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Cite as: 146 Con LR 194, [2012] EWHC 3717 (TCC)

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Neutral Citation Number: [2012] EWHC 3717 (TCC)
Case No: HT-12-370


Royal Courts of Justice
Strand, London, WC2A 2LL
21st December 2012

B e f o r e :


TRANSPORT FOR GREATER MANCHESTER (formerly Grater Manchester Passenger Transport Executive)
- and -



Steven Walker QC, Camille Slow and Marc Lixenberg (instructed by Weightmans LLP) for the Claimant
Jonathan Acton Davis QC and Simon Crawshaw (instructed by Linklaters LLP) for the Defendant
Hearing date: 17 December 2012



Crown Copyright ©


    Mr Justice Akenhead:


  1. The Claimant, now called Transport for Greater Manchester ("TGM"), is the organisation responsible for implementing local transport policy in the Greater Manchester area. The Defendant, Thales & Transport Security Ltd ("Thales") is a specialist transport and security contractor. By a contract ("the Contract") dated 22 October 2008, TGM employed Thales to supply a new tram operating system ("TOS") to be installed both on the existing Manchester Metrolink system and on extensions thereto. It is anticipated by TGM that following its expansion the Metrolink network will be the largest tramway system in operation in the UK. The Phase 3A expansion was approved by the Department for Transport and involves about £1 billion's worth of work to provide three new tramway extensions to Oldham and Rochdale, to Droylsden and East Manchester and to Chorlton and South Manchester, together with a new tram depot, new trams, ticket machines and other associated infrastructure including the TOS. The TOS in this case was to cover the whole of the third phase expansion (and I was told the existing phases) and includes the provision of monitoring and communication equipment in all trams, trackside equipment in relation to the operation of signalling and points and control room computers as well as other equipment for directing, monitoring and communicating with the trams. The Contract was a substantial one involving a price of some £22 million, albeit that the Contract has been subject to a number of Deeds of Variation in April 2009, March 2010 and August 2010. Major differences between the parties have arisen most recently not only to do with money and time claims but also the provision by Thales of access to records and other documentation. It is this latter area of dispute which is the subject matter of these Part 8 proceedings.
  2. The Contract and the Factual Background
  3. By Clause 4.1 of the Contract, Thales undertook to "deliver the System and other Deliverables at the Locations", to "install and complete Testing and Commissioning of the System at the Locations", to "decommission and remove Trackside TOS Equipment from" a specified section of the project and to do various other things. The System was defined by Clause 1.1 as:
  4. "the tram operating system to be supplied to [TGM] by [Thales] (including the supervisory system and SCADA Deliverables and any part or parts of the same and all Software required for the installation, use and maintenance of the tram operating system and all associated spares), as more particularly specified in the TOS Specification and the Supplier's Proposals".
    There were design, progress and completion, procurement, testing, installation and commissioning obligations.
  5. The dispute resolution clause, Clause 37, allowed either party to refer the dispute (as defined) to an adjudicator for a decision within 28 days (or within 42 days if the referring party so agreed). In broad terms, this adjudication provision (Clause 37.3) appears to mirror the requirements for adjudication set out in the Housing Grants, Construction and Regeneration Act 1996. Ultimately dispute resolution is to be by way of litigation in court.
  6. Clauses 27 and 28 are in the following terms:
  7. "27.1 The Supplier shall for a period of at least 12 years…maintain accurate, up-to-date and complete records relating to its obligations under this Agreement ("Records") (in a form suitable for inspection under clause 28) relating to the performance of its obligations under this Agreement including:
    (a) the acquisition and properties of all materials, parts and items of equipment included in the manufacture and/or supply of the Deliverables;
    (b) the design and/or the supply and installation of the Deliverables…
    28.1 In addition to the information otherwise to be submitted or provided to [TGM] under any other provision in this Agreement, the Supplier shall submit to [TGM] or to any Auditor, or ensure that there is submitted to [TGM] or such Auditor, within such period as [TGM] or such Auditor may reasonably require (having due regard to the time and costs involved in providing such information but disregarding any costs of less than £100 per request), such other information, records or documents in its possession or control or in the possession or control of any auditors, agents or Sub-contractors as [TGM] or such Auditor may reasonably request (including any information requested from [TGM] by the Department for Transport) and which relates to the Records.
    28.2 [TGM], its representatives or agents, the Secretary of State for Transport…and any Auditor shall be entitled, on giving reasonable notice and at all reasonable times, to inspect and make copies of:
    (a) any of the Records (and the Supplier shall ensure that [TGM], the Secretary of State for Transport and any such Auditor shall be similarly entitled to inspect and make copies of any such records or documents maintained by any Sub-contractor); and/or
    (b) such other information, records or documents in the Supplier's possession or control or in the possession or control of any auditors, agents or Sub-contractors relating to:
    (i) the supply of the Deliverables; or
    (ii) the carrying out of any of the Supplier's obligations under this Agreement;
    (c) in each case as [TGM], the Secretary of State for Transport and any such Auditor may reasonably request for the purpose of auditing any information supplied to [TGM] the Secretary of State for Transport or such Auditor under the Agreement or verifying the Supplier's compliance with its obligations under this Agreement;
    And the Supplier shall submit to [TGM], the Secretary of State for Transport or to such Auditor, and shall ensure that any relevant auditor, agent or Sub-contractor shall submit to [TGM], the Secretary of State for Transport or to such Auditor such information and explanations and grant such access as [TGM], its representatives or agents, the Secretary of State for Transport (including any auditor appointed by him) or such Auditor may reasonably require in connection with such auditing or verifying.
  8. The project appears not to have gone well, although the responsibility therefor has not yet been finally established. It seems that some four years into the project only some £7.8 million or about one third of the original Contract Price has been paid and, at least potentially, there is possible liability on Thales up to £36 million of liquidated damages for delay. Although claims were intimated before, a number of substantial claims have been presented by Thales over the past few months, the Combined Claim being submitted on 7 September 2012, the Heavy Rail Claim at some date thereafter and the "Failure to Provide Information or Facilities Claim" on 18 October 2012. Very substantial money claims have been presented; for instance the Combined Claim is for an extension of time of 43 months and £42.3 million and the submission had 19 files of annexures attached. The Claims, albeit on a large scale, raise matters which are commonly raised on construction or engineering claims: alleged variations, late instructions or information, lack of cooperation and delays.
