The judgment of Mr Justice Edwards-Stuart in London Borough of Bromley -v- Heckel  EWHC encompasses many of the themes regularly discussed in this blog. Proceedings were issued late;there was an inappropriate application for disclosure;the witness evidence was inadequate. Finally an application for an extension of time was refused, thus effectively ending the action.
“This shows, perhaps, why a statement of truth is important and why it is necessary for the deponent to a witness statement to state the sources of his information or belief.”
“…parties who issue late are obliged to act promptly and effectively and, in the absence of sound reasons (which will seldom if ever include a continuing failure to comply with pre-action protocol requirements) the proceedings should be served within four months or in accordance with any direction from the Court. A claimant who does not do so and (where the Protocol for Construction & Engineering Disputes applies) who does not obtain directions on notice does so at extreme peril.”
- A claimant who issues and serves late runs major risks.
- The court would not order disclosure of documents which the claimant could not prove existed and which the defendant denied having.
- The evidence in support was inadequate. The witness statement should have been supported by a statement of truth and give the source of information and belief.
- The claimant’s application for an extension of time to serve the particulars of claim was refused. The claimant could and should have served it timeously.
- There are major dangers in issuing and serving late and then relying on an application for an extension of time.
- It is wise to assume that compelling reasons are required to justify not being able to draft and serve particulars of claim on time.
- Ensure witness statements have a statement of truth and explain, fully, the source of the maker’s information and belief.
- A claimant is taking a major gamble when not serving particulars of claim on time. In this case the application to extend was not subject to CPR 3.9 but was still refused and the action, effectively, struck out.
The claimant issued proceedings against the defendant claiming damages for work he did as a project manager for the construction of a family centre in 2007 and 2008. The defendant sent certain documents in 2014 and again in 2015.
Proceedings were issued in September 2014 and a claim form (but no particulars) served on the 1st December 2014 together with an application for disclosure seeking
a. it was not an application for pre-action disclosure because the claim form had already been issued; and
b. it was not an application for specific disclosure, because it was not limited to any particular class or classes of documents; and
c. since no Defence had been served, it was not immediately obvious what matters “were at issue between the Parties”; and
d. In the circumstances the disclosure sought went much wider than the ambit of standard disclosure.”
THE INADEQUACIES OF THE WITNESS STATEMENT IN SUPPORT
“The facts stated herein are either true to my own knowledge or have been derived by me from the study of the documents in this matter.”
The witness statement was not, as it should have been, supported by a statement of truth. The effect of this is that so far as the facts stated in the witness statement were derived by Mr Bradshaw from a study of the documents in the case, those facts were not supported by any form of assertion that they were true, only that they were not within his own knowledge because they had been derived from a study of the documents.
“13. I understand that the terms of SJH’s involvement was set out in a written agreement (“the Contract”), which is (inter alia) the subject of this Application.
14. SJH organised two tenders – one for the construction of the building and another for the ground works. Tenders were returned to him and he advised the School of the outcome and recommended one company (“Vinstrata”) for the ground works and the other (“Keyspace”) to erect a pre-fabricated building over those ground works.
15. I understand that those contracts were made by SJH with the two companies, although no copy of either the tender papers or the contracts was ever produced either to the Council or to the school’s officers. I am also seeking copies of those contracts in this application. “
Nowhere in his witness statement did Mr Bradshaw state the basis of his understanding as set out in paragraphs 13 and 15. This is a matter of some importance because Bromley had by then been told, in the clearest terms, that Mr Heckel’s engagement as Project Manager was made orally and that he does not have copies of the two building contracts. A surprising feature of this witness statement is that it made no mention of RPC’s letter of 2 May 2014. This shows, perhaps, why a statement of truth is important and why it is necessary for the deponent to a witness statement to state the sources of his information or belief. Further, I remain wholly unclear as to what possible ground Mr Bradshaw could have had for thinking that Mr Heckel might have entered into either of the two building contracts on his own account.
THE APPLICATION FOR DISCLOSURE WAS “QUITE HOPELESS”
The defendant had filed a witness statement stating that he did not have any of the specific documents sought in his possession and there had never been any written terms of engagement. The judge observed
“Again, in my experience as a Solicitor with extensive experience of dealing with contracts, I find it difficult to understand how the Defendant failed to enter into any formal written contracts.”
