HT-2023-000250 - [2025] EWHC 1354 (TCC)

Kyndryl's unjust enrichment claim is pleaded at paragraph 50 of the Particulars of Claim:

Kyndryl seeks to introduce the underlined words by amendment in order to pursue an unjust enrichment claim based on the principle of free acceptance. That principle is set out in Goff & Jones on Unjust Enrichment, 10th edition, paragraph 17–03 as follows:

JLR consents to that amendment and does not seek summary dismissal of the unjust enrichment claim insofar as it is based on free acceptance. However, insofar as the claim is also based on requests by JLR for additional services, JLR objects that no requests have been pleaded and none was made.

In response, Kyndryl applies to amend the Legacy Environment Claim to introduce the following paragraphs:

JLR opposes those amendments. It argues that they are inadequate, and do not answer its objection, because they do not properly particularise the requests, contrary to the requirements of CPR 16.4(1)(a), 16PD7 paragraphs 7.4 and 7.5, and the overriding objective. It says that Kyndryl should at least identify when the alleged requests were made, by whom, and in what terms. There is force to this complaint. Kyndryl says that its case is that there was a consistent course of conduct giving rise to the requests, and that to plead every individual request would be burdensome and unnecessary. But in my view, although the amendments set out the general nature of the case, JLR is at least entitled to know whether Kyndryl relies on any specific requests or whether its case is confined to an implication from a course of conduct. If the former, then JLR is entitled to particulars of the requests; if the latter, it is entitled to confirmation that the case is limited in that way and to an explanation of how the implication nevertheless arises. To say only that Kyndryl will rely on the course of conduct over many years and on the entirety of interactions between the parties is not satisfactory.

I am not persuaded, however, that JLR's criticisms of the existing pleading and the proposed amendments, are such that it would be right to refuse permission to amend and to dismiss the claim summarily now, as JLR asks. As JLR accepted in argument, this is a pure pleading point—whether there were in fact requests for additional services sufficient to give rise to an unjust enrichment claim is an evidential matter for trial. I therefore have in mind what Tugendhat J said in Kim v Park [2011] EWHC 1781 (QB) at [40]:

I am fortified in my view that that is the correct approach in the present case by the consideration that Kyndryl's unjust enrichment claim will proceed to trial in any event on the basis of free acceptance, so the court will in any event have to examine the parties' conduct in order to decide whether JLR was unjustly enriched by accepting services provided by IBM outside the contract.

JLR objects to the amendments on the further ground that they are inconsistent with the existing pleading. It says that the existing case (at paragraphs 1.1, 9.3, 23.1, 23.2 and appendix 3 of the Particulars of Claim) is that IBM suffered loss by failing to achieve expected savings on the migration to Flex, whereas the proposed amendments advance the case that IBM incurred additional costs by performing additional requested services. I do not think that that objection takes matters any further for present purposes. There is no reason in principle why Kyndryl could not pursue both claims together or in the alternative.

I will therefore permit the amendments to paragraphs 42A, 42B, 69A and 69B. JLR may make a request for further information, if so advised, and is at liberty to seek further appropriate relief if it considers that the request has not been properly answered or that the claims remain insufficiently particularised.”

Paragraphs 42A/B and 69A/B of the Amended Particulars of Claim therefore now set out this case for the Legacy Environment Claim and the Storage Solution Claim respectively.

Requests 1 and 2 (42A/B) and 8 and 9(69A/B) essentially seek further and better particulars of each specific request made by JLR. The nature of the response by Kyndryl may be gleaned from the following passage at the start of Response 1. Response 8 is in similar vein. In each case these introductory assertions are followed by many pages of detailed information:

“The Claimant does not at this stage rely on specific requests in relation to its claim based on unjust enrichment in relation to the Legacy Environment Claim, but rather relies on an implication arising from a course of conduct in which the Defendant repeatedly and consistently made clear that IBM should continue to provide the additional services consisting of the Services Delta and/or which amounted to a request that IBM should do so, notwithstanding that the Defendant had failed to transform its IT estate so as to enable the migration to Flex to take place. That course of conduct was reflected in very large numbers of interactions which took place between the parties at a management and at an operational level between 2017 and the expiration of the DCHA in October 2021. Whilst those interactions included an extremely high number of express or implied requests for additional services which comprised the Services Delta, the Claimant’s case is not at this stage advanced on the basis of details of specific requests, but rather on a course of conduct over years. It would not be proportionate, and is not necessary, to plead all the facts which are relevant to that course of conduct…The Claimant sets out here an explanation as to how the implication arises…”

It seems to me that, subject to one small caveat, this is an adequate response to the requests, as envisaged by Mr Quest KC. Kyndryl have, in effect, been put to their election as to whether they wish to pursue a case based on specific requests or whether its case is confined to an implication from a course of conduct. They have chosen the latter course and given the required confirmation that the case is limited in that way and an explanation of how the implication nevertheless arises. That is now Kyndryl’s case and they will stand or fall on it at trial.

