Halsion Limited v St Thomas Street Development Limited

A statement of case in complex TCC litigation must identify the material facts and the precise contractual wording relied upon, separating the factual basis of alternative causes of action. It must not use pre-contract negotiations to infer the meaning of specific contractual provisions or to establish subjective intention, although such material may be relevant to the objective genesis and aim of the contract as a whole. Claims for rectification and estoppel must plead the facts supporting the relevant accord, knowledge, assumption and continuation with sufficient particularity. Declaratory relief should be refused where it serves no useful purpose. Serious and significant failures to comply with Civil Procedure Rules 1998 pleading requirements may justify striking out the entire pleading where that is proportionate and practical.

Halsion sought repayment of £1,934,732.11 paid following an adjudicator’s decision concerning the inadequate sizing of a life-safety generator supplied under a trade contract. It relied on the proper construction of the contract, alternatively rectification for common or unilateral mistake, and alternatively estoppel by convention. It also sought declarations concerning the contract and the effect of two adjudications.

STSD applied under CPR 3.4(2) and CPR Part 24, contending that the amended Particulars of Claim were prolix and confusing, failed to identify the contractual wording in issue, improperly relied on negotiations, inadequately pleaded rectification, estoppel and knowledge, and sought declarations serving no useful purpose. The central issue was whether the defects required strike-out or could be addressed by amendment.

1. Construction pleading. The claimant must identify the particular contractual wording requiring construction and plead the material documentary, factual and commercial context concisely. It is insufficient to reproduce numerous provisions and then state the meaning said to emerge. Subjective common intention is inadmissible on construction.
2. Pre-contract material. Negotiations and communications may establish facts known to both parties or the objective genesis and general aim of a contract. They may not be used to draw inferences about the meaning of specific provisions or the parties’ subjective intentions.
3. Rectification and estoppel. The common-mistake rectification case sufficiently identified the alleged common intention, but failed to plead the factual basis of the accord and its outward expression. The unilateral-mistake case inadequately pleaded the facts supporting STSD’s alleged knowledge. The estoppel case similarly relied on extensive, unidentified factual narrative and failed to enable STSD to understand the case it had to meet. These defects were capable of amendment.
4. Declarations. The declarations concerning the adjudications had no reasonable prospect of success. The adjudications were not subject to review as such; the court needed only to determine the parties’ substantive rights and, if appropriate, order repayment. Declaratory relief concerning construction likewise served no presently demonstrated useful purpose.
5. Overall pleading defects. The Particulars of Claim breached CPR 16.4(1)(a) and CPR PD16, as informed by the TCC Guide. They were prolix, elided the factual bases of alternative claims, included evidence and rhetoric, and materially hindered the defence and case management. The defects went beyond mere infelicities. The only proportionate and practical response was to strike out the Particulars of Claim as a whole under CPR 3.4(2)(a), (b) and (c), subject to any application to amend by wholesale redrafting. Consequential matters, including permission to appeal, were adjourned.