CCP Graduate School Limited v The Secretary of State for Education

This is my judgment in relation to the application of the defendant, whom I will call “the Secretary of State”, who appears by Mr McGurk of counsel, to strike out the Claim under Civil Procedure Rule 3.4, or to have reverse summary judgment granted in its favour under Civil Procedure Rule 24.2, so as to terminate this litigation against the Secretary of State.

Although, initially, the application was resisted altogether by the claimant, whom I will call “CCP”, and which appears by Mr Coulter of counsel; CCP has now responded by applying, by an application notice of 7 October 2022, to amend the particulars of claim into amended particulars of claim to rely, at least in the alternative, on a different contract to that at least primarily relied upon before.

I also have an application by CCP made by notice of application of 8 February 2023 to adduce a witness statement of Nawal Omar (“Mr Omar”) of 13 December 2022. In fact, after the first part of this hearing, which took place on 6 September 2022, and before the adjourned hearing on 19 April 2023, both sides sought to adduce further witness statement evidence. In view of the facts that, firstly, this is only an interim application and not a trial, and, secondly, of the effects of the evidence on the points which have been raised, and that, thirdly, I considered that each side have had time to react such that any lateness could not cause any real prejudice, I admitted and considered all of the witness statements. In fact, the time on 19 April 2023 was insufficient to hear all the submissions, and I heard further oral argument on 20 April 2023 (and subsequently on 16 June 2023 as I explain below).

The essence of the claim brought by CCP is that it provided education courses to students who received funding for their tuition fees from the Secretary of State via the Student Loans Company on the basis of loan contracts being entered into by the Secretary of State with the relevant students. The claimant claims that the Secretary of State wrongly ceased paying the loan monies for those loan students to CCP in relation to students enrolled by CCP in 2014 onwards. The CCP claims sums of over £450,000 in respect of monies which the claimant says should have been paid to it, CCP. CCP also claims that the result of non-payment has been such as to lead to the collapse of CCP’s business, and CCP claims some millions of pounds losses allegedly due to that.

CCP’s case in the particulars of claim was based on an allegation that the Secretary of State owed CCP a contractual obligation in a contract made between CCP and the Secretary of State, which I will call “the direct contract”. This it was said was a contract on the part of the Secretary of State with CCP that the Secretary of State would honour the promises that the Secretary of State had made to the students to pay their tuition fees to CCP; see, for example, paragraph three of the particulars of claim. Following intimations from me at the hearing on 6 September 2022 that I saw that claim as having no real prospects of success (for reasons which I set out below), CCP advanced its amended particulars of claim, which assert that CCP is entitled to the benefit of, and to enforce, alleged terms in the contracts between the individual students and the Secretary of State, which I will call “the student contracts”, being terms for the Secretary of State to make loans to the students by way of paying their tuition fees monies directly to CCP. CCP relies on the Contracts (Rights of Third Parties) Act 1999, which I will call “the 1999 Act”, as conferring such rights upon CCP (and which I will call “the student contracts 1999 Act argument”).

The Secretary of State says, firstly, that the direct contract argument has no real prospect of success. Secondly, that the student contracts 1999 Act argument also has no real prospect of success. Thirdly, that in any event much, if not all, of the claim is limitation barred. Fourthly, if any part of the claim which is sought to be introduced by amendment would not have been limitation barred at the date of issue of the claim form, but would be limitation barred now, the combined effect of section 35 of the Limitation Act 1980 and Civil Procedure Rule 17.4(2) means that the Court cannot permit the amendment on the basis that the claim sought to be introduced is, “a new claim”, and does not arise out of the same, or substantially similar, facts to those already in issue. Fifthly, that, in any event, this claim is an abuse of process because it should have been raised and determined in earlier litigation which I will call “the first action”, being claim number QB-2019-002047. The first action resulted in a judgment of May J given on 2 September 2021, neutral citation number [2021] EWHC 2432, which I will call “the May J judgment”. The Secretary of State relies on the fact that Master Cook had refused in that litigation to allow what is essentially this claim to be raised by way of counterclaim on grounds of lateness.

Many of the facts of the case are not in issue and are set out, and found, in the May, J, judgment. In this jurisdiction, being England and Wales, student finance is now, and at the relevant time was, dealt with by a combination of primary legislation, being the Teaching and Higher Education Act 1998, which I will call “the 1998 Act”, and regulations made under it, being the Education (Student Support) Regulations 2011, which I will call “the 2011 Regulations”.

Section 22 of the 1998 Act provided as follows:

I note that under section 22, the Secretary of State was required to make grants and loans to, “eligible students”. Regulation 4 of and part II of Schedule 1 to the Regulations define “eligible student”. Regulation 4(1) and (2) read:

Thus, a person who was an eligible student would qualify for support from the Secretary of State, being a grant or a loan, in connection with a, “designated course”. Regulation 5 defined what was a, “designated course”; and read:

Under Regulation 5(1)(e), for a course or a relevant course on or after 1 September 2012 to be a designated course, it needed to be, firstly, a course, and secondly, one provided by a publicly funded institution and leading to an award to be granted by a body falling within the meaning of sections 214(2)(a) or (b) of the Education Reform Act 1988.

However, the Secretary of State could designate other courses under Regulation 5(10) and it was that method by which, “private institution”, course providers such as CCP had their courses designated.

Regulation 11 provided for the Secretary of State’s support when provided by way of loan, to be provided by a contract to be made between the student and the Secretary of State; and read as follows:

Regulations 108 and 113 provided for how the support was to be paid.

Regulation 108 related to grants.

Regulation 113 related to loans; and read as follows:

From 2011 onwards, CCP provided one year education courses known as a Diploma in Teaching in the Lifelong Learning Sector, but which had the acronym, which I use, of, “DTLLS”, and which course led to a DTLLS qualification. That course was designated by the Secretary of State under Regulation 5(10). In order to obtain that designation, CCP had had to apply to the Secretary of State for it and I have been provided in evidence with the form of the application which would be made by a course provider applying in April 2013. The application document is entitled, “Alternative provider specific course designation: Draft guidance for applicants, criteria and conditions”. It states that, “This document sets out how the new specific course designation system will work”. Later on, it has a section entitled, “Conditions of specific course designation”, and states that certain provisions would operate from 2014/2015 and that a sample terms and conditions document would be published on a relevant website when, “The specific course designation process is launched in June 2013”.

It goes on to have a section entitled, “Sanctions”, with the following paragraph:

Later on in the document there was provided, “Annex C – Flowchart two: Specific course designation assessment process”. Within the relevant flowchart:

there is a section reading,

That document relates to the procedure from 2013 onwards. The applicant, here potentially CCP, would firstly fill out the application for designation, which CCP must obtain, and which is entitled, “Proposal that a full-time course be designated for the purpose of student support”. Then, if the application was successful, the applicant would receive a letter from the Secretary of State containing terms and conditions in accordance with the flowchart.

I do not have material from 2013; what I do have before me is a letter of 4 April 2011 (“the 2011 Letter”) from the then relevant government department, then the Department for Business, Innovation and Skills, addressed to CCP and headed, “Specific designation for student support in higher education – CCP Group – one-year full-time Diploma in Teaching in the Lifelong Learning Sector (DTLLS)”. It refers to an application which had been made for designation; and provides that CCP is designated to provide the DTLLS course from 4 April 2011, and sets out as to how and when monies would be paid in relation to students who were eligible for tuition fee support. It went on to say,

I note that the 2013 guidance says, as I have recited, that a successful applicant would need to sign certain conditions, and that that they would be signed by a nominated accountable officer and would run from June 2013 onwards. However, no-one has provided me with any such terms and conditions and there is no mention of them in any witness statement, or in the particulars of claim, or the proposed amended particulars of claim. There is no reference to terms and conditions in the 2011 letter; indeed, there is nothing in evidence or pleaded regarding, firstly, any terms and conditions, or, secondly, any direct contract being formed, or alleged to have been formed, at any point following 2011.

The essential pleading of the claimant’s direct contract case is in the particulars of claim. Paragraphs 18, 19 and 20 of the particulars of claim read as follows:

It is thus clear that the direct contract relied on is said to have been created before 2013, that is to say that it arose from the events which took place in 2011 and, perhaps, 2012.

Paragraphs 21 and 22 of the particulars of claim refer to the fact that the Secretary of State decided to replace the DTLLS qualification with a new Diploma in Education and Training, (and which has been and which I will call “the DET” qualification); and that CCP applied to be a designated provider in relation to that qualification, but that CCP’s application failed.

The designation of a course and course provider only related to the teaching of that course. CCP had no ability to award a DTLLS qualification (or a DET qualification); rather, that was to be done by a validating institution, the relevant entity for these purposes being Pearson.

In paragraphs 23 to 26 of the May, J, judgment there is set out the facts that: CCP operated by, firstly, having a student sign up with CCP to take a particular course, here the DTLLS course. That was their “enrolment stage”. Secondly, the student then applied to the Secretary of State for the tuition fee funding; however, CCP would start the student on the DTLLS course while awaiting the outcome of that application. May J held that there was nothing wrong with an application being made for student finance support up to nine months from the starting of the student on the course. Thirdly, the Secretary of State would then approve the tuition fee application and remit the first tranche of fees to CCP in relation to the student. Fourthly, CCP would then register the student with Pearson for the DTLLS qualification, and which would involve a making of a payment of £165 per student to Pearson; that being termed the “registration stage”. In fact, CCP had adopted a practice of disregarding, apparently with Pearson’s apparent consent, a requirement stated by Pearson to register the student with Pearson on the student enrolling with the course provider, here CCP. However, in October 2013, Pearson was to issue new terms which set a specific limited time period for registration to take place.

As far as a student was concerned, they would apply for student support, being a student loan, to the Secretary of State by way of an application for student finance. I have before me the form of application which was made in 2013/2014 and which is entitled, “Application for student finance 2013/14”. In section four of that application form, the student has to give details of their university/college and also of the course in relation to which they are seeking the student support.

There is subsequently a section headed, “Loan request section”, and that provides, in relation to tuition fees loans, “Your tuition fee is set by the university or college you go to. Any tuition fee loan you borrow will be paid directly to your university or college”. The student then ticks a box next to a section, “I want to apply for a loan to pay the full tuition fee charged by my university or college”, although there is a facility for a student to apply for a loan for only part of the tuition fee.

There is, later on in the form, a section headed, “Student declaration”. It opens with a box which includes the words, “This declaration covers all of the student finance available to students for academic year 2013/14. By signing this declaration, you are confirming that you have read the specific terms and conditions about loans…”. The application is to be signed by the student.

There is then a general declaration concerning various matters, and there is then a section headed, “Loan contract”, which contains provisions numbered from “a” to “n” as follows:

Together with the document is provided a further document entitled, “Student loans – A guide to terms and conditions 2013/2014”, and that is the document which is referred to in paragraph “a” of the loan contract. It contains, in its section two, a set of paragraphs which explain that the tuition fee loans will be paid in three tranches to the university or college and the timing and amounts of such payments.

There is also before me what is entitled a, “Student finance declaration form”, also to be signed by the student. It contains the same provisions as to the loan contract as I have already recited from the application for student finance.

The money which is paid to the college, and which discharges the student’s obligation to pay equivalent monies to the college, are in this circumstance a loan rather than a grant, so that the student becomes liable to repay the monies, potentially together with interest, and potentially, or at least mainly, by way of deductions from earnings as is set out in relevant legislation (including elements of the 2011 Regulations made under section 22 of the 1998 Act).

Thus, from 2011 onwards, CCP was enrolling students on the DTLLS course, it being a designated course as far as CCP was concerned. Each student was then applying for tuition fee finance from the Secretary of State, albeit through the SLC as the Secretary of State’s agent, and entering into a contract with the Secretary of State, such that the Secretary of State would pay the tuition fees in three instalments over the year to CCP and the student would be liable under the terms of the student finance scheme to repay the loan with interest to the Secretary of State. Following the entry into that contract between the student and the Secretary of State, CCP would then register the student with Pearson for the DTLLS qualification.

Mr McGurk for the Secretary of State has referred to the fact that for various other classes of student, for example, apprentices and 16 to 19-year-olds, CCP would enter, with regards to various courses, into lengthy detailed contracts with government bodies such as the Skills Funding Agency and the Education Funding Agency, whereby CCP would contract with those agencies to provide courses and training for students and the agencies would contract to pay CCP money for doing so. I will call these “the SFA/EFA contracts.”

In 2013/2014, the Secretary of State decided to replace the DTLLS qualification with the DET qualification and, as stated in the particulars of claim, CCP failed in an application to become a designated course provider for the DET qualification. As part of this change, the Secretary of State sent CCP a letter dated 5 June 2014.

That letter was entitled, “Lapsing of specific designation for student support in higher education”. It then referred to the DTLLS courses, whether one year or two years in length. It stated that, as a result of a particular governmental review:

In paragraphs 30 to 43 of the May, J, judgment it is held that: firstly, although if CCP had taught a DET course it would not have been designated for the purposes of the Regulations, in theory CCP would have been able to register such students with Pearson for a DET qualification. However, as CCP was not a designated provider for a DET course, any application by a student for finance on that basis, that is to say enrolled for a DET course and registered for a DET course, would fail. In consequence, the CCP did not enrol students for the DET course.

Secondly, Pearson imposed a cut-off date of 31 August 2014 for registering students for the DTLLS qualification and CCP knew that.

Thirdly, CCP decided that it would not register students with Pearson for a DTLLS qualification, being students whom it had enrolled for the DTLLS course, but who had not yet obtained student finance. CCP took that decision because effecting such registrations would not fit its then business model, which involved using the tuition fees paid by the Secretary of State in order to pay for the registrations with Pearson, and those fees had not been paid by Pearson’s cut-off date of 31 August 2014.

