Tai Ping Carpets UK Ltd v Arora Heathrow T5 Ltd

These proceedings were started by the claimant in the Birmingham District Registry. They concern a claim for £620,000-odd allegedly due and owing pursuant to a contract whereby the claimant was engaged by the defendant to supply and install carpet at its five star hotel at Heathrow Terminal 5. The claim is essentially a final account dispute. The claim is denied, albeit that the defendant accepts that some lesser sums are due to the claimant. There is also a counterclaim in relation to alleged defects in the carpet which is valued at just over £200,000.

The parties are agreed that the case should be transferred to the Technology and Construction Court. Indeed, it seems to me clear that these proceedings should have been started in the TCC, it having all the hallmarks of a relatively typical TCC case. However, there is now a dispute between the parties as to which TCC court this case should be transferred. The claimant, having started in Birmingham, perhaps unsurprisingly wants the matter to be transferred to the Birmingham TCC. The defendant wants the matter transferred here to London.

Unhappily, the parties have already spent £10,000 on this spat about the proper location for the case management and trial of these proceedings. Moreover, as I indicated to the parties during the course of counsel’s submissions, this is the third such location dispute with which I have dealt in recent months. Each of them has raised very similar issues. For that reason, I have decided to set out my conclusions in fuller form than might otherwise have been warranted.

The TCC is the only part of the Queen’s Bench Division of the High Court that offers a fully nationwide specialist court service. Although the High Court Judges who do TCC work are based in London, they try suitable TCC cases all over the country. Moreover, in cities like Manchester and Birmingham, there are well-established and busy TCC courts presided over by specialist senior Circuit Judges who habitually try high-value and complex TCC cases.

CPR 30.3(2) is concerned with the general matters that will be taken into account when considering an application to transfer proceedings into the TCC from a County Court and, by analogy, from the ordinary Queen’s Bench list. Collins v. Drumgold[2008] EWHC 584 (TCC) sets out in more detail the sorts of factors (such as technical complexity, financial value and convenience) to which the TCC will have regard when considering such a transfer.

In reality, however, this dispute is not concerned with a transfer into the TCC because, although the case requires to be moved from the Birmingham District Registry, the parties are agreed that a transfer to the TCC should take place. Thus, this case is solely concerned with whether the case should be case managed and tried in the London TCC or the Birmingham TCC. The decision of Ramsey J in Neath Port Talbot County Borough Council v. Currie & Brown Project Management Limited[2008] EWHC 1508 (TCC) helpfully sets out the factors to be considered on such an application. He said:

“18.

Before dealing with the applications, it is worth considering some general principles which apply to the allocation of business in the TCC. The first principle concerns transfer to and from London in the case of TCC cases. Generally, where there is a TCC judge at a Regional Centre which is convenient to the parties or which, on the balance of convenience, is the appropriate place for management and trial of the case to take place, the case should remain at that centre rather than being transferred to London. In those circumstances, cases issued at a Regional Centre will be case managed and tried by the full time or principal TCC judge or another TCC judge sitting at that centre.

19.

The London TCC judges both now and formerly in carrying out Official Referees' business, have a long tradition of travelling outside London to hear cases where the balance of convenience favours that option. When a TCC case at a Regional Centre merits case management or trial by a High Court Judge it will generally be more appropriate for a High Court judge to case manage or try that case at a Regional Centre rather than for a case to be transferred to London.

…

20.

Therefore, the question of transferring a case to London will occur only where that transfer is necessary because the balance of convenience favours the matter being dealt with in London. Of course, there will be instances, such as the present case, where the court directs that a particular hearing will take place at a different location. That, however, does not affect the principle of transfer.”

In addition, in Neath Port Talbot, Ramsey J dealt with the related question of assignment, that is to say the decision as to whether the case in question was appropriate for a senior Circuit Judge or a High Court Judge. In that case, the claim was for a sum of around £54 million on a PFI Project. It was therefore designated a High Court Judge case but Ramsey J ordered that it would remain in Bristol to be case managed in the Bristol TCC, with a High Court Judge then coming to Bristol for the trial.

Although this is the defendant’s application to transfer the case to the London TCC, the claimant takes a procedural point to the effect that the transfer application should have been made to the Birmingham District Registry. In support of that contention Miss Mirchandani relies upon CPR 23.2(1) which provides that:

“The general rule is that an application must be made to the court where the claim was started.”

She says that, because the claim was started in the Birmingham District Registry and technically is still there, this application should have been issued in the Birmingham District Registry.

It seems to me that that is incorrect because of the provisions of CPR 30.5(3) which provide that:

“An application for the transfer of proceedings to or from a specialist list must be made to a judge dealing with claims in that list.”

This is technically an application to transfer the proceedings from the QB (that is to say the Birmingham District Registry) to the specialist list (that is to say the TCC list). In those circumstances it seems to me that Mr. Stansfield is right to say that the application is properly made to a TCC judge pursuant to CPR 30.5(3). I therefore conclude that I have the necessary jurisdiction to consider this application.

