Amendments to Pleadings: Al Nahda Insulation Contracting LLC & Another v Tremco Illbruck Export Ltd

In Al Nahda, the TCC has maintained its strict approach to late amendments, and those which it does not consider have any real prospect of success.

Background

The Claimants were two construction companies in the GCC which had formed a joint venture, and were engaged as the car park flooring sub-contractor for the construction of the Dubai Mall (then the largest shopping mall in the world). The Defendant was the supplier of a traffic deck coating system known as “Vulkem”.

The Claimants alleged that the Vulkem supplied to them, and which was applied to the 500,000 m2 of car parks was defective, and caused them to incur liabilities and losses of some 74 million AED (around £16 million). The Defendant contended that the failure of the Vulkem was owing to defective installation by the Claimants.

The Vulkem was shipped to the Claimants in 38 shipments. The parties, by two consent orders, had agreed that any losses flowing from 28 of these shipments were statute-barred, as they had bills of lading dated more than 6 years prior to the issue of the claim form.

Trial of the action was listed for 8 days, due to commence on 8th May 2017. On 8th November 2016 the Claimants made an application to amend their Particulars of Claim to seek to argue; 1) That all of their losses flowed from the failure of later remedial works, or 2) That as a result of a subsequent “agreement” relating to the later remedial works, and the failure of those works (which was within 6 years of the date of issue), they were entitled to recover the difference between the costs which they would have incurred had the remedial works been applied to the entirety of the car parks and the cost of total replacement.

Decision

Mr Stephen Furst QC (sitting as a Deputy Judge of the High Court), in a judgment handed down on Monday 6th February 2017, refused the Claimants’ application to amend. In so doing, the Judge applied the dicta of Coulson J in CIP Properties (No.3) [2015] EWHC 1345 (TCC), and Willmott Dixon v Robert West [2016] EWHC 3291 (TCC), and held that if an amendment was to be allowed it must: (1) have a real prospect of success, (2) be adequately particularised, and (3) be supported by a good explanation if it is “late” or “very late”.

Mr Furst QC held that the Claimants’ application to amend was on which was to be considered “late” or “very late”, as if the amendments were to be allowed, it would be difficult to know whether the trial date could be kept. The Judge noted that no explanation was given, or evidence put forward by the Claimants, to address the “critical question” of why the application was made late.

The Judge further held that the amendment which sought to argue that the entire losses flowed from the failure of the remedial works had no real prospects of success as a matter of causation and was “bound to fail”. It was also held that the proposed amendments lacked particularity and would, in any event, pose difficulties for the quantum experts who would have to work out how much the remedial works would have cost if they had been applied to all of the car parks. This, it was held, would cause significant disruption to trial and meant the amendments should not be allowed.

Comment

This is another example (see also Willmott Dixon v Robert West blog post here) of a party being refused permission to make late amendments.

If amendments are required to a pleading, parties should first think carefully about the strength of the amended case which they seek to introduce. The decision in Al Nahda emphasises that only those amendments with a real prospect of success will pass the threshold test to even be considered.

This decision is also a reminder that any application to amend should be made as soon as the need for amendment arises, and that any supporting witness evidence should specifically address the reasons for the amendment, and its timing.

What is clear is that, in the TCC at least, disruption to the parties caused by late amendments is taken very seriously, and will often outweigh any prejudice to a party who is unable to run an amended case.

Neil Moody QC and Timothy Killen represented the successful Defendant, instructed by Ben Aram and Rhys Tebbett of Kennedys Law LLP

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