Fourthly, those students who were in the position that they had been enrolled by CCP for the DTLLS course but had not yet been registered with Pearson either for the DTLLS qualification or for the DET qualification, would apply for student finance to the Secretary of State on the basis that they would be studying the DTLLS course.

Fifthly, once the Secretary of State had processed such applications and entered into its loan contract with the student to provide that tuition fee finance by way of payments to CCP, and the 31 August 2014 Pearson cut-off date having passed:

Seventhly, CCP did not, however, tell Pearson that CCP was not a designated provider of DET courses. In fact, that matter was not relevant to Pearson, which was only concerned with what material the student had been taught and what results the student had achieved and work the student had done and produced.

Eighthly, CCP did not tell the Secretary of State that CCP had enrolled students on the DTLLS course and that those students had obtained finance on that basis, but that CCP had actually registered students for the DET qualification.

CCP’s case is that a large number of students had been enrolled prior to the cut-off date in the 5 June 2014 letter of 1 September 2014, and where the claimant had, as I have already explained, taught out the DTLLS course with extra material, but with the students being registered for, and so that they received, the DET qualification. Tuition fees were paid by the Secretary of State to CCP for some of these students both before and after the May J judgment, in circumstances to which I will come.

In 2014, the Secretary of State started to investigate CCP in relation to various allegations which had been raised by whistleblowers and others against CCP. That resulted in the Secretary of State suspending tuition fee payments to CCP in January 2015, and an investigation process taking place which subsequently exonerated CCP, at least to a sufficient extent such that the Secretary of State reinstated such payments in July 2016.

It was only subsequently that the Secretary of State discovered what had happened with regard to CCP registering students for the DET qualifications while teaching them on an extended DTLLS course.

In 2019, the present defendant, the Secretary of State, as then claimant, brought the first action against CCP for the sum of £196,862.50 in payments which had been made by the Secretary of State to CCP in relation to students who had been enrolled and obtained finance in relation to the DTLLS course. The Secretary of State asserted that CCP had had no right to receive such money and that it should be repaid by CCP. That claim was to be the subject matter of the May J judgment and was defended on various bases by CCP, including, firstly, that there was no legal route by which the Secretary of State could claim such monies against CCP, and secondly, that in any event, whatever rules in the 2013 guidance, or which otherwise existed, had been breached, those breaches would not entitle the Secretary of State to have the money returned.

The history of the first claim is set out in a witness statement of Cristiana De Faveri, dated 19 March 2022, adduced on behalf of the Secretary of State and is essentially common ground.

The claim form was issued and served in June 2019. Mr Dan Pathirana, a director of CCP, then filed, with CCP thus effectively being a litigant in person, on 27 June 2019, a defence document which raised various matters and which, amongst other things, asserted that the Secretary of State had underpaid CCP the total sum of £379,745. The defence document according to its terms, reserved the right to recover those monies in different proceedings, but also asserted that CCP claimed all withheld fees.

The reply from the Secretary of State stated that there was no contract between the Secretary of State and CCP.

CCP then instructed lawyers and, at a hearing on 30 October 2020, obtained a conditional order for permission to serve an amended defence with provision for the Secretary of State to object to such amendments, and permission for CCP to reply if the Secretary of State did so object. There was no reference in the relevant order for there to be any potential for a counterclaim to be made by CCP.

On 24 November 2020, CCP served on the Secretary of State a document entitled, “Amended defence”, but which included a counterclaim for £379,745 and for damages, being essentially what is now the claim before me being made in relation to the alleged direct contract. Paragraphs 4 and 33 of that document read as follows:

On 8 December and then on 23 December 2020, the Secretary of State objected to the introduction of the counterclaim.

On 16 April 2021, CCP applied for permission to bring the counterclaim, saying that without such permission, CCP would issue separate proceedings. That application was heard on 10 April 2021 and Master Cook made an order striking out the counterclaim. I have no transcript of Master Cook’s judgment, although there was at least some common ground between the parties that Master Cook accepted a submission on behalf of the Secretary of State that the application was simply made too late. There is also a suggestion from Mr McGurk, who did appear then for the Secretary of State, that Master Cook had also said that the counterclaim would require some expert evidence from an expert in education law, although at first sight I do not see why such expert evidence would be required, or that it would have been likely for Master Cook to have said that. However, I do have Mr McGurk’s recollection to that effect. There was no appeal against Master Cook’s order.

The trial before May J took place on, and presumably was throughout listed to take place on 21 to 23 June 2021. The May J judgment was delivered on 2 September 2021; its conclusions are at paragraphs 57 to 69 of that judgment.

Paragraphs 60 and 61 held that the relevant students were entitled to receive student finance in the form of a payment to CCP of tuition fees as they had been enrolled prior to 1 September 2014 on what was then a CCP-designated course, being the DTLLS course, and that they had then attended and been taught it. It was held that they thus came within the teach out requirements of the 5 June 2014 letter.

Paragraph 62 held that CCP had acted contrary to the 2013 guidance, and the Secretary of State’s expectations, and, “had broken the rules in this respect.”.

Paragraphs 62 and 63 held that the sanction for this would potentially have been suspension or removal of the designation of CCP for the DTLLS course, but such had already occurred, albeit only to take effect subsequently, and for a subsequent period, by virtue of the 5 June 2014 letter.

Paragraphs 64 and 65 held that the Regulations did not give the Secretary of State any right to recover monies paid from CCP in circumstances where the students had actually been taught on, and in accordance with, the course on which they had been enrolled.

Paragraph 66 effectively notes that if fees were not paid by the Secretary of State through the tuition fee loan to CCP, the student would, in principle, be liable for the fees to CCP. Of course, the student might be able to rely on some breach of contract which had taken place by CCP in relation to the contract between the student and CCP; and May J does not seem to have considered the situation of whether the student could have refused to pay CCP because CCP had acted in a way such that the Secretary of State might not be required to provide relevant funding. That scenario and situation does not seem to have been explored before May J and she simply seems to have considered that the student could require the Secretary of State to provide the relevant funding.

Paragraphs 67 and 68 of May J’s judgment read:

I note that the Secretary of State does not seek to have contended for any partial recovery; the Secretary of State’s case appears to have been that the fact that CCP had registered the student with Pearson for the DET qualification destroyed the student’s entitlement to receive funding for the DTLLS course. It seems to me that May J simply disagreed with that proposition.

In conclusion, May J held that the Secretary of State’s claim against CCP failed, as set out in paragraph 69 of her judgment as follows:

In consequence of that judgment and the resulting order, the Secretary of State took the view that not only could the Secretary of State not recover the £196,862.50 already then paid, but also that there were another tranche of students who fell within the teach out provisions of the 5 June 2014 letter as applied to the actual facts by May J so that those students were entitled to loans with the relevant monies having (under Regulation 113) to be paid to CCP.

As a result, the Secretary of State made payments to CCP in respect of those students’ tuition fees totalling £98,750. CCP, however, says in this claim, and which contention it had averted to previously, that that was not enough.

CCP issued this claim on 22 October 2021 seeking £459,937 alleged outstanding tuition fees. Further, CCP asserts that the result of the non-payment of such fees has caused the collapse of CCP’s business and claims as damages an alleged net loss of profits of £2,784,000 to 2021, and continuing at a rate of £464,000 per year. CCP also claims, on an and/or basis, alleged loss of capital value of its business of at least £3 million plus interest and costs.

The Secretary of State filed a defence and applied to strike out or for a reverse summary judgment, supported by witness statements of Cristiana De Faveri, the Secretary of State’s solicitor, and Paul Williams, the deputy director in the relevant departments, of 9 March 2022. CCP resisted by witness statements of Minal Popat, solicitor, and Dan Pathirana, director of CCP, of 16 August 2022. The Secretary of State responded by a second witness statement of Ms De Faveri and Mr Williams of 31 August 2022.

Following the hearing on 6 September 2022, and as directed by me, CCP produced proposed amended particulars of claim and filed further documents. Shortly before the adjourned hearing on 19 April 2023, both sides adduced further witness statements being from CCP of Nawal Omar of 13 December 2022, and from the Secretary of State a third witness statement of Paul Williams of 14 April 2023 to which CCP responded with a third witness statement of Dan Pathirana of 18 April 2023. I allowed that material to be admitted but noted, in relation to Mr Williams’ third witness statement and exhibits, that CCP had had little time to react to them.

Following a hearing on 19^th and then 20 April 2023, I reserved judgment and directed that I would deliver it today, 16 June 2023, orally. At 14:48pm on 15 June 2023, I received an email from the Secretary of State’s solicitors referring to a Court of Appeal decision delivered on 19 May 2023 in Secretary of State for the Home Department v Cox [2023] EWCA 551, and to the fact that it concerned the 1999 Act, although the email merely suggested that I might care to read certain paragraphs of it. Having only reached this email, and read it, following the conclusion of a lengthy hearing on 15 June 2023, on conducting a skim reading on the Court of Appeal judgment, I felt that it might very much affect the 1999 Act section of this judgment and the claimant’s application to amend to rely on the student contract and the 1999 Act. I therefore directed that the parties should be able to provide oral submissions this morning before I delivered the reserved oral judgment. I heard those oral submissions and, in consequence, have had to revise relevant elements of this judgment. I feel that it was somewhat unfortunate that this authority was only drawn to my attention on 15 June 2023, and possibly also only on 15 June 2023 to the claimant’s attention. However, it seems to me that I have been able to hear full submissions and that there is no prejudice which would have led me to delay giving my oral judgment.

I have considered all the evidence before me; the parties’ lengthy skeleton arguments and written submissions as well as the oral submissions of counsel, and if I do not mention particular points, or do not mention them in detail, that is for considerations of time and space. Of course, a party can always seek clarification should they be so minded.

The Secretary of State has brought the application before me relying on various procedural provision. The first set of bases is for the court to strike out the claim and statements of case under the provisions of CPR 3.4(2), which reads as follows:

Sub-rule (a) enables the Court to strike out if the relevant statement of case does not disclose reasonable grounds for bringing the claim. I note that under this provision the Court almost invariably has to accept that what is actually stated in the statement of case is correct as a matter of fact; the Court merely has to consider whether, assuming the relevant material is established as a matter of fact, it affords reasonable grounds for the claim in law.

In relation to sub-rule (b), the two distinct questions arise as to (i) to whether there has been an abuse of process and, if so, (ii) whether it is appropriate to strike out the claim. Here, it is said by the Secretary of State that there has been and is an abuse of process: firstly, because the claim is bound to fail including for limitation reasons (albeit that does not seem to me to add much to the claimant’s other contentions regarding limitation to the effect that the pleaded facts do not show reasonable grounds for bringing the claim and also for reverse summary judgment on the basis of no real prospect of success); secondly, the Secretary of State asserts that these proceedings are an abuse as the relevant claim should have been brought, if at all, as a counterclaim in the first action, but Master Cook refused to allow such to occur because CCP had failed to advance a counterclaim at an appropriate time in that process; and, thirdly, in relation to sub-rule (c), which provides for a potential for strike out where there has been a failure to comply with a rule, practice direction or order.

With regard to sub-rule (c), the Secretary of State contends that there have been breaches of Civil Procedure Rule 16.4 dealing with the contents of particulars of claim and where CPR16.4(1)(e) requires there to be stated matters set out in the relevant Practice Direction to Part 16. That Practice Direction at paragraphs 7.5 says:

The Secretary of State contends that the particulars of claim do not set out what matters are relied on to give rise to the alleged direct contract, which is said to be an implied contract; that is to say an agreement by conduct.

The Secretary of State’s second set of bases for the orders sought are an application for reverse summary judgment under Civil Procedure Rule 24.2:

The Secretary of State relies on and contends that there are made out CPR 24.2(a)(i) and (b); and it is common ground that in approaching such an application, the Secretary of State needs to show that the claim has no real prospect of success and also that there is no other compelling reason for a trial.

On the question of there being no real prospects of success, the principles and approach which the Court applies and takes for common ground are summed up in the White Book notes at 24.2.3:

That is power to be exercised in accordance with the overriding objective, which is set out in Civil Procedure Rule 1.1, which reads:

Section 35 of the Limitation Act 1980 reads:

in the case of any other new claim, on the same date as the original action.

the addition or substitution of a new cause of action; or

the addition or substitution of a new party;

The conditions referred to in subsection (4) above are the following—

Here, it is common ground that the limitation period for a claim in contract is, in principle, six years, see section five of the Limitation Act 1980. The Secretary of State’s primary assertion is that all, or at least some, of the alleged causes of action arose before 22 October 2015, being six years prior to the issue of the claim form in this case, and so are necessarily limitation barred and bound to fail so that the claim is an abuse within CPR 3.4(2)(b), and also lack real prospects of success.

The claimant, CCP, disputes this both generally and because CCP asserts that the Secretary of State suspended payment in 2015 and 2016 so that the causes of action in relation to both the direct contract claim and the student contract claim should be treated as arising only in July 2016 or, in any event, after 22 October 2015 (thus being less than six years prior to the issue of the claim form).

The Secretary of State disputes that; but also responds to say that if CCP is correct in that then the student contract claim, which is sought to be introduced by amendment, would be out of time if a new claim form was issued today; that is to say in 2023, more than six years after July 2016. The Secretary of State goes on to submit that the claims which are sought to be raised by amendment are, “new claims”, within section 35 of the Limitation Act 1980, and the Court does not have jurisdiction under section 35 of the Limitation Act 1980 and CPR 17.4 to grant permission for those claims to be introduced now; where, if an amendment is permitted and is made, they will, for limitation purposes, relate back to the date when the claim form was issued, being 22 October 2021 with the consequence that, for limitation purposes, the claim will be treated as having been brought within time, thus depriving the Secretary of State of the limitation defence which would otherwise exist if the proposed student contract claims were made the subject matter of a claim form issued now.

