Associated Electrical Industries Ltd v Alstom UK (a private unlimited company)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Andrew Smith |
| Judgment Date | 24 February 2014 |
| Neutral Citation | [2014] EWHC 430 (Comm) |
| Date | 24 February 2014 |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: 2013 Folio 751 |
[2014] EWHC 430 (COMM)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Andrew Smith
Case No: 2013 Folio 751
Thomas Corby (instructed by Clyde & Co LLP) for the Claimant
Stuart Benzie (instructed by Pinsent Masons LLP) for the Defendant
Approved Judgment
Hearing date:7 February 2014
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
The claimant in these proceedings, Associated Electrical Industries Limited ("AEI"), was late in serving its particulars of claim. The defendant, Alstom UK ("Alstom"), applies to strike out the claim, and AEI applies for an extension of time for service of the pleading. Although the applications can be described as simply as that, I heard extended arguments and I need to set out the facts in some detail in order to explain them.
The claim
AEI was an electrical engineering company, which from 1929 until 1989 operated the British Thomson-Houston mechanical engineering plant in Mill Road, Rugby, Warwickshire. It no longer trades, but, as it is pleaded, its parent, Telent Limited ("telent") keeps it "in existence to meet industrial injury claims". Alstom was previously called GEC Power Systems Limited ("GEC Power"). In 1989 The General Electric Company PLC and Alsthom SA agreed to establish a joint venture, GEC Alsthom NV, and therefore the GEC group was reorganised and businesses were "hived down" in an asset transfer to GEC Power and then shareholdings in GEC Power (and other GEC companies) were transferred to GEC Alsthom NV. By an agreement dated 21 March 1989 AEI agreed to sell to GEC as going concerns certain businesses at the Mill Road plant, including a division known as "Large Machines". GEC also agreed to buy a steam turbine business that AEI had carried on at the plant until 1961 but then moved to Manchester. The steam turbine business was not transferred directly from AEI to GEC Power, but (for reasons that are obscure but irrelevant) under an agreement dated 20 March 1989 it was transferred as a going concern by AEI to its associated company, The English Electric Company Limited ("English Electric"), and then, under an agreement dated 21 March 1989, by English Electric to GEC Power. All three agreements included a term whereby the purchaser (that is to say, the company to whom the assets of the business were transferred) agreed that it would "assume responsibility for the satisfaction of all the Liabilities" and to "indemnify the Vendor against all proceedings, claims and demands in respect thereof". "Liabilities" was defined (subject to some irrelevant exceptions) as "amounts owed by and liabilities (both ascertained and contingent) of the Vendor in connection with any of the Businesses at the Transfer Date …".
Between 1956 and 1961 a Mr Rodney Oliver was an apprentice mechanical engineer at the Mill Road plant. In 2005 he died of mesothelioma, and his widow and executrix brought a claim against AEI, which in June 2010 was settled by AEI and Alstom, each contributing half of the damages and costs without prejudice to claims that either might have against the other for its contribution. By a letter dated 16 March 2012 AEI, or more precisely telent on its behalf, asserted such a claim on the basis that Mr Oliver had probably worked in the turbine and compressor test facility at Rugby, which was part of the business transferred into the joint venture and so to GEC Power. In a response dated 30 May 2012 Alstom stated that it was "not averse to accepting responsibility for the claim" if better evidence was produced of a link between the steam turbine business and Mr Oliver's exposure to asbestos. It recognised that "finding such information may prove a challenge" since the site had been sold in about 2004. On 15 April 2013 telent wrote again explaining the basis for the claim: it said that it would like to continue discussions, and asked that Alstom agree to a six months' extension of "any time bars or time limits within which telent must commence any proceedings, and confirm that Alstom agrees that it will not argue or plead or rely on any passage of time which may occur between today's date and 12 October 2013 in answer to or defence of any of telent's claims in any proceedings". It reserved its right to bring proceedings without further notice if this was not agreed by 15 May 2013. On 30 May 2013 AEI issued the claim form in these proceedings, in which it claimed an indemnity of £273,392.13 under its 1989 agreement with Alstom, with alternative claims of damages in that amount and a contribution under the Civil Liability (Contribution) Act, 1978. On 30 May 2013 Alstom agreed that the limitation period should not apply to any proceedings brought before 12 October 2013, but, as I would infer, the claim form had been issued before AEI learned this.
