Atos Consulting Ltd v Avis Europe Plc
| Jurisdiction | England & Wales |
| Judge | MR. JUSTICE JACKSON,THE HON. MR. JUSTICE RAMSEY |
| Judgment Date | 14 February 2007 |
| Neutral Citation | [2005] EWHC 982 (TCC),[2007] EWHC 323 (TCC) |
| Date | 14 February 2007 |
| Docket Number | Case No: HT–05–53 |
| Court | Queen's Bench Division (Technology and Construction Court) |
[2005] EWHC 982 (TCC)
Mr. Justice Jackson
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
St. Dunstan's House
MR. N. BAATZ QC (instructed by Nabarro Nathanson) appeared on behalf of the Claimant.
MR. L. AKKA (instructed by Olswang) appeared on behalf of the Defendant.
This judgment is in three parts: Part 1, Background; Part 2, The Application to Strike Out; Part 3, Decision.
Part 1: Background
The claimant in these proceedings, to whom I shall refer as Atos, is an information technology services provider. The defendant in these proceedings, to whom I shall refer as Avis, is a company which provides car rentals across Europe and the Middle East as well as elsewhere in the world. On the 19 th December 2003 Avis and Atos entered into a contract known as the Master Services Agreement ("the MSA" for short) whereby they agreed that Atos should provide services in connection with Avis's programme of reform of its financial systems and processes, and that Avis should carry out work in order to enable Atos to carry out those services. Avis chose, and the MSA accordingly specified, Enterprise Resource Planning, known for short as "ERP". Enterprise Resource Planning was a software product to be supplied by a company called People Soft. It was intended that ERP would replace Avis's existing on-line accounting system (known as "OLAS") and Human Resource system (known as "HR"). The object was the establishment by Avis of a system that aligned the financial systems and processes, support functions, of Avis's business so that they were standardised, and the creation of a shared Pan-European business service centre. This Pan-European business service centre was to be located in Budapest. It was to serve as a shared centre for all Avis's European operations, and for the roll-out of the new ERP and HR system in the first instance to pilot countries. The pilot countries were to be Germany and Hungary.
Unfortunately there were problems during the period that this contract was being performed by the parties. It is no part of this court's function today to delve into those problems or to express any view as to where the rights or wrongs may lie. Suffice it to say that delays occurred and also a decision was made that work on the expenses system should be de-coupled from work being done on the revenue system.
Both parties took the view that the other was at fault and that shortcomings in performance by the other party had caused or largely contributed to the problems and delays.
On the 19 th October 2004 Ms. Judith Nicholson, the company secretary and head of the legal department of Avis, sent a letter to Atos setting out various breaches of contract. In that letter Ms. Nicholson asserted that those were repudiatory breaches, and Ms. Nicholson stated that Avis accepted the repudiatory breaches and thereby brought the contract to an end. In the letter Ms. Nicholson also asserted in the alternative, a right to terminate the MSA pursuant to the express provisions of clause 4 of the MSA.
Atos did not accept that it had committed repudiatory breaches of the agreement. Atos did not accept that there was any contractual right of termination under clause 4. Atos took the view that Avis's letter dated the 19 th October was itself a repudiatory breach of contract which Atos purported to accept. Thus, the situation arose that both parties were asserting that the MSA had come to an end, and both parties were asserting that the other party was responsible for the termination of the MSA. Both parties asserted substantial financial claims either for breach of the MSA or under the provisions of the MSA. Very broadly, if I may deal with matters broadly for present purposes, Avis was asserting a claim in the region of £30 million and Atos was asserting a claim in the region of £10 million.
It can be seen from this summary of the facts that since both parties had financial claims, either party was in a position to go first in any legal proceedings and to assume the mantle of claimant, leaving the other party to be defendant and counterclaimant.
Against that background, since attempts at negotiation and mediation were unsuccessful, the parties turned their attention to litigation. In the event, it was Atos who issued a claim form and brought proceedings against Avis, asserting that Avis had repudiated the MSA and advancing a number of claims against Avis for breach of contract and so forth, and asserting Atos's financial claims against Avis.
