Barrie v J Barrie (Plant Hire) Ltd

Summary judgment is inappropriate where fresh material exposes a substantial dispute about the underlying debt and the transaction requires disclosure, documentary evidence and cross-examination. On a second-tier appeal, permission may be granted where no important point of principle or practice arises but the evidence shows that summary disposal was plainly and obviously wrong. That constitutes another compelling reason for the appeal to be heard. The inquiry is not confined to the enforceability of an ancillary payment document where the wider transaction and ownership of underlying book debts remain disputed. Where the proper remedy is an appeal, the original judge cannot vary the order in the manner sought.

James Barrie obtained summary judgment against J Barrie (Plant Hire) Ltd for approximately £62,700 plus interest under a handwritten document acknowledging a debt and promising payment by instalments. The company contended that the document was not binding and that the underlying transaction, including the transfer of book debts, had been misunderstood. The District Judge entered summary judgment, and His Honour Judge Edwards QC dismissed the company’s appeal.

Fresh evidence then indicated that payments of book debts had been made to Barrie after the transaction. The company sought permission for a second-tier appeal and separately applied to the District Judge to set aside or vary the judgment. The central issues were whether the evidence required a trial and whether the District Judge had jurisdiction to vary the order.

Appeal allowed in part. The Court of Appeal unanimously granted permission to appeal from the High Court order and allowed the appeal against summary judgment. It dismissed the separate appeal against the refusal to vary the District Judge’s order.

1. Under section 55(1) of the Access to Justice Act 1999, permission for a second-tier appeal requires an important point of principle or practice, or another compelling reason. Aldous LJ rejected the pleading points because they had not been raised below and did not satisfy that threshold. Chadwick LJ reached the same result, holding that the available material showed that summary judgment was plainly and obviously wrong. Laws LJ agreed with both judgments.
2. The evidence disclosed substantial matters requiring investigation. There was an apparent contradiction between the handwritten acknowledgment of a debt and the contemporaneous share sale agreement, which required directors to acknowledge that they had no claim against the company. There was also a need to explain why payments in respect of book debts apparently owed to the company had been made to Barrie after the acquisition.
3. The crucial issue was whether the transfer of Barrie’s sole-trader business included debts outstanding on 4 December 1998. That issue had not been explicitly determined by the District Judge, whose decision addressed only the enforceability of the handwritten document. Proper disclosure and a trial involving cross-examination were therefore necessary. The order for summary judgment was set aside and the case was remitted to the Mercantile Court in Chester for directions.
4. The District Judge was correct to refuse the later application to vary or set aside the order. An alleged fraud could be addressed in the pending appeal, and the District Judge had no jurisdiction to vary the order in the manner proposed.

• Court of Appeal (Civil Division): Permission granted; appeal against the High Court order allowed; summary judgment set aside; case remitted to the Mercantile Court in Chester for directions. Separate appeal against refusal to vary dismissed.
• High Court of Justice, Queen’s Bench Division: His Honour Judge Edwards QC dismissed Plant Hire’s appeal from the summary judgment.
• District Judge: Summary judgment entered for Barrie on 27 March 2000. Application to set aside or vary that order refused on 25 September 2000.