Birse Construction Limited v HLC Engenharia Gestäo de Projectos SA

Pre-action disclosure in construction litigation requires a fact-sensitive assessment under CPR rule 31.16. The applicant must first show a real prospect that disclosure will fairly dispose of the anticipated proceedings, assist settlement, or save costs. The court must then separately consider whether disclosure is desirable and whether its discretion should be exercised in favour of an order.

Disclosure is more likely to be appropriate where important information is held exclusively by the respondent and the applicant cannot fairly formulate or assess its case. It remains an unusual remedy. Broad, speculative or ill-defined requests should be approached cautiously, and pre-action costs and resource expenditure must remain reasonable and proportionate.

Birse sought pre-action disclosure from HLC SA before anticipated proceedings concerning HLC SA’s purported termination of a subcontract. The central issue was whether the MERC waste-treatment facility was being used for commissioning and testing, or for commercial and operational purposes, when a fire occurred.

Birse had left the site and lacked documents concerning events before the fire. It sought eight categories of documents under section 33(2) of the Supreme Court Act 1981 and CPR rule 31.16. Categories (a) to (e) concerned use and operation of the facility. Categories (f) to (h) concerned the fire, insurance and possible reliance on contractual clauses 12 and 13.

1. Categories (a) to (e): order made. HLC SA and Birse were each likely to be parties to the anticipated proceedings. Following amendment of the draft order, the documents sought fell within the scope of standard disclosure under CPR rule 31.16(3)(c). The anticipated issue was whether, on 10 August 2003, the premises were being used for the purposes of clause 29.2 of the main contract.
2. The jurisdictional threshold in CPR rule 31.16(3)(d) requires close and critical analysis. The court must ask whether there is a real prospect that disclosure will fairly dispose of the anticipated proceedings, assist resolution without proceedings, or save costs. If that threshold is met, the court must separately consider desirability and discretion. Those stages may merge, but they must not be conflated.
3. The threshold was met in all three respects. Existing documents shed only limited light on the purpose for which the MERC was being used. The requested categories were likely to provide materially better evidence. They created a serious possibility of settlement, would promote fair preparation of the claim, and were likely to avoid pleading amendments, delay and wasted costs.
4. The court treated pre-action disclosure as unusual in TCC litigation because construction projects generate extensive documentation and disclosure is costly. The court should consider the parties’ pre-action correspondence and limit pre-action costs and resource expenditure to what is reasonable and proportionate. The remedy is particularly apt where relevant information is concentrated in the respondent and is otherwise unavailable to the applicant.
5. Categories (f) to (h): no order. Those documents principally concerned possible reliance on clauses 12 and 13. HLC SA’s termination letter relied on clause 9.2, so the proposed documents did not presently fall within standard disclosure or satisfy the desirability requirements. If they became relevant through later pleadings, they could be obtained during the action in the ordinary course.

An order for pre-action disclosure was therefore made for categories (a) to (e), subject to the specified amendments.