CCP Graduate School Ltd v The Secretary of State for Education
[2024] EWHC 822 (KB)
CCP Graduate School Limited v The Secretary of State for Education
16 June 2023
[2023] EWHC 1910 (KB)
High Court
A school sued the government for not paying them enough money. The judge said there was no contract for the government to pay the school directly, and they should have brought the lawsuit earlier. The school's lawsuit was thrown out.
Key Facts
- •CCP Graduate School Limited (CCP) provided education courses funded by the Secretary of State for Education (Defendant) via the Student Loans Company.
- •The Defendant ceased payments to CCP for students enrolled from 2014 onwards.
- •CCP claims over £450,000 in unpaid fees and millions in lost profits due to business collapse.
- •CCP's initial claim was based on a direct contract with the Defendant, later amended to rely on the Contracts (Rights of Third Parties) Act 1999 (1999 Act) to enforce terms in student loan contracts.
- •A prior action (QB-2019-002047, May J judgment) involved the Defendant's unsuccessful attempt to recover payments made to CCP.
- •The Defendant's 2014 investigation into CCP led to a temporary suspension of payments, later reinstated.
- •CCP's DTLLS course was replaced by the DET qualification, and CCP's application to provide DET courses was unsuccessful. CCP continued teaching DTLLS courses and registering students for DET qualifications.
- •The current claim seeks £459,937 in unpaid fees and damages for business losses.
Legal Principles
Strike out a statement of case if it discloses no reasonable grounds for bringing the claim, is an abuse of process, or fails to comply with rules.
CPR 3.4(2)
Reverse summary judgment if the claimant has no real prospect of succeeding and there's no compelling reason for a trial.
CPR 24.2
Amendment of statement of case requires permission unless all parties consent. Permission is granted considering the overriding objective.
CPR 17.1(2)(b), CPR 1.1
Limitation period for contract claims is six years (Limitation Act 1980, s.5).
Limitation Act 1980, s.5
Court may allow amendment adding a new claim only if it arises out of the same or substantially the same facts (CPR 17.4(2), Limitation Act 1980, s.35).
CPR 17.4(2), Limitation Act 1980, s.35
Test for implying a contract from conduct: necessity to give business reality to the transaction (Baird Textile Holdings Ltd v Marks and Spencer plc).
Baird Textile Holdings Ltd v Marks and Spencer plc
Contracts (Rights of Third Parties) Act 1999: A third party can enforce a term if the contract confers a benefit and the parties intended it to be enforceable (Dolphin Maritime & Aviation Services Ltd v Sveriges, Secretary of State for the Home Department v Cox).
Contracts (Rights of Third Parties) Act 1999, Dolphin Maritime & Aviation Services Ltd v Sveriges, Secretary of State for the Home Department v Cox
Abuse of process: later proceedings may be abusive if the claim should have been raised in earlier proceedings (Johnson v Gore-Wood, Aldi Stores v WSP Group plc).
Johnson v Gore-Wood, Aldi Stores v WSP Group plc
Outcomes
Reverse summary judgment granted against CCP on the direct contract claim.
No real prospect of success in establishing a direct contract; the existing contractual structure is commercially realistic without one; the 2011 designation process doesn't imply a contract; the limitation period has expired.
Permission to amend the particulars of claim to include the student contract claim refused.
Claim fails under the Contracts (Rights of Third Parties) Act 1999 (1999 Act); the student contract doesn't purport to confer a benefit on CCP; even if it did, it appears the parties didn't intend it to be enforceable by CCP; the claim is time-barred.
Claim struck out on grounds of abuse of process.
CCP should have raised the claim as a counterclaim in the first action; failing to do so constitutes an abuse of process; no special circumstances justify this.