June Dorothy Marshall & Anor v Dean Kimberley Marshall & Anor

DEPUTY MASTER LINWOOD:

1. This is my judgment on two applications. The first is the claimants’ application for judgment on a pre-action admission pursuant to CPR 14.4 and the strike out of certain parts of the defence which flows from that admission. By the second application the defendants deny they made any admission but apply to withdraw it if it is found to have been made.

2. The first and second claimants are mother and daughter respectively. The first and second defendants are the first claimant’s sons. I will refer to them by their first names for ease of reference with no disrespect intended. At the centre of this claim is a partnership known as the Country Market Partnership governed by a Partnership Agreement. The Partnership property, worth about £6.6M, consists of farmland, a shop and a garden centre but there is a dispute as to the extent of property within the Partnership. Background

3. These applications are only concerned with the question of dissolution of the Partnership. Mr Walsh has provided a helpful chronology which I have expanded as below. 3.1 Circa 1983 to 1997. The Marshall family farm an area of land in Kingsley, Hampshire; business evolves from a smallholding to a farm shop and garden centre. 3.2 1 July 1997. The Partnership Agreement is executed by Peter, husband of June, and their children, Dean, Gary and Sharon. 3.3 19 th January 2017 Peter dies. 3.4 7 th June 2017. Grant of probate. June and two partners at Clifton Ingram appointed as Executors. 3.5 June 2017 to February 2018. The parties’ solicitors, Ms Barrington for the claimants and Mr Rivers for the defendants, debate the effect of Peter’s death on the Partnership. There is no agreement as to same, whether as to Partnership shares or anything else. 3.6 20 th March 2018. Mr Rivers writes to Ms Barrington: “My clients, Dean and Gary Marshall, have obtained counsel’s advice which may be summarised as follows: “1. The death of William Peter Marshall caused the partnership to dissolve. Unless an alternative agreement is properly reached, the remaining partners are now obliged to wind up the affairs of the partnership (perhaps by selling the partnership business and property as a going concern) and to distribute the assets appropriately.” Then: “4. The partnership dissolved on the death of William Peter Marshall as clause 4.1 of the Partnership Agreement provides: ‘the Partnership shall continue for the joint lives of the Partners or until its earlier termination under this Agreement.’ This means that the partnership continues while all the partners are alive, and when one of the partners dies, the partnership comes to an end. It accords with (and does not displace) Section 33 of the Partnership Act 1890. The clear provisions of Clause 4.1 are not qualified by Schedules 1 and 2.1 of the Partnership Agreement.” 3.7 9 th March 2018. Mr Laurie Scher’s opinion obtained by the defendants states: “14. Schedules 1 and 2 to the Partnership Agreement do, perhaps confusingly, make provisions which apply to a situation where the Partnership continues after the death of a Partner. They also use terms like ‘termination accounts’ where, again, the Partnership is clearly envisaged as continuing. Notwithstanding this potential for confusion, in my opinion, the clear provisions of clause 4.1 are not qualified by Schedules 1 and 2. I refer to Lewison, The Interpretation of Contracts, 6 th edition, para 9.08.

15. According to the Partnership Agreement and s33, then, the death of Peter dissolved the Partnership. The Partnership is in a ‘twilight’ period, between its dissolution, and its eventual winding up. The surviving partners have a duty (and a right) to wind up the business and affairs of the Partnership.

20. I am aware that this may not have been the advice expected by my clients, and would be happy to advise further if that would assist.” 3.8 29 th June 2018. The claimants’ solicitors write to the defendants’ solicitors and say: “We have both agreed that the Partnership exists now only for the purpose of winding up its affairs and selling. It may well be true that commercially, the Business has more value as a going concern. However, the Partners are all under the same duty now to wind up the Business and sell it. There is no right to continue trading.” 3.9 2018-2019. The parties attempt to resolve disputes over the partnership property and the winding up. In particular, the claimants’ solicitors on 23 rd August 2018 say: “We have both acknowledged for some considerable time now (and indeed both of us have Counsel’s opinion reaching the same conclusion) that the Partnership dissolved on the death of Peter Marshall. Earlier you acknowledged this: briefly referring to the possibility of reconstituting a new partnership if that was agreed.” There is no direct response by the defendants’ solicitors but the correspondence continues, especially as to meetings. 3.10 Summer 2019. Ms Barrington describes this period of time in her fir witness statement of 4 th July 2005 at paragraph 11: “In or around Summer 2019, matters had reached an impasse and there was no clear way forward. It seemed to me that there was foot dragging by the defendants. It was not clear to me why this was so, given the defendants’ clearly articulated position that the Partnership had come to an end. I was also instructed that the defendants appeared to be continuing to actively run the Partnership business without involving the claimants as opposed to simply doing what was necessary to wind up the Partnership. I had begun to be concerned that perhaps the defendants were no longer maintaining their position that they first raised – namely that the Partnership had come to an end. In the absence of an agreement as to the extent of the Disputed Land, and agreement on next steps as respects the winding up of the Partnership there was no apparent end in sight and therefore no path to my clients realising the significant value of their respective shares in the Partnership.

12. For that reason, on 22 August 2019, I sent a formal Letter of Claim to the defendants’ new (but now also former) solicitors, Penningtons Manches Cooper LLP (‘PMC’).” 3.11 22 nd August 2019. The Letter Before Action is sent to PMC. It is headed “Proposed Claim” by these claimants against these defendants and states it is sent in accordance with the Practice Direction and Pre-Action Conduct and Protocols. Under the heading “Relevant Background” at paragraph 6 it states: “As you are aware, pursuant to clause 4.1 of the Agreement, as well as s33(1), Partnership Act 1890, the partnership came to an end on the death of any of the partners – the partners only being entitled to continue business thereafter in order to wind up the business of the partnership.

7. Peter died on January 19 th , 2017. Following his death disputes arose with regard to the winding up of the partnership and payment to Peter’s estate of his share of the partnership. Additionally, there is a dispute as to the extent of land included within ‘partnership property’.

