[2002]EWHC 2728 (COMM)
 CaseNo:2002/645

IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
COMMERCIAL COURT

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 19 December 2002

Before :

THE HONOURABLE MR JUSTICE GROSS
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Between :

	Babcock International Limited 	Claimant	
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	Mitsui Babcock Energy Limited	Defendant	
	And by Part 20 Claim:

(1) Mitsui Babcock Energy Ltd (2) Mesco (UK) Ltd	Part 20 Claimants
and
(1) Babcock International Ltd (2) Babcock Management Ltd 
(3) Babcock International Group PLC			Part 20 Defendants
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Mr Michael Swainston QC & Mr Simon Salzedo (instructed by Barlow Lyde & Gilbert) for the Claimant & Part 20 Defendants
Mr Gavin Kealey QC & Mr Pushpinder Saini(instructed by Allen & Overy) for the Defendant and Part 20 Claimants

Hearing dates : 16 – 19 September 2002
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Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

THE HON MR JUSTICE GROSS

Mr Justice Gross : 
INTRODUCTION
1.	There is before the Court, an application, dated 11th July, 2002, by the Claimant, Babcock International Limited (“BIL”) for summary judgment, pursuant to CPR, Part 24, against the Defendant and First Part 20 Claimant, Mitsui Babcock Energy Limited (“MBEL”) and the Second Part 20 Claimant, Mesco (UK) Limited (“MESCO”).  MBEL and MESCO’s primary stance is that the matter is not appropriate for summary determination and should instead go to trial.  If that be wrong, however, then, by an Application Notice dated 12th July, 2002, MBEL and MESCO themselves apply, albeit purely “responsively,” for summary judgment against the Part 20 Defendants, BIL, Babcock Management Limited (“BML”) and Babcock International Group PLC (“BIG”).
2.	The ambit of these Part 24 applications is best left until a summary of the principal issues in dispute (“the Issues”), to which I shall come in due course.  It can, however, at once be stated that the broad issue in the case is whether BIL, or MBEL, is responsible (as between BIL and MBEL) for claims in respect of asbestos and other industrial injuries sustained by employees or former employees of BIL.
3.	The practical importance of the present dispute lies in the fact that the insurer which had hitherto insured both BIL and MBEL in respect of such claims became insolvent in early 2001.  I note that it is said to be desirable that this dispute should be resolved expeditiously, as its outcome may well impact on many claims now pending in the courts; such a consideration may properly be taken into account in deciding whether or not to entertain a Part 24 application; that said, the desirability of an expeditious resolution to the present dispute can and does play no role in determining whether BIL is, or for that matter, MBEL and MESCO are, entitled to summary judgment. 
THE FACTS
4.	I  turn to the factual background, taken substantially from the parties’ helpful Case Memorandum. BIL was incorporated in 1900 under the name Babcock and Wilcox Limited (“B&W”), and was involved in heavy engineering including boiler making from time to time.
5.	In 1965 MBEL was incorporated under the name Babcock & Wilcox Operations Limited (“B&WO”).  It became a subsidiary of Babcock Energy Management Limited (“BEML”) which was itself a subsidiary of B&W.
6.	B&WO had the primary object of managing the business and undertaking of B&W as agent to B&W.  It was also empowered under its Memorandum to carry on business itself as “mechanical, electrical, constructional and general engineers, contractors and repairers and as consultants and specialists in mechanics and engineering generally”.  The minutes of B&WO’s first Board Meeting on 2nd March 1965 record its primary contemplated objects as:-
“(a) To manage that part of the business of [B&W] entrusted to it
 (b) To act as the agent of B&W in relation thereto.”
7.	On 20th October 1978, a Transfer Agreement (“the TA”) was concluded between B&W and B&WO.  Under that agreement B&W agreed to sell its boiler-making business to B&WO.  Recital B stated that: 
“The parties have agreed for the sale and purchase of the whole of the undertaking, assets, business, goodwill and liabilities of the boiler-making undertaking of the Vendor (“the Business”)…
By clause 1 of the TA, BIL agreed to sell and B&WO agreed to purchase the undertaking of BIL’s boiler-making business (“the Business”), which was defined as to include all:-
… other assets and liabilities whatsoever and wheresoever of the Vendor whether now held in the name of the Vendor or the Purchaser to the intent that … all the liabilities, obligations, debts and duties of the Vendor shall (subject as aforesaid) become liabilities of the Purchaser.” 
Clause 2 of the TA provided that:-
“As part of the consideration for the said sale the Purchaser shall undertaking [sic] to pay, satisfy, discharge, perform and fulfil all the debts, liabilities, contracts, engagements and obligations of the business whatsoever subsisting at the effective date thereof and shall indemnify the Vendor against all actions, proceedings, claims, costs and demands in respect thereof.”
8.	The TA was filed at Companies House in respect of B&WO on 20th November 1978.
9.	Following the TA, B&WO changed its name to “Babcock Power Limited” and adopted a new Memorandum of Association in which its first object was stated to be:-
“To acquire and take over as a going concern the boiler-making undertaking and business now and heretofore carried on [BIL] and all the assets, liabilities and goodwill of such undertaking and business.” (cl3(A))
10.	Babcock Power Limited changed its name to Babcock Energy Limited (“BEL”) in 1987.
11.	In 1995 BEL’s immediate parent company, BML (the Second Part 20 Defendant), sold 75% plus 1of the shares in BEL to MESCO (the Second Part 20 Claimant) pursuant to an Agreement for Sale and Purchase dated 30th August 1995 (“the SPA”).  BML’s and MESCO’s obligations were guaranteed by their respective parent companies, BIG (the Third Part 20 Defendant) and Mitsui Engineering & Shipbuilding Co., Ltd..  Completion under the SPA took place on 30th September 1995.
12.	The SPA provided as follows:-
“1.  INTERPRETATION
“Company” means Babcock Energy Limited …
“Group Company” means each of the Company, the Subsidiary Undertakings and the Associated Undertakings;
“Relevant Claim” means a claim by the Buyer involving or relating to breach of a Warranty …
“Seller’s Retained Group” means the Sellers Guarantor and any subsidiary or holding company for the time being of the Seller’s Guarantor, excluding any Group Company;
4.  COMPLETION
4.2  At Completion the Seller shall deliver to the Buyer each item specified in schedule 2 …
4.8  Neither the Buyer nor the Seller is obliged to complete this Agreement unless:
4.8.1  the other complies with all its obligations under this clause  4 …
8  WARRANTIES
8.2  The Seller acknowledges that the Buyer is entering into this Agreement in reliance on the Warranties.
8.3  The Warranties are qualified by matters fairly disclosed or expressly referred to in the Disclosure Letter.  The Buyer undertakes that, based on the information which it has received at the date of this Agreement, it does not believe that it has cause to bring a material Relevant Claim in respect of breach of any of the Warranties.
10.  LIMITATIONS ON THE SELLER’S LIABILITY
10.3  The Seller is not liable for a Relevant Claim … unless the Buyer has given the Seller notice of the Relevant Claim …
10.3.2 … on or before 30 September 1997.
22.  GENERAL
22.2  The failure to exercise or delay in exercising a right or remedy provided by this Agreement or by law does not constitute a waiver of the right or remedy or a waiver of other rights or remedies.
22.5  This Agreement (together with the documents referred to in it) constitutes the whole agreement between the parties relating to the sale and purchase of the Shares (neither party having relied upon any representation made by the other party which is not a term of this Agreement or, to the extent that it has done, it has (in the absence of fraud or wilful misrepresentation or wilful concealment) no rights or remedies in respect thereof) …
SCHEDULE 2
ITEMS FOR DELIVERY BY THE SELLER AT COMPLETION
13.  A duly executed release and discharge of each guarantee, indemnity and charge given by each Group Company [which included MBEL] … relating directly or indirectly to any liability of any member of the Seller’s Retained Group [which included BIL]
SCHEDULE 4
WARRANTIES
1.  CAPACITY AND AUTHORITY
1.2    Right, power, authority and action
1.2.1  The Seller has the right, power and authority and has taken all action necessary to execute and deliver this Agreement and each document to be executed at or before Completion.  The Seller and Seller’s Guarantor have obtained all consents required by each of them to effect the sale and purchase contemplated by this Agreement.
9  INSURANCE
9.1  Policies
The Disclosure Letter contains a list of each current insurance and indemnity policy in respect of which each Group Company has an interest (…the “Policies”)
9.2  Status of Policies
To the best of the Seller’s knowledge, information and belief, each of the Policies is valid and enforceable and is not void or voidable … no Group Company has done anything or omitted to do anything which might make any of the Policies void or voidable.
