England and Wales High Court (Technology and Construction Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		16/10/2009

 


Mr Justice Akenhead:

Introduction

1. This action is currently in the Chancery Division. The Defendants apply in this Court, the Technology and Construction Court within the Queen's Bench Division, to have the action transferred to the TCC. This raises important matters relating to the jurisdiction of the different divisions of the High Court and specialist lists within those divisions to deal with such applications and to the basis upon which such applications are to be made.

The background

2. The Defendants were the developers of the Westfield London Shopping Centre in West London. The Claimants' business included the operation of cinemas. By an agreement for lease dated 5 October 2006, the Defendants and the Claimants entered into an agreement for a lease of a multi-screen cinema to be built as part of that development. In essence, the cinema was to be constructed by the Defendants to a shell and core stage and then was to be released to the Claimants so that they could carry out fitting out works.
3. By Schedule 1 of the agreement, the Defendants undertook to carry out and complete the "Developer's Works" in accordance with the "Plans" and in accordance with the "Critical Dimensions". The Defendants were not to "make any Cinema Variation without the consent of [the Claimants], such consent not to be unreasonably withheld or delayed provided that no variation shall be made which will result in the Critical Dimensions not being achieved". The Critical Dimensions were defined as follows:

"…the dimensions (subject only to the tolerances referred to in the specification for tolerances and movement in the General Specification at Annexure 5) as shown on the General Arrangement Drawings."

The Plans included drawings other than the General Arrangement Drawings. The General Arrangement Drawings were attached as Annexure 3 to the agreement.

4. Clause 7.6 (b) of the agreement states as follows:

"As soon as may be practicable after the time that the boundary walls of the Premises have been constructed and installed and in any event not later than 1 month before the start of the week within which the Access Date is expected to occur… the Developer and the Tenant shall jointly instruct the Independent Measuring Surveyor on terms that [he] will owe a joint duty of care to both the Developer and the Tenant to determine whether the Critical Dimensions have been satisfied. The following provisions…are to apply in that connection:

(i) if it is determined that the Critical Dimensions have not been satisfied, the Developer shall procure that appropriate measures, if physically or economically practicable, be taken promptly to satisfy the Critical Dimensions and to have the requisite works to do so carried out as soon as possible…

(ii) following the completion of any requisite works referred to in clause 7.6(b)(i) the Independent Measuring Surveyor is to be instructed to determine the question again;

(iii) if it is agreed or determined that no such measures as are referred to in clause 7.6(b)(i) are practicable, or if it is determined that the Critical Dimensions have still not been satisfied following the completion of any requisite works referred to in clause 7.6(b)(i) the Developer shall give written notice to the Tenant to that effect and in doing so shall follow the Notice Procedure:

(A) the Tenant may rescind this agreement by giving to the Developer notice to that effect within 20 Working Days following the receipt of the Developer's notice;

(B) time is of the essence of the rescission and the right, having so arisen, is to lapse if not exercised within that time limit; and

(C) the provisions of clause 3.4 and 3.5 are to apply to rescission under this clause…"

5. Both parties had professional consultants. The development overall was clearly a very substantial one with over 300 shops and 50 food outlets. The design work proceeded in 2006 and 2007 at least in relation to the cinema. Works on the ground were proceeding in 2007 and 2008.
6. By October 2007, it is asserted by the Claimants that there were 20 discrepancies or non-compliances with the Critical Dimensions. They assert that further non-compliances with the Plans occurred or emerged thereafter. In broad terms, the Defendants assert that they and the Claimants agreed to numerous variations to the Critical Dimensions and that they proceeded to carry out their works to reflect such changes.
7. In April 2009, the First Claimant purported to rescind the agreement pursuant to Clause 7.6(b) on the grounds in effect of non-compliances with the Critical Dimensions requirements of the agreement. The Defendants purportedly treated this as a repudiation and accepted it as such.

