Charter UK Ltd v Nationwide Building Society

Pleadings must identify a present claim, the material facts supporting it and the remedy sought. They cannot reserve a possible future cause of action or plead immaterial allegations to obtain disclosure. Imperfect or untidy pleadings are not ordinarily struck out, but a passage disclosing no cause of action or remedy may be removed where it confuses or obstructs fair conduct of proceedings. A party has no automatic right to amend without agreement. Preliminary issues should be ordered only where a substantial costs saving is likely. Where liability issues require the same factual history and a preliminary determination would leave substantial issues or further hearings, a split trial of liability and quantum may be appropriate.

This was the first case management conference in a claim concerning alleged agreement for the supply and implementation of computer software. Charter alleged that a binding contract was concluded during discussions on 14 June 2007 and advanced alternative contractual and restitutionary claims. Nationwide denied that any binding contract existed and disputed liability in any event.

The court considered whether parts of the Particulars of Claim concerning confidentiality and intellectual property should be struck out, whether five proposed preliminary issues should be tried separately, and whether liability and quantum should be split.

The strike-out application was granted in relation to paragraphs 43–45 of the Particulars of Claim and related parts of the Reply. The proposed preliminary issues were refused, and a split trial of liability and quantum was ordered.

1. Pleading requirements. The court drew together the principles in Clarke v Marlborough Fine Art (London) Limited & Anor (The Times, 4 December 2001), Nomura International Plc v Granada Group Limited ([2007] EWHC 642) and Johnson v Gore Wood & Co ([2002] 2 AC 1). A claim and its particulars must identify the nature of the claim, the remedy sought and the basic facts relied on. Pleadings must not be used to introduce immaterial matters or obtain disclosure for a speculative claim.
2. Strike-out. Under the CPR and the court’s inherent jurisdiction, untidy or imperfect pleading does not ordinarily justify striking out. The position is different where no cause of action is pleaded and the material risks confusion or obstruction of the fair disposal of the proceedings. The guidance in Atos Consulting Limited v Avis Europe Plc ([2005] EWHC 982) was applied. The more permissive approach in MMI Research Limited v Celsion Limited was distinguished because a basic cause of action had not been pleaded here.
3. Application. The disputed paragraphs pleaded no cause of action, sought no remedy and merely suggested that a claim might be identified in the future. They were also creating uncertainty about disclosure. Striking them out did not determine whether a properly supported confidentiality or intellectual-property claim could later be advanced. Any future amendment would require permission unless agreed and would be considered on its merits.
4. Preliminary issues. The court was slow to order preliminary issues unless a substantial costs saving was likely. The proposed issues would require evidence about the parties’ relationship from 2006 to mid-2008 and would leave substantial liability questions, including conditions subsequent and repudiation. A quantum meruit issue would also require detailed factual assessment.
5. Trial structure. Quantum was only incompletely pleaded, while the liability outcomes had several permutations. Once liability was decided, the parties might resolve their financial differences. Liability and quantum were therefore ordered to be tried separately, with the quantum hearing fixed a few months later to avoid unnecessary delay.