Abdel Rahman v Chase Bank (C.I.) Trust Company Ltd and Five Others

CourtCourt of Appeal
JudgeLe Quesne, Lord Carlisle of Bucklow and Frossard, JJ.A.:
Judgment Date03 June 1994
Date03 June 1994
Le Quesne, Lord Carlisle of Bucklow and Frossard, JJ.A.:

W.J. Bailhache for the appellant;

M.H. Clapham for the respondent.

Case cited:

(1) Ketteman v. Hansel Properties Ltd., [1987] A.C. 189; [1988] 1 All E.R. 38; [1987] 1 FTLR 284; [1987] 1 E.G.L.R. 237; (1987), 85 L.G.R. 409; 36 BLR 1, dicta of Lord Griffiths applied.

Additional cases cited by counsel:

Ascherberg, Hopwood & Crew Ltd. v. Casa Musicale Sonzogno Di Pietro Ostali S.N.C., [1971] 1 W.L.R. 1128.

Farley (Ernest) & Sons Ltd. v. Takilla Ltd., 1992 JLR 54.

Hammersmith & Fulham London B.C. v. Top Shop Ltd., [1989] 2 All E.R. 655.

Henderson v. Henderson (1843), 67 E.R. 313.

Hoystead v. Commissioner of Taxation, [1926] A.C. 155 ([1925] UKPC 107).

Jones v. Hughes, [1905] Ch. 180.

Kahn v. Goleccha Intl. Ltd., [1980] 2 All E.R. 259.

Yat Tung Inv. Co. Ltd. v. Dao Heng Bank Ltd., [1975] A.C. 581 ([1975] UKPC 6).

Civil Procedure—pleading—amendment—extremely late amendment of pleadings on ancillary issues highly undesirable if other parties already acted in reliance on unamended pleadings and judgment given against applicant on central issue—parties entitled to expect final judgment not to be circumvented by raising of new issues—public interest in efficient litigation and effect of refusal to amend on party seeking it relevant—consequences preferably to be borne by lawyers responsible for delay

The respondent sought to amend its pleadings in an action brought against it in the Royal Court by the appellant.

The appellant brought an action challenging the validity of a substantial settlement, under which the respondent was a potential beneficiary, made by her deceased husband. During the proceedings, the question arose whether, if the settlement were found by the court to be invalid under Jersey law, it could nevertheless operate as a valid testamentary disposition of the funds in question; in its pleadings, the respondent categorically denied that it could have this effect and submitted that its case relied entirely upon the settlement's validity as a settlement.

The Royal Court subsequently found the settlement to be invalid (these proceedings are reported at 1991 JLR 103), following which the appellant and several of the defendants to the action (not including the respondent) reached agreement on their respective claims to the estate of the appellant's husband, on the basis that he had died intestate.

The respondent subsequently sought to amend its original pleadings so as to claim (as it alleged it originally would have but for the carelessness of one of its overseas lawyers) that the settlement would have testamentary effect if found by the court to be invalid (which by that stage it had), so that it still had a claim to the money. Both the Judicial Greffier and the Royal Court allowed the amendment, the latter doing so solely on the grounds that (a) there was no indication that in seeking the amendment the respondent was acting mala fides; and (b) it should not punish the respondent for mistakes in the conduct of its case which, in any event, showed that there remained issues of controversy between the parties. By the time the amendment was allowed, more than 10 years had elapsed since the commencement of the whole proceedings.

The appellant appealed against the Royal Court's order, submitting, inter alia, that (a) the respondent was estopped from seeking to amend its case at such a late stage of the proceedings, having failed to raise the issues it now wished to raise when it had had the opportunity to do so earlier in the litigation; and (b) in the exercise of its discretion, the court ought to refuse the amendment.

The respondent submitted in reply that its pleadings as they stood did not properly represent the case it had always intended to argue and it was therefore necessary to amend the pleadings.

Held, allowing the appeal:

The amendment should not have been allowed, since from the start of the proceedings the respondent had expressly disclaimed the argument that it now wished to put. It would not be in the interest of justice to allow it to change the entire basis of its case at such a late stage and any consequence of its failure to seek to amend earlier should therefore be borne by its lawyers and not by the other parties to the action. In reaching this conclusion, the court had regard to the following factors: (a) the fact that other parties to the proceedings had come to a binding agreement on the basis of the pleadings as they stood, and that that basis would be destroyed by such an amendment; (b) the fact that the litigation had proceeded for over 10 years on the basis of the unamended pleadings; (c) the anxieties occasioned by litigation, and the legitimate expectation of the other parties that if the court found in their favour then, subject to the possibility of appeal, the matters in issue would have been concluded; (d) the public interest in the efficient conduct of litigation; and (e) the consequences for the respondent (which it had brought upon itself) of refusing to allow the amendment, which were that it would not be entitled to a share of the substantial settlement. Since it had not considered any of these matters, the Royal Court had not properly exercised its discretion and its order would accordingly be set aside and the amendment refused (page 192, line 28 - page 194, line 30; page 195, lines 20-45).

LE QUESNE, J.A., delivering the judgment of the court: The facts of this case have already been stated in too many judgments of the Royal Court and of this court to need repeated recitation here in a judgment dealing only with amendment of the pleadings. We assume that readers of this judgment interested in the detailed background will refer to one those judgments.

The appellant is the plaintiff in these proceedings, which she started by representation in 1981.

[The learned Judge of Appeal set out the pleadings of the appellant and the answer of the respondent and continued:]

The Royal Court decided to take first the issue of the validity of the appellant's marriage to Kamel Abdel Rahman ("KAR"). That issue was decided in 1987, when the Royal Court declared that the marriage had been valid. The next issue taken was that of the validity of KAR's settlement in Jersey law. In February 1990, the Royal Court held that the settlement was invalid for breach of the maxim "donner et retenir nevaut." The court delivered its reasons for this decision in June 1991 (reported at 1991 JLR 103).

On September 9th, 1992, the respondent (the second defendant in the original action) issued a...

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