Atos Services UK Limited v (1) The Secretary of State for Business, Energy, and Industrial Strategy (2) The Meteorological Office [2022] EWHC 42 (TCC) (17th January 2022)
Facts
The proceedings occurred as a result of the Defendant’s (The Secretary of State for Business, Energy, and Industrial Strategy) attainment of a new supercomputer for the use by the Second Defendant. The Claimant (Atos Services UK Limited) were unsuccessful during the procurement process and they alleged the Defendant had breached its obligations under The Public Contract Regulations 2015.
The new supercomputer was presumed to be the most advanced up to the present date and is devoted to climate change as well as weather predictions.
The defendants denied liability on the following basis:
- Due to the proposed development supercomputer lacking the required architectural equivalence to the primary supercomputer, the Claimant’s offer was rightly assessed;
- The architectural equivalence requirement was successfully interpreted; and
- There was no error or other violation of the Regulations in reaching the decision that the tender was non-compliant.
A 9-day trial is scheduled to start on 9th May 2022 and is limited to issues such as liability, causation, and serious breach. The court will be deciding on the correct interpretation of the notion of architectural equivalent at that trial.
High-performance computing is widely acknowledged as a recognized field of competence. It is also common knowledge that the court will require expert witness testimony.
Decision
The parties have agreed that Coulson J’s description of the applicable principles in BY Development & others v Covent Garden Market Authority [2012] EWHC 2546 should be used as a starting point (TCC).
As a result, before such evidence can be included, the court must have a genuine need for it in order to reach a proper finding. The fact that the evidence is possibly relevant, beneficial, or desirable is insufficient. The circumstances must be such that the court would be unable to make a proper finding without the requested expert testimony. In this regard, the court must keep in mind that it has a specific and limited role to play in addressing such challenges. As a result, the court must decide whether it can safely fulfil that specific and limited job without the material in question. Expert testimony, on the other hand, must be permitted if it is required for the court to make a proper decision.
Good Law Project Ltd & Anor, R (On The Application Of) v The Secretary of State for Health and Social Care [2022] EWHC 46 (TCC) (12th January 2022)
Facts
This was a hearing of four separate judicial review challenges brought by the Claimants, Good Law Project Limited and EveryDoctor Limited, in relation to the decisions of the Defendant, the Secretary of State for Health and Social Care, to make direct contract awards for the supply of personal protective equipment (“PPE”) to the Interested Parties (“PestFix,” “Clandeboye,” and “Ayanda”) and the legality of this under Regulation 32(2)(c) of the Public Contracts Regulations 2015 (“the PCR”).
During the COVID-19 pandemic in March 2020, the Defendant implemented a new way to procuring personal protective equipment (PPE) to guarantee that appropriate supplies were made accessible to the NHS and other care providers despite a global shortage. Using Regulation 32(2)(c) of the PCR, over 32 billion units of personal protective equipment (PPE) with a total value of £14 billion were procured through over one thousand directly negotiated and awarded contracts. The Claimants were challenging the Defendant’s decisions to award nine contracts in this case.
The Claimants sought declarations that the Defendant acted unlawfully in awarding the above contracts. In failing to put in place procedures which indicated the selection or evaluation criteria in deciding whether or not to contract with any provider, the Defendant violated the EU standards of equal treatment and openness. Furthermore, there was no competitive bidding for any contract.
The Defendant ran a high priority lane (“the HPL” or “the VIP Lane”) in which vendors who were suggested by Ministers, MPs, and senior officials were given preferential treatment, greatly enhancing their chances of winning a contract or contracts.
The following is the Defendant’s case: The Defendant’s response to requests for documents and information at the pre-action protocol stage complied with the applicable Pre-Action Protocol’s requirements, and there has been no alternative failure to disclose reasons.
Decision
Although the operation of the High Priority Lane was in violation of the PCR’s provision of equitable treatment and thus illegal, it is highly unlikely that the outcome would have been significantly different, with the contracts going to PestFix and Ayanda. In those circumstances, the court declined to provide declaratory relief under section 31(2A) and (2B) of the Senior Courts Act 1981.
