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England and Wales High Court (Technology and Construction Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Technology and Construction Court) Decisions >> Environment Agency v Lewin Fryer & Partners  EWHC 1597 (TCC) (06 July 2006)
Cite as: (2006) 22 Const LJ 574,  EWHC 1597 (TCC)
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QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Strand, London, WC2A 2LL
|- and -
|LEWIN FRYER & PARTNERS
Sorene Court Reporting & Training Services
73 Alicia Gardens, Kenton, Harrow, Middx HA3 8JD
Telephone No: 020 8907 8249
(Official Tape Transcribers)
Ms Joanna Smith (instructed by Squire & Co., WC2) for the Defendant
Hearing date: 23/06/2006
Crown Copyright ©
HIS HONOUR JUDGE PETER COULSON Q.C.:
(a) Jacobs UK Ltd., formerly Babtie Group Limited ("Babtie"), who were engaged by the EA to act as General Supervisor and Quality Management Supplier in respect of the Project;
(b) Balfour Beatty Civil Engineering Ltd ("BB"), who were engaged as contractors by the EA in respect of the northern section of the Project including Taplow Sluice and Glen Island Bund north;
(c) Edmond Nuttall Ltd ("Nuttall"), who were engaged as contractors by the EA in respect of the southern section of the Project, including Manor Farm, Slough Road, Myrke Embankment, and various other low embankments.
(a) Whether the EA were in breach of their relevant obligations;
(b) If they were, whether these breaches gave rise to LFP's ultimately abortive applications against the three contractors;
(c) Whether, in all the circumstances, the EA should be ordered to pay the costs claimed.
B. The Power to Make the Order Sought
B.1 The Issue
B.2 General Disclosure Obligations
(a) To disclose by way of a list all documents on which that party relies and/or which adversely affect his own case or that of another party and/or which support the case of any other party; (see the provisions as to standard disclosure in CPR 31.6).
(b) When giving standard disclosure, to make a reasonable search for such documents pursuant to CPR 31.7. Reasonableness depends on a variety of factors including the number of documents, the complexity of the proceedings and the difficulties or otherwise of retrieval. If a party does not search for a category or class of documents because that party considers that it would be unreasonable to do so, it must say so in its disclosure statement.
(c) A party's duty to give disclosure is limited to documents which are or have been in his control: see the provisions of CPR 31.8. This covers not only documents that the party has or has had in its possession, but also documents of which that party has or has had a right to possession or inspection.
(d) The duty to disclose is a continuing one until the end of the proceedings: see CPR 31.10. Documents covered by the rules relating to standard disclosure which come into a party's possession during the proceedings must be disclosed.
B. 3 Adverse costs orders
"(1) The Court has discretion as to –
(a) whether costs are payable by one party to another;
(b) the amount of those costs; and
(c) when they are to be paid.
(2) If the Court decides to make an order about costs –
(a) the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party; but
(b) the court may make a different order...
(4) In deciding what order (if any) to make about costs, the Court must have regard to all the circumstances, including –
(a) the conduct of all the parties;(b) whether a party has succeeded on part of his case, even if he has not been wholly successful; and(c) any payment into Court or admissible offer to settle...
(5) The conduct of the parties includes –
(a) conduct before, as well as during, the proceedings, and in particular the extent to which the parties followed any relevant pre-action protocol;(b) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;(c) the manner in which a party has pursued or defended his case or a particular allegation or issue...
B.4 The Usual Order on Applications for Pre-Action Disclosure
"(2) The general rule is that the Court will award the person against whom the order is sought his costs –
(a) of the application; and
(b) of complying with any order made on the application.
(3) The Court may, however, make a different order having regard to all the circumstances, including –
(a) the extent to which it was reasonable for the person against whom the order was sought to oppose the application; and
(b) whether the parties to the application have complied with any relevant pre-action protocols."
B.5 Summary as to Principle
(a) The EA were in breach of their disclosure obligations;
(b) Those breaches reasonably caused LFP to issue their pre-action disclosure applications of the 9th March against the three contractors;
(c) In the overall exercise of my discretion it is reasonable and appropriate to make the EA pay the costs of those pre-action disclosure applications.
(a) The EA's complete failure to disclose in their list of documents the documents in the possession of Babtie, BB and Nuttall which, on LFP's case, were throughout within the control of the EA.
(b) The EA's failure to keep LFP informed of their attempts to obtain, by voluntary means, the documents in the possession of Babtie, BB and Nuttall and, in particular, their failure to tell LFP about the voluntary disclosure exercise agreed with Babtie until shortly before the hearing on the 27th April.
