Ambaram Narsey Properties Ltd v Khan [2001] FJLawRp 71; [2001] 1 FLR 283 (16 August 2001)

AMBARAM NARSEY PROPERTIES LIMITED v MOHAMMED YAKUB KHAN, MOHAMMED NASIR KHAN, MOHAMMED SABIR KHAN, MOHAMMED IQBAL KHAN, MOHAMMED MUKTAR KHAN & MOHAMMED AZAD KHAN & LAUTOKA CITY COUNCIL

High Court Civil Jurisdiction

20 April, 16 August, 2001

HBC 0139/96L

Amendment of Defence during trial after closing of Plaintiff's case – unpleaded issues brought out in cross-examination – ambiguity – mistake - whether any prejudice caused to other parties by late amendment - High Court Rules O.20 r.5(1)

The First Defendant sought to amend its defence for the third time at a stage during the trial where it was presenting its case and had completed lengthy evidence from two defence witnesses. The need for amendment arose out of unpleaded issues that were raised by a defence witness under cross-examination by the Plaintiff and Second Defendant. The First Defendant based its application on the need to clear up an ambiguity i.e. that the builder in question was employed as an independent contractor. The Court considered whether there was injustice and/or prejudice caused to the other parties and took into account of the fact that the amendment sought was in respect of issues raised in evidence during cross-examination.

Held–(1) There has been no mala fides here, but rather a genuine mistake on the part of the First Defendants.

(2) No prejudice will occur to the litigants in meeting the First Defendants claim in their respective cases.

(3) The following orders are made:

1. Leave is given to the First Defendants to file an amended statement of defence;
2. Leave is given to the Plaintiff and to the Second Defendant to have any relevant witness recalled for further cross-examination on the issue now unambiguously pleaded.

100. Leave is also given to the Plaintiff to re-open its case to call or recall witnesses on the same issue.

4. The Plaintiff and Second Defendant are to have their costs occasioned by this amendment, borne by the First Defendants.
   

Cases referred to in Judgment

Ketteman v Hansel Properties Ltd [1987] AC 189
Cropper v Smith [1884] UKLawRpCh 91; (1884) 26 Ch. D 700
Shoe Machinery Co. v Cutlan [1986] 1 Ch. 108
The Duke of Buccleuch [1892] UKLawRpPro 34; [1892] P 201
GL Baker Ltd v Medway Building & Supplies Ltd. [1958] 1 WLR 1216
Loutfi v C Czarnikow Ltd (1952) 2 All ER 823
FEA v Balram (1972) 18 FLR 20
Farell v Secretary of State [1980] 1 All ER 166
Brickfield Properties Ltd v Newton [1971] 3 All ER 328
Reddy Construction Co. Ltd v Pacific Gas Company Ltd [1980] 26 FLR 121
Hipgrave v Case [1885] UKLawRpCh 46; (1885) 28 Ch D 356
Tildesley v Harper [1878] UKLawRpCh 284; (1876) 10 Ch D 393

Buphendra C. Patel with Chen B. Young for the Plaintiff
Dr. Mohammed Shams-Ud-Dean Sahu Khan with Sadar-Ud-Dean Sahu Khan for the First Defendants
Anu Patel for the Second Defendant

17 April, 2001

RULING

Gates, J

The 1st Defendants seek to amend their defence. The trial has reached the stage where the 1st Defendants are presenting their case. They have completed lengthy evidence in their defence from 2 witnesses. They apply by summons dated 12 April 2001, to which is annexed the proposed amended Defence.

In effect the amended to existing paragraphs 5, 8(i), (ii), (vi) (f), (vii), and 15, incorporates into the defence the claim that the 1st Defendants took all reasonable care in their construction works having appointed a "qualified and/or experienced builder and/or contractor" to do the works. Previously on amended defence had been filed on 12 October 2000. That Amended Defence had incorporated the claim that the 1st Defendants had relied inter alia on "relevant professional advices in the drawing of plans and specifications", and relied on approvals by the 2nd Defendant of plans, specifications, drawings, calculations, and on the 2nd Defendant's inspections and supervision.