Hirst & Anor v Dunbar & Ors [2022] EWHC 41 (TCC) (14th January 2022)
Facts
The First Claimant (“C1”) was a joiner by trade, but also carried out construction and development works. C1 was the sole shareholder and director of the Second Claimant (“C2”).
The First Defendant (“D1”) was a shareholder and director of the Second and Third Defendants (“D2” and “D3”), with D2 specialising in purchasing/ownership of real estate, and D3 being a construction company.
The Claimants alleged that they entered into an oral contract with the Defendants to undertake work at Low Newall Farm in Bradford (“the Site”) in exchange for a reasonable sum (“the Contract”). They claimed that they have completed the Contract and that the fair worth of the Works was £487,181.86, which was payable on a quantum meruit basis. C1 attempted to purchase the Site at one point, however the arrangement fell through due to financial issue. The C1 however claimed this was irrelevant to the Works.
Liability was denied by the Defendants who argued that the C1 had not completed the Works due to a Contract with them, and instead, the C1 carried out the Works at his own risk, to increase the value of the Site, which he would benefit from as the purchaser. C1 lost the advantage, following financial difficulties, which was his own risk.
On August 2nd, 2019, the claim form was filed in court. The applicable limitation period for this matter is six years from the date of the Claimants’ cause of action accruing, hence the question to be considered was whether the Claimants’ cause of action accrued prior to August 2, 2013.
Decision
There appeared to be some confusion at the opening of the trial about when the Works ended and whether the Claimants’ activity at the Site in 2013 was relevant to limitation. However, it became clear not only that the Claimants had left the Site in substance by the summer of 2012, but also that they had reached practical completion by December 2012.
The Claimants argued that the Scheme applied to the Contract, and that as a result, time did not begin to run until the Defendants had or should have issued a payment notification under the Scheme. The Claimants claimed that this should have happened no later than five days after the Claimants received the letter on March 6, 2014, which was interpreted as a claim under paragraph 6 of the Scheme, and that time began on March 12, 2014. The Defendants contested that the Scheme applied, but stated that regardless of whether it did, time began to run from the significant completion of the Works, which was on December 4, 2012, at the latest.
The claim was rejected. Despite Claimants claim that the Works were not done in accordance with the Contract, their claim was still precluded by statute.
John Graham Construction Ltd v Tecnicas Reunidas UK Ltd [2022] EWHC 155 (TCC) (27th January 2022)
Facts
The Claimant was hired as a subcontractor by the Defendant under a subcontract (“the Subcontract”) for the construction of the Tees Renewable Energy Plant Biomass Power Station. The parties had a number of disagreements, which resulted in four adjudications and two arbitrations. The first arbitration finished in early 2021 and reached a final determination of topics presented to the arbitration tribunal through two partial awards. The second arbitration is still in progress. The adjudicator’s ruling in the first adjudication was reversed by Award 1.
The Defendant had not paid the Contra Charge awarded because it claimed it was a separate and distinct component of Adjudication 4 and that the Adjudicator exceeded his jurisdiction by deciding that the sum was payable by the Defendant. Despite the fact that the decision in Adjudication 1 was reversed by Award 1, the Adjudicator made the mistake of concluding that the decision in Adjudication 1 “protected the Claimant from culpability for breach of contract.” In doing so, the Adjudicator went beyond his authority.
The Claimant therefore claimed that the Defendant engaged in Adjudication 4 without reserving its position and has relinquished its right to contest the Adjudicator’s jurisdiction, and that the Adjudicator did not exceed his jurisdiction in any case. The Defendant has not paid the Contra Charge because it claims it is a separate and distinct component of Adjudication 4 and that the Adjudicator exceeded his jurisdiction by deciding that the sum was payable by the Defendant. Despite the fact that the decision in Adjudication 1 was reversed by Award 1, the Adjudicator made the mistake of concluding that the decision in Adjudication 1 “protected the Claimant from culpability for breach of contract.” In doing so, the Adjudicator went above his authority.
