HT-2022-000043 - [2024] EWHC 3180 (TCC)

Fecha: 11-Dic-2024

Was the Claimants’ breach serious and significant?

Was the Claimants’ breach serious and significant?

51.

The Claimants contend that the breach of Mr Coppel’s order was not serious or significant. Ms Hannaford’s skeleton argument makes the following submissions:

93.

It is submitted that the Claimants’ conduct demonstrates that they have sought to comply with the Coppel Order.

94.

First, in relation to MP Bio’s documents:

(1)

They have obtained agreement from MP Bio to allow the Claimants access to search its documents (despite MP Bio’s views that (a) the Coppel Judgment is not binding on MP Bio; and (b) it is no longer obliged to provide any assistance because the Sub-Contract has expired.

(2)

The reason why MP Bio’s documents have not been provided to date is that MP Bio, acting through solicitors, Norton Rose:

(a)

Has said that it will be necessary to carry out an initial review of MP Bio’s documents to identify and withhold any sensitive or privileged material.

(b)

Has raised concerns about the Claimants’ solicitors’ access to privileged documents and insisted that an ethical wall arrangement is used by its e-disclosure providers.

(3)

Further, negotiations have been made more difficult by the fact that the parties are no longer in a commercial relationship with one another because the Sub-Contract between MP Bio and the Claimants has expired and the relationship has deteriorated, as explained by Mr Haughton at paragraphs 32 – 38 ….

(4)

Accordingly, the Claimants have been required to correspond with Norton Rose at length and to take steps to set up e-disclosure arrangements that are acceptable to MP Bio in order to reassure it (and its legal advisors) on these matters.

(5)

This has taken time, but the Claimants remain confident that they will be in a position to provide relevant documents for inspection.

95.

Second, in relation to Boson’s documents:

(1)

The Claimants wrote to MP Bio asking for its assistance in achieving co-operation from Boson and subsequently wrote directly to Boson requesting its prompt assistance to enable the Claimants to comply with their disclosure obligations. This request was refused with Boson stating that it did not “need or intend to comply with any request made by Sante for assistance in this matter” (see paragraph 65 above).

(2)

The Claimants wrote to Boson on two further occasions to seek to persuade it to change its mind, including by offering to pay its costs of providing assistance, but they have received no response (see paragraphs 71 to 74 above).

(3)

The Claimants have obtained MP Bio’s agreement to procure Boson’s assistance and MP Bio has contacted Boson to ask for its cooperation.

(4)

The Claimants are dependent on Boson’s co-operation as they do not have any ability to access Boson’s premises without permission in order to obtain the documents themselves (see Lewis Silkin’s letter of 11 September 2024 at paragraph 77). Therefore, as a result of Boson’s refusal to co-operate, the Claimants have been unable to provide any of Boson’s documents to date. This notwithstanding, the Claimants have been clear that they will continue to take steps to obtain these documents (see Disclosure Certificate [AB/4/390, 401]) and have sought Disclosure Guidance from the Court on this topic (see Section E below).

96.

Further, the Claimants have been transparent with the Defendant and the Court as to the steps that they have taken (see Section D3 above). This has included (1) multiple letters to the Defendant’s solicitors explaining steps taken and progress to date and (2) the provision of the Disclosure Certificates which listed documents for disclosure by category at Appendix A, and (3) an explanation in the Disclosure Certificates (in accordance with paragraph 12.3 of PD 57AD) as to why MP Bio and Boson’s documents are not available to be provided to the Defendant by way of inspection.

97.

It is submitted that these actions are indicative of a party that is making every effort to obtain the documents covered by the Coppel Order. In the circumstances, it is submitted that the Defendant cannot credibly suggest that the Claimants have committed a serious and significant breach of Coppel Order.

There is a good reason for the Claimants’ position

98.

It is submitted that there are good reasons for the Claimants’ position (i.e. their inability to provide the MP Bio documents (so far) and to obtain the Boson documents). As set out above, and in the statements of Mr Haughton and Mr Taylor, the reasons why documents have not been provided to date are not due to any lack of effort on the Claimants’ part but rather because (a) securing MP Bio’s cooperation has been a long and difficult process; (b) it has not yet been possible to secure Boson’s co-operation; and (c) the Claimants do not have any other means of obtaining these documents.

52.

In the Defendant’s submissions, the case is that the breach is serious and significant concentrates upon the absence of Boson’s documents rather than any absence of MP Bio’s documents. As to the latter, whilst there have been delays, it now appears that disclosure of MP Bio documents will now take place.

53.