  9. Prior to the submission of the Combined Claim, Thales sent a letter on 17 May 2012 notifying its intention to make a claim for extensions of time and additional costs. On 5 July 2012 TGM called for further information regarding the nature and quantity of the potential claims, reiterating its letters dated 12 and 27 July 2012.
  10. Over the months which followed, it became clear that TGM believed that all or some of these claims were "global" claims, being claims which assume that the difference between overall costs and recovery do or must by inference flow from the matters complained about. Indeed, the expression is used in the Combined Claim to describe the quantum basis. TGM is broadly of the view that the delays and other problems have been caused by the failure of Thales to provide an effective design and deliver a working and safe system. It attributes all or much of the blame for this to a lack of resources and of the right expertise and of understanding, inadequacies in senior and project management, design management and safety management and a fundamental failure to deliver a robust tram operating system which meets the contractual requirements. Against that, Thales asserts that the problems have been caused by changes, late instructions, incompatibility between specifications and the like. This is as one witness says "hotly contested" and it is unnecessary and probably undesirable for the Court to comment on the merits of the respective positions of the parties on these claims.
  11. Following the receipt of the Combined Claim, the parties had a meeting on 9 October 2012 at which TGM raised requests for a number of documents. This was followed up by an e-mail dated 10 October 2012 from Thales in which in relation to TGM's requests it provided its response, much of which was to refuse to provide the information and documents requested, albeit that in some respects it indicated that it would provide some documents or information. TGM wrote to Thales on 17 October 2012 complaining that Thales had not provided requested information in relation to these claims and inferring that Thales wanted "to proceed with an adjudication relating to your unparticularised and global claims as quickly as possible in an endeavour to seek an advantage". Complaint was made as to Thales' "transparent and aggressive tactics…designed not only to afford you a material advantage but also to prevent us from properly investigating and presenting a proper and complete picture to any tribunal concerning your performance". Complaint was also made about the lack of particularity in the claims. The letter attached two appendices which identified documents already requested and further documents and called upon Thales "to make available to us for inspection all information, records or documents in your possession or control or in the possession or control of any of your auditors, agents or subcontractors referred to" in the two appendices. Reference was made to Clauses 27 and 28 of the Contract. The letter makes clear that the further information was being sought in order to enable TGM "to understand the basis on which you seek additional entitlements under the" Contract and to carry out a review of those claims. Attached to the letter were references to 51 documents or classes of documents requested.
  12. Thales' solicitors wrote on 19 October 2012 but did not respond directly to the letter of 17 October 2012. That elicited a response on 22 October 2012 from TGM's solicitors which again sought the submission or inspection of the requested information, records or documents by 4 pm on 26 October 2012. The letter explained that TGM was seeking to "assess your client's claims". On 1 November 2012, Thales' solicitors gave notice that it intended to refer to adjudication one of the claims within the Combined Claim, the "Additional Mitigations against Driver Error claim" ("the AMADE Claim"). TGM's solicitors' response on 2 November 2012 was, amongst other things, to say that its client had not had ample opportunity and time to respond to the AMADE Claim.
  13. Meanwhile on 23 October 2012, Thales referred to adjudication various issues arising under what was called the Heavy Rail Points Claim, with Finola O'Farrell QC appointed as adjudicator. She was to produce her decision on this towards the end of November 2012 and it is unnecessary to review what she found, although both parties seem to consider that in some respects each "won".
  14. These Part 8 proceedings were issued by TGM on 9 November 2012 by which it sought an order by way of specific performance that Thales provides an extensive list of documentation set out in Annex 8 to the attached Particulars of Claim.
  15. The Pleadings
  16. The Particulars of Claim sets out the history, Clauses 27 and 28 of the Contract and refers to the letters by which the request for documents was made. It attached as annexes a number of letters referred to above as well as Annex 8 which listed 53 types of document to which it asserted that it was entitled to access. The form of this Annex is to identify the documents required and to provide in two columns reasons for inspection: "to audit information supplied under the TOS Contract" and "to verify that Thales has complied with its obligations under the TOS Contract". References are made in those columns to the witness statements served with the proceedings relied upon.
  17. The Court gave directions on 13 November 2012 (corrected on 19 November 2012 as to several dates) for the exchange of evidence, skeleton arguments and for an oral hearing on 17 December 2012. The solicitors, Counsel and parties are to be congratulated on complying with a relatively tight timetable for a relatively complex piece of litigation.
  18. Thales through its Counsel, if not initially through its witnesses' statements, conceded that "irrespective of strict entitlement under the Contract" it would within a reasonable period disclose 33 of the 53 categories of documents requested, namely items 5, 13, 16, 19, 20-30, 32-44, 46, 49, 50, 52 and 53 listed in Annex 8. There remains an issue on a part of the documents sought under Item 5. Thales has indicated that it will undertake to the court to provide such documents as it has agreed to provide.
  19. Broadly, although there are some miscellaneous arguments, Thales argues as follows:
  20. (a) Upon a proper interpretation of the Contract, accepted by Mr Acton Davis QC as being a narrow as opposed to a broad one, the references in Clause 27.1 documents which "relate" to the performance or carrying out of obligations or to the supply of Deliverables are limited in such a way that cost records or documents are generally excluded.
    (b) Again, as a matter of contractual interpretation, TGM is only entitled to request documents in order to audit information supplied to the TGM or to verify Thales' compliance with its obligations under the agreement. It then argues that on the evidence as presented the purpose of the requests is neither of these specified purposes.
    (c) The requests must be reasonable in all the circumstances.
    (d) There is a lack of clarity in TGM's requests such that as a matter of authority specific performance should not be ordered.
    (e) In several respects, documents requested do not exist or are outside Thales' control.
    (f) A number of documents are not "Records" but were created after the event.
    (g) In two respects, requests were not made before the proceedings were issued.
    (h) Requests for certain cost related documents are of unreasonable breadth or insufficiently precisely drawn. The argument is made that because the contract is a fixed-price contract documents related to cost are immaterial and therefore incorrectly or at least unreasonably requested.