9.3  Claims
No claim is outstanding under any of the Policies and to the best of the Seller’s knowledge, information and belief, no matter exists which is likely to give rise to a claim under any of the Policies.
LIABILITIES
15.2  Guarantees and indemnities
15.2.1  No Group Company has any liability (including, without limitation, contingently) under a guarantee, indemnity or other agreement to secure or incur a financial or other obligation with respect to another person’s obligation other than that of a Group Company
20  LITIGATION AND COMPLIANCE WITH LAW
20.1  Litigation
20.1.1 … To the best of the Seller’s knowledge, information and belief save in relation to any contract (a “Material Contract”) between a Group Company and a customer, supplier or subcontractor relating to a Major Project … no civil, criminal, arbitration, administrative or other proceeding in any jurisdiction is pending or threatened by or against a Group Company …
20.1.2  To the best of the Seller’s knowledge, information and belief, save in relation to a Material Contract, no matter exists which is likely to give rise to a material, civil, criminal, arbitration, administrative or other proceeding in any jurisdiction involving a Group Company …
21  	INSIDER AGREEMENTS
There is no agreement between a Group Company on the one hand and a member of the Seller’s Retained Group on the other hand, under which there is any outstanding liability.”
13.	As already noted, the SPA made reference to the Disclosure Letter of 30th August, 1995 (“the Disclosure letter”). The Disclosure letter provided as follows:
“1.  For the purposes of this letter:
1.2 … all disclosures made shall be deemed to be made generally in respect of the Agreement and to qualify Warranties given by the Seller in the Agreement;
3. …we make the following general disclosure:-
3.10  the Memorandum and Articles of Association of the Company and the Group Companies and any matter which might be revealed by searches of the Company and the Group Companies at Companies House …
4.  We now refer to Schedule 4 of the [SPA] and the paragraph numbering in this paragraph 4 follows that in Schedule 4.
…
9  INSURANCE
9.1  A summary of current insurance policies in force in relation to the Energy Division … is attached …
9.3  Please see section 3.3 of file 14 which contains details of all recent claims for the Energy Division …”
14.	BEL subsequently changed its name again to “Mitsui Babcock Energy Limited” (“MBEL”).
15.	Up until the end of 1989, Iron Trades Employers Insurance Association Limited (“Iron Trades 1”) insured both BIL and BEL (MBEL) against liabilities which would include claims by their respective former employees for asbestos and other industrial injuries.  On 31st December 1989, Iron Trades 1 ceased writing business and went into ring-fenced run-off.   In 1997, as further discussed below, Iron Trades 1’s insurance business was transferred to Chester Street Insurance Holdings Limited (“Chester Street”).
16.	Chester Street became insolvent in early 2001.  A report by the Joint Scheme Administrator dated 29 March 2001 expressed considerable uncertainty about the company’s ability to meet its liabilities and set the initial payment percentage for claims at 5%.
17.	By a letter dated 23 November 2001, the Mitsui “camp” notified BIL that it considered MBEL to have been relieved of all liabilities and obligations by reason of clause 4.2 and Schedule 2, paragraph 13 of the SPA, and demanded a duly executed written release accordingly.  No such written release was provided.
18.	BIL commenced the current action on 7th December 2001, seeking damages, declarations and other relief on the footing that MBEL is obliged under the TA to pay and discharge the liabilities of the boiler-making business, and to indemnify BIL against any such liabilities.  BIL alleges that the Schedules to the Particulars of Claim list specific claims identified as at the date of the Particulars as arising from the boiler making business and hence (on BIL’s case) falling with the TA.  The parties’ cases are further summarised below, when dealing with the individual principal Issues.
THE ISSUES
19.	The (principal) Issues which arise on the present applications are these:
(I)	As a matter of the true construction of the TA and the SPA, to what extent, if at all, was MBEL relieved by clause 4.2 and paragraph 13 of Schedule 2 of the SPA of such liabilities and obligations as were imposed on it by the TA? (“Issue (I): Construction”);
(II)	If MBEL/MESCO are wrong on construction, whether BML, BIG and BIL are estopped from contending that para. 13 of Schedule 2 to the SPA does not have the meaning attributed to it by MBEL/MESCO? (“Issue (II): Estoppel”);
(III)	If MBEL/MESCO are right on construction, or being wrong on construction, are right on estoppel, to what relief, if any, are they entitled?  (“Issue (III): Equity”); sub-issues which arise are conveniently dealt with under the following headings: (A) Release in equity;  (B) Specific Performance – as a matter of principle;  (C) Waiver by election;  (D) Time bar by analogy;  (E) Laches;
(IV)	If MBEL/MESCO are denied relief (for whatever reason); (A) what was the scope of business transferred under the TA? (B) (depending on the answer to (A)) which, if any, claims in Schedules 1-3 of the Particulars of Claim can the Court determine at this stage arise from that business (ie. the business determined by (A))?  (“Issue (IV): Scope of Business”).
20.	In the broadest outline, BIL seeks summary judgment (1) in favour of its case on construction; (2) dismissing MBEL’s/MESCO’s  arguments on estoppel; (3) if need be, denying MBEL/MESCO relief in equity; and (4) in favour of its case that the scope of business transferred under the TA in particular extended to both the so-called production and construction divisions (not the production division only) and that the Court can and should at this stage determine in its favour at least many of the claims in the relevant Schedules to the Particulars of Claim.
21.	Likewise, in broad outline, MBEL/MESCO: (1) resist the BIL case on construction and contend that their own construction of the TA and SPA is to be preferred;  (2) assert that their case on estoppel has, at the least, a realistic prospect of success, so that summary judgment against them would be inappropriate and wrong;  (3) assert that their entitlement to relief in equity cannot be disposed of against them by way of summary judgment and that, to the contrary, if appropriate, should be determined summarily in their favour;  (4) dispute BIL’s entitlement to summary judgment on all aspects of Issue (IV).
22.	By way of further elaboration as to the parameters of the hearing:
(1)	Issue (I): Construction: MBEL accepted (Transcript 19th September, p.79) that it would be right for this Issue to be determined, provided the Court was satisfied that there was no further significant material evidence which could be of assistance in relation to the 1978 TA; it was not suggested that there was or might be any such evidence in relation to the 1995 SPA.
(2)      Issue (III): Equity:  As to this Issue, should it arise:
(i)	MBEL’s and MESCO’s responsive application for summary judgment, related only to this Issue.
(ii)	It will already have been observed that this Issue contains a considerable number of sub-issues; on all those, BIL pressed for summary judgment.  Those sub-issues do not, however, exhaust BIL’s resistance to MBEL’s/MESCO’s claim for equitable relief – there being still further issues such as estoppel which remain outstanding and which were accepted by BIL as being inappropriate for a summary judgment application.
(iii)	In the circumstances, it seems plain that the most that MBEL/MESCO could achieve by way of their summary judgment application, is resolution of the “live” sub-issues under Issue (III) in their favour.  Given the outstanding issues not the subject of this hearing, MBEL/MESCO could not (even at best) dispose of the entirety of Issue (III) in their favour.
THE TEST FOR SUMMARY JUDGMENT
23.	CPR Part 24.2 provides as follows:
“The Court may give summary judgment against a claimant or defendant on the whole of a claim or on a particular issue if – (a) it considers that –
(i) that claimant has no real prospect of succeeding on the claim of issue; or
(ii) that defendant has no real prospect of successfully defending the claim or issue; and
(b) there is no other compelling reason why the case or issue should be disposed of at a trial.”
24.	In the light of the guidance given by Swain v Hillman [2001] 1 All ER 91(CA) and Three Rivers DC v Bank of England [2001] UKHL/16 [2001] 2 All ER 513, an application under Part 24 should be approached as follows:
(1)	Ordinarily, disputes are to be resolved at trial, on the evidence and after completion of disclosure and other pre-trial procedures; in that sense, Part 24 confers on the court an exceptional power.
(2)	Properly used, the Court’s power under Part 24 is a salutary power; it is there, ultimately in the interests of all concerned, to dispose of cases (or issues) that are not fit for trial at all.
(3)	The test of whether a case (or issue) is fit for trial, is whether there is a real prospect of the claim or defence, as the case may be, succeeding; “real” is equivalent to “realistic” and is to be contrasted with “fanciful”.
