MW High Tech Projects UK Ltd v Mr Peter Greenhalgh
| Jurisdiction | England & Wales |
| Judge | Mrs Justice O'Farrell,Mrs Justice O'Farrell DBE |
| Judgment Date | 27 July 2022 |
| Neutral Citation | [2022] EWHC 2000 (TCC) |
| Docket Number | Case No: HT-2021-000094 |
| Court | Queen's Bench Division (Technology and Construction Court) |
[2022] EWHC 2000 (TCC)
Mrs Justice O'Farrell DBE
Case No: HT-2021-000094
Case No: HT-2021-000438
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT (QBD)
Royal Courts of Justice
Rolls Building
Fetter Lane, London, EC4Y 1NL
Roger ter Haar QC & Jason Evans-Tovey (instructed by Howard Kennedy LLP) for the Claimant
Daniel Shapiro QC & James Sharpe (instructed by Beale & Co LLP) for the Defendant
Hearing date: 29 th June 2022
Approved Judgment
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.
This judgment will be handed down by the judge remotely by circulation to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be Wednesday 27 th July 2022 at 10.30am
There are a number of matters before the Court:
i) the Claimant's application to amend the Particulars of Claim in Claim HT-2021-000094;
ii) the Claimant's application for an order consolidating Claim HT-2021-000094 and Claim HT-2021-000438;
iii) the Defendants' application to strike out parts of the claims, and/or for summary judgment in respect of those parts, on the basis that the relevant parts of the pleading in each case have no real prospect of success and/or are so vague as to amount to an abuse of process or are likely to obstruct the just disposal of the proceedings;
iv) the Defendants' application for disclosure, by way of Initial Disclosure or Extended Disclosure; and
v) the Defendants' application for further time to file and serve their defence.
Background to the dispute
This claim arises out of three waste-to-energy projects undertaken by the Claimant:
i) the Suez Project at the Eco Park, Charlton Lane, Shepperton, Surrey, comprising a gasification facility, designed to process 60,000 tonnes per year of mixed municipal waste, and an anaerobic digestion facility, designed to process 40,000 tonnes of food waste per annum;
ii) the Levenseat Project at Levenseat, Forth in Lanarkshire, comprising a gasification facility, designed to process 90,000 tonnes per year of refuse derived fuel (“RDF”);
iii) the Hull Project at Cleveland Street, Kingston-upon-Hull, Yorkshire, comprising a gasification facility, designed to process in the region of 300,000 tonnes per year of RDF.
The Claimant is a private limited company incorporated in England, which at all material times carried on business in the provision of engineering and construction services. The Claimant is 100% owned by M+W Germany GmbH and is a member of the M+W Group.
Each of the Defendants is a former statutory director of the Claimant:
i) Mr Greenhalgh was a statutory director of the Claimant from 14 July 2004 to 29 November 2016;
ii) Mr Baber was a statutory director of the Claimant and managing director from 10 October 2014 to 21 September 2016;
iii) Mr Taylor was a statutory director of the Claimant and chief financial officer from 1 May 2013 to 31 March 2017.
The material statutory duties owed by directors to a company are set out in the following provisions of the Companies Act 2006 (“the 2006 Act”):
Section 170 — Scope and nature of general duties
(1) The general duties specified in sections 171 to 177 are owed by a director of a company to the company.
…
(3) The general duties are based on certain common law rules and equitable principles as they apply in relation to directors and have effect in place of those rules and principles as regards the duties owed to a company by a director.
(4) The general duties shall be interpreted and applied in the same way as common law rules or equitable principles, and regard shall be had to the corresponding common law rules and equitable principles in interpreting and applying the general duties.
…
Section 171 — Duty to act within powers
A director of a company must –
(a) act in accordance with the company's constitution; and
(b) only exercise powers for the purposes for which they are conferred.
…
Section 173 — Duty to exercise independent judgment
(1) A director of a company must exercise independent judgment.
(2) The duty is not infringed by his acting –
(a) in accordance with an agreement duly entered into by the company that restricts the future exercise of discretion by its directors; or
(b) in a way authorised by the company's constitution.
Section 174 — Duty to exercise reasonable care, skill and diligence
(1) A director of a company must exercise reasonable care, skill and diligence.
