Standard Life Assurance Ltd v Gleeds (UK) (A Firm)

JurisdictionEngland & Wales
CourtQueen's Bench Division (Technology and Construction Court)
JudgeMr Justice Fraser
Judgment Date27 July 2021
Neutral Citation[2021] EWHC 2081 (TCC)
Docket NumberCase No: HT-2019-000306 and HT-2020-000022

[2021] EWHC 2081 (TCC)

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS

TECHNOLOGY AND CONSTRUCTION COURT (QB)

Rolls Building

Fetter Lane

London, EC4A 1NL

Before:

THE HONOURABLE Mr Justice Fraser

Case No: HT-2019-000306 and HT-2020-000022

Between:
Standard Life Assurance Limited
Claimant
and
(1) Gleeds (UK) (a firm)
(2) Buro Four Project Services Limited
(3) Shearer Property Associates Limited
(4) Building Design Partnership Limited
(5) Carter Jonas LLP
(6) Cundall Johnston & Partners Limited
Defendants

Jonathan Selby QC and Callum Monro Morrison (instructed by Mayer Brown LLP) for the Claimant

Vince Moran QC and Harriet di Francesco (instructed by Vinson & Elkins LLP) for the Fourth Defendant

Michael Wheater (instructed by BLM Law LLP) for the Fifth Defendant

Piers Stansfield QC and Rachael O'Hagan (instructed by CMS Cameron McKenna Nabarro Olswang LLP) for the Sixth Defendant

The First Defendant (represented by Clyde & Co LLP), the Second Defendant

(represented by DAC Beachcroft LLP) and the Third Defendant

(represented by Kennedys Law LLP) attended the hearing

but did not make submissions

Hearing Date: 22 July 2021

Mr Justice Fraser
1

In these proceedings the Claimant seeks permission to amend its Particulars of Claim. It is not an entirely straightforward application, in the sense that it follows an earlier attack on the Claimant's Particulars of Claim, in which some of the Defendants sought to strike out the claim (or more accurately, large parts of it). That attack was unsuccessful, but led both to a judgment and an order against the Claimant. As part of the consequential matters, a detailed order was made by Kerr J about what the Claimant had to do in terms of pleading its case, particularly so far as quantum is concerned. Some explanation is therefore needed in order to put this application into its proper context. I explained at the hearing itself what my decision was on the application, but said I would provide more detailed reasons in order to explain. These are those reasons.

2

The action is a factually complex one. The proceedings concern a mixed-use retail and residential development at Parkway, Newbury, West Berkshire, which was designed and constructed for the Claimant, which is a well known pension fund and investment company. Such developments often form part of the investment portfolio of such companies. The Defendants were each involved, in a variety of different roles, in the design and construction of that development.

3

The basis of the claim as a whole arises in the following way. The main contractor for the development was Costain Limited (“Costain” hereafter). The contract price was £77.4 million, though a very sizeable portion of that, £39.9 million, comprised provisional sums. The Claimant's case is that it paid £146.4 million to settle Costain's final account in June 2014. This is almost double the original contact price. The final account amount included £50.3 million which was made up as follows: £28.4 million in respect of variations to the building contract, of which £25.8 million arose from contract administrator instructions (CAIs) and £2.6 million from confirmations of verbal instructions (CVIs); and £21.9 million in respect of contractor's loss and expense arising from delay and disruption. There were substantial time and cost overruns on the project, which led to a very sizeable loss and expense claim by Costain against the Claimant. The Claimant settled that claim and has instituted proceedings against the current defendants.

4

The Claimant advances its claim in these proceedings in the following way. It makes a claim against the First, Second and Third Defendants in connection with the way that the building contract with Costain was procured. This claim is approximately £20 million. This part of the claim is usefully referred to by the parties as Part A. This application does not concern Part A or the Part A Defendants, which is why these parties attended to observe, but did not actively participate in, this application to amend.

