The Prudential Assurance Company Ltd v HM Revenue and Customs  EWCA Civ 376
This was an appeal hearing in a very long running taxation case subject to a Group Litigation Order. The Claim and Defence in the case had both been pleaded in very general terms. Lewison LJ noted that the pleadings were so vague that a reader would have ‘very little idea about the issue’.
Para 22: “As Mr Ewart QC for HMRC opened the appeal to us it soon became clear that the lack of pleadings meant that the parties disagreed about: what was the scope of the trial; what were the issues that the judge had to decide; whether points had or had not been raised; whether or not they could be raised on appeal; and even what the judge had decided. This is no way to conduct litigation involving millions of pounds. We were told that this unacceptably cavalier approach to pleadings was a common feature of this kind of litigation. It must stop.”
As a consequence of the lack of proper pleadings in the case, the Court of Appeal had to spend the first day and a half of the appeal deciding which points were open to HMRC to argue. At the conclusion of that part of the judgment several issues were excluded by the Court which included the following:
- i) Wholly new issues;
- ii) Issues which HMRC tried to ventilate before the judge, but he refused on the ground that they were raised too late;
iii) Issues which would have required further facts to be found;
- iv) Unpleaded issues which ought to have been pleaded.
Lewison LJ emphasised that this approach to proceedings was not acceptable; it failed to approach the trial and appellate processes properly, was inimical to finality of litigation, gave rise to disproportionate costs and delay and the disproportionate allocation of Court of Appeal resources and, if it required the re-opening of the trial, it incurred the unfair and unnecessary costs to both parties and the courts, contrary to the proper administration of justice.
This case serves as a reminder to us all! Do not underestimate the importance of properly drafted pleadings.