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
		16th July 2013

 


Mr Justice Akenhead:

Introduction

1. The Applicant, Mi-Space (UK) Ltd ("Mi-Space") seeks pre-action disclosure of what would be a substantial amount of documentation from Lend Lease Construction (EMEA) Ltd ("Lend Lease"). An issue arises as to whether or not there is an arbitration clause in the underlying agreement between the parties, it being common ground that if there is an arbitration agreement the Court does not have the power to order pre-arbitration disclosure. Other issues arise about the scope of the documentation which has been sought.
2. By a written agreement ("the Prime Contract") dated 29 September 2010, Lend Lease was engaged by the Secretary of State for Defence ("the Authority") to redevelop residential units for service personnel and families known as the Canadian Estate at Bulford. The Prime Contract was a form of "target cost" contract. In addition to "Target Cost" the Prime Contract also provided for a Maximum Price. The Target Cost and Maximum Price could be adjusted in respect of what were known as "Prime Changes". Without making any findings as to what the Prime Contract provisions meant Clause 10 provided for "Minimum" and "Target" Cost figures, a "Target Profit" which was 5.24% of Target Cost, a "Target Price", a "Maximum Cost" (expressed as Target Costs +14.98%) and a Maximum Price (expressed as Target Cost +15.72%); the Maximum Price was identified as £49,523,043. It was necessary to determine what the "Actual Costs reasonably and properly incurred" by Lend Lease were because the "Final Price Payable" was based upon such Actual Costs. There was what is sometimes called a "pain/gain" arrangement whereby if the actual cost was less or more than the Target Cost there were agreed arrangements whereby the pain or the gain was shared by the parties, although, if the cost exceeded the Maximum Cost Lend Lease was to be liable for all costs incurred over that amount. Provision was however made for adjusting the Target Cost and Price and the Maximum Cost and Price in certain circumstances, for instance if there were "Changes" as envisaged in Clause 13. An "open book" accounting arrangement was agreed upon in effect enabling the Authority to consider and review the costs being claimed for.
3. Lend Lease employed Mi-Space as the primary sub-contractor to carry out most of the work. The Sub-Contract, dated 13 May 2011, between Mi-Space and Lend Lease is a cost plus arrangement with comparable "pain/gain" provisions which were intended to incentivise Mi-Space to minimise costs incurred delivering the works. The Sub-Contract contains detailed terms relating to the final sum payable to Mi-Space but in general terms the incentive arrangements in the Sub-Contract are based on the financial outcome under the Prime Contract whereby Mi-Space agreed that it would receive an agreed share of any cost saving under the Prime Contract and it would pay an agreed share of any cost overrun. A comparable "open book" arrangement applied. Clause 1A .1 provided that the two parties should:

"…establish and maintain effective communications and management procedures and commit themselves to transparent and co-operative exchanges of information."