The Claim and the Proceedings

8. The Claimants issued proceedings in the Chancery Division of the High Court on 17 April 2009, on the same day as the First Claimant had purported to rescind the agreement.
9. The Particulars of Claim followed on 1 May 2009. This document runs through 64 pages of text and contains three schedules. Its "primary" case (Paragraph 2.12) is that the Defendants failed to construct the cinema in accordance with the agreement or to satisfy the Critical Dimensions requirements so that the First Claimant was entitled to rescind the agreement and receive payment for costs, alternatively damages, for the antecedent breaches of the agreement.
10. The structure of the Particulars of Claim, following a "Summary of Claim" and the setting out of the relevant provisions of the agreements (in Paragraphs 2 to 4), involves the detailed analysis of what happened in fact between 2006 and April 2009. It is made clear that at least part of the reason for this was in anticipation of a defence of estoppel and waiver which had been asserted before the purported rescission. Thus, there is set out at Paragraph 11, for example, an explanation as to what happened in relation to a difficulty encountered in constructing a lift pit to a sufficient depth; it is pleaded that the Claimants' consultants agreed to an alteration in principle but only on a specific basis. Much is made, for instance in Paragraph 12, about the reactions of the Claimants' consultants to various structural drawings and plans submitted to them in the April to June 2007 period; in Paragraph 13, it is said in some detail by reference to various e-mails that the First Claimant rejected the divergences between the submitted plans and drawings and contractual requirements. Particular importance is attached to what happened at Technical Review Meetings 7 and 8 in December 2007 and January 2008 respectively. It is said in Paragraph 20 that by March 2008 11 of the 20 discrepancies said to have been identified remained without a practical solution; this suggests that a practical solution may have been found for 9 of the 20 discrepancies, albeit with possible reservations. It is pleaded that, where changes were made to the Critical Dimensions with the knowledge of the Claimants, appropriate reservations were made. All in all, over 30 pages of this pleading are directed to the technical history of what happened up to 2009 in relation to plans and drawings, the reactions thereto and to what was happening in terms of construction on the ground.
11. The Particulars of Claim assert that there was no variation of the contract as such or waiver or estoppel but that, following the service of requisite notices as required under the agreement, there was a valid rescission. In addition at Paragraph 35, the Claimants plead that the Defendants had failed to construct the Cinema in accordance with the General Specification and the Plans, such alleged breaches being set out in Schedule A to the pleading. This Schedule sets out some 14 areas of breach together with the results or consequences of the breaches. Some £1.6 million is claimed.
12. The Defence and Counterclaim was served on 22 June 2009. It is a substantial document, running to 139 pages. In summary, it is asserted that, although in a number of respects the work departed from the Critical Dimensions, this was as a result of or in the context of the Claimants themselves seeking or approving such departures in such a way that by their conduct they waived their right to insist upon compliance with the Critical Dimensions requirements or are otherwise estopped from requiring the work to be constructed in accordance with the Critical Dimensions requirements. Much of the pleading involves a detailed analysis of the history. Of the 20 discrepancies with the Critical Dimensions requirements raised during that history, 9 are accepted as discrepant and relating to the Critical Dimensions. It is denied that there were other material discrepancies. Additional claims are brought against the Claimants' ultimate holding company and the Second Claimant for allegedly inducing breaches of contract by the First Claimant.
13. The Reply and Defence to Counterclaim, served in August 2009 runs to 96 pages and goes into substantial factual detail as to why many of the factual assertions made by the Defendants were wrong or give rise to different interpretations or inferences.
14. On 21 September 2009 the parties agreed terms in relation to an application which had been issued by the Defendants for security of costs. That was reflected in an order dated 29 September 2009.

This Application

15. On 24 September 2009, the Defendants issued an application before the TCC to have the Claimants' claim together with their Counterclaim and additional claims transferred to the TCC. This was supported by a witness statement of Mr Elvy of the Defendants' solicitors. Both parties' Counsel put in helpful and detailed skeleton arguments which were supplemented over a 2½ hour hearing. It is accepted by both parties that the issues can be split and indeed have been split by agreement into "Primary" and "Secondary" Issues, with the Primary Issues being whether there was a valid rescission or an accepted repudiation and covering the estoppel and waiver issues. The Secondary Issues are in effect everything else. It is accepted that the Secondary Issues are TCC business.
16. There are essentially three areas of issue between the parties on this application. The first relates to the jurisdiction of a court in one division of the High Court to order a transfer to it of a case from another division in which it is then proceeding. The second relates to the basis upon which and criteria subject to which the court should proceed in deciding whether a transfer should be made. The third relates to the specific facts of this case and as to whether this is a suitable case to be transferred to the TCC. I will deal with the first two issues together.

Jurisdiction for inter-division transfer and basis for transfer

17. Sections 64 (1) and 65 (1) of the Supreme Court Act 1981 state:

"64(1) Without prejudice to the power of transfer under section 65, the person by whom any cause or matter is commenced in the Court shall in the prescribed manner allocate it to whichever Division he thinks fit.

65(1) Any cause or matter may at any time and at any stage thereof, and either with or without application from any of the parties, be transferred, by such authority and in such manner as rules of Court may direct, from one Division or judge of the High Court to another Division or judge thereof."

It is, properly, not contentious that a claimant may commence its proceedings in any division of the High Court albeit that its decision to do so may be subjected to a transfer to another division.

18. CPR Part 30.5 addresses the transfer of proceedings:

"(1) The High Court may order proceedings in any Division of the High Court to be transferred to another Division.

(2) A judge dealing with claims in a specialist list may order proceedings to be transferred to or from that list.

(3) An application for the transfer of proceedings to or from a specialist list must be made to a judge dealing with claims in that list."

19. Before turning to the relatively limited amount of authority which addresses the jurisdictional and practical issues arising under CPR Part 30.5, I have been invited to consider a number of pre-CPR authorities. Under the Rules of the Supreme Court, it was Order 4 which addressed the transfer of proceedings; Rule 3 stated:

"A cause or matter may, at any stage of the proceedings therein, be transferred from one Division to another by order of the Court made in the Division in which the cause or matter is proceeding."