    (i) Documents which were commercially sensitive should not be discloseable, nor should documents relating to employment records disclosure of which would or might offend against the Data Protection Act.
  21. TGM argues for a broader definition of the Contract and asserts that each of the remaining types of document requested are discloseable under Clauses 27 and 28. There was a belated attempt to define more precisely several classes of document which were sought.
  22. The Law and Practice
  23. There was non-contentious reference to the House of Lords decision in Cooperative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1 in which Lord Hoffman reviewed the law on specific performance in a case in which a landlord sought to enforce by way specific performance a covenant requiring the lessee to keep the premises open for retail trade. What can be culled from this review is broadly that (1) specific performance is a discretionary remedy which is flexible and adaptable to achieve equity, (2) it should not be ordered when damages are an adequate remedy, (3) the need for constant supervision by the Court needs to be taken into account, (4) there is or may in different cases be a distinction between specific performance requiring the carrying on of an activity and the achievement of a result, and (5) the ability of the Court to be precise in its order is extremely important.
  24. It is necessary to bear in mind that Part 8 proceedings are primarily of utility in cases involving matters of law, whether they be questions of contractual or statutory construction or otherwise. Where there are material and genuine disputes of fact, and the legal questions cannot be answered without facts being found, the Court would have to take steps by way of normal trial procedures to seek to resolve the factual questions first.
  25. I will deal with more specific issues of law, for instance relating to privilege, when they arise.
  26. The Meaning and Scope of Clauses 27 and 28
  27. There are no factual issues which relate to the factual background or matrix. Much of that background is clear from the Contract itself:
  28. (a) The Contract was an important part of a very much larger infrastructure project projected to cost about £1 billion.
    (b) TGM was a public body with statutory powers to procure amongst other things the extension of the Metrolink tram system in Greater Manchester.
    (c) In that context, TGM would have a legitimate interest in having a very detailed knowledge and understanding of exactly what was going on in relation to the project which was the subject matter of the Contract, given its importance to the overall extension project and its own statutory responsibility.
  29. In addition to Clauses 27 and 28, there are other relevant clauses:
  30. (a) Clause 1 definitions include:
    "Auditor means a person carrying out an audit of the economy, efficiency and effectiveness with which either [TGM] or the Authority are carrying out any of their functions…"
    "Compensation Event means a breach by [TGM] of any of its obligations under this Agreement, including any failure or delay in providing access to the Metrolink System in accordance with clause 11.5 (a)"
    "Deliverable means an item to be supplied by [Thales] to [TGM] under the provisions of this Agreement"
    "Project Schedule means the schedule for the design, delivery, installation and testing and commissioning of the System set out in the Supplier Bid Schedule in the agreed form, as further developed and replaced by the Supplier Project Schedule to be prepared and periodically updated in accordance with clause 5"
    "Records means the records relating to the Supplier's performance of its obligations under this Agreement as more particularly described in clause 27"
    (b) Clause 1.2 (l) provided that headings in the Contract were "for convenience only".
    (c) Clause 6 provided by way of detailed terms for a design review process by which Thales was to submit various types of design document and to implement a "Requirements Managements System" which was to "ensure that all requirements from the TOS Specification and any documents it references are mapped through the Functional Specification, the Structural Design and the Detail Design, throughout the Project Schedule". Thales was to hold design reviews at appropriate stages and maintain a register in relation to "Design Submissions".
    (d) Clause 10 provided that each of the Deliverables was to "be delivered to the appropriate Location in accordance with the provisions of the TOS Specification and the Project Schedule" with "title and risk in the Deliverables [to] pass to" TGM on delivery.
    (e) Clauses 15 and 16 provided that the Purchase Price was to be paid by way of Milestone Payments, subject to Clause 18 Retentions.
    (f) Clause 21 provided for Liquidated Damages for late acceptance of the System including Sections thereof. Although the liquidated damages rates per day differed between different Sections of the work, they ranged between £1,250 and £35,000 per day. Clause 23 provided for certain limits on liability.
    (g) Clause 31.1 required Thales on request to "liaise and cooperate in all good faith with" TGM "so as to facilitate the smooth and efficient operation and development of the Metrolink System from time to time including making available and/or granting access to all reasonable information, records and documents…as are or may be relevant to the Metrolink System as are in its possession or under its control."
    (h) Clause 32 provided for Variations which TGM was entitled to issue. Unless there were issues, the parties were to agree about the financial consequences of the Variation as well as any extension of time. If the parties could not agree, then the matters in issue could be referred to an independent expert for resolution.
    (i) Clause 33 provided for Compensation Events and, in effect, for compensation to be payable for the consequences of such Events as well as for the award of an appropriate extension of time.
    (j) Clause 34 confirmed that Thales "acknowledges that [TGM] is subject to the requirements of the "Freedom of Information Act" and provided for liaison between them when a Request for the Information under that Act was lodged, giving Thales an opportunity to make representations to TGM as to whether further information should be disclosed. There was an acknowledgement that notwithstanding the provisions of Clause 35 which dealt with confidentiality TGM might be required to disclose information relating to the Thales or its performance.
    (k) Clause 35 provided for the parties to "keep confidential all Confidential Information received by one party from the other party relating to this Agreement" but the confidentiality obligation did not apply to any disclosure required by legislation, court order or the like.
  31. It is now necessary to turn to Clauses 27 and 28 themselves in the context of the other material contractual obligations and the factual background. First, Clause 27 relates to "records relating to [Thales'] obligations under this Agreement…relating to the performance of its obligation under" the Contract. This clearly covers performance of the obligations as well as any failure to perform the obligations. The use of the general words "relating to" suggests that this is or in given circumstances may well be broader than if words such as "limited to" were used. The examples given in Clause 27.1 shed some light; for instance documents evidencing "the acquisition and properties of all materials parts and items of equipment" go beyond simply demonstrating that the procured items comply with the Contract, in terms of the properties of the items; documents which show the acquisition or purchase of such items are also to be considered as Records.