4. In terms of what Mi-Space was entitled to financially, this was based on the "Actual Costs…reasonably and properly incurred by" Mi-Space, albeit subject to verification. Clause 10.13 provided for the pain/gain arrangements, it being made apparently clear in Clause 10.16 that the "Final Price Payable" (which allowed for Actual Costs and profit as well as the pain/gain adjustments) excluded costs incurred by Lend Lease, Mi-Space, its subcontractors and consultants and indeed other subcontractors engaged by Lend Lease by reason of their breaches or other defaults. It was understood that "Prime Changes" which were defined as Changes as defined in Clause 13 of the Prime Contract would or could feature in the adjustment of various figures in the pain/gain computations.
5. The Works were substantially completed in December 2012. Lend Lease has been for some months and currently still is in the process of seeking to reach settlement with the Authority in respect of (i) the Prime Actual Costs incurred in providing the Works and (ii) adjustments to Target/Maximum Costs.
6. There clearly has been some delay in the completion of the various works and issues have arisen between Mi-Space and Lend Lease as to various financial entitlements. Mi-Space is concerned that Lend Lease is not doing all that it should do to secure agreement about Prime Changes and, in particular the Prime Changes which are also Changes under the Sub-Contract, and to secure adjustments to the various pain/gain Target/Maximum figures to minimise the pain and to maximise any gain. It is worried that, as the main sub-contractor responsible for over £30 million's worth of work, it could end up suffering more than it should do. This concern had emerged by March 2012 when it received from Lend Lease its latest cost forecast. Part of the growing concern related to whether Lend Lease was actually even passing on to the Authority Mi-Space's claims for Changes, in whole, in part or at all.
7. Solicitors for both parties became involved towards the end of 2012, TLT for Mi-Space and Pinsent Masons LLP for Lend Lease. On 22 November 2012 TLT sent a letter pursuant to the Pre-Action Protocol relating to proposed proceedings for declaratory relief. That claim has been the subject of numerous exchanges between the parties with the gist being that Mi-Space has incurred substantial costs that fall outside the pain/gain provisions of the Sub-Contract. However, at least so far as I can ascertain from the voluminous documents put before the Court, the current application does not relate to that claim. It relates to possible claims which have not yet been the subject matter of a Pre-Action Protocol engagement.
8. The question of pre-action disclosure in relation to the current application seems to have been raised initially in December 2012 and January 2013. Initially TLT sought a number of classes of documents in its letter of 14 December 2012 to Pinsent Masons whose reaction on 30 January 2013 was, broadly, that Lend Lease was "happy in principle to provide such documents and information as your client reasonably requires in order to assist its understanding of our client's cost assessments" but the categories requested "are extremely wide and to provide copies of everything requested would be a costly and time-consuming exercise". It is clear that a number of documents were made available and indeed copied for Mi-Space. In essence, thereafter Lend Lease took a firm line suggesting that what Mi-Space and TLT were seeking was "unfettered access to all costs information held by Lend Lease".
9. There is some dispute between the parties as to what documentation was actually provided for inspection or copying to Mi-Space by Lend Lease and that is something which I can not determine on this application. There is little doubt however that a substantial amount of documentation was provided on any account.

These Proceedings

10. On 23 May 2013, Mi-Space issued its application for pre-action disclosure. An estimate of 2½ hours was given and it was supported by the first of three witness statements from Mr Wrzesien of TLT. This statement runs through 22 pages of prose and three lever arch files of documentation. Although the statement is cross referred to the lengthy exhibits, no page numbers were given and it proved a very lengthy process for this judge to try to follow what he says in that statement. This was responded to by a first witness statement from Mr Kippax of Pinsent Masons which led to a responsive statement from Mr Wrzesien, a second statement from Mr Kippax in reply and a yet further statement from Mr Wrzesien containing further rebuttal material.
11. The exercise has been confounded and delayed by the failure on the part of the applicant and its solicitors to follow the basic practice set out in the TCC Guide and common sense which would have involved preparing and lodging in good time before the hearing an application bundle. The Court was never provided with such a bundle and indeed until about 4.30 pm on the afternoon before the hearing, the Court did not even have that first statement of Mr Wrzesien, the actual application itself or the exhibits to the first witness statement of Mr Kippax for the Respondent. The Court was only provided with a list of what was intended to go into the bundle just before 3 pm on the day before but the Court did not have the documents on that list at that time. It was only due to the good offices of Ms Jefford QC and her Chambers that I received these documents belatedly. There was probably some 10 hours pre-reading for the Court. It is incumbent on solicitors making applications such as this, which are complex and heavy, to assist the court by providing some estimate of the reading time required well before the hearing so that appropriate time can be set aside by the Judge to read the relevant documents. It was only when I began reading the extremely limited amount of documentation available to the Court the day before the hearing which comprised several of the responsive witness statements from both sides that I realised that the Court was missing the earlier documentation and that it was likely that a substantial amount of reading remained to be done. Although I dipped into the responsive statements, they made little sense without a sight of what they were responding to. Similarly the receipt earlier in the afternoon before the hearing of the three bundles of exhibits to Mr Wrzesien's first statement made little or no sense without knowing what point each of the extensive exhibits was supposed to be supporting or explaining.
12. The consequence of this was that I had to come into court without having been able to read all that needed to be read in advance. That was unsatisfactory and it does not help the proper administration of justice. I was minded to adjourn this application at the expense and cost of the Applicant but was persuaded by both Counsel that it was better to soldier on and to do the best that could be done in the time available. In this context, I have been particularly assisted by the written and oral submissions of Leading Counsel. I have of course been able since the hearing to do all the necessary reading.
13. I have received a graceful apology from Mr Wrzesien explaining what had happened, which I accept.
14. I will not set out the arguments in any detail but will hope to address them in the course of dealing with the various matters in issue.