This appears to be a further allegation that Mr Heckel entered into the building contracts on his own account. I find it difficult to understand what experience Mr Bradshaw may have had as a solicitor that has led him to think that Mr Heckel might have entered into formal building contracts in his own name on behalf of the School.
Turning to the disclosure application itself, even as now limited by Ms McCarthy, the application is in my view quite hopeless. If Mr Heckel does not have copies of the relevant documents, he cannot disclose them. Both he and his solicitors have asserted that there was no contract of engagement and that Mr Heckel does not have in his possession copies of the building contracts. There is no material which would justify the court going behind the statement of Mr Heckel, and therefore in this case there can be no question of making an order against Mr Heckel for disclosure of documents which he says he does not possess. The application is even less compelling in circumstances where it is quite likely to be the case that either Bromley or the School has copies of the building contracts sitting in a file somewhere.
Unsurprisingly the application for disclosure was dismissed.
THE APPLICATION FOR AN EXTENSION OF TIME FOR SERVICE OF THE PARTICULARS OF CLAIM
The claimant was significantly out of time for service of the particulars of claim. The application for an extension was made prior to the time for service and was not, therefore, an application for relief from sanctions. It was governed by the more general context of the Overriding Objective. However the claimant had difficulties:
One difficulty facing Bromley is that the application for the extension of time is contingent upon there being an order for disclosure and the provision of the relevant documents, because the date of the latter acts as the trigger for the 42 day extension. If no documents are produced, the application for the extension of time falls away because there is no start date for the 42 day period. However, this is simply the product of careless drafting and, if the point had been raised with Ms McCarthy, she would almost certainly have applied to amend the application to request an extension period that, in the alternative, ran from the date of the order refusing disclosure.
Mr Allen drew my attention to the judgment of Cooke J in Nomura International plc v Granada Group Ltd  Bus LR 1, where he said, at paragraphs 37 and 41:
“37. In my judgment, when regard is had to these authorities the key question must always be whether or not, at the time of issuing a Writ, the claimant was in a position properly to identify the essence of the tort or breach of contract complained of and if given appropriate time to marshall what it knew, to formulate Particulars of Claim. If the claimant was not in a position to do so, then the claimant could have no present intention of prosecuting proceedings, since it had no known basis for doing so. Whilst therefore the absence of present intention to prosecute proceedings is not enough to constitute an abuse of process, without the additional absence of known valid grounds for a claim, the latter carries with it, as a matter of necessity, the former. If a claimant cannot do that which is necessary to prosecute the claim by setting out the basis of it, even in a rudimentary way, a claimant has no business to issue a Claim Form at all “in the hope that something may turn up”. The effect of issuing a Writ or Claim Form in such circumstances is, so the plaintiff/claimant hopes, to stop the limitation period running and thus deprive the defendant of a potential limitation defence. The plaintiff/claimant thus, unilaterally, by its own action, seeks to achieve for itself an extension of the time allowed by statute for the commencement of an action, even though it is in no position properly to formulate a claim against the relevant defendant. That must, in my judgment, be an abuse of process and one for which there can be no remedy save that of striking out the proceedings so as to deprive the claimant of its putative advantage. The illegitimate benefit hopefully achieved can only be nullified by this means. Whatever powers may be available to the court for other abuses, if this is an abuse, there is only one suitable sanction.
. . .
In my judgment therefore if Nomura, at the time of issuing its Claim Form, was not in a position to do the minimum necessary to set out the nature of the claim it was making, it would be seeking an illegitimate benefit, namely the prevention of further time running under the Limitation Acts for a claim which it could not properly identify or plead. That would be an abuse of the process of the court. Insofar as it sought to make any claim in contract, it would be necessary for it to be able to identify the particular contract and the alleged breach. In the case of any breach of tortious duty, it would be necessary for it to be in a position to identify the essential acts or omissions which constituted the breach of duty, negligence or negligent misstatement. For the purposes of negligent misstatement, Nomura would have to be able to identify what advice or information was inaccurate and what was given negligently, at least in essence. If Nomura was not in a position to do this, it was not in a position properly to issue a claim, since it could not have proceeded properly to plead Particulars of Claim without the off chance occurring that something would turn up. In such circumstances it could have no present intention to pursue a claim since it had no sufficient idea of the claim it wished to pursue.”
These observations are apposite to this case, because Bromley has accepted that the claim form was issued when it was in order to prevent the running of time. If it was truly unable to set out the nature of the claim that it intended to make, then the issue of the claim form would have been an abuse of the process of the court for the reasons given by Cooke J in these passages.
However, in support of the application for specific disclosure, Ms McCarthy had submitted in her skeleton argument that to refuse the application would be to deny the Claimant to the evidence necessary to understand and “properly plead the claim”. During the hearing Ms McCarthy disclaimed any suggestion that, in the absence of the relevant documents, Bromley could not plead a claim at all against Mr Heckel: she submitted that it was not in a position to plead it “properly”, in other words such that it would not require amendment once the documents became available. In the context of a claim against a project manager, that in my view is a proper position to take.
I consider that Bromley could have pleaded, and could now plead, a claim against Mr Heckel with or without sight of his retainer (assuming, contrary to the evidence, that such a retainer exists). I have already set out how, in its letter of claim dated 30 January 2014, Bromley has alleged that Mr Heckel was instructed to undertake certain duties and that it was reasonably foreseeable that a failure to discharge their duties properly could result in the building being defectively constructed. In making these observations I am not to be taken as indicating that such a claim would have any merit: I am merely stating that I agree with Ms McCarthy that a claim could be formulated.
But since receipt of RPC’s letter of 2 May 2014 Bromley has known that it was Mr Heckel’s case that he was retained orally and that there were no written terms of engagement. Bromley has known also that it has itself been unable to trace any letter of engagement of Mr Heckel by either itself or the School.
Should the court exercise its discretion to extend the time?
In Lincolnshire County Council v Mouchel Business Services Ltd  EWHC 352 (TCC), Stuart-Smith J said this, at paragraph 45:
“To my mind, the established principles, the amendments to the CPR that I have identified, and the terms of the Protocol all point in one direction: parties who issue late are obliged to act promptly and effectively and, in the absence of sound reasons (which will seldom if ever include a continuing failure to comply with pre-action protocol requirements) the proceedings should be served within four months or in accordance with any direction from the Court. A claimant who does not do so and (where the Protocol for Construction & Engineering Disputes applies) who does not obtain directions on notice does so at extreme peril.”
I agree entirely with these observations. Bromley’s application was framed initially in quite unreasonably wide terms: it was effectively seeking disclosure of almost Peruvian Guano scope prior to service of its Particulars of Claim. That was bound to fail. Even if it had limited its application to the documents sought by Ms McCarthy, it would have known that Mr Heckel was saying that he had no written terms of engagement and that he did not possess copies of the two building contracts. In those circumstances, it should have been self-evident to Bromley that its application would have to be supported by the most cogent evidence if the court was to be persuaded to make an order for disclosure in the face of Mr Heckel’s assertion that he did not have copies of the documents in question.
Far from being supported by cogent evidence, Bromley’s application – supported as it was by a witness statement that did not contain any adequate statement of truth – completely ignored what Bromley had been told in RPC’s letter of 2 May 2014. Further, it was based on what Mr Bradshaw said he understood without giving any explanation of the basis of that understanding. Accordingly, since the application for disclosure was doomed to failure, there was no merit whatever in the application for an extension of time. Had it been heard in December 2014 it would have been refused and Bromley would have had to serve its Particulars of Claim by the required date, namely 5 January 2015.
“The Claim was issued to protect the Council against time bar. When the Claim was issued, we immediately applied for a Hearing of the matter now before this Court.”
That statement is simply untrue. The claim form was issued on 5 September 2014, but the application was not issued until shortly before 1 December 2014. By no stretch of the imagination can leaving a gap of nearly 3 months between the issue of the claim form and the issue of the application be described as doing something “immediately”. There is, therefore, no excuse whatever for Bromley’s failure to issue the application when (or very soon after) it issued the claim form.
Not only did Bromley delay in making this application, but also it never pursued an application for pre-action disclosure of the documents requested in its letter of 30 January 2014. This would have been understandable, given the clear statements in RPC’s letter of 2 May 2014 (ie. to the effect that Mr Heckel did not have copies of the construction contracts and that is engagement by the School was verbal), but for the fact that it then made an application in December 2014 seeking, amongst other things, the same documents.