  32. Clause 28.1 expands on what needs to be produced by Thales because, subject to the requirement that they are "reasonably" called for, Thales has to provide such other information, records or documents "…which relate[s] to the Records". Therefore, not only do the Records defined in Clause 27.1 have to be provided, but also other documentation relating to the Records has to be provided. Clause 28.2 goes further because not only by Clause 28.2(a) does it provide for TGM and indeed others (the Secretary of State for Transport and any Auditor) to have access to the "Records" as defined in Clause 27.1 but also by Clause 28.2(b) there is to be access to "such other information, records or documents": the use of this latter expression suggests that this information and these records or documents are "other" than the Records. This Clause 28.2 (b) term is the same as that used in Clause 28.1 and highlights that they are to be other than the Records.
  33. Clause 28.2 (b) makes it clear that, for access to be given by Thales, the "other information, records or documents" have to relate to "the supply of the Deliverables or carrying out of" Thales' obligations. Again the expression "relating to" is used, which suggests strongly that not only do documents which record what is happening or has happened in relation to performance have to be disclosed but also other documents which relate to performance and supply. In my view, the parties were agreeing on the provision not only of source or basic records relating to performance and supply but also of other documents which relate in a broad sense to performance and supply. Thus, there may be a record of hours worked by a team of designers: that is a Record which relates to performance of the design of the Deliverables and is discloseable under Clause 27.1 and 28.2(a). There may however be an internal report or audit done some months later which purports to comment on the performance of the team: that would be discoverable under Clauses 28.1 and 28.2 (b) because it relates to the carrying out of the design obligation.
  34. Clause 28.2(a) and (b) are subject to the constraints, such as they are, in Clause 28.2(c). These constraints are that:
  35. (i) There has to be a request for the information, records or documents from TGM, the Secretary of State or an Auditor;
    (ii) The request must be reasonable; although there is no definition of what might be reasonable, it must mean reasonable in all the circumstances judged at the time of the request;
    (iii) The request must be for at least one of two purposes: "auditing any information supplied" or "verifying [Thales'] compliance with its obligations under" the Contract.
    There is no definition of the word "auditing". Chambers Dictionary defines the noun "audit" as "an examination of the accounts by an authorised person…a check or examination…an evaluation of a specified quantity or quality…a calling to account generally" while the verb is defined as "to examine and officially verify, etc (the accounts of the company)". However, the context of the word "auditing" is that of auditing "any information supplied" to TGM. It is clear from the overall terms of these two clauses that the information supplied can go way beyond simply accounting information and therefore "auditing" goes beyond official verification of financial accounts. In my view, the overall context of the word is such as to suggest that an equivalent meaning is "vetting" or "checking".
  36. It follows from the above that the following propositions hold true:
  37. (i) Documentation which is discloseable by Thales goes beyond simply contemporaneous documents which record what Thales has done. Documentation which relates to what it has done or not done pursuant to the Contract is discloseable.
    (ii) As Leading Counsel for Thales properly accepted in argument, such documentation can include documentation which records the cost of labour, materials, plant, sub-contractors, suppliers and the like because it relates to the performance of the obligations. The fact that a cost has been incurred, say in respect of a team of engineers working on the project, demonstrates that there has been an attempt to perform the obligations. The fact that £1.5 million (say) has been paid to a supplier relates to the "acquisition…of all materials, parts and items" within the meaning of Clause 27.1 (a).
    (iii) It is not only the source or original contemporaneous records which have to be disclosed but also other related information records or documents within the meaning of Clauses 28.1 and 28.2(b). Therefore, documents, such as reports or internal audits, created after the events in question which have been recorded originally, which address previous events or matters otherwise earlier recorded, are linked to the supply of the Deliverables or the performance (or non-performance) by Thales of its obligations under the Contract.
    (iv) The request for documents or information must be reasonable and, if and to the extent that it is not, Thales does not have to comply with the request.
    (v) The request needs only to be complied with if the purpose is either to enable TGM to vet or check information supplied to TGM under the Contract or to enable it verify whether or not Thales has complied with its obligations.
    (vi) The fact that documents which are otherwise discloseable under Clauses 27 and 28 are confidential is immaterial and can not be used as an excuse to withhold disclosure, although, once disclosed, TGM is required to comply with Clause 35 relating to confidentiality. That said, if TGM is required to provide the information contained in documents disclosed by Thales to third parties under the Freedom of Information Act, then it may do so subject to the provisions of Clause 34.
  38. It is rightly accepted by the parties' Counsel that the test here for discloseability is simply the contractual test. This is an application for specific performance and not for pre-action disclosure.
  39. The Individual Classes of Documents
  40. Before turning to the individual classes of documents which remain in issue, I need to address the issue broadly as to whether TGM has established that one or other of the contractual purposes identified in Clause 28.2 (c) has been established.
  41. The correspondence and the evidence reveals a growing concern within TGM and those advising it about the various claims running into many millions of pounds which Thales began to submit as from September 2012 onwards and about the prospect that Thales might refer, in a way which suited itself and its own commercial interests, parts of these claims to adjudication. It must be appreciated that the type of adjudication legislated for by the parties here which requires a decision on what might be immensely complicated factual and legal scenarios within 28 days of the reference can produce a relatively rough type of justice; indeed "rough justice" has been used in various court decisions to describe the process, albeit that this is qualified by the facts that Parliament through the Housing Grants, Construction and Regeneration Act 1996 imposed such an adjudication regime on the construction industry and that many parties incorporate such adjudication arrangements in their contracts. Clearly, on the evidence, one of the factors motivating TGM from September onwards was a perceived need to be in a position in which it could defend itself in actual or impending adjudications.
  42. However, the factual reality is that this project has been subjected to very substantial delays with many of the sections of work being already late, compared with original contractual completion requirements. In terms of milestones, no more than about one third are said to have been completed. Something has obviously gone seriously wrong. The Court can not at this stage on the evidence formulate any view as to whose fault or responsibility the delays are. However, logic suggests the spectrum of responsibility is that either TGM or Thales is responsible for all of the delay and alleged extra cost (apart from one short extension of time for one section which has been granted) or (and this at least is statistically more likely) there is a large or small element of responsibility as the case may be on each party. Either way, TGM has a very real interest in determining whether and to what extent it or Thales is responsible for what has happened. On either basis, TGM has a legitimate interest in determining the responsibility for the allegedly poor or satisfactory performance (as the case may be) by Thales of its obligations under the Contract, as it may be established.