The Agreed Dispute Resolution Forum

15. It is common ground that the Court does not have jurisdiction to make an order under CPR 31.16 for pre-action disclosure where the dispute between the parties will be decided in arbitration. This view is clearly supported by the TCC decision in Travelers Insurance Company Ltd v Countrywide Surveyors Ltd [2010] EWHC 2455 (TCC).
16. It is therefore necessary to analyse what the Sub-Contract says about dispute resolution in the context of Section 6(1) of the Arbitration Act 1996 which defines "arbitration agreement" as meaning "an agreement to submit to arbitration present or future disputes (whether they are contractual or not)." Clause 29.1 of the Sub-contract states:

"In the event of a "Dispute" as defined in the Dispute Procedure at Schedule 5 arising or a matter being referable to the DRB in accordance with the specific conditions of the Contract, [Mi-Space] and [Lend Lease] have agreed to follow the Dispute Procedure set out in the said Schedule 5."

The reference to "DRB" is to a "Disputes Review Board". DRBs have become quite common on very substantial infrastructure type projects around the world, many of them involving hundreds of millions of dollars or more. They often comprise three members, one being chairman, who will keep a weather eye on the project as it goes along, with more or less regular meetings at the site. One of the main ideas of having DRBs is that they can look at disputes as they emerge and make recommendations to the parties with a view to "nipping in the bud" such incipient disputes. Obviously, for each contract which provides for a DRB, one needs to analyse what its terms of reference are and contractually what its functions are to be.

17. One therefore turns to Schedule 5. One can say straightaway that it is not drafted in a perfectly or immediately comprehensible way, although much of what it does say is comprehensible. It describes 5 "Steps" which follow the opening words:

"The parties to this contract will use their best endeavours to resolve in good faith any dispute or difference which may arise between them in accordance with one of the dispute resolution procedures ("the Procedure") set out below."

The five Steps are: "Defining the Dispute", "Negotiation", "DRB Initial Meeting", "Consensual Resolution" and "Non-consensual Resolution".

18. Step 1 defines how and when a dispute arises:

"A dispute or difference will be deemed to arise when one party notifies the other in writing (with a copy to the Dispute Review Board "DRB") of its grievance, dispute or claim of whatever nature arising out of, in connection with, or in relation to the negotiation, execution, interpretation, performance or breach of this agreement, including but not limited to any claim based on contract, tort, equity, or domestic or international statute. ("the Dispute").

Thus, it is a very broad definition and the dispute arises as soon as there is a notification of the "grievance, dispute or claim" and even before the other party has responded or even had an opportunity to respond to what is notified.

19. Step 2 involves the parties using their best endeavours to resolve the Dispute, failing which "the Dispute will thereafter be managed by the DRB in accordance with Step 3 and/or Step 4 and/or Step 5 below".
20. Step 3 is headed "DRB Initial Meeting" and the first part is headed "Constitution of DRB":

"3.1 The DRB will be appointed upon the execution of the Contract and must consist of three persons.

3.2 If the above persons are unable or unwilling to serve on the DRB or there is a vacancy in the DRB for any reason, then each of the parties must first seek an appropriate replacement.

3.3 Each party will appoint one member for the approval of the other party and the parties will mutually agree on the third who will act as Chair person. If the parties are unable to agree the appointment of a Chair person then the other two members of the DRB shall nominate such person from an approved list which shall contain 3 names selected by the Contractor and 3 names selected by the Authority.

3.4 If the parties are unable or unwilling to comply with clauses 3.2 and 3.3 above having been notified of the position set out in clause 3.2, the persons appointed pursuant to clause 3.1 upon execution of the Contract to act as the DRB shall be entitled to select the alternative DRB members either in whole or part as the case may be and such selection shall be final and binding and not capable of challenge…

3.7 Once constituted the DRB's appointment can terminate only by agreement of the parties. A member of the DRB can be changed with the agreement of the parties."

21. The next part of Step 3 is headed "Timetable of Events and Procedure":

"3.9 Details of the Dispute must be presented in writing to the DRB within 15 Working Days of the reference. The DRB will first decide when to conduct a first hearing. For an urgent matter the DRB will meet at its earliest convenience.