(4)	It is not appropriate to utilise Part 24 for the purpose of conducting a mini-trial on the documents without disclosure and without oral evidence; the more complex or time-consuming the case (or issue), the greater is the need for caution to avoid an application for summary judgment turning into a mini-trial.  In such cases it is incumbent on the Court to consider carefully whether or not to entertain the application and frequently it may be inappropriate to do so.  Where, however, there is a realistic prospect of benefit to the parties, then the application may proceed but it will be necessary to keep well in mind the nature of the exercise which is permissible under Part 24.
25.	Having regard to these considerations, it seemed to me appropriate to proceed with the applications in the present case.  First, it would be of benefit to the parties (and third parties) if the Issues should prove capable of relatively speedy resolution, a point which remains valid even though it has taken longer to produce this judgment than I would have wished. In this regard, I record that MBEL/MESCO did not oppose the goal of speedy resolution but contended that the way to achieve it lay by way of preliminary issues (with disclosure) rather than by way of application(s) for summary judgment.  Even assuming there to be force in this MBEL/MESCO stance, it did not seem to be to be a sufficient reason for not proceeding with the applications before the Court, while recognising the limitations inherent in Part 24 procedure.  Secondly, Issue (I) raised a question of construction. In this context, questions of construction, on which evidence is inadmissible save for the relatively narrow gateway provided by “matrix” evidence (properly so-called), give rise to different considerations.  Once such an issue is before the Court, whether by way of Part 24 application of otherwise, then unless there is a real prospect of matrix evidence emerging at trial, there are not infrequently powerful reasons for grasping the nettle and determining it.  Even should both parties possess arguments with (at the outset) a “real prospect” of success, no useful purpose can be served in leaving such an issue over to trial, unless at the trial the court will be better informed in a relevant respect, or the issue cannot be determined separately from others going to trial, or, perhaps, the matter comes within Part 24.2(b).  Realistically, as already foreshadowed, I understood MBEL to accept that such an approach was appropriate in the context of Issue (I).
26.	I turn now to the individual Issues, acknowledging gratefully as I do so, the very considerable assistance furnished by Mr Swainston QC (who appeared for BIL/BML/BIG) and Mr Kealey QC (who appeared for MBEL/MESCO).
ISSUE (I):  CONSTRUCTION
27.	The rival cases in outline:  For MBEL, Mr Kealey QC submitted that the TA amounted essentially to an internal reorganisation.  For the future, MBEL was to be constituted as an operating company in its own right; as from the 31st March 1978, MBEL would assume liability for production division employees.  However the parties did not go down the route of novating past contracts of employment.  It followed that BIL remained responsible in respect of obligations and liabilities that might be owed to past employees.  As a matter of legal analysis and substance, therefore, the TA provided that MBEL would indemnify BIL in respect of its pre-1978 employee liabilities arising out of its boiler making business.  Accordingly, as a matter of the natural and ordinary meaning of the language used, paragraph 13 of Schedule 2 to the SPA “caught” this undertaking on MBEL’s part to indemnify BIL under the TA.  The purpose of paragraph 13 was to cater for “undiscovered indemnities and agreements” in order to achieve a “clean break” between the companies acquired by MESCO and those being retained by BML (the “Seller’s Retained Group”); in short, MESCO was to acquire companies such as MBEL free of financial obligations which related to liabilities of the companies being retained.  MBEL was accordingly released or entitled to a release as provided for by paragraph 13.  Further, such a construction made good commercial sense; in 1978 the risk assumed by MBEL in respect of the indemnity relating to BIL’s pre-1978 employee liabilities was notional; not only was there no reason to doubt the solvency of the insurers, Iron Trades 1;  in addition, BIL and MBEL remained part of the same corporate group.  However,  in 1995, BIL and MBEL were going their separate corporate ways.  There was no good commercial reason for MBEL to continue to bear the risk of insurer insolvency in respect of BIL’s pre-1978 employee liabilities.  Still further, this was not a matter which could be left to the warranties in the SPA, given the fact that BIL and MBEL were not parties to the SPA and the law relating to privity of contract (as it then stood); that said, if paragraph 13 bore the construction contended for by MBEL, it would reinforce Warranties 15.2.1. and 20.1.2; the SPA was to be read as a whole.
28.	Pausing here, the practical effect of Mr Kealey’s construction argument, post the SPA, was this: (1) MBEL was potentially liable in respect of pre-1978 matters in respect of contribution claims relating to its own operations; any such liability had nothing to do with the TA;  (2) Again, apart from the TA, if correct, or arguably correct in its case on Issue (IV), then MBEL had assumed liability in respect of workers in the construction division from 1st October 1976 (for reasons which will become apparent when dealing with that Issue);  (3) MBEL itself assumed liability under the TA in respect of production division employees as from 31st March, 1978;  (4) MBEL was, by reason of paragraph 13 of Schedule 2 to the SPA, released or entitled to a release in respect of BIL’s pre-1978 employee liabilities.
29.	For BIL, Mr. Swainston QC argued that MBEL was seeking to place a weight on paragraph 13 of Schedule 2 to the SPA which it could not bear. He underlined that paragraph 13 was found in a Completion schedule; this was an unlikely location for a substantive provision, let alone a clause of the importance ascribed to it on MBEL’s construction.  BIL’s case was that the relevant wording in paragraph 13, “guarantee, indemnity and charge” constituted a genus, namely security documents – essentially cross-security documents relating to the “old” group’s borrowings.  It was common ground that the wording in question included such security documents; it was BIL’s case that this was the exhaustive meaning of these words. It followed that paragraph 13 did not apply to the TA at all. Turning to the TA, the same conclusion was arrived at.  Even if “indemnity” in paragraph 13 had a broader meaning than that contended for in Mr. Swainston’s primary case, the TA was not a mere “indemnity”.  That was to take altogether too narrow a view of the TA and to read the word “indemnity” without regard to the context; it ignored the fact that before any question of indemnification arose, the TA involved, at least as between the parties thereto, the assumption of various obligations and liabilities by MBEL as it own (cl.1); moreover, those obligations and liabilities were to be paid, satisfied, discharged, performed and fulfilled by MBEL (cl.2).  If MBEL’s construction was correct, a release of the “indemnity” contained in the TA would in any event be insufficient for MBEL’s purpose; the separate obligations assumed by MBEL under the TA would remain of full force and effect, with a liability (at law) to pay damages in respect of any breach of contract.  With regard to the suggested objective of a “clean-break”, the MBEL construction was curious and did not achieve it; that construction involved MBEL, in 1995,  addressing in paragraph 13 some but not all pre-1978 liabilities and accepting liability for 1978-1995 liabilities. In short, when in 1995 under the SPA, MESCO purchased from MBEL’s parent a shareholding in MBEL, it acquired both the assets and liabilities relating to those shares, as an integral part of the transaction; it was not a purchase of assets only without the attendant liabilities.
30.	Proceeding to determine the Issue:  So far as will have been apparent, the arguments address the true construction of the TA and SPA.  It cannot, however, be said that Mr Kealey’s argument is “hopeless” or that, from the outset, it could be seen to have no real prospect of success.  I do not, however, think it right simply to leave Issue (I) over to a trial.  To the contrary, I think that no useful purpose would be served by doing so; my reasons are these:
i)	MBEL does not suggest that anything, or anything additional, will be forthcoming by way of “matrix” evidence in relation to the 1995 SPA.  This is unsurprising, not least given that it is MBEL’s case that no one in its “camp” was in 1995 aware of the 1978 TA.  Leaving aside somewhat theoretical questions – which are unnecessary to resolve in this case – as to whether a fact of which a reasonable party ought to have been aware but the actual party was not can constitute a part of the contractual matrix, matrix evidence must involve circumstances of which both parties were aware.  If MBEL was in 1995 unaware of the 1978 TA, then whatever complaint could be made as to BIL/BML/BIG’s knowledge in this regard, it could not give rise to additional matrix evidence.  For completeness, it is fair to note in this regard: (1) that, on the available material, it would seem that, for its part, the BIL camp too had overlooked or forgotten the existence of the 1978 TA but, for the reasons already set out, even should that prove to be incorrect, no additional matrix evidence could be generated;  (2) BIL’s stance was that MESCO could make no complaint as to ignorance of the TA; as already noted, the TA had been filed at Companies House and the Disclosure letter referred expressly to “any matter which might be revealed by searches … at Companies House”.
ii)	 Mr Kealey QC raised the possibility of whether there might be matrix evidence outstanding in relation to the 1978 TA “which would inform the Court … that what was being transferred was purely the insurance risk and nothing more” (Transcript 19th September, p.79).  For my part, I regard the possibility, now 24 years after the event, of there being in this context (1) additional matrix evidence in existence which is (2) useful and materially adds to Mr Kealey’s submissions, as altogether too speculative to warrant adjourning the present Issue on this ground.  Nothing in the available material even hints at the existence of such additional evidence.
iii)	It does not appear to me that Issue (I) is so intertwined with any of the remaining Issues that were I to refuse summary judgment on those Issues it would be appropriate to postpone a decision on Issue (I).  Plainly too, no question concerning CPR Part 24.2(b) arises in respect of Issue (I).  In the circumstances, I shall proceed to determine Issue (I).