Mr Coulter, for CCP, accepts, correctly in my view, this analysis, but relies on Civil Procedure Rule 17.4(2). He says that the student contract claim, “arises from the same or substantially the same facts as are already in issue” and so that the court does have jurisdiction to grant permission to amend. As to this aspect, I bear in mind the White Book notes at 17.4.4.3, which make clear that the Court will be engaged in a value judgment as to whether or not that exception is satisfied, and which will involve considering everything that is presently in issue in the case, including not merely the claimant’s case, but also the case which is presently advanced by the defendant.

It is convenient to deal with the matters before me in the following order; firstly, the direct contract claim; secondly, the student contract claim; thirdly, the alleged abuse as a result of what happened in the first action.

I therefore turn to the direct contract claim. The Secretary of State says that this is bound to fail; firstly, because there is no reasonable prospect of the claimant establishing a direct contract between CCP and the Secretary of State at all. Secondly, that CCP has no reasonable prospect of establishing that the Secretary of State is in breach of such a direct contract in the circumstances which have happened. Thirdly, that the claim is, on any event, brought too late for limitation purposes.

I return to the present particulars of claim; in paragraphs 13 and 14, they refer to CCP applying to the Secretary of State to designate CCP’s DTLLS course and the Secretary of State granting the application. Paragraph 15 states that the mechanism for the payment of the tuition fees would be that such would occur on CCP giving confirmation of the student’s attendance to the Secretary of State. Paragraph 16 refers to the fees being paid in three tranches in October, February and May. Paragraph 17 refers to CCP advertising its courses to students.

I remind myself of paragraph 18, which I have cited in full above, and that it refers to students applying to the Secretary of State for funding support and, “following the Secretary of State providing confirmation that the student was entitled to funding support… the students were accepted onto the course by CCP.”. That, in fact, was not how I, now, or, it seems to me, May J, understood CCP’s case, which was rather being that at least some students were enrolled prior to and while awaiting the Secretary of State’s confirmation that they would be awarded loans rather than simply after the Secretary of State had provided confirmation. I remind myself of the present paragraphs 19 and 20 of the particulars of claim which I have cited in full above.

I have previously referred to the next section of the present particulars of claim, and which are headed, “Events subsequent to the contract”, and which deal with 2013 onwards events. I remind myself that in paragraphs 23 to 28, CCP referred to the allegations made against CCP in 2014 to 2016, and that in paragraph 24, CCP asserts that the Secretary of State had a right or duty to suspend payment of the tuition fees; CCP’s case seemingly being that that right or duty extended until at least 22 October 2015. In paragraph 27 it is stated by CCP that CCP accepted that at the material time the Secretary of State might have had legitimate questions to raise. Paragraph 28 states that by November 2016 all of the Secretary of State’s legitimate concerns had been answered, and that the Secretary of State was then bound to pay the outstanding fees within a reasonable period, being one month. Paragraphs 29 and 30 refer to the Secretary of State advancing by letter of 21 December 2016 the matters which eventually became the subject of the first action, and alleges that from receipt of that letter, which was a month after November 2016, the tuition fee payments were wrongfully withheld from CCP, “in breach of the agreement”.

It seems to me to be clear from the present particulars of claim that the allegation here is that there was a direct contract formed in 2011 as stated in the first sentence of paragraph 19 of the particulars of claim, which I have cited in full earlier in this judgment.

Mr McGurk, for the Secretary of State,’s first point is that this is an allegation of an implied contract and therefore CCP needs to plead all the conduct relied upon and state by whom, when and where the conduct was done in accordance with the provisions of 7.5 of Practice Direction 16. Mr McGurk points to the assertion in the particulars of claim, “The Secretary of State promising to pay the tuition fees on behalf of the student (reliant on the Secretary of State’s promise of payment)”, and says that there are absolutely no particulars of what was done by the Secretary of State and CCP which is said to have amounted to such a promise being made by the Secretary of State to CCP.

There is some force in that submission, although it could be said that a possible natural meaning of the words at paragraph 19 of the particulars of claim is that the promise was actually made to the students. However, if there was any failure to comply with the rule and the Practice Direction here, I would consider that the proportionate remedy would not be to strike out the statement of case, but to require clarification and amendment, as long as the result was a pleading which amounted to a statement of reasonable grounds for the claim, and which had real prospects of success; a matter which I, in any event, analyse in the next sections of this judgment. The court has wide powers to deal with breaches of the rules and that sanctions must be proportionate; see Biguzzi v Rank Leisure plc [1999] 1 WLR 1926. I do not see any relevant breach of the rules and Practice Directions as justifying, in itself this draconian remedy of strike out.

Mr McGurk’s second point is that the particulars of claim do not disclose reasonable grounds, in any event, for the existence of a direct contract between CCP and the Secretary of State. He says that all they state is that, at most, there was a promise to students to provide loans for tuition fees, and a decision by the Secretary of State to designate the CCP DTLLS course, and possibly a course of conduct involving the Secretary of State complying with the Secretary of State’s loan contract obligation to the students and the Regulations. Mr McGurk says that those are not reasonable grounds from which to imply a contract by conduct as between CCP and the Secretary of State.

Mr McGurk relies on the decision of Baird Textile Holdings Ltd v Marks and Spencer plc [2001] EWCA Civ 274 to say that a contract will only be implied where there is a necessity so to do, and a necessity to find the existence of a particular contractual relationship. He relies on elements of the judgment of the Vice Chancellor in paragraphs 15 to 21 which read as follows:

I have also borne in mind, in the judgment of Judge, LJ, its paragraph 48:

I note that this approach was reaffirmed in the decision of West Bromwich Albion FC v El Safty [2006] EWCA Civ 1299 at paragraph 42.

Mr McGurk submits there is an unparticularised alleged promise, and that the fact that CCP have become a designated course provider for students, the payment of whose tuition fees to CCP would be made by the Secretary of State, is simply insufficient to amount to reasonable grounds for it being necessary to infer there having been an actual direct contract between CCP and SLS, rather than some other legal scenario. The most particular other legal scenario being simply the existence of a contract between the Secretary of State and the student, which would enable the student to fund a contract made between the student and CCP; and where the existence of the contract between the Secretary of State and the student would give CCP confidence to enter into the contract between CCP and the student and teach the student the course.

Mr Coulter submitted that sufficient had been pleaded to give reasonable grounds from which an implication might be made; saying, in effect, that (i) the simple and sole existence of a contract between the student and the Secretary of State could not, or at least might not, have seemed to be a commercially realistic situation where CCP would wish to have security that the tuition fees would be paid, and (ii) the particulars of claim did state that a promise had been made by the Secretary of State to CCP.

I see substantial force in Mr McGurk’s submission of there being a breach of paragraph 7.3 of Practice Direction 16. The allegation of a promise by the Secretary of State, including to whom it was being made and how, especially if it was said to be made to CCP, that was done, is all very unparticularised. However, I do not see it as appropriate to strike out on that ground. The particulars of claim do contain an allegation that the Secretary of State was making a promise, and, in effect, that in some way, CCP was accepting such promise by obtaining designation and teaching the student. That could, it seems to me, in principle, in some circumstances, make it arguably necessary to imply a contractual relationship between the Secretary of State and CCP. If that claim has real prospects of success, then any deficiency in its pleading can be remedied by further particulars or amendment, so that what amounts to reasonable grounds are properly expressed.

However, that analysis is dependent on such a claim having real prospects of success on the evidence before me, and to which aspect I now turn. Mr McGurk’s submissions, in essence, are as follows; firstly, the Baird necessity test is a high one. Secondly, the overt express contractual situation here is that there is one contract between the Secretary of State and the student, and a second contract between CCP and the student. Thirdly, that there is no need for a contract to exist between CCP and the Secretary of State. Fourthly, the designation process is simply different from these relationships and non-contractual in nature. Fifthly, if there was to be a contract, it would have taken a form similar to the SFA/EFA contracts and both CCP and the Secretary of State knew that perfectly well, but such did not occur.

Mr Coulter submitted that CCP has real prospects of success in establishing a direct contract; he relying particularly on the reference to terms and conditions to be signed, as stated in the 2013 guidance.

As I stated to the parties on 6 September 2022, it seems clear to me that the direct contract argument has no real prospects of success; this being for the following main reasons; and where I have all the material which CCP relies on, and it does not seem to me, on the evidence before me, that there is any potential for further relevant disclosure or documents on the evidence, but rather I see there as being no foundation for such a speculation.

Firstly, the obvious contractual analysis in the evidence before me is that there is, firstly, one contract between CCP and the student, where the student promises to pay CCP for teaching the student a DTLLS course, and, secondly, another contract between the Secretary of State and the student, whereby the Secretary of State promises to lend the student the money for tuition fees and to provide that loan to the student by remitting the money to CCP.

That set of transactions gives rise to an overall contractual scenario which is commercially realistic and workable, and I cannot see that there is any essential need for there to be a contract between CCP and the Secretary of State. If the Secretary of State refuses to pay: (i) the student can enforce the Secretary of State’s obligation directly; and (ii) CCP can sue the student, and the student in any proceedings brought by CCP can join in the Secretary of State on the basis that the Secretary of State owes obligations to the student for the money to be paid. It may well be that CCP would like and wish for the Secretary of State to be directly liable to CCP, and it seems to me that it might well be fair and reasonable for the Secretary of State to be so liable to CCP. However, I cannot see any basis for saying that there is a necessity for such a direct liability to exist in order for the scheme to be workable.

Further, the scheme that I have identified is that which is set out by the Regulations, which provide for a contract between the student and the Secretary of State, provide for a designated course provider, and provide for payments to be made under the contract between the student and the Secretary of State to that designated course provider. There is no mention in the Regulations of there being any contract between the Secretary of State and the course provider, here CCP; rather there is a glaring absence within the statutory scheme of the direct contract which CCP wishes to assert.

Secondly, there is nothing in the 2011 designation process to suggest a contract. That designation process was, in any event, simply, as far as CCP was concerned, a means by which CCP was able to put itself in a position to attract students, and a means by which CCP was able to expect those students to receive loans from the Secretary of State. The fact that a student has a funder who is lending to the student does not mean that there is any need or necessity to imply a contract between that funder and the course provider. The course provider can ask the funder to sign a contract if the course provider wishes to insist on that, but that is not what happened here. Further, the primary purpose of the designation process is clearly for the Secretary of State to be satisfied that the course is suitable. That is to say the designation process is for the benefit of the Secretary of State, not for the benefit of the course provider. It seems to me that it would be very odd if an engagement in that process would lead to contractual obligations being imposed on the Secretary of State to pay money to the course provider where the Regulations do not contain any such provision.

Thirdly, I would regard the terms and conditions point as being unfounded. Firstly, it is not actually part of the pleaded case. Secondly, CCP has advanced no evidence with regards to what such terms and conditions were, or as to what was, or would be, relevant in them. Thirdly, the references before me to terms and conditions are in fact part only of a restructuring by the Secretary of State of the process, which restructuring was only to commence in 2013 and 2014 at the earliest, and where the CCP DTLLS designation was in fact revoked in 2014. It seems to me, on the evidence before me, that the terms and conditions referred to in the 2013 guidance were never applicable to the DTLLS designation at all. Fourthly, it is in fact CCP’s own case, as is made clear in the particulars of claim, that the alleged direct contract arose in 2011; that is to say before 2013. Fifthly, these terms and conditions would only have been conditions of maintaining the designation, and I do not see why or how they would give rise to a contractual obligation on the Secretary of State to pay tuition fees to CCP.

I have, though, given little weight to the SFA/EFA contracts point. The mere fact that other contracts are written in detail with their own substantial terms does not mean that the Court should not apply a contract if it was necessary for the Court to do so.

I did note at the time that Mr McGurk seemed somewhat uncomfortable at some points, although it seems to me now much less so, when in the course of submissions I suggested that the logical consequence of the Secretary of State’s case is that, if the Secretary of State in any situation refuses to pay tuition fee monies to a course provider such as CCP as a result of a dispute between them, the contractual structure means that the course provider, here CCP, should simply sue the student, and when the student can then decide to sue the Secretary of State, presumably by an additional claim under Civil Procedure Rules Part 20. However, that is the logical consequence of the contractual structure, subject to the 1999 Act, and of the Secretary of State’s submission. It is, in my judgment, the correct analysis. It may be unfortunate for students who may not wish to be victims of a dispute between the Secretary of State and the course provider, but that is the structure of the Regulations and the documents. Of course, a student may have their own defence against the course provider dependent on whatever is the subject matter of the dispute raised by the Secretary of State; and if the Secretary of State is correct then it may be that the student can take advantage of whatever the Secretary of State is relying on. However, that is all a matter for the analysis of the contract between the student and the course provider. This is, it seems to me, the usual consequence of the law of the privity of contract; claims for breach of contract are generally brought by and between the contracting parties unless an exception applies.

Here, of course, CCP has now sought to raise the statutory exception to common-law privity of contract of the 1999 Act, and that is what I have termed the student contract claim, as opposed to the direct contract claim. It seems to me that, as far as the contractual structure is concerned, leaving aside the 1999 Act, the Secretary of State is correct to say that, if the Secretary of State has a dispute with a course provider, the student will have to face being sued by the course provider and cannot simply tell the Secretary of State and the course provider to sort the matter out between themselves, if necessary, by litigation between them not involving the student.

