In Whalley v PF Developments Ltd(1) the Court of Appeal confirmed that in certain situations claimants may recover heads of loss that were not expressly claimed in their pleading. The Court of Appeal also made general comments about how notice of matters to be considered at trial may be given.
The underlying issue was a boundary dispute between neighbours in Warrington involving relatively modest sums. The claimants had bought a property with a garden and adjoining land. They intended to separate off the land before developing and selling the property. The defendant company, PF Developments Limited (PFD), owned the adjacent property, the garden of which backed onto the land. The second defendant, Ms Thomason, was the sole director of and shareholder in PFD. Thomason was joined to the proceedings when she purchased the neighbouring property from PFD in an attempt, the claimants asserted, to prevent enforcement of any judgment against PFD.
After several fruitless pre-action exchanges (including both parties taking down allegedly incorrect boundary fencing and erecting new purportedly correct boundary fencing), the claimants issued a claim. The claim was principally for declarations as to title, but the claimants also sought damages "to include compensation both for time and effort spent in repairing the gates".
No defence was filed and the claimants obtained judgment in default. An unsuccessful application to set aside the judgment in default was made and at the hearing of that application the judge gave directions, including for the sequential filing of witness statements "in relation to the damages and other relief sought". This direction was given, at least in part, because the claimants had indicated that they intended to claim damages representing interest incurred on borrowings made to fund the property purchase, the defendants having thwarted their plan to develop the property. The judge's directions gave the defendants an opportunity to see the claimants' position on damages and to respond.
The claimants' witness statement set out heads of loss that went beyond those claimed in their statements of case. The defendants' witness statement in response dealt with the damages claims only in its final three paragraphs. Crucially, the defendants did not assert that the claimants could not claim damages that had not been pleaded in the statements of case; rather, they focused on the merits of the damages claimed.
At trial, the witness statements on relief were relied on and the defendants' counsel made only passing reference to the claimants' ability to seek loss that had not been expressly pleaded. However, the judge decided that "in the absence of amendments to the pleadings, the court is confined to considering those damages that can properly be said to relate to that description in the particulars of claim". She accordingly awarded the claimants only "compensation both for time and effort spent in repairing the gates", representing £1,352.35 of the more than £37,000 sought.
The Court of Appeal agreed with the judge that the additional heads of damage sought by the claimants in their witness statement should have been expressly pleaded. However, it found that the judge had adopted a "somewhat disciplinarian" approach and had, in effect, decided the case "on a pleading point that had not been clearly articulated, let alone argued following a trial at which the claims had been the subject of submissions from both sides on the merits".(2) In the Court of Appeal's view, the heads of loss claimed were made "crystal clear" in the claimants' witness statement, which the court had directed to be produced and which was akin to a pleaded schedule of loss. Further, the defendants had had ample opportunity to challenge the losses claimed, but had not done so. Even if the defendants had made such a challenge, the claimants would have applied for permission to amend their particulars of claim and permission would in all likelihood have been granted.
Accordingly, the appeal was allowed and the case was remitted for an assessment of damages based on the heads of loss set out in the claimants' witness statement.
More generally, the Court of Appeal stated:
"The purpose of a statement of case is to define the issues and to warn each party what will be dealt with at the trial but the flexibility of modern procedure is such that, provided the mechanics are fair, adequate notice of matters to be dealt with at trial can be given under the direction of the court otherwise than through the formal medium of a statement of case."(3)
The Court of Appeal's decision does not mean that claims need not be properly pleaded. Statements of case are still crucial and, as a general rule, should set out in full all issues in dispute. The Court of Appeal here agreed that all of the heads of loss sought by the claimants should have been pleaded.
However, it is clear that failures to plead issues adequately are not necessarily fatal to a party's success on those issues, provided that opponents are otherwise notified and aware of the issues and are not prejudiced by the lack of proper pleading. Accordingly, Whalley acts as a reminder that parties must consider carefully which issues – including any not set out in pleadings as they perhaps strictly ought to be – should be addressed at trial. If parties wish to argue that issues raised by opponents are inadequately pleaded, they should do so in the clearest terms; parties fail to raise such arguments, or ignore inadequately pleaded issues altogether, at their peril.
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(1)  EWCA Civ 306.
(2) Per Lord Justice Rimer, Paragraph 28.
(3) Per Lord Justice Lewison, Paragraph 31.