Insofar as Boson’s documents are concerned, the position as to what has already been produced appears to be as follows:

(1)

Some documentation was produced during the course of the QIMA Audit;

(2)

I understand Mr Coppel to have accepted in paragraph 15 of his judgment Mr Bowsher’s submission that Boson had produced some documentation which is favourable to the Claimants’ cause;

(3)

Some other documentation has probably been provided, but limited in nature and not including any adverse documents.

54.

At the time when Mr Coppel made his decision, the expectation was that witnesses from Boson would be called at the trial of these proceedings. This is clear, not only from the information given by the Claimants before the CMC, but also from paragraph 21(1) of Mr Coppel’s judgment where he said:

Moreover, it seems to me that the relationship between Santé, Bio and Boson was a close one in the sense that they participated in what was in substance a joint venture, in seeking to be awarded contracts for the supply of lateral flow tests. And that it has been close during this litigation, which had at its commencement, and continues to have, a strong flavour of being a joint enterprise. The fact that one or more of Boson’s employees will be giving evidence for the Claimants is indicative of that.

55.

This is no longer the expectation. For the purpose of resisting the Defendant’s application, the Claimants filed a witness statement from Mr Taylor, a partner in the firm of solicitors representing the Claimants. In paragraph 42 of that statement, he said:

I understand from Mr Haughton of Santé that, at the time of filing the CMIS on 2 June 2023, it was Santé’s expectation that the relevant individuals from Boson would likely be willing to attend the trial as witnesses of fact. However, I also understand that this was based on the historic relationship between Santé and Boson and this was not discussed with Boson prior to the filing of the CMIS. As set out above, the relationship between Santé and Boson has since diminished to a significant degree, and there is no longer any commercial relationship between the parties. Therefore, as matters currently stand, Santé does not presently consider that any such individuals from Boson will voluntarily attend as witnesses of fact (particularly given the events relating to Santé’s disclosure efforts described below)….

56.

The difficulties in obtaining documents from Boson has been summarised in the passage from Ms Hannaford’s skeleton argument which I have quoted at paragraph 51above.

57.

In my judgment, the question of how serious and significant the Claimants’ breach was depends to an extent upon what happens evidentially at trial. Before explaining why I say that, I should set out a further extract from Mr Bowsher’s skeleton argument setting out the Defendant’s case as to the significance of the absence of disclosure emanating from Boson:

80.

To a large extent, whether Sante’s breach was deliberate or otherwise is neither here nor there. The critical factor here is that a fair trial of issues which might turn on Boson documents is no longer possible, and it is hard to see what point there would be in a trial after removing those issues. See the dicta in all the cases at paragraph 40 above about the fact that the Court’s foremost concern at every stage must be to ensure a fair trial, and that disclosure of all relevant documents is a critical part of ensuring a fair trial.

81.

At a bare minimum, applying the dicta in the cases at paragraph 40 above, Santé cannot be allowed to run a case in respect of any issue on which Boson is likely to hold relevant documents. Once those issues are removed, the Court must then consider whether there is any sensible purpose in having a trial of the remaining issues (Byers v Samba– see quote at paragraph 40(c) above).

82.

As Jason Coppel KC pointed out [APP/297] §3, Boson’s “role is central to the key disputes” and Boson’s documents are of “particular significance” in relation to the issues 1, 4, 12 and 13. Even if only those 4 issues identified by Jason Coppel KC as being ones where Boson’s documents were particularly significant were stripped out of the claims, it is hard to see what (substantively) would really be left:

Issue 1, identified by Jason Coppel KC, is the extent to which responses relevant to Boson in the Standard Selection Questionnaire were accurate. If it assumed that they were not accurate, then the SoS has strong grounds for arguing that Santé should never have been admitted to the procurement process in the first place.

Issue 4, identified by Jason Coppel KC, is the contractual (including informal contracts or any agreed orally or by conduct) relationship between the Claimants, MP Bio and Boson. Santé’s case is that Boson was not their sub-contractor and therefore did not fall within the provisions of the contracts with the SoS entitling the SoS to terminate the contracts. Bizarre though it may be, it seems likely that Boson holds documents relevant to this issue that Santé do not have in their own possession:

(i)

It seems very unlikely that MP Bio and Boson (a German and Chinese company respectively) documented a £98 million contract to manufacture Tests as thinly as they are said to have done (see paragraph 18 - 23 above), especially when this is compared to the contract (for the same Tests) between the MP Bio and Santé [APP/35].

(ii)

3 contractual documents have been disclosed so far (see paragraphs 18 – 23 above). Santé only disclosed 2 of those documents in response to the application before Jason Coppel KC and after almost a year of correspondence in which the SoS refused to accept Santé’s initial assertion that the Boson Letter was the only contract. 2 of the 3 contractual documents disclosed do contain provisions enforceable only by Santé (see paragraph 19 and 23), yet Santé claims not to have had the Purchase Order in its possession before it was provided in 2023 by MP Bio/Boson.

