MW HIGH TECH PROJECTS UK LIMITED v PETER GREENHALGH & Ors

The court may permit amendments where they are clearly formulated, adequately particularised and have a real prospect of success, balancing prejudice to the applicant against prejudice to the opponent and the administration of justice. Consolidation is appropriate where common parties, issues and evidence make it likely to save time and costs. Strike-out and summary judgment require a claim to be fanciful or legally unsustainable; the court must avoid a mini-trial and should determine a short point of law only where the evidence is sufficient. Disclosure beyond Initial Disclosure may be ordered where necessary to enable a party to understand the case or formulate a defence.

The claimant, an engineering and construction company, brought claims against three former directors arising from losses on three waste-to-energy projects. It alleged breaches of contract and duties under sections 171, 173 and 174 of the Companies Act 2006.

The court considered applications to amend the pleadings, consolidate two claims, strike out or summarily determine parts of the claims, order disclosure, and extend time for the defence. The central issues were whether the proposed claims were sufficiently particularised and arguable, whether limitation could be determined summarily, and whether further disclosure was necessary.

1. Amendment. Permission to amend was granted. The overriding objective required a balance between injustice to the applicant and prejudice to the defendants and other litigants. The proposed amendments were coherent, sufficiently particularised, and arguably within the applicable limitation periods. It was legitimate to plead that individual failures, or combinations of failures, constituted breaches and caused the claimant’s entry into the relevant contracts and resulting loss.
2. Consolidation. The two claims were consolidated. They concerned the same parties and representation, common statutory and contractual obligations, similar alleged breaches, and the same pleaded causal link and basis of loss. Consolidation was likely to save time, effort and cost, while leaving later case-management decisions open.
3. Strike-out and summary judgment. The defendants’ applications were dismissed. The pleaded facts disclosed legally recognisable claims under sections 171 and 173 of the Companies Act 2006, and it was reasonably arguable that failures to assess contractual, technical and commercial risks could constitute breaches. The court declined to decide without a trial whether contractual claims were displaced by the statutory framework. The limitation issues also required factual findings and full argument.
4. For applications under CPR 3.4 and CPR 24.2, the claim must have a realistic, more than fanciful, prospect of success. Pleaded facts should generally be accepted, and the court must avoid a mini-trial. A short point of law may be decided summarily only where the evidence is sufficient and the parties have had a proper opportunity to address it.
5. The section 174 claims were adequately particularised. They identified the directors’ asserted knowledge, skill and experience and specified alleged failures, including non-compliance with project risk-management procedures.
6. Disclosure. The claimant had complied with Initial Disclosure under paragraph 5.1 of PD51U, but paragraph 5.11 was engaged. Further disclosure was necessary because the former directors lacked possession of the relevant documents and the claims depended on an audit trail concerning knowledge, risk assessments, approvals and project failures. The claimant was ordered to disclose specified board reports, risk-management documents, committee minutes and audit reports. The defence period was extended until after disclosure.