3.10 At the first hearing each party will be given full opportunity to present its views. After each party has made a presentation, the DRB will consider the parties positions.

3.11 The DRB shall use its best endeavours to assist the parties to settle and resolve disputes. The DRB may recommend to the parties that they revisit their negotiations and take further steps with a view to settling the Dispute prior to the DRB making any recommendation to resolve the Dispute in accordance with Step 4 or 5…The DRB may also set out a timetable for any steps required pursuant to this Clause."

22. The next part of Step 3 is headed "Recommendations":

"3.12 Following the hearing the DRB must within 5 days after the hearing, either make recommendations to the parties in accordance with Clause 3.11 or proceed to make its recommendations in writing for the appropriate method to resolve the Dispute to all parties in accordance with the following Clauses. In exceptionally difficult cases, this time may be extended by agreement of all parties.

3.13 If Step 2 fails and the DRB considers steps recommended in Clause 3.11 to have been unsuccessful in resolving the Dispute, the DRB can decide upon which of 2 options should be implemented to resolve the Dispute. Mediation shall be the only consensual option available and can only be ordered by the DRB with the consent of both parties.

3.14 There is one non-consensual resolution, namely:

(a) Arbitration

The DRB will have authority to make binding decisions in respect of this option under clause 3.14…

3.16 The parties will proceed to Step 4 or Step 5 as recommended or ordered by the DRB…".

23. Step 4 deals with "Consensual Resolution" and goes through the appointment of the mediator, procedures to be followed in the mediation and the like. Step 5 is headed "Non-consensual Resolution" and "Option 2 Arbitration". Paragraphs 5.1 and 5.2 state:

"5.1 The Dispute shall be finally settled by arbitration administered by the DRB in accordance with the following procedure.

5.2 The place of arbitration shall be [city and country]. The language to be used in the arbitral proceedings shall be English. The governing law of the arbitration shall be the substantive law of England & Wales."

It is common ground that in spite of the reference to the arbitration being "administered by the DRB", Paragraphs 5.3 to 5.19 which list the powers of the arbitrators, the timing and content of awards and what is to happen to costs make it absolutely clear that it is the DRB itself and its members who are to be the three person arbitral tribunal.

24. Paragraph 6.1 states that the "Procedure shall be governed by and construed in accordance with English law, and any Dispute shall be subject to the exclusive jurisdiction of the English courts". There is only one other clause relied upon which is Paragraph 7 headed "Limitation":

"Either party shall be able to refer a Dispute to the DRB provided that the Dispute has been referred to the DRB under Step 3 within 12 months of such Dispute arising in accordance with Step 1 of this Procedure and thereafter parties shall be time-barred from having such Dispute dealt with under this Procedure. For the avoidance of doubt, this clause shall only apply in respect of Disputes notified in accordance with Step 1 of this Procedure and will not operate as a time bar against any disputes or claims (whether in respect of known or latent matters) which have not been notified pursuant to Step 1."

