Transport for Greater Manchester v Thales Transport & Security Ltd

Contractual inspection and disclosure clauses using broad language such as relating to may extend beyond contemporaneous source records. They can include later reports, internal audits and cost records where those materials bear on contractual performance, the supply of deliverables or the acquisition of materials and equipment.

A request must be reasonable in all the circumstances and must serve one of the contractual purposes: checking information supplied under the contract or verifying compliance with contractual obligations. Confidentiality does not ordinarily defeat an otherwise valid request, although the recipient remains bound by contractual confidentiality obligations. Specific performance will not be ordered where the request is insufficiently precise, seeks documents not previously requested, or raises unresolved factual or privilege issues.

Transport for Greater Manchester contracted with Thales Transport & Security Ltd to supply and install a tram operating system for the expansion of the Manchester Metrolink network. The contract required Thales to maintain records and provide access to information, records and documents relating to its obligations, subject to reasonable requests for auditing or verification purposes.

After Thales submitted substantial delay and compensation claims, TGM sought access to numerous categories of documents. Thales accepted that many categories should be disclosed but disputed the scope, reasonableness, precision, confidentiality, control and privilege implications of the remaining requests. TGM brought Part 8 proceedings seeking specific performance.

1. Specific performance principles. The court treated specific performance as a discretionary and flexible remedy. Damages, the need for supervision and the precision of the proposed order were relevant. The principles reviewed in Cooperative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1 were applicable.
2. Construction of the contractual obligations. Clauses 27 and 28 were construed broadly. Records relating to performance included material concerning performance and non-performance, not merely documents recording contemporaneous events. The obligations extended to related reports, internal audits, cost records, supplier and subcontractor information, and documents created after the relevant events.
3. Limits on requests. A request had to be reasonable in all the circumstances and had to serve at least one of two purposes: checking information supplied under the contract or verifying compliance with contractual obligations. The court described auditing in this context as including vetting or checking. TGM’s wish to assess and respond to substantial claims was a legitimate contractual purpose.
4. Confidentiality and privilege. Commercial confidentiality did not justify withholding documents otherwise within Clauses 27 and 28. TGM remained subject to its confidentiality obligations. Genuinely privileged documents were generally outside the disclosure obligation, but the evidence concerning reports prepared by the Nichols Group was insufficient to determine dominant purpose. Further evidence was ordered, applying the approach noted in West London Pipeline and Storage Ltd v Total UK Ltd [2008] EWHC 1729 (Comm), para 86(1).
5. Orders. Specific performance was ordered for numerous categories, including reports, audits, cost and supplier records, utilisation reports, resource schedules and design-review minutes, subject to stated limits and redactions. No order was made for requests that had not been clearly made before proceedings, were too imprecise or broad, or depended on unresolved factual issues. Compliance was generally required within six weeks, with permission to apply for further time.