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England and Wales High Court (Technology and Construction Court) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Technology and Construction Court) Decisions >> Gwelhayl Ltd v Midas Construction Ltd & Anor [2008] EWHC 2316 (TCC) (16 September 2008) URL: http://www.bailii.org/ew/cases/EWHC/TCC/2008/2316.html Cite as: [2008] EWHC 2316 (TCC), [2008] CILL 2637, 123 Con LR 91 |
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QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Strand, London, WC2A 2LL |
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B e f o r e :
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GWELHAYL LIMITED -and- (1) MIDAS CONSTRUCTION LIMITED |
Applicant |
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(2) THE BAILEY PARTNERSHIP |
Respondents |
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6th Floor, 12-14 New Fetter Lane, London EC4A 1AG
Telephone No: 020 7936 6000. Fax No: 020 7427 0093
DX 410 LDE [email protected]
MR. JONATHAN LEE (instructed by Michelmores) for the Second Respondent
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Crown Copyright ©
MR. JUSTICE COULSON:
A. Introduction
B. Principles
"(1) This rule applies where an application is made to the court under any Act for disclosure before proceedings have started.
(2) The application must be supported by evidence.
(3) The court may make an order under this rule only where –
(a) the respondent is likely to be a party to subsequent proceedings;
(b) the applicant is also likely to be a party to those proceedings;
(c) if proceedings had started, the respondent's duty by way of standard disclosure, set out in rule 31.6, would extend to the documents or classes of documents of which the applicant seeks disclosure; and
(d) disclosure before proceedings have started is desirable in order to –
(i) dispose fairly of the anticipated proceedings;
(ii) assist the dispute to be resolved without proceedings; or
(iii) save costs."
"The circumstances spelt out by the rule show that it will 'only' be ordered where the court can say that the documents asked for will be documents that will have to be produced at the standard disclosure stage. It follows from that, that the court must be clear what the issues in the litigation are likely to be i.e. what case the claimant is likely to be making and what defence is likely to be being run so as to make sure the documents being asked for are ones which will adversely affect the case of one side or the other, or support the case of one side or the other."
"It is plain not only that the test of 'desirable' is one that easily merges into an exercise of discretion, but that the test of 'dispose fairly' does so too. In the circumstances, it seems to me that it is necessary not to confuse the jurisdictional and the discretionary aspects of the sub-rule as a whole. In Bermuda, Waller LJ contemplated that paragraph (3)(d) may involve a two-stage process. I think that is correct. In my judgment, for jurisdictional purposes the court is only permitted to consider the granting of pre-action disclosure where there is a real prospect in principle of such an order being fair to the parties if litigation is commenced, or of assisting the parties to avoid litigation, or of saving costs in any event. If there is such a real prospect, then the court should go on to consider the question of discretion, which has to be considered on all the facts and not merely in principle but in detail."
"That discretion is not confined and will depend on all the facts of the case. Among the important considerations, however, as it seems to me, are the nature of the injury or loss complained of; the clarity and identification of the issues raised by the complaint; the nature of the documents requested; the relevance of any protocol or pre-action inquiries; and the opportunity which the complainant has to make his case without pre-action disclosure."
(a) The passage from Bermuda International Securities set out above in which Waller LJ said that the court must be clear what the issues in the investigation are likely to be.
(b) Two further passages from the judgment of Rix LJ in Black in which, at paragraph 71, he made the point that, for jurisdictional purposes under CPR rule 31.16(3)(a) and (b), the rules required that the parties concerned in an application were parties "who would be likely to be involved if proceedings ensued" but that that did not mean to say that the proceedings themselves had to be likely. He contrasted the jurisdictional position with the court's overriding discretion at paragraph 83 of his judgment, because there he emphasized that, whilst the jurisdictional test could be met by the prospect that costs would be saved, the crossing of that jurisdictional threshold, as he put it:
"... tells you practically nothing about the broader and more particular discretionary aspects of the individual case or the ultimate exercise of discretion. For that, you need to know much more: if the case is a personal injury claim and the request is for medical records, it is easy to conclude that pre-action disclosure ought to be made; but if the action is a speculative commercial action and the disclosure sought is broad, a fortiori if it is ill-defined, it might be much harder."
(c) In Snowstar Shipping Company Ltd v Graig Shipping Plc [2003] EWHC 1367 (Comm) Morison J noted that, "... the more speculative a claim the less inclined the court is to grant the application and its weakness is a factor which I take into account when considering whether a pre action disclosure order should be made."
