HT-2023-000311 - [2024] EWHC 3449 (TCC)

Having set out that background in some degree of detail, as I was taken to it in the course of argument by both Ms McCarthy and Mr Bury, I turn to summarise the submissions that they accordingly made.

Ms McCarthy says that what can be seen from the exchanges between Willmott Dixon and KCA is that it remained the case up until the time that the claim was issued that Willmott Dixon could not say that they intended to pursue proceedings against KCA. They did not know that proceedings would be pursued against them by LBH since no proceedings had been issued, and all their correspondence with KCA was couched in terms of a contingent claim that they might make if a claim was made against them. Secondly, she submits that it can be seen from the correspondence that Willmott Dixon did not know the essence of the claim that they intended to make. They could not set out the claim, even in the most rudimentary way, and they simply did not do so.

As I have already said, it seems to me that it is the latter of those things that is really material as a matter of principle. But, having regard to the former point – that is the intention to commence proceedings – the submission that is made is not one that I can accept.

As Mr Bury has said, it is quite clear that LBH, a local authority, was carrying out remedial works to defects which it plainly laid at the door of Willmott Dixon and which were matters that could be said to be design defects. It might, of course, be the case that there is a contrary argument that they were workmanship defects, not design defects, but a claim in respect of design defects was one that was clearly going to be made by LBH at some point. It is, in my view, unrealistic to interpret the correspondence that refers to a claim that might then be made against KCA to recover any losses that Willmott Dixon incurred by reason of its liability to LBH as meaning that there was no intention to pursue the claim, rather than as simply capturing the point that, if there was no liability to LBH, there would be nothing to pass on to KCA. The language used in inter-solicitor correspondence was, as Mr Bury put it, entirely conventional and reflected the fact that Willmott Dixon was passing on what was being said to it by LBH rather than itself positively asserting that there were design defects in the building, not least because, if it positively asserted that in open correspondence, it would be asserting that it was itself in breach of contract.

So far as the second element and, in my view, the more important element of the argument is concerned – that is whether Willmott Dixon knew that it had grounds to bring the claim and knew the essence of the claim – it seems to me that it quite clearly did.

The claim remained, and remains to this day, somewhat unparticularised. That is because the employer, LBH, had not yet concluded its own investigations or remedial works, which themselves would have necessitated opening up, and had not fully articulated the claim to be passed on. But the essence of the claim was known. It was a claim that would be one for damages for breach of contract. The relevant parts of the contract were obvious, that is the obligations to exercise reasonable care and skill, together with the warranties which were given in respect of compliance with the Building Regulations and the indemnity in respect of breaches of the Design and Build Contract. The nature of the defects had been set out, most particularly in respect of fire safety defects, but more generally in respect of other matters.

It is, in my judgment, unrealistic to suggest that it was abusive to commence proceedings on that basis. It is not entirely satisfactory that the Claim Form was expressed in the very general terms that it was, but, if it is read in context as referring to the defects that had been alleged by LBH and as seeking to pass on to KCA the claims made by LBH against Willmott Dixon, there was, in my view, sufficient in the preceding correspondence for KCA to know the generality or the essence of the claim that was made against it, which it would then properly expect to be particularised in the Particulars of Claim.

Some reliance was placed on the fact that, when Willmott Dixon sought the stay of proceedings, which it did in December 2023, it did so on the basis that the lack of particularity in LBH’s position meant that it could not understand the claim against it, but again, in my judgment, that has to be understood in context. Willmott Dixon was not saying, and the court would not have understood it to be saying, that it had absolutely no idea what the nature of the claim against it was and/or that LBH was just waiting for something to turn up, but rather that LBH’s claim was one that was not sufficiently particularised for Willmott Dixon to be able to serve fully particularised Particulars of Claim on the three defendants to this action.

To that extent, Willmott Dixon was waiting for something to turn up, but it knew what was going to turn up or should turn up in relatively short measure, and that was a properly particularised claim from LBH. That process was delayed by the stay that was then sought by LBH, but, as Mr Bury submitted, the end result of that should be that everything happens in a proper and logical order, with LBH particularising its claim against Willmott Dixon, which Willmott Dixon is then in a position to pass on to KCA.

I do not accept that the upshot of that is that Willmott Dixon has abused the court’s process to buy itself an additional year to see, as it was put in Nomura and USAF, whether something turns up. The reality of the situation is that Willmott Dixon knew that a claim was going to be made against it, and, indeed, the fact that LBH’s Claim Form was issued just two weeks later supports that position. That is not relying on post-issue events to excuse an abuse of process. It is relying on the post-issue events to demonstrate, or to reinforce, that Willmott Dixon’s position at the time it issued proceedings was not one of seeking to abuse, or in fact abusing, the court’s procedure.

The position further was that Willmott Dixon knew the nature of the claim that would be made against it and the nature of the claim that it would be passing on. Whether one expresses that as the essence of the claim or the minimum necessary, it knew what the relevant contract was, what the clauses it would be alleging a breach of were, and what the broad nature, at least, of those breaches was. There is, to my mind, nothing abusive in starting those proceedings and seeking to protect the limitation position, as indeed is often the case, and then taking the benefit of the time that follows in order to regularise the position so far as the claim up the line is concerned.

For those reasons, I will dismiss the application to strike out. I do not think that I need to be concerned with the alternative position in relation to setting aside the order made in December, save that there may be some submissions to be made on time to respond to the Pre-Action Protocol Letter that has now been served and the consequences that follow from that. I will hear further submissions on that if necessary.