CPL Ltd v CPL OPCO (Trinidad) Ltd & Anor

A preliminary issue should be ordered only where it is likely to produce a real saving of time or cost and materially assist the fair and efficient resolution of the proceedings. The court must adopt a cautious approach, particularly where the proposed issue is factual, overlaps with issues remaining for trial, requires witnesses to give evidence twice, or risks delay and inconsistent findings. The potentially decisive nature of the issue is not conclusive. Case management, costs, delay and the use of court and party resources are primary considerations.

The defendants applied at a costs and case management conference for a preliminary trial concerning an alleged oral collateral contract under which the second defendant was said to have assumed liability for sums owed by the first defendant. The claimant proposed that issues concerning the existence and amount of the underlying debt should also be tried preliminarily, or that no preliminary issue should be ordered.

The court considered whether either proposed course would promote efficient and proportionate resolution of the claim, having regard to factual overlap, witnesses, disclosure, delay, costs and the possibility of inconsistent findings.

1. The application was refused. Neither the proposed issues concerning the underlying debt nor the second defendant’s alleged collateral contract would be tried as a preliminary issue.
2. The court adopted the cautious approach required by the authorities, including Rossetti Marketing Ltd v Diamond Sofa Company Ltd [2012] EWCA Civ 1021, SCA Packaging Ltd v Boyle [2009] UKHL37, Bond v Dunster [2011] EWCA Civ 455, McLoughlin v Jones [2001] EWCA Civ 1743 and Lexi Holdings Plc v Pannone & Partners [2009] EWHC 3507 (Ch). Questions of case management, cost, delay and the use of party and court resources had to come first.
3. The debt issues were unsuitable for separate determination. The second defendant’s liability was contingent on the first defendant’s liability, so the first defendant and its defences would also have to participate. The proposed two-day estimate was unrealistic, and the factual matrix of the debt and damages claims overlapped sufficiently to create inefficiency and a risk of inconsistent findings.
4. The collateral-contract issue might have disposed of the claim against the second defendant, but that was not conclusive. It involved factual questions, including the parties’ subsequent conduct, the background and commercial context of the relevant meeting, and matters relevant to construction of the participation agreement. The claimant’s witness would therefore have to give evidence at both trials.
5. The anticipated saving in costs was insufficient. The second defendant had raised no positive defences to the debt claim, which was likely to involve largely arithmetical proof. Nor would a preliminary trial avoid substantial delay: it could occur shortly before a full trial and might postpone the full claim by at least six months. The court declined to reserve trial resources for a full claim that might not proceed.