MW HIGH TECH PROJECTS UK LIMITED v PETER GREENHALGH & Ors

The court allowed the Claimant permission to amend the Particulars of Claim in the Suez and Levenseat proceedings to clarify limitation, to plead breaches of sections 171, 173 and 174 of the Companies Act 2006 and to particularise reliance on the company’s internal rules (the "Red Book") as part of the company constitution. The court exercised its case management power to order consolidation of the Suez/Levenseat claim and the Hull claim because of substantial overlap in parties, legal issues and causation. The defendants' applications to strike out parts of the pleadings and/or for summary judgment were dismissed: the pleaded facts disclose realistic prospects of success and several contested legal issues (including the availability of parallel contractual remedies and the appropriate limitation analysis) required trial. The court found the Claimant had complied with the Initial Disclosure obligations under PD51U but, exercising the wider discretion in paragraph 5.11 of PD51U, ordered additional initial disclosure of specified categories of documents necessary to enable the defendants to understand and formulate their defences. The defendants were granted further time to file a consolidated defence after that disclosure.

The claimant, an engineering and construction company, sued three former directors for losses said to have arisen from three waste-to-energy projects (Suez, Levenseat and Hull). The pleaded causes included breaches of contract and breaches of statutory duties under sections 171, 173 and 174 of the Companies Act 2006, with pleaded losses said to flow from entry into material EPC contracts and a variation agreement.

Procedural posture and relief sought:

• The claimant applied for permission to amend the Particulars of Claim in the Suez and Levenseat proceedings and for consolidation of the Suez/Levenseat and Hull proceedings.
• The defendants sought strike out and/or summary judgment on parts of the claims as disclosing no real prospect of success or being an abuse or insufficiently particularised; they also sought further disclosure and an extension of time to plead.

Issues for decision:

• whether the proposed amendments met the test for late amendment and were sufficiently particularised (including limitation-related pleading);
• whether the proceedings should be consolidated;
• whether parts of the claims should be struck out or summarily dismissed under CPR 3.4 or 24.2 (including claims in contract and under ss.171, 173 and 174 CA 2006);
• whether the pleaded claims were statute-barred;
• whether the s.174 claims and loss particulars were sufficiently pleaded; and
• whether further disclosure should be ordered under PD51U.

Court’s reasoning:

• On amendment: the court applied the established approach under the CPR and case law, weighed the overriding objective, and concluded the amendments were coherent, adequately particularised and not futile; permission to amend was given, including an express limitation-limited formulation for claims accruing within six years before issue.
• On consolidation: the claims involved the same parties and counsel, overlapping factual and legal issues and a common causation and loss model; consolidation would save costs and avoid multiplicity of proceedings, so consolidation was ordered without prejudging future case management decisions.
• On strike out/summary judgment: the court applied the realistic prospect test and refused to strike out or give summary judgment because the pleaded facts could establish breaches of ss.171/173/174, there were unresolved legal questions (including whether contractual claims are displaced by statutory duties and the appropriate limitation approach) and the matters required factual investigation at trial.
• On limitation: the court identified competing authorities and approaches and concluded that, given the absence of direct authority and the claimant’s reliance on continuing breaches culminating in the entry into the contracts (dates within six years of issue), limitation was an issue for trial rather than summary disposal.
• On disclosure: although the claimant had provided extensive documents and relied on PD51U initial disclosure exceptions, paragraph 5.11 gives the court a broad discretion to order additional disclosure where necessary to enable a party to understand the claim or to formulate a defence; because the defendants, as former directors, lacked possession of historic project documents and needed an audit trail to investigate decision-making, the court ordered additional categories of documents from Schedule A (board reports, PIRA/TERA/TFU documents with annexures, CRC minutes and audit reports) at the initial disclosure stage.

The judgment therefore permits the claimant to refine the pleaded case, consolidates the proceedings, rejects the defendants' attempts to dispose of parts of the case summarily, and requires targeted further disclosure before service of the consolidated defence.

At first instance the court ordered that the Claimant be permitted to amend the Particulars of Claim in HT-2021-000094, and ordered consolidation of HT-2021-000094 and HT-2021-000438. The court dismissed the Defendants’ applications to strike out or for summary judgment on the challenged parts of the pleadings, concluding the pleaded facts disclose realistic prospects of success and that the contested legal issues and factual disputes should be resolved at trial. The court held that, although the Claimant had complied with Initial Disclosure under PD51U, paragraph 5.11 empowered the court to order further Initial Disclosure and it was necessary here; it directed disclosure of specified categories of documents (board reports, full PIRA/TERA/TFU documents with annexures, CRC minutes and internal/external audit reports) and granted the Defendants further time to file a consolidated defence after that disclosure. The court’s rationale was that the amendments were adequately particularised, consolidation would avoid multiplicity, summary disposal was inappropriate given legal uncertainty and factual disputes, and additional disclosure was necessary to enable the Defendants to understand and respond to the claims.