Case No. IP-2021-000073

43.Pixdene submits that Paddington should provide it and/or the third party auditor with copy documents before attending at Paddington’s offices for inspection “with any questions to be answered”, otherwise it might necessitate several visits to the data room, increasing the costs and logistical burden of an audit. 44.Paddington submits that the notice is necessary so that Paddington has time to assemble the relevant documentation ready for inspection by the third party auditor, and that the only possible interpretation of the reference to “normal working hours” in clause 5 is that Pixdene can only insist on an inspection in the presence of Paddington’s representatives and/or under Paddington’s control. It submits there would be no need to refer to “normal working hours” if the inspection could take place without such representatives being present.45.Paddington also submits that although there is no reference to the venue being ‘Paddington’s offices’ or otherwise being specified, it is obvious that the inspection is to take place at a venue of Paddington’s choosing. In particular, it submits, there is nothing to suggest that Paddington would have to transport all its records to some other location (such as the third party auditor’s offices) to enable the auditor to carry out the inspection. Discussion and determination46.I accept Paddington’s submission that the fact that clause 5 provides that inspection requires prior written notice, and is to be carried out “during normal working hours”, shows that the parties at the time of agreeing the clause, were envisaging (i) a physical inspection of documents by the third party auditor (ii) at a place under Paddington’s control. If inspection of documents was envisaged by setting up a data room at the auditor’s offices, for example, then it would not be necessary to specify that inspection could take place only “during normal working hours” as there would be nothing to stop the auditor from working late or at weekends, for example. I am also satisfied that is what the reasonable person with all the relevant knowledge at the time of the RDA would have understood the parties to mean by the language. These are Paddington’s documents to which access is being strictly controlled by Paddington, as agreed by the parties in clause 5.47.Clause 5 does not specify the venue for inspection, but I do not have difficulty in construing the clause as meaning any premises under Paddington’s control which Paddington may reasonably choose. The RDA is governed by the laws of England and Wales so I doubt that setting up the data room outside of the jurisdiction was envisaged or would be so understood by the reasonable man. 48.I do not agree with Paddington’s submission that clause 5 can properly be construed as obliging the third party auditor to inspect only in the presence of Paddington’s representatives: I am satisfied that the fact that the parties specified an independent, third party auditor, with his own professional obligations, would be understood by that reasonable person to mean that such a person can be trusted to carry out the inspection professionally without requiring further supervision. Nor do I think such a provision should be implied as it is neither necessary (for the reasons I have given) nor is it obvious. To the contrary, it would be quite usual to usher such an auditor into the data room and let him get on with it without supervision, to be ushered out again at the end of normal working hours. 49.Nor can I understand how clause 5 can possibly be construed to mean that Paddington is obliged to send the documents to the third party auditor (in some sort of pre-inspection?) in advance of making the documents available for inspection, thereby rendering the actual inspection (and notice, and requirement for normal working hours) pointless. That drives a coach and horses through the purpose of this carefully chosen language of clause 5, as the reasonable man would identify. I reject Pixdene’s submission on this point.