“The court may give summary judgment against a claimant or defendant on the whole of a claim or on a particular issue if – (a) it considers that – (i) the claimant has no real prospect of succeeding on the claim or issue; or (ii) the defendant has no real prospect of successfully defending the claim or issue; and (b) there is no other compelling reason why the case or issue should be disposed of at a trial.”
“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 respondent’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 .”
“21. The authorities therefore make clear that in the context of summary judgment the court is by no means barred from evaluating the evidence, and concluding that on the evidence there is not real (as opposed to a fanciful) prospect of success. It will of course be cautious in doing so. It will bear in mind the clarity of the evidence available and the potential for other evidence to be available at trial which is likely to bear on the issues. It will avoid conducting a mini-trial. But there will be cases where the Court will be entitled to draw a line and say that – even bearing well in mind all of those points – it would be contrary to principle for a case to proceed to trial. 22. So, when faced with a judgment application, it is not enough to say, with Mr Micawber, that something may turn up.”
“(a) that the statement of case discloses no reasonable ground for bringing or defending the claim; (b) that the statement of case is an abuse of the court’s process or is otherwise likely to obstruct the just disposal of proceedings; or (c) that there has been a failure to comply with a rule, practice direction or court order.”
“1.1 This practice direction sets out the procedure a party should follow if they wish to make an application for an order under rule 3.4(2)(a) (where a statement of case discloses no reasonable grounds for bringing or defending a claim); or under rule 3.4(2)(b) (where a statement of case is an abuse of the court’s process or otherwise likely to obstruct the just disposal of the proceedings). ……. A.4 A defence may fall within rule 3.4(2)(a) where: (1 ) it consists of a bare denial or otherwise sets out no coherent statement of facts, or (2) the facts it sets out, while coherent, would not amount in law to a defence to the claim even if true.”
“i) A defence must be concise. It should be confined to the material facts necessary to inform the claimant of the nature of the case she has to meet…… ii) “An application underCPR 3.4 (2)(a) calls for analysis of the statement of case, without reference to the evidence. The primary facts are assumed to be true. The court should not be deterred from deciding a point of law; if it has all the necessary materials it should “grasp the nettle”…but it should not strike out under this sub-rule unless it is “certain” that the statement of case, or the part under attack, discloses no reasonable grounds of claim…Even then, the Court has a discretion; it should consider whether the defect might be cured by amendment; if so, it may refrain from striking out and give an opportunity to make such an amendment.” (Sussex (1) at [33(2)], citations omitted.). iii) “Rule 3.4(2)(b) is broad in scope, and evidence is in principle admissible. The wording of the rule makes clear that the governing principle is that a statement of case must not be “likely to obstruct the just disposal of the proceedings.”
“”34. In the context of r.3.4(2)(b), and more generally, it is necessary to bear in mind the Court’s duty actively to manage cases to achieve the overriding objective of deciding them justly and at proportionate cost; as the Court of Appeal recognised over 30 years ago, “public policy and the interest of the parties require that the trial should be kept strictly to the issues necessary for the fair determination of the dispute between the parties”: Polly Peck v Trelford [1986] Q.B. 1000, 1021 (O’Connor LJ). An aspect of the public policy referred to here is reflected inCPR r.1.1 (2)(e) : the overriding objective includes allotting a case “an appropriate share of the court’s resources, while taking into account the need to allot resources to other cases”. 51. …The overriding objective of deciding cases justly and at proportionate cost requires the Court to monitor and control the scale of the resources it devotes to each individual claim. Irrelevant matter should, as a rule have no place in Particulars of Claim. There may be cases where the court would allow the inclusion of some minor matters that are, on a strict view, immaterial. But where the irrelevant pleading makes serious allegations of wrongdoing which are partly implicit, unclear, lacking in the essential particulars, and likely to cause a significant increase in cost and complexity the case for striking out is all the clearer.”