12. In view of the above it is June and Sharon’s case that accounts should be taken, and the partnership should be wound up, the business and property belonging to Country Market should be sold.” 3.12 September 2019. The defendants’ solicitors request a three month extension of time to respond. The claimants’ solicitors refused this but did extend time to 30 September 2019 and said that they would not issue proceedings before that date. 3.13 30 th September 2019. The defendants formally respond. (“The Response.”) They state in the first paragraph: “Thank you for your Letter of Claim dated 22 August 2019, and your further letter of 5 September 2019. Our clients have now taken advice from Leading Counsel on the contents of your letter and in relation to the issues between the parties more generally. Leading counsel then instructed by the defendants was Ms Caroline Shea KC. PMC continue saying a full response cannot be made due to Leading Counsel’s availability until 17 th October 2019 and: “Should you choose to issue proceedings prior to that date then we reserve our right to produce this letter to the Court when it comes to determine the issue of the costs of any such proceedings.” 3.14 Under the heading: “The Issues Between the Parties” PMC say: “Contrary to the assertion in your Letter of Claim there is no dispute between the parties that the Partnership must be wound up and the partnership business sold. The only barrier to the winding up of the Partnership is the determination of the status of part of the land used and occupied by the Partnership. The dispute between the parties and the first issue to be resolved by the court, by way of declaration, is whether the land forming part of title SH26598 which is not included in the Deed of Trust dated 9 June 1998 … is Partnership property.” 3.15 3 rd October 2019. The claimants’ solicitors reply and say: “We are pleased to see that your clients do not feel that there is any dispute that the Partnership be wound up and the Partnership Business sold.” 3.16 16 th October 2019. The claimants’ solicitors in a letter dealing mainly with an overdraft issue say: “It is incumbent on [your] clients to consult June Marshall on the operation of the partnership. We appreciate that steps are being taken to resolve matters and for a sale of the business but, in the interim, your clients are reminded that the partners should be moving towards a sale and treating each other as partners and behaving appropriately.” 3.18 17 th October 2019. PMC repeat the second paragraph of their reply of 30 th September 2019, namely, the dispute for the court to resolve concerns land, and not mentioning dissolution of the partnership. 3.18 Early 2020. A two-day mediation takes place predicated upon the Partnership having been dissolved. Settlement was not achieved but the claimants’ solicitors worked on release of options and pre-emption rights over the Land. 3.19 8 th February 2021. One year on from the mediation the defendants’ solicitors in without prejudice save as to costs correspondence, selected items of which the parties’ solicitors had agreed to waive privilege upon, after commenting on the continuing pre-emption rights, say: “It is my client’s position that the partnership is ongoing and was not determined by the death of Peter Marshall and therefore on the conclusion of any settlement, your clients will retire from the ongoing partnership.” 3.20 24 th February 2021. The claimants’ solicitors reply, moving matters forwards as to the pre-emption rights and other matters, but also saying: “David Masters’ final paragraph is astonishing. All correspondence, including from you, since 2019, has confirmed that the parties believe that the Partnership technically dissolved on Peter Marshall’s death and continues only for the purposes of sale. Your clients obtained Counsel’s opinion and provided a copy of this which confirmed that position. This view was concurred in by my clients’ Counsel and the parties have acted in accordance with that belief since then. Would you please advise by the end of this week on what basis you have reached a different conclusion?” 3.21 3 rd March 2021. The defendants’ solicitors confirm: “My clients are not putting obstacles in the way of a settlement which they wish to conclude as soon as possible.” In their final paragraph they say: “As for the status of the ongoing partnership, our clients have received further advice on this matter and this is now their position.” 3.22 26 th October 2023. Counsel, Mr Jamie Sutherland, provides an opinion (“the Sutherland Opinion”) to the defendants’ solicitors regarding pre-emption rights. Under the heading “Background” and a sub-heading “The Partnership” he states: “5. Peter died on 19 January 2017, and it is not disputed that this had the effect of dissolving the Partnership. Dean and Gary are seeking to buy out June and Sharon’s shares in the Partnership and carry on trading themselves. However, an issue has arisen over apparent pre-emption/option rights affecting part of the land, which could affect both the price to be paid for the Partnership shares and Dean and Gary’s ability to obtain finance for the purchase.” 3.23 17 th November 2023. The defendants’ solicitors send the Sutherland Opinion to the claimants’ solicitors commenting on pre-emption rights only. No mention is made of the dissolution issue. This marks the end of the without prejudice correspondence which is before me if that privilege applies to that letter of 17 th November 2023. 3.24 30 th July 2024. The claimants’ solicitors, by then part of Heald Nickinson, send the defendants’ solicitors then, as now, Charles Russell Speechlys, draft particulars of claim and threaten to issue and serve same if no satisfactory response is received. Those draft particulars say at paragraph 3: “All of the Parties and Peter were Partners in what they all referred to amongst themselves as Country Market Partnership (the ‘Partnership’). The Partnership dissolved on the death of Peter by virtue of (a) s.33(1), Partnership Act 1890, and (b) by virtue of Cl.4.1 of the Partnership Agreement (the ‘Agreement’).” 3.25 23 rd August 2024. The defendants’ solicitors in reply say good progress is being made in negotiations and court proceedings are not necessary. 3.26 29 th January 2025. The claim form is issued with particulars of claim, including paragraph 3 as in the draft I have quoted above. 3.27 1 st April 2025. In their defence the defendants say at paragraph 3.1: “When Peter died on 19 January 2017, he ceased to be a member of the Partnership. It is denied, however, that the Partnership itself was dissolved for this reason under section 33(1) of the Partnership Act 1980” [meaning 1890] “or by virtue of clause 4.1 of the Agreement, or for any other reason.” 3.28 4 th June 2025. The claimants serve a reply in which they say at paragraph 5(a): “It is denied that the Claimants have misconstrued Clause 4.1 of the Agreement, and it is averred that the Partnership dissolved upon Peter’s death. Paragraph 3 of the Particulars of Claim is repeated. (b) Further and alternatively, the Claimants aver that an estoppel has arisen (whether by convention or otherwise) which operates to prevent the Defendants from asserting that the Partnership is continuing, in circumstances where the parties have, for an extended period of time, shared an express common understanding that the Partnership dissolved upon Peter’s death. The Claimants have acted upon that understanding to their detriment and have been encouraged to do so by the Defendants.” Then at 7(h)(i): “There has been a common understanding since June 2018 that the Partnership dissolved on the death of Peter. The Defendants have made a pre-action admission to this effect in the PMC letter dated 30.09.2019.” 3.29 4 th July 2025; Claimants’ Application was issued. 3.30 9 th October 2025; Defendants’ application to withdraw issued. The Issues