In all such circumstances, I simply see no real prospects of CCP showing the necessity required for an implied contractual relationship between CCP and the Secretary of State, being that required to establish the direct contract claim. I also see there as being no compelling reason for a trial; it seems to me to be all clear and, so far as I am having to consider particular documents and periods in this case, all to be historic. I would therefore grant reverse summary judgment against the claimant in relation to the direct contract claim and this point alone.

Mr McGurk, however, advances two further arguments on which I have heard full submissions and which, it therefore seems to me, that I should consider in this judgment. Firstly, Mr McGurk says that, even if there was an implied contract, CCP’s claims must still fail because, firstly, the relevant students did not come within the 5 June 2014 letter teach out provisions, and, secondly, CCP have broken the rules by registering students for the DET qualification and not telling the Secretary of State that that was being done, and also, for that matter, not telling Pearson what actually was happening.

I have borne in mind the principles and guidance set out in the already cited case law and notes; and I deal with this aspect relatively shortly as I am already going to grant reverse summary judgment against the direct contract claim. I conclude that the Secretary of State has not shown that CCP has no real prospects of success on these grounds.

Dealing first with Mr McGurk’s argument that the students on whom the CCP bases its claims for unpaid money for tuition fees are not within the 5 June 2014 letter wordings, I remind myself that the Secretary of State said, “Any existing eligible students who commenced one of these courses”, that is the DTLLS course, “in the academic year 2013/14, and are already in receipt of student support, will be able to continue receiving it.”. Mr McGurk submits that the relevant students, firstly, had not started being taught by 1 September 2014 (the start of the 2014/2015 academic year) and therefore had not commenced their course, and secondly, had not had any payments made by the Secretary of State to CCP in respect of their tuition fees by 1 September 2014. Therefore, they were not “already in receipt of student support” by 1 September 2014. Mr McGurk submits that all the students falling within the 5 June 2014 wordings had, in fact, had all payments made for them either before or after the May J judgment.

Mr Coulter submits, as set out in Mr Pathirana’s witness statements, including his 18 April 2023 response to Mr Williams’ third witness statement of 14 April 2023, firstly, that all the relevant students had been enrolled by CCP by 1 September 2014 and that was sufficient of itself; but also that many, if not all, had started being taught by CCP by 1 September 2014. Secondly, that all the relevant students had made applications for finance to the Secretary of State by 1 September 2014 and that many, if not all, of those applications had been accepted; although the first payment would then often, perhaps not in all cases, only fall to be made under the Regulations after a period of attendance and request, that is to say, after 1 September 2014. However, Mr Coulter submits that acceptance by the Secretary of State of the application, and perhaps also creation of the student contract, would be sufficient. He submits that this is particularly true of many students who started, he says, the DTLLS course in June 2014.

Thirdly, Mr Coulter submits that evidence which has now been produced by the Secretary of State to justify the Secretary of State’s factual assertions that relevant students had not had money paid to CCP on their behalf before 1 September 2014 is highly unsatisfactory. Firstly, as stated in Mr Williams’ third witness statement, even the Secretary of State has had to correct it and concede that a small number of students for whom monies have not yet been paid to CCP, even on the Secretary of State’s case, fall within the Secretary of State’s interpretation of the 5 June 2014 letter. Secondly, that the provenance of the Secretary of State’s spreadsheets analysing the students relied on by CCP and their applications for finance and payments made, and the source information for such spreadsheets, is extremely unclear; and that they are and will be capable of challenge, particularly following disclosure and evidence. Thirdly, that, in any event, these spreadsheets include inconsistencies, omit various relevant students, and wrongly, according to Mr Coulter (this being contrary to Mr McGurk’s second argument below), exclude students who ended up being registered for, and who then obtained, a DET qualification. Fourthly, that even the Secretary of State appears to have problems within the spreadsheets, as they have been altered again and again in each of Mr Williams’ various witness statements. Fifthly, Mr Coulter submits that as a result of the collapse of CCP’s business due, he says, to the Secretary of State’s wrongful non-payment of outstanding fees, many of CCP’s records have been lost or are difficult to analyse and that the claim simply requires a full factual examination, including following full disclosure being provided by the Secretary of State.

In my judgment, the Secretary of State has not shown that CCP has no real prospects of success for two sets of reasons. Firstly, it seems to me that there are very real questions of contractual construction relating to the 5 June 2014 letter which arise, being, firstly, what is meant by its wording, “commence the course”. The Secretary of State says that this means that the student has to have started being taught; CCP says that all is required is for the student to have been enrolled on the course, and which may have led to the student engaged in various pre-teaching activities such as pre-reading. While construction of document issues can be resolved in a summary judgment application and depend much on the words used, they also involve consideration of other matters including the commercial purpose of the document and the factual matrix of the facts reasonably known to the parties to it. These are all factored into the holistic analysis of what the reasonable reader would see as the correct meaning; see Arnold v Britton [2015] AC 1619 (a contract case) and other decisions following it and various authorities to which I will be referring later in this judgment.

Here, it seems to me, firstly, there is a real prospect the CCP’s construction argument would succeed, especially once the factual matrix is considered, which will include how these courses and providers operate and the extent to which that would have been known to both CCP and the Secretary of State. I can see a real prospect of CCP advancing relevant facts and evidence which would influence the construction so that it might well be decided that the mere fact of a formal enrolment is sufficient for a student to have, “commenced the course”. Secondly, in any event, the question of what, if the Secretary of State is right on construction, would be sufficient factually to amount to a start of teaching in relation to any individual student, is also a very nuanced question and would itself result in a factual analysis of what happened in relation to each student. For example, such questions would arise as to whether provision of a reading list would be enough, or whether the start of a Freshers’ week of induction without any formal lecture or seminar would be enough. Thirdly, there is a construction question as to what is meant by, “in receipt of student support”; the Secretary of State says that an actual payment must already have been made. I am not at all convinced that that is the only possible construction of those words; at first sight it is difficult to see why entry by a student into a student contract containing a promise by the Secretary of State to the student to pay tuition fees, and upon which the student may very well have relied, would not be enough to amount to the student being, “in receipt of student support”, in the mind of a reasonable reader. This would be reinforced if, for example, the student had already received part of a maintenance loan. It could well be argued that such a student was not to lose what they had already been promised. It seems to me that the Secretary of State’s construction might well be argued to be contrary to the commercial purpose of the letter. Similar arguments could arise where a student had applied, but the Secretary of State had failed to process the application speedily. Here, CCP could reasonably argue that the student was not to be deprived of finance by the Secretary of State’s delay in granting the student what is in fact their statutory right. Again, I see a real prospect of success and where factual evidence will be material to construction. Further, at each point the various possible constructions give rise to particular factual questions when they are sought to be applied to each individual student, and which matters I do not think I can resolve on the evidence before me.

Secondly, it seems to me that there is real force in Mr Coulter’s and Mr Pathirana’s criticisms of the Secretary of State’s spreadsheets, which give rise to real prospects of CCP succeeding in showing that there still are relevant students within the 5 June 2014 letter whose tuition fees have not yet been paid by the Secretary of State. I see real prospects of success for CCP on this hypothesis and by extension, on CCP’s wider construction of the letter’s words, including for the following reasons. Firstly, even the Secretary of State now accepts some students fall within the wording; that itself casts a general doubt on the reliability of the spreadsheets. Second, it does seem to me that Mr Coulter and Mr Pathirana have identified what are apparent inconsistencies. Thirdly, the provenance and basis of the spreadsheets are unclear, they have twice mutated and they seem to be something of a work in progress. Fourthly, the Secretary of State will have the underlying data and records and it does not seem to me to be mere Micawberism for CCP to say that disclosure may well enable CCP to construct a very different spreadsheet. I, therefore, would not grant reverse summary judgment against CCP on this basis.

I do also note that Mr McGurk has stated that the Secretary of State will now pay the sum £12,000 for students that the Secretary of State now says fell within the terms of the 5 June 2014 letter; notwithstanding that the Secretary of State says that they have no liability, or at least no liability enforceable by CCP, to do so. However, that aspect, it seems to me, is irrelevant to my decisions.

Mr McGurk’s second argument in this area is to submit that CCP’s registering of the students for the DET qualification, when CCP was not a designated provider of a DET course, would entitle the Secretary of State not to pay for the relevant tuition fees, assuming a direct contract existed. Mr McGurk submits, firstly, that the situation does not fall within the 5 June 2014 letter at all. Secondly, even if it did, the 5 June 2014 letter, in its footnote, reserved the right to revoke the designation of the course in the event of serious misconduct by the provider and that that was the case here. Thirdly, in any event, such misconduct by CCP would justify non-payment to CCP even if there was a direct contract between CCP and the Secretary of State.

Mr Coulter submitted, firstly, that May J had already effectively decided this point in favour of CCP. Secondly, in any event, the Secretary of State had not revoked the DTLLS designation, at least not for the period before 1 September 2014, and that CCP had taught out the DTLLS course and should be paid for doing so.

I hold that CCP would have had real prospects of success on this issue. Firstly, it seems to me that the Secretary of State’s argument that the actual situation was that there was not a teach out under the 5 June 2014 letter, because of the registrations for the DET qualification, is inconsistent with paragraph 60 to 63 of the May J judgment. May J held that the 5 June 2014 letter did apply in those circumstances. I also consider, for what it is worth, that May J was right to so conclude for the reasons she gave in those paragraphs, and also in her paragraphs 65 to 66. The key question is whether or not the course was, and remained, designated; the 5 June 2014 preserved the designation, subject, as the letter said, to any justified revocation of the designation. That (a revocation of the designation) simply has not occurred for those students. It seems to me that whether the students were registered for the DET qualification or for a DTLLS qualification, or any other qualification, is irrelevant; the students had the right to finance for their DTLLS course. In fact, I note that that is the view that the Secretary of State took in paying the further £98,750 tuition fees payment after the May J judgment.

Secondly, it is correct that the 5 June 2014 letter reserves the right to un-designate the DTLLS course as provided by CCP for serious misconduct on the part of CCP. However, here it seems to me that the Secretary of State has two problems. Firstly, the Secretary of State did not un-designate the DTLLS course. As recorded by May J in paragraph 63 of the May J judgment, the Secretary of State only un-designated it subject to the transitional provisions in the 5 June 2014 letter, and the Secretary of State did not carry out an un-designation following the Secretary of State learning of the registrations for the DET qualification. The Secretary of State may, for all I know, have felt that it was too late to do so retrospectively, and, if that is right, it merely demonstrates that the Secretary of State is now too late to advance the point. It seems to me that this alone gives CCP real prospects of success.

However, I add, secondly, that I do not think that it is at all clear that the Secretary of State could, or would, un-designate CCP as course provider for the DTLLS course as a result of CCP registering students for the DET qualification where: CCP actually did teach the DTLLS course, and anything else sufficient for Pearson to grant the DET qualification; and Pearson did then award the DET qualification to the satisfaction of the students. Although the Secretary of State may very well have designated CCP as a provider of the DTLLS course on the assumption it would lead to the DTLLS qualification, there would, in this situation, be a range of possible responses of the Secretary of State, who would have to act within ordinary public law principles. CCP could well argue, as May J seems to have thought, that the end result should not have been of any particular concern to the Secretary of State; the relevant course had been taught and Pearson had thought it appropriate to award a qualification which the students wanted, and indeed was the Secretary of State’s preferred qualification. It could be said that the Secretary of State’s argument should actually be with Pearson for its being prepared to award a DET qualification on the basis of DTLLS material.

I do bear in mind that the Secretary of State might say that the award of the DTLLS qualification was a key component of any designation of the DTLLS course; however I see there as being considerable arguments both ways, which would lead to a consideration of material relevant to the statutory policies, and it seems to me that CCP would have real prospects of success.

Thirdly, in relation to Mr McGurk’s argument that CCP’s conduct would justify the Secretary of State not paying CCP under any direct contract, again I see CCP as having real prospects of success as, firstly, that would all depend on the terms of the relevant implied contract. Those terms are notoriously fact specific and dependent on the Court having to look at all the parties’ conduct to extract them; and, as in the Baird decision itself, if there was to have been a direct contract, it may be difficult for the Secretary of State to add in further terms in addition to a basic contract that if CCP taught the relevant course, here the DTLLS course, then the tuition fee would be paid to CCP. Secondly, even if a term is breached or a rule is broken, that does not necessarily mean that the Secretary of State is freed of an obligation to pay. The Secretary of State can be freed from such an obligation, should such a direct contract exist, in one of two situations; firstly, there is a term which provides that compliance with it is a condition of payment. That is possible, but it raises, again, the difficulty as to how such a term would be implied from this factual situation, particularly where the core of the relationship is the DTLLS course and its being taught, and not what ultimate qualification the student might be awarded. The second possibility is that the breach is fundamental insofar as it goes to the root of the relevant contract. Again, it seems to me that both sides’ positions as to whether or not the hypothetical breach in this case is a fundamental one would be arguable, although it does seem to me that the tenor of the May J judgment may well suggest that it would not have been. However, the answer to that question very much depends on the facts and the relevant conduct.

It seems to me, for all those reasons, that I would not have granted reverse summary judgment on these grounds, although the difficulty which I have averted to about what would be the terms to imply into any direct contract do reinforce my decision that CCP has no real prospects of implying any direct contract at all.

Mr McGurk, however, also has a further set of limitation arguments which support both his abuse-based strike out application, that is to say on the basis that it is abusive to bring a claim which is obviously limitation barred, and his reverse summary judgment application, that is to say on the basis that the existence of a clear limitation defence means that the claim has no real prospect of success. Mr McGurk submits that on the three-tranche payment system laid down by the Regulations and in the student contract, that, if there had been a direct contract, all of the payments would have fallen due by May 2015 at the latest; that is to say, well before 22 October 2015. Thus, CCP’s causes of action would all have arisen more than three years before the claim form was issued on 22 October 2021, and all the claims are limitation barred by section 5 of the Limitation Act 1980.

Mr Coulter responds to rely on the suspension of payments by the Secretary of State from about October 2014 to November 2015, although Mr McGurk says it was actually from January 2015 to December 2016, and the particulars of claim say it was from October 2014 to July 2016. Mr Coulter submits, firstly, that the Secretary of State had a right to suspend payments under the direct contract where the Secretary of State was reasonably investigating CCP, even if that investigation proved, as was the case, to be unfounded. He also submits that the carrying out of such an investigation, and operation of such right of suspension, would, (i) Prevent a cause of action arising, or at least suspend any limitation period during the suspension period, and, (ii) In relation to any cause of action which had already arisen, would have had a suspensive effect for such period. Mr Coulter submitted that Mr McGurk had actually accepted that in argument at the September 2022 hearing, even if Mr McGurk was subsequently to seek to resile from such an acceptance during the hearing before me on 20 April 2023.

Secondly, Mr Coulter submitted that what the Secretary of State did, led, in the circumstances, to the Secretary of State being estopped from relying on any suspension period as part of any six-year limitation period. Mr Coulter, in relation to this, referred to the decision of Hillingdon LBC v ARC [2001] CP Rep 33. There, the parties had been negotiating with regards to a possible claim and the claimant argued that both had assumed during the negotiations that no limitation period was running. However, once the limitation period had passed, and only after which a reference had been made by the claimant to the Lands Tribunal, the defendant had then taken a limitation point. The claimant said that the defendant was estopped from doing so.

In paragraph 43, Arden J, as she then was, identified the basic requirements for an estoppel by convention as follows:

Arden J then dealt with an alternative case of promissory estoppel arising from some clear and unequivocal representation that the relevant defendant would not rely on any limitation defence, and held that there was no such representation on the facts of that case; see paragraph 66 of her judgment:

Arden J then dealt with a need for there to be relevant detrimental reliance on any shared assumption or representation so as to make it unconscionable for the relevant defendant to take a limitation point, and held that that did not exist on the facts of that case in paragraphs 67 to 71 of that judgment:

Mr Coulter submitted that it was implied, by the Secretary of State’s conducting an investigation and suspending payments whilst doing so, that the parties assumed that, at least if CCP did not seek payment in the meantime, the period of the investigation would not count for limitation periods, and so the running of limitation would be suspended during it. Mr Coulter said that by not bringing a claim at that time, CCP had suffered relevant detriment to make it unconscionable for the Secretary of State to rely on that period for limitation purposes, even though limitation then had another three to four years to run after the end of the investigation.

In relation to the argument that the investigation had the effect of suspending the coming into being of the cause of action, or of a limitation period running, Mr Coulter relied on a paragraph 52 of a witness statement of Mr Williams of 3 May 2021 in the 2019 claim, which read:

Mr Coulter said that this amounted to an admission that the suspension was justified so that the Secretary of State had no liability to pay while the investigation was being reasonably carried on.

Mr Coulter may also at one point have raised a question as to whether the running of any limitation period was restarted by part payments within the meaning of section 29 of the Limitation Act 1980. However he did not pursue that point orally and, in my view, rightly. These obligations, if they existed, gave rise to individual causes of action in relation to each relevant student and each tranche of money; this is not a case of part payments or a running account which could lead to section 29 being in point.

Mr Coulter also, in his final submissions, referred to section 32 of the Limitation Act 1980, providing for new limitation periods where there has been a deliberate concealment(s) of facts required to advance a cause of action or the claim is based on a mistake. However, I do not see any evidence before me which could support an assertion of deliberate concealment of any key fact required to plead CCP’s case. Also, I see no basis to say that CCP’s claims were in any way based on a mistake. Mr Coulter did in fact not press section 32 of the Limitation Act and I think he was right not to do so.

Mr McGurk submitted that for an investigation to prevent a cause of action arising, or to cause it to be suspended, would require an implied term and there was simply no basis to imply such a term in any direct contract or also in relation to the student contract. He referred to the well-known principles on which the Court makes implications; see, for example, Cine UK Ltd v BNY Mellon (International) Ltd [2022] EWCA Civ 1021, paragraphs 55 and 137 to 140; and in particular that such an implication (a) must be of a term which would be fair and reasonable And (b) would require either obviousness or a necessity for it to be made in order for there to be business efficacy And (c) the implication must not be inconsistent with the underlying contract or statutory scheme. Mr McGurk also submitted that where Parliament wishes to create suspensions of limitation periods during investigations in the context of a statutory scheme, Parliament tends to use an express wording to such effect, as, for example, appears in section 47F in paragraph 21 of Schedule 8A to the Competition Act 1998 (although the relevant amendment to that Act postdated the statutory provisions with which I am concerned).

In my judgment, this point also leads me to the conclusion that it has been shown that CCP has no real prospects of success because, in my view, the original claim was clearly brought out of time and, accordingly, would be limitation barred. It seems to me that CCP has no real prospects of succeeding in showing that it was brought in time and that there is no compelling reason for a trial. It may also render the claim as being an abuse, but I would not seek to strike out separately on this ground where reverse summary judgment seems to me to be more appropriate.

I so conclude for the following reasons. Firstly, I have not seen any material, and have not been taken to any provision of the Regulations or the statute, which would confer any power on the Secretary of State not to make payments in relation to tuition fees just because the Secretary of State was conducting an investigation where the outcome of the investigation could demonstrate that the Secretary of State would not be bound to pay but where, in fact, that has not been the outcome.

Secondly, it seems to me that that would require an implication into the statutory scheme, which would be contrary to its expressed purpose of funding the students’ liabilities for tuition fees to their course providers; here, CCP. It seems to me that there are no grounds for such an implication. Firstly, because it does not seem to me that it is even fair and reasonable to make such an implication; if the Secretary of State has no actual right to resist payment, it does not seem to me that it is fair to the student, or to CCP, for the Secretary of State not to pay on time just because the Secretary of State thinks, reasonably, they might have a right to resist payment. It would leave the student in the position that they could be sued by CCP in the meantime; and, if CCP did have a direct contract with the Secretary of State, it would leave CCP out of pocket and with its business model disrupted without any actual justification and without any potential for CCP to be compensated, even by a payment of interest. However, secondly, it seems to me that it simply cannot be demonstrated that such a term would be necessary for business efficacy or obvious. If the Secretary of State’s worries are well-founded then the Secretary of State can refuse to pay because the Secretary of State is not, and will not, be liable to make payment. If the Secretary of State’s concerns are not well-founded then the Secretary of State should pay.

Thirdly, although this is merely a further consequence of what I have already said; it seems to me that such an implication would cut across the statutory scheme for the reasons which I have given.

There is, fourthly, the Competition Act analogy point to the effect that Parliament will adopt a practice of imposing a limitation suspension where it considers that to be appropriate, and which is a factor to bear in mind as to whether or not an implication can be made where there is silence. However, it seems to me that I do not have to rely on that point, but that the case for implication will clearly fail for the reasons I have already given.

I do note, and have considered, Mr Coulter’s points with regards to the contents of Mr Williams’ witness statement of 3 May 2021. However, firstly, it seems to me that Mr Williams’ reference to delegated powers is referring here to the Student Loans Company’s powers which have been delegated to it by the Secretary of State. It does not define what power is meant. It seems to me that the natural construction of the witness statement is that it is referring to the Student Loan Company’s power to administratively prevent the payment being made, since the Student Loan Company is the entity that enters into the student contract and operates it as delegee of the Secretary of State rather than some statutory power to refuse to make the payment altogether. Secondly, in any event, the witness statement does not identify the relevant power and, even more importantly, it does not suggest that exercising it will have any effect in limitation law. Thirdly, the question before me is one of law, whatever Mr Williams and the Secretary of State may have thought. Fourthly, in any event, firstly, that witness statement was only in relation to 115 students whose claims were altogether refused and therefore does not seem to me to be relevant to this particular claim. Secondly, the witness statement refers to the investigation process being concluded in 2014, which is more than six years prior to the issue of this claim form. Therefore, any suspension to which that witness statement referred, seems to me to be irrelevant; it is not about the matters investigated in 2015 and perhaps also in 2016.

I do, however, also note and have considered that, during the August 2022 hearing, Mr McGurk accepted that there would be some sort of ability of the Secretary of State to withhold payments while carrying out a reasonable investigation on the basis of some sort of application of public law. He also accepted at that point that that would lead to an implied provision in any contract which might exist to suspend payment during the currency of such circumstances. When Mr Coulter sought to take advantage of this to say that it would lead to a suspension of limitation periods, Mr McGurk resiled and said that there would be no implied contractual provision, although I am unsure as to what his position would be as to the situation in public law. However, he did make clear that the Secretary of State’s case was that any such suspension would not have effect to suspend a limitation period.

For the reasons I have already given, I have considerable doubts whether the Secretary of State would have any right to suspend payments in public law (and so as to be able to resist a judicial review in the event of non-payment) and would be inclined to find that such was not the position should I have to do so in the light of my analysis of the statutory scheme and my reasoning above. I would rather see such public law right (if it existed) only as a freestanding basis for resisting judicial review, and I refer to this further below. However, while I have borne this aspect in mind, a more important question which I have to consider is whether the Court should imply into the student contract itself a contractual term for a suspension of an obligation to pay during the course of a reasonable investigation so as to affect the operation of the Limitation Act 1980, and which, for the reasons given above, I do not think that I should do. I do not see that whatever might be the position in public law should affect my conclusion as to contractual limitation with regard to the enforcement of the student contract against the Defendant at contractual common-law by ordinary CPR Part 7 Claim.

It seems to me also that there is no basis to imply any term into any direct contract that might exist between CCP and the Secretary of State to that effect i.e., that where the Secretary of State is acting reasonably in investigating allegations and decides to suspend making payments during that period, notwithstanding the allegations are actually ill-founded or otherwise the situation is not actually such as to justify non-payment, any cause of action either does not come into existence or has its limitation suspended. That is in particular for the following reasons. Firstly, I do not see such a term as being fair and reasonable for the same reasons as I gave above with regards to the statutory scheme and the student contract.

Secondly, in any event I do not see it as either necessary or obvious, again for the reasons given above. The Secretary of State can take the risk of not paying, and seek to defend any claim which might be brought, as in some circumstances might also the student on the basis of their asserting the truth of the allegations. However, if the Secretary of State fails to make out the truth of the allegations, I see no reason why it would be obvious or necessary to give business efficacy to the direct contract to have implied a term that the Secretary of State should have been able in the meantime to withhold the money, or to avoid paying interest or any other compensation for the delay in payment.

Thirdly, I have found above that there is no such term in the student contract. It would be odd if the situation was different as far as the student was concerned from CCP.

Fourthly, even if there was a public law power to suspend, and which I very much doubt as I have said above, it seems to me it would be purely an administrative and/or public law matter which might possibly, for example, enable the Secretary of State to resist a judicial review. However, I do not see why any such situation should invade and effect a direct contract relationship. I accept that such a contract would need to be seen within its statutory and public law context but, as I have said; firstly, I doubt that any such public law power would exist in the first place; and secondly, if it did exist, it seems to me that it would be purely administrative rather than legal and affecting the accrual or continuance of their causes of action.

Fifthly, I do also note that if the Secretary of State did not pay and a claim was brought in the County Court or the High Court, then the Court might well, if it considered the circumstances to be appropriate, decide to adjourn the resulting proceedings pending the progress and outcome of the investigation; but that does not lead to a conclusion that the proceedings would not have been properly issued, or that a limitation period would not be and have been running, it would be just simply a case management decision.

Finally, in a limitation context there is a difference between the concept of accrual of cause of action and a suspension of an obligation to pay. There are many situations where a cause of action arises and accrues for limitation purposes, but a party cannot sue until something else occurs. However, for limitation purposes, time still runs from the original accrual. For example, under section 69 of the Solicitors Act 1974, the solicitor has to deliver a bill and wait one month before an action can be brought, but that does not prevent the six-year limitation period running from when the underlying work was done; see the White Book notes 7C-105 and cases there cited. It seems to me that even if there was a suspension of the right to sue the Secretary of State through the time of a reasonable investigation, that would not prevent time running for limitation purposes. However, that is a separate point and, in any event, it does not seem to me the necessary implications exist to have the suspensory effect which Mr Coulter seeks to demonstrate in this case.

I turn to the estoppel point. Mr McGurk cited later cases to Hillingdon in the area of estoppel of convention, ABN Amro Bank NV v RSA Insurance and Ors. [2021] EWCA Civ 1789 and Tinkler v Commissioners for Her Majesty’s Revenue and Customs [2021] UKSC 39? in order to submit that the law of estoppel by convention requires some, “crossing of the line”, by a party, which is relied on by the other side to their detriment so as to make it unconscionable for the first party to take a point, here limitation. The question of what amounts to such a, “crossing of the line”, or other relevant conduct can be difficult and fact specific, but I do not see that that matters here because of a number of overriding points.

Firstly, the Secretary of State never communicated anything about limitation; all the Secretary of State said was that they were not paying while they were investigating. There seems to me to be no basis for any contention that in some way there was a “crossing of the line” upon which the Claimant could have properly relied so as to give rise to any estoppel.

Secondly, and perhaps even more importantly, the Secretary of State finished the investigations in 2016 and made clear, from at least 2017 onwards, that the Secretary of State was not paying any more money; thus, CCP had plenty of time after 2017, including in 2019, to bring a claim, or, at the end of 2019, and perhaps even in early 2020, to bring a counterclaim in the 2019 claim (which under section 35 of the Limitation Act 1980 would have related back to the 2019 issue date of the 2019 claim; it being a first counterclaim rather than a new claim). However, CCP did not do any of these things. I do not see there as being any scope for any contention of detrimental reliance here, even if there had been a conventional representation contrary to my earlier expressed view. It seems to me that the situation is the same as was set out in paragraph 64 in Hillingdon.

