Bromcom Computers PLC v Arbor Education Partners Ltd & Ors

On an application for strike-out or summary judgment, a claim should proceed where the pleaded case has a realistic, evidence-based prospect of success. Whether words or conduct convey implied representations is ordinarily an objective, fact-sensitive question for trial. A pleading may be amended to make express the necessary intentions to convey a representation and to induce reliance where the existing primary facts support those allegations. English law imposes no general pre-contractual duty of disclosure. Public procurement does not, without more, create a new common-law exception, particularly where comprehensive regulations govern the process.

Bromcom alleged that Arbor and its directors used actionable misrepresentations in a public procurement exercise for the supply of school management information systems. The alleged representations arose from Arbor’s responses to questions about its Experian score and financial standing. Bromcom relied on those alleged misrepresentations as the unlawful means supporting a conspiracy claim.

Arbor applied under CPR 3.4 and CPR 24.3 to strike out the Particulars of Claim or obtain summary judgment. The application challenged the implication of the representations, the pleading of intention to convey and induce reliance, and an alternative case based on a freestanding duty to disclose financial information during the procurement process.

1. Summary judgment and strike-out. The court applied the principles stated in Easyair v Opal Telecom Ltd [2009] EWHC 339, approved in AC Ward and Sons v Catlin (Five) Ltd [2009] EWCA Civ 1098. The question was whether the claim had a realistic, rather than fanciful, prospect of success. The court was not to conduct a mini-trial, but was not required to accept the pleaded case without analysis.
2. Implied representations. The test is what a reasonable person in the position of the representee would have understood from the representor’s words and conduct in context: IFE Fund SA v Goldman Sachs International [2006] EWHC 2887. Whether the alleged representations were made was a fact-sensitive issue. Consistently with Mellor v Partridge [2013] EWCA Civ 477, a literally true statement may be misleading if relevant facts are concealed, and an implicit representation may amount to a half-truth. The surrounding evidence gave Bromcom a real prospect of establishing the alleged representations, so this part of the application was dismissed.
3. Intention to convey and induce reliance. It was common ground that intention to convey the alleged meaning, and intention to induce ULT to rely on it, were necessary components of the misrepresentation case. The existing allegations concerning Arbor’s financial position, knowledge, the purpose of the representations and ULT’s anticipated reliance supplied sufficient primary facts. Bromcom was directed to re-amend expressly to plead both intentions. Strike-out was disproportionate.
4. Duty of disclosure. English law starts from the absence of a general duty to disclose information during contractual negotiations. The proposed procurement-related exception had no analogous authority. A long-term or relational contract did not assist because any duty in such a contract concerns performance rather than pre-contractual negotiations. The discussion in Bates v The Post Office [2019] EWHC 606 did not support the pleaded duty.
5. The Public Contracts Regulations 2015 provided a statutory regime governing the procurement process, including the assessment of financial standing. Regulations 58 and 59 left ULT able to seek further information. There was no room to imply an additional, wide-ranging common-law disclosure duty where Parliament had not imposed one. The alternative duty-of-disclosure case was struck out.