4. The Issues are: (1) Was an admission within the meaning of CPR Part 14 made by the defendants in 2019? (2) If so, should the court grant the defendants permission to withdraw that admission under CPR 14(5) and all the circumstances of the case? Issue 1: is there an admission? The Law and Submissions

5. CPR 14.1 states: “(1) A person may, by notice in writing – (a) admit the whole or any part of another party’s case before commencement of proceedings (a ‘pre-action admission’); (b) withdraw a pre-action admission before commencement of proceedings, if the person to whom the admission was made agrees. (2) After commencement of proceedings – (a) any party may apply to the court for judgment on the pre-action admission; and (b) the maker of the pre-action admission may apply to the court for permission to withdraw it.”

6. The note at 14.1(1) states the new rule from October 2023 is striking in its simplicity, and then in the final paragraph: “One practical effect of the rule, as with the previous rule 14.1(a) is that it gives a claimant confidence that they can rely on a pre-action admission made under it in the knowledge that it can only be withdrawn either with their agreement or, after proceedings have begun, with the permission of the court. This in turn may limit the need for them to spend time and money in continuing to investigate and gather evidence in relation to the particular issue.”

7. Then at 14.1(2) referring to the new rule “This reflects the traditional reluctance of the court to allow a party to backtrack without good reason and the duty of the court and the parties under the overriding objective to help ensure that the proportionate and expeditious management of cases is not slowed down by unjustified changes of position.”

8. Both parties made substantial submissions on the distinction between an admission and an averment, referring me to the decision of Popplewell J, as he then was, in Bayerische Landesbank Anstalt Des Offentlichen Rechts v Contsantin Medien AG [2017] EWHC 131 (Comm) at paragraphs 20 to 23.

9. Mr Walsh submits the party making the averment must consider not only whether the statement is true, but also whether and how it may be proved with evidence, as opposed to an admission which is a response to an averment made by the opposing party where the party is only concerned with whether what has been alleged by him is true, without the need to prove or disprove the allegation independently.

10. CPR 14 applies to the withdrawal of admissions but not withdrawal of averments. In the last part of paragraph 21 of Bayerische the distinction was explained thus: “A party is not bound to make a positive allegation by way of a positive averment merely because he believes it to represent the true position. He will often, therefore, be permitted to abandon an averment which he was free to choose whether or not to make in the first place. Admissions are different. The allegation has been put in play by the opponent, and the party is therefore obliged to state a position in respect of it. He cannot avoid the issue arising.”

11. Mr Walsh submits a party is free to choose whether to make an averment but an admission is an allegation “put in play” by a party in respect of which the recipient is obliged to state their position. In other words, an admission requires accepting a part of the other party’s claim but an averment will narrow the scope, whether of facts or law; see also the decision of Master Brightwell in Moyses Stevens Flowers Limited v Flower Station Limited & Another [2024] EWHC 4 (Ch) at paragraph 51.

12. Mr Sadiq sums up the distinction in Bayerische at paragraph 21 as an admission being responsive in nature, in that an allegation has been “put in play” by one party and the other sets out their position in response.

13. Mr Walsh submits that the first question is: who put the issue of the dissolution of the Partnership on the death of Peter - the dissolution issue - “in play”? . He has set out a detailed history of the correspondence over the early period of June 2017 to February 2018. Mr Walsh submits that this is an important point, as the defendants “put in play” for the first time the suggestion that the Partnership had dissolved by the death of Peter and sought to prove this by providing Mr Scher’s opinion, as I describe at paragraphs 3(6) and 3(7) above. That, he submits, is therefore an averment and therefore not an admission.

14. Mr Walsh further submits that the claimants in their letter of 29 th June 2018 accepted the position, namely, the averment by the defendants, so there is no admission as all flows from the averment. Mr Sadiq submits this is an over complication of the law and that the rule is very simple; has someone accepted the whole or part of another party’s case? If they have, whether expressly or impliedly, it is an admission. He emphasises that it does not matter who is the first party to raise the matter and that is not the effect of Bayerische at paragraphs 20-21.

15. Mr Sadiq also submits that as to the admission, the claimants put it in play with their letter before action, especially at paragraphs 6 and 12 - see my paragraph 3.11 above - where they said that “our case is as in the Letter Before Action”. That, he submits, is the averment and the admission comes from the defendants’ acceptance of the claimants’ case as set out in the Response.

16. The pre–Letter Before Action correspondence he submits is therefore irrelevant to this part of the application as it does not deprive the Letter Before Action of the essential element of setting out the claimants’ case, emphasising again that the rule is simple, as is the position here.

17. Mr Walsh summarised his position that the Letter Before Action does not invest that assertion at paragraph 6 with any special quality erasing previous dealings so that whatever was said before does not matter. He submits that Mr Sadiq has to exclude the antecedent correspondence as it does not help him.

18. In particular, he emphasised that (a) the law is straightforward if correctly applied, which is not what the claimants have done; (b) it has to be applied rigorously, which again has not happened here; (c) there must be clarity; (d) the proper consideration of the Partnership Agreement is a question of law not fact; (e) the claimants are trying to make the issue as nebulous as possible; (f) precision in correspondence is crucial and central; without that clarity is not possible; (g) the claimants’ case collapses if the antecedent correspondence is taken into consideration; they therefore have to submit, wrongly, that it is irrelevant.

19. Mr Walsh submits the statement in the Response that there is no dispute that the Partnership must be wound up does not mean the technical point of law is agreed or accepted. He then cited the judgment of Jacobs J, as he then was, in PJSC Tatneft v Bogolyubov & Ors [2020] EWHC 623 (Comm) at paragraph 18 where there was an application to withdraw a previous positive averment, as he submits is the position here.

