Jordan Grand Prix Ltd. v Tiger Telematics Inc Rev 1

Under Civil Procedure Rules 1998 Part 24, the court may refuse summary judgment yet make a conditional order where the defence is possible but improbable to succeed. The assessment is made on the written material available at the interlocutory stage. It is not a prediction of the result at trial and does not require a mini-trial.

An appellate court reviewing such a discretionary order should interfere only for an error of principle, failure to take account of a material consideration, serious procedural irregularity, or a decision outside the reasonable range. The amount of any payment into court must reflect all materially arguable issues and the defendant’s financial circumstances.

The claimant, a motor racing team, sued its sponsor for unpaid sponsorship fees under agreements covