Bourke & Anor v Favre & Anor

I preface this judgment by saying first that it is given while I am sitting in the Applications Court and is necessarily neither polished nor lengthy. I do however consider it important to give the judgment as soon as possible. Second I will refer, as counsel did, to the parties by their first names, without of course intending any disrespect.

This is an application to amend the particulars of claim. The background to the case and the facts are well known to the parties and it is not necessary for me to set them out in any great detail. Very briefly, the action concerns a landed estate in Chettle in Dorset, consisting of a principal house known as Chettle House, and various other houses and cottages and farm land and the like. In 1966 the estate was owned by Esther Bourke in part absolutely, in part in reversion contingently on the death of her brother without issue, which in the event happened. After apparently she had been diagnosed with terminal cancer, Esther gave the estate, other than Chettle House, to her daughter Susan, the first defendant, Susan being persuaded to marry so as to enable the gift to be given in consideration of that marriage and thereby avoid estate duty. Susan was the eldest of Esther's three children, the others being Patrick, the first claimant, and Edward or Teddy, who has since died, but his widow Barbara is the second defendant. Peter, the second claimant, is Patrick's son, and Fiona, the proposed third claimant, is Peter's wife.

The existing claims are two-fold. One is the claim based on the terms of a supposed oral agreement made by Susan, Edward and Patrick with Esther in 1966 at the time of the gift of the estate by Esther to Susan. The other is Patrick's claim for adverse possession of Home Farm. The proposed new claims are, firstly, an alternative claim based upon proprietary estoppel, and, secondly, three new adverse possession claims, one by Patrick to a copse, the other two by Peter and Fiona (a) to various parcels said to form part of the curtilage of Chettle House, namely the North and South Rookeries and the Tennis Court, and (b) to the vegetable garden.

I was referred to a number of well-known cases for a statement of the relevant principles, namely the decision of the Court of Appeal in Worldwide Corporation v. GPT Ltd. [1998] EWCA (Civ) 1894, the decision of the Court of Appeal in Swain Mason v. Mills & Reeve LLP [2011] 1 WLR 2735, and the decision of Hamblen J in Brown v. InnovatorOne plc [2011] EWHC 3221 (Comm). In Brown's case at paras.5 to 13 there is a statement of the principles by Hamblen J drawn from the other two Court of Appeal cases and various other cases, which strikes me as an admirable, accurate and succinct statement of the principles. I will not read it all out but those paragraphs are to be regarded as incorporated in my judgment as principles guiding me. I was also referred to a subsequent Court of Appeal decision, Hague Plant Ltd. v. Hague & Ors. [2014] EWCA (Civ) 1609 for a discussion in the judgment of Briggs LJ of what is for these purposes to be regarded as a late amendment: see paras.31 to 34. Again, I am not going to read out those paragraphs but they are to be regarded also as incorporated in my judgment. Mrs. Talbot Rice QC, who appeared for the defendants, sought to persuade me on the basis of what Briggs LJ there said, that whenever the trial date has been fixed and the amendment posits a risk to the trial date, it counts as a "very late" amendment as opposed to a simply “late” amendment. Put like that, I do not accept the proposition. That seems to me far too mechanical a view of the judgment, which is not to be read like a statute. Worldwide and Swain Mason were clearly cases of very late amendments being made either during the course of a trial or very shortly before it. The current application is not as late as that, but it is, on any view, a late application and, as Briggs LJ says, this is a factor of almost infinitely variable weight. I do accept that in any case where an amendment poses a risk of the loss of a trial date which has been fixed, that is a significant factor to put into the scale.

In para.14 of Brown v. InnovatorOne, Hamblen J lists four factors which are likely to be included in the relevant factors in any case as follows: (1) the history as regards the amendment and the explanation as to why it is being 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. I will take each of those four factors in turn.

So far as the history is concerned, I agree with Mrs. Talbot Rice that the history of these amendments shows that they were made later than they really should have been. The dates are well known to the parties but, very briefly and dealing first with the proprietary estoppel claim, the claim as issued confined this aspect of the case to the contractual claim. Even before issue, one might have thought that such a claim faced some fairly predictable hurdles. First, the Court would be asked to find that an oral agreement had been made in 1966, almost 50 years ago, and one that went beyond a purely informal and non-binding understanding or agreement between members of the same family, but was intended to be fully legally binding. Second, there was a predictable defence based on section 40 of the Law of Property Act 1925. One might have thought in those circumstances that the claimants before issuing proceedings would have given consideration as to whether they needed or had any alternative ways of putting that claim. It is not irrelevant that Peter himself, I am told, is a partner in a firm of solicitors and specialises in property disputes.