In any event, in circumstances where the parties are agreed that the one place that this case will not be dealt with and tried is the Birmingham District Registry, that court cannot be the appropriate place for the decision to be made as to where it should be case managed and tried. Since the parties are agreed that it should be case managed and tried in the TCC, it must be better for a TCC Judge to decide the issue. Thus, even if there has been a procedural irregularity, it seems to me that, just as Ramsey J did in Neath Port Talbot, I should waive it so as to comply with the overriding objective. I therefore move on to deal with the substantive issue.

The claimant argues that the balance of convenience favours keeping this case in Birmingham at the Birmingham TCC. Miss Mirchandani points to a number of factors in support of that proposition, including the following:

In response, the defendant argues that the balance of convenience favours the transfer to London. Mr. Stansfield relies on a number of points in support of that proposition including the following:

It will be immediately apparent from those two lists that the vast majority of the factors relied on by each side cancel each other out. As I have indicated, that is not an uncommon situation, but it arises starkly in this case. Put shortly, it is more convenient for the claimant to have the case management and trial in Birmingham and more convenient for the defendant to have the case management and trial in London.

Although very many of the factors cancel each other out, I have concluded that the balance of convenience favours keeping this case in Birmingham. There are two particular matters to which I have had regard in arriving at that conclusion.

First, it seems to me that, in the absence of any significant factors favouring the transfer to London, I should keep this case in Birmingham because that is what the claimant has requested. After all, it is the claimant who has gone to the trouble and expense of starting these proceedings, and it is the claimant who runs the costs risk, to the extent that its claim may ultimately be unsuccessful. These are the claimant’s proceedings and the responsibility for them rests with the claimant. If, therefore, the various other competing factors broadly cancel each other out, then it seems to me that I ought to give particular weight to the claimant’s choice of location for case management and trial.

Secondly, again given the way in which the majority of factors cancel each other out in the present case, it seems to me that the court can and should have regard to the fact that inevitably, so it seems to me, proceedings which are case managed and tried in London will be more expensive than they would be if they were case managed and tried in one of the regional centres. Of course I have had regard to the defendant’s offer of a discount on its hotel rates, but that presupposes that the claimant’s witnesses will have to stay in hotels. If the case was kept in Birmingham, they would not have to stay in hotels at all.

When dealing with the question of costs, I have also had regard to the fact that this is a case where the claim is for £600,000. Although that is doubtless a large sum for the claimant, it is a comparatively modest sum by the standards of the TCC, and it will be important to ensure that the costs are kept down, having regard to the modest value of the claim. It seems to me that, if the case is kept in Birmingham, there is a greater opportunity for the judge who is case-managing it to do just that.

Although the allocation of this case to a senior Circuit Judge or a High Court Judge is not expressly raised in the documents, it seems to me that it is a matter that is of some relevance to the question of location. Of course, if a case is allocated to a High Court Judge then, even if the proceedings are case-managed outside London, the trial can be heard by a High Court Judge at the appropriate regional TCC centre: see Neath Port Talbot,

Conversely, so it seems to me, if (as I believe it to be) this is a case which is suitable to be case-managed and tried by a senior Circuit Judge then again, absent any overwhelming reason to transfer it to London, it would be sensible for the proceedings to be kept in Birmingham.

I ought also to make reference to two particular factors that were argued before me, one by each side, to which I have had regard but which do not ultimately seem to me to be of any great significance in the balancing exercise that I am obliged to undertake.

Mr. Stansfield, on behalf of the defendant, pointed out that the location of the works, namely the hotel, was closer to London than Birmingham. He is certainly right that there will be cases where that can be an important factor. However, in the present case, I am bound to say that I doubt whether it is a factor of any great significance. This is largely a final account dispute and it would be most unlikely that the judge will have to visit the hotel and look at the carpets in order to resolve any aspect of that dispute. In any event, even if a site visit was necessary during the trial, it could be arranged just as easily from Birmingham as from London, given that Heathrow Terminal 5 is just off the M25. And although Mr. Stansfield referred to the probability that experts would be required to visit the hotel, that does not affect the choice of the appropriate location for case management and trial.

On behalf of the claimant, Miss Mirchandani referred to the fact that the claimant is a relatively small company. That is right up to a point: it has a turnover of about £3 million. But, as Mr. Stansfield pointed out, it is part of a much larger international parent company. In those circumstances it seems to me that the size of the claimant is not of itself an important factor. In addition, I have already taken into account the point about costs and the likely higher costs in London than in Birmingham.

Accordingly, for the reasons noted above, I have reached the conclusion that this case should be allocated to a senior Circuit Judge and should be case managed and tried at the TCC in Birmingham. For those reasons, the defendant’s application to transfer the case to London fails.