Decision
The Adjudicator determined, among other things, that the Defendant was not entitled to levy the Contra Charge in a Decision dated April 16, 2021. Section 6 of the Decision deals with the subject of the Contra Charge. In section 6.1, after summarising the parties’ arguments.
The decision that the Defendant was not entitled to levy the Contra Charge, that the Adjudicator did not overstep his authority, and that the Contra Charge Decision is fully enforceable.
Transparently Ltd v Growth Capital Ventures Ltd [2022] EWHC 144 (TCC) (26th January 2022)
Facts
Transparently Limited (the applicant) (“TL”) filed an application with the court seeking a mandatory interim injunction requiring Growth Capital Ventures Limited (the respondent) (“GCV”) to deliver to TL software, source code, and other documents necessary for the completion of an IT platform developed by GCV.
Following a competitive tender process, GCV was chosen in March 2019 to create TL’s negotiation management platform, which is intended to make dispute settlement easier in the context of separation and divorce processes. GCV supplied the Statement of Work (“SOW”) on April 26, 2019, outlining the functional requirements of the software that would be delivered in two phases.
TL (as “the customer”) and GCV (as “the service provider”) signed a software development agreement on May 14, 2019. (“the SDA”).
Decision
The court relied upon the test in American Cyanamid Co (No 1) v Ethicon Ltd [1975] UKHL 1:
- Whether or not there was a serious question to be tried;
- Whether or not damages would be an adequate remedy for TL instead of an injunction and
- Where the balance of convenience lay in granting an injunction or not.
The court found against TL on all of these limbs. It was found that the evidence adduced by TL that it required this software was weak.
TL were contractually entitled to delivery of the software however this was conditional on them complying with their obligations to provide payment; their failure to comply with these obligations was fatal to their case.
Fairgrove Homes Ltd v Monument Two Ltd [2021] EWHC 3450 (TCC) (21st December 2021)
This case included two matters before the Court.
- An application by Fairgrove in proceedings HT-2020-000364 against Monument to enforce a Tomlin order, seeking to secure the release of funds presently held in escrow.
- Part 8 claim issued by Monument against Fairgrove, seeking an order that the funds remain in escrow pending the outcome of a final account process between the parties.
Background
Monument (a property developer) engaged Fairgrove (a construction company) to build a residential development in Derbyshire under a construction contract dated 1 August 2017, pursuant to a joint venture agreement (“the Agreement”). During the performance of the Agreement, the parties had disagreements, which resulted in a settlement agreement dated November 14, 2019. (“the Settlement Agreement”).
Adjudication
Following conclusion of the Settlement Agreement, Fairgrove referred a dispute to Adjudication concerning the failure of Monument to pay £50,000 due under clause 2.1(d) of the Settlement Agreement. Clause 2.1(d) read as below:
“2.1 Party A shall pay to Party B the total sum of £350,000.00 (less any amount specified at 2.1 (d) below) divided into instalments payable as follows:
(d) the amount of £50,000 to be added to the agreed final account for Construction Costs and paid no later than 30th April 2020 in any event by way of bank transfer to Lloyds Bank plc, sort code: x, account no: x”.
During the Adjudication submission, Fairgrove argued that the sum of £50,000 was due by 30 April 2020 as a matter of construction contract and Monument argued that the sum was not due until the final account was agreed.
The Adjudicator decided that Fairgrove was entitled to immediate payment of £50,000 plus interest and that Monument should also pay his fees.
Monument did not pay Fairgrove, but paid the Adjudicator.
Enforcement
Fairgrove issued a summary judgement application on 7 October 2020 to enforce the Adjudicator’s decision and Monument opposed that application based on three grounds:
- the Adjudicator did not have jurisdiction to decide the dispute as the Settlement Agreement was a stand-alone agreement;
- the dispute arose only from that agreement and that the Settlement Agreement was not a construction contract; and
- in any event the Court should grant a stay of enforcement in view of Fairgrove’s financial situation and it being in a CVA.
Monument further argued that Fairgrove was in breach of the Settlement Agreement and that upon taking a final account, Fairgrove would owe Monument a substantial sum, totalling around £300,000 and that stay was sought due to a real risk that Fairgrove would not be able to repay Monument.