20. As to clarity, Mr Walsh referred me to Tinkler & Another v Invesco Asset Management & Others [2025] EWHC 1624 (Ch) at paragraph 46 where Leech J said: “Moreover, where the admission is said to be one of law or of a complex nature, it is unlikely that the Court will find that the relevant communication has sufficient clarity to fall within CPR Part 14.1 if it has not been set out clearly and addressed to a party who relies on it.”

21. Mr Walsh criticises the claimants’ application as not setting out the alleged admission in their Application Notice nor in Ms Barrington’s first statement. He also submitted that the correspondence shows for all purposes the parties treated the Partnership as continuing. I do not accept that for these reasons: (1) The Partnership was in the twilight period pending winding up, as referred to by Mr Scher in his opinion. (2) That June continued to take drawings she was entitled to under the Partnership Deed does not affirm it or estop her in any way from maintaining the Partnership had been dissolved. As a matter of practicality she needed the monies to live on.

22. Mr Walsh summarised five reasons why the statement in the Response is not an admission and is an averment: (1) The defendants put the issue in play themselves; (2) The reference to dissolution is obscurely included in the section of the Letter Before Action headed “Relevant Background”. It is not present as an issue in dispute. It could have been included in June and Sharon’s claims but was not. (3) Reference to dissolution in the Letter Before Action is prefaced “As you are aware…” so the defendants put the matter in play, and accordingly it is a reference to the averment. (4) The Response is not conclusive as it states there was no dispute. It therefore reflects the common understanding. (5) There is a lack of clarity, namely, the reference to no dispute as to the dissolution issue is insufficiently clear to mean the death of Peter dissolved the Partnership.

23. Therefore, even if, which Mr Walsh does not accept, the statement in the Response is an admission as opposed to an averment, he submits it is incapable of being an admission as it is (1) equivocal; (2) capable of numerous interpretations; (3) not sufficiently clear for the purpose of CPR 14. Discussion and decision

24. I do not accept that who first put the issue “in play” in a series of communications on the same matter between the same parties governs the question as to whether the statement in the Response is an averment or admission. In my judgment, that issue must be considered by looking at the correspondence as a whole and the particular facts and circumstances of the matter.

25. Here the defendants made an averment in their letter of 20 th March 2018 summarising Mr Scher’s advice that “the death of William Peter Marshall caused the Partnership to dissolve”. That was accepted by the claimants’ solicitors, who then became concerned after negotiating for almost one and a half years that there was no clear way forward, apparent foot dragging and possible reneging upon the agreement that Peter’s death had dissolved the Partnership.

26. It is wrong, in my judgment, for parties in all circumstances to be constrained by what could be termed “first mover” advantage so that once an averment has been made on an issue the other party cannot make an averment of its own. That is to ignore changes in circumstances and also the effluxion of time and, as here, the real threat of issuing proceedings. Further, to not permit a party to draw a line in negotiations in an attempt to force the issue would be adverse to the proper management of litigation and obstruct the limitation of costs. It would not facilitate the just and swift disposal of issues.

27. The Letter Before Action resolves it in the formal terms expected by the CPR and is headed “Proposed Claim” and cites the pre-action conduct and protocols and imposes a 21-day time limit for a response. In essence, at paragraph 6 it states as background the Partnership comes to an end on the death of Peter, and at paragraph 7 that Peter died. It then sets out claims for the Partnership being wound up.

28. I find the statements in paragraphs 6 and 7 of the Letter Before Action that the Partnership had come to an end and the business only continued to be wound up to be an averment. The response is formal in its nature and acknowledges the like formal nature of the Letter Before Action. It has been prepared by solicitors who have taken advice from Leading Counsel on the Letter Before Action. It states there is no dispute that the Partnership “must be” wound up.

29. I find on the face of it, and subject to Mr Walsh’s challenges as to form, that to be an admission as the claimants put the point in play and the defendants in the Response admitted the same when they could have denied it. That was their express considered choice.

30. I now turn to the challenges by Mr Walsh as to form, namely, that the admission is equivocal, capable of numerous interpretations, insufficiently clear as to the purposes of CPR 14 and lacks clarity.

31. The key sentences that are concerned are the quotations I have set out above in 3.12, 3.14, 3.15 and 3.19 which should be considered consecutively.

32. Mr Walsh submits that paragraphs 6 and 7 of the Letter Before Action are “obscurely included” under relevant background. I disagree. Whilst it could be included under both June and Sharon’s Claims, it did not have to be. If the defendants’ solicitors and Leading Counsel were in any doubt as to what was meant they could and should have said so. They understood; hence the Response. In any event, under Claims it is clear they seek the winding up of the Partnership that is predicated upon death and dissolution in paragraphs 6 and 7 of the Letter Before Action.

33. Mr Walsh also submitted that the inclusion of “as you are aware” in paragraph 6 accepts the defendants put the matter in play, so this is a response to an averment. I disagree, for the reasons I have given above as to why this is the averment.

34. As to the lack of clarity, namely, the reference there is no dispute as to the partnership being wound up being insufficiently clear to mean the death of Peter dissolved the Partnership, in my judgment, the Response is to be read as replying to both paragraphs 6 and 7 of the LBA, not only paragraph 6, as appeared to have been the emphasis in submissions. It is paragraph 7 and the reference to “disputes arose” that I find the Response was directed to, where it states: “Contrary to the assertion in your letter of claim, there is no dispute between the parties that the Partnership must be wound up”. That also addresses Mr Walsh’s submission that the Response merely reflects a common understanding.

35. I also note the defendants’ solicitors could have, if they were in any doubt as to the admission they made with the benefit of extensive legal advice, sought to clarify or discuss it further with the claimants’ solicitors. That they knew exactly what they admitted is supported by the start of their attempts to resile from the admission by stating on 8 th February 2021, namely “the Partnership is ongoing and was not determined by the death of Peter Marshall”. There was no equivocation in the way they resiled from their previous position.