This wording is obviously significantly different from CPR Part 30.5. On any count, prior to the introduction of the CPR, a judge from one division could not order the transfer of a case which was proceeding in another division.

20. In effect, by 1998, proceedings could be commenced in the Official Referee's Courts (the forerunner of the TCC). However, RSC Order 36 rule 3 provided for the transfer of proceedings from the Chancery or Queen's Bench Divisions to the Official Referees. The ORs could also transfer matters back to either of those divisions if it was considered that they could "more appropriately be tried" by them.
21. There is no doubt that prior, at least, to the CPR regime, a test of appropriateness or inappropriateness was the primary relevant criterion in determining whether there should be a transfer. In Barclays Bank plc v Bemister and another [1989] 1 AER 10, the Court of Appeal addressed this issue. At pages 12 and 13 Sir John Donaldson MR said:

"…Where there is a choice of divisions or, in the case of the Commercial Court, a subdivision, it is for the plaintiff to exercise that choice. In doing so, he or his legal advisers will or should have some regard to how his claim can be most speedily and satisfactorily determined. But mistakes can be made. Those mistakes may take the form of beginning an action in a division other than that to which that type of action is assigned, or to which in terms of its subject matter, it is appropriate. This can and would be remedied by ordering a transfer. However, they can also take the form of backing the wrong horse. The judges concerned may be running well at the time the action is begun, but, due to an excess weight of actions, may seem to be flagging long before the date of the hearing is reached. Again the mistake can be remedied by transfer, but in this instance the court is faced with rather greater problems…

The decisive factor is not of course the inconsistent wishes of the parties, but the objective need for speed if justice is not to be denied. This objective need is not an absolute. It is relative to the needs of other actions in the same and other divisions or subdivisions of the High Court, matters which will be unknown to individual litigants.

…If an action has been begun in a division (or subdivision in the case of the Commercial Court, for example) to which, in accordance with the rules, or generally accepted practice, it is inappropriate, either party can and should apply for a transfer to the appropriate division. Subject to that qualification, no party should apply for a transfer to another division. If any party considers that he has a claim for special expedition… he should apply for an expedited hearing. It will then be for the judge concerned to consider the need alleged and whether an appropriate degree of expedition can be achieved without transfer. If in his judgement it cannot, he should himself make enquiries at the head of another division with a view to ascertaining whether that division can afford the parties [a] speedier hearing without unduly prejudicing the legitimate needs and expectations of parties to actions which are already the concern of that division. If the result of those enquiries is that a transfer is the appropriate course, it would be for the judge of his own motion to direct a transfer with the consent of his own head of division and that of the division to which the case would be transferred…"

Thus, the Master of the Rolls was laying down a test of appropriateness or inappropriateness for any transfer. Expedition was something to be dealt with administratively.

22. In Pantheon Ltd v Chandler Hargreaves Ltd 139 NLJ 329, the Court of Appeal derived the following from the Barclays Bank case:

"I deduce the following principles from [that] decision. Only if an action has been begun in a division in which it is inappropriate that the trial should take place should there be a transfer. That is so, even if the transfer would achieve a speedier trial. Where, as in the present case, a speedier trial will be the result of not transferring, then a transfer should only be ordered from the division which achieves the speedier trial-in this case, the Chancery Division-if a hearing in the Chancery Division of the issues which arise in the action is clearly inappropriate."

On the facts of that case, the Court appeared to accept that the case and the issues raised could be dealt with as adequately in the Commercial Court as in the Chancery Division. As the action had been started in the Chancery Division, it was in those circumstances not inappropriate for it to remain there.

23. It is probably unnecessary to enter into a debate as to precisely what the pre-CPR test was for the transfer of proceedings to another division. The test was undoubtedly appropriateness or inappropriateness. All things being equal, as in the Pantheon case, the action would stay where it was. If on balance it was more appropriate that another division or specialist court within another division should deal with the case, it would not be a wrongful exercise of discretion to transfer it. The wording of RSC Order 4(3) undoubtedly gave the Court a discretion and it would be difficult to say that that was a wrongful exercise of discretion.
24. When one comes to the CPR, one needs always to bear in mind the Overriding Objective. Indeed, the court must give effect to the Overriding Objective in interpreting any rule (CPR Part 1.2). That objective is the just dealing with cases. That involves amongst other things dealing with cases in proportionate ways bearing in mind amongst other things the complexity of the issues and the importance of the case, expedition and fairness. One of the objectives of the drafters of the CPR was to give to courts a greater flexibility than they had previously had.
25. I now turn to considering the jurisdiction which the court hearing a transfer application has. I am fully satisfied that CPR 30.5 gives to any division of the High Court jurisdiction to order proceedings in another division to be transferred to it. The wording of CPR 30.5 (1) is in itself wide enough to permit this interpretation. One can presume that the drafters of CPR 30.5 had in mind RSC Order 4 rule 3: whilst the latter makes it expressly and unequivocally clear that it is only the division in which the case is proceeding which can rule on the transfer to another division, CPR 30.5(1) has no such verbal qualification or restriction. In CPR 30.5 (1), the "High Court" includes in effect any High Court judge.
26. Mr Reed, Counsel for the Claimants, argues that the wording of CPR 30.5 (1) should be read in practice as follows:

"The High Court [in one Division] may order proceedings in [that] Division of the High Court to be transferred to another Division"

Particularly given the earlier RSC rule which was not repeated in the CPR, there is no obviously compelling reason to believe that the drafters of the CPR meant anything different from what they actually wrote. The interpretation which I believe is correct is one which provides flexibility. It may well be appropriate and sensible for the Division or subdivision to which the transfer is aimed to consider whether the nature and circumstances of the case are such that it is the proper venue for the particular proceedings. Flexibility is maintained also by permitting the division in which the case is then currently proceeding also to have jurisdiction to consider the application. The existence of the Overriding Objective means that one should construe CPR 30.5 in such a way as to facilitate a transfer when this is the sensible course of action. If for some reason the court to which transfer was sought genuinely considered for good reasons that the nature of the case or even its then current resources were such that it would be better for the case to remain where it was, it makes sense for that court to be involved in the transfer application. That would avoid a case being sent to and fro within the court system.

27. CPR Part 30.5 (2) makes the position even clearer when it comes to considering the jurisdiction of a court such as the TCC which is a "specialist list". The wording is unequivocal in giving to a judge of this court the jurisdiction to order "proceedings to be transferred to…that list" (emphasis added). There is no verbal reference to this power being exercised within a particular Division. Mr Reed argued, in the light of his interpretation of CPR Part 30.5 (1), which as I have indicated above is wrong in my view, that one has to construe CPR Part 30.5 (2) as relating only to a judge within a particular division transferring proceedings within that division. The wording however is not restrictive. CPR Part 30.5(3) makes it emphatically clear that the application to transfer to a specialist list such as the TCC must be to a TCC judge; it would be an odd state of affairs and contrary to the Overriding Objective of saving cost if a party first had to apply to a judge of the relevant division and then, having achieved a transfer order, apply again to the judge in the specialist list. The wording of CPR Part 30.5 (2) and (3) is clear and indeed informs the interpretation of CPR Part 30.5 (1).
28. Given that a judge of any division of the High Court has jurisdiction to order the transfer of proceedings to another division and in particular that a TCC judge has jurisdiction to order proceedings to be transferred to or from the TCC list whether from or to the Chancery, Queen's Bench or even Family Divisions, I now turn to the basis upon which that jurisdiction or power should be exercised. The first thing to confirm is that it is a discretionary power: the use of the word "may" confirms that. The second is that the power must be used to secure the just disposition of the case in accordance with the Overriding Objective.
29. It has been said in other contexts that courts in applying the CPR should not be hidebound by precedent relating to the application or interpretation of the old RSC. Accordingly this court is not and does not regard itself as bound as such by those decisions.
30. However, the appropriateness of the courts to and from which transfer is sought to deal with the disputes between the parties is and must be a highly material factor. To borrow from examples created by Lord Justice Glidewell in the Pantheon case, a claim for personal injury would often be inappropriate for the Chancery Division whilst a passing off claim or a probate case may well be inappropriate for the Queen's Bench Division. It is conceivable however, that where the issues in a personal injury claim are to do with damages and are dependent upon tax issues, the Chancery Division might be appropriate.
31. There is one authority which both parties have referred to in which Mr Justice Colman considered the power to transfer under the CPR. In Lumbermens Mutual Casualty Comp v Bovis Lend Lease Ltd [2004] 2 CLC 778, he was concerned with an application in the Commercial Court to transfer the matter to the TCC. The material parts of the judgement are as follows:

"1. This application, to transfer out of the Commercial Court, and the proceedings now before it, raises rather starkly, an issue which, in rather less stark form, occasionally, has to be determined by this court. The particular issue is, where there is a case which involves important issues of law, with which the Commercial Court is particularly familiar, and also involves substantial issue of fact and liability with which another court, in this case the TCC, may be significantly more familiar, what ought the Commercial Court to do in the face of the submission that the bulk of the trial will be devoted to the issues with which the other court is more substantially familiar than the Commercial Court?

2.The approach which has traditionally been taken, and which is supported by decisions of the Court of Appeal, notably in Boobyer v. Holman and in the Barclays Bank v. Bemister [1992] 2 Lloyd's Rep 436 case, is to ask whether it is inappropriate that the action proceedings should remain in the Commercial Court.

3. Inappropriateness, seems to me, to be something which has to be approached with reference to the overriding objective in the CPR. This obviously involves considerations, the aim of which is to achieve a just and efficient resolution of the issues which are raised in the proceedings. One only has to look at CPR 1.1 to appreciate that it is important to consider such matters as the amount of money involved, the importance of the case, the complexity of the issues, ensuring that the trial is dealt with expeditiously and fairly, and allotting to it an appropriate share of the court's resources while taking into account the need to allot resources to other cases.