Turning to the period after 5 January 2015, on the basis of Mr Bradshaw’s second witness statement it appears that he made three telephone calls to the TCC office between the date of issue of the application, 1 December 2014, and the date of his letter to the court on 21 August 2015. This is because he said he made calls “approximately every two months” during this period. Whilst the lack of any response to these calls to the court office is not to be excused, Mr Bradshaw’s pursuit of a hearing date was at best dilatory. He finally wrote to complain on 21 August 2015 expressing concern at what had been going on. I do not know why he waited over eight months before writing to the court.
Ms McCarthy submitted that it would be grossly unfair to deprive Bromley of the possibility of pursuing a claim worth nearly £500,000. This is usually a powerful point, but I have to say that serious difficulties face Bromley in this particular claim. It seems that Bromley effectively contracted for a pre-fabricated modular building. Mr Heckel was engaged as a Project Manager, not as a designer. It is not usually part of a project manager’s duties to check the design or make periodic inspections of the quality of the work. A project manager is concerned with co-ordination and administration of the overall project. For example, a project manager would not ordinarily be concerned with applications by the contractor for interim payments or the rectification of defects.
It seems that the main problems with the building involved the design and construction of the floor and the roof and the construction of the external hardstanding. Taking the floors by way of example, these were constructed on a grid of steel girders supported on blockwork. Rafters spanned between the steel girders over which was laid a damp proof insulating membrane. Battens were laid over the membrane on which the 18 mm floor grade plywood was placed and secured. The flooring became damp and spongy because moisture was trapped between the top of the insulating membrane and the underside of the plywood. It is not clear to me whether the dampness within the structure of the floor was solely the result of condensation consequent upon lack of ventilation or was also contributed to by leaks from other parts of the building.
But whatever the true cause, it is quite hard to see how these defects in the construction of a prefabricated building could be laid at the door of a project manager. True it is that SJH described itself as building consultants, but it seems that its role was that of property management rather than involvement in design or construction.
It may be that Bromley can make out a case against Mr Heckel for his failure to respond promptly or effectively to the complaints about the state of the building, but I have great difficulty in seeing how the measure of damages appropriate to a breach of duty of that sort would include the cost of repair of the original defects. So whilst I bear in mind that there may be a case for Mr Heckel to answer – on the information available it is not possible to say – I strongly suspect that the quantum of that claim will be a great deal less than the £500,000 mentioned by Ms McCarthy.
Mr Allen has submitted that the issue of the claim form was itself an abuse of the process and that it should therefore be struck out. For the reasons I have given, I do not consider that the issue of the claim form was an abuse of the process because I consider that a claim of some sort could have been formulated. But a consequence of that conclusion is that, given the events as I have outlined them, I can find no justification whatever for the failure to serve Particulars of Claim within the time required by the rules.
Although I accept that those acting for Bromley are not entirely to blame for the delay in listing this application, the fact is that Bromley should never have made the application in the first place because, if Ms McCarthy’s submission is correct – as I have held it to be, it could have served its Particulars of Claim by the required date.
In these circumstances, the observations of Stuart Smith J in Mouchel, which I have quoted above, are directly in point. Having issued proceedings at the last minute, Bromley was under an obligation to act promptly and effectively. This it signally failed to do. I consider that Bromley has shown no good reason for the grant of an extension of time within which to serve its Particulars of Claim, and so the application for an extension of time is refused.
Extensions of time for service of particulars of claim
- The Lincolnshire -v- Mouchel case on late service of the particulars of claim is discussed here.
- A case where the claimant was successful in its prospective application is discussed in Extending time for serving particulars of claim: an application ahead of time saves the day
There are numerous posts on witness statements on this blog. The most relevant to the issues in this case are:
- The importance of the statement of truth
- Witness statements & sources of information and belief: 10 key points
- Witness statements giving the source of information and belief: a rule overlooked at your peril.
- Making first hand statements avoids penalties
- Drafting witness statements and the lawyer as witness
- Witness statements are for facts: knowing the difference between evidence and submissions (and why it matters).