  43. The background of fact is that the Combined Claim, at least, is apparently, for better or for worse, based on a total or global cost basis, and is for some £42 million, which if justified, would treble the original Contract Price. If, as asserted by Thales, the project has and will cost £42 million more than it has priced for, something has gone seriously wrong, leaving aside whose fault it is. Either Variations, Compensation Events or other factors justifying compensation have occurred or to the extent that they have not occurred or materially impacted upon performance there has been poor performance on the part of Thales. Cost has in one sense become a barometer or a reflection of the performance, not only because Thales has put this forward as the basis of its Combined Claim but also because a substantial excess of expenditure over contract allowances can on projects such as this demonstrate or underpin how good or bad the performance has been.
  44. It is clear from the evidence that the purpose at least broadly of the request for documents has been to audit, vet or check information supplied by Thales already and to support its Combined Claim. Clause 33.1 requires Thales to give "full available details of the relief and/or the Compensation Amount" and to "demonstrate to the reasonable satisfaction of" TGM that the Compensation Event has caused non-compliance and caused it to suffer the Compensation Amount (defined as "the net costs suffered by [Thales] as a result of the Compensation Event"). It is perfectly legitimate for TGM to need to audit the information supplied and it can therefore see the information, records or documents relating to not only the original (good or bad as the case may be) performance but also the performance of Thales' obligations under the clauses as to whether they have provided all requisite information, records or documents relating to the claims which have been made. This is not intrinsically or inherently unfair or non-commercial, particularly in the light of the fact that, as soon as a dispute arises on a given claim, Thales may be entitled to refer it to adjudication for a quick decision within 28 days. It is not unfair that Thales has to supply or make available documents which may help, undermine or hinder its claims. If the documents helped to establish that Thales is in the right and that TGM is responsible, then it is important that TGM can appreciate and understand that. If the documents demonstrate the opposite, it is only fair and sensible that Thales can not then readily (even if unconsciously) mislead TGM or an adjudicator with evidence, information and documentation which does not tell the whole story.
  45. Of course, the alternative purpose referred to in Clause 28.2 is the verification of Thales's compliance with the Contract. If the Claims are good in fact and in law, documentation and other information sought through Clause 28 would be useful and even necessary to confirm (or verify) that Thales was or was not in any way contractually to blame for the events or other factors which have led to delays and the incurrence of the substantial extra cost claimed.
  46. The letter from TGM of 17 October 2012 identifies a number of reasons why it wants documentation:
  47. (a) "to enable [TGM] to understand the basis on which you seek additional entitlements under the" Contract.
    (b) "we have already asked for certain documents in relation to the verification of your claim".
    TGM's letter dated 2 November 2012 to Thales puts the matter in more commercial terms:
    "…the commercial issues between our two organisations are not going to be resolved…without [TGM] having the opportunity objectively to consider all of the information that is relevant to the substantiation of your claim. That information is equally important in the context of enabling [TGM] to have a clearer picture and understanding of the difficulties that have beset the Project historically (and indeed continue to do so) which of itself is undoubtedly a key factor in enabling the most efficient completion of the Project from the perspective of both our organisations…
    [TGM] as a public body, is held fully accountable for the use of public funding, which therefore requires a high level of scrutiny before claims of this nature can be settled. This is only possible by full disclosure of all documentation; which of course is reflected fully in our contract with Thales…
    The core position remains that [TGM] is entitled under the Contract to the additional information sought from Thales and…providing access to the information is of key importance to both the resolution of the commercial issues and the completion of the project…"
  48. The Particulars of Claim was supported by a Statement of Truth identifying specifically the two reasons spelt out in Clause 28.2. I am satisfied overall that this itself has been effectively supported and established by the extensive evidence submitted by TGM. The fact that TGM's motivation has been triggered by the submission of very substantial claims from Thales is immaterial. If everything had been proceeding in accordance with the contract, one can speculate as to whether the current requests for the specific documents in question would have been made in October and November 2012.
  49. I will deal in as short an order as is proportionate with each of the classes of documents which remains in issue.
  50. Category 1 relates to "All reports produced by the "Tiger Team" concerning the performance of the TOS Contract by Thales." The "Tiger Team" was a team formed because Thales was concerned about the escalating costs of the project (Mr Gerrity - Paragraph 53). It was established to identify problems on the project and report on them to Thales' senior management (Mr Warrener - Paragraph 24). The evidence suggests that there is at least one report produced in June 2011 (Mr Tildesley – Paragraph 53), which is said to have been "a high level ex post facto analysis of some of the difficulties experienced". The fact that it is after the event is irrelevant for the reasons given above. It is clear that there was an analysis done of the difficulties, doubtless which were thought to have affected the performance of Thales' obligations under the Contract. The fact that it is a "high-level" does not prevent it from being a document which "relates" to contractual performance within the meaning of Clauses 27 and 28. The request is reasonable given the nature of the Tiger Team and the problems and difficulties which it was required to address and the report or reports should assist and inform TGM as much as it did Thales. TGM's case on this is established.
  51. Category 2 relates to "All internal audit reports concerning the TOS Contract". It is said that the reference to "internal audit reports" is too imprecise. I disagree because in almost every moderately or very sophisticated organisation engaged on this sort of project there is invariably a system of internal auditing which concerns compliance with various areas of endeavour, such as safety and design; they will often be in place and provided to deal with things which have gone wrong. The Contract Quality Plan itself refers to internal audits to be carried out by Thales' Quality Manager and its own "TMS Project File Structure & numbering Scheme" identified a File 13 which contains "Audit Schedules" and "Audit Reports". There should be absolutely no difficulty in ascertaining what is an internal audit report and there is no lack of precision in the wording. It is said that there are no internal audit reports relating to cost. If that is true, then any order for specific performance will not bite on it because the order can only relate to documents which exist. In my judgment, this category of documents should be provided. Internal audit reports should identify whether there has been contractual, statutory or other compliance.