4. Where the Commercial Court finds that there has been started within it an action which raises matters of law or construction or both, or matters of fact which are peculiarly within the province of the Commercial Court and may be described, so to speak, as core issues, in the sense that they are the kind of issue which the Commercial Court deals with regularly, and with which its judges are extremely familiar, its approach generally, in my experience, is to retain the matter within the court, unless it takes the view that other issues in the case are of a nature which so strongly demands that they should be determined by another court, as to outweigh the consideration that the Commercial Court-type issues ought to be retained for trial.

5. In the present case there are specific issues of insurance law and construction which have to be resolved as a necessary part of the proceedings. One of the issues, to which I would refer as "the ascertainment point", and another of the issues, which is "the breach of warranty point," are so fundamental to the overall global issue between the parties, that their resolution will determine whether indeed it is necessary for the court to investigate that part of the case which is said to be a typical Technology and Construction Court case, namely, the issue whether and to what extent Bovis was liable to Braehead, and if so, to what extent Bovis was entitled to recover its claim from Braehead.

8. At the end of the day it is necessary to take a view, and bearing in mind the relative impact of these two parts of the proceedings, as to whether the presence of the TCC part of the case renders this court inappropriate, having regard to the wider considerations in the CPR, and having regard, in particular, to the nature of the insurance issues. Now, I have to say that I regard one of the insurance issues, to which I referred as the ascertainment point, not only as fundamental to the matters at large between the parties in this case, but as of far-reaching importance in the law of insurance generally. It seems to me that the issue, as to the extent to which the concept of the ascertainment of liability for the purposes of a liability policy requires quantification by a settlement agreement of the amount of the liability in question can be so regarded. It involves a consideration of the circumstances in which a cause of action under a liability policy can be said to arise, and the scope of the judgment and the principles underlying the judgment in Post Office. v. Norwich Union.

10. The Commercial Court, obviously, from time to time has to deal with matters of great technical complexity. Not only is this in connection with construction contracts, such as ship building and oil-rig building, but also in connection with physical, technical problems in all sorts of other fields. Balancing the nature of the issue raised by the question of liability as between Bovis and Braehead on the one hand, and the importance and specialist nature of the insurance issues on the other, I have come to the conclusion that on balance, this case ought not to be transferred. It seems to me, that to regard this case as inappropriate to be retained in the Commercial Court, within the concept of the CPR, it is necessary to look at the structure of the litigation as a matter of reality. And to determine how this court's case management processes may in fact be brought to bear on what could be quite a complex trial.

11. This court's case management processes involve, and indeed, in this case ought to involve, the consideration of the determination of the insurance issues before determining the issues relating to liability between Bovis and Braehead. The reason for this is simple. Insurance issues can be determined in the course of a very short trial. A very short trial can be fixed at any time from the summer of 2004 onwards. It would take very little to prepare for that type of trial, and if matters were determined, particularly in relation to the ascertainment and the breach of warranty points, in one particular way, it would be unnecessary for any court, whether the Commercial Court or the TCC, to go on to consider, what may be described, as the building contract liability point.

13. On the other hand, I have to take into account also, the relative expertise of the courts concerned. I also have to take into account the relative importance of the issues which are particularly appropriate to one court or another. I accept, that if this matter were tried in one continuous trial, dealing with all the issues at the same time, including the Bovis/Braehead liability issue, the trial would be likely to take at least six weeks in the Commercial Court, and of that six weeks, the bulk of the time would be devoted to the Bovis Braehead liability issues.

14. I have come to the conclusion that the course, which in the interests of justice and the fairness to all parties concerned, ought to be adopted, is that the case ought to be managed and tried in the Commercial Court. The process of management can be a matter of further discussion. In terms of the case management order, my present position is that the insurance issues must be determined first. And they should be determined in the course of 2004 rather than later, so that the parties will know whether they have to spend what could be, a very considerable amount of money on a further trial on the Bovis/Braehead liability issue."

