QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Strand, London, WC2A 2LL
B e f o r e :
| (1) NATL AMUSEMENTS (UK) LIMITED
(2) NATIONAL AMUSEMENTS, INC
(3) NATIONAL AMUSEMENTS, LTD
|- and -
|(1) WHITE CITY (SHEPHERDS BUSH) LIMITED PARTNERSHIP
(2) COMMERZ REAL INVESTMENTGESELLSCHAFT mbH
Benjamin Pilling (instructed by Ashurst LLP) for the Defendants
Hearing dates: 8 October 2009
Crown Copyright ©
Mr Justice Akenhead:
"…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.
"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…"
The Claim and the Proceedings
Jurisdiction for inter-division transfer and basis for transfer
"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.
"(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."
"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.
"…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.
"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.
"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.
"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  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."
"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…"
"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).
"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  1 All ER 711, McCausland v Duncan Lawrie  4 All ER 995, Kinane v Mackie-Conteh  EWCA Civ 45 and Anderson Antiques (UK) Ltd v Anderson Wharf (Hull) Ltd  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.
Decision on application
|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|
|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
"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.