25. It is common ground that no DRB has ever been appointed. There is no evidence before the Court as to why this is particularly the case. There is therefore no obvious good reason why the parties can not even now appoint appropriate members of the DRB if they so wish. If one party refused to appoint, then it would be in breach of Paragraph 3.3 of the Procedure and specific performance could be sought to require it to do so. Alternatively, it might be argued that the refusal of that party was such that the contractual dispute resolution machinery had broken down enabling the parties to proceed to court. There is no suggestion that at this stage has yet been reached or that either party has refused to appoint members of the DRB.
26. It is somewhat unusual for Dispute Review Boards also to be arbitrators but there is no reason in principle or, so far as I am aware in policy, why they could not be arbitrators in relation to the same project. In one practical sense at least there is an advantage, which is that the members of the DRB might well have acquired a good working and practical knowledge of the project and all the disputed problems which have arisen as the project has proceeded.
27. One then turns to consider what it is that the parties agreed. The umbrella clause is Clause 29.1 of the Sub-Contract itself which identifies that the parties "have agreed to follow the Dispute Procedure set out in the said " Schedule 5. They did not say, expressly at least, that the final dispute resolution forum should be the Court. That however is not in any absolute way determinative but it is nonetheless a background matter to be borne in mind.
28. The five Steps in the Dispute Procedure in reality involve four dispute resolution processes (negotiation, DRB involvement and recommendations, mediation (if agreed to by both parties) and arbitration). I do attach however some importance to the opening words prefacing the Dispute Procedure which requires the parties to use best endeavours to resolve "any dispute or difference …in accordance with one of the dispute resolution procedures" set out therein. Step 1 however identifies notification of the grievance, dispute or claim as the moment at which there is a Dispute. It is at least conceivable that, for instance, a party might be able to go to court before a notification if urgent injunctions had to be obtained and it might well be difficult to seek a stay of proceedings under Section 9 of the Arbitration Act 1996, even assuming that there is an effective arbitration agreement.
29. When one moves to Step 3 following any failed negotiation, this Step is predicated upon the basis of the DRB being appointed "upon the execution of the Contract". It was, without any great force, suggested by Miss Jefford QC that the DRB had to be appointed by the time that the Sub-Contract was executed. It is however clear that the whole idea of the DRB is that each side nominates one member and contractual provision is made for the appointment of the "Chair person"; given that this is a contractual arrangement, this could only come into play following the entering into of the Sub-Contract. I would therefore read Clause 3.1 as meaning that the DRB was to be appointed once and after the Sub-Contract was entered into. Any argument therefore that because there is currently no and never has been any DRB in place the Dispute Procedure can not be operated is unjustified. There is machinery still available for the DRB to be appointed and appropriate steps could be taken to secure the appointment if one or other party dragged its feet. There has been no suggestion that in some way the parties have mutually abandoned the Dispute Procedure or that some waiver or estoppel operates to enable either party to by-pass the Dispute Procedure and proceed in Court.
30. The next sub-issue involves a consideration of whether the DRB's powers of recommendation as to whether there should be mediation or arbitration are truly "either/or" powers or are or may be in effect cumulative. Miss Jefford QC seeks to argue that the impact of Clauses 3.13 and 3.16 points inexorably to there being the possibility of only one or the other dispute resolution methods. Thus, she has to argue that, if the DRB opts for mediation, then there can be no arbitration and vice versa. However, this is not an obviously commercially sensible interpretation. Obviously it is a good idea for parties to try to resolve their disputes by way of mediation rather than rushing straight in to arbitration. If these clauses are construed as meaning that a party can have no recourse to arbitration if the DRB has opted for mediation, then this is likely to prove a disincentive to mediate through these contractual provisions and to lead to one party or the other not agreeing to mediation, which thereafter can not proceed. Also, if the option to mediate is proceeded with, the parties are left with no contractual provision for dispute resolution which is surprising in the context of the prefacing words to Schedule 5 as well as the wording in Clause 29.
31. One must also be careful to construe the words in Clauses 3.13 and 3.16 in the light of the whole of the Dispute Procedure. I attach particular importance to Clause 5.1 which identifies that the parties have agreed that that the "Dispute shall be finally settled by arbitration". This is relatively mandatory language and it is, in my judgment, telling the parties that, if the earlier Steps (negotiations, DRB recommendations and mediation) fail (which they might do), the final and what will be the binding dispute resolution method is arbitration. Reading Clauses 3.13 and 3.16 having regard to this later provision, I am left in no real doubt that that is exactly what the parties have agreed. Additionally, the reference in Clause 3 to the management of the dispute by the DRB "in accordance with Step 3 and/or Step 4 and/or Step 5" is consistent with all these steps being required (albeit in the case of mediation being available), this wording reflecting the common sense that there may be resolution or settlement of the Dispute before the ultimate stage, arbitration.
32. One residual point relates to what would or could happen if the DRB refuses or at least fails within a reasonable time or at all to decide that the matter should go to arbitration, thus potentially denying or at least delaying final dispute resolution and consequently justice as between the parties. Section 16(1) of the Arbitration Act 1996 gives the parties a very wide freedom in connection with the appointment of arbitrators and it provides a default procedure if they have not agreed on the appointment of arbitrators or the procedures for achieving such appointment. Section 18 provides as follows:

"(1) The parties are free to agree what is to happen in the event of a failure of the procedure for the appointment of the arbitral tribunal…

(2) If or to the extent that there is no such agreement any party to the arbitration agreement may (upon notice to the other parties) apply to the court to exercise its powers under this section.

