Appeal — Summary judgment – Fresh evidence — Appellant acting as guarantor for loan from respondent for property development – Company defaulting on loan repayments – Respondent seeking to enforce guarantee — Appellant counterclaiming — Deputy master granting respondent summary judgment and striking out counterclaim – Appellant appealing and applying to adduce fresh evidence — Whether fresh evidence sufficiently probative or relevant to justify case going to trial – Appeal dismissed
The appellant wished to develop a property in Frinton-on-Sea. The respondent was a finance company specialising in short term bridging loans secured on property. The claimant obtained a loan from the respondent and entered into a deed of guarantee including a facility letter. The agreement comprised within the facility letter was between the respondent and another company (LEL) and provided for the supply of funds of £675,000 on various terms for the purpose of financing the development. The appellant guaranteed £100,000 of the monies loaned by the respondent.
There was a default on repayment of the loan and the defendant brought proceedings to enforce the guarantee given by the appellant. The appellant counterclaimed, arguing that his own company had advanced monies to companies connected with the respondent. There was an oral contract of joint venture between the appellant’s company and LEL with an express or implied term that LEL would pursue the development with reasonable diligence and to completion. The respondent had committed the tort of procurement of breach of contract against the appellant so that the appellant was entitled to and did rescind the guarantee. The respondent was granted summary judgment by a deputy master pursuant to CPR 3.4(2) and the appellant’s counterclaim was struck out. The appellant appealed against that order and applied to adduce further evidence. The court had to determine whether the fresh evidence was sufficiently probative or relevant to justify the case going to trial.
Held: The appeal was dismissed.
(1) The court was not satisfied that the fresh evidence was sufficiently probative or relevant that, if it were admitted into evidence, the result would be that the appellant had established there was a good reason for a trial of the matter. On the materials before the court, the deputy master had come to the right decision: Miles v Bull [1969] 1 QB 258 and EasyAir Ltd (t/a Openair) v Opal Telecom Ltd [2009] EWHC 339 (Ch) considered.
(2) The appellant’s counterclaim arose out of dealings with the appellant’s company which it was argued had advanced monies over the years to LEL and other companies connected with the respondent for the purposes of funding construction projects and that at all material times there existed a legal charge between that company and LEL. It was alleged that the respondent’s actions had facilitated a breach of LEL’s obligations under the charge and under the joint venture contract. However, the main difficulty was that the appellant was not a party to the relevant contracts, his company being the contracting party. The appellant contended that he was not seeking to pierce the corporate veil but that if A procured a breach of contract by B against C which was the alter ego of D, then D could sue A. That was an important point of law which should not be decided on a summary basis. The court rejected the argument that the case should go forward for trial. Although it was a novel point, the case had been so poorly particularised that, on the facts, it was not suitable for exploration at trial. If there was a case to be tried, the company was well able to pursue it, and there was no reason for the present case to go forward.
Andrew Butler (instructed by Ashley Wilson Solicitors LLP) appeared for the appellant; Iain Pester (instructed by Sylvester Amiel Lewin & Horne Solicitors LLP) appeared for the respondent.
Eileen O’Grady, barrister
