Application to amend to plead new case is dismissed
On Friday, 30 May 2025, Master Pester handed down judgment in Fay of London Ltd v Axis Specialty Europe SE [2025] EWHC 1334 (Ch) dismissing the Claimant’s application to amend its Particulars of Claim the effect of which was practically speaking abandoning its original claim and seeking to substitute new claims based on fraudulent breach of trust, breach of fiduciary duty, breach of contract, negligence and in deceit.
The claim arises out of alleged unauthorised borrowing on a property located in Eaton Square, London (the “Property”) which was owned by the Claimant company. Axis underwrote a policy of insurance providing professional indemnity cover to a group of now insolvent entities known as the Jirehouse entities. Mr Stephen Jones was a solicitor and had significant control over all the Jirehouse entities. On 3 May 2019, the Solicitors Regulation Authority intervened in the legal practice of the Jirehouse entities and the Jirehouse entities are now in liquidation.
The claim originally alleged that Mr Jones caused the Claimant to enter into three consecutive sets of loans, secured over the Property, and alleged that the proceeds of authorised borrowings against the Property had been lost through being inappropriately invested in risky and illiquid investments. The original claim expressly pleaded that no loss was suffered by the Claimant through the unauthorised borrowing in relation to either the first or second sets of loans.
Thirteen months after the Particulars of Claim were served, the Claimant provided a first draft Amended Particulars of Claim which advanced a new claim, alleging loss and damage for the sums advanced by the first set of the three loans. Axis refused its consent to the amendments, on the grounds that the new draft amended claims were statute barred, the alleged breaches and/or loss having occurred in 2014, more than six years prior to the issue of the claim. The Claimant issued an application to amend with a further draft amended Particulars of Claim which introduced a claim for fraudulent breach of trust and subsequently provided a yet further version of the draft amended Particulars of Claim.
Master Pester dismissed the Claimant’s application. In respect of the claim for fraudulent breach of trust, Master Pester held that Axis had at least a reasonably arguable defence on limitation on the basis of Axis’ argument, relying upon Paragon Finance v DB Thakerar & Co [1999] 1 All ER 400, that Jirehouse was a category 2 trustee such that the limitation period applicable is six years which has expired. In respect of the other proposed claims, Master Pester held that they did not arise out of the “substantially the same facts” as the original claim and Axis had at least a reasonably arguable defence on limitation. As a result, permission to amend was refused. In doing so, the judge also declined to make an order on a Mastercard basis.
James Sharpe (together with Daniel Shapiro KC) acted on behalf of Axis, instructed by Zoe Burge of CMS Cameron McKenna Nabarro Olswang LLP.
You can read a copy of the judgment here.
