Whilst it is rare for a defence which has (on its face) been carefully pleaded by counsel and cross checked by instructing solicitors to contain an admission made in error, it does happen. When it does, the likely next step is to seek to seek amendment and/or withdrawal of the admission. However, the Court’s permission in those circumstances is never guaranteed, particularly where there is very little by way of explanation as to how the error was made in the first place.
The Court of Appeal in Clarkson -v- Future Resources FZE & Others  made it abundantly clear that any application to resile from an admission must include a full & frank explanation of reasons for withdrawing and that such should be provided in a timely fashion. The case also highlights the importance of a document verified by a statement of truth.
The action was a complex dispute in respect of funds used to purchase property. The claimant asserted that some of the defendants had received £984,000 that had been advanced, an assertion which was initially admitted. The defendants then sought to amend the defence in order to put the receipt of funds in issue. The application was refused in the first instance. The defendants appealed to the Court of Appeal, but were again unsuccessful.
The Court’s key criticism of the application was that the request to withdraw the admission failed to address any of the factors listed at CPR PD.14, paragraph 7.2, which the court must consider when faced with an application to amend or withdraw an admission. One of those factors includes ‘the grounds upon which the applicant seeks to withdraw the admission including whether or not new evidence has come to light which was not available at the time the admission was made’. The application referred to a single letter from the defendants’ solicitors acknowledging CPR PD14 and stating that ‘you are aware…that the factual issues relating to the various…loans are very complex. An error was made by previous Counsel in drafting the two sub-paragraphs concerned which regretfully was not picked up at the time the pleading was approved by each of our clients’. No witness or other evidence in support of the application was provided to the Court in first instance.
In her judgment, Lady Justice Simler stated that, ‘it is fundamental to an application of this kind that the judge is given a full and frank explanation of how things have gone wrong, and the basis on which the admission is to be withdrawn. This should include how the admission came to be made in the first place and the grounds upon which the applicant seeks to withdraw the admission, including whether or not new evidence has come to light which was not available at the time of the admission’. The letter relied on by the defendants did not begin to provide such explanation. Hence, Lady Justice Simler was satisfied that the Judge at first instance was correct to reject the application and dismissed the appeal.
In addition, the Court emphasised the importance of the statement of truth. Before trial, a statement of case verified by a statement of truth is in itself evidence of the facts alleged and, therefore, it carries considerable weight. If it transpires that the facts stated were incorrect, a full explanation must be provided.
Whilst it may seem obvious, applications to resile from admissions (and indeed any application) must be drafted having regard to the relevant practice direction in the CPR. Importantly, the application must provide a full explanation of the circumstances. Such applications are not routine and the Court will have a natural prejudice against granting them. The case also serves as a reminder to litigants of the significance of verifying a document with a statement of truth. It is unfortunate that statements of truth are too often signed without proper consideration of whether the person signing has an honest belief in the facts stated. If it later transpires that the facts stated were incorrect and amendment is sought, details of why the litigant believed the facts to be true in the first instance must be provided.
Written by : Richard David, Legal Executive
To ensure you do not miss out on similar articles and legal updates, please subscribe up to our newsletter.