  52. Category 3 relates to "all audit reports concerning the performance of TOS Contract prepared for Thales by Ernst & Young, Mazars and any other external auditor engaged by Thales". It is not challenged that there are or may be such audit reports: they would not necessarily be the same as the accounts published through Companies' House. I have no doubt that they are documents therefore that "relate" to the performance of Thales under the Contract, even if they do cover other matters as well. Such reports logically should be limited to the period starting at the commencement of this project up to the date of the institution of these proceedings. I do not consider that the request for them is unreasonable because they will not be difficult to produce and, as has already been accepted by TGM, appropriate redactions can be made in relation to references within such reports to other projects. Finally, it is argued that Mazars, which is said to be the auditor of Thales, has a term in its contract of engagement to the effect that Thales may not disclose a document to any third party without permission and it is asserted that Mazars had indicated that they "would not be willing to agree to [Thales] releasing our contract or other group reporting documents to" TGM. Apart from the fact that this is not obviously credible, any such term must be subject to a Court order. Finally, Clause 28 relates to information, records or documents in the possession or control of, amongst others, the auditors of Thales. This category should be provided.
  53. Category 4 relates to "all internal project reports concerning costs and delay incurred in the performance of the TOS Contract (including reports by or to any company in the Thales group of companies)". There is no dispute that there are such internal reports and indeed Mr Tildesley says that they consist of monthly cost account management and internal dashboard review reports. There is no difficulty with precision and I have no doubt that Thales can work out what such reports are. Any reports which deal with delay must relate to the extent to which there has been performance of the Contract. Any reports which deal with cost also relate to performance both in terms of compliance with the claims clauses and also as a reflection of compliance with the Contract. The fact that these reports contained commercially sensitive information for the reasons given above is immaterial; there is no explanation as to why these documents are so commercially sensitive that TGM, which is subject to a confidentiality clause in any event, can not see them. Finally, it is said that the cost information in some of these reports related to the project as a whole and, because the Contract was a fixed-price one, reports about cost are immaterial; I disagree for the reasons given above. This category should be provided.
  54. Item 5 has been largely agreed to by Thales but it objects to the production of what it calls its Chorus 2 system. The category called for was: "All written procedures and policies relating to the recording of time and cost incurred on the TOS Contract". The objection is that this system applies to all UK Thales' companies and is commercially sensitive: Mr Tildesley says in Paragraph 19 of his statement that "it is confidential". Apart from the fact that little information is given about this bald assertion, it is not a valid objection. In any event, TGM is required to maintain confidentiality and, if it caused, allowed or permitted the documents to be leaked, it could well be in breach of its confidentiality requirements and is subject to appropriate court sanctions accordingly. This category should be provided.
  55. Item 6 is: "All documents relating to the Job Collection Number used to record time and costs against specific project tasks on the TOS Contract". The evidence suggests that there are a number of Job Collection Numbers, presumably used for computer-generated information. Thales says that it has already provided "details of the time spent by all employees against identifiable task numbers" (Mr Tildesley – Paragraph 57). It is not denied that there are documents and records which record costs against specific project tasks. However it is argued that the fact that the Contract is a fixed-price one makes it wholly immaterial that records and information about cost be provided. This wrong. For the reasons given above, these documents should be provided.
  56. Item 7 is "all documents used to record time and costs spent on the Contract". For reasons already given, these documents should be provided.
  57. Item 8 is described in the following terms: "All records of the hours spent against Labour Rates ("LR") rates, in relation to the TOS Contract, described by Thales as the rates used as the basis of the labour quantum in their Combined Claim and Heavy Rail Claim and further described by Thales as the basis of their total labour costs in the Cost Record Inspection on 9th October 2012 and Thales' letter reference WA087-07-542 dated 24th September 2012". Rather blandly, Mr Tildesley says that the "Report requested by [TGM] does not exist". When I queried this with Counsel, I was told by Junior Counsel on instructions that what he meant was that there are no such records and in effect his reference to a Report was that there was no computer-generated document which in effect reports all recorded hours spent against Labour Rates. There is a factual dispute about this which I cannot resolve. Reference is made to a letter dated 24 September 2012 from Thales to TGM which refers to there being "one costing system" in its DTS business unit, which seems to be some computerised system which has man-hours and apparently "LRs" or Labour Rates on it. I can not make an order now for specific performance due to this factual issue but, if the parties wish, there could be a trial to resolve it.
  58. Item 9 relates to: "Thales' internal accounts containing all supplier and subcontractor costs incurred in respect of the TOS Contract". The objection by Thales is that it is "entirely unclear what information Thales is being asked to provide in relation to this request" (Mr Tildesley – Paragraph 58) and that the request is insufficiently specific. Mr Webb of TGM explains that the information required "relates to those costs which are not covered by either the TIMES or Panorama systems or through Purchase Orders and/or subcontracts, but which form part of Thales' costs" (Paragraph 74). This request relates to the need to identify costs incurred by Thales and when in relation to subcontractors and suppliers. If this information is only on either of the two systems identified, it does not have to be provided. If however it is recorded elsewhere on the other hard copy or electronic documents, it should be provided as it relates to performance of obligations including the "acquisition of materials, parts and items of equipment included in the manufacture and/or supplier of the deliverables".
  59. Item 10 is described as: "All contracts and purchase orders between Thales and subcontractors and/or suppliers in connection with the TOS Contract". The first point taken is that these documents were not requested prior to the issue of the proceedings and that therefore there was no pre-existing breach. TGM says that they were encompassed within the heads contained in Appendix 2 to the letter dated 17 October 2012 referred to above. The reference to Appendix 2 may be wrong because Item 10 of Appendix 1 was: "Invoices from materials, subcontractors and suppliers - procurement process through supply chain". Although this item insofar as it relates to invoices is addressed in Item 11 in Annex 8 to the Particulars of Claim, information was also requested with regard to the "procurement process through supply chain". Appendix 2 does not obviously relate specifically to contracts and purchase orders albeit that Paragraphs 17 to 24 to relates to performance by suppliers. This was however not specific and in my judgment the request was insufficiently clear prior to the issue of proceedings and does not as such amount to a request for the documents now sought. There will therefore be no order for the specific performance in relation to this item. That said, and to save time and cost later, I have no doubt that this class of documents, if the subject matter of a request under Clause 28, should be provided as it falls fairly and squarely within Clause 27.1 (b) and otherwise relates to the performance of the obligations because it is necessary to determine what sub-contractors and suppliers were employed to do contractually and whether that reflects what the Contract calls for.