36. In my judgment, the admission has the clarity and certainty for CPR 14 as an important and considered part of the formal reply to a pre-action protocol letter it had to. I find further support for this conclusion in the references by the defendants’ solicitors in response to: “The dispute between the parties and the first issue to be resolved by the court … is whether the land …” repeated in their letter of 17 October 2019, together with the use of the word “must” before “be wound up”. The only possible meaning is an admission that the Partnership must be wound up based on, as in reply to, the reference at paragraph 7 in the Letter Before Action to Peter’s death.

37. One other point I should deal with is the position of a letter before action compared to a statement of case. I accept, as Mr Sadiq submits, that by the terms in a pre-action protocol compliant letter before action the parties crystalise their claims and seek a response. Mr Walsh submits that Mr Sadiq elevates a letter before action to that of a statement of case. I do not think he does, but I would emphasise there is no difference between an admission in a defence and one in response to a pre-action protocol letter before action, in the sense that permission is required to withdraw it if the application is made post-issue.

38. In summary, I find as to Issue 1 that there was an admission by the defendants in the Response which complied with CPR 14, in that the partnership came to an end with the death of Peter. Issue 2. Should the defendants be granted permission to withdraw that admission? The Law

39. CPR 14.5 provides: “In deciding whether to give permission for an admission to be withdrawn, the court shall consider all the circumstances of the case, including - (a) the grounds for seeking to withdraw the admission; (b) whether there is new evidence that was not available when the admission was made; (c) the conduct of the parties; (d) any prejudice to any person if the admission is withdrawn or not permitted to be withdrawn; (e) what stage the proceedings have reached, in particular, whether a date or period has been fixed for the trial; (f) the prospects of success of the claim or of the part of it to which the admission relates; and (g) the interests of the administration of justice.”

40. The note at CPR 14.5(1) states each case turns on its own facts and the court has a wide discretion. I was referred to the judgment of Mr Justice David Steel in American Reliable Insurance Co v Willis Ltd [2008] EWHC 2677 (Comm) and the decision of Ward LJ in Woodland v Stopford & Others [2011] EWCA Civ 266 at paragraphs 25 to 27, including [16 to 18] of American Reliable .

41. As for the factors at paragraph 26 Ward LJ said: “These factors are not listed in any hierarchical sense nor is it to be implied in the Practice Direction that any one factor has greater weight than another. A judge dealing with a case like this must have regard to each and every one of them, give each and every one of them due weight, take account of all the circumstances of the case and, balancing the weight given to those matters, strike the balance with a view to achieving the overriding objective.”

42. Mr Walsh also cites Tutt v Ministry of Defence [2023] EWHC 2834 (KB) where Pearce J in summarising the authorities said at paragraph 8(3) referring to Woodland that: “The court should be given a full and frank explanation as to the circumstances in which the admission was made and the basis upon which it is sought to be withdrawn.”

43. As to CPR 14.5(f), prospects of success, Mr Justice Pearce in Tutt said at paragraph 8(5): “In particular when reflecting on prospects of success, the court cannot, and should not, engage in too close an examination of the merits of the defence nor more particularly should it conduct some kind of trial on the papers. This is likely to be particularly important where, as here, relevant witness evidence is not before the court. See Newham Borough Council v Arboleda-Quiceno [2019] EWHC 2660.”

44. Mr Walsh further submits that an application is not barred by error on an initial assessment of liability as opposed to on new evidence, and the timing of the admission against the timing of withdrawal is a relevant factor. (See Tutt at paragraphs 13, 14 and 15 respectively.) As to prejudice at paragraph 17 Pearce J said: “The claimant contends that this is a strong case and inevitably he would say that, but it certainly seems to me that his position is made more difficult by the withdrawal of the admission if that is permitted. The prejudice with which the court is likely to be concerned here is not, as it were, the windfall advantage or disadvantage from the admission being made and/or bring withdrawn, it is the prejudice from the fact that the claimant having received the admission was entitled to work on the assumption that he did not need to prove those matters relevant to that which was being admitted.”

45. In Ahmed v Ouajjou and Another [2023] EWHC 2666 (Comm) Jacobs J at paragraphs 132 to 134 stated as to prejudice that if the admission which was narrow in itself was not permitted to be withdrawn it would prevent the defendants from arguing the true position in a complex claim worth tens of millions of pounds in respect of which there was to be a trial in any event. That would be highly prejudicial and produce an artificial trial and as a result factor (g) would be contrary to the administration of justice.

46. Mr Sadiq emphasised the need for any application to withdraw to be made in good faith, which necessitates a full and frank explanation of (a) the circumstances in which the admission was made, and (b) the basis for withdrawal on the ground it is no longer true. (See Bayerische at paragraph 63 and American Reliable at paragraph 18.) Mr Sadiq also cited as to error and the need for proper and full explanation Cavell v Transport for London [2015] EWHC 2283 (QB) where at paragraph 15, referring to error, William Davis J criticised: “… the total lack of any explanation” for the error by the applicant which, “combined with the lack of any new evidence” was in those circumstances of very considerable significance.

47. At paragraph 16 he said: “It cannot be in those interests to permit the withdrawal of an admission made after mature reflection of a claim by highly competent professional advisors when there is not a scintilla of evidence to suggest that the admission was not properly made. Were it to be otherwise civil litigation on any sensible basis would be impossible.”

48. A party is not expected to waive privilege and no adverse inferences are to be drawn by maintaining that privilege. However, in Bayerische at paragraph 55 it was stated: “Nevertheless, the Court has to decide an application under Rule 14.1(5) on the evidence which is before the Court. If the evidence which the party seeking to withdraw an admission chooses to put forward in support of that application involves an explanation which is inadequate or unsatisfactory or in some way deficient, then that is a factor which the Court will take into account as one of the considerations when dealing with the factor which is enumerated under subparagraph (a) of Practice Direction 7.2.”

49. I now turn to the parties’ submissions under CPR 14.5 factors and my determination of them, including the weight to be attached where necessary. (a) The grounds for seeking to withdraw the admission.

50. As is apparent from the above chronology, almost 18 months after the admission the defendants’ solicitors said for the first time, and only on a without prejudice basis, that Peter’s death did not determine the Partnership. When asked for an explanation they responded one month later on 3 rd March 2021 that they had “received further advice”. This is far from the full and frank explanation as to the circumstances in which the admission was made and the basis for withdrawal. (See Tutt at paragraph 8(3).)

51. That full and frank explanation should have been set out in a prompt approach to the claimants’ solicitors for agreement to withdraw the advice which could, to preserve the defendants’ position, have been made on a protected basis, but no such approach was ever made. Indeed, the defendants compounded the lack of explanation by circulating on 17 th November 2023, over four years on from the advice, the Sutherland Opinion which states the effect of the death of Peter was that the Partnership was dissolved.

52. The claimants rightly accept this is not an active assertion by the defendants as to the continuation of the Partnership, but it appears Mr Sutherland could only have stated this on instructions from PMC. Again, there was no explanation. Further, the defendants’ solicitors did not qualify that statement when writing providing the Sutherland Opinion. There is no explanation as to why they did not.

53. Further, the defendants could and should have responded to the draft particulars of claim provided almost five years after the admission in July 2024 but ignored the point. Whilst I can understand and indeed applaud the apparent nearness of settlement mentioned in their response on 23 August 2024, still nothing was said for many years on an open basis.

54. In the defence served on 1 April 2025, five and a half years after the admission, there appears for the first time a full explanation as to the defendants’ change of position at paragraph 3. Mr Flenley is the defendants’ solicitor who has made a witness statement dated 7 October 2025 opposing the claimants’ application. He sets out his clients’ position by each of the CPR 14.5 factors.

55. As to the grounds at his paragraph 7.3 he says the defendants “must accept the Admission was made in error”, that it was “wrong” and that “that error was made on the basis of Counsel’s opinion provided in 2018, which was incorrect”. He continued that the case is now being managed with the assistance of Leading Counsel and the position is as set out in the correspondence from February 2021. He did not mention the without prejudice privilege which attaches to that correspondence. Finally he states: “Insufficient consideration was given by Counsel instructed in 2018 to the operation and effect of the remaining clauses of the Agreement, including in particular clauses 18.1 and 23”.

56. What he does not but should have set out for the explanation to be full and frank, was how the admission was made when, as his predecessor solicitors described it in the response, they had taken advice from Leading Counsel on the Letter Before Action and in relation to the issues more generally.

57. Her advice is privileged and no adverse inference can be drawn merely by the defendants maintaining that privilege, but as Popplewell J continues at paragraph 55 of Bayerische , if the evidence for that explanation is inadequate or unsatisfactory or in some way deficient that is a factor the court will take into account. Here, in my judgment, the explanation is all three, inadequate, unsatisfactory and deficient in view of the circumstances when the admission was made, namely, after reflection and upon advice, inadequately explained and then compounded by the Sutherland Opinion.

58. Mr Walsh in his oral submissions responding to the claimants’ criticism of the lack of a full explanation asked: what more is there to say? The admission is wrong in law and the defendants are taking opportunistic advantage of a windfall. I note as to what he describes as an error of law that there is a difference between advice being wrong and there being a difference of opinion between counsel on a point of law. Mr Walsh also submits that insufficient consideration was given by previous lawyers as to clauses 18.1 and/or 23 in particular. But I do not think that submission can be made as to Ms Shea KC’s advice and there is no evidence before me from the solicitor then instructed who wrote the Response.

59. It is, as Mr Sadiq submits, implicit in the Response that it reflects that advice, otherwise why refer to it? Further, PMC in their letter of 17 th October 2019 had an opportunity, had they so wished, to retract the admission subject to agreement. Instead, they maintained the dispute concerned matters other than dissolution.

60. A change of counsel does not entitle a party to a change of position without more, as to which the defendants are silent. In a particular case this factor, Jacobs J states in Ahmad at paragraph 117, may be regarded as especially important, but there is no rule that it is always the most important factor and the they all should be considered as a whole.

61. Mr Walsh summarised his client’s position that the admission is wrong in law and there is nothing more to say. That submission in my judgment falters upon the lack of a full and frank explanation, as I have explained. Overall, as I have said above, the defendants have not properly evidenced the explanation of the circumstances in which the admission was made, nor the grounds for its withdrawal. (b) Whether there is any new evidence that was not available when the admission was made.

62. There is no new evidence. As Mr Walsh submits, it is a question of law and a lack of new evidence is no bar to the granting of his application. (c) The conduct of the parties.

63. Mr Flenley states that if, as I have found, there was an admission in 2019 then the intervening six years between the admission and his application can be explained by three matters. First, it was corrected in February 2021, four and a half years ago, and there have been active negotiations over that period in view of which there was no need to formally withdraw the admission unless or until formal proceedings were commenced. I disagree. It has always been best practice in litigation to act on a timely basis and in accordance with the CPR. Then there is no reason for doubt and costs are often saved. The CPR specifically provides for a notice in writing to be given withdrawing the admission if the recipient agrees. That was not done and I can see no reason for latitude to be extended to the defendants in those circumstances.

64. What is of special concern is the way the “correction” was made in without prejudice correspondence in February 2021. It did not become open until effectively the defence in April 2025, just over four years later. There was no explanation for maintaining that privilege until the defendants realised they had to, otherwise they could not rely upon that correspondence as evidence in their application.

65. Mr Flenley also says in his witness statement at paragraph 6.3 there was no withdrawal of an admission as one had not been made; it was “merely a change of position. At the time the parties were actively engaging in settlement discussions, and the Defendants simply did not consider that they needed to express this change of position in open correspondence”. He ascribed that, in part, to the alleged non-admission but says: “Had the Defendants considered this point at that time, the Defendants would have made the position clear in open correspondence as well.”

66. I find that difficult to accept. It would have been the work of one or two minutes to cut and paste a single sentence in the letter of 8 th February 2021 into an open letter. The like applies to the single sentence in the letter of 3 rd March 2021. Nothing was put in writing by the defendants on any basis until service of the defence in April 2025. It appears that the defendants deliberately decided not to put the point in open correspondence. The only possible reason I can think of for maintaining the without prejudice privilege on this critical point is some form of costs advantage. I note the privilege is expressed as save as to costs.