The proceedings were issued in November 2013. A defence was served in January 2014. That indeed made it clear that the defendants' case was, firstly, that the land was given to Susan absolutely with no terms attached, the defence referring to advice from counsel having been given to Esther before executing the conveyance containing the gift, that whoever was given the land in consideration of marriage once they married could dispose of the land in whatever manner they saw fit. The defence also relied on a lack of consideration and on section 40 and, for good measure, section 53 of the Law of Property Act. The service of the defence of course gave the claimants a second opportunity to consider the strengths of their pleaded case and whether they ought to think about any alternative claims. Indeed, the service of the defence led to the service of a reply in April 2014, by which time the trial window had been fixed for March 2015.

The first indication of a proposal to amend did not come until September 2014. That was said to be prompted by the drafting of the witness statements. No indication was given to the defendants at that stage of the nature of the proposed amendment, the only statement being "We would mention that our clients will be applying for permission to amend the claim". The defendants' solicitors, on 29^th September, invited the claimants to send a finished draft of the amended pleading or, at the very least, full particulars of the proposed amendment, and suggested that pleadings should come before the exchange of witness statements because otherwise further evidence would be required which would cause unnecessary and avoidable expense. That was followed up by a further letter on 3^rd October saying:

The response, on 6^th October, from the claimants' solicitors referred to a letter of 18^th November 1966, which was said to be very significant. It said:

I have seen the letter of 18^th November 1966. No doubt several points may be made on it but, among other things, it does apparently refer to advice that had been given by counsel emphasising that there must be no strings attached to the conveyance by way of settlement upon marriage, that being apparently for Revenue reasons. The writer of the letter indicated:

Again, however, it seems to me that receipt of that letter on disclosure gave the claimants an opportunity to consider whether, in the light of it, they wanted or needed to plead any alternative case. Had that been done in October, it would have enabled the witness statements to address both the existing and the new cases, and it could not realistically have been suggested that there was not time to do that before the trial. As it is, the suggestion of waiting to see the defendants' evidence before deciding whether to seek an amendment is not, I think, a good reason for not putting forward details of the case in October when they were asked to do so. In fact the witness statements were exchanged in early November but the amendments were not brought forward until 2^nd December.

I think in the circumstances that the application can properly be characterised as late, and I have not found the explanation for putting it off from when it was first suggested in September until early December an adequate one. Mrs. Talbot Rice says that the claimants made a conscious decision to only plead a contractual claim in the first instance, and then not to amend until after receipt of the witness statements, and she invited me to characterise that as an abuse of the process of the court. I do not go so far as to characterise it as an abuse, but I do regard it as misguided. Once the necessity to amend has become apparent, a party really ought to tell the other side not only of their intention to amend but, at least in outline, of what the amendment consists, so that the opposing party has sufficient advance notice in order to enable him or her to give consideration whether to oppose or consent to such an amendment. The desire to see the other side's witness statements before amending is not, I think, a good reason for holding back on a proposed amendment. The purpose of pleading is to identify the issues so that disclosure and witness statements can be focused appropriately. It is putting the cart before the horse to wait until you have seen what the other side says before deciding whether or not to pursue an amendment. So much for the history.

The second issue is the prejudice to the claimants. I can deal with this quite shortly. So far as the proprietary estoppel claim is concerned, the effect of refusing it will be likely to preclude the claimants from relying on any claim under the 1966 arrangements other than the contractual claim currently pleaded. The defendants have made it clear that they would resist any attempt, if that claim failed, to bring a second action based on proprietary estoppel on Henderson v. Henderson (1843) 3 Hare 100 grounds. Mr. Pearce QC, who appeared for the claimants, realistically accepted that, at the lowest, there is a significant risk of that, and both parties invited me to proceed on the assumption that if the amendment was not allowed a proprietary estoppel claim would be barred in future. I agree that there is at least a significant risk of that happening, as this seems to me to be a classic Henderson v. Henderson case. The prejudice to the claimants therefore in refusing the amendment is that it would be likely to prevent them from running a case which might be their only possibility of succeeding. Mrs. Talbot Rice does not ask me to form any view of the merits of the proprietary estoppel claim, so I must assume that there may be a viable way of putting the case in proprietary estoppel, and if the claimants are not allowed to plead this claim, they may be losing something of value and their only opportunity of winning this action.

Prejudice to the defendants. This is more difficult to judge. Susan's witness statement, which I have read the whole of, was not confined to what happened in 1966, but does go on to give an account of her intentions and attitude to the future of the estate from time to time. Mr. Pearce says that she has therefore already largely covered the areas of enquiry which are covered by the new case. Although he accepts that some further evidence will be required, he says it would be perfectly possible to get ready in time. Mrs. Talbot Rice, however, told me that although she had no instructions to this effect, she would feel compelled to ask for an adjournment if the amendment was allowed, on the basis that there was not enough time to do the work between now and the trial, which is now due in a window starting 9^th March.