These proceedings were begun by a claim form which was issued on the 3 rd March 2005. That claim form was followed by a particulars of claim which, inclusive of schedules, runs to approximately 60 pages and sets out Atos's claims at some length and in some detail.
Avis took the view that Avis was the natural claimant in these proceedings and that Atos's particulars of claim was unsatisfactory in a number of respects, and would obstruct the just disposal of the proceedings. Accordingly, in order to bring these contentions before the court, Avis issued an application to strike out the particulars of claim.
Part 2: The Application to Strike Out
By an application notice dated the 3 rd May 2005 Avis applied for an order in the following terms:
"1. The particulars of claim be struck out.
2. The claimant have liberty to file and serve replacement particulars of claim, providing that such replacement particulars are served by 4 p.m. on 23 rd May 2005 …"
Avis's application was brought pursuant to r.3.4 of the Civil Procedure Rules 1998, as well as the inherent jurisdiction of the court. Rule 3.4 of the Civil Procedure Rules provides, so far as material for present purposes, as follows:
"(2) The court may strike out a statement of case if it appears to the court that …
(b) that the statement of case is an abuse of the court's process or is otherwise likely to obstruct the just disposal of the proceedings;"
The grounds of application as set out in the application notice read as follows:
"The particulars of claim are an abuse of the court's process and are otherwise likely to obstruct the just disposal of the proceedings."
These grounds were amplified in a witness statement by Mr. Stephen Baker, a partner in the solicitors firm Olswang, who act for Avis in these proceedings. The grounds have been further refined and reformulated in the skeleton argument of Mr. Lawrence Akka, who is counsel for Avis. These grounds have been developed and explained this morning. I shall give my own brief summary of these grounds.
The first ground is this: the particulars of claim contain a number of matters which really need not be pleaded in the particulars of claim at all. For example, the particulars of claim address a contention that Avis was entitled to and did terminate the MSA pursuant to clause 4 of the MSA. That is no longer part of Avis's case. Also it is said that user acceptance testing will come into the case but in a different way from that which is addressed in the particulars of claim. The second ground, which really follows on from the first ground, is that a number of matters in the particulars of claim are dealt with in an inappropriate way. It is said that Atos has misunderstood Avis's position in some respects; in other respects, Avis's position has moved on from that which was outlined in correspondence. Thirdly, it is said that the particulars of claim contain a number of matters which are pure reply points, things which should be pleaded in the reply and which should not feature in the points of claim, and are premature if they feature in the points of claim. Thus it is said one has the disadvantage that ultimately Atos's pleaded case will be ascertainable by looking at approximately half of the particulars of claim in conjunction with the whole of the reply. Fourthly, it is said that there are a number of detailed factual allegations set out in the particulars of claim about matters which Avis will address in their defence and counterclaim, and the consequence of this is that Atos will want, in Mr. Akka's phrase, "to have another go" at these matters, and so one will have an untidy double pleading of Atos's case on these factual matters. Fifthly, it is said that if the particulars remain as they stand and the pleadings go forward from this base, ultimately one will have a set of pleadings which makes it more difficult for Avis to set out its case and which will make it more difficult for the court to identify, understand and resolve the differences between the parties.
In oral argument Mr. Akka did not pursue the first limb of the application, namely that the particulars of claim were an abuse of the court's process. Very sensibly, he concentrated his submissions on the second limb, namely that the particulars of claim was likely to obstruct the just disposal of the proceedings. That then is the substance of the application to strike out which this court must address.
Part 3: Decision
I can, for my part, see force in the observation that in retrospect it would have been better if Avis had been claimant and Atos had been defendant in these proceedings. If, hypothetically, both parties had come before me before proceedings were begun, and I know they could not do this, and had asked, "Who do you think should go first?", I would have expressed the view that a more tidy set of pleadings would probably result if Avis went first. That, however, is not the issue which I must address today. The issue which I must address is whether the particulars of claim should be struck out. Mr....
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