(d) In Rose v Lynx Express Ltd [2004] EWCA Civ 447; [2004] 1 BCLC 445 Peter Gibson LJ, in giving the judgment of the court, said:
"A court should be hesitant, in the context of an application for pre-action disclosure, about embarking upon any determination of substantive issues in the case. Accordingly, it would normally be sufficient to found an application under CPR 31.16(3) for the substantive claim pursued in the proceedings to be properly arguable
and to have a real prospect of success, and it would normally be appropriate to approach the conditions in CPR 31.16(3) on that basis."
I note that the test as to 'a real prospect of success' is therefore the same or very similar to the test relevant for the setting aside of a default judgment under CPR Part 13 and summary judgment under CPR Part 24.
(e) In Total E&P Soudan SA v Philippe Edmonds, Andrew Groves and White Nile Limited [2007] EWCA Civ 50, Tuckey LJ said that the judge should take a broad view of the merits of a potential claim but should not investigate in too much detail a legally complex claim or defence.
C. The Nature of the Underlying Claim
"I would like to clarify that Peter's appointment does not have any impact upon the terms of your appointment as set out in our letter of 8th September 2004 which will remain unaffected.
However, I will be grateful if you could ensure that Peter inputs into and approves any agreement you make on our behalf going forward. Please also copy Peter in on any correspondence in and out relating to this project."
"What is, however, clear is that the final account remains very much unresolved and in these circumstances the final account documentation which both parties seem intent on preventing Gwelhayl from seeing remains very much at issue. Whilst Gwelhayl is seeking to resolve this situation without recourse to legal proceedings the actions of Midas and Bailey are making this very difficult. Midas and Bailey seem to suggest that Gwelhayl can resolve the question of a final account in the absence of final account information.
In the event that it is necessary for Gwelhayl to institute proceedings against Midas and Bailey in order to resolve matters relating to the final account then in the ordinary course of proceedings both Midas and Bailey will be bound to disclose all of the information which Gwelhayl has repeatedly requested."
"Any proceedings which are instituted which investigate Bailey's role in the project and in particular in relation to the final account will necessarily involve an investigation of the information which was set out in the Schedule of Requests that was appended to the Fenwick Elliot LLP letter dated 18th July 2008. The information on the Schedule of Requests merely sets out the essential information that an Employer needs to see in order to fully understand the final account."
D. Analysis of Application
D.1. Category 1
D.2.Category 2:The Nature and Merits of Gwelhayl's Claim and its Prospects of Success
(a) Was the alleged settlement binding on Gwelhayl such that they cannot now open it up? If so, why?
(b) If the settlement was not binding, and given that the disputes on the final account between Gwelhayl and Midas are being referred to arbitration, what possible loss can there have been as a result of Bailey's alleged breach of authority in reaching the purported settlement? It seems to me that, on the material before me, there could be no such loss.
(c) On the other hand, if the settlement was binding, what loss have Gwelhayl suffered as a result? In other words what, presumably lower, figure does Mr. Stone or Gwelhayl say represented the value of the measured work element of the final account, and how and why is that said to be the (lower) figure that Bailey should have agreed with Midas and/or how and why is it said that Bailey should not have agreed a figure in excess of that?
(a) Gwelhayl's primary case is that there is no claim against Bailey because there was no binding settlement; and
(b) Even if there was a binding settlement, Gwelhayl still do not know whether or not there will be a claim against Bailey;
I am unable to conclude that there will be a claim at all, let alone a claim with a real prospect of success. In those circumstances it seems to me that, whatever the jurisdictional position I should not permit this application under the exercise of my discretion under CPR 31.16. Indeed, my position is not dissimilar to that of Morison J in Snowstar. In many ways the position here is worse, because at least there the judge was able to conclude that the claim met the 'real prospect of success' test, even though he went on to describe it as 'fragile' and 'weak' and for that reason did not exercise his discretion in favour of the application. In this case I am unable even to go that far, for the reasons that I have set out above.
E. Delivery Up
"(1) The court may grant the following interim remedies – ...
(c) an order –
(i) for the detention, custody or preservation of relevant property; ...
(m) an order permitting a party seeking to recover personal property to pay money into court pending the outcome of the proceedings and directing that, if he does so, the property shall be given up to him ..."