31.	Discussion:  I have, with respect to Mr Kealey’s arguments, reached the clear conclusion that, on this Issue, those of Mr Swainston are to be preferred.  My reasons follow.
32.	(1) The Location of paragraph 13 of Schedule 2 to the SPA:  I think there is force in Mr Swainston’s submission that had paragraph 13 been intended to carry the wide-ranging substantive importance attributed to it by MBEL, it is unlikely to have been located in a Completion Schedule.  The point does not benefit from elaboration and is plainly not by itself decisive; it simply jars, however, to suppose that this was the place to insert a provision which, according to MBEL, was intended to cater for (all) “undiscovered indemnities and agreements”.
33.	(2) The genus of the words “guarantee, indemnity and charge” in paragraph 13:  Mr Swainston submitted that the words “guarantee, indemnity and charge” constituted a genus, namely, security or cross-security documents relating to the Seller’s Retained Group’s borrowings; I agree.  It was common ground or not seriously disputable that in a transaction such as the SPA (sale of a majority shareholding in a private company), it would be standard practice to find a clause dealing with the release of the company being disposed of from previous intra-group cross-security arrangements; moreover, it would be expected that such releases would form part of the completion agenda.  Realistically, therefore, Mr Kealey did not resist the argument that paragraph 13 applied to “old” group cross-security documents.
34.	The next question is whether that genus constituted the exhaustive meaning of paragraph 13.  Mr Kealey answered “no”; Mr Swainston “yes”.  I agree with Mr Swainston.  I am unable to accept that a clause designed to deal with the genus already described should carry the additional, important and open-ended meaning ascribed to it by MBEL.   For my part, I would expect that it is instead to the warranties inevitably contained in an agreement such as the SPA, that one would look to flush out information regarding the “target” company and to allocate the risk of unknown liabilities or undisclosed obligations on the seller: (see too, Buying and Selling Private Companies and Businesses, Simon Beswick, Butterworths 2001, esp. at p.210).  Now, it is not suggested that paragraph 13 is in any “standard” format and, of course, each agreement must be considered on its own terms, rather than by way of preconceptions as to what a standard agreement might contain.  That said, having considered the terms of the SPA, I am satisfied that paragraph 13 had the limited purpose of covering the genus of cross-security documents already described and cannot be regarded as a catch-all provision of the nature advocated by MBEL. On one view, this conclusion is sufficient to dispose of Issue (I); if paragraph 13 has the limited meaning which I think it has, then it does not “bite” on the TA at all.  It is, however, important to consider the Issue as a whole before reaching a final conclusion and I go on to do so.
35.	(3) Was the TA an “indemnity” within the meaning of paragraph 13 of Schedule 2 to the SPA?  Assuming that paragraph 13 had a wider meaning so that it was capable of “biting” on the TA, would it be right to characterise the TA as an “indemnity”?
36.	Mr Kealey’s submission was that, upon analysis, the substance of the obligation taken on by MBEL towards BIL under the TA was to “indemnify” or, quite simply, to “hold [BIL] harmless”.  Relying on observations of the highest authority in The “Fanti” and “Padre Island” [1990] 2 Lloyd’s Rep. 191, at 196-197 (per Lord Brandon) and 202 (per Lord Goff), that a promise of indemnity is simply a promise to hold the indemnified person harmless, Mr Kealey contended that that is precisely what was provided for in cll. 1 and 2 of the TA.  The substance of the obligation was that BIL should not be called on to pay and that MBEL, as the indemnifier, would pay in the first instance or reimburse BIL if it failed to do so.  It followed, said Mr Kealey, that the only risk assumed by MBEL (B&WO) in 1978, was the risk of insurer insolvency.
37.	I am unable to accept these submissions.
i)	First, I of course respectfully accept everything said in The “Fanti” and “Padre Island but I am not persuaded that those authoritative observations assist in answering the question here, as to whether the TA is properly to be characterised as an “indemnity”.
ii)	Secondly, it must not be overlooked that cll. 1 and 2 of the TA were addressing the future as well as pre-1978 employee liabilities.  With regard to the future, the TA plainly intended to effect the transition of MBEL (B&WO) from an agent to an operating company, leaving BIL (B&W) as simply a holding company.  In this regard, it was, as will be recollected, common ground that MBEL assumed liability in respect of production division employees as from 31st March, 1978.  At least for the future, therefore, cll. 1 and 2 of the TA could not possibly be categorised as an “indemnity”. It follows that for Mr Kealey’s submission to be well-founded, cll. 1 and 2 would have to mean one thing for the future and another for the past.  I do not think that could be right.
iii)	Thirdly, as between BIL and MBEL (and regardless of how the TA worked out towards third parties), I see no difficulty in MBEL assuming the “primary” obligations set out in cll. 1 and 2 of the TA, both in respect of BIL’s pre-1978 employee liabilities and for the future.  In commercial terms, the intent of those clauses is clear.  As Mr Swainston put it, as between BIL and MBEL, there are three distinct aspects to these provisions: (1) MBEL agreed to treat the obligations in question as its own; (2) MBEL agreed to take on and discharge these obligations; (3) MBEL agreed to indemnify BIL as there set out.  As it seems to me, in context, unless it is correct to ignore or treat as meaningless aspects (1) and (2), the TA cannot be characterised as an “indemnity”; I am, however, unpersuaded that there is any good reason for ignoring aspects (1) and (2).  In terms of the corporate re-organisation – even if it was as Mr Kealey described it, an internal re-organisation – such a transfer of responsibility made good sense.  Once, however, all three aspects of the relevant provisions of the TA are taken into account, then, in my judgment, the TA is not an “indemnity” but is something in substance more than that;  MBEL is not simply holding BIL harmless, it is assuming additional obligations.
(4)	Fourthly, the same conclusion may be reached by a different route.  Unless it be right to ignore what I have termed aspects (1) and (2) of the TA, then the consequence of releasing MBEL from the “indemnity” in the TA would leave untouched its “primary” obligations and its potential liability in damages (at law) for breach thereof.
38.	For all these reasons, even if paragraph 13 had a wider meaning than the genus already described so that it was capable of “biting” on the TA, I am satisfied that it does not do so;  the TA was not an “indemnity”.  If anything, the nature of the exercise just conducted reinforces the conclusion arrived at earlier on the narrow scope of paragraph 13; commercial parties could not realistically be supposed to have intended such a process of analysis to be required let alone as part of a Completion Schedule.
39.	(4)  The position as to warranties in the SPA:  I am, with respect, unpersuaded by Mr Kealey’s submission that MBEL’s construction of paragraph 13 was correct because (i) paragraph 13 was intended to supplement the warranties by reason of concerns about privity of contract and the availability of damages and (ii) paragraph 13 was a mechanism intended to ensure compliance with warranties 15.2.1 and 20.1.2 of the SPA.  For reasons already given, I think that is almost to stand the respective roles of paragraph 13 and the warranties on their heads; it was the warranties which were intended to allocate to BML the risk of unknown liabilities or undisclosed obligations; Schedule 2, including paragraph 13 thereof, contained the mechanism for compliance with completion requirements; Schedule 2 was not intended to contain a mechanism for ensuring that BML complied with the warranties; no such mechanism was needed.  In my judgment, subject of course to the impact of the Disclosure letter, it was the intention of the parties to the SPA that it was to the warranties that MESCO was to look in respect of any proper complaints concerning “undiscovered indemnities and agreements”; either there was a claim under such warranties or there was not; if there was a claim under a warranty it is an unremarkable feature of the SPA that it had to be brought within a specified period of time (see cll. 1 and 10.3 of the SPA).  On no view was paragraph 13 to be regarded as a “catch-all” provision.  For completeness, whether or not the parties considered the ramifications of the law as to privity of contract as it then stood, it is unrealistic to suppose that they intended paragraph 13 to cater for such matters.