I further think that the estoppel point fails in any event because I cannot see anything unconscionable in the Secretary of State taking the limitation point. CCP was not lulled into not suing because of something which happened in the limitation period which meant that CCP had engaged in that thing and allowed limitation to pass. On the facts before me, it seems that CCP simply decided not to bring its claim for years after the investigation ended and after the Secretary of State had made their position clear; that is to say CCP may have misunderstood the law as to limitation, but that is not the result of anything that the Secretary of State has said or done, or did.

For all those reasons, it seems to me that the claim, even the direct contract claim as contained in the existing particulars of claim, was issued outside the limitation period; it is clearly limitation barred and I would grant reverse summary judgment on that basis also.

I turn next to the proposed amendment. That proceeds on the basis, firstly, that there was a contract, being a student contract between the student and the Secretary of State for the Secretary of State to pay the amount of the tuition fees to the course provider; that is to say CCP. Secondly, that CCP is entitled to enforce the Secretary of State’s obligations to pay CCP contained in the student contract under the 1999 Act.

Section 1 of the 1999 Act into this judgment reads as follows:

Section 2 of the 1999 Act reads as follows:

It is common ground that the student contract neither includes nor excludes the 1999 Act expressly.

The parties cited to me, originally, Dolphin Maritime & Aviation Services Ltd v Sveriges [2009] 1 CLC 460. This decision arose from a situation where a ship owner in a club was pursued by insurers of cargo owners who had suffered losses due to a collision said to be the fault of the ship. Insurers instructed agents who negotiated a settlement contract for the club to pay the insurers by paying sums to the agents. The club and the insurers then agreed for the payment to be made direct to the insurers, but the agents, who as a result lost access to the money from which they wished to take their fees, although they could have sued the insurers for their fees, for jurisdictional reasons preferred and sought to sue the club in this jurisdiction.

One of the agents’ arguments was that the 1999 Act enabled them to sue for breach of the provision in the contract between the insurers and the club that the money should be paid to the agents. Christopher Clarke J, as he then was, considered first whether the agents, Dolphin, could satisfy section 1(1)(b), that is to say whether the contract purported to confer a benefit on Dolphin; and secondly, whether it appeared in any event that section 1(2) applied, that is to say whether the parties did not intend the relevant term to be enforceable by Dolphin.

Paragraphs 66 to 84 of Christopher Clarke J’s judgment read as follows:

After reserving judgment in this case, judgment was delivered by the Court of Appeal in Secretary of State for the Home Department v Cox [2023] EWCA Civ 551. As I have said above, I therefore permitted further oral submissions with respect to that judgment and its consequential effect on the parties’ contentions before me. In that case, government employees were held to have entered into contracts with their government departments which provided that they could opt to have elements of their salaries paid directly to their trade unions or others; in the case of the trade unions, in order to meet the employees’ own union subscriptions. The question arose as to whether the trade unions who were not party to those contracts of employment, although they did have other non-binding agreements made directly between them and the government departments, could enforce the provisions contained in the employees’ contracts of employment under the 1999 Act. In the majority of the Court of Appeal were Lewis LJ, and Underhill LJ; Stuart-Smith LJ, dissenting on the facts.

In his judgment, Lewis LJ, firstly considered counsel’s essential submissions in paragraphs 66 to 67, which I read into this judgment as follows:

He started his discussion of the law in paragraph 68:

He then cited section one of the 1999 Act and referred to the Law Commission report which gave rise to it. He then set out his general analysis in paragraphs 75 to 77 of the judgment:

He then referred to authority on the approach of construing contracts and arriving at the meaning of contracts in paragraphs 78 to 80 of his judgment:

Stuart-Smith LJ, dissented on the facts but not on the law; with regards to the law, he referred to that in paragraphs 100 to 101 of that judgment:

He then referred to the question of whether the contract before the Court of Appeal, “purports to confer a benefit”, on the trade union in paragraph 105 of that judgment:

He then explained why he disagreed with the majority’s conclusion that the parties to that contract did not intend the trade union to be able to enforce it.

Underhill LJ, agreed with Lewis LJ, both as to law and factual application. On law, in addition to what I have already cited in paragraphs 118 and 119, he said in paragraph 117:

He expressly agreed with paragraphs 83 to 87 of Lewis LJ’s judgment in paragraph 121 of his judgment.

I consider that I can extract the following propositions of law from Cox and Dolphin:

Mr McGurk submitted that CCP failed on both aspects of the two-limb test. In relation to section 1(1)(b), he submitted that the student contract was essentially the same as the contract in Dolphin and, firstly, was a mere method of payment of the loan monies to the student by paying them to CCP. Secondly, this was no different from a customer/bank situation or the principal/agent situation envisaged in paragraphs 68(ii) and 76 of the Dolphin judgment, or the situation of a beneficiary/trustee. Thirdly, this was especially so as the real beneficiary of the payment would be the student, whose obligation to CCP would be discharged by the payment to CCP, and thus it was the student on whose behalf the payment was being made, being similar to that situation contemplated in paragraph 67 of the Dolphin judgment. Fourthly, that the benefit to CCP would be merely an incidental one, as envisaged by paragraph 68 of the Dolphin judgment. Mr McGurk submitted that the benefit of the contract is all to the student, not CCP, and therefore that the contract did not purport to confer a benefit on CCP.

As to the second limb, Mr McGurk submitted, with regards to section 1(2), that it does appear that the student and the Secretary of State, being the parties to the student contract, did not intend the relevant term to be enforceable by CCP. Mr McGurk submitted, firstly, that there was no question of payment of the fees being made to the student and that this was analogous to paragraph 79 of Dolphin, although Mr McGurk did not canvass the situation that the student might pay fees from their own monies to CCP and thereafter seek reimbursement of them from the Secretary of State. Secondly, Mr McGurk did submit that the student might well wish to vary the student contract or prevent the Secretary of State paying CCP, whereas, if the Secretary of State did pay CCP, the student would find themselves liable to the Secretary of State, a liability which the student would wish to avoid. Thirdly, Mr McGurk did submit that the scheme of the Regulations was that the contract would be between, and thus only enforceable by, the student and the Secretary of State, especially as there was a further contract between the student and CCP. Fourthly, Mr McGurk relied on the fact that he said that the Secretary of State plainly did not intend to incur liability to the course provider, here CCP, because, if the Secretary of State did had so wished, the Secretary of State would have caused there to be created something similar to the SFA/EFA contracts.

Mr Coulter submitted, firstly, that this was a scheme and a contract where the aim was to pay CCP the tuition fees for CCP’s course and therefore it was all about conferring a benefit on CCP. Secondly, the situation was thus wholly different from Dolphin where the relevant provisions were wholly mechanistic and any rights of Dolphin were simply incidental to the settlement of a claim between the club and the insurers. Mr Coulter submitted that CCP’s entitlement was core to the underlying contract. Thirdly, Mr Coulter submitted that a student would have every desire that CCP would be able to enforce the student contract term against the Secretary of State as that would prevent the situation of CCP suing the student and the student having to join the Secretary of State into those proceedings. Mr Coulter referred to the fact that Mr Omar, a student, had made clear in his witness statement that all he would have wanted would have been for CCP to be able to pursue the Secretary of State and effectively leave Mr Omar out of it and any litigation. Fourthly, Mr Coulter submitted that it is inconceivable that the Secretary of State would ever pay any money to the student or wish to do so, and especially where Regulation 113 states that the payments must be made to the course provider. He therefore submitted that the contract does purport to confer a benefit on CCP and that there is insufficient to demonstrate that it was not intended that CCP could not enforce the term.

Although the question before me is simply whether the amendment has real prospects of success and there is no need on CCP’s part to show any more than that, I do have the full documentary material before me on what is a question of pure construction and law. No-one has identified any question of disputed fact with regards to this, subject to one point to which I will come. The matter is of some general importance as it deals with the scenario of where the Secretary of State has a dispute with a course provider and as to whether or not the course provider can sue the Secretary of State direct in relation to the tuition fees or whether the provider has to sue the student and the student sue the Secretary of State. It is also important to the question as to whether the course provider can claim damages against the Secretary of State; as if no obligation is owed which the course provider can enforce, there is no situation at first sight whereby the course provider can claim damages for any loss which may be suffered by the course provider. I also bear in mind that the course provider’s rights against the student will be in the course provider-student contract and that contract may or may not contain similar or very different terms to the student contract between the student and the Secretary of State.

I have, with some hesitation, concluded that I should resolve this issue in favour of the Secretary of State on the second but not the first of the 1999 Act limbs, and as a result hold that CCP has no real prospects of success and refuse permission to amend on this ground. My central reasons are as follows.

I deal first with section 1(1)(b) and whether the student contract purports to confer a benefit on CCP. Here, I face a major difficulty because I see Dolphin and Cox as being in some conflict with each other. The conflict arises from the fact that Dolphin contains a detailed analysis of the circumstances in which a contract provides for money to be paid to a third party but where, in that judgment, the contract is said not to, “purport to confer a benefit”, for section 1(1)(b) purposes on the third party. However, the Dolphin decision is not mentioned and does not appear to be cited in the Cox decision, where it appears to have been common ground that the contract enabling employees to opt to have their union subscriptions paid by deduction from their wages, and consequent payment direct to the union, was such as to, “purport to confer a benefit on the union”, even though it was simply a mechanism of payment for the benefit of the employee of part of the employee’s wages. I have concerns as to what extent the Court of Appeal’s judgment is simply based on a concession, and I therefore have decided to analyse these arguments, firstly, simply in Dolphin terms, ignoring Cox, and then, secondly, to consider whether I have come to the same or a different conclusion having taken into account what is said in Cox.

Applying therefore, firstly, the pure Dolphin analysis, it seems to me that the section 1(1)(b) test is not satisfied and that the student contract would not purport to confer a benefit on CCP within the meaning of the words used in section 1(1)(b) of the 1999 Act. That is for the following reasons; firstly, at first sight, the statutory scheme and the basis of the student contract is to confer a benefit on the student of enabling the student to discharge their tuition fees obligation to the course provider. The student has a statutory entitlement to be benefitted by the state in that way, and it is only the student who can apply for that benefit.

Secondly, the statutory scheme works by the student contracting with the Secretary of State, not by the course provider contracting with the Secretary of State, even though the scheme provides for payment to be made to the course provider. That does not appear at first sight to be a situation of a statutory scheme or contract to confer a benefit on the course provider.

Thirdly, this is not a situation of a contract, or a term of a contract, between A and B which provides for B to do something which only benefits another person, C, without benefitting A. The paradigm type of contract within the 1999 Act is where A wishes to make a gift to C and pays B to actually effect the provision of the gift e.g. by making a monetary payment of the amount of the gift or by supplying goods or by other some means. However, here the student is contracting with the Secretary of State for the Secretary of State to pay the course provider not as a matter of gift or to otherwise benefit the course provider but because that will discharge the student’s obligation to the course provider and benefit the student.

Fourthly, I do not see that much difference between this scenario and that postulated in paragraph 68(ii) of Dolphin, where B is overdrawn at C’s bank. There, the contract to make the payment will both result in a payment to C, but also to B’s obligation to C being wholly or partly discharged. Even Dolphin’s counsel seems to have accepted that such a contract would not confer a section 1(1)(b) benefit on C, and Christopher Clarke J saw that as being clear. That is not withstanding that a bank may very much wish for its overdrawn accounts to be liquidated by repayment. That situation seems somewhat analogous to the situation before me.

Fifthly, it does seem to me that paragraph 75 of Dolphin is directly in point; the beneficiary here is the student on whose behalf the payment to the course provider is made and received, and not the course provider.

Sixthly, it does seem to me that paragraph 76 of Dolphin is still in point, notwithstanding that it is part of the scheme and contract that the course provider will keep the money paid by the Secretary of State. It is of course not certain that that would be the case as the student may have paid CCP money in advance of the Secretary of State’s payments and where CCP would then have to reimburse such money. However, in any event, the real beneficiary is still the student and not the course provider.

Seventhly, it does seem to me that the provision to pay CCP is simply mechanistic and designed not to benefit CCP but to protect the Secretary of State from the money going into the student’s pocket and being dissipated. There is no suggestion in the scheme that it is to protect the course provider; it may be of commercial comfort to the course provider, but that is a different matter and a similar situation did not lead to the conclusion that the 1999 Act would apply in Dolphin.

I see those points as outweighing those advanced by Mr Coulter on this aspect. This is notwithstanding that I do see Dolphin as being distinguishable on its facts especially as in that situation Dolphin did have a much more incidental and mechanistic role than the course provider has in the situation before me. However, the situation here is still that the scheme is such that the true beneficiary is the student. It might be different if the student had no obligation to pay the course provider, but that is not the structure of the scheme and the student contract. I do also accept that usually the student would like the course provider to be paid, but the same was the case in the Dolphin scenario (in that usually the club would like the agent, to whom they owe remuneration, to be paid#0.

Therefore, if I was considering Dolphin alone, it seems to me that I would hold that section 1(1)(b) was not satisfied. However, I do need to consider the Cox judgment, where there was a contractual provision to have money due to A, the employee, paid to B, the trade union, to discharge A’s obligation to pay union dues owed to B. That was conceded to “purport to confer a benefit”, on the trade union; see Cox at paragraphs 83, 101 and 105. However, the Court of Appeal both accepted the concession and, it seems to me, can be said to have stated that it was rightly made. I refer to paragraphs 83 and 105 of the judgment, even though paragraph 83, when considering the point, opens with the words, “it may well be”.

