Analysis
The claimant, Mr Brudenell-Bruce Earl of Cardigan brought a claim for breach of trust against two trustees of the Savernake Estate trust of which he is a beneficiary.
Mr Moore is a lay trustee of the trust. Mr Cotton is a professional trustee and an accountant. No claim was brought against the third trustee Mr Ford.
On 14 November 2013 the claimant applied for permission to amend his particulars of claim. A draft of the proposed re-amendments was supplied to all parties on 1 October 2013. The second defendant replied to the draft stating that he was minded to agree to the amendments subject to a number of points. No outright objection was taken to any of the amendments and indeed the second defendant stated that he wished to amend his own defence and he had not requested further particulars of the claimant’s existing pleadings.
The trial was listed for five days starting on 9 December 2013. There were also separate Part 8 proceedings for court approval of a sale by the trustees of a property, Tottenham House. Contracts had already been exchanged subject to the approval of the court.
Some amendments were agreed.
The first amendment considered by the court related to Tottenham House and the claimant wanted the sale price disclosed. The second defendant objected to disclosing the sale price on the basis this was confidential.
The second amendment related to a paragraph in the claim stating that costs had not been controlled and therefore the trust had lost money.
The third amendment related to the costs of management which indicated irresponsibility on the part of the trustees. The second defendant objected to the amendment as there was an overlap with another paragraph of the pleading that alleged that their remuneration was too high and it was too late to get an expert report and therefore this jeopardised the trial date.
The fourth amendment contained five subparagraphs each alleging that the defendants failed to derive income from particular assets. The second defendant objected that each of these claims was a new claim; it did not arise from disclosure; expert evidence would be needed and it would prejudice the second defendant as supplementary evidence and extra work would be needed to deal with it.
The fifth amendment alleged that the second defendant ‘made a number of false or misleading statements, each of whom he knew or ought to have known to be false or at least misleading’. The first statement related to the mortgageable value of estate properties as the defendant used valuations in the trust accounts much higher than in the alleged statement. The second defendant objected as the particulars of the alleged knowledge of falsity were not provided. The claimant responded that it was clear that the defendant’s knowledge of falsity was allegedly based on values in the accounts that the trustees themselves used. There were then numerous other statements alleging fraud.
The sixth amendment related to damage to a stable block and stated that the repairs cost £2.375m. The second defendant objected that a claim for removal of trustees had been elevated to a large claim for compensation and expert evidence would be needed which would lead to the vacation of the trial date. The existing pleadings include a prayer for compensation for breach of trust to be ‘specified after full disclosure’.
The seventh amendment related to trustee remuneration including that the charges were too high for Tottenham House but did not detail the acts or omissions that led to this and that the second defendant charged too much for defending a previous claim by the claimant. Itemised bills had been delivered by the defendant.
Held (allowing some amendments):
- 1) Applications for leave to amend proceedings must be dealt with by reference to the overriding objective of dealing with the case having regard to the specific factors set out in CPR rule 1.
- 2) The courts have become increasingly reluctant to grant late amendments particularly when they are sought close to, or at, trial. It is an important factor whether the amendment will put the parties on an unequal footing or will place or add an excessive burden to the respondent’s task of preparing for trial so as to jeopardise the trial date.
- 3) The first amendment is allowed with a direction that the sale price must not be disclosed orally at the hearing.
- 4) The trust accounts have been disclosed and the net loss or profit is a matter of fact and there is no need for this evidence to be pleaded. Therefore the second amendment can not be allowed.
- 5) The third amendment is allowed as any compensation claimed under this paragraph would have to give credit for any excessive remuneration which was found to refundable pursuant to allegations elsewhere in the particulars.
- 6) The fourth amendment is allowed. The allegations are strictly new albeit foreshadowed in very general terms in the existing pleading. They must have arisen from disclosure; however, certain information relating to them became available on disclosure. The defendant has had sight of these allegations for six weeks and had not previously sought particulars of the existing very general allegations. Allowing the amendment would give the defendant something concrete to shoot at.
- 7) The fifth amendment in relation to the mortgageable value details an allegation that has been around since the original pleading with no request to elaborate. The source of the alleged knowledge of falsity can be deduced from what is said in the subparagraph. The amendment is allowed on condition that full and proper particulars of the alleged knowledge of falsity are provided by the claimant.
- 8) No other statements in relation to the fifth amendment are allowed – the allegations are not detailed in the existing pleadings, nor are elaboration of anything contained in the pleading, no attempt is made to particularise any source of the alleged knowledge of falsity. Some related to previous proceedings which were not challenged by the claimant during those proceedings.
- 9) The sixth amendment should be allowed even if it means the vacation of the trial date.
- 10) Some of the seventh amendment is disallowed as the claimant should have made a claim about the defendant’s costs in the previous proceedings and to do so now is an abuse of process. Where itemised bills have been produced the claimant must give proper particulars of the allegations in question.
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