The procedural history
AEI's solicitors, Clyde & Co, served the claim form on Alstom under cover of a letter dated 20 September 2013. Particulars of claim were not contained in or served with the claim form, and therefore, as required by part 58.5 of the Civil Procedure Rules ("CPR"), it stated that particulars of claim would follow if an acknowledgment of service was filed that indicated an intention to defend the claim. Alstom had until 8 October 2013 to file an acknowledgement of service with the court, and on 1 October 2013 it filed one stating that it intended to defend the claim. Therefore particulars of claim had to be served within 28 days, that is to say on or before 29 October 2013: CPR 58.5.
The CPR provide that "On receipt of an acknowledgment of service, the court must notify the claimant in writing": CPR 10.4. However, by 8 October 2013 Clyde & Co had not been notified of the acknowledgment of service by either the court or Alstom, and they learned about it only because on 8 October 2013 their court clerk made enquiries of the Commercial Court registry. According to the evidence of Mr Andrew Preston, a partner in Clyde & Co, they were given the explanation that the "Commercial Court was very busy". I understand that it is provoking for solicitors that the court service should so explain non-compliance with the CPR when the Court of Appeal has said that they, financial pressures notwithstanding, can seldom do so: Mitchell v News Group Newspaper Limited, [2013] EWCA Civ 1537 at para 41. However, as I shall explain, the court's failing does not affect my decision on these applications.
Alstom's solicitors are Messrs Pinsent Masons, who on 18 October 2013 wrote to Clyde & Co enclosing a copy of the acknowledgment of service, stating that they understood that no particulars of claim had been served and asking that Clyde & Co "clarify the position". Apparently they thought that the deadline for service of the particulars was governed by CPR 7.4(2) and was 14 days after service of the claim form, but this was an error: CPR 7.4(2) does not apply to Commercial Court proceedings. (The evidence of Ms Nicola Seymour, a solicitor in Pinsent Masons, suggests that they might not have enquired before 18 October 2013 because it was thought that Alstom's communication of 30 May 2013 might somehow have extended "the date for service of the claim" and "the last date for taking the relevant step to effect service of the claim form would have been 12 October 2013 with deemed service on 15 October 2013 and as such [AEI] was obliged to serve the particulars of claim by that date …". I do not follow this reasoning, but nothing, I think, turns on it.)
Pinsent Masons received no reply and repeated the request for clarification on 25 October 2013. On 29 October 2013 Clyde & Co sent Pinsent Masons an email at 5.20 pm asking for a 14 day extension to finalise and serve particulars of claim. They explained that they had learned of the acknowledgment of service only on 8 October 2013, that they had "therefore" been able to work on the pleading for only three weeks, that some papers on the claim were more than 50 years old and were still being located, and that they had "lost a day" on 28 October 2013 because of the St Jude's storm (which caused widespread travel disruption). Pinsent Masons replied on 30 October 2013 that it was "not for [them]" to agree to an extension of time because the position was governed by CPR 7.4 and time had expired on 8 October 2013, and that they reserved Alstom's position "that failure to serve the Particulars of Claim within the specified time limit means that [the] claim is now out of time". On 13 November 2013 Alstom issued and served its application that the claim be struck out under CPR 3.4(2).
On 18 November 2013 Clyde & Co sent to Pinsent Masons particulars of claim, which had been verified by a solicitor in Clyde & Co, stating that they did so by way of service. The particulars did not include a claim under the 1978 Act, and Mr Thomas Corby, who represented AEI, confirmed that it was intentionally abandoned (and on 28 January 2014 "out of an abundance of caution" and perhaps unnecessarily AEI served notice of discontinuance of this claim). In their covering letter, Clyde & Co pointed out Pinsent Masons' error about when particulars had been due, referring to the Commercial Court Guide. Pinsent Masons replied on 21 November 2013 that they were aware of the provisions of the Guide, but that it does not affect the requirements of the CPR and Practice Directions. That is so, but it refers to the relevant provision of CPR part 58, as Clyde & Co pointed out in a further communication of 28 November 2013....
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