32. The Lumbermens case does not as such dictate that the pre-CPR practice remains in force. It certainly highlights inappropriateness or appropriateness as the case may be but the learned judge clearly qualified that factor by reference to the Overriding Objective. The Court can, properly, have regard to the application of appropriate case management processes. Mr Justice Colman decided in effect on a trial management basis that it would be better for the insurance issues in that case to be determined first so that the parties might, depending on the outcome, not have to pay out substantial costs on a further trial. Insurance issues of that type were and are regularly dealt with in the Commercial Court.
33. In my view, the Court is entitled to have regard to the relative appropriateness of the different Divisions or specialist courts within them in considering whether the transfer should be made. Thus, given the increasing familiarity with and even greater competence of judges within the different divisions to deal with matters outside the traditional expertise of judges within their allotted divisions, the judge considering the transfer application should have regard to what is the more or most appropriate court to try the particular case. The judge considering the application must consider on the basis of the pleadings and other information put before the court upon what issues the bulk of the time, cost and resources involved in trying the case (and certainly the issues to be dealt with first) will be directed towards. Put another way, the Court needs to ascertain if possible where and within what areas of judicial expertise and experience the bulk or preponderance of the issues lies. If there is little or only an insignificant difference between the two venues, the discretion will generally be exercised in favour of the status quo to reflect the fact that a claimant is entitled to issue proceedings in whatever division it thinks fit and that either court is sufficiently experienced in addressing the issues. I would add that, where it is clear that significantly greater expedition will be achieved in one court rather than the other, that would be a material factor to be taken into account; expedition is a factor recognised within the overriding objective. On a similar basis, where it is established that costs will be less in one Division rather than the other, that is a material factor. In the context of the TCC, the Court should have specific regard to CPR Part 60 and the TCC Practice Direction with regard to the types of claim which are or may be appropriate for trial by the TCC. It is a reasonable presumption that, if the more or most appropriate court deals with the issues, there should be some saving in costs and time in disposing of the case.
34. In essence, in my judgement, the Court should take a pragmatic approach to determine the most appropriate venue, taking into account the experience and expertise generally of judges therein, and any time and cost saving to be achieved in one venue rather than the other. It is not the case that the party seeking transfer must establish that it would be inappropriate for the case to remain in the Division in which it was issued. However, if it was to establish that factor, that would be a very strong ground in favour of transfer.

This case

35. It is absolutely clear from the pleadings that the trial of the Primary Issues, namely those relating to rescission or repudiation, will involve a detailed examination of what happened over a period of nearly 3 years in terms of design and construction of the Cinema area in this development. Both parties have put in issue how each and their respective professional advisers addressed and reacted to drawings and changes to and from the original agreement Plans and Critical Dimensions. There are factual disputes as to what was said and done and equally, and possibly even more importantly, as to what interpretations should be put upon or inferences arise from the parties' statements and behaviour throughout this period; for instance, were effective reservations made by or on behalf of the Claimants? It was accepted by both Counsel that there were disputes in respect of 11 of the 20 Critical Dimensions complaints raised in the latter half of 2007. In this context, it will be necessary for the trial judge to determine what the Critical Dimensions were and how they are definable from Annexure 3 to the agreement. Since estoppel and waiver are key defences, it will be necessary to consider how and to what extent (if at all) the Defendants relied upon what was said or done; that will or may well depend upon whether it was realistic or reasonable in a design and construction context for them to have placed reliance on what was said or done. It is accepted that the Secondary Issues, which are or may well not be insignificant, are TCC business.
36. CPR Part 60.1(3) states:

"A claim may be brought as a TCC claim if-

(a) it involves issues or questions which are technically complex; or

(b) a trial by a TCC judge is desirable.

The TCC Practice Direction gives in Paragraph 2.1 non-exhaustive "examples of the types of claim which it may be appropriate to bring as TCC claims":

"(a) building or other construction disputes…

(b) engineering disputes…"

37. On the face of the pleadings alone, there is little doubt that the very large bulk of the factual issues between the parties relate to building and engineering and the practice of parties involved in design, construction and development. From the pleadings, it can be seen that they are complex. In that sense, the issues could be described as commonly dealt with in the TCC, which has particular experience of development problems arising out of agreements for lease which require the developer or landlord to carry out construction works prior to the formal granting of the lease. That is not to say that the judges of the Chancery Division are unable or insufficiently experienced to deal with cases of this sort. However, the almost daily fare of the TCC is construction and engineering projects, whilst that is not the case, fortunately or unfortunately, in the Chancery Division.
38. Mr Reed argues however that upon analysis the real issues in the case only coincidentally involve construction and engineering issues. The question as to what are the Critical Dimensions as defined by reference to Annexure 3 of the agreement, namely the General Arrangement Drawings, can be determined simply as a matter of normal contractual interpretation: one looks at those Drawings and, without more, one can determine what the Critical Dimensions, as opposed to any other dimensions, are. Although I make no concluded finding about this, I strongly suspect that the exercise is not quite so simple. Whilst most of those Drawings have a longitudinal and latitudinal 8 metre grid, it may prove necessary to consider the background to the agreement, at least as it emerged in the period in which the parties were negotiating. It may well be the case that a judge who has particular experience of analysing and considering design drawings has an advantage in being able in context to construe, contractually, what a drawing means.
39. Mr Reed's main points in this context however relate to the operation and requirements of Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989. As is stated in Megarry & Wade on the Law of Real Property (7^th edition 2008): " A contract for the sale or other disposition of land made on or after September 27, 1989 is neither valid nor enforceable unless it complies with the requirements of Section 2…"(Para. 15-014); "…the old doctrine of part performance…has been abolished…" (Para. 15-015). Mr Read goes on to argue that all the terms of such a contract must have been expressly agreed and incorporated in a signed document (Para. 15-027), the contract must be signed by on behalf on each party (Paras. 15-035 and 15-039), and that:

"any alterations… made to a concluded written contract must themselves comply with the requirements of s.2. This cannot be achieved by an exchange of letters, and the parties will therefore either have to exchange identical signed copies of the variation, or they will both have to sign one document which makes the change. If they did not comply with s.2, the alterations will be a nullity and the original contract will remain enforceable because no binding agreement has superseded it." (Para. 15-040).

