Practice and procedure – Transfer of cases – Shorter Trial Scheme – Parties to claim for specific performance applying to transfer action to STS – Whether court having jurisdiction to transfer existing case to scheme – Whether case falling within class of cases for scheme – Whether case being appropriate for transfer – Application granted
The claimant brought proceedings for specific performance of a contract by which the claimant contended that the defendant had agreed to sell a property known as Units A-C, 47-49 Pomeroy Street, SE14, at a price of £2.75m. The claimant was a registered provider of social housing and a registered society. The defendant was the freehold owner. The contract contained a condition precedent about planning permission. The claimant’s case was that the defendant waived the condition precedent and/or encouraged the claimant to believe that it would be entitled to purchase the property notwithstanding planning permission would not be obtained by the long stop date. Detrimental reliance and unconscionability was pleaded and the claimant relied on estoppel. The defendant denied waiver and estoppel and counterclaimed for a declaration that the contract had been lawfully terminated.
The parties applied to the court to transfer the action to the shorter trials scheme which, along with the flexible trial scheme, was a pilot set up by Practice Direction 51N, which had come into force on 1 October 2015 and was due to run for two years. Paragraphs 1.1-1.5 of PD 51N applied to both schemes, paragraphs 2.1-2.60 applied to the STS. Both schemes were available in the Chancery Division, Commercial Court, Financial List, Technology and Construction Court and London Mercantile Court. Paragraph 2.3(d) of PD 51N provided that cases in the Intellectual Property Enterprise Court would not normally be suitable for the STS because it already operated a similar procedure.
The STS was intended to involve tight control of the litigation process by the court, in order to resolve disputes on a commercial timescale. The case would be managed by a docketed judge with a trial date fixed for not more than eight months after the case management conference (CMC) and judgment six weeks thereafter. The maximum length of trial would be four days, including reading time. Costs would be assessed summarily.
Issues arose: (i) whether the court had jurisdiction to transfer a pending, existing case in the STS at all; (ii) whether the case fell within the class of cases which the STS was for and was an appropriate case to transfer; and (iiii) the procedure to be followed on transfer.
Held: The application was granted.
(1) The court had power to transfer an existing case into the STS and to transfer a case out of the STS if it was within it. The overriding objective expressly included, as far as practicable: saving expense, dealing with cases in ways which were proportionate and allotting to a case an appropriate share of the court’s resources. Having an appropriate case conducted in the STS was likely to reduce the cost to the parties and free up the court’s resources to make them available to other litigants. Since transferring a proper case into the scheme was likely to save expense, deal with the case proportionately and allot to it an appropriate share of the court’s resources, CPR 3.1(2)(m) provided an express basis on which the court could make the necessary order. That reasoning also applied equally to a transfer out in a proper case.
Construing PD 51N itself as a whole, the schemes provided for were clearly intended to work so that cases could be transferred in and out of them, as appropriate. The legislative intent, that such an order should be made in a proper case, was clear. To the extent that it could be said that the power derived implicitly from PD 51N itself, the fact that such a power was absent from Part 30 (which dealt with transfers of proceedings in the High Court) was not determinative since PD 51N took precedence. The order for transfer did not affect the court or division in which the case had begun so, if a case commenced in the Chancery Division, it would remain in that division after transfer.
The STS involved the case being managed and tried by judges and so the application to transfer had to be made to a judge (PD 51N, paragraph 2.12). Although the STS had some specific rules about the particulars of claim (PD 51N, paragraphs 2.21 to 2.23) and defence (paragraphs 2.30 to 2.32), when a case was transferred into the STS, it might or might not be necessary to require the parties to amend any existing statements of case. Experience of transferring cases into the IPEC, and its predecessor the Patents County Court, showed that such a step was often not necessary. It could well be disproportionate to require a further round of pleadings or amendments simply because the case should be transferred.
(2) In the Chancery Division, the STS was for business cases (PD 51N, paragraph 2.2. That was not intended to reduce the ambit of the scheme as compared to the other courts in the STS. The actions in those other courts were all business cases of one sort or another. The term “business” as used in paragraph 2.2 was a broad one. The term covered a wide range of the sort of cases which were heard in the Chancery Division. The contrast was between business cases in the widest sense and purely private, non-commercial matters such as family property and family trusts.
The present case was a commercial property dispute and, as such, fell well within the ambit of the STS. The fact that the claimant was a registered provider of social housing did not take the case outside the scheme. None of the exclusions in paragraph 2.3 of PD 51N applied and this was an appropriate case for transfer.
(3) Paragraph 2.5 of PD 51N provided that all STS claims would be allocated to a designated judge at the time of the first CMC or earlier if necessary. The term “designated” simply referred to the fact that cases in the STS were docketed so that, so far as possible, all the case management and the trial were dealt with by the same judge. Any judge of the relevant court might be allocated to deal with a case in the STS. The parties had agreed to take steps to fix a CMC. It would be arranged to be heard by the judge allocated to the case. Other agreed directions were for a reply and defence to counterclaim and exchange of lists of issues. Further directions could be given at the CMC. There was no need to require the parties to amend the existing particulars of claim or defence.
Trowers & Hamlins LLP appeared for the claimant; Hogan Lovells LLP appeared for the defendant.
Eileen O’Grady, barrister
Click here to download the transcript of Family Mosaic Home Ownership Ltd v Peer Real Estate Ltd
