In Outlook Asset Management LP v Capstone Corporate Limited, the Court of Appeal clarified the procedural considerations required following the strike out of an action pursuant to Civil Procedure Rule (CPR) 26.3.
The respondent successfully applied to the BVI Commercial Court for a strike out pursuant to CPR 26.3(1)(b) on the basis that the pleadings had disclosed no reasonable prospect of success.
Several 'procedural gaffes' on the part of the appellants ensued. Four days after circulation of the draft judgment, the appellants purported to file an amended statement of claim pursuant to CPR 20.1(1). Two days later, Justice Adderley released his judgment striking out the action.
All three of the appellants' procedural grounds of appeal were rejected by the Court of Appeal, which held as follows:
- The Commercial Court judge need not have considered the amended statement of claim considering CPR 20.1's automatic permission to amend provisions before he struck it out. A statement of claim that has been struck out can be substituted only if the court:
- decides to treat the action as subsisting; and
- gives the claimant permission to file a fresh statement of claim.
To file an amended statement of claim, the appellants first needed leave from the Commercial Court judge and to have provided it in draft.The alternative would allow a claimant to circumvent a strike-out decision by filing an amended statement of claim pursuant to CPR 20.1(1), rendering the strike-out ruling otiose and frustrating the court's overriding objective.
- A judge must give a party which has a defective pleading an opportunity to put right any defect; the Court of Appeal held that such an opportunity had been given. The appellants had erred by attempting to amend their pleadings without an application to put a draft amended statement of claim before the judge for his approval.
- The Court of Appeal found that in the interests of the CPR's overriding objective, the Commercial Court judge might have considered the appellants' evidence (in the form of the purported amended statement of claim), even at the late stage after circulation of the draft judgment. Under its powers in CPR 62.20, the Court of Appeal found that the document submitted to the judge did not remedy the defect in the pleadings or save the action.
The Court of Appeal also rejected the appellants' three other substantive grounds of appeal relating to the claim's subject matter.
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