40. He then goes on to argue on the basis of a number of authorities that a very important Chancery-type issue arises, which is whether and if so to what extent estoppel or waiver can validate transactions, in this case variations to the agreement for lease, which he says, to be valid, needed to have been in a document signed by both parties or otherwise formally agreed. He argues that there is a growing judicial consensus that equitable estoppel cannot be used to give effect to any alleged agreement which would be void under Section 2. He relies upon the dictum of Lord Scott in Yeoman's Row Management Ltd v Cobbe [2008] UKHL 55:

"There is one further point regarding proprietary estoppel to which I should refer. Section 2 of the 1989 Act declares to be void any agreement for the acquisition of an interest in land that does not comply with the requisite formalities prescribed by the section. Subsection (5) expressly makes an exception for resulting, implied or constructive trusts. These may validly come into existence without compliance with the prescribed formalities. Proprietary estoppel does not have the benefit of this exception. The question arises, therefore, whether a complete agreement for the acquisition of an interest in land that does not comply with the section 2 prescribed formalities, but would be specifically enforceable if it did, can become enforceable via the route of proprietary estoppel. It is not necessary in the present case to answer this question, for the second agreement was not a complete agreement and, for that reason, would not have been specifically enforceable so long as it remained incomplete. My present view, however, is that proprietary estoppel cannot be prayed in aid in order to render enforceable an agreement that statute has declared to be void. The proposition that an owner of land can be estopped from asserting that an agreement is void for want of compliance with the requirements of section 2 is, in my opinion, unacceptable. The assertion is no more than the statute provides. Equity can surely not contradict the statute. As I have said, however, statute provides an express exception for constructive trusts…" [Para. 29]

He referred to a number of other authorities which addressed the impact of estoppels of one sort or another (e.g. Godden v Merthyr Tydfil Housing Association 1997 (1997) P&CR D1, CA, Yaxley v Gotts [2000] 1 All ER 711, McCausland v Duncan Lawrie [1996] 4 All ER 995, Kinane v Mackie-Conteh [2005] EWCA Civ 45 and Anderson Antiques (UK) Ltd v Anderson Wharf (Hull) Ltd [2007] EWHC 2086 Ch) to seek to show in some respects how clear and simple the law is and in other respects how unclear it is. In any event, he said that the issues arising out of this case were on this aspect of it likely to be important. He argues that the interpretation of Section 2 of the 1989 Act and the policy of that Act are central to the issues leading up to the purported rescission in that, if it be the case that the variations to or departures from the Critical Dimensions were orally agreed or the parties proceeded upon the basis that such alterations could be acted upon, such variations would not comply with Section 2; he then goes on to argue that the original agreement stands and his clients' right to rescind on the grounds of departures from the Critical Dimensions remained in place and that the Defendants cannot by way of waiver or estoppel achieve that which Section 2 regulates against. He also asserts that the issue of whether the Second Claimant or the holding company induced a repudiatory breach of contract is well within the core area of expertise of the Chancery Division.

41. It would be wholly inappropriate for this Court to comment upon the viability of this series of arguments by Counsel for the Claimants. They may or may not succeed in whole or in part. However, these particular arguments do not seem to me to be such as are peculiarly or exclusively within the normal or common boundaries of Chancery business. I do accept that the interpretation of the 1989 Act is itself within those boundaries but issues relating to waiver and estoppel are common across the Divisions and within the specialist lists in the Queen's Bench Division. The determination of the policy behind any Act of Parliament is not uncommon across the courts. The proposition or argument that one cannot achieve by estoppel or waiver something which is unlawful, contrary to the provisions of statute or contrary to the policy behind a statute, is not novel in either the Chancery or the Queen's Bench Division. Similarly, issues about the inducing in subsidiary companies of breaches of contract by holding companies are not uncommon in the TCC or the Queen's Bench Division.
42. I have formed the view that, taking into account CPR Part 30.5, CPR Part 60 and the TCC Practice Direction and having regard to the Overriding Objective, the most appropriate venue for this case is the TCC. The large bulk of the factual investigation and significant elements of the contractual interpretation involve the consideration of engineering and construction drawings, exchanges and practice as well as a substantial and significant history of professional building and engineering disciplines exchanging information and possibly acting upon such exchanges. The Secondary Issues are accepted to be TCC business. Whilst a number of issues, it is accepted, could be dealt with, with equal confidence either by the Chancery Division or the TCC in the Queens Bench Division (such as: were the necessary conditions for the exercise of the right of rescission present when the Claimants sought to exercise that right and, if the rescission was wrongful, was it a repudiation of the agreement), the factual issues are primarily TCC business. If it turns out that vitally important points of law relating to Section 2 of the 1989 Act have to be decided, they can, as easily from the TCC as from the Chancery Division, be appealed. All things being equal, time and cost will be saved by a trial in the TCC all of whose judges are extremely experienced in this area of construction and design.
43. It is accepted that, based on current programming, a trial in the TCC before a High Court Judge would come on for trial 2 to 3 months earlier than in the Chancery Division. This is a minor factor in the circumstances, given the minor difference, which, although it is supportive grounds for a transfer, would not, on its own, have led to the transfer.