(3)Those powers are—

(a) to give directions as to the making of any necessary appointments;

(b) to direct that the tribunal shall be constituted by such appointments (or any one or more of them) as have been made;

(c) to revoke any appointments already made;

(d) to make any necessary appointments itself.

(4) An appointment made by the court under this section has effect as if made with the agreement of the parties…"

There is a thus a statutory longstop if the DRB is not appointed.

33. Assuming however that a DRB has been appointed, the DRB having made its recommendations and used its best endeavours to bring about a resolution of the Dispute and the parties having failed to resolve it, there are only two options left and the DRB "can decide which…should be implemented" although it's hands are partly tied if one or both parties do not agree to mediation. Clauses 3.3, 3.6 and 3.7 envisage that the DRB will be appointed contractually by the parties, although the precise terms of reference are not as such specified but predictably would require the DRB to comply with the Dispute Procedure. There are, in my judgment, in effect two possible and practicable routes if the DRB dithers or does nothing in terms of moving on to the arbitration stage. There is first the contractual route whereby the DRB could be forced to move on to that stage or the statutory route set out above. Assuming that the Dispute Procedure was incorporated into the terms of appointment of the DRB, it would legitimately be interpreted as requiring the DRB to move on to the arbitration stage, once or within a reasonable time after the Step 3 DRB stage has been effectively exhausted. It is clear that the timetable for the Step 3 stage for any given dispute is reasonably tight because details of the Dispute have to be presented to the DRB within 15 days of the Dispute being referred and it is obviously envisaged that the first hearing and subsequent efforts to resolve the Dispute should be achieved with reasonable expedition. If, irrespective of the terms of their engagement, the DRB members continue unjustifiably to refuse or fail to move to the arbitration stage, and assuming that one can not construe the Dispute Procedure as requiring the DRB to move on, then Section 18 of the 1996 Act can be deployed because the parties are left with "a failure of the procedure for the appointment of the arbitral tribunal" and the parties could go to court to have an arbitrator or arbitrators appointed.
34. One final possible lacuna is raised in relation to Clause 7 of the Dispute Procedure the second sentence of which is said to suggest at least that there could be disputes or claims which do not fall within the Dispute Procedure and which therefore by default could be referable to litigation. I agree with Mr Walker QC that the second sentence is simply clarifying the first sentence which is in effect a limitation clause in relation to the disputes which have not been referred to the DRB within 12 months of the Dispute arising. I have not been asked to review whether any of Mi-Space's possible claims are subject to this limitation or what the consequences might be. I have not been asked to assume or find for instance that the various claims have got to a stage at which they have become Disputes or that 12 months has passed in relation to any of them or that this might then enable Mi-Space to proceed to litigation.
35. The parties did not specifically refer to much authority on this particular issue although it was accepted that the notes to the CPR Volume 2 at 2E-99 were germane. Thus the fact that the agreement to refer disputes to arbitration depended upon the exercise of an option did not prevent it from being an arbitration agreement. Similarly, it was also accepted, properly in my view, that the fact that a dispute resolution clause required parties to go through the various other dispute resolution approaches such as negotiation and agreement (and by analogy a DRB process) before arbitration was initiated could still be an arbitration agreement within the meaning of the 1996 Act.
36. It follows from the above that I am of the view that the parties have agreed to refer the disputes to arbitration with the DRB to be the arbitrators. Consequently, the Court does not have power to order pre-action disclosure. It is of course open to the parties (and might well be sensible given the fact that no DRB has yet been appointed and to save costs and time) to agree a specific but ad hoc arbitration arrangement for dispute resolution, possibly with only one arbitrator. However, the parties would have to agree that.

Miscellaneous Matters

37. It is therefore unnecessary to go in any great detail into the application for a pre-action disclosure. It is common ground that there are three relevant threshold tests:

(i) The Respondent and the Applicant are likely to be a party to the proceedings

(ii) If proceedings are commenced, the Respondent's duty by way of standard disclosure would extend to the documents of which the Applicant seeks disclosure.

(iii) Disclosure before proceedings commence is desirable to dispose fairly of the proceedings or assist the dispute to be resolved without proceedings or save costs.