“The purpose of a pleading or statement of case is to inform the other party what the case is that is being brought against him. It is necessary that the other party understands the case which is being brought against him so that he may plead to it in response, disclose those of his documents which are relevant to that case and prepare witness statements which support his defence. If the case which is brought against him is vague or incoherent he will not, or may not be able to do any of these things. Time and costs will, or may be wasted if the defendant seeks to respond to a vague and incoherent case. It is also necessary for the Court to understand the case that is being brought so that it may fairly and expeditiously decide the case in a manner which saves unnecessary expense.”
“The transactions which the Defendant is alleged to have conducted in the name of the company without disclosing his conflict of interest and which have caused loss have not been clearly identified. The Further Information could perhaps have cured these defects but is has not done so. The particular transactions cannot be identified with ease. Moreover, additional claims, not foreshadowed or pleaded in the Amended Particulars of Claim, appear to have been added. They have no place in the Further Information since they have not been pleaded in the Particulars of Claim.”
“The “issue” to which rule 24.2 (“the claimant has no real prospect of defending the claim or issue”) andPD 24 refers is a part of the claim, whether a severable part of the proceedings (e.g. a claim for damages caused by particular acts of infringement or non-payment of several debts) or a component of a single claim (e.g. the question of infringement, or the existence of a duty, breach of a duty, causation or loss). It is not any factual or legal issue that is one among many that would need to be decided at trial to resolve such a claim or part of a claim. If the determination of an issue before trial has no consequences except that there is one fewer issue for trial then the court has not given summary judgment and the application was not for summary judgment. If it were otherwise, parties would be able to pick and choose the issues on which they thought their cases were strong and seek to have them determined in isolation, in an attempt to achieve a tactical victory and cause the respondent to incur heavy costs liability at an early stage.”
“49. Moreover, it would be wrong as a matter of principle to impose a requirement of causal connexion before account can be taken of an excluded party’s conduct when addressing the fairness or unfairness of an exclusion. The exercise for the court is to determine whether conduct which was prejudicial to the party complaining was unfairly so. In the context of exclusion, that involves a determination of whether the exclusion was unfair. That determination is an objective one as I have already explained and is not dependent on the subjective intention with which particular acts were done. The objective nature of this exercise indicates that the court should undertake it in the light of all the circumstances known to the court. Fairness or unfairness is to be determined in the light of those circumstances seen as a whole. Just as a genuine belief by a party that he or she was acting properly in excluding another party is not determinative of the question and does not prevent a finding of unfairness so an exclusion is not to be regarded as having been unfair if circumstances existed warranting the exclusion. This is so even if those circumstances were not known at the time of the exclusion or were not the reason for it. The existence or otherwise of a causal connexion between a petitioner’s conduct and his or her exclusion is likely to be a factor relevant to the court’s consideration of the fairness of the exclusion. If particular circumstances were not the cause of an exclusion then it is likely to be harder for a respondent to argue that those circumstances justified the exclusion particularly if they were known at the time and even more so when they had occurred some time before the exclusion. However, that is a matter of argument and of assessment of the evidence and is very different from the contention, which I reject, that as a matter of law a respondent cannot rely on particular circumstances to say an exclusion was fair if those circumstances did not in fact cause it. Mr Cawson’s argument would require the court to treat as unfair actions which would not be so regarded if account were to be taken of all the circumstances of the case and of the parties’ dealings. That would be incompatible with the nature of the exercise being undertaken by the court and which requires a conclusion as to unfairness. The alleged unfairness is to be assessed in the context of equitable considerations constraining the powers of those controlling the company the presence or absence of considerations which is to be determined by reference to the circumstances as a whole. Having found in the light of the circumstances as a whole that there are such equitable considerations operating to constrain one party’s rights, then it follows that the court has to determine the question of fairness in the light of those same considerations. In doing so, it is again to have regard to the circumstances as a whole. It would be perverse if the court were permitted and required to look to all the circumstances of the case in order to decide whether the relevant equitable considerations are present but required to look only to some of the circumstances in order to decide whether a particular action was unfair and so precluded by those considerations.”
