![Claim No: LM-2023-000318 - [2025] EWHC 1098 (Comm)](https://backend.juristeca.com/files/emisores/logo_WAai98v.png){kind=logo}
The application for summary judgment
The application for summary judgment
I now turn to the application for summary judgment, which can be addressed more briefly.
The relevant principles to be applied were largely a matter of common ground between the parties. They both referred to the well-known guidance derived from Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) at [15] (approved by the Court of Appeal in AC Ward & Sons Ltd v Catlin (Five) Ltd [2009] EWCA Civ 1098). Omitting internal citations, the seven key principles are these:
The court must consider whether the claimant has a "realistic" as opposed to a "fanciful" prospect of success;
A "realistic" claim is one that carries some degree of conviction. This means a claim that is more than merely arguable
…
In reaching its conclusion the court must not conduct a "mini- trial" …
This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents …
However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial …;
Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case …;
On the other hand, it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent's case is bad in law, he will in truth have no real prospect of … successfully defending the claim against him …. Similarly, if the applicant's case is bad in law, the sooner that is determined, the better. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction…”
I also bear in mind Mummery LJ's warning in Doncaster Pharmaceuticals Group Ltd v. Bolton Pharmaceutical Co 100 Ltd [2006] EWCA Civ 661 that the court should be alert to "the defendant, who seeks to avoid summary judgment by making a case look more complicated and difficult than it really is", and "the cocky claimant who … confidently presents the factual and legal issues as simpler and easier than they really are and urges the court to be 'efficient' …". Further neither CPR Part 24, nor the overriding objective, permits the court to enter judgment on the basis that a party has a strong case, the defence is not likely to succeed, or that the time and costs involved in a trial are disproportionate to the potential gains (see HRH The Duchess of Sussex v Associated Newspapers Ltd. [2021] EWCA Civ 1810, at [32]).
In my judgment, whilst I accept that IVL has many powerful points to make in relation to EDD having been engaged in activity that required authorisation under the Regulations, it remains the case that the Claimants have a defence to the counterclaim that has a reasonable prospect of success.
It would be inappropriate at this stage to go into detail on the merits of each point relevant to the above conclusion. By way illustration only, however, I have concluded that there is a realistic prospect of the Claimants establishing at trial, after disclosure and cross-examination, that Mr Chandler or one of more of his three colleagues named in paragraph 3 of Schedule 5 to the SPA had “actual knowledge” of the matters which now feature in the breach of warranty claim advanced in the Counterclaim:
The true construction of the term “actual knowledge” as used in these provisions of the SPA is one that needs to be considered in context. At present I do not have sufficient evidence as to that context. For example, there is nothing to explain why Mr Chandler and his colleagues were specifically picked out by the parties and as to the detail of the role that they were to perform in the transaction. At this stage there is no evidence from Mr Chandler himself or any of his colleagues. IVL’s evidence is limited to that of Mr Murdoch and a limited selection of documents.
In light of the above there is a real prospect of the Claimants establishing that the true construction of “actual knowledge” only requiring that the relevant individual was aware of all of the relevant facts that are said to give rise to a warranty claim, as opposed to the correct legal analysis to be applied to those facts. Further, in my judgment, on the evidence provided by the Claimants, specifically the witness statement of Mr Lay, there is at the very least a reasonable prospect of establishing that Mr Chandler and others within the relevant group of individuals were fully aware of all of the relevant facts as to how EDD conducted business which are now said to have required authorisation under the Regulations.
Further, even if the term “actual knowledge” did require some appreciation of the legal consequence of the relevant facts, I am not convinced that it is fanciful to conclude that material supporting that conclusion may not arise from disclosure of documents in these proceedings and witness evidence in due course. It is the Claimant’s evidence that IVL did have legal advice on regulatory issues arising from disclosure given by prior to the SPA being executed. It seems to me to be reasonably arguable that, if all of the relevant facts as to how EDD conducted business were known, such advice could be expected to have included a review of the requirements of the Regulations.
To these matters can be added further questions such as whether the Counterclaim has any real substance in circumstances in which, since its acquisition by IVL, EDD has continued to conduct business without the need for any authorisation under the Regulations and without interruption. This raises the real and substantial question of whether the counterclaim is one that could be for anything more than nominal damages. The Defence to the Counterclaim seems to me to have reasonable prospects of success in establishing this contention as well.