Timeliness and rationale are critical in amending pleadings, particularly close to trial; mere reliance on prior case law is inadequate.

Introduction

[1] These are two appeals filed before us by the appellant against the two decisions of the Court of Appeal on 7 November 2012 which allowed the appeals by the respondent against the decisions of the High Court. The appellant was the plaintiff and the respondent was the defendant before the High Court. We shall refer to the parties as they were before the High Court.

[2] There were two separate appeals before the Court of Appeal. We shall refer to the first appeal as the amendment appeal and the second appeal as the merits appeal. The Court of Appeal had allowed the defendants appeal in the amendment appeal against the High Courts dismissal of the defendants application to amend the defence and counterclaim (the first decision). The Court of Appeal also made an order setting aside the High Courts judgment entered against the defendant after full trial in the merits appeal and ordered a new trial of the whole action before another judge (the second decision).

[3] It is to be noted that the defendant did not apply for a stay of the hearing on the merits of the plaintiffs case upon his application to amend the defence and the counterclaim being refused. The High Court accordingly proceeded with the trial on the merits and delivered judgment in favour of the plaintiff.

Facts Of The Case

[4] The relevant background facts of the case are these. The defendant personally signed a term loan agreement as the borrower with the plaintiff. The defendant defaulted in repayment and the plaintiff brought an action on 19 August 1998 against the defendant for the repayment of the loan. On 16 April 1999 the defendant filed his defence and counterclaim. The main issues raised in the defence were firstly, whether there was a collateral agreement that the requirement under the facility agreement for the defendant to maintain a required security value of not less than 154% of the aggregate principal amount advanced would not apply to the defendant, and secondly, whether there was an agreement between the plaintiff and the defendant that the indebtedness of the defendant would be settled through a corporate exercise called the Torie Scheme. On 14 June 1999 the plaintiff filed its reply and defence to the counterclaim.

[5] The case went through five pre-trial case management sessions on 28 September 2011, 19 October 2011, 3 November 2011, 21 November 2011 and 13 January 2012. There was no intimation by the defendant at any time at the case management sessions of any need to amend the defence. On 24 February 2012 the High Court fixed the matter for trial on 19 March 2012 and 20 March 2012 on the pleading as it stood.

[6] On Thursday 15 March 2012, the defendant filed for the first time the application to amend the defence (application to amend) and a counterclaim. It was served on Friday 16 March 2012 giving no time for the plaintiff to reply. The application to amend was fixed for hearing on Monday 19 March 2012 (ie the first day of trial). The amendment sought to introduce two new and distinct defences. First, by para 4 of the proposed amended defence the defendant alleged that he was a mere nominee and therefore not liable for the loan. Secondly, by para 35 of the proposed amended defence the defendant alleged that the plaintiff had not accounted for the securities mortgaged by the defendant as security for the facility, or the proceeds of their sale.

[7] In the defendants affidavit in support of the application to amend there was no explanation for the gross delay other than stating that he had only discovered the new defences when pre