“It follows that it is necessary to consider whether the conduct of Austin and Gerard warranted their dismissal and their exclusion from the business of the company. The dismissal and exclusion would be unfair prejudice if the circumstances at that time did not warrant such action. The exclusion of Austin and Gerard would not have been justified solely because Patrick wished to take control of the company and was no longer willing to put up with the participation of his brothers. Mr Cawson said that this was in fact the reason for the dismissal. He invited me to conclude that the other matters now alleged against Austin and Gerard had not actually caused the dismissal and so were to be disregarded. I have already explained, at [47]–[50], my conclusion that it is not necessary for there to be a causal connexion between an exclusion and the matters which are said to justify it and which might lead the court to find that it did not constitute unfair prejudice. Instead in considering whether an exclusion was unfairly prejudicial I am to look at matters in the round and determine whether it lies in the mouth of a person excluded from the life of a company to say that the exclusion was unfair. The motive for and the reasons which actually caused the exclusion will be relevant to the extent that if an exclusion was in fact for an unjustified reason then the court will need to examine with greater care and potentially with a degree of scepticism an argument that there were other matters which although not motivating the exclusion happened to justify it. This is particularly so if those matters had been known at the time of the exclusion. In the circumstances of this case if I were to find that the exclusion was caused by Patrick’s decision that he no longer wished his brothers to be involved in the business and wished to have outright control (matters which would not justify the exclusion) then I would have to consider with care the contention that the other circumstances meant that the exclusion was not unfair.”
“225. For my own part, I am inclined to agree with the idea that the proper approach is a broad, objective one, and that in assessing the fairness or otherwise of the petitioner’s exclusion, there is no bar to taking account of matters which were in existence at the time, but not actually known to the respondent. I thus prefer the approach of Warren J in Amin v Amin[2009] EWHC 3356 (Ch) and of Judge Eyre QC in Waldron v Waldron [2019] Bus LR 1351 to that of Mark Cawson QC in In re J & S Insurance & Financial Consultants Ltd[2014] EWHC 2206 (Ch) . 226. This result seems to me to follow from the language of section 994 itself. This posits an objective test: i e, whether the company’s affairs are being or have been conducted in a manner that is unfairly prejudicial. Where the petitioner has been excluded, the question is: was the exclusion fair? A respondent ought to be entitled to argue that it was, by reference to all relevant circumstances obtaining at the time of the exclusion, whether he was subjectively aware of them or not. For example, a respondent may make the decision to exclude the petitioner on an entirely mistaken basis, not knowing that at the same time—perhaps because the truth had been concealed from him—the petitioner was in fact guilty of serious misconduct which would certainly have justified exclusion, if known about. In such a case, it seems to me it ought to be open to argue that the petitioner’s exclusion was objectively fair , in the sense that his (unknown) conduct was damaging to the business and he deserved to play no ongoing part in managing it.”
“There are cases, such as In re A Company (No. 006834 of 1988), Ex parte Kremer [1989] B.C.L.C. 365 , in which it has been said that if a breakdown in relations has caused the majority to remove a shareholder from participation in the management, it is usually a waste of time to try to investigate who caused the breakdown. Such breakdowns often occur (as in this case) without either side having done anything seriously wrong or unfair. It is not fair to the excluded member, who will usually have lost his employment, to keep his assets locked in the company.”
“The Law Commission Report on Shareholder Remedies, at pp. 30–37, paras. 3.26–56 has recommended that in a private company limited by shares in which substantially all the members are directors, there should be a statutory presumption that the removal of a shareholder as a director, or from substantially all his functions as a director, is unfairly prejudicial conduct. This does not seem to me very different in practice from the present law. But the unfairness does not lie in the exclusion alone but in exclusion without a reasonable offer. If the respondent to a petition has plainly made a reasonable offer, then the exclusion as such will not be unfairly prejudicial and he will be entitled to have the petition struck out. It is therefore very important that participants in such companies should be able to know what counts as a reasonable offer.”
“A discussion took place about the inappropriate behaviour of Peter Willoughby, his administrative failings, failures to complete agreed upon tasks, attendance and time keeping issues spanning many years.”
“In view of his recent erratic behaviour and his failure to carry out properly the administrative and other functions entrusted to him by the board, this procedure was entirely justified…”
“…it is our instructions that it is your client who has acted in a manner damaging to the interests of the Company in failing to carry out his proper administrative duties, unauthorised absences, the removal of stocks and acting against the company’s interests.”