40.	(5) Matrix and the SPA:  In his reply submissions, Mr Swainston submitted that this was a situation where “heads BIL winds, tails BIL wins …”.  I agree.  My inclination is that when the SPA was entered into, none of the parties thereto knew of the TA.  If that be right, there can be no good reason to strain the construction of paragraph 13 of Schedule 2.  If that be wrong, however, and the parties must be taken to have had the TA in mind when entering into the SPA, then I accept Mr Swainston’s submission that had they intended to reverse the obligations imposed on MBEL under the TA, the “inescapable conclusion” is that they would have dealt with the matter more fully and not by way of paragraph 13.  A similar analysis applies to any question of the parties’ knowledge of any risk as to Iron Trades 1’s solvency.  Accordingly, it is unnecessary to enter into the more complex questions already referred to, namely, whether facts of which the actual parties are unaware can form part of the contractual matrix.  Furthermore, no realistic permutation of the matrix evidence causes me to revise the view to which I have (as indicated) otherwise come on the true construction of the SPA.
41.	(6) Overall conclusion:  Always subject to Issue (IV), the TA transferred from BIL (B&W) to MBEL (B&WO) both assets and liabilities.  The shareholding sold under the SPA likewise came with both assets and liabilities; the liabilities were not stripped out.  There is no discernible intention of achieving the (partial) “clean-break” contemplated by MBEL’s submissions.  As a matter of construction, clause 4.2 and paragraph 13 of Schedule 2 of the SPA did not serve to relieve MBEL from such liabilities as were imposed on it by the TA; whether or not the SPA “ought” to have done so is neither here nor there with regard to its true construction.
ISSUE (II):  ESTOPPEL
42.	(1)  The allegation formulated:     Here, MBEL/MESCO seek to raise an argument of estoppel based upon the breach of a duty to speak.   The allegation, as will be seen, is a serious one,  of or akin to fraud.  Although pleadings had been served, this Issue was not pleaded.   It was first touched upon in Mr. Kealey’s skeleton argument and evolved into its final form in the course of his submissions.   
43.	In the circumstances, it is appropriate to set out the case sought to be advanced in the precise words used by Mr. Kealey, taken from the transcripts.  First, on the 18th September, Mr. Kealey said this (at pp. 92-3, 114-115, 122): 
“ BML and BIG had, by reason of the circumstances of this case … a duty to speak and to tell MESCO not only what the true level of claims insured by Iron Trades 1 was, but also, in those circumstances, that Iron Trades 1 was in a ring-fenced run-off.  Therefore there was some uncertainty about its future solvency.
If that duty had been performed, MESCO – and, therefore, MBEL – would have obtained protection from the risk of having to meet BIL’s liabilities because of the inadequacy or insufficiency of BIL’s insurance.
The means of providing that protection is to deny BML and/or BIG the ability to advance any construction of paragraph 13 that would prevent MESCO or MBEL from obtaining that protection.  In other words they should be estopped from denying that they are obliged, in accordance with that paragraph, to procure MBEL’s release from  the indemnity in clause 2 of the Transfer Agreement.
… there was a conscious decision taken not to disclose all of the recent Iron Trades claims… against that background I invite you to conclude that an honest, reasonable or responsible person in the position of the contracting parties with MESCO, under the 1995 contract, would have disclosed to MESCO not only the true level of the recent claims involving Iron Trades, but also given those level of claims that Iron Trades 1 was in ring-fenced run-off.   In other words … that Iron Trades 1 had ceased writing prospective policies from 1989, and moreover had been replaced for the purposes of renewals and writing of new policies as from 1989 by another Iron Trades company within the same group.  Because … it is to be inferred from that factual circumstance that Iron Trades 1 had to be isolated from Iron Trades 2, or vice versa, so that the business which Iron Trades 1 had written and the consequences or the results of that writing, should not affect the liquidity of a succeeding insurer.  In other words, you cut off a company so that it is in run-off, and if, ultimately, it goes into insolvent run-off, that does not affect the replacement corporate entity.
… in circumstances where a party has consciously and deliberately chosen not to give full and appropriate details of recent claims involving an insurer .. which is, in ring-fenced run-off, and in circumstances where, therefore, one may infer that that party who fails to give that disclosure is aware of the possibility that the other party may not have the same degree of knowledge, even in the absence of a contract of the utmost good faith, the first party… if acting responsibly and honestly, has a positive duty to disabuse the other party of his happy contemplation that there is no problem.”
Secondly, on the 19th September,  Mr. Kealey added the following clarification (at pp. 9-12):
“ … in terms of causation… [had] MESCO been told of the level of claims, the true level of claims, then … MESCO would not have behaved differently from how it did behave… Mr. Majima thought they were all insured and had no reason to doubt the solvency of the insurer…. the duty to speak and the unconscionable behaviour extended to the correction of the impression that MESCO had, and which one infers it was known that MESCO would have, that the claims, whatever their level, were fully insured by an insurer which possessed no financial characteristic or other characteristic that might suggest a future inability to meet those claims….
Mr. JUSTICE GROSS:   Your misrepresentation had someone … pleaded it, would have been as to the state of the insurer.
Mr. KEALEY:  Yes.
Mr. JUSTICE GROSS:  Not  as to the level of the claims. Any complaint about the level of claims would have been doomed to failure.
Mr. KEALEY:  That is absolutely right. The importance of the misrepresentation in relation to the levels of claims… is the fact that … there was a conscious and deliberate decision to mislead us about the level of claims.”
44.	(2)  Mr. Swainston’s preliminary “marker”:     Mr. Swainston submitted that it was most unsatisfactory that these serious allegations were unpleaded.  There was force in this submission but, plainly, in a Part 24 context, it would have been undesirable for me to shut it out; nor did Mr. Swainston press me to do so or, even, to adjourn so that the matter could be pleaded out.  Instead, Mr. Swainston indicated that he was content to deal with the case as it was now articulated but urged me to scrutinise it carefully.   For my part,  I was content to proceed in this fashion; first,  because I received the clear indication from Mr. Kealey that he would be prepared to put his name to a pleading of fraud;  secondly, because given the availability of the transcript, the parties would have been no better off with an adjournment followed by a pleading.   That said, in whatever document it had emerged, this case does call for close scrutiny.
45.	(3)  The legal basis:    The legal basis for the estoppel asserted by Mr. Kealey may be found in the following passage, taken from Lord Wilberforce’s speech in Moorgate Mercantile Ltd. v Twitchings [1977] AC 890, at p.903:
“ … inaction or silence, by contrast with positive conduct or statement, is colourless; it cannot influence a person to act to his detriment unless it acquires a positive content such that that person is entitled to rely on it.   In order that silence or inaction may acquire a positive content it is usually said that there must be a duty to speak or to act in a particular way, owed to the person prejudiced … The necessity for this duty, particularly with regard to silence or omission, has been stated in many authoritative judgments too well known to need complete citation…. the test of duty is one which can safely be applied so long as it is understood what we mean…  What I think we are looking for here is an answer to the question whether, having regard to the situation in which the relevant transaction occurred, as known to both parties, a reasonable man, in the position of the “acquirer” of the property, would expect the “owner” acting honestly and responsibly, if he claimed any title in the property, to take steps to make that claim known to, and discoverable by, the “acquirer” and whether, in the face of an omission to do so, the “acquirer” could reasonably assume that no such title was claimed.”
46.	In argument, reference was made to certain other authorities.  The “Henrik Sif” [1982] 1 Lloyd’s Rep. 456 is an example of a case where the duty to speak resulted in the Court finding that there was an estoppel.  There, the plaintiff cargo interests pursued a claim against the charterers;  the charterers failed to advise the plaintiffs that, by reason of a demise clause in the bills of lading,  the proper party (against whom the claim should have been pursued) was the shipowner;   in due course the claim became time-barred against the shipowner.    Applying the observations already cited from Moorgate Mercantile (supra),  Webster,J. held (inter alia) that the charterers had been under a duty to alert the plaintiffs to the true facts;  accordingly, they were estopped by silence or acquiescence from denying that they were parties to the bills of lading and/or from relying on the demise clause.  Orion Finance Limited v JD Williams & Company Limited (CA, 22nd July, 1997, unreported) is a decision underlining the importance of keeping in mind that the party against whom the estoppel is alleged, must be proved to have made an unequivocal representation;   where silence is relied upon, the question is (transcript, p.12, per Evans,LJ): 
“  … were the circumstances such that silence had legal effects? That is… essentially a question of fact.  Were the circumstances such that silence was equivalent to a positive statement ?  If so, then a representation was made, because there was a duty to speak if the impression otherwise given was to be contradicted.”