Decision on application

44. The application will be allowed and the claim will be transferred to the TCC.

Costs

45. Following the release to the legal advisers of the parties of the draft judgement, I invited the parties to address ancillary matters such as costs in writing, which Counsel have now done. The Defendants, having succeeded in securing the transfer, put forward a bill of costs for summary assessment in the sum of £41,408.07. The Claimants had put forward a bill of about half that figure.
46. The Claimants first seek to argue that costs should be in the cause or reserved because in effect they acted reasonably in opposing the application, that it was important to have matters clarified by the High Court and that it was a case management decision. Whilst I accept that the Claimants did not act unreasonably in opposing the application, that factor would only go to the basis of assessment, which would consequently be on a standard rather than an indemnity costs basis. The fact that it may well have been important that this judgement has clarified matters is not sufficient reason, at least in this case, to justify departure from the normal rule that the losing party should pay the costs. Although, necessarily, inter-divisional transfers are a matter for case management, that is not in itself a reason for refusing the successful party its costs. However, it is undoubtedly the case that, if this application had not been challenged, the basic and relatively minor costs of effecting the transfer would have been properly considered as costs in the case; that is a factor to take into account.
47. It follows from this that the normal practice should apply and the Defendants, being the successful party, to a contested application should have its costs paid by the unsuccessful Claimants.
48. I now turn to the summary assessment. I am surprised, if not shocked, that the costs of and occasioned by such a transfer application, even though contested, should or could reasonably be anywhere near £40,000. Although the case itself raises complex issues, what was essentially required was to put before the court a bundle containing the extensive pleadings and any previous orders accompanied by a statement which broadly summarised why the case should be transferred. That is essentially what has happened. The Defendants' solicitors and Counsel had been involved from the start of these proceedings and, having been involved in settling the pleadings, must have been very familiar with the issues in the case. There was no opposing witness statement from the Claimants and the hearing was listed for 1½ hours, albeit that it ran for about 2¼ hours. The skeleton arguments submitted by Counsel, which were in my judgement not excessive, were extensive.
49. I will not analyse the Defendants' costs bill in any great detail. In the absence of any or any significant discussion between the parties prior to the issue of the application, a simple application should have been prepared which would only need to have been supplemented by a full witness statement if opposition was indicated. I therefore allow £1,000 to be costs in the case as being what the costs should have been in any event if this application had not been opposed.
50. As for the balance, I can not see that the costs of pursuing an application which was to be contested should have exceeded £15,000. My broad assessment is as follows:

Partner's time-5 hrs @ £400	£2,000
Assistant's time-20 hrs @ 290	£2,900
Trainees time-10 hrs @ £120	£1,200
Counsel-leading and junior	£6,000
Miscellaneous	£1,000
Total	£13,100
Add VAT @ 15%	£1,950
Total rounded down	£15,000

So far as Counsel costs are concerned, it was reasonable for Leading Counsel to be instructed to advise in relation to the transfer application. So far as Junior Counsel is concerned, this became a more complex and lengthy hearing as a result of the deployment of numerous authorities by the Claimants; this justifies what might be a somewhat higher than usual allowance for Counsel.

Permission to appeal

51. The Claimants had made extensive representations about permission to appeal. For the reasons given in this judgement, I do not consider that the Claimants have any realistic prospect of success in the Court of Appeal: the CPR is clear and the need to have regard to the Overriding Objective in considering applications the transfer is unarguable. So far as the merits of the Claimants' position are concerned, the continued argument is an arid one. This is a case management decision.
52. The Chancellor of the High Court, to whom letters from each party's solicitors were sent about two weeks ago on the subject, wrote through his Legal Secretary by e-mail on to October 2009 as follows:

"The Chancellor of the High Court has considered the letters of 29th September from Messrs Reed Smith and 1st October. The Chancellor considers that it would be premature to consider the nomination [of a Chancery judge] before the summons in TCC returnable on 7th October has been finally determined. The transfer application is properly made to the TCC under CPR Rule 30.5. There is no requirement, as suggested by Reed Smith, for it to be considered by a Chancery judge first."

This lends some support to the validity of the views which I have expressed about CPR Rule 30.5.

53. There is no other good ground for granting permission to appeal. Whilst the issue of principle is important, it is also clear what the principle is. I must also have regard to the practicalities, having regard to the Overriding Objective, of securing the expeditious disposition of the case. Directions will be given shortly if not agreed to secure a trial of the Primary Issues before the Long Vacation in 2010. Whilst it is always open to the Court of Appeal to expedite an appeal, I doubt that with the best will in the world an appeal could be brought on and judgement given within 3-6 months; given that Court's work load, it is as likely as not that the trial of the Primary Issues will be proceeding in the TCC before appellate resolution.
54. Permission to appeal is refused.