Specialist Building Products Ltd (trading as Profile 22 Systems) v New Century Doors Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Alexander Nissen |
| Judgment Date | 20 June 2022 |
| Neutral Citation | [2022] EWHC 1571 (TCC) |
| Docket Number | Case No: HT-2021-000406 |
| Court | Queen's Bench Division (Technology and Construction Court) |
[2022] EWHC 1571 (TCC)
Mr Alexander Nissen QC
(sitting as a Deputy High Court Judge)
Case No: HT-2021-000406
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, London, EC4A 1NL
Jack Watson (instructed by Wright Hassall LLP) for the Claimant
Emma Hynes (instructed by Machins LLP) for the Defendant
APPROVED JUDGMENT
Hearing date: 7 June 2022
Mr Alexander Nissen QC:
Introduction
There are two live applications before the Court. The first in time is an application by the Defendant to amend its Defence and Counterclaim. The second is an application by the Claimant to strike out the Defence and Counterclaim and/or for summary judgment on the claim. The two applications are related in the sense that the outcome of the strike out or summary judgment applications may be impacted by any permission to amend and also because the Claimant opposes the amendments on the grounds they have no prospect of success, for reasons also advanced in its own application. For these reasons I heard submissions on both applications concurrently.
The hearing was also intended to deal with costs and case management matters if time permitted. In the event, there was insufficient time to deal with those matters save that the Court heard some submissions from both Mr Watson for the Claimant and Ms Hynes for the Defendant on the question of whether there should be a trial of preliminary issues. The CMC itself has been fixed for hearing on a separate occasion.
The proceedings are already very stale and, as noted, have yet to reach the case management stage. The Claimant issued proceedings as long ago as April 2019, claiming £21,193.01. A Defence and Counterclaim was issued in June 2019, admitting the claim subject to a defence of set off, counterclaim and indemnity. The set off was claimed in the sum of £127,160. Subsequent pleadings were issued over time. In the first of many iterations of a draft Amended Defence and Counterclaim issued in December 2020, the Defendant sought to increase the value of its set off and counterclaim by £700,000, making its total value £827,160. As a consequence, the parties consented to an order made on 1 March 2021 that the claim and the application in respect of it be transferred to the Technology and Construction Court. The hearing of the applications before me was the first substantive step in this Court.
As its name suggests, the Claimant is a supplier of specialist building products. This dispute concerns component parts of fire doors, supplied by the Claimant, which are assembled by purchasers, of which the Defendant was one, for onward sale. There is no dispute that the Defendant ordered and was supplied with components in the period from June to August 2018. The Defendant originally defended the claim on the grounds that the products were defective in quality and non-compliant with the specification. The core complaint was that the fire doors and frames assembled from the Claimant's goods in accordance with the Claimant's system did not comply with the relevant Building Regulations and British Standards and that this was a breach of an overarching contract for sale or a series of individual contracts made in respect of each purchase order (“Sale Contract(s)”). This defence is no longer maintained within the Amended Defence and Counterclaim for which permission is sought. Instead, the case is now made on the basis of breach of collateral warranties and/or in misrepresentation. No breach of any Sale Contract(s) is now advanced.
The draft Amended Defence and Counterclaim had undergone no less than four iterations before the hearing of the application. It also changed again during the course of the hearing. In the end, it was necessary for me to direct that a yet further final version of the amendment sought should be provided shortly after the hearing. I gave the Claimant an opportunity to comment in writing on the final version to the extent it felt necessary so it provided brief supplemental submissions. It was not necessary for the Defendant to respond and it declined to do so. This judgment is concerned with the question of whether permission to amend the Defence and Counterclaim should be granted in the form in which it was lodged on 8 June 2022.
Legal Principles
In respect of the application to amend, the applicable principles are agreed. Given that limitation issues potentially arise, CPR rule 17.4(2) applies. The relevant questions to be answered are conveniently summarised in Mulally & Co v Martlett Homes [2022] EWCA Civ 32 as follows:
(a) Is it reasonably arguable that the opposed amendments are outside the applicable limitation period?
(b) Do the proposed amendments seek to add or substitute a new cause of action?
(c) Does the new cause of action arise out of the same or substantially the same facts as are already in issue in the existing claim?
(d) Should the Court exercise its discretion to allow the amendment?
In respect of the application to strike out, the Claimant contends that the Defence and Counterclaim (and, to the extent relevant) the draft Amended Defence and Counterclaim disclose no reasonable grounds for bringing it: see CPR 3.4(2)(a). In respect of summary judgment, the Claimant contends that the defence has no real prospect of success. The Claimant's submission was that, in the present context, there is no material difference between the tests in the two applications. As I have noted, the amendments are also opposed on the grounds they have no prospect of success.
The applicable principles in respect of these two applications have conveniently been summarised by O'Farrell J in Standard Life Assurance Ltd v Gleeds and others [2022] EWHC 1310, TCC. At paragraphs [30] to [33] she said:
“The applicable test
30. CPR 3.4(2) provides that:
“The court may strike out a statement of case if it appears to the court:
…
(a) that the statement of case discloses no reasonable grounds for bringing or defending the claim …”
31. The principles to be applied are as follows:
i) If the pleaded facts do not disclose any legally recognisable claim against a defendant, it is liable to be struck out. However, the application must assume that the facts alleged in the pleaded case are true.
ii) It is not appropriate to strike out a claim in an area of developing jurisprudence, since in such areas, decisions as to novel points of law should be based on actual findings of fact: Barratt v Enfield BC [2001] 2 AC 550 per Lord Browne-Wilkinson at p.557.
iii) The court must be certain that the claim is bound to fail; unless it is certain, the case is inappropriate for striking out: Hughes v Colin Richards & Co [2004] EWCA Civ 266 per Peter Gibson LJ [22]–[23]; Rushbond v JS Design Partnership [2021] EWCA Civ 1889 per Coulson LJ at [41]–[42].
32. CPR 24.2 provides that:
“The court may give summary judgment against a claimant … on the whole of a claim or on a particular issue if –
(a) it considers that –
(i) that claimant has no real prospect of succeeding on the claim or issue; … and
(b) there is no other compelling reason why the case or issue should be disposed of at a trial.”
33. The principles to be applied on such applications are well-established and can be summarised as follows:
i) The court must consider whether the claimant has a “realistic” as opposed to a “fanciful” prospect of success: Swain v Hillman [2001] 1 All ER 91.
ii) A “realistic” claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel [2003] EWCA Civ 472 at [8].
iii) In reaching its conclusion the court must not conduct a “mini-trial”: Swain v Hillman.
iv) The court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5) [2001] EWCA Civ 550.
v) The court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd [2007] FSR 63.
vi) If the court is satisfied that it has before it all the evidence necessary for the proper determination of a short point of law or construction and the parties have had an adequate opportunity to address the question in argument, it should grasp the nettle and decide it. It is not enough to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction: ICI Chemicals & Polymers Ltd v TTE Training Ltd [2007] EWCA Civ 725.
vii) The burden of proof remains on the defendants to establish that the claimants have no real prospect of success and that there is no other reason for a trial.”
The amendments
It is unnecessary to set out the amendments in their entirety. The extent of red deletions and underlining can be seen from the draft itself. Those amendments which are material to the objection can be summarised as follows:
(a) At the meeting in June 2011, which had already been pleaded, it is said that an offer was made to supply components based on certain features. The offer was based on the doorsets achieving 30-minute fire resistance so that they could be stated to be compartment fire doors complying with ADB; such doorsets...
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