Pleadings form a bedrock of our adversarial system of civil litigation. The law requires pleadings to mark out the parameters of a litigant’s case by concisely identifying the facts and issues in dispute.
Over many years the law as to pleadings has therefore developed to prevent, so far as possible, unjust results as between the parties, and otherwise to assist courts with finite public resources to reach a decision.
But what occurs when a pleading fails to identify a relevant fact or material cause of action? Recently, the Singaporean Court of Appeal grappled with this question in How Weng Fan & Ors v Sengkang Town Council  SCGA 21. Whilst this is a foreign judgment, the case nevertheless provides a taxonomic approach where an unpleaded issue arises at trial.
The background to this case is extensive. In brief terms, the case arises from contracts entered into by certain Singaporean Council employees and councillors on behalf of the Council. The contracts were alleged to be made without a formal tender process (or adequate tender process) and for a higher price than necessary. At trial the issue framed by the claimant’s pleaded case was whether the defendants breached their fiduciary or equitable obligations owed to the Council.
The court previously held that in awarding these contracts: (i) the defendants did not breach any fiduciary or equitable obligations owed to the Council as they were acting in good faith; but (ii), nevertheless, that they were grossly negligent in implementing and controlling the payment process for these contracts (the “System”), resulting in the Council suffering loss.
Issues for determination
The issue was, however, that the claimants failed to specifically plead liability in negligence as a legal consequence arising from the pleaded facts. Relevant to this note, the primary issues falling for determination were: (i) whether the Council adequately pleaded the factual basis that the Councillors breached their duty of skill and care; and (ii) if not, should the Councillors nevertheless be liable in negligence for the System failures.
The court commenced by noting there are dual underlying principles to pleadings: (i) first, to define the parameters in which a parties’ case is mounted which allows the opposing party to know the case it must meet; and (ii) second, pleadings assist the court by defining with ‘clarity and precision’ the factual and legal issues in dispute.
With that in mind, the general rule is therefore that parties are bound by their pleadings and a court is precluded from deciding matters that are not in dispute between the parties (“General Rule”). This said, there are two important qualifiers to the General Rule: (i) first, only material facts must be pleaded to support each element of a legal claim (“Material Facts Principle”); and (ii) second, a court may permit an unpleaded point to be raised where there is no ‘irreparable prejudice’ caused to the other party that cannot be adequately compensated by costs or otherwise would be clearly unjust (“Prejudice Principle”).
After analysing the case law authorities the Court distilled a number of key legal principles. Relevantly, the assessment of prejudice is ‘fact-sensitive’ and requires the court to scrutinise (amongst other things): (i) a party’s pleadings; (ii) written submissions; and (iii) the manner in which evidence was led at trial. In undertaking this assessment, the Court is left with the following principles:
- Where material facts of each element of a claim are pleaded, albeit in support of a different legal conclusion, the court will be ‘more inclined’ to allow the claim unless there is “clear evidence that the defendant will be unduly prejudiced”; and
- Where material facts of each element of a claim are not pleaded, the court will only allow the claim if satisfied “there will be no prejudice occasioned as a result because both sides engaged with the issue at trial”.
In practical terms, the second proposition can be satisfied by showing: (i) the issue was raised in evidence; (ii) it was clearly appreciated by the other party; and (iii) no reasonable objections were taken during the trial to such evidence being led.
Outcomes from the principles
In considering the above factors, the court delineated three potential consequences by reference to a hypothetical unpleaded claim in negligence:
- If a claimant does plead the material facts of a claim in negligence but does not specifically refer to negligence as a legal consequence, the court may apply the Material Facts Principle and make findings of negligence unless clear evidence exists the defendant will be unduly prejudiced;
- If a claimant does not plead the material facts in negligence and legal consequences, the court may nevertheless apply the Prejudice Principle to find the defendant liable where: (i) the claimant adduces evidence supporting each element of negligence; (ii) the claimant otherwise puts its case in negligence (including through cross-examination) to the defendant which is understood by the defendant; and (iii) the defendant makes no objection to such evidence being led; or
- If a claimant neither pleads the material facts in negligence and legal consequence nor adduces any evidence in support of its case in negligence, the defendant will not be liable for negligence.
With respect to the System failure issue, it was for the Council to establish that each element of negligence was in its pleadings (albeit, phrased toward an equitable/fiduciary claim), being: (i) the existence of a duty of care; (ii) that duty was breached; and (iii) the breach caused damage to the Council.
The court held that with respect to four of the defendants that the Council had loosely pleaded the ‘flawed’ System and the damage that resulted therefrom. The Court further held that no prejudice would be occasioned on these persons because evidence had been adduced relating to their failures, and that submissions were made in relation to those failures.
The position was different with respect to the remaining three defendants. This arose because the Council: (i) failed to plead that the three individuals were responsible for setting up or implementing the alleged System; and (ii) the Council failed to cross-examine them on the failures. In the circumstances, the court held that a clear case was not run against these three individuals, and it would therefore be unduly prejudicial for the court to now find them liable in negligence.
Implications for England?
It appears from the English authorities that the Material Facts Principle exists in all but name. For example, in Drane v Evangelou  1 WLR 455 Lord Denning MR ruled on a claim brought for breach of covenant for quiet enjoyment arising from an unlawful eviction where three men broke down a door, removed the claimant’s belongings, and bolted the door from the inside. The court found that regardless of the pleaded result at law a claim could lie in trespass. In doing so, Lord Denning MR referred to an earlier decision that “[i]t is sufficient for the pleader to state material facts. He need not state the legal result. […] He can present, in argument, any legal consequence of which the facts permit”.
But what for the Prejudice Principle? The state of the English jurisprudence is not that an unpleaded issue may never be the subject of investigation at trial but that it will only be allowed where it would be ‘unjust’ to not decide the issue. However, such cases will be ‘rare’ (see Lombard North Central Plc v Automobile World (UK) Ltd  EWCA Civ 10 at  per Rimer LJ). The ‘rare’ case identified by Rimer LJ was where it is apparent that both sides have come to court ready to deal with the issue despite its omission. But this general statement does not identify the substance of how the issue is to be decided. It surely must rest upon procedural fairness (i.e. an ‘unjustness’ principle where a party should know the case it must meet). Implicit in the preceding observation it is worth remembering a foundational principle from the time of Browne v Dunn that if both parties disregard the pleadings and fight the case on issues chosen at trial, it would then be unjust for the parties to return to the pleadings as governing the contest. This may be done by inference from the way the trial was conducted, or, in a clear case, acquiescence by one party to the course adopted by the other (see Browne v Dunn; Gould v The Mount Oxide Mints Ltd (in liq) (1916) 22 CLR 490 at 517-8; and Banque Commerciale SA v Akhil Holdings Ltd (1990) 169 CLR 279 at 286-7).
Given the above, should a taxonomic structure similar to that developed in Singapore be used to decide the ‘rare’ case? That is, should such case be decided in accordance with the broad principles identified in the preceding paragraph but with the identifiable metrics of: (i) the issue being raised on the evidence; (ii) it was clearly appreciated by the other party; and (iii) no reasonable objections were taken during the trial to such evidence being led. This said, the acceptance of any Prejudice Principle may be an insurmountable step for the English Courts particularly where: (i) strict rules of pleading apply; and (ii) it is rather counterintuitive to allow a principle that evidence can define the scope of the issues rather than the pleaded issues themselves. Nevertheless, in future cases it may be useful for litigants and courts to approach upleaded issues by grounding such assessment in principles of justice between the parties but within the confines of a pellucid three-part approach where the facts can be assessed against clear metrics.