Mr McGurk says that that is not sufficient to cause me to depart from my analysis based on Dolphin. However I think it is. The Court of Appeal seems to have thought it sufficient to satisfy section 1(1)(b) for there to be a factual benefit; in that case, and in this one, receipt of money by B to discharge a debt owed to B by A. That is factually a benefit to B; and it is sufficient, it seems to me, according to the Court of Appeal for the contract to, “purport to confer a benefit”, on B. The Court of Appeal did not merely accept the concession but, at least at one point, stated that it was both a proper concession and that they assented to it.

I am concerned that Dolphin does not appear to have been cited to the Court of Appeal, or taken into account in relation to that concession. However, it seems to me that the situation in Cox was effectively one of a contract made between two persons requiring payment to be made by one to a third party in order to discharge their debt to that third party; and that is the situation which is before me. The Court of Appeal appears to have been treating section 1(1)(b) as raising a factual question, i.e. “Will entity B, here CCP, be benefitted by the contract?”; and there, and here, it is clear that that would be the case as a debt would be discharged which is to the benefit of the creditor who is no longer faced with a situation of money outstanding.

Mr McGurk says that there are further reasons as to why section 1(1)(b) is not satisfied. Firstly, because the student contract, he says, does not even purport to factually benefit CCP, and that CCP is merely referred to in a box in the completed application form. However, I disagree. The contract terms of the student contract make quite clear, as I have already cited, both in paragraph “a” of the loan contact conditions referring to the attached guide, and in paragraph “b” of the loan contract conditions referring to the Regulations, that the payment is to be made to the course provider; and, in construing the student contract, it seems to me that the application form would form an obvious part of the factual matrix and would reveal the identity of course provider, being CCP.

Secondly, Mr McGurk submitted that Cox was distinguishable because there, there was a separate non-enforceable collective agreement between the trade union and the government which said that the relevant deduction provisions in the contract of employment were a “benefit”. However, I do not see that the Court of Appeal’s reasoning was in any way based on that, or should have been based on that. This is a pure question of law as to what is a “benefit” and what is the purported “conferring of a benefit” for the purposes of section 1(1)(b); and whether the parties considered it to be a benefit, or a conferring of a benefit, or not, seems to me to not be the point.

In the circumstances it seems to me that the highly persuasive effect of the Court of Appeal’s judgment is such that I ought to follow it rather than my consideration of the Dolphin judgment; and I hold section 1(1)(b), being the first limb test, to be satisfied in this case.

However, I then part on to the second-limb section 1(2) test and hurdle, and it seems to me that it does appear that the relevant terms were not intended to be enforceable by CCP as the course provider. I come to this conclusion for the following reasons.

Christopher Clarke J approached this question by asking what, realistically, from an objective perspective, would be in the mind of the contracting parties as to whether or not Dolphin, the non-contracting party, could enforce, and, also by extension, as to whether or not Dolphin, the non-contracting party, could veto any variation of the contract between the contracting parties. I note that the contracting parties in the situation before me are the Secretary of State and so such a variation would include the student and the Secretary of State making an agreement that the Secretary of State simply did not pay out the tuition fees, or perhaps even switched the course provider from CCP to a different academic institution should the student decide to change course providers.

Christopher Clarke J’s approach seems to me to be, effectively, the same approach as in Cox, although Cox did not consider the variation aspect because it does not seem to have been raised in any way in that case. However, I recognise that I must apply the full contractual analysis as set out in Cox.

Cox does make clear that, although the rebuttable presumption exists, it is a weak one and there is not any considerable burden on the Secretary of State to show that, “it appears”, that the term was not intended to be enforceable by the course provider.

I have, therefore, carried out the approach set out in Cox, considering the alternative meanings of the contract being as to it being, or not being, intended that CCP could enforce the particular terms. Carrying out that analysis I bear in mind, in particular, the following.

Firstly, the words of the student contract go no further than providing for payment to CCP as a mechanism. There is nothing, it seems to me, in the contract to show that it was intended that CCP would be able to enforce.

Secondly, it is true, as Mr Coulter has stated, that there are no words of exclusion of the 1999 Act in the student contract. Mr Coulter relies on what was said by Stuart-Smith, LJ, in paragraph 103 of Cox to say that that is an important point and also that it is relevant that the government is an entity which would be regarded as having been able to take, and have taken, legal advice; and where lawyers, if they wished to exclude the 1999 Act, would propose that a term to that effect would be included. However, that judgment is a dissenting judgment and I bear in mind that in paragraph 104, Stuart-Smith LJ also recognised that in the Cox case there was no wording specifically including the 1999 Act and seems to have treated that as being of some relevance in the other direction.

Thirdly, the nature of the contract, which was said by Lewis LJ, to be important, is that this term which the Claimant seeks to enforce is a mere mechanism for the Secretary of State to provide a benefit to the student. This is not a pure benefitting of a beneficiary case as mentioned by Lewis LJ, in paragraph 83 of Cox, and which he seemed to regard, and I regard, as being more obviously attracting the intention that the beneficiary should be able to enforce. Rather, it is a facility and mechanism case closer to the Cox case and to the remarks of Lewis LJ at the end of paragraph 83 and in paragraph 85 of Cox. It is true that the student has no choice with regards to what happens, unless of course the student decides either to seek to renegotiate the student contract or, alternatively, simply not to attend the college. However, it does seem to me that this contract, being the student contract, is all about the provision of a benefit to the student rather than a benefit to the college. I see, in consequence, the nature of the contract as not being one which at all naturally suggests that it was to be enforceable by CCP, and it seems to me that that conclusion is entirely in accordance with what Lewis LJ, says in paragraphs 83 and 88 of Cox.

It also seems to me that this is reinforced by an essential nature of the contract being to create an obligation on the student; that is to say the loan from the Secretary of State creating various loan, debt and related obligations imposed on the student. There was no equivalent to that in the Cox situation. Even though the student’s obligation to CCP is being discharged by the operation of the relevant student contract terms, they have the consequence that the student is thereby made liable to the Secretary of State. It seems to me, at first sight, that it would be commercially unlikely that the student and the Secretary of State could be intending that CCP could, by deciding to enforce the student contract, foist that loan liability onto the student.

Further, in relation to the nature of the contract, it seems to me that the statutory scheme, and the student contract which forms part of it, exist to enable the student to exercise their statutory right to have their tuition fees obligations financed by the Secretary of State; it is not to enable CCP to be paid, even if the fact of payment would confer a benefit on CCP.

Furthermore, I cannot see how the scheme and student contract could have been intended to give CCP, as course provider, a damages remedy for breach of the contract if the Secretary of State did not pay. It seems to me that has nothing to do with the underlying statutory scheme at all.

In relation to my consideration of the commercial likelihood that the parties to the student contract intended that CCP could enforce it, I do note that the only student from whom any evidence has been sought has said that it would have been far from their mind and intention that they would have been wished to have been dragged into litigation regarding whether or not the tuition fees were payable by the Secretary of State where the dispute is really between the Secretary of State and the course provider. It seems to me that there is some force in Mr Coulter’s submission that that would be regarded by the contracting parties as being objectively the case.

On the other hand, it also seems to me objectively that the parties to the student contract would not wish CCP, as the course provider, to have control of whether the tuition fees were to be paid by the Secretary of State whether or not the student objected to that occurring with resultant loan obligations being incurred by the student to the Secretary of State. I can well think of situations where a student might well wish to prevent the Secretary of State making payments and thus triggering the student’s own obligations to the Secretary of State; for example, the student might complain about CCP’s conduct with regards to the registering of the student for the DET course. The students did not actually make any such complaints, but they could have done. A student might have complained about the quality of CCP’s teaching or with regards to such matters as to lecturers and teachers having gone on strike with the result that teaching became limited. A student might complain about a disciplinary process or various forms of staff misconduct or failure to police other students, as often happens in the tertiary academic context. A student might just simply wish to make a political point for some reason or another and say that CCP should not be paid money.

All these matters are common occurrences in tertiary educational life and it seems to me are sufficiently common for me to be able to take judicial notice of them. In any of those circumstances, it seems to me that the Secretary of State and the student would have a common position that the last thing that the student would want would be for the Secretary of State to have to pay, and as a result pay, the course provider so that the student, instead of resisting the course provider’s claims, has to pay the Secretary of State. Further, even if the student could say that the Secretary of State might also want to take some of these points as amounting to matters which would entitle the Secretary of State not to pay, that might very well not be the position. It seems to me that the Secretary of State could very well objectively wish to take the same view on the basis that the Secretary of State would not wish to be dragged into a dispute between the student and CCP.

It seems to me that in terms of inferring the objective common intention of the parties to the student contract, these matters all lean to those parties having a common intention that CCP would not be able to enforce the contract. It seems to me, further, that that point is all the more strong in circumstances where the student and the Secretary of State might in the future wish to negotiate a variation of the student contract. One possible practical example I have already given, is where the student wishes not to stay at CCP, but rather, on grounds possibly of alleged poor teaching or one or more of the other matters I have mentioned, the student wishes to go to another course provider and to take the student contract with them. Christopher Clarke J rhetorically asked in Dolphin as to whether the contracting parties in such a case would wish the third party, under the 1999 Act, to be able to veto such a variation. It seems to me that the same question needs to be asked in this case and that the answer is clearly that the student and the Secretary of State would not intend such to be the case.

It seems to me that all these points outweigh those advanced by Mr Coulter in favour of his construction of the contractual intention. It seems to me his strongest point was the objective argument that the reasonable student would not wish to be involved in any litigation to resolve the nature of the disputes which arose in this case, and would wish any such litigation to take place between CCP and the Secretary of State. However, the student will always be exposed to the possibility that the course provider, here CCP, would prefer to sue the student under the course provider-student contract between the student and CCP, rather than to pursue the Secretary of State. In any event, I see the point as outweighed by reason of the other matters.

I add that Mr McGurk also relied on the fact of the existence of the SFA/EFA contracts to say that it was clear that the Secretary of State would not have subjectively intended that CCP could enforce the student contract; but rather, if the Secretary of State was to enter into any enforceable obligation with the course provider, the Secretary of State would only do so through a formal written contract of the nature of the SFA/EFA contracts. I, however, do not see that as being a point of any forceful relevance. There is no evidence before me to the effect that the student, or the hypothetical student, would know of the existence of the SFA/EFA contracts, or any reason as to why such a student should do so. Therefore, they would not form part of the relevant factual matrix. It seems to me that Mr McGurk was effectively trying to introduce what is clearly irrelevant to this process, namely a subjective consideration of one side not revealed to the other contracting party. Furthermore, it seems to me that that sort of point would introduce a set of factual questions which might well be the subject matter of disputed evidence and which factual questions could not be resolved in the context of what is, effectively, a summary process.

However, for the reasons which I have given, I do not see any real prospect of success for CCP on the 1999 Act argument and I refuse permission to amend on that basis.

However, I would not refuse permission on the grounds advanced by Mr McGurk that, even if CCP could enforce the student contract, such claim would fail because of the terms of the 5 June 2014 letter, or CCP’s conduct, or the absence of any student contract for any of the relevant students, apart from those within the £12,000 odd now accepted group. For the same reasons as stated above, I see real prospects of success for CCP on those various aspects.

However, I would refuse permission for limitation reasons, but only for one of the two sets of reasons advanced by Mr McGurk. That set of reasons is because the limitation position seems to me to be indistinguishable from the direct contract scenario; the relevant student contract causes of action accrued more than six years before 22 October 2021, and therefore any claims are limitation barred because the suspension argument and the estoppel argument must fail for the same reasons as I have given above. Therefore, even if amendment was allowed, and even with the relation back to 22 October 2021 for the bringing of the claim, which would be affected by section 35 of the Limitation Act 1980, the claims would still be limitation barred and still have no real prospects of success.

Mr McGurk also submitted that I would have no jurisdiction to permit amendment, even if the suspension or estoppel arguments were good, as then the limitation period would have expired after 22 October 2021 but before today. It is common ground that these are new claims within the meaning of section 35 of the Limitation Act 1980 and CPR 17.4, and therefore I would have no jurisdiction to permit amendment on this set of hypotheses unless the new claims arose out of the same or substantially similar facts as are already in issue on the claim.

Mr Coulter relied on both the existing particulars of claim and Goode v Martin [2002] 1 WLR 1828 to say that the student contract and its terms are matters in issue, both on the particulars of claim and in the Secretary of State’s arguments, and that all he is seeking to do is to say that, if the Secretary of State is saying that they are the actual contract and relevant terms, CCP can enforce them in law, and therefore that contention simply arises out of the same or substantially similar facts as already are in issue. Mr McGurk says that is not so, he says that this is the introduction of a new contract and new terms.

I conclude that this proposed claim would arise out of the same or substantially similar facts to those already in issue. Firstly, the existing particulars of claim do refer to the Secretary of State’s alleged, “promise to pay”, and the only promise to which reference is there being made is that contained the student contract; and CCP is simply wishing to amend to assert that, in law, the 1999 Act enables that promise to be enforced by CCP. Secondly, and more importantly, the Secretary of State’s case is that (a) there is no direct contract between the Secretary of State and CCP but only the student contract between the student and the Secretary of State and (b) there is no direct contract because that student contract exists. It seems to me that this is simply analogous to the Goode v Martin [2001] EWCA Civ 1899situation and decision. CCP is simply taking the Secretary of State’s defence and saying that, if that defence is right, CCP can use it to succeed by an argument of law under the 1999 Act, and can enforce the student contract with the same result as that for which CCP was previously contending under the direct contract.

While it can be said that the terms of the student contract are, in one sense, not in issue within the direct contract claim; firstly, I disagree and think that they are; and, secondly, the student contract and its terms are precisely matters which are raised by the Secretary of State to (successfully – see above) dispute the existing direct contract claim.