67. But there is no evidence for that which means no proper reason or explanation for use of the privilege. That, plus the extremely long delay of four years in putting the issue on an open basis, is conduct I consider goes against the defendants’ application. I add in that respect: (a) the failure of the defendants to seek withdrawal prior to the issue of proceedings, (b) likewise their failure to object on an open basis upon receipt of the draft particulars of claim, (c) likewise after service of the reply on 4 June 2025, indeed, the application to withdraw was issued four months thereafter, and (d) the provision of the Sutherland Opinion without qualification.

68. Mr Flenley then at his paragraph 7.5.3 criticises Ms Barrington’s statement that is the first time the defendants had resiled from the admission, which he states is relevant, in that it is poor conduct. As Ms Barrington accepts, this could have been more precise by her stating that was the position on an open basis, but that would indicate the likely presence of the without prejudice correspondence, conduct that may then again also result in Ms Barrington being criticised. In any event, I do not think this can amount to criticism of Ms Barrington as, as I have found above, the conduct which is in my judgment properly subject to criticism is that of the defendants in maintaining their position on a without prejudice basis.

69. Mr Flenley’s third point as to conduct is that the claimants have continued like all other partners to take drawings, so that even without the without prejudice correspondence, it is clear the claimants recognise the defendant’s position that the Partnership is ongoing. I disagree. As I have said above, the taking of drawings is necessary for June’s day-to-day expenses. It would be odd to expect her to forego her income over all those years and I do not accept this as proper criticism of the claimants’ conduct.

70. I also have substantial concerns as to the conduct of the defendants in their approach to justifying their grounds for the withdrawal, as I have set out above at paragraphs 50 to 61, as the matters I mention there often also amount to issues of conduct such as the failure to give a full and frank explanation, the absence of explanation as to the advice of Ms Shea KC, the delay, the failure to write on an open basis and the provision of the Sutherland Opinion.

71. In addition, the defendants’ conduct can also be criticised as to the change of position after mediation had taken place, on the basis that the dissolution issue was agreed, which I refer to below under “Prejudice”.

72. Further, the claimants had not issued proceedings until recently but had for a considerable period of time negotiated on a basis which the defendants maintained but then withdrew. June is now 86 years old and whilst, as the defendants submit, there is no evidence of ill-health, nor that her oral evidence is required on this point, the fact remains the dissolution of the Partnership has been put back by the delay caused by the defendants and her years will proportionately decrease in probability as they increase in number.

73. In all the above circumstances and for those reasons, I find that the conduct of the defendants militates against the exercise of my discretion as far as CPR 14.5(c) is concerned, but that is only one of the various circumstances or factors. (d) Prejudice if the admission is withdrawn or not.

74. Mr Flenley states that if I grant his application then the claimants have to prove a liability they otherwise would not and that prejudice “is not a relevant consideration for the court” as dissolution is a question of law. He adds, and I agree, that the claimants would find it no harder to gather evidence.

75. But he says the defendants will suffer significant prejudice to what is a valuable going concern worth approximately £6.6 million. If withdrawal is not permitted that could prejudice the value of the ongoing business and all they have done in building it over the last 30 years.

76. Ms Barrington refers to the prejudice to June in view of her age and that she does not have access to sufficient funds as she cannot realise her and Peter’s shares. She also states that, had the defendants done one or more of setting out their position openly in 2021 or thereafter, or explaining the change of position fully, or explaining the admission in the Sutherland Opinion, or responding to the draft particulars of claim in 2024 then the claimants would have issued proceedings earlier and not incurred the especially high costs of negotiations.

77. Ms Barrington refers to the claimants’ overall costs for the two-day mediation as being approximately £70,000 which the claimants engaged in due to the defendants’ admission. However, in my judgment, various matters were progressed in the mediation. There is no evidence before me as to whether the claimants would have engaged in mediation had the admission been withdrawn before it. Having said that, I consider it reasonable to assume that without the admission the mediation would have proceeded on a different basis and/or lasted longer and thereby cost the parties even more.

78. I also have in mind the claimants’ detailed plea in the Reply at paragraph 7 that the defendants’ error estopped them asserting the Partnership did not dissolve on Peter’s death.

79. But overall, on balance, the prejudice to the defendants on this single issue appears greater than that to the claimants in view of the finality of the admission and especially as a trial is necessary of the other matters in dispute. (e) The stage the proceedings have reached; in particular has a date or period been fixed for trial?

80. Mr Walsh submits that his application was made at the earliest stage of these proceedings, as soon as it became clear the claimants would rely on the admission. I disagree. The application is not constrained by or to the issue of proceedings. The defendants in my judgement could and should have resiled from the Response (a) on an open basis, and (b) in accordance with the procedure in CPR 14.1(1)(b) by 8 th February 2021 at the latest. That was four and a half years before the application was actually issued.

81. Mr Flenley also states at paragraph 7.7.1 of his statement that their application was made at the very outset of the proceedings and that the defendants “made their position abundantly clear in the Defence as it had done in previous correspondence”. Again, I disagree, for these reasons: (1) An application made on 10 th October 2025 cannot be described as “at the very outset” of proceedings which were commenced on 29 th January 2025 let alone provision of the draft particulars of claim on 30 th July 2024. (2) The previous correspondence was without prejudice and until the current inter solicitor agreement to waive privilege could not be relied upon or referred to. (3) Even if that correspondence had been open, it gave no reasons whatsoever whether in the circumstances in which it was made there was a basis for withdrawal, nor other reasons which only became apparent upon service of the defence.

82. Further and in any event, even if both the defendants’ firms of solicitors and Leading Counsel were of the view there was no admission, it would have been a reasonable and proportionate course of action to make a protective approach long before this protective application. Further, there is the prejudice to the claimants who proceeded for some time, including engaging in a substantive mediation at large cost, on the basis that the issue was agreed. That applies no matter that the issue is one of law as opposed to the clients being put to the trouble of gathering evidence of fact.

83. Mr Walsh submits that the position here is akin to that in Ahmad at paragraph 133, in that the admission here is a narrow one and the case would still go to trial in any event. Further, if permission is not given the defendants would be barred from raising key defences to the winding up of the Partnership and are more likely to lose at trial, so it would be highly prejudicial.

