PHD Modular Access Services Ltd v Seele, GmbH

Pre-action disclosure is exceptional. The existence of commercial disputes and a possibility of later litigation is insufficient. There must be a real prospect, short of certainty or likelihood, that proceedings will be brought. The court must also consider whether disclosure is desirable to dispose fairly of anticipated proceedings, assist resolution without proceedings, or save costs, consistently with the overriding objective. Part 31.16 is not a routine procedural support or tactical weapon for adjudication. Any order must be proportionate and tightly confined to documents materially relevant to the anticipated issues.

PHD Modular Access Services Ltd, a scaffolding sub-contractor, applied for disclosure and pre-action disclosure against Seele GmbH under Civil Procedure Rules 1998 Part 31.16. The parties had been involved in seven adjudications concerning extensions of time, variations and payment, and Seele had purported to terminate the sub-contract. PHD sought wide classes of documents concerning time and money claims, including material passing between Seele and its main contractor, Vinci. The central issues were whether court proceedings were sufficiently anticipated and, if so, whether the requested disclosure was justified and proportionate.

1. The application for pre-action disclosure was dismissed. The evidence showed no more than a possibility that proceedings might later be commenced. PHD had generally succeeded in the adjudications, and Seele had not indicated that it would challenge them.
2. Under Civil Procedure Rules 1998 rule 31.16, there must be more than a faint possibility of proceedings. The court must be satisfied that there is a real prospect, if not certainty or likelihood, that proceedings will occur between the parties. A general assertion that commercial disputes make litigation possible is insufficient.
3. The court must also be satisfied that pre-action disclosure is desirable to dispose fairly of the anticipated proceedings, assist the dispute to be resolved without proceedings, or save costs. The discretion must be exercised in accordance with the overriding objective. Pre-action disclosure should not become common or standard merely because an issue has arisen.
4. The court considered that at least some documents concerning claims made by Seele to Vinci could be materially relevant. For example, a claim by Seele upstream for the same weather delay or overtime as that disputed with PHD could bear directly on the credibility of Seele’s factual case. A different main-contract context would not necessarily prevent disclosure.
5. Any order would nevertheless have required substantial limitation. Requests for all instructions, variations, extension-of-time applications or correspondence were impossibly wide and disproportionate. The court cautioned that Part 31.16 should not be used as procedural support or a tactical weapon in adjudication, particularly while the parties were pursuing contractual or statutory adjudication.

First-instance decision. No prior appellate decision is stated in the judgment.