  60. Item 11 is for "All invoices from suppliers and/or subcontractors in respect of the TOS Contract". For reasons given earlier, this class of documents is to be provided.
  61. Item 12 relates to: "All records showing payments made to suppliers and/or subcontractors in respect of the TOS Contract". Again, Thales says there was no request for this category before proceedings were issued. It would seem that some of these documents are at least partly covered by Items 6 and 7 above but there is no actual request in this form and accordingly specific performance will not be ordered. However for reasons given earlier, I have no doubt that if a proper request was made that these documents should be provided they would need to be provided.
  62. Item 13 is for "All periodic utilisation reports from October 2008 to October 2012 in respect of the TOS Contract". There seems to be no issue between the parties that such utilisation reports should be provided but the evidence suggests either that there was only one such report in relation to the year up to September 2012 or that Thales has already provided all of them. Whilst the Court can not resolve the factual issue between the parties in this context, nonetheless specific performance can be ordered on the basis that to the extent that utilisation reports from October 2008 to October 2012 have not already been provided by Thales they should be. To avoid any risk of non-compliance, Thales should provide (if necessary again) all such utilisation reports.
  63. Category 14 is "Documents containing a breakdown of the labour costs incurred by Thales in respect of personnel engaged on the TOS Contract". Apart from points made as against Items 6 and 7 above, Thales' Counsel argued that this category is too imprecise to justify an order for specific performance. I agree. It would have been much better for TGM to have spelt out the types of documents. As drafted, it could include the individual payment records for each individual involved as well as other payroll costs for each employee. It would be unfortunate if an order for specific performance in these terms was made and, at a later litigation disclosure stage, other documents emerged which also provided breakdowns. That would put Thales in arguable contempt of court even though it had done its best to provide some documents showing a breakdown. I do not say however that an appropriately drafted and specific request of the sub-classes of documents sought could in principle be refused.
  64. Item 15 relates to: "All cost reports relating to the TOS Contract". Apart from repeating points made by Thales in respect of Items 6 and 7, which I have rejected, it is asserted that this class is too imprecise. I disagree. A report is a report; it is not an internal e-mail which happens to say something about cost, which would not be a report. The subject matter is clear and relates to cost; it is and should be clear that this is not related to the legal costs of litigation or even of adjudication. It is not suggested that there are not cost reports and I would be very surprised if on a project such as this one there were not regular cost reports at different levels. Indeed, this would be commercially important so that senior management can keep a handle on what the actual costs at different times are. These documents should be provided.
  65. A different issue is raised in relation to Item 16 which is for: "Thales UK and Project-specific board minutes relating to the TOS Contract from 22 October 2008 to the present". There can be no objection to project specific board meeting minutes relating to the board of Thales, the company which is the Defendant in this case. The objection is taken that Thales UK Ltd, a company in the Thales group, is not the same as the Defendant and the board meeting minutes for Thales UK are not in the possession or control of the Defendant. If copies however are in the Defendant's possession they can and should be provided to the extent that they relate to the Contract; it would be surprising if there was not some reporting to Thales UK board about a project which was running three if not four years late and which in terms of cost overruns was some three times over budget. Such documents do relate to the performance and to the extent that copies are within the control of the Defendant and to the extent that there are minutes which do relate to the Contract, they should be disclosed. To be fair to Thales, it has offered to provide its own board minutes to the extent that they relate to the Contract; matters which do not relate to the Contract can be redacted.
  66. Item 17 relates to: "Documents explaining the reason(s) for the departure from the Project of four Project Directors (Messrs Hooley, Morrissey, Rutherford and Gibbs) and four Directors (Messrs Batley, Ford, Pagent and Rowley)". Some evidence has been put in by TGM which suggests or infers that there has been a high turnover of key senior employees, which itself suggests that something has gone seriously wrong. This is at least in substantial part challenged by Thales. In one sense certainly it is what might be termed on a specific disclosure application a "fishing expedition". I am not satisfied that this is a reasonable request for a number of reasons. First, it seems little more than a guess that the reason for these directors departing has something to do with their poor performance on this project; whilst, if true, that is possible, there is no direct evidence that this is so. Second, necessarily the reasons why senior personnel move are often extremely confidential, not least to the departing personnel and, although confidentiality alone would not be a reason for refusing the request, it is a factor which can be taken into account in determining reasonableness where the request is for tangential information which only theoretically might throw some light on the overall performance of Thales. A point is being made about the Data Protection Act but that was not a particularly good point given that disclosure of otherwise protected documents pursuant to compliance with a court order must provide some defence to any charge of breach of that Act. Accordingly, I am not prepared on the current evidence to make an order for specific performance in relation to this.
  67. Item 18 raises some interesting issues on privilege. It seems to be common ground that genuinely privileged documents, such as advice given by solicitors, would not be discloseable pursuant to Clause 27 or 28, at least generally. The documents sought are those "relating to resource planning and project reviews carried out by The Nichols Group from the commencement of their involvement in the Project to the present, including their terms of appointment, activities undertaken and outputs (including reviews and reports)". The Nichols Group was engaged by Thales, it is said by Mr Done (for Thales) in December 2010 and prepared reports on an ad hoc and regular weekly basis, albeit these were "very high level, ex post facto" reviews "of the issues experienced on the project". The fact that they are high-level or after the event is neither here nor there for reasons given earlier in this judgment. It is clear that they were brought in and for some two years at least were giving advice and reporting on the issues, which must have included delays, compensation events, cost overruns, which are all symptomatic of good or poor performance of contractual obligations. Subject to the issue of privilege, these reports should be provided as well as those more generally relating to resource planning and project review and the other classes of document referred to within this Item.