Suresh Chandra was called by the 1st Defendants, and it is now suggested he was an independent contractor. He was across-examined at length by counsel for the Plaintiff and for the 2nd Defendant on the circumstances and terms of his engagement. I am not sure why this was done, since little on this issue was elicited in examination in chief. Perhaps it was done as a matter of caution. Neither of the previous Defences filed deal with the defence of having employed an independent contractor. Dr. Sahu Khan referred to paragraph 12:

"The First Defendants will also reply on the Defence of act of a third party and/or Act of God."

and urged that this was a sufficient pleadings to include the act of an independent contractor. This argument was not developed. If it were available from this paragraph it would appear such defence has not been spelt out at all clearly. Dr. Sahu Khan argues that it is to clear up such ambiguity that he seeks to make the amendment. If it were a distinct defence and not in reality a clarification that is a less compelling reason for amendment see Ketteman v Hansel Properties Ltd. [1987] AC 189 at p 220.

Counsel for the 2nd Defendant objected to this amendment. He said it was made mala fide and precluded the joining of the builder because the limitation period had expired. He also pointed to the fact that the 1st Defendants in their former pleadings had admitted that they were responsible for building the building.

This in turn caused an injustice to the 2nd Defendant. All preparation for the case had centered around the builder being employed by the 1st Defendant's and not acting as an independent contractor. This presented difficulties over interrogatories and discoveries. It changed the whole of the 1st Defendants' defence, which defence would have been abundantly obvious to the 1st Defendants' solicitors at the outset.

Mr. B C Patel for the Plaintiff adopted all of Mr. Anu Patel's counter arguments. He conceded both he and Mr. Anu Patel should have objected earlier when this issue was raised in the 1st Defendants' case. He said the amendment was an ingenious way of avoiding liability. It also smacked of being an afterthought.

In Cropper v Smith [1884] UKLawRpCh 91; (1884) 26 Ch. D. 700 at p 710 Bowen L.J. said

"Now, I think it is a well established principle that the object of Courts is to decide the rights of the parties, and not to punish them for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights. Speaking for myself, and in conformity with what I have heard laid down by the other division of the Court of Appeal and by myself as a member of it, I know of no kind of error or mistake which, if not fraudulent or intended to overreach, the Court ought not to correct, if it can be done without injustice to the other party. Courts do not exist for the sake of discipline, but for the sake of deciding matters in controversy, and I do not regard such amendment as a matter of favour or of grace."

and his Lordship added at p 711:

"It seems to me that as soon as it appears that the way in which a party has framed his case will not lead to a decision of the real matter in controversy, it is as much a matter of right on his part to have it corrected, if it can be done without injustice, as anything else in the case is a matter of right."

A.L. Smith L.J in Shoe Machinery Co. v Cutlan [1896] 1 Ch. 108 at p 112 expressed himself to be in emphatic agreement with Bowen L.J.'s observations.

Order 20 rule 5 (1) of the High Court Rules provides:

"5.-(1) Subject to Order 15, rules 6, 8 and 9 and the following provisions of this rule, the Court may at any stage of the proceedings allow the Plaintiff to amend his writ or any party to amend his pleading, on such terms as to costs or otherwise as may be just and in such manner (if any) as it may direct."

Amendment may be allowed "at any stage of the proceedings" which includes during a trial The Duke of Buccleuch [1892] UKLawRpPro 34; [1892] P. 201, at p 211 per Lord Esher MR; G .L. Baker Ltd. v Medway Building & Supplies Ltd. [1958] 1 WLR 1216. With some reluctance the trial judge was prepared to allow the statement of claim to be amended in Loutfi v C. Czarnikow Ltd. (1952) 2 All ER 823 as late as after the close of the case but before judgment.

Reasons for Amendment

In Loutfi (supra) at p 824A Sellers J said:

"I think it would be only in conformity with well-established rules that I should allow that amendment because it is simply setting out in the pleadings that which has emerged in the course of the case as an issue between the parties."

Earlier at p 823F his Lordship had indicated the requisite test and said:

"I entirely accept the submission for the Defendants that that is very late, and that the court should be reluctant to grant amendments at such a late stage unless there is very good ground and strong justification for so doing."

In the trial before me not much was raised on this issue in chief. However the terms of the builders engagement were gone into at length in cross-examination by both the Plaintiff's counsel and also by the 2nd Defendant's counsel. As a result the apparently unpleaded issue became an issue in controversy between the parties, (see G.L. Baker Ltd. supra at p 1231; as applied in FEA v Balram [1972] Fiji LR 203; see too comments of House of Lords in Farrell v Secretary of State [1980] 1 All ER 166 at l73).

