Advanced Control Systems Inc v Efacec Engenharia e Sistemas SA

A pleading will not be struck out merely because it uses a narrative, sampling exercise or global claim. Primary facts may be pleaded from which the court could reasonably infer breach, causation or loss. A global claim is permissible in principle, subject to proof and evidential issues. However, pleadings must still identify the case sufficiently for effective case management and trial. Where a claim is inadequately particularised but is not vague, incoherent or abusive, the appropriate course may be to require repleading rather than strike it out.

The claimant sought payment of approximately $1.7 million under a subcontract for electrical distribution-system works in Bangalore. The defendant denied liability and advanced a substantial counterclaim based on alleged poor performance, breach, disruption, prolongation and associated losses.

The claimant applied to strike out parts of the Defence and Counterclaim. Alternatively, it sought proper responses to a Part 18 Request. The central issue was whether the defendant’s broad and cross-referenced allegations were liable to be struck out, or whether the defendant should be given an opportunity to provide adequate particulars.

1. Outcome. The application to strike out paragraphs of the Defence and Counterclaim was dismissed. The alternative application for further particularisation was allowed. The defendant was required to replead the Counterclaim with particulars sufficient for proper case management and trial. The claimant was awarded the costs of the application.
2. Applicable pleading principles. The court adopted the principles drawn together by Kerr J in Standard Life Assurance v Gleeds [2020] EWHC 3419 (TCC). A party may plead primary facts and invite inferences of negligence, breach or causation. Strike out or summary disposal is appropriate only where the court could not reasonably draw the necessary inferences even without rebuttal evidence.
3. Extrapolation by sampling may be a permissible method of proving the necessary inferences. A global claim attributing losses to another party’s breaches is permissible in principle, subject to proof and evidential issues.
4. The defendant’s narrative pleading served a legitimate purpose by conveying its case of poor performance and its alleged consequences. It was not so vague or incoherent as to justify strike out, and it was not abusive. The court therefore declined to strike out the challenged paragraphs.
5. Nevertheless, the Counterclaim did not provide adequate particularisation for case management or trial. Its allegations overlapped, referred back to broad narrative paragraphs and failed to identify sufficiently the breaches, affected documents or systems, causative links and claimed losses. The appropriate remedy was an opportunity to replead, including by schedules or, if properly formulated, a sampling exercise.