  68. The privilege issue arises because Mr Done says at Paragraph 10 that since December 2011 "the reports produced by Nichols have been prepared for Thales Legal department for the dominant purpose of gathering evidence and information for use in relation to contemplated adjudication and/or litigation disputes arising under the" Contract. Ms Cairns of the legal department and herself a solicitor repeats that almost verbatim and adds that the reports since December 2011 were to assist her in advising in relation to the claims. This assertion is in one sense slightly odd because there is no detail provided about this and no explanation as to whether the Nichols Group is continuing to provide exactly what it did before December 2011 (in which case, it is at least arguable that the dominant purpose remains as it did before) or whether there has been a new retainer for it only to provide adjudication or litigation related services. Bearing in mind what Mr Justice Beatson said in the case of West London Pipeline and Storage Ltd and another v Total UK Ltd and others [2008] EWHC 1729 (Comm) and in particular his observation at paragraph 86(1) that affidavits "should be as specific as possible without making disclosure of the very matters at the claimant of privilege is designed to protect", I can not make a decision on the available evidence. Because the witness statements from Thales are somewhat opaque on the issue and raise genuine questions, I consider that it is appropriate in my discretion to give Thales an opportunity to submit further witness evidence which is more specific and provides a sufficient substratum of fact to enable the Court to form a view as to dominant purpose and any other issues relating to privilege. Further witness evidence needs to be put in reasonably promptly, albeit that it may have to be after the Christmas and New Year break, by 9 January 2013.
  69. Item 19 relates to "All versions of Thales resource schedules for the delivery of the TOS Contract both prior to and after the date of the TOS Contract". This goes directly to performance, in particular to time related performance, and these documents should be provided. There is an issue between the parties as to whether some of these have been provided under cover of a letter dated 25 September 2012 but TGM says that it has no record of having received such a letter. These documents should be provided.
  70. Item 31 calls for " All internal design review meeting minutes in connection with the TOS" to be provided. It is said that this is unreasonably broadly categorised and for that reason should not be allowed. It is not denied that there were (as there must have been) internal design review meetings and it is highly likely that there will be minutes of such meetings. The quality and completeness of the design at different stages and its impacting upon progress directly relates to performance by Thales. I do not consider that this request was unreasonably broad. TGM has offered in effect a qualification which is that only such meeting minutes as are contained on Thales' electronic document management system should be provided. I will so order.
  71. Item 45 relates to "Documentation relating to integration and performance of suppliers' equipment within the overall system". The objection is that this is too vaguely drawn. I agree because the scope of documents relating to this could on one interpretation be considered to be narrow, for instance relating to the formal or technical confirmation and approval in relation to the technical integration and performance of such equipment (for instance in approved co-ordination type drawings) or to a much wider group of documents which could include memoranda, handwritten notes, correspondence, minutes and as well as technical design documentation. It is undesirable to leave the party being ordered positively to provide certain documents uncertain what is required. An alternative formulation was raised by Leading Counsel for TGM in reply to which Leading Counsel for Thales could not agree, at least on short notice. Accordingly I am not prepared to make an order for specific performance in relation to this item.
  72. Item 47 raises a similar issue in calling for "Records that demonstrate to what standards the works for the Project have been installed". Again, there is a potentially embarrassing lack of definition because it should be possible to formulate the type of records to be provided. For instance, on some projects like this, where there are internal issues about poor quality, what are called "non-conformance reports" can be raised which record not only what is wrong but also, as time goes on, how it has been remedied. For similar reasons given in relation to Item 45, I decline to make any order.
  73. Item 48 involves "Installation completion certificates to demonstrate completion prior to testing (i.e. signed ITPs-Installation Test Plans)". Mr Tildesley says at Paragraph 52 of his statement that "this information is held by the DCM contractor and not by Thales" and that the DCM contractor has been asked by letter dated 30 November 2012 for access to the documentation. The letter is exhibited. It needs to be mentioned that the DCM contractor is the three party joint venture (of which Thales is one party) engaged to carry out the Phase 3A infrastructure work on the Metrolink extension. This evidence is not readily credible, although one understands that there may well be a need to procure agreement from the other joint venture partners, although no evidence to that effect has been provided. It is somewhat surprising to say the least that Thales has not procured the consent from the joint venture of which it is an active member within some 17 days of the request. There is (what may well be unwitting) obfuscation on the part of Mr Tildesley when he says that the information "is held by the DCM contractor". He does not say it is or copies of it are not as such in the possession of Thales and indeed there is clear evidence that Thales is the author of the documentation. I therefore propose to order it to be provided unless by 9 January affidavits are provided from the DCM and from Mr Tildesley demonstrating good reasons why the documentation should not be provided and confirming that the documentation has not been and is not in the possession or control of Thales.
  74. The final item in issue (Item 51) is "Records relating to internal handover processes and their implementation of the TOS from 22 October 2008 to the present". The complaint again is that this is an unreasonably broad request. I agree and it is wide. TGM would need to spell out what types of record and what types of implementation. There was a belated attempt on the part of TGM by its Counsel in reply to provide more specific wording that could not be agreed. I therefore make no order in this regard.
  75. Timing
  76. There is an issue between the parties as to the time for compliance with the orders which the Court will make. Obviously, a reasonable period for compliance should be given, which can take into account the fact that Thales has had two months with which to comply with the request already. On the other hand, is not desirable that an impossibly short period of time is given which will automatically put Thales in contempt. Mr Tildesley within a second statement indicated that Thales could comply with some of the requests fairly promptly, for instance in relation to Category 30 of documents he said could be provided by 21 December 2012.
  77. What I propose to do therefore is to allow six weeks from 21 December 2012 for Thales to comply with the orders above but as well to have permission to apply on three clear working days notice for additional time, such application to be supported by written evidence. I am concerned that Thales should not in any way "drag its feet" in any event or so as to gain some tactical or strategic advantage in impending adjudications by delaying the provision of documentation and information. I will therefore also order that Thales shall use all reasonable endeavours to produce all documentation and other information which is the subject matter of the orders significantly earlier than the six weeks. That should mean at the very least that the documentation and information which it has been indicated could be provided earlier would be provided as soon as is reasonably practicable and that Thales does not hold back all the documentation and information until the last hour of the last day of the six weeks. Time for ultimate compliance is to be by close of business on the last day.
  78. Decision
  79. I have indicated above (and I shall not repeat) the specific respects and scope of the specific performance which I am ordering and the timetable for the order to be complied with. I have indicated the dates by which witness statements or affidavits need to be filed and served.

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