On the issue of ambiguity perhaps Dr. Sahu Khan is on weaker ground. If allowed this would be the Third Amendment of the 1st Defendants' Defence. The Defence had previously referred to the reliance on professional advisers in matters of the drawing of plans and specifications. Why not a reliance on the builder for a large 4 storey building for the central business district of Lautoka? The facts of course must be proved in evidence, but it would not have been surprising if the Defence had intended to plead to include the builder.

I have come to the view that there has been no mala fides here, but rather a genuine mistake. At the outset the proposed defence regarding independent contractor should have been pleaded. It was not done. In Brickfield Properties Ltd v Newton [1971] 3 All ER 328 at p 336b Sachs L.J. said:

"Legal proceedings are serious matters in which the parties seek and are entitled to justice — so far as possible they should not be treated as a minuet or game in which the courts are astute to exclude a party from the floor or field by reason of a technically false step taken through a genuine and excusable mistake of their advisers."

The case involved an application to cure a defective writ under the same High Court rule, Order 20 r. 5.

In considering whether to allow a late amendment of the pleadings a court must consider what prejudice might be caused to the other parties. Here the Plaintiff and 2nd Defendant had elected to cross-examine the builder at length on his terms of engagement. Now that the matter is specifically pleaded and the witness is to be recalled after discovery no prejudice will occur to the litigants in meeting the 1st Defendants' claim in their respective cases. Inevitably this case must go part heard again. Such interval will provide further time for the 2nd Defendant to consider what evidence to adduce in challenging the claim clarified by the amendment. Time to meet the amended claim as a result of an abandoned trial hearing date was a significant reason for allowing the appeal and thus the amendment in Reddy Construction Co. Ltd. v Pacific Gas Company Ltd. [1980] Fiji LR 121 at p 126H.

The Plaintiff and 2nd Defendant claim prejudice on the question of limitation, stating they will not now be able to join the builder as a party. This criticism has nothing to do with the amendment of the 1st Defendants' pleadings. In considering who to sue or who to blame, any of the parties could have sued or joined the builder long before this trial commenced. Each one chose not to do so. If their respective claims are now barred by limitation they cannot lay that at the door of the 1st Defendant for the way they chose to frame their initial Defences, and such claims existed quite independently of the 1st Defendants' pleadings. The availability of a cause of action against the builder was a matter that would have been abundantly obvious both to the 1st Defendant as also to the Plaintiff at the time of filing of pleadings or at least several months prior to the commencement of this trial Hipgrave v Case [1885] UKLawRpCh 46; (1885) 28 Ch D 356 at p 361. Though there was found to be lateness and carelessness in bring forward the real issue or issues to be tried, the Court of Appeal allowed amendment in Tildesley v Harper [1878] UKLawRpCh 284; (1876) 10 Ch. D. 393.

Much will depend of course on the quality of the evidence and credibility of the witnesses on the issue. It would not be proper to penalize the 1st Defendants for failing to include the builder in the line of defence already pleaded that the 1st Defendants relied on the advice and work of persons of competence, professional advisers, in their development of the site.

In Farrell's case supra, a case arising out of the troubles in Northern Ireland, Viscount Dilhorne at 173b said:

"It could have been pleaded that there was negligence on the part of persons other than the four soldiers. Any such allegations would have to have been properly formulated, and if such a case had been pleaded and presented, then the question whether any and if so what duty of care was owed to persons reasonably suspected of attempting to commit or of committing a serious crime would have arisen for consideration."

The Plaintiff had failed to plead that others, NCOs and directing officers other than the 4 soldiers, had been negligent by virtue of their planning and control of the operation.

Lord Edmund-Davies observed at 173j:

"It is therefore unnecessary to consider what should have been done had useful admissions been elicited, save to say that latitude extended by a trial judge in relation to cross-examination does not per se broaden the pleaded issues, though it may give rise to a successful application for leave to amend if such cross-examination proves fruitful."

In the result, the 1st Defendant, is given leave to file an amended statement of defence as proposed in the summons. Leave is given to the Plaintiff and to the 2nd Defendant to have any relevant witness recalled for further cross-examination on the issue now unambiguously pleaded. Leave is also given to the Plaintiff to re-open its case to call or recall witnesses on the same issue. The Plaintiff and 2nd Defendant are to have their costs occasioned by this amendment, which are to be borne by the 1st Defendants.

Application for Leave to Appeal and Stay refused.

Shayne Sorby