The caveat is that, as set out above and elsewhere in the Responses, Kyndryl qualify their answers with the words “at this stage”, which suggests that they may at a later stage seek to rely upon specific requests. I think that this is unacceptable and that Kyndryl should make clear that this is now their case. Of course, one can never say never in litigation and Kyndryl could at a later stage in the proceedings seek to further amend their case in this respect, albeit they would have a procedural mountain to climb in order to do so. But, in order to comply with the judgment of Mr Quest KC, the words “at this stage” and any similar qualifications should be removed.

Request 3 has been adequately answered in the response.

Requests 4-7 and 11-14 essentially seek further details of the course of conduct relied upon. However, in my view, these matters are now adequately pleaded in the Amended Particulars of Claim, as further particularised in the Responses.

E. Requests 15-17 and 27.2

Paragraphs 30-37 of the Amended Particulars of Claim set out a course of negotiations between the parties during 2019 and 2020. The upshot of these exchanges is said to be as follows:

“38.

In May and June 2020, while all key contractual terms had been agreed, the parties continued to agree minor changes to the Red Schedule:

38.1.

A “Key Issue List” dated 6 May 2020 created by IBM and circulated between the parties detailed the progress of each of the contractual documents which were subject to negotiation. For the item “Services A. Red” there were no “open discussion points” remaining, with the only outstanding areas those where “drafting principles agreed but wording not agreed” and “cross reference, conformance, drafting agreed but not included”; and

38.2.

On 16 June 2020, the parties prepared a “Defender Close Plan” which made clear the Red Schedule was at 95% completion and was with “JLR/M&R to clean and resolve their actions”.

39.

As a result of their conduct as described above, IBM and the Defendant agreed (expressly or impliedly by their conduct in agreeing the Red Schedule as part of Project Defender) that IBM was entitled to a variation of the DCHA which would reflect the difference between the service set out in the DCHA Schedule A and the service being provided and set out in the Red Schedule (the “Services Delta”) and that the Claimant IBM would be entitled to the difference in price reflecting the Services Delta since the date that the Defendant’s systems should have been migrated to Flex (the “Variation Agreement”)”

Requests 15-17 and 27.2 effectively seek, in a fairly traditional way, particulars of the alleged agreement, as if it were a fully concluded agreement. As to this, I agree with the submission of Mr Pilling KC, Counsel for Kyndryl, that this is to misread the pleading. The agreement was inchoate.

Furthermore, paragraphs 30-37 of the Amended Particulars of Claim, taken as a whole and read with responses 15-17, sufficiently set out the course of negotiations between the parties during 2019 and 2020 which is said to lead to the averments at paragraphs 38 and 39 of the Amended Particulars of Claim.

For these reasons, I do not think that any further particularisation of paragraphs 38 and 39 of the Amended Particulars of Claim is required.

F. Requests 20-25

Paragraphs 29 and 31 of the Amended Particulars of Claim allege as follows, with my underlining:

“29.

Further, there was a convention between the parties from January 2017 onwards that the DCHA would require further amendment to reflect the additional cost and absence of savings caused by the transformation project and migration of midrange servers to Flex not being carried out. The Claimant will rely at trial on all relevant written and oral exchanges between IBM and the Defendant in this period to evidence this convention including…

31.

The Project Defender discussions proceeded on the common convention that, if Project Defender failed to produce a new solution, then the Defendant would pay the difference in Charges between those envisaged and the services provided by IBM for the midrange servers. The Claimant will rely at trial on all relevant written and oral exchanges between IBM and the Defendant in this period to evidence this convention including…”

Requests 20-25 essentially seek particularisation of all the evidence to be relied upon to establish the pleaded conventions, and not merely the non-exhaustive list of matters set out in these paragraphs (11 items in paragraph 29 and 3 items in paragraph 31).

I agree with Mr Pilling KC that this approach on the part of JLR is misconceived. Kyndryl have set out the nature of their case in sufficient detail to allow JLR to answer it and to prepare their evidence for trial, not least in circumstances where the evidence will be disclosed sequentially. It is not necessary or appropriate to require Kyndryl to particularise now every single conversation or exchange which is said to underpin the pleaded conventions.

G. Requests 36-40

These requests relate to quantum. As to these it should be noted at the outset that Kyndryl have provided a reasonably detailed case as to quantum at Appendix 3 to the Amended Particulars of Claim. JLR have not yet pleaded to this Appendix. Furthermore, as already noted above, quantum expert evidence is to be dealt with sequentially. In those circumstances, I would begin from the position that quantum should be progressed through JLR setting out its case in equivalent detail and through the work of the experts.

Against that background I can deal quite briefly with the disputed requests. In my view:

H. Conclusions

For these reasons, and subject to some minor tidying up of the responses, this application fails.

Standing back from the detail of particular requests, the following overall points should be made.

First of all, I do not think that these requests have been strictly confined to matters which are reasonably necessary and proportionate to enable JLR to prepare its own case or to understand the case it has to meet. These are threshold conditions. Since those conditions are not satisfied, the court has no jurisdiction to make any order under CPR Pt 18. The requests are much more akin to the sort of very wide-ranging requests for further and better particulars which were common under the pre-CPR procedure.

