Lloyds Developments Limited v Accor HotelServices UK Limited

An Unless Order takes effect automatically when its terms are not met. Compliance is assessed by asking whether the response was plainly incomplete or insufficient in light of the order. A minor error does not necessarily invalidate substantial compliance, particularly where the response, viewed as a whole, served the order’s purpose.

Where a party knowingly continues proceedings after an alleged non-compliance, the court may be able to give effect to waiver or estoppel principles, consistently with the overriding objective. Pleadings should not be struck out summarily where an alleged representation is reasonably capable of bearing the pleaded meaning, or where factual discrepancies are suitable for trial. A change in the legal analysis of causation is not, without more, an abuse of process.

Lloyds claimed damages arising from the termination of agreements with Accor concerning the development and management of a Tribe-branded hotel in Glasgow. Lloyds alleged that Accor had required design changes and had made fraudulent representations concerning copyright, causing delay, increased costs, funding difficulties and eventual losses associated with a replacement Virgin hotel.

Accor applied to strike out the proceedings for alleged breaches of three Unless Orders. It also sought to strike out parts of the copyright misrepresentation, delay and loss, and Virgin Glasgow claims. The issues concerned compliance with the Unless Orders, the effect of Accor’s subsequent conduct, the adequacy of pleaded representations and particulars, and whether Lloyds’ amended causation case was abusive.

1. Unless Orders. The sanction in an Unless Order is automatic. No further order is required to activate it. The court must nevertheless decide whether the stipulated act was done in compliance with the order. The relevant question is whether the response was plainly incomplete or insufficient, applying the approach summarised in Owners of the Motor Vessel ‘Gravity Highway’ v Owners of the Motor Vessel ‘Maritime Maisie’ [2020] EWHC 1697 (Comm).
2. The 11 December 2024 order was complied with. Signing Hogan Lovells’ engagement letter amounted to acceptance, not a counter-offer. Payment on account was required before work began, but was not a condition precedent to the appointment becoming effective. The order’s reference to joint appointment did not make Lloyds responsible for Accor’s separate act of signing or communicating with Hogan Lovells.
3. The 9 May 2024 order was also complied with. Although the witness statement probably misstated the position concerning three documents, it substantially served the purpose of explaining the disclosure process. It did not fall significantly short of what was required. Accor’s failure to raise the alleged non-compliance for several months, while continuing substantively with the litigation, was also relevant. The court observed that waiver or estoppel may in an appropriate case prevent a party from later asserting that proceedings had automatically ended.
4. The response to the February 2024 order concerning the Part 18 request was sufficient. The delay case was not a conventional critical-path delay claim. Delay was pleaded as part of the causal explanation for termination. A broad statement identifying at least four months’ delay and explaining its calculation gave Accor a sufficient understanding of the case it had to meet.
5. The copyright misrepresentation allegations were not fanciful. The pleaded communications were capable, taken together and in context, of conveying that the design infringed copyright. The issue was fact-sensitive and should be determined at trial. Alleged differences between the pleading and witness evidence did not justify interlocutory strike-out.
6. The delay and loss allegations disclosed a complete case. The claimed delay was relevant to the alleged repudiatory breach, while the termination was said to cause the losses. The level of particularisation required was therefore less exacting than for a claim seeking recovery of an identified sum as an actual delay loss.
7. The amended Virgin Glasgow claim was not abusive. Lloyds had changed its legal analysis of causation once it became clear that the replacement development produced losses rather than a benefit. This was a single change, supported by subsequently served evidence, and was materially different from the prolonged and deliberate vacillation in Ashraf v Attarian [2023] EWHC 2800 (Ch). All strike-out applications failed.