5

The next part of the claim is called Part B, and concerns breaches of duty on the part of the Fourth, Fifth and Sixth Defendants (respectively, BDP, SGA (Sutton Griffin Architects, the relevant predecessor of the Fifth Defendant Carter Jonas LLP, who acquired its obligations) and Cundall). These three defendants comprised the Design Team for the project. The size of this claim is about £25.1 million, with an alternative claim of about £22.8 million. The first claim against the Part B Defendants is called the Primary Claim, and the latter the Alternative Claim. The difference between the two is the Primary Claim relies upon extrapolation, and the Alternative Claim does not.

6

The third part of the claim concerns the Second Defendant only, and is regarding an agreement that was concluded with the well-known retailer Marks & Spencer plc in January 2008. It relates to land which was subject to a compulsory purchase order, and approximately £11.5 million is claimed. This part of the claim is called Part C, and does not concern the other defendants. Part C is not relevant on the Claimant's application to amend its Particulars of Claim.

7

The essence of the complaint against the Claimant, in the earlier attack to which I have already referred, was that much of the quantum of its £38.1 million claim for damages in the Part B claim, which are for alleged professional negligence, had been calculated by extrapolation from an analysis of a relatively small part of their work (what I will refer to as “the Initial Sample”). It was said by the Part B Defendants that extrapolation was impermissible. These defendants maintained in those applications that the Claimant had failed to plead a case against them supporting any award of damages, in respect of all but £12.9 million of the £38.1 million claimed. The use of the Initial Sample as a method was challenged.

8

The Part B Defendants argued that the claim for the balance of £25.2 million was an abuse of process, had no reasonable prospect of success and was unsupported by a pleading disclosing a reasonable cause of action. They therefore submitted that the relevant part of the Part B claim should be struck out or, alternatively, summary judgment should be given in favour of those defendants on their different defences.

9

There were therefore three applications made in respect of Part B which were each to strike out or dismiss parts of that claim. These applications were issued on 31 July 2020 by each of BDP, SGA and Cundall, all of the Part B Defendants. They were heard together by Kerr J on 11 and 12 November 2020. The Claimant contended that its plea of negligence against the Part B Defendants was good in law and fact; and that the extrapolation method used to calculate its losses was valid and permissible. It also submitted that it would be disproportionate and absurd to require it to plead and prove its case separately, in respect of each and every individual component of the claim. It maintained that the Part B Defendants knew the case they had to meet, and that it was permitted to quantify its claim for loss and expense by advancing what is called a global claim.

10

On 15 December 2020 Kerr J handed down a careful reserved judgment on the applications. This can be found at [2020] EWHC 3419 (TCC). Those applications had been fought, however, not in respect of the original Particulars of Claim, but against a proposed Amended Particulars of Claim, in which (one assumes) the Claimant had accepted or taken on board at least some of the criticisms made of its pleading, and proposed amendments to deal with those criticisms. That proposed Amended Particulars of Claim had been produced a little time before the hearing in November 2020. Kerr J found against the Part B Defendants and did not strike out part of the proposed Amended Particulars of Claim, or give summary judgment to the applicants. His detailed reasons are given in the comprehensive 150 paragraph judgment, and that should be consulted by anyone who wishes anything more than the cursory summary that I provide here. There are two aspects of that judgment (or its consequences) that need to be identified here.

11

Firstly, he ordered a greater sampling exercise be done by the Claimant than that contained in the Initial Sample. Secondly, he appreciated that a fresh pleading would be required from the Claimant. He explained at [147] in outline terms how this should be done. He sensibly decided a fresh start was required, so ordered the pleading to be prepared afresh, and without the usual deletions and underlined additions adopted for amendments. Given the scale of changes required, such an approach was entirely understandable and any reader of the new Particulars of Claim can only be relieved that this was the approach he required. He also allowed the parties free rein to seek to agree a timetable, both for the pleading steps that were required, and also for the other defendants (those to Part A and Part C) to consider how these changes would impact upon their pleadings. He did, however, identify the way in which the new claim should deal with variations.

12

Thereafter, two orders were produced. One was by Kerr J of 17 January 2021, that left many of the dates to be agreed. The next was by Jefford J dated 19 February 2021, which had appended to it another version of the order by Kerr J at Appendix 1, but with dates included. The trial is set to take place in October 2023, with a trial estimate of 12 weeks. It is therefore a substantial case even by the standards of this specialist court. 12 weeks and seven parties demonstrates the...

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