CL-2024-000271 - [2025] EWHC 2162 (Comm)

CPR 24.3 provides that:

“The court may give summary judgment against a claimant or defendant on the whole claim or an issue if:

(a)

it considers that the party has no real prospect of succeeding on the claim, defence or issue; and

(b)

there is no other compelling reason why the case or issue should be disposed of at trial.”

An applicant for summary judgment must show that the respondent’s case has a “fanciful” as opposed to “realistic” prospect of success: Swain v Hillman [2000] P.I.Q.R. P51, at P52 – P53, per Lord Woolf. A realistic claim is one that carries some degree of conviction and is more than merely arguable: ED & F Man Liquid Products v Patel [2003] EWCA Civ 472, at [8], per Potter LJ.

The parties were helpfully agreed that the law in relation to summary judgment was accurately set out in the well known passage of the judgment of Lewison J (as he then was) in Easyair Limited (t/a Openair) v Opal Telecom Limited [2009] EWHC 339 (Ch), in which he said:

“The correct approach on applications by defendants is, in my judgment, as follows:

(i)

The court must consider whether the claimant has a “realistic” as opposed to a “fanciful” prospect of success: Swain v Hillman [2001] 2 All ER 91;

(ii)

A “realistic” claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel [2003] EWCA Civ 472 at [8];

(iii)

In reaching its conclusion the court must not conduct a “mini-trial”: Swain v Hillman;

(iv)

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: ED & F Man Liquid Products v Patel at [10]

(v)

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: Royal Brompton Hospital NHS Trust v Hammond (No 5) [2001] EWCA Civ 550;

(vi)

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: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd [2007] FSR 63;

(vii)

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 claimant's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. 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: ICI Chemicals & Polymers Ltd v TTE Training Ltd [2007] EWCA Civ 725.”

TCI was incorporated on 3 December 2008. At that stage, its two shares were held by nominee shareholders. By 1 January 2009, those shares were held by TCR. There was no direct evidence of when that share transfer took place. I was asked to infer that it must have been prior to the date of the share sale agreement (namely 18 December 2008), principally because it was argued that TCI would not have agreed to take on the obligation to purchase the shares in GMI unless it was by then backed by TCR. Alternatively, it was argued that TCI must have been confident by the date of the agreement that it would be backed by TCR.

The share purchase agreement was entered into between Mr Townsley (as seller) and TCI (as buyer) on 18 December 2008 (GMI SPA). That agreement contained the following material terms:

In more detail, the material terms of the GMI SPA were as follows:

“Clause 1

“Completion” Completion of the sale and purchase of the Shares in accordance with clause 6

“Completion date” the fifth Business Day after the last in time of the Conditions is waived or satisfied or any other date agreed in writing by the Seller and the Buyer

“Conditions” the conditions set out in clause 2.1

“Consideration” the consideration to be paid and issued to the Seller as at Completion pursuant to clause 4

“Options” the Call Option, Deadlock Option, Default Option, Drag-Along Option, Put Option and Tag-Along Option, each as defined in the Shareholders’ Agreement

“Seller Consideration Shares” means 4999 new ordinary shares of £1 each in the capital of the Buyer

Clause 2: Conditions.

2.1

Completion of the sale and purchase of the Shares under this Agreement is, in all respects, conditional upon the following:

2.1.1

the European Commission having issued a decision under Article 6(1)(b) or Article 6(2) of Council Regulation (EC) 139/2004 (the Merger Regulation) (or being deemed to have done so under Article 10(6) of the Merger Regulation), on terms satisfactory to the Buyer, declaring the purchase of the Target [SC Company] by the Buyer compatible with the common market;

2.1.2

the sale or distribution of the Preston Property to the Seller;

2.1.3

following the completion of clause 2.1.2, the surrender of the Preston Leaseholds to the Seller; and

2.1.4

following the completion of clause 2.1.3, the grant of the Preston Lease in the agreed form.

2.2

If the Conditions are not satisfied or waived by 5.00 p.m. on 30 April 2009, clause 2.1 of this Agreement shall (unless the parties agree in writing to an extension) cease to have effect immediately after that date and time, except for the provisions set out in clause 2.3.

2.3

The following provisions shall continue to have effect, notwithstanding termination of this Agreement: clauses 1, 2.2 and 2.3, 13, 15, 16, 17, 19 and 20.

2.7

The Buyer may, to such extent as it thinks fit and is legally entitled to do so, waive the Conditions by written notice to the Seller.

3.

SALE AND PURCHASE.

On 6 April 2009, TCR acquired an interest in TCI for £21,919,000. The Conditions in clause 2 of the SPA were satisfied at about this time and Completion under the GMI SPA subsequently took place on or after 6 April 2009.

On or after 6 April 2009, TCI, TCR and Mr Townsley entered into a shareholders’ agreement in respect of TCI (“TCI SHA”), which (as indicated in the GMI SPA) included:

Following completion of the GMI SPA and the entering into of the TCI SHA, it is alleged that the Defendants continued the fraud, using around £1,041,000 of further dividend income and around £6,300,000 of sums paid in cash in respect the acquisition of the GMI shares to continue to ‘manage profit’ in order to cause the acceleration of the acquisition by TCR of Mr Townsley’s Seller Consideration Shares in TCI. The acceleration was, it was alleged, induced by reason of TCR’s belief that the longer that it waited to complete the purchase, the more it would pay.

Because of this, it is alleged that TCR was induced to purchase Mr Townsley’s remaining shares in TCI. This purchase was not in fact pursuant to an exercise of the option in the TCI SHA, but was pursuant to an independent agreement.

In summary, as a result of this alleged conspiracy and deceit, various things happened:

On 23 January 2024, there was an assignment by TCGP of claims that it and its subsidiaries might have in relation to the purchase of the shares and assets of GMI (“First DoA”). One key issue raised by Mr Philbin concerned the standing of the special managers of the TCGP to assign on behalf of all of Thomas Cook Group Plc’s subsidiaries. In this regard, a key subsidiary in this case was TCR because it was that subsidiary that (on the Claimant’s case) was induced (i) to acquire shares in the special purpose vehicle (TCI) incorporated by Thomas Cook Group Plc and/or its subsidiaries for the purpose of TCI undertaking the GMI acquisition, and (ii) to enter into option agreements within the TCI SHA to acquire the rest of TCI’s shares from Mr Townsley, and then to accelerate that acquisition of the rest of TCI’s shares.

The Claimant now accepts that Mr Philbin was quite correct in asserting that the effect of the First DoA could never have been to assign causes of action on behalf of TCR. This was because (unknown, it was said, to the Claimant when it entered into the First DoA) the special managers of TCGP and TCR were different, such that TCGP’s special managers had no power to assign any claims held by TCR.

Because of this, the Claimant has had to acquire a deed of assignment from TCR’s special managers, which was done on 4 February 2025 (‘the second DoA’). The Claimant asked the Court for permission to amend its particulars in order to plead reliance upon that second DoA.

As I have already indicated, the parties agreed that I should consider this application on the basis of the Amended Particulars of Claim, with its reference to the Second DoA.