The Court of Appeal recently adopted a pragmatic approach in SPI North Limited v Swiss Post International (UK) Ltd and Asendia UK Ltd,(1) ruling that defendants need not seek information from third parties where they cannot admit or deny allegations put forward in the particulars of a claim.
SPI North Limited brought a claim against Swiss Post International (UK) Limited for breach of express and implied terms of a premium partnership agreement. SPI North also brought a claim against Asendia UK Limited for inducing that breach.
In their respective defences, Swiss Post and Asendia UK pleaded that they had been unable to admit or deny various allegations made by SPI North. In response to various Civil Procedure Rule (CPR) Part 18 requests for further information made by the claimant, the defendants stated that such information had not been "easily available" and had required "appropriate investigation with the benefit of both contemporaneous documents and the assistance of potential witnesses". According to the defendants, these requests would be more appropriately dealt with as part of the disclosure process and in witness evidence.
The procedural rules on what must be stated in a defence are set out in CPR 16.5 and provide that:
(1) In his defence, the defendant must state –
(a) which of the allegations in the particulars of claim he denies;
(b) which allegations he is unable to admit or deny, but which he requires the claimant to prove; and
(c) which allegations he admits.
(2) Where the defendant denies an allegation –
(a) he must state his reasons for doing so; and
(b) if he intends to put forward a different version of events from that given by the claimant, he must state his own version.
The above rule is cemented by the guidance contained in Paragraph 10.2 of Practice Direction 16, which provides that a "defendant should deal with every allegation in accordance with rule 16.5(1) and (2)".
SPI North applied to the court for the defendants' defences to be struck out unless they were amended to comply with CPR 16.5 on the basis that, had the defendants taken reasonable steps to make enquiries of third parties (eg, former key employees), they would have been able to admit or deny certain of the allegations.
The issue reached the Court of Appeal. The court held that a defendant can state that it is "unable to admit or deny" an allegation where:
the truth or falsity of the allegation is neither within his actual knowledge (including attributed knowledge in the case of a corporate defendant) nor capable of rapid ascertainment from documents or other sources of information at his ready disposal.
Three factors were at the heart of the court's decision:
- timing – the short period of time in which the defendant has to file a defence after service of particulars of claim or acknowledgement (regardless of the value or magnitude of the claim);
- enquiries – the great difficulty of establishing what enquiries the defendant should reasonably make of a relevant third party within that timeframe; and
- statement of truth and third-party information – any third-party information obtained would need to be verified and checked before a statement of truth could be signed. Such an exercise would be unrealistic within the limited timeframe for service of the defence.
The court also highlighted that the judgment should not discourage:
- defendants from making enquiries of third parties; or
- claimants from agreeing to or opposing reasonable requests for extensions of time sought by defendants to make such enquiries.
The court has taken a sensible and pragmatic approach to the work required by defendants to plead a defence. The case provides clear guidance that a defendant may properly plead that it is unable to admit or deny an allegation in circumstances where the allegation's truthfulness or falsity is neither within the defendant's factual knowledge nor capable of being determined from documents or other information available to it. Confirmation that it is unnecessary for a defendant to make enquires of third parties will no doubt be welcomed by defendants faced with practical difficulties in making such enquiries within the short timeframe provided for in the CPR for the filing of a defence.
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