(iii)

Given how thin the contracts are, it seems likely that there are other contractual documents within Boson’s possession which provide for Santé to have rights (and therefore support the argument that Boson was in reality Santé’s sub-contractor) but which, somehow, Santé do not have in their own possession.

(iv)

It would therefore have to be assumed in the SoS’ favour that Boson was in fact Santé’s sub-contractor.

Issue 12 relates to the basis on which the QIMA audit was carried out (i.e., whether it was reliable) including the documents and information made available by Boson during the audit. Santé’s own disclosure include documents indicating that Santé believed that Boson had falsified workers records after the event in order to fix the holes in their records identified by the QIMA record. In the absence of disclosure from Boson, it must be assumed that Boson did not provide any documents or information to the QIMA auditor other than what she properly took into account in her audit – i.e., Santé cannot be permitted to challenge the factual findings in the QIMA Audit.

Issue 13 relates to the authenticity of the Jimei Licence. In the absence of documents from Boson, it must be assumed that this was not authentic (and it should be noted that Santé themselves thought it was a “fake” in 2021 (see paragraph 28 above). Therefore, Boson did not have the benefit of the Jimei Licence in relation to any breaches of Chinese labour laws.

83.

If all the above issues are assumed in the SoS’ favour, the factual substance of both claims is entirely removed. If it is assumed that the statements in the SSQ were false (issue 1), Boson was Sante’s sub-contractor (Issue 4), the factual findings in the QIMA audit must be accepted (Issue 12) and the Jimei Licence was not authentic (Issue 13), it is impossible to see how there would be any prospect of Santé succeeding at trial on either the Procurement Claim or the Wrongful Rejection Claim. In those circumstances, Santé should not have been admitted to the DPS in the first place (because false statements were made in the SSQ) and, in any event, the SoS was entitled to reject the Tests (under the terms of the contract between the SoS and Santé) and not to allocate further contracts.

58.

I return to the significance of what will happen eventually at trial.

59.

The original expectation was that Boson witnesses would attend to give evidence. In that situation the sort of documentation referred to in Section 1A to the DRD discussed by Mr Bowsher in the passage I have quoted at paragraph 57 above would be highly material for the Defendant to test and for the Court to assess, the evidence of such witnesses.

60.

In that situation there would be a significant risk of the Defendant not having a fair trial if such witnesses were to attend without disclosure having been given.

61.

In paragraph 21(5) of Mr Coppel’s judgment, Mr Coppel said:

If Boson refuses, that will need to be explained to the Defendant and ultimately to the Court, with a degree of openness which has thus far been somewhat lacking in the explanations from the Claimants’ side. Any refusal to cooperate by Boson will no doubt be a matter which can be taken into account by the Court at trial in assessing the credibility of the evidence given on behalf of the Claimants, in particular by Boson’s employees.

62.

Referring to this passage, Ms Hannaford suggests that the ability of the Court to draw adverse inferences renders the Claimants’ breach less serious, since a Court could remedy or mitigate the effects of such breach by drawing adverse inferences.

63.

I agree that a Court could resolve the difficulties created by Boson’s failure to co-operate by drawing adverse inferences, or, perhaps more likely, by reaching findings of fact on the basis that the Claimants had failed to prove their case in relevant respects, such as whether the Jimei licence was shown to the QIMA auditor.

64.

However, if the Court did not do so, perhaps because it took a favourable view of the credibility of Boson witnesses notwithstanding the absence of disclosure, then it seems to me that the Defendant might well feel that he had not had a fair trial.

65.

Of course, these problems would be avoided if disclosure from Boson were to be forthcoming, but the evidence and submissions put forward by the Claimants suggests that that is unlikely. There is also a risk that it might be forthcoming but at a very late stage.

66.

The other possibility is that no Boson witnesses are called. In that situation, the Defendant would be able to put forward the arguments put forward in paragraph 82 of Mr Bowsher’s skeleton argument, quoted at paragraph [57] above, to the effect that in the absence of such disclosure the Claimants’ case must, to a greater or lesser extent, fail factually.

67.

Ironically, in that situation, it might be that the Defendant would be better off without the disclosure than with it. However, I do regard the inability of the Defendant to put forward its defence without the documents which the Claimants had been ordered to disclose as being a serious and significant consideration.

68.

It seems to me that at the heart of the matter is that the Claimants did not put before the Court at the time of the hearing before Mr Coppel the evidence now produced which might have suggested that the relationship between the Claimants and Boson was not as close as he found it to be. However, his findings were what they were, and they are res judicata.

69.

I accept that the evidence does not show a deliberate refusal by the Claimants to disclose Boson documents, but there was a failure to do so which was serious and significant in its effects.