C. The Relevant Facts
"During the inspection process, it became clear to us that (contrary to expectations) the Claimant's disclosure did not contain much new information in relation to the roles of third parties and, in particular, correspondence between the on site consultant/supervisors (e.g. Babtie) and the contractors, together with site records, were scarce. We, therefore, anticipate inviting various third parties to allow access to their files and to provide disclosure with the aim of ensuring that the parties and the Court have a complete picture of the relevant events. Of course, if the relevant third parties do not consent to disclosure we anticipate that an application for non-party disclosure will need to be made and a further period thereafter to allow for analysis of the third party disclosure and consideration of the possibility of third party proceedings."
"We agree with your observations on the extent and volume of the disclosure on both sides and have also not ruled out the possible need to access third party documents. We will be in a better position to review this and any further time needed for compliance with the existing directions once the relevant copy documents requested following inspection have been provided to us."
"3. The third party documentation to which you refer is relevant, if at all, to the issues that your client has now raised in its Defence in respect of the construction of the scheme. The fact that your client and its advisers has not had access to this documentation before pleading construction issues in its Defence and that you now take the view that it is essential to have sight of this documentation suggests that it is the basis of your client's Defence to certain aspects of the claim that has not been thoroughly investigated.
6. We are ourselves following up the position with Babtie and if their files can be made available we will liase with you on arrangements for this. Insofar as the other parties are concerned, it, of course, will be necessary for us to inspect the files as well and we shall be grateful if you will copy us in on arrangements for this to avoid unnecessary duplication of costs..."
"RC has made requests of Babtie, Balfour Beatty, Nuttalls and RPC. Nuttalls and RPC originally gave their consent. RPC are sending documents to RC this Friday. Nuttalls have withdrawn their previous agreement. Nuttalls have instructed Plexus Law who claim there is no basis on which third party disclosure can be ordered. SMJ and RC agreed this was nonsense.
Babtie have instructed Beale & Co., who have objected to the draft application on the grounds that it is too wide-ranging and a fishing expedition. Balfour Beatty have instructed Pinsents who have taken a similar line.
RC is reviewing his draft application and after addressing the various complaints will issue it.
SMJ noted that RC and SMJ have some common interest here. SMJ suggested that RC call him again before he issues the application. SMJ will up-date RC on our own efforts to obtain third party disclosure. RC suggested that the agency might have contractual rights to inspect Babtie's documents."
"2 SMJ reported that he is making slow progress with Babtie and Nuttalls because the insurer's solicitors have got involved. SMJ is still hopeful that this issue can be dealt with voluntarily. RC is proposing to issue his application this week. He has run it past Counsel. Counsel advises the application has more chance of succeeding if it is more narrow although RC cannot see how he can sensibly narrow it. RC will send a draft to SMJ for his comments. If SMJ cannot resolve the issue voluntarily SMJ suggested that we either expressly or implicitly support the application so that it has more chance of success. SMJ also noted it would be helpful if the parties could inspect the documents at the same time rather than sequentially as will be the case for the RPC documents."
"In a letter dated the 17th January 2006 you notified us that that your client had discovered at its Maidenhead site office a series of original documents which had not previously been disclosed. We were at that stage surprised that your client's search had not extended to the Maidenhead site office, or that its search had failed to identify the documents referred to in your letter dated the 17th January. Not only did this confirm that your client's list of documents dated the 2nd December 2005 was incomplete, it also suggested that your client was still discovering documents which neither your firm nor your client's experts had seen previously, or had any opportunity to consider in investigating the matter. Our concerns as to your apparent inadequate investigations prior to the commencement of proceedings against our clients were confirmed when we came to the issue of third party disclosure and you confirmed that you had not seen or, it seems, even contemplated requesting documents from Babtie, the party responsible for supervision of the works and ensuring the quality of construction. We consider this oversight on your part (and your client's part) startling."
In his second letter, written after the telephone conversation referred to above, Mr Crossingham also made criticism of the way in which the EA had gone about dealing with the disclosure of other parties. He said:
"Insofar as third party disclosure is concerned, we understand that Babtie and Nuttall had initially agreed to disclose their files to you, but that having notified their insurers both have now retracted that offer and appointed solicitors who are not prepared to co-operate. We reiterate our surprise and concern that you did not carry out the non-party disclosure exercise as part of your investigations before issuing proceedings against our clients. We are somewhat surprised that either Nuttall or Babtie could refuse your client access to their files. We understood from our telephone conversation with your Mr James on the 1st March 2006 that you accepted that Babtie's documents were within your client's control. Certainly the QMS contract between your client and Babtie might justify such an argument."