Reliance is placed, non-controversially, on various authorities such as Black v Sumitomo [2002] 1 WLR 1562, Hays v Ions [2008] EWHC 745 (Ch), Gwelhayle v Midas [2008] EWHC 2316 (TCC), Bermuda International Securities Ltd v KPMG [2001] EWCA 269 and Birse v HLC [2006] EWHC 1258 (TCC).

38. In the Bermuda case, Lord Justice Waller said that "the court must be clear what the issues in the litigation are likely to be i.e. what case the claimant is likely to be making and what defence is likely to be run so as to make sure the documents being asked for are ones which will adversely affect the case of one side or the other, or support the case of one side or the other" (Paragraph 26).
39. I have formed the strong view from the voluminous evidence that it is difficult to be clear what the issues in the litigation are likely to be, assuming that there was going to be litigation as opposed to arbitration. Much of the evidence from Mr Wrzesien for Mi-Space was expressed in terms of its "concerns" in effect that there "may" be breaches of contract on the part of Lend Lease which leads me to the view that Mi-Space wants to put itself in a position to see if it has any arguable claim. In that respect much if not all of its application is a fishing expedition. There was little or no evidence explaining that Mi-Space was facing an immediate reduction in what it is due to be paid or has suffered a reduction in what it has been paid by reference to the operation of the pain/gain provisions to which its application for documents is related. It is therefore difficult to conclude that indeed many of the documents sought will necessarily or probably be discloseable by way of standard disclosure.
40. This is not a case in which either party can say that disclosure before proceedings is likely to dispose of the proceedings or to assist it being resolved without proceedings. The only ground therefore of ordering pre-action disclosure is the saving of costs. Mi-Space put this on the basis of it being saved the costs of having to amend its pleadings if or when litigation was commenced. I am not satisfied that this will actually be the case and this has not been readily established. In any event for any saving in costs to the Claimant, there will be a double exercise in disclosure if this application was allowed which will comparably add to the costs.
41. As indicated above, Mi-Space sought documents which would or might enable them to determine some aspects of the overall pain/gain calculation. In particular they sought documents relating to Prime Changes, emanating from Lend Lease and all of its sub contractors and consultants, doubtless because it thinks that with this documentation it could work out by how much the Maximum Price might be adjusted upwards which would to that extent limit the pain and increase the gain. They also seek extensive documentation relating to Actual Costs arising under the Prime Contract. I am of the view that many of these heads of document sought are much too widely drawn. For instance what is sought is "all correspondence between the Respondent and the Authority in relation to the Prime Changes applied for by the Respondent". Because the issues between the parties are imprecisely drawn, the provision of correspondence would probably involve an enormous amount of documentation much of which would be tangential. The request for "all minutes and notes of meetings…in relation to the Prime Changes" could relate to thousands of pages of documentation and I presume that many of the minutes and notes will relate to matters other than the Prime Changes, even if tangentially they refer to Prime Changes. Documentation in relation to Actual Costs includes not only all applications to the Authority for payment but also any correspondence and documents provided in support of those applications; that potentially could include large quantities of documentation which had nothing to do with anything which might be an issue between the parties. Mi-Space also want the sub-contracts of four other sub-contractors or consultants retained by Lend Lease which together with the other documentation sought suggests that it is in truth seeking to do an audit on all the costs incurred by everyone in relation to this project. It is very largely a disproportionate request for documentation.
42. It should not be for the Court on an application such as this to try to weed down extremely wide categories of documents that are sought by the applicant. It should be for the applicant to make a proportionate and focused request for pre-action disclosure. Fortunately in this case Lend Lease through its Counsel has offered to provide the documents listed at Paragraphs 1 to 5 of TLT's letter dated 14 December 2012 to Pinsent Masons, which it believed that it had already provided either for inspection or for copying or both. Some of these documents fall within the categories sought by Mi-Space in its application and therefore the Court does not have to carry out some weeding down exercise.
43. It follows from the above that if I had formed the view that that there was no arbitration agreement I would have either made no order at all in favour of Mi-Space or the order would have been limited to the scope of documents in any event offered by Lend Lease (see the preceding paragraph). Lend Lease has undertaken to Mi-Space that it will make available such documents.

Decision

44. The application is dismissed.