I start from the fact that this amendment is not a refinement or modification of the existing claim but is indeed, in my judgment, a wholly new case. Peter in his witness statement in support of the application describes it as arising out of the same facts as the existing case, but I reject this. The facts in issue on the existing case are whether Susan made a legally-binding promise in 1966 as a condition of receiving the estate from her mother. That necessarily focuses the enquiry of the entire trial, at any rate so far as this aspect is concerned, on what took place in 1966. Any evidence that is adduced subsequent to that date is merely adduced for the light it may shed on what took place then. The new claim is based on representations. One representation is said to be by entering into the 1966 agreement - I say nothing as to whether that case can succeed if the 1966 agreement was not legally binding; I can see certain difficulties with it - but to require the parties to look at the 1966 agreement as constituting a representation if not a legally binding contract would not by itself add very much to the trial. Beyond that, however, the amendment seeks to introduce numerous subsequent representations, indeed said to be too numerous to particularise, and in particular in Schedule 1 of the proposed amended particulars of claim, 10 specific matters are listed dating from 1984, 1991, 1992, 1993, 1994, 1995, 2000, 2001, 2002, 2005 and unspecified dates between 2002 and 2011. It is true that some of these events, although not I think all of them, are already touched on in Susan's witness statement, but Susan's witness statement does not of course address the question of whether she made the representations alleged. I accept in these circumstances that the new case is not essentially based on the same facts but is based on very different facts. It will require, in effect, a very careful revision of the whole witness statement and a review of the whole history from 1966 (or at least 1984) to 2012 in the light of the new allegations.

Mr. Pearce said that Susan has already given evidence that until recently she saw Peter as the natural person to inherit, but this to my mind rather illustrates the disadvantages and difficulties for the defendants in introducing a new case of this type at this stage, and why any further evidence will have to be prepared with considerable care. It is one thing to say that Susan thought of Peter as the most appropriate person in due course to inherit the estate; it is, as Mrs. Talbot Rice submitted, and as I accept, a subtly but importantly different thing to consider whether any statements she made to that effect had any legal effect such as to give rise to an estoppel. There is, to my mind, a real difference between an owner of land saying she intends to leave land to X, a statement which prima facie leaves her free at any time to change her mind, and an owner of land making statements in circumstances that preclude her from going back on it. This makes the precise words used, insofar as it is now possible to reconstruct them, and the precise context in which things were said or not said, of extreme importance and to be looked at very closely.

I accept therefore that there is a very significant change to the preparation for trial that will be required for the new case from the existing case, and that considerable work will be required to revisit the history of Susan's intentions and the history of Susan's statements over a long period, viewing her evidence now not from the point of view of whether it helps to assist with whether there was a binding agreement made in 1966, a relatively simple question to ask and to answer, but against wholly new allegations of representations extending over a very long period. I accept Mrs. Talbot Rice's characterisation of that as a wholly new case and one that involves a significant amount of work.

Does it necessitate an adjournment? I am left in some doubt whether an adjournment is really necessary. Withers is a large firm and at first blush one might think that even revisiting Susan's witness statement with some care would not be beyond it in the time available. On the other hand, Mrs. Talbot Rice tells me that she would feel compelled to ask for an adjournment, and one does not lightly dismiss a submission from responsible leading counsel of that nature. She inevitably will have a much better idea than the Court can of the practicalities involved. I conclude that although it is not obvious to me that an adjournment will really be required, there is a real and not fanciful risk of this. If an adjournment were necessary, it would inevitably cause significant prejudice to the defendants. Susan is already in her 80s, and the judgment of the Court of Appeal in Worldwide seems to me to be precisely on point. I can take it from Hamblen J's judgment, where he refers to what Waller LJ says in the case of Worldwide:

But even if an adjournment is not required, I accept that there will be prejudice to the defendants. To permit the amendment to run the new case will require considerable work between now and trial, and by this stage the defendants ought to know what the issues are to be tried, what documents are available for that purpose, and what the witness evidence is. To require the defendants to prepare a wholly new case at the same time as to get the existing case in final shape for trial is inevitably going to cause prejudice. It puts significant pressure on the defendants and at the same time it does not put a corresponding pressure on the claimants who have already prepared their evidence with this claim in mind.