Therefore, if I had thought that any of the suspension or estoppel or other limitation arguments advanced by Mr Coulter had real prospects of success, I would not have refused permission to amend on this limitation ground. However, as I do not think that they would, I would have refused permission to amend to introduce the student contract claim on limitation as well as the 1999 Act grounds.

I now come on to the Secretary of State’s third argument that, whatever my conclusions on the direct contract or the student contract aspects, I should strike out this Claim out as an abuse of process because the claims which the Claimant is seeking to advance in this Claim were not permitted to be pursued in the 2019 claim by Master Cook.

Mr McGurk’s argument is effectively that, firstly, this claim arises out of the same circumstances as those in the 2019 claim and should have been brought by counterclaim in it. Secondly, that CCP failed to bring a counterclaim properly and, as a result, CCP’s attempt to do so was struck out and refused. Thirdly, that therefore it is an abuse for the claim to be brought now; and so, fourthly, that the Court should not permit it to be brought.

Mr McGurk relied on various authorities; firstly, Aldi Stores v WSP Group plc. [2008] 1 WLR 748 where at paragraphs 5 and 6 it was said:

Mr McGurk says that that shows that if a party could have raised a claim in previous proceedings, that may well be sufficiently abusive for the party to raise the claim in subsequent proceedings to justify a strike out following a broad merits base test being applied.

Next, Mr McGurk referred me to Arbuthnot Latham Bank Ltd v Trafalgar Holdings Ltd [1998] 1 WLR 1426 at 1432G:

Mr McGurk says that this is exactly what has happened in this case with regards to the counterclaim and the 2019 claim being struck out, and therefore for it to be an abuse for the claim to be sought to be (re)raised in this case.

Mr McGurk then referred me to Securum Finance Ltd v Ashton and Anor. [2001] Chancery 291; here, a bank had sued directors and guarantors of a loan but been struck out for delay and had brought a second claim to enforce the security grant by the guarantors over their property. The guarantors said that this was an abuse. At paragraphs 16 to 17, Chadwick LJ, rejected a Henderson v Henderson [1843-60] All ER Rep 278 argument of abuse as he held that the Henderson doctrine did not apply to creditors who sued first for payment and then second to enforce a security. In paragraph 18 Chadwick LJ said:

Mr McGurk then cited Davies v Carillion Energy Services Ltd [2017] EWHC 3206. Here, the first claim had been struck out for failure to comply with an unless order to provide particulars. The claimant brought a second claim and the defendant applied to strike out on both Henderson and abuse principles. Morris J analysed the authorities and concluded in paragraphs 52 to 55 as follows:

I note that the actual outcome in Davies was firstly, although there had been failure to comply with an unless order, that had not been a wholesale disregard so as to invoke the Arbuthnot, Securum, and also Collins v CPS Fuels Ltd [2001] EWCA Civ 1597 jurisdiction; see paragraphs 64 to 71 where it was held that the relevant failure to comply with one part of an unless order was understandable and not inexcusable.

Secondly, in all the circumstances of that case, the second action was not such an Aldi/Henderson abuse as would justify strike out on grounds of re-litigation; see paragraphs 72 to 73:

I note that Morris J here only said that the District Judge’s decision not to strike out on this ground was within a proper balancing exercise and conclusion; not that it was inevitable.

Mr McGurk submitted, firstly, that the attempted counterclaim in the 2019 claim was struck out for culpable delay and therefore so should be this claim on Arbuthnot/Securum/Collins grounds. Secondly, in any event, where the 2019 claim was litigated to a trial and conclusion, this is precisely the situation of an Aldi/Henderson abuse, justifying striking out.

Mr Coulter submitted, firstly, although Mr Pathirana, for CCP, had sought to advance the counterclaim in the 2019 claim, he could not pursue it properly due to CCP’s financial difficulties, which themselves had been caused by the Secretary of State wrongly withholding money. He accepted that CCP’s accounts showed a positive balance sheet of £150,000 in 2019, but referred to it then falling and to a bank account only having a four-figure sum of some £13,000 in about August 2020. He adduced no evidence of Mr Pathirana or other shareholder’s own resources. Secondly, he referred to the fact that Mr Pathirana and CCP had made clear their intent to bring a second claim throughout. Thirdly, he said this claim has a different subject matter from the Secretary of State’s 2019 claim, which was about the Secretary of State’s argument that a failure to register students for a DTLLS qualification meant that the Secretary of State could recover money paid.

I consider first, as did Morris J in Carillion, the Arbuthnot/Securum/Collins argument. Firstly, it does seem to me that this is a case of the first action being struck out for procedural failure. I accept that it can technically be said that a counterclaim in the 2019 claim, the first action, was never brought at all; but, on the other hand, it is an equivalent situation. CCP could have raised this claim at close to the start of those proceedings by filing a counterclaim with their defence without requiring permission to do so. However, they failed to take this course, possibly because they had no wish to pay the counterclaim fee and possibly because they did not wish to engage in the burden of a counterclaim. I have no evidence as to which was the case or whether something else was the case. CCP then included the counterclaim with the amended defence without permission, delayed in seeking permission and then had it struck out. It seems to me that, notwithstanding that the counterclaim was technically never brought at all, this is an equivalent situation to a striking out having occurred for procedural failure.

However, I, like Morris J in Carillion, do not see this as a, “wholesale”, disregard of proper procedure. As in Carillion, CCP did, firstly, seek to set out and comply with the rules, and, secondly, did set out a claim in trying to bring the matter forward and also stating their intention to do so. I can see CCP’s approach as being understandable and I do not see it as being inexcusable. I certainly do not see this as a situation of contumely; rather, it is a case where CCP had ventilated a counterclaim but had failed to advance it properly in the context of the 2019 claim, that is to say the first action being brought against CCP by the Secretary of State.

Having considered the matters all together, I would not strike out the direct claim or refuse permission for the bringing of the student contract claim on that basis.

However, like Morris J in Carillion, I now need to consider the question of the Henderson/Aldi abuse of process. The first question is whether this claim could have been brought and been sensibly dealt with in the first action; I consider the answer to that question is clearly, “Yes”. The first action and this claim do have, essentially, much of the same subject matter, being whether the Secretary of State was bound to pay the tuition fees to CCP in the 2014 to 2015 circumstances. That is what May J decided in paragraphs 61 to 63 of the May J judgment, at least as far as those students were concerned. Secondly, I accept that the 2019 claim was also about if the Secretary of State could recover from CCP payments which the Secretary of State could have refused to make, and May J did also hold that there was no basis in law for the Secretary of State to do so as there was no unjust enrichment in those circumstances and that aspect does not arise in, and is not proposed to arise in, the claims before me.

I do also accept that this claim raises various questions which did not arise in the first action, including,

However, the first action and its issues in trial did,

Firstly, as I have already said, it is plain that this claim could have been raised in the first action. Secondly, if the claim had been raised in the first action, it would have been resolved in it. Thirdly, I do not see that the first action could not have been sufficiently particularised at the start of the first action, let alone within it. I note that CCP says that much of the data is held by the Secretary of State, but CCP is really in the same situation now as then and could always have sought particulars and disclosure. It does not seem to me that the lack of data has either now prevented, or would then have prevented, CCP formulating the counterclaim, as it has similarly not prevented it formulating this claim.

Fourthly, I accept that it is true, as CCP says, that the Secretary of State has not only not paid the money claimed in this claim, but delayed until after the May J judgment in paying the £98,750 and is still, even according to the Secretary of State, at least until recently, failing to pay the further £12,000 odd. However, I do not feel that I have sufficient evidence to say that CCP’s financial situation and the absence of those monies prevented CCP advancing these claims in 2019, or for that matter at a stage very early on in 2020 when they could, it seems to me, still have been allowed to be advanced in the first action. CCP apparently had a substantial business in 2019 and substantial cash amounts in its bank account in 2019 and still in early 2020. Moreover, CCP as a limited company could look to its shareholders and sources of finance, and I have no evidence before me to suggest that they would have been unable to, and unwilling to, fund CCP. Further, Mr Pathirana did advance the prospect of precisely the present claim in the original defence. At first sight I can see no reason as to why CCP did not then advance, although it would then have had to pay for, a counterclaim.

Further, as I have said, I do not see why, if the matter had been advanced in early or mid-2020, or even at the 30 October 2020 hearing, the Court dealing with the first action would have refused permission to include the counterclaim.

I also note that Mr Pathirana accepted that CCP’s insurers had agreed to fund CCP’s defence to the first action in August 2020. While Mr Pathirana says that the insurers would also have required a 51% chance of success for a counterclaim to be advanced, there is no evidence before me of any consideration being given to this and as to any representations being made to insurers or as to their refusing any such representations. It simply seems to me that the counterclaim could, and should, have been brought in 2019 or, if not, then in 2020.

Fifthly, the effect of this claim, either the present claim or the proposed amended claim being raised in new proceedings, will result in a substantial waste of the Court’s as well as the parties’ resources, including time and costs, if it proceeds. That is because the first action trial covered much of the same factual history and consideration of the same documents, including the 5 June 2014 letter and the statute and Regulations; all of that would have to have been gone through again.

It is true that CCP will say that it will accept the May J judgment findings of fact and law, and would contend that the Secretary of State is bound by them, but, firstly, there may well be disputes as to what they are and how they apply. Secondly, there will still be significant waste by way of duplication of both reading and argument. Thirdly, there will be significant waste of preparation, including both in terms of procedural hearings themselves and for a trial. Fourthly, there will be the need for witnesses, such as Mr Pathirana and Mr Williams, to give evidence and be cross-examined all over again. In addition, I note that May J clearly rejected various evidence from Mr Pathirana in paragraphs 37 to 41 of the May, J, judgment; it seems to me the Court would be likely to be disadvantaged by not having and dealing with all of Mr Pathirana’s evidence on one occasion.

Sixthly, there is another important point, although it seems to me the aforesaid would be enough for my conclusions, being that I have a distinct concern that the first action might well have taken something of a different course if CCP’s claims of a contractual relationship which CCP could enforce against the Secretary of State had been advanced before May J to the extent which that is sought to be advanced in this claim. I can see no suggestion in the May J judgment that it was suggested to May J that such a contractual relationship existed. Rather, and although paragraph four of the defence in that action did assert that there was a contractual relationship, it seems to me that that point was ignored and that May J assumed that no such contractual relationship existed. If it had been agreed or held that such a contractual relationship did exist as between CCP and the Secretary of State, then it seems to me that would have been of advantage to the Secretary of State in the first action; as, firstly, the Secretary of State would have been able to say that the Secretary of State could pursue CCP simply for breach of contract and for repayment and without having to rely on unjust enrichment as a separate extra/quasi-contractual principle. Secondly, the Secretary of State’s unjust enrichment case would have been improved in such circumstances, at least on the aspect of injustice. Thirdly, it would have enabled the Secretary of State to better seek to refute May J’s conclusion at paragraph 66 of the May J judgment if the student was entitled to be funded by the Secretary of State. The Secretary of State could argue that in a tripartite contractual analysis, the hypothetical student could say that there was no liability to CCP where the Secretary of State was not bound to pay CCP. It would have been much more difficult for the hypothetical student to argue that proposition where the only contracts, and their enforcement, were only between the Secretary of State and the student on the one hand, and the student and CCP on the other. I accept that I have not seen the terms of the student/CCP contract which might assist with regard to these points but, on the material before me, I can see that the May J judgment might have taken a different course had these arguments of CCP having or being able to enforce a contractual relationship with the Secretary of State been advanced (and all the more so had they succeeded) in the first action.

I do accept that May J reached her decision for two reasons; the first being that the Secretary of State had not shown that there was any route in law for the Secretary of State to pursue CCP. The second being that, in any event, the Secretary of State has shown no basis of recovery from CCP even if a route in law existed. These considerations only impact the first route aspect at first sight, but even if that was right, it would still have affected the course of the trial and possibly the Secretary of State’s decision whether or not to appeal May J’s conclusion and costs. I also do consider it might even have affected the argument as to whether CCP’s breaches of the rules would have enabled the Secretary of State to recover from CCP, at least on a direct contract analysis.

Whether I am right or wrong as to this particular set of points, it simply demonstrates the importance of the need to raise all claims in one set of proceedings, even if only by way of counterclaim, so that a fair and just overall conclusion can be reached without allowing one side a potential advantage by defeating the first claim on one set of bases and then bringing a second claim which may have a different (or at least a modified) set of bases.

I have considered all those points and, even if I ignored the last set of points, it seems that they render that what is now being sought by CCP by bringing this claim an abuse which justifies strike out and refusal of permission to amend. I do not see any, and, in any event, I do not see sufficient, excusing or special circumstances to allow CCP to proceed.

This is notwithstanding that I accept that, in part, the subject matter of this claim is different from the first action and that Mr Pathirana and CCP made their intentions clear throughout, at least to the Secretary of State and Master Cook albeit perhaps not May J. However, both of those are only factors to weigh in the balance; and I have weighed them and consider that they are insufficient to lead me to any other conclusion to that which I have already expressed. It might indeed have been different if Master Cook had granted some permission to raise the counterclaim, which he was striking out, in second proceedings or said something to that effect, but I have no evidence or material to conclude that that was or would have been the case and no-one has suggested it to me.

In all the circumstances, it seems to me that the abuse question, in one sense, logically comes first, although it had been useful to go through the rest of the process in order to have the background against which to analyse it, and that in fact the appropriate order I should make is to strike out the claim and refuse permission on grounds of abuse. However, my order will provide that I would have granted reverse summary judgment against the claimant CCP and have refused permission to amend in any event for the other reasons given in this judgment.