Secondly, if those threshold conditions had been satisfied, I would not have exercised my discretion in favour of JLR. The power under CPR Part 18 is one of the court's case management powers, and its exercise should be considered in the context of the overall case management of the action. Here the court can, and has, sought to case manage the dispute in a way which will protect the legitimate interests of both parties, notably by directing the sequential exchange of factual and quantum evidence. Furthermore, the facts of this case militate against the exercise of this discretion in favour of JLR: see paragraph 15 above.

Thirdly, even if I had concluded that there were deficiencies in the responses given, I would have been very reluctant to grant the relief sought, let alone unless orders. I think that a party complaining about responses to requests for further information needs to be much more specific than JLR has been here in pinpointing exactly what is wrong with the answers and what is needed to put this right. The application made is expressed in the most general terms, even though unless orders are sought.

Fourthly, it is of considerable importance, in relation to JLR’s overall complaint that they are being faced with an amorphous claim, that Kyndryl's unjust enrichment claim on the basis of free acceptance will proceed to trial in any event, so the court will, come what may, have to examine the parties' conduct over a long period. This fact, it seems to me, renders artificial many of the points that might otherwise be made about the vagueness of Kyndryl’s case.

Finally, I do not think the parties are well served by this further round of extensive (and no doubt expensive) interlocutory skirmishing. Mr ter Haar KC has now set out a detailed and sophisticated timetable leading to a trial towards the end of 2026. The parties should seek to work within that timetable. If there are genuine and specific difficulties the parties should seek to resolve those by agreement, and if one party or the other is being uncooperative, the matter can be brought back to this court for resolution. But that should be a last, not a first, resort.

For all these reasons, this application is dismissed.

By way of postscript, I should add that this judgment was circulated in draft on 19^th May 2025, in the usual way and with the customary note that this was “to enable the parties to make suggestions for the correction of errors, prepare submissions on consequential matters and draft orders and to prepare themselves for the publication of the judgment.”

On 23^rd May 2025, in addition to proposed corrections, I received a letter from Mr Charlton KC and Mr Munro, Counsel for JLR, asking “the Court to clarify four matters which are highly material to the decisions that have been taken and how they are to be understood by the parties for the purposes of the consequentials hearing, further pleadings, disclosure, witness statements and trial.” This was said to be in accordance with a Practice Note issued by the Court of Appeal in the case of In re YM (A Child) [2024] 1 W.L.R. 3873.

On the same day Mr Pilling KC responded as follows:

“Mr Charlton K.C. copied me into his email to you in the chain below, which attached his letter to you dated 23 May 2025. The matters raised in that letter have not been discussed between the parties. I assume that you would not welcome comments from my client on the matters raised by Mr Charlton, which were the subject of written and oral submissions and which you no doubt considered when writing the draft judgment. If the court is considering making substantive amendments to the draft judgment, we would be respectfully ask that my client be permitted to make observations on the letter before amendments are made.”

(my emphasis)

On 26^th May 2025, I informed Counsel that I would let the parties know if I required any further submissions; otherwise, the final judgment would be handed down at the beginning of the coming term.

Since the practice developed of circulating draft Judgments, the appellate courts have made clear that the request for “correction of errors” is intended to be a strictly limited function.

In Egan v Motor Services (Bath) Ltd [2008] 1 All E.R. 1156, CA the Court of Appeal (1) deprecated the growing practice of counsel writing to the judge upon receipt of draft judgment, asking him to reconsider his conclusions, and (2) stated that, (a) circulation of a draft is not intended to provide counsel with an opportunity to re-argue the issues in the case, and (b) only in the most exceptional circumstances is it appropriate to ask the judge to reconsider a point of substance.

More recently, the Court of Appeal explained the purpose of the circulation of draft Judgments in George v Cannell [2022] EWCA Civ 1067 at [24]:

“The purposes of circulating a judgment in draft are to enable the parties to identify typographical and other obvious errors and to prepare an agreed order or submissions on consequential matters. The authorities make clear that this is not to be treated as an opportunity to advance further argument.”

Finally, reference should be made to the case cited by JLR, In re YM (A Child) [2024] 1 W.L.R. 3873, in which the following guidance was given (my emphasis):

The passages highlighted above in the case of In re YM (A Child) show, in my view, the misconceived nature of the present request for clarification:

Finally, it should be emphasised that the purpose of clarifications is to head off unnecessary appeals, unnecessary in the sense that some ambiguity or uncertainty could be resolved quickly and without the delay and expense attendant upon an appeal. However, as I have sought to explain, I am not disposed to make the orders sought by JLR, because of the overall views I have expressed above as to the case management of this litigation. If JLR wish to persuade the Court of Appeal to take a different view as to case management, that is their entitlement, of course. But that would be a necessary appeal because the Court of Appeal was asked to adopt a radically different view as to case management than I have set out.