There are two aspects to this. First, the time available to the defendants to prepare the new case is very compressed but, as I say, the claimants are not put under the same time pressure because they have known about this proposed amendment since September. Mr. Pearce says that if the defendants had started preparation on 2^nd December when they were first told of this application, they could have easily dealt with it in time, but this is not a complete answer. A party who makes a late amendment must anticipate that it may be opposed, and I do not see that the defendants have acted unreasonably in waiting to see if the application is granted before starting work on a wholly new case.

The second aspect of it, which is an unusual one, is that the claimants have prepared their evidence knowing what their whole case was, whereas the defendants have prepared their evidence for one case and then find they have to reconsider their evidence for a quite different second case. To some extent the claimants rely on what Susan has already said at a time when they knew, but she did not, that they were considering a claim based on proprietary estoppel and based on representations made by her throughout the period. Although I have accepted that this was not a conscious abuse of process, it does strike me as prima facie unfair, and the sort of unfairness that cannot readily be compensated for in costs. It creates an unlevel playing field. The modern approach in litigation is to require parties to be open, above board and cooperative. For the claimants to prepare their own evidence knowing that they might very well seek to amend to plead a proprietary estoppel claim but not telling the defendants that that was what they were going to do until after they had seen the evidence that the defendants had already prepared, strikes me as contrary to these principles.

Fourthly, clarity and particularity. Ms. Talbot Rice complains that there is a lack of clarity and particularity in the pleading, and the defendants have served a lengthy schedule of so-called defects in the pleadings. I do not have the time or the inclination to go through them one by one. I agree that some of them are over-stated. For example, I do not regard it as necessary when pleading an adverse possession claim to plead specifically that one has an intention to possess. But there is undoubtedly some substance to the criticisms, for example, where the new pleading seeks to plead Susan's knowledge of certain things, no particulars are given. Mr. Pearce says that it is not a requirement of the rules to plead particulars of knowledge. That may very well be so, but that does not quite adequately answer the point. If knowledge is pleaded, it is common for the other party to seek further information and to seek particulars of that allegation. What Hamblen J says in para.14 is:

Having gone through those four questions, I now ask whether the proprietary estoppel claim should be permitted. In my judgment, the answer is no. In circumstances where the amendment is made late; where no good explanation has been given for so late an amendment; where to permit the amendment might force the defendants to ask for an adjournment but where, even if it does not, it would require a significant amount of extra work and would put the defendants at the disadvantage that I have referred to, as compared to the claimants - a disadvantage entirely down, it seems to me, to the claimants' decision not to apply to amend before exchange of witness statements - it is, in my judgment, more consistent with the overriding objective to refuse the amendment. This may indeed cause prejudice to the claimants but, if so, they only really have themselves to blame.

So far as the new adverse possession claims are concerned, this seems to me to be rather simpler. I take the view that it is very unlikely that those claims would be caught by the principle of Henderson v. Henderson. No current claim to adverse possession of any part of the curtilage of Chettle House is engaged in these proceedings; indeed Fiona is not currently a party to the claim. In these circumstances, refusing leave to amend would, as it seems to me, allow those claims to be pursued in a second action. The same is probably true of the claim to the copse where, again, the basis of claim is rather different to the existing claim to Home Farm, and I do not think it can be said that these claims properly belong to the subject of litigation within the principle of Henderson v. Henderson. I am of the clear view that the claims, if not permitted to be brought in this action, would be able to be brought in a second action.

That being so, the only prejudice to the claimants of not being able to pursue the claims in this action is that they would have to start a second action. In those circumstances, it does not seem to me that there is any good reason to put additional pressure on the defendants by requiring them to deal with these entirely new claims at short notice for a trial which was some six weeks away at the time when the application came before the court. It may be that the claim to the rookeries and the tennis court and the vegetable patch would not add very significantly to the preparation for trial, but the claim to the copse, which involves consideration of the grant of some shooting rights to third parties, may do so.

In my judgment, these matters should not form part of the trial in March, if the defendants are opposed to having them heard then. They are entirely new causes of action and rather different from the existing adverse possession claims. Moreover, if the contract claim succeeds, it seems to me that they may become quite unnecessary. However, it may be that, in light of my view that the claimants are very likely to be free to pursue these claims subsequently, the defendants may, after all, prefer to deal with these claims in March on the basis that, even though there is extra work involved, it is more attractive to the defendants to have all the issues resolved in one action rather than face what I regard as the almost inevitable consequence of a second action. In those circumstances, I propose to give Mrs. Talbot Rice an opportunity to consider whether she wishes, nevertheless, to have those matters tried, but, unless she wishes to have them tried in March, I will refuse permission to amend in relation to those claims as well, having expressed quite strong views that they would not be prevented from being brought in a second action.