(2) This means the care, skill and diligence that would be exercised by a reasonably diligent person with –
(a) the general knowledge, skill and diligence to be expected of a person carrying out the functions carried out by the director in relation to the company; and
(b) the general knowledge, skill and experience that the director has.
…
Section 178 — Civil consequences of breach of general duties
(1) The consequences of breach (or threatened breach) of section 171 to 177 are the same as would apply if the corresponding common law rule or equitable principle applied.
(2) The duties in those sections (with the exception of section 174 (duty to exercise reasonable care, skill and diligence)) are, accordingly, enforceable in the same way as any other fiduciary duty owed to a company by its directors.
On 11 October 2013 the Claimant entered into an EPC contract in respect of the Suez Project in the sum of £71 million.
On 20 March 2015 the Claimant entered into an EPC contract in respect of the Levenseat Project in the sum of £87 million.
On 19 May 2015 the Claimant entered into a variation agreement in respect of the Suez Project in the sum of £91 million.
On 20 November 2015 the Claimant entered into an EPC contract in respect of the Hull project in the sum of £154 million.
The projects were not a success. The Claimant estimates that it has suffered losses of approximately £320 million across the three projects.
The Claimant's case is that the Defendants were in breach of their duties and obligations as directors of the Claimant by entering into contracts for the above projects without engaging adequate and suitably experienced personnel, without adequate investigation into new technologies, without adequate designs or information, without taking proper and reasonable account of the project risks, without properly examining profitability and using tender prices which were far too low.
It is the Claimant's case that, had the Defendants not been in breach of their duties and obligations, the Claimant would not have entered into the contracts for any of the projects, or would have exercised its right to disengage from the same.
Proceedings
On 17 March 2021 the Claimant commenced proceedings against the Defendants in Claim No. HT-2021-000094, the Suez and Levenseat Proceedings.
On 14 July 2021 Particulars of Claim were served in the Suez and Levenseat Proceedings.
On 16 November 2021 the Claimant commenced proceedings against the Defendants in Claim No. HT-2021-000438, the Hull Proceedings.
On 8 February 2022, the Claimant served draft amended Particulars of Claim in the Suez and Levenseat Proceedings, draft Particulars of Claim in the Hull Proceedings, and draft Consolidated Particulars of Claim.
The applications
On 17 March 2022 the Claimant issued an application in the Suez and Levenseat Proceedings, seeking an order pursuant to CPR17.1(2)(b) and CPR17.4 that the Claimant has permission to amend the Particulars of Claim.
The application is supported by the first witness statement of Dominic Offord, a partner in Howard Kennedy LLP, dated 17 March 2022.
Also on 17 March 2022, the Claimant issued an application in each claim, seeking to consolidate the Suez and Levenseat Proceedings and the Hull Proceedings.
That application is supported by the second witness statement of Mr Offord, dated 17 March 2022.
On 25 March 2022, the Defendants issued an application in each claim, seeking an order that those parts of the claims that:
i) have no real prospect of success; and/or
ii) are so vague as to amount to an abuse of process or otherwise be likely to obstruct the just disposal of the proceedings; and/or
iii) fail to comply with CPR 16.4; and/or
iv) are not supported by sufficient documentation as required by paragraph 5.1 of CPR PD51U so that the Defendants can understand the case they have to meet and respond to the same;
be struck out pursuant to CPR 3.4(2)(a) or (b) and/or summary judgment be given on those parts of the claim pursuant to CPR 24.2.
Further, the Defendants seek an unless order in respect of disclosure of documents set out in a schedule attached to the application, and an extension of time for filing the Defence in each claim until after sufficient disclosure and adequate particularisation of the same.
The basis for the Defendants' applications and opposition to the Claimant's applications are set out in the first witness statement of David McArdle, solicitor and partner of Beale & Co LLP, dated 25 March 2022 and his second witness statement dated 23 June 2022.
The Defendants' applications are opposed by the Claimant and reliance is placed on the third witness statement of Mr Offord dated 16 June 2022.
Claimant's application to amend
The Claimant seeks to amend the Particulars of Claim in the Suez and Levenseat Proceedings in the following respects:
i) the Claimant limits its claims to damages and interest in respect of any cause of action for breach of contract or for breach of the 2006 Act to claims...
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