"If you wish to pursue an application for the third party disclosure against Babtie, Nuttall or anyone else, you are free to do so. We will let you have our comments on the terms of any such application if you provide us with a draft. We are not intending to pursue such an application at this stage, nor to contribute to your costs of so doing. We should also add that we believe that any such application must be carefully defined and proportionate. We do not, for the avoidance of doubt, accept that documents held by either Babtie or Nuttall are within our client's control."
"...we were in contact with two of the third parties against whom you were seeking disclosure and wanted to see whether we could assist in reaching an agreed position on disclosure with them in order to minimise costs. The position remains the same, but we can do little without understanding what you are seeking."
This was the first express reference to this "contact" but no further information was given. As indicated above, another letter on the same day from the EA's solicitors complained about LFP's decision to go ahead and issue the application without letting them see a copy of the draft. There was also an argument about whether or not the EA should be given a copy of the application now it had been issued, although eventually this was provided.
"On the 11th April you wrote to us enclosing a box of further documents from your client's files which clearly already have been disclosed. Your explanation was that 'during the course of interviewing witnesses we have also identified additional documentation not previously disclosed.' Included within those documents were 'a set of photographs taken during the construction process by Nuttalls' and 'a file of method statements relating to the structures which are the subject of these proceedings'. As you know, as a result of the inadequacies in your client's initial disclosure (which was itself late) our clients have been forced to seek disclosure from third parties. As you also know, having been provided with our client's disclosure application it seeks disclosure of construction photographs from Nuttall (e.g., see the first witness statement of Robert Crossingham at paragraphs 35(1)) and method statements also clearly within the categories of documents sought. Not only is it alarming that you are still discovering previously undisclosed documents at such a late stage, but it is still more so given that, to your knowledge, we have had to apply to third parties for documents which were at all times within your client's control. This is clearly relevant to the issue of the costs of our client's non-party disclosure application and we reserve the right to seek to recover some, or all, of those costs from your client."
"25 The categories of documents I identified on Babtie's files as relevant to the construction allegations raised by the Defendants are as follows:-
Contract 6 [BB]
25.1 Site instructions, method statements, channel cross section checks, value engineering documents, Babtie/Defendant's correspondence, construction photographs and photograph register.
Contract 9 [Nuttall]
25.2 Site instructions, method statements, Babtie/Defendant's correspondence, correspondence with Nuttall, digital photographs (copies)."
Greater detail was provided in his letter to LFP's solicitors on the 28th April, which identified the documents that were going to be provided on a site-by-site basis.
D. The Claim for Costs in respect of Babtie
(a) Were the Babtie documents disclosable by the EA? (Section D2 below)
(b) Why was the disclosure application made against Babtie and was it inappropriate or unreasonable? (Section D3 below)
(c) Can criticisms be made of the EA's conduct in respect of the Babtie documents? (Section D4 below)
(d) Are LFP entitled to claim against the EA the costs of their pre-action disclosure application against Babtie? (Section D5 below)
D.2 Were the Babtie Documents Disclosable by the EA?
"3.1 The ownership and copyright in all drawings, reports, calculations, computer software, data and other documents provided by the client in connection with the work shall remain vested in the client...
3.3. At any time during this appointment when requested to do so or upon termination of this agreement the quality management supplier [Babtie] shall promptly deliver to the client all documents, papers and other property belonging to the client or acquired at the client's expense which may be in the possession of control of the quality management supplier."
"Whilst the scope of this contractual entitlement may, I believe, have entitled the Claimant to obtain copies of third party reports, LFP drawings, minutes prepared by the Environment Agency and the like in the possession of Babtie, all these were already available either through the Claimant's or the Defendant's disclosure."
D.3 Why was the Application made against Babtie and was it Unreasonable/Inappropriate?
D.4 Can criticisms be made of EA's conduct in respect of the Babtie documents?
D.5 Are LFP entitled to claim against the EA the costs of their application against Babtie?
(a) LFP's costs of their application for pre-action disclosure against Babtie dated the 9th March 2006
(b) Babtie's costs of that application which had been ordered to be paid to Babtie by LFP.
E. The Claims against BB and Nuttall
E.2 Were the BB/Nuttall documents disclosable by the EA?
E.3 Why was the disclosure application made against BB/Nuttall and was it inappropriate or unreasonable?
E.4 Can criticisms be made of the EA's conduct in respect of the BB and Nuttall documents?
E.5 Are LFP entitled to claim against the EA the Costs of their Applications against BB and Nuttall?