Tomlin Order
Prior to the hearing of the summary judgment application, the parties entered into a further settlement agreement, recorded in the Tomlin Order. The Order provided for a stay and recorded that Monument agreed to pay Fairgrove’s costs of the summary judgment application in the sum of £9,283.00.
Under paragraph 3 of the Schedule of the Order, Monument had until 1 April 2021 to issue proceedings to determine its liability to pay Fairgrove any sums pursuant to clause 2.1(d).
The Part 8 Claim
Monument issued a part 8 claim on 30 March 2021 together with a draft Order which sets out the following:
“It is ordered that:
1. The funds held in the Escrow account by Security for Express Limited under reference HT-2020-00364-SfE Ref: DE11 DF-01 A are to remain in the escrow account pending the outcome of the final account which the Claimant is ordered to serve on the Defendant once the final account has been determined.”
Fairgrove applied in the consolidated proceedings to enforce the Tomlin Order, since Monument has failed to comply with the terms of the Tomlin Order, more specifically paragraph 3.
Decision
Three issues were considered before the Court.
(1) Does the Part 8 Claim constitute proceedings falling within the terms of paragraph 3 of the Schedule to the Tomlin Order?
(2) If the answer to issue (1) is yes:
(a) Should the Court (i) determine now the Part 8 Claim (and in particular the question of construction of clause 2.1(d)) or (ii), alternatively, make further directions leading to a later trial of the Part 8 Claim, along the lines suggested by Monument?
(b) If the answer to (a) is (i) above, what is the Court’s determination of the Part 8 Claim?
Decision
Mr Justice Morris, upon reviewing the parties’ positions and evidence submitted, concluded that the part 8 claim are not “proceedings … to determine liability to pay the Claimant any sums pursuant to clause 2.1(d) and that under the terms of paragraph 3, the £50,000 held by the escrow agent must be paid to Fairgrove without set off or deduction. Fairgrove application to enforce the Tomlin Order succeeded.
Naylor & Ors v Roamquest Ltd & Anor [2021] EWHC 3507 (TCC) (23rd December 2021)
This case involved an adjourned application of the Defendant to strike out some elements of the Particulars of Claim (“PoC”), issued on 30 July 2020 and was initially the subject of Mrs Justice O’Farrell’s judgement dated 10 March 2021 ([2021] EWHC 567 (TCC)). It also considered the Claimants’ application to amend the PoC.
Background
The claim arose out of a mixed residential and commercial development in Greenwich, London, that consists of eleven tower blocks. The 124 Claimants are leaseholders of one or more flats in six tower buildings.
The development was carried out during 2009 and 2014 and a test carried out at the development by the Building Research Establishment disclosed that it had no flame retardant properties and therefore failed to comply/meet the criteria set by the Building Regulations.
Each Claimants benefited from NHBC Warranty and the NHBC accepted the claim under the Policy for the remedial scheme required, including replacement of the Alucobond cladding, Kingspan insulation, and cavity barriers, as well as the ‘waking watch’ scheme put in place to ensure the safety of the residents. Remedial works were said to be commenced by the Defendants in 2018-2019. The parties disputed as to when the works actually commenced.
Proceedings were issued in April 2019 and the claim included claims for damages under the Defective Premises Act 1972 in relation to all Claimants and for breach of contract in relation to Claimants with direct contractual relationship with first Defendant which were “Off-Plan Contract” purchases.
The Defendants argued that the Claimants had no standing to bring the claim and that paragraph 69 to 82 of the PoC should be struck out.
Decision
It was held that the Defendants’ application to strike out parts of the claim and/or for summary judgement in those parts be adjourned, and that if the Claimants intend to file and serve draft amendments to the Particulars of Claim to address the issues raised by the Defendants in the application, those draft amendments, along with any additional evidence relied on, must be filed and served.
The claimants were given the permission to amend their claim in relation to the APOC and Updated Schedule of Defects to the extent discussed and identified within the case summary.
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