The High Court has rejected an appeal of a County Court decision to a) refuse to consider an additional argument first raised by a Defendant at trial, and b) to refuse an application at trial to amend pleadings to include that additional argument.
This decision affects any parties to litigation before the courts and is an important indication of the courts' approach to late amendments to pleadings or attempts to raise unpleaded arguments at trial.
The litigation related to Mr and Mrs Zaman who were occupiers 119 Healds Road and had been for a number of years. They had originally agreed to purchase the property from the previous owners, Mr and Mrs Fadipe. However, Mr and Mrs Zaman, rather than having the property registered in their names, agreed to allow Mr Mallon to be registered as the owner at the land registry as security for a trade debt between Mr Mallon and Mr Zaman. The intention was that once the trade debt had been repaid, the property would be transferred into the names of Mr and Mrs Zaman.
However, after the trade debt was repaid, Mr Mallon failed to transfer the property to the Zamans. Instead he raised mortgages against the property. He did not maintain mortgage payments, resulting in possession action by his mortgage lenders, including Kensington
The Zamans defended Kensington's possession claim, and in their defence they raised a number of legal arguments, including proprietary estoppel, mistake (in registering the property in Mr Mallon's name), and claimed, amongst other things rectification of the Land Register. Mr Mallon did not defend the claim.
On the morning of the first day of the trial in February 2018, Mr and Mrs Zaman's Barrister tried to raise an additional argument that a constructive or resulting trust had arisen. He argued that either the existing pleading was sufficient to raise that arguments because it already pleaded the necessary facts, or alternatively a short amendment to the existing pleading be permitted that would include the wording “the above gives rise to a constructive and/or resulting trust.”
The trial judge refused both arguments, and refused to consider whether there was any trust in place. Kensington won at trial and obtained a possession order. Mr and Mrs Zaman appealed.
Sir Gerald Barling, sitting as a Judge of the High Court in the Business and Property Court in Leeds, upheld the trial judge’s decision for the following reasons:
This is a welcome decision in that the courts have reaffirmed their commitment to the idea that parties need certainty as to the arguments they will face at trial. It also reinforces the 'cards on table' approach that the Civil Procedure Rules were originally designed to engender
This decision will be of great help to those parties that are faced with opponents who, through lack of preparation or simple litigation tactics, attempt to raise new arguments at trial. It also provides clear direction to parties that want to raise additional arguments – these requests need to be done in good time ahead of trial and in the correct way, i.e. a formal application.
This publication is intended for general guidance and represents our understanding of the relevant law and practice as at September 2019. Specific advice should be sought for specific cases. For more information see our terms and conditions.
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