5)) and continued:
“You are aware (indeed have laboured the point) that the factual issues relating to the various … loans are very complex.  An error was made by previous Counsel in drafting the two sub-paragraphs concerned which regrettably was not picked up at the time the pleading was approved by each of our clients
The case is a long way from trial (assuming the summary judgment application is not successful) and there is little or no prejudice to the Claimant if the re-amendments are allowed, whereas (conversely) the degree of prejudice to the affected Defendants will be substantial.
In the circumstances we consider the balance of prejudice clearly favours the re-amendments being permitted and invite your client to reconsider its position to avoid argument on the point.”
37. No witness or other evidence in support of this application was supplied to the judge before or at the hearing on 8 February 2021.  This is notwithstanding that witness statements were served by the MC defendants in the days before that hearing, but addressed to other unrelated matters.
38. The judge dealt with the question whether or not to allow withdrawal of certain admissions at [133] and [134] of his judgment as follows:
“133. To withdraw an admission made after the commencement of proceedings, a party requires permission pursuant to CPR 14.1(5).  In deciding whether to give permission for an admission to be withdrawn, the court is required by Practice Direction 14, paragraph 7.2 to have regard to all the circumstances of the case, including the matters identified in that paragraph.  The ground upon which the applicant seeks to withdraw the admission is an important consideration.  As stated by Steel J in American Reliable Insurance Company v CAN Insurance Company [2008] EWHC (Comm) at [17]-[18], “…  the court is entitled … to receive a fairly full and frank explanation of how things went wrong, or at least appear to have gone wrong, namely to identify the basis upon which the background to the admission is to be withdrawn, the reason for it, how it came about that the admission was made in the first place, and so on”.
134. Mr Buck submits that the apparent position of the MC Defendants, that the court should simply wave through the withdrawal of formal admissions of liability of a total value just short of £1 million, without an application (or any explanation) is remarkable.  No formal application for permission to withdraw the admissions has been made, and, in the absence of such, the application must fail.  There is no witness statement in support of the application to amend and there is no witness evidence to support the withdrawal of the admissions.  Mr Buck made the point that, apart from Mr Clarkson himself, the MC Defendants have filed no evidence at all.  There is no proper basis upon which the admissions can be withdrawn and thus no basis upon which these two re-amendments should be allowed.  I accept those submissions.  I will not give permission in the absence of any explanation for the withdrawal of these admissions.”
39. Mr Bowles challenged this decision, contending that the judge should have permitted the withdrawal.  He submitted that the judge was misled and fell into error by overlooking the letter dated 3 February 2021 from Taylors to the solicitors acting for Asertis, stating that the admissions were made because of an error by counsel previously instructed.  This explanation, which could not be amplified without waiving privilege, was inherently credible.  However, the judge was led to believe that no explanation of any sort had ever been offered, as the last sentence of [134] of his judgment shows.
40. In Mr Bowles’ submission, had the judge considered the letter of 3 February 2021, he would have been bound to conclude that it provided a frank and credible explanation.  The admissions were made by mistake.  He would then have had to consider factors including the balance of prejudice to each side.  While accepting that there was some prejudice to Asertis if the admissions were withdrawn, it was outweighed by the prejudice to the MC defendants in question.  Further, the MC defendants have a valid defence to these claims: they contend that only Mr Clarkson is liable for the sums in question.  This is important because Mr Clarkson has a set-off and judgment would not have been entered against Mr Clarkson for these sums.
41. I do not accept that the judge made any error or was wrong to refuse the withdrawal of admissions in this case.  My reasons follow.
42. The withdrawal of an admission of liability to pay part of a claim for a specified amount of money is governed by CPR 14.1(5): the permission of the court is required to amend or withdraw an admission.  The court has a wide discretion to allow withdrawal, and the Practice Direction lists specific factors that must be considered at CPR PD14 paragraph 7.2:
“7.2 In deciding whether to give permission for an admission to be withdrawn, the court will have regard to all the circumstances of the case, including –
(a) the grounds upon which the applicant seeks to withdraw the admission including whether or not new evidence has come to light which was not available at the time the admission was made;
(b) the conduct of the parties, including any conduct which led the party making the admission to do so;
(c) the prejudice that may be caused to any person if the admission is withdrawn;
(d) the prejudice that may be caused to any person if the application is refused;
(e) the stage in the proceedings at which the application to withdraw is made, in particular in relation to the date or period fixed for trial;
(f) the prospects of success (if the admission is withdrawn) of the claim or part of the claim in relation to which the admission was made; and
(g) the interests of the administration of justice.”
43.These are all factors to be considered in accordance with the overriding objective, and no single factor carries greater weight than any other: see Woodland v Stopford [2011] EWCA Civ 226 at [26].  The weight to be attached to each factor will inevitably vary according to the particular circumstances of the case.
44. Given the judge’s reference to the “absence of any explanation” (emphasis added) at [134] of his judgment, I proceed on the basis that the letter of 3 February 2021 was not considered by him at all.  The question for this court in those circumstances is whether the judge was wrong on the material available, including the letter of 3 February, to refuse to permit the withdrawal.
45. Leaving aside the absence of an application under CPR 14.1(5), it is fundamental to an application of this kind that the judge is given a full and frank explanation of how things have gone wrong, and the basis on which the admission is to be withdrawn.  This should include how the admission came to be made in the first place and the grounds upon which the applicant seeks to withdraw the admission, including whether or not new evidence has come to light which was not available at the time of the admission.
46. The letter of 3 February simply did not begin to provide the full and frank explanation required.  Indeed it begged more questions than it answered.  The bare assertion that an error was made by previous counsel and was not picked up, did not begin to explain how the pleading came to be amended by subsequently instructed leading counsel without the error being identified, either by him or by Taylors.  The pleading was verified twice, by each affected defendant, by a signed Statement of Truth (coupled with a contempt warning on the second occasion), but nothing was said to explain how this occurred without the error coming to light.
47. The signing of a statement of truth is no empty formality.  Its importance is emphasised by the potential liability for contempt of court if signed without an honest belief in its truth.  At interlocutory stages a statement of case, verified by a statement of truth, is itself evidence of the truth of the facts alleged in it: CPR Part 36 (2) (a).  It therefore carries considerable weight.  Conversely, the letter of 3 February carried no such weight.  Furthermore, the fact that none of the affected MC defendants responded promptly (or at all) to the Asertis application for summary judgment on the admissions they had made, was never explained.  If an error was made, it is inconceivable that this application did not alert the MC defendants to it.  They had months to file witness evidence (verified by a signed statement of truth) but failed to do so.
48. Finally, there was nothing to explain the grounds upon which the withdrawal of the admissions was sought; the MC defendants (including Mr Boswell and Mr Unsworth) had admitted receiving the relevant funds, and they did not apply for permission to withdraw those admissions.  Having admitted receipt of those funds, there was no explanation why they were not liable to repay them.  The judge would have been entitled to understand the positive case being advanced by the MC defendants, who had admitted liability for almost £1m; but no explanation was ever provided. 
49. For all these reasons, I have no doubt that the judge was correct to reject this application for the reasons he gave, and I would therefore dismiss this ground of appeal.