Civil procedure – Entitlement to summary judgment – CPR 24 – Action for redemption of charge and account of sums due – Charge securing overage payments due to defendants under various agreements to which claimant not party – Claimant seeking summary judgment on claim that certain costs deductible from payments – Previous Part 24 application by defendants refused – Whether issue res judicata against defendants – Whether case otherwise suitable for summary judgment — Application refused
The claimant acquired a property that was subject to a charge granted by the vendor in favour of the first defendant. The charge secured overage payments due to the latter under a complex set of agreements for redevelopment of the land, including the construction of a supermarket. The claimant was not a party to those agreements and had no direct relationship with the first defendant; it was common ground that overage payments were due to the first defendant. However, a dispute arose with regard to the extent to which the claimant was entitled to deduct from those payments the costs incurred by the supermarket company for infrastructure and site assembly and by the claimant under contractual arrangements with that company. The sums in question arose under the agreements to which the claimant was not a party and related to the extent of infrastructure works that were required to enable development of the site for use by the supermarket.
The claimant brought proceedings for the redemption of the charge and an account of any sums due under it. The first defendant applied, under CPR 24, for summary judgment in its favour for the balance of the overage money on the ground that no deductions were possible under the terms of the agreements. That application was refused, as was the first defendant’s appeal against that decision. The Court of Appeal held that the first defendant’s entitlement to overage was subject to a requirement to give credit for the enabling works, but it gave no guidance on how this was to be effected.
The claimant subsequently made its own application for summary judgment on the deductions issue, seeking a ruling that the first defendant was obliged to deduct the costs of the enabling works from the overage payments to which it would otherwise be entitled. It contended that it was no longer open to the first defendant to challenge the deductibility of those items since that issue had been determined against it in the previous summary judgment application and was now res judicata.
Held: The application was refused.
The claimant’s application failed because it had not shown either that there was: (i) no real prospect of the first defendant successfully defending the issue; or (ii) no other compelling reason why it should be disposed of at trial. The issue had not been determined against the first defendant. Subject to the overriding decision of the Court of Appeal, all arguments remained fully open and could not be finally determined at the present stage. No progress could be made on how to implement the principle set out by the Court of Appeal without a full investigation of the interrelationship of the various complex contracts. An ascertainment of the infrastructure and site assembly costs could be carried out only in accordance with those agreements and would require a careful examination of what works had been carried out, by whom, at what cost and whether those works fell within the ambit of the agreements. The first defendant could raise any argument in respect of those claimed costs that would have been open to him under those agreements.
The issues between the parties required a full investigation at trial after the disclosure and service of appropriate evidence. The claimant’s case was not straightforward. The relationship between the parties was unusual in that the claimant had sought the redemption of a charge that was held by the first defendant to secure moneys due under agreements to which the claimant was not a party. Success on the Part 24 application would not produce any significant saving in costs since any deductions to be made would involve a detailed consideration of the actual expenditure on a line-by-line basis. The Part 24 application had delayed the progress of the matter towards trial. Its resolution would not resolve all the disputes between the parties and a substantial trial would be still inevitable. This was a classic case in which the parties were best served by progressing the case speedily and expeditiously towards trial.
Nicholas Strauss QC and Neil Kitchener QC (instructed by Lawrence Graham LLP) appeared for the claimant; Alexander Hill-Smith (instructed by Lester Aldridge) appeared for the defendants.
Sally Dobson, barrister
