Management Information Centre Limited v Royal Berkshire NHS Foundation Trust

A claim should not be struck out merely because its contractual case is vague, where it remains legally recognisable and the claimant lacks relevant documents through no fault of its own. Summary judgment remains inappropriate where there are reasonable grounds for believing that disclosure may materially add to or alter the evidence relevant to the claim’s prospects.

However, an implied overarching agreement cannot operate as an alternative to an express agreement where the parties’ relationship is otherwise governed by a series of individual contracts and implication is not necessary. A relational contract does not automatically give rise to a duty of good faith. The claimant must plead why such a term is necessary or obvious, having identified the express contractual terms.

Management Information Centre Limited claimed damages from Royal Berkshire NHS Foundation Trust following the termination of an alleged continuing agreement for IT services. It alleged an express or implied overarching agreement, terminable on reasonable notice, and a relational contract containing an implied duty of good faith.

The Deputy Master permitted amendments and refused the Trust’s application under CPR rule 3.4 and Part 24 for strike out or summary judgment. Permission to appeal was granted on five grounds, including contractual formation, certainty, implication of an overarching agreement, the relational-contract case, and costs.

The appeal concerned whether the amended claim disclosed a legally recognisable and sufficiently certain claim, whether the implied-agreement case was legally inconsistent with the express-agreement case, and whether the duty of good faith had been adequately pleaded.

1. Grounds 1 and 2 failed. The amended Particulars of Claim remained vague, particularly as to when and how the alleged overarching agreement was formed, and did not comply fully with PD16 paragraphs 7.3 and 7.4. Nevertheless, the claim was legally recognisable: it alleged a contract for identified services, termination without reasonable notice, breach and loss. In the circumstances, strike out was not justified.
2. Summary judgment was also inappropriate. The correct question was whether the claim had more than fanciful prospects, without conducting a mini-trial. There were reasonable grounds for believing that disclosure might materially add to or alter the evidence relevant to that question. The claimant’s lack of documents arose from the conduct of its former management, and the defendant held potentially relevant material. The claim was weak but not merely speculative.
3. The pleaded contract contained just enough substance to be enforceable at the interlocutory stage. The alleged terms were that, insofar as the Trust required the services, it would use the claimant to provide them; the claimant would provide them; the Trust would pay; and neither party could terminate without reasonable notice. The court was not yet deciding whether those terms would be proved or whether a contract existed.
4. Ground 3 succeeded. An implied overarching agreement could not be an alternative to the alleged express agreement on the pleaded facts. If the court rejected the express overarching agreement, the relationship would necessarily be treated as a series of contracts evidenced by purchase orders and project proposals. An implied overarching agreement would then be inconsistent with that finding, and implication was not necessary. Paragraph 5.2 was therefore struck out, alternatively summary judgment was entered on it.
5. Ground 4 partly failed. The original relational-contract pleading was inadequate because a long-term relationship did not itself establish a duty of good faith. The amended pleading cured the defect by alleging that the term arose through obviousness and/or necessity and by pleading supporting facts. The express terms would first have to be established, but the amended case was not fanciful. Paragraph 6.6 should be clarified as part of the general good-faith duty, not as a separate duty.
6. The appeal succeeded only on ground 3. Costs were reserved for written submissions, and the parties were invited to consider transfer to another Business and Property Court.

• Chancery Appeals, High Court: The appeal was allowed on ground 3. Paragraph 5.2 of the Amended Particulars of Claim was struck out, alternatively summary judgment was entered on it. Grounds 1, 2 and 4 failed. Costs were reserved.
• Deputy Master Glover: Orders dated 27 November 2023 and 5 February 2024 permitted amendments and dismissed the strike-out and summary-judgment application.