84. Mr Sadiq emphasised the prejudice to the claimants, including not issuing proceedings and progressing the matter at a far earlier stage, June’s age and the costs incurred on the basis that dissolution by reason of Peter’s death was accepted. Mr Walsh objected to Ms Barrington’s evidence as to June’s position, in that she personally could not give such evidence. I think solicitors acting in a matter such as this who are so inextricably linked by reason of their correspondence with the matter and connection to their clients and with the authority of those clients can make such statements even if it were that, for example, they would not be permissible in trial witness statements for these courts for the purposes of PD57AC.

85. In summary, I think there is considerable prejudice to each party if this application is not decided in their favour. (f) The prospect of success of the claim or the part of it to which the admission relates.

86. Both counsel agree that I am not conducting a mini trial. I have considered the submissions of the parties, plus the pleadings as to the legal issue and the prospects of success carefully. I have in mind Tutt , at paragraph 8(5). Mr Walsh also submits that I should not engage in too close an examination of the merits of the defence, citing Arboleda-Quiceno v London Borough of Newham [2019] EWHC 2660 (QB) at paragraphs 24 and 27. I note at paragraph 25 Mrs Justice Lambert DBE said there must be limits to the permissible examination of evidence at an interlocutory stage. The like in my judgment applies to examination of points of law.

87. My conclusion as to this factor is that the defence is certainly not fanciful, but without trespassing into a mini trial I do not consider I can find other than that both parties’ positions are fully arguable and this factor is therefore in my judgment neutral. (g) The interests of the administration of justice.

88. Mr Walsh cited the decision of Zacaroli J, as he then was, in HLHP v Oriental Food Limited [2024] EWHC 497 (Ch) at paragraphs 27 to 29 in support of his submission that by section 39 of the Partnership Act 1890 is a gateway, in that both Partners “may on the termination of the partnership apply to the Court to wind up the business”. Therefore, he adds, even if I refuse this application the claimants will still have to satisfy the court on the dissolution issue. Accordingly, it is not in the interests of justice to deny the defendants the opportunity to run this argument.

89. Mr Sadiq distinguishes HLHP as that decision concerned a section 994 petition, also referring me to paragraph 35 and the question being whether the party concerned had standing to petition. I agree. I do not consider HLHP to be of assistance in the matter of this admission.

90. Further, whilst I note the gateway by section 39, what the defendants said by way of admission was that (a) the Partnership must be wound up, and (b) the business sold. Therefore the dissolution issue falls away and Mr Walsh is correct that the matter will still go to trial on other issues, but that does not affect the interests of the administration of justice as that is the ordinary course of litigation where there is an admitted issue.

91. In no sense would it be unjust for a trial to proceed in that manner. That in my judgement is supported by the note at CPR 14.1(2) which refers to “...the traditional reluctance of the court to allow a party to backtrack without good reason and the duty of the court and the parties under the overriding objective to ensure the proportionate and expeditious management of cases is not slowed down by unjustified changes of position.

92. I have referred to Cavell at paragraph 46 above. In that road traffic accident claim the defendant said that liability would not be an issue and then later that the admission was made in error, but no explanation offered, notwithstanding careful consideration and it being a reasoned decision arising therefrom. There was “a total lack of any explanation coupled with the lack of any new evidence”.

93. As to this fact at paragraph 16 Mr Justice William Davis said: “It cannot be in those interests to permit the withdrawal of an admission made after mature reflection of a claim by highly competent professional advisors when there is not a scintilla of evidence to suggest that the admission was not properly made. Were it to be otherwise civil litigation on any sensible basis would be impossible.”

94. Cavell concerned a far simpler but equally crucial issue, namely, liability, albeit as to fact as opposed to law. But here the defendants were also advised by highly competent professional advisors, PMC and Ms Shea KC, compounded by the circulation without comment by PMC of the Sutherland Opinion.

95. Further, the so-called error here is the difference of opinion on a point of law. I note that that change was on the instruction by the defendants of their third legal team of solicitors and counsel. It may, and I put it no higher in the absence of evidence, have been occasioned by a desire on the part of the defendants to reset their position for tactical reasons in the dispute, but it took a very long time and the claimants did act to their detriment, as I have explained.

96. In my judgment, the interests of the administration of justice are best served by ensuring that the parties are held to the admission that has been made after full and due consideration on the basis of all the relevant facts and the law by competent professional advisors. Such admissions are made on the basis that they have consequences.

97. The advantages of an admission generally in disputes include that they should result in a reduction in legal costs and not just to the recipient. The issues should become more focused. It is likely that settlement is promoted or made easier, especially as an admission should be taken by the recipient as an indication of a genuine and transparent approach which accords with the overriding objective. In summary, I find this factor militates against permitting withdrawal. Conclusion

98. When I take a step back from my consideration of the individual factors and look at all the circumstances of this claim, I am in no doubt I should refuse this application to withdraw. I place substantial weight upon my determination in the claimants’ favour of factors (a), (c) and (g). I find (b), (e) and (f) quite neutral. In the particular circumstances, (d) I think favours the defendants.

99. This is not of course a quantitative consideration but a qualitative one. It is possible that one factor could, in the overall circumstances, outweigh all the others. So could the combination of factors that are otherwise neutral, but in all the circumstances of this particular case I am in no doubt that the most significant factors are (a), (c) and (g) and I attach the most weight to them. My answer to Issue 2 therefore is that I refuse the defendants’ application for permission to withdraw the admission.

100. Finally, I see that the parties’ costs for this one and a half day hearing amount to some £210,000. I would urge them to do all they can to negotiate an end to this dispute which can only I think be in their very best interests, particularly in view of the costs which will increase rapidly from now onwards. I will now hear counsel as to the terms of the order and the other steps upon the applications before me. (This Judgment has been approved by Deputy Master Linwood.) Digital Transcription by Marten Walsh Cherer Ltd 2 nd Floor, Quality House, 6-9 Quality Court, Chancery Lane, London WC2A 1HP Telephone No: 020 7067 2900 DX: 410 LDE Email: [email protected] Web: www.martenwalshcherer.com