47.	(4)  Discussion:    As it seems to me, the MBEL/MESCO estoppel case faces insuperable hurdles; even judged by the standards of Part 24, it is too nebulous and lacks the coherence necessary to give it a real prospect of success;  it falls short of the threshold of viability required for such a case, taking into account  the scrutiny to which it would be subjected as involving allegations of or akin to fraud.   I neither express nor imply any criticism of the MBEL legal team in raising it at this hearing;  I do not, however, think that, despite their valiant attempt,  it is “fit” to go to trial.  My reasons follow.
48.	I begin with the level of asbestos claims and the alleged suppression of details of recent claims.   As has been seen from the transcript extracts, success here is necessary for MBEL to make good its case but not sufficient for it to do so;   given the available evidence that MBEL would not have acted differently regardless of the true level of claims, any case based simply on claims levels is (and was accepted in argument to be) doomed.   The significance of claims levels lay instead in the submission that their suppression disclosed a “conscious and deliberate decision to mislead”.    From there, so the argument ran, it was but a short step to a desire on BML’s/BIG’s part to conceal the risk of Iron Trades 1 being overwhelmed by such claims and hence the duty to speak as to Iron Trades 1 being in ring-fenced run-off.    Leaving all other matters to one side, it follows that if MBEL/MESCO cannot make good the first step(s) in the argument, then, realistically,  the estoppel case is going nowhere.  Against this background, the evidence about claims levels and suppression of details as to recent claims falls to be considered.     In my judgment, the MBEL/MESCO estoppel argument does indeed break down at this first stage.   
i)	As to the levels of asbestos claims, the evidential foundation is simply lacking for the submission that these were rising from the early 1990s so as to give rise to concerns as to the financial soundness of Iron Trades 1.      Though there is an assertion to this effect in the witness statement of a Mr. Keaveney, it is belied by his own reports in 1996 and 1997, exhibited thereto and which comprise the contemporaneous evidence relied on in this regard.     The high point of these reports from the MBEL/MESCO point of view comprises the reference to an “increasing trend in the level of asbestos related claims”;   the consequence, however, is a forecast of rising premium levels, not risk to or collapse of  the insurer.   Beyond that, Mr. Keaveney’s contemporaneous reports evidence a variety of employers’ liability claims including deafness and white finger;  they simply do not disclose a torrent of asbestos related claims.    Furthermore, as Mr. Keaveney’s reports post-date the SPA and as the thrust of this MBEL/ MESCO argument is an increase in asbestos related claims over time, it follows that there can be no question of the situation being worse at the time of the conclusion of the SPA;  if anything, it could only have been less alarming.   I add only this.  With the benefit of hindsight knowledge as to asbestos claims levels, it might be tempting to conclude that “everyone knew” about rising levels of asbestos claims in the early 1990s.   That temptation must, however, be resisted.  First, I must be guided by evidence;  “judicial knowledge” should only be used with caution.  Secondly, that was not MBEL’s/MESCO’s case; to the contrary if “everyone knew” that case would have been dealt a body blow.   Thirdly, general or generalised knowledge would not assist on the question of whether particular claims levels posed a threat to the solvency of Iron Trades 1.    
ii)	 I turn next to the suggestion of suppression of true claims levels.   Had the MBEL/MESCO case here turned simply on a failure to provide full claims information,  then, at least in the context of Part 24, I would have understood the force of it.  However, as already observed, the alleged “suppression” is a key part of the argument that BML/BIG had taken a conscious decision to mislead MESCO.    In support of this submission, MBEL relied on a witness statement of Ms. Atherton (its Legal and Commercial Director and Company Secretary) which, in turn, was based on a Schedule (at p.2022 of the Bundles) of recent claims (ie., “recent” at the time of the conclusion of the SPA);  the Schedule, it was said, did not include claims against Iron Trades policies in respect of occurrences before 1988 and was also incomplete in other respects.     In my judgment, the Schedule provides no support whatsoever for the submission of any conscious misleading, or fraud; this is so, because the Schedule, on its face, makes plain that it does not apply to any pre-1988 claims.   The reasons given by the BIL witness statements as to why more information was not supplied may be more or less persuasive but it is incontrovertible that the fact that the Schedule was limited to post-1988 claims was or must have been obvious to MESCO and its advisers in 1995.   Given Mr. Kealey’s clarification of the MBEL case (transcript, 19th September), it is unnecessary to take time here in considering the other details in respect of which the Schedule was said to be incomplete;  indeed I understood Mr. Kealey in argument to accept that such details did not matter.
iii)	Pausing here, if I am right so far, then the “estoppel” case does not get off the ground.  There is no real prospect of MBEL succeeding in mounting a fraud or bad faith claim.    Moreover, there can be no question of the case improving at trial.   Key witnesses, such as Mr. Keaveney, crossed from the “Babcock” to the “Mitsui” camp in 1995 and MBEL has been run by “Mitsui” ever since.  In case, however, I am wrong on this, I go on to consider the allegations concerning BML/BIG and the soundness of Iron Trades 1.
49.	For the purposes of Part 24, I assume against BIL that BML/BIG knew, at the time of concluding the SPA, that Iron Trades 1 was in ring-fenced run-off and further knew that MESCO did not know that.    Even on the basis of this assumption,  I am satisfied that this part of the MBEL case has no real prospect of success.
i)	First, having regard to the carefully drawn contract (the SPA), I am not persuaded that BML/BIG came under any “duty” to speak to the financial soundness of the then BEL’s insurers.   Schedule 4, para.9 to the SPA stops short of giving any such warranty.  If there had been a warranty in this regard, breach of warranty would have given rise to a contractual remedy;  if there was no warranty, I am unable to see why there should be a duty to speak, at least unless BML/BIG had created a false impression as to Iron Trades 1’s soundness by some or other representation.
ii)	Secondly,  I cannot spell out, even arguably, any such representation, let alone unequivocal representation (see Orion Finance, supra),  from BML/BIG’s conduct, words or silence, to which I have been referred.    No false impression was created requiring contradiction.  For reasons already given, the arguments as to claims levels and their alleged suppression do not assist;  even with those arguments, I would have had difficulty discerning any such representation;  without them, there is really nothing to support this aspect of MBEL’s case.
iii)	Thirdly, if, contrary to the above, there had been any representation as to  Iron Trades 1 being sound and good for claims in 1995, then there is no foundation for the submission that such a representation was false, still less knowingly false.    Mr. Swainston argued forcefully that the mere fact that an insurer was in ring-fenced run-off carried no implication of a threat to solvency.    I do not, however, rest my conclusion on that argument.  Instead, here, as it seems to me, the very practical consideration arises that Chester Street did not go into liquidation until 6 years later;   it is fanciful to seek to infer from that fact the conclusion that in 1995 Iron Trades 1 was not sound and good for claims.    The matter does not end there.  In July 1997, some two years after the conclusion of the SPA, the assets and liabilities of Iron Trades 1 were transferred to Chester Street.  That transfer was effected pursuant to the provisions of the Insurance Companies Act 1982 (“the 1982 Act”).  Such transfers require Treasury approval, not least as to the transferee (here Chester Street) having the necessary margin of solvency after taking the proposed transfer into account.   In my judgment, this consideration alone is fatal to the MBEL estoppel case.   It establishes – some two years after the conclusion of the SPA during which time on the MBEL/MESCO case the position as to asbestos related claims must have worsened – that  Chester Street was solvent in 1997.   It follows, as MBEL/MESCO accepted in argument (transcript, 19th September, pp. 130-131), that in 1997 MBEL had a solvent insurer.  Viewed in this light alone, the estoppel point goes and can go nowhere.
50.	For completeness:
i)	For the same reasons as those already given, any argument as to “reliance” by MESCO/MBEL, a necessary ingredient of the estoppel case, is doomed to failure.
ii)	As it seemed to me, the estoppel case involved in any event a leap too far.  It is one thing to have treated  charterers in The “Henrik Sif” (supra), as estopped from denying that they were parties to the contract in question;   the linkage between their failure to alert the plaintiffs to the truth and that which they were estopped from denying was direct and immediate.   By contrast, here, had BIL been estopped from denying that Iron Trades 1 was sound and good for claims in 1995, it would have assisted MBEL/MESCO not at all.    Accordingly, MBEL/MESCO needed to go altogether further and estop BIL from relying on (ex hypothesi) the true construction of paragraph 13 of Schedule 2 to the SPA.  For that, I can see no justification.
iii)	Overall, though my decision on this Issue has not rested on it, there was the strong flavour that the estoppel case represented a backdoor route by which MBEL sought to raise arguments belonging more naturally  to a warranty claim under the SPA or to a claim for misrepresentation relating thereto but which were now time barred (SPA, cl.10) or otherwise excluded (SPA, cl. 22.5,) or for some other reason have not been pursued. 
iv)	In all the circumstances, I express no concluded view on Mr. Swainston’s further submission that the estoppel, whatever its impact on BML/BIG, could not affect BIL at all (not being a party to the SPA).
51.	It follows, for the reasons given, that I dismiss MBEL/MESCO’s arguments on Issue (II).   They lack any real prospect of success.
ISSUE (III):  EQUITY
52.	It will be recollected that the premise for Issue (III) was that MBEL/MESCO had succeeded on Issue (I) or Issue (II).  The question then remained of how MBEL/MESCO was to obtain the relevant release under para. 13 of Schedule 2 to the SPA.   On the hypothesis of success on Issue (I) or (II),  MBEL/MESCO submitted it was to be obtained by way of equitable relief to which they were entitled.  Mr. Swainston, however, contended that success on Issue (I) or (II) yielded only a pyrrhic victory because  MBEL/MESCO was to be refused relief under Issue (III).  In a nutshell, it was too late for equitable relief.    Mr. Kealey’s retort was that the content of Issue (III) was not suitable for summary determination but, “responsively”, if it was, then MBEL/MESCO was entitled to summary judgment in their favour.    At the outset of the hearing, my instinctive reaction was that Issue (III) was unlikely to be appropriate for determination under Part 24.  Having carefully considered the submissions advanced during the hearing, I am now firmly of that view.   Given the conclusions already reached on Issues (I) and (II), Issue (III) is academic.  In the circumstances, it is tempting to say no more than that Issue (III) must go to trial.  Given, however, that some considerable time was spent at the hearing on Issue (III), it seems right to explain, if only very briefly, the reasons for my conclusion on this Issue.
53.	It is convenient to address Issue (III) in terms of the sub-issues foreshadowed earlier:
i)	(A)   Release in equity:   Here, the relief sought by MBEL/MESCO was a declaration that, in equity, MBEL was released from the indemnity in the TA;  equity regards as already done that which parties to a transaction have agreed to do.     BIL resisted the application of this equitable principle on the basis of (lack of) privity of contract, in essence, as I understood it, by reason of neither MBEL nor BIL being parties to the SPA.    MBEL/MESCO responded by reference to the authority which BML/BIG warranted they possessed under para. 1.2 of Schedule 4 to the SPA.   For my part and with respect to these arguments, I doubt that in a situation where para. 13 of Schedule 2 to the SPA requires a “duly executed release and discharge”, it would be sufficient to rely on the equitable principle contended for by MBEL/ MESCO.   I would not therefore have been minded to determine sub-issue (A) summarily (if at all) in favour of MBEL/MESCO. Conversely, I reach no final conclusion in favour of BIL on this sub-issue.     On its own it would be of no practical use to BIL and, in my judgment, this sub-issue is best finally resolved (if ever necessary) in company with the remaining sub-issues under Issue (III).   
ii)	(B)  Specific Performance:     If not entitled to release in equity, then MESCO contended that it was entitled to specific performance of the obligation to give or procure the giving of the release in question under para. 13 of Schedule 2 to the SPA.   Here, as it emerged, the real question was not the availability of specific performance in principle.  Instead, the real dispute goes to whether MESCO was disentitled to such relief by reason of the remaining sub-issues under Issue (III).  Given the view which I take on those sub-issues, there can be no question of a summary determination on this sub-issue.
iii)	(C)   Waiver by election:      BIL’s case was that MBEL’s/MESCO’s entitlement to a release was waived by election in (1) proceeding with completion of the SPA on 30th  September, 1995 without first having obtained such a release (“alleged waiver 1”);   and/or (2) not calling for such a release until late 2001 (“alleged waiver 2”).    I am not prepared to grant BIL summary judgment on either basis.   First,  though not decisive had it stood alone, cl. 22.2 of the SPA would need to be considered.   Secondly, my strong inclination is that  alleged waiver results in no more being waived than the right to refuse to complete because of the absence of a relevant release.  I do not grant MBEL/MESCO summary judgment in this regard only because of my view that should the question of waiver ever return to be dealt with, it is desirable that it be dealt with as a whole.   Thirdly, alleged waiver 2 appears, as it seems to me, to turn on lapse of time.  Not only would I not wish to deal with this topic in isolation from the sub-issue of laches (see below) but I would also decline to deal with it absent a full inquiry into the facts.      For his part, in this regard, Mr. Swainston placed  much reliance on Leaf v International Galleries [1950] 2 KB 86; he urged me to conclude that the mere fact that in practical terms nothing turned on the present dispute until the liquidation of the common insurers in 2001, was not a good reason for inaction on MBEL’s/ MESCO’s part any more than on the part of the disappointed buyer who failed to obtain rescission in Leaf.    At least for the purposes of Part 24, I cannot accept this argument;   Leaf was concerned with rescission not waiver;  there the buyer was seeking to set aside the contract;  it is understandable that a time will come when that is simply too late;  here, if Mr. Kealey is otherwise right,  MBEL/MESCO seek to give effect to the SPA;   different considerations apply, at least under Part 24.      Mr. Swainston further sought to argue by analogy from the sale of goods cases where a party lost the right to reject goods or documents  by not doing so timeously;   for present purposes, suffice to say that such cases fall to be considered against the background of the Sale of Goods legislation and do not therefore require an answer in Mr. Swainston’s favour here.    For all these reasons, should it matter, the sub-issue of waiver would have to go to trial.
iv)	(D)  Time bar by analogy:     BIL’s argument here was that MBEL’s/MESCO’s claim to specific performance was time barred.  This submission was based on s.36 of the Limitation Act 1980 (“the 1980 Act”).   S.36 of the 1980 Act disapplies the time limit laid down by s.5 of the Act for actions founded on simple contract to claims for specific performance or (inter alia) other equitable relief,  but provides that the statutory time limit “may be applied by the court by analogy in like manner as the corresponding time limit under any enactment repealed by the Limitation Act 1939 was applied before 1st July 1940”.  Mr. Swainston argued for the application of the time limit by analogy;  Mr. Kealey argued that it should not be so applied.    If I may say so, the argument was interesting and not straightforward;  both Mr. Swainston and Mr. Kealey supported their respective arguments by reference to authority.     In the event, for present purposes, there is a short answer to Mr. Swainston’s point.   As appears from Cia de Seguros Imperio v Heath Ltd [2001] 1 WLR 112, esp. at pp. 120 and 126,  the application of the statutory time limit by analogy depends on there being nothing in the circumstances of the case that renders it unjust to do so.     It follows that it would be wrong to determine this sub-issue without a full consideration of the facts. It is in any event to be remembered that as with the whole of Issue (III), this sub-issue only arises on the assumption that Issues (I) and/or (II) had been determined in favour of MBEL/MESCO;   as it seems to me, it is artificial and unsatisfactory to seek to determine it summarily given the academic basis on which it currently rests.    Accordingly, this sub-issue too cannot be determined under Part 24 and, should it matter, must go to trial.
v)	(E)   Laches:   As is well-established, questions of laches do not turn on mere lapse of time;  all the circumstances must be considered.  Such an inquiry is inappropriate for Part 24.  Realistically, Mr. Swainston did not contend (or seriously contend) otherwise.  Accordingly, should it matter, this sub-issue must go to trial.
ISSUE (IV):   SCOPE OF BUSINESS
54.	(1)  The nature of the dispute:   The argument here goes to the scope of the business transferred under the TA; did the TA cover both (i) the production division (ie., boiler manufacturing) and (ii) the construction division (ie., boiler erecting)?    Mr. Swainston submitted that it did and there was no real prospect of MBEL/MESCO succeeding with any contrary argument;    Mr. Kealey submitted that the TA was confined to the production division and did not extend to the construction division;  there was, he said, at least a real prospect of succeeding with such an argument, so that this Issue should go to trial.   As it is said that the vast majority of the claims which are the subject of the application for summary judgment arise from the construction division, the Issue is of considerable practical importance.
55.	Attractively and frankly, Mr. Kealey accepted in argument that if the matter fell to be decided on a balance of probabilities based on the documentation now before the Court, MBEL/MESCO would be in difficulty.  Such, however, was not the test to be applied on an application for judgment under Part 24; the Court, Mr. Kealey cautioned, must guard against being drawn into conducting a mini-trial on the documents without disclosure and oral evidence.   
56.	(2)  The rival arguments:     It is convenient to take Mr. Kealey’s argument first.   In essence it was very straightforward.  He relied on documentation emanating from the “Babcock” camp to the effect that the construction division had been transferred to MBEL in 1976, separately and independently from the (later) TA.    Accordingly, when the TA came into being in 1978, its scope was limited to the production division;  the construction division had already been transferred.    As to the TA itself, it did not purport to transfer to MBEL all of BIL’s assets and liabilities in respect of all of its businesses;  the TA covered only the “boiler-making undertaking of the Vendor” which was defined as “the Business”.     The words “boiler-making undertaking” were to be read as confined to the production division, both as a matter of their true construction and by reason of the evidence of the prior, separate and independent transfer of the construction division. 
57.	Evidentially, Mr. Kealey placed particular reliance on two documents.  First, he referred to the following extract from the Minutes of the B&WO board meeting, held on 26th October, 1976:
“ 5. COMPANY REORGANISATION
It was officially noted that with effect from 1st October, 1976, the Construction Division was transferred from Scottish Division into Babcock & Wilcox (Operations) Ltd.”
This item supported the MBEL/MESCO case of a separate transfer of the construction division, prior to the TA. In passing, this document also served to explain the MBEL concession recorded in paragraph 28(2) above as to the date on which it assumed liability in respect of workers in the construction division.  Secondly, Mr. Kealey referred to a statement attributed to a Mr. Holt, a B&W board member, at a meeting of the management committee of B&WO, held on 15th November, 1976:
“  Mr. Holt stated that B&W Ltd. would, from 1st January 1978, transfer all its UK assets and liabilities in respect of its boilermaking activities to Babcock & Wilcox (Operations) Ltd. and thereafter would have the relationship of a normal holding company. The effect of this would once again unite the Production Division with the other divisions of B&W (Operations)”  Ltd. and the company would own all those assets which were employed in its activities.”
Mr. Kealey relied especially on the wording that the contemplated transfer “would once again unite the Production Division with the other divisions”; that statement was consistent with an earlier transfer of the construction division;  moreover, this passage supported the argument that the “boiler-making undertaking” in the TA was not the entirety of the B&W (BIL) business.  
58.	Mr. Swainston’s argument proceeded as follows:
i)	There can be no (realistic) doubt that when B&WO (MBEL) was originally constituted as agent of B&W (BIL) in 1965, the business it conducted included construction and everything to do with boilers.
ii)	In 1976, there were changes or proposals affecting the construction division; but these changes or proposals went only to management, reporting and administration, rather than a transfer of  business and physical assets.   Here, Mr. Swainston relied, inter alia, on the various witness statements of a Mr. Lewis, together with selected supporting documentation.    Mr. Lewis had joined “Babcock” in 1956 and had become manager of the patents department in the 1970s;  he remained working there full-time until his retirement in 1996 and thereafter continued on a part-time basis as a consultant.
iii)	Whatever the true view of the events of 1976, the TA in 1978 was intended to extend and did extend to both production and construction divisions and, if need be,  regularised the position.  This was plain on the true construction of the TA and from the surrounding matrix.  As to the TA itself,  the expression “business” was deemed to include:
“ … all … assets and liabilities whatsoever and wheresoever of the Vendor whether now held in the name of the Vendor or the Purchaser to the intent that the same shall vest in the Purchaser for all the estate and interest of the Vendor therein ….”
It followed, said Mr. Swainston in a written note, that “any prior administrative transfer, or even beneficial one, was subsumed within the definition of the Business, and the related assumption of liabilities, obligations, debts and duties which was expressly agreed between BIL and MBEL under the 1978 Transfer Agreement”.   As to the surrounding matrix, Mr. Swainston underlined the fact that prior to 1978 there was no mention in the MBEL accounts of any elements of the boiler-making business whereas in 1978 and thereafter the MBEL accounts dealt expressly with all of them.  In this regard, the Annual Report of B&WO (MBEL) for 1978 contained the following:
“ The company was reconstituted in 1978 and the whole of the United Kingdom power plant and heavy engineering business of Babcock  & Wilcox Limited, together with all the related assets and liabilities were transferred to it with effect from the beginning of that year.”
iv)	Facing up to the requirements of Part 24 and addressing the question of the absence of disclosure, Mr. Swainston said this:
“ … there is a large volume of documents already in play… it is overwhelmingly apparent from the documents .. that there is no reasonable prospect of MBEL or MESCO succeeding on the construction division point….. we take our chances on showing that but we are confident that we can … in the 1978 agreement it is quite clear that the construction division was embraced.  Accordingly, it is within the business as defined and within the scope of the assumed duties, obligations and liabilities.”
59.	(3)  Discussion:    As it seemed to me, BIL could not possibly succeed in obtaining summary judgment on this Issue if and insofar as it depended on the witness statements of Mr. Lewis and selected supporting documentation (step ii) in Mr. Swainston’s argument).   If matters rested there,  MBEL/MESCO would be entitled to have Mr. Lewis cross-examined and to call for disclosure of documents in accordance with the CPR;  the BIL selection could not suffice.   The key point is whether Mr. Swainston’s powerful submissions under steps i), iii) and iv) above, make good the conclusions to which he invites the Court to come, bearing very much in mind that this is an application for judgment under Part 24.
60.	Instinctively, I am attracted to Mr. Swainston’s argument.   On the material currently available, as Mr. Kealey realistically accepted,  Mr. Swainston has much the better of this Issue.   On the available material, it seems likely that any 1976 transfer of the construction division was, as Mr. Swainston contended, subsumed within the TA.  Moreover, given the passing of time, it must be unlikely that fresh witnesses will emerge to assist MBEL/MESCO.   It is the next step which I find I cannot take.  That step relates to disclosure. This is an Issue where I cannot properly conclude that there is no real or realistic prospect of disclosure yielding documentation going to support the MBEL/MESCO case.   It is to be noted that when addressing the question of disclosure (step iv) in his argument), Mr. Swainston could not contend that there was no more to be given.   To accept his argument here, would involve accepting that the selection of documents compiled by BIL presented a complete picture, even though BIL itself is not in a position to say that nothing else is disclosable.    Given the somewhat tangled corporate history of  the Babcock group at the relevant time, I am unwilling to reach such a conclusion. Without in any way reflecting adversely on those in the BIL legal team who have produced the documents now before the Court, it is not simply fanciful to suppose that there might be relevant documents other than those included in the current selection.   Moreover and by way of contrast with Issue (I):  (1) I do not see and the parties have not approached Issue (IV) as a pure question of construction;   (2) the fact that there might be available documentation relevant to Issue (IV) readily appears from the two documents singled out by Mr. Kealey – whereas in the context of Issue (I), there was, realistically, no more than the expression of a hope that something might turn up.
61.	In taking the route of summary judgment rather than a preliminary issue with disclosure, BIL has unavoidably assumed the risk of falling short of its target for want of disclosure; that risk has now materialised.   It may of course transpire that when disclosure has been given, the MBEL/MESCO case is no further forward.  If so and were this Issue then pursued to a trial, MBEL/MESCO will be at risk as to costs.   It would seem wrong, however, to shut out MBEL/MESCO at this stage from obtaining disclosure and considering their position in the light of it;  that would indeed be to fall into the trap of conducting a mini-trial on a selection of documents.  I must, therefore,  refuse the BIL application on Issue (IV). 
62.	I  was asked in argument to rule on BIL’s entitlement to obtain summary judgment in respect of the individual claims listed in the relevant schedules to the BIL Particulars of Claim.   In the circumstances, this is academic;  it may however assist the parties if I indicate that (had I decided Issue (IV) in BIL’s favour) I would have been minded to grant summary judgment in respect of those individual claims where BIL was named as the Defendant and a named location was supplied.     Additionally and for completeness, I record that, had BIL succeeded on Issue (IV), I was asked by Mr. Kealey and agreed to leave over for further consideration the precise form of relief to be granted in particular having regard to certain Australian claims and a possible question, I think, of double insurance.
63.	I shall welcome the assistance of counsel on (1) directions, if the parties are so minded, for the trial of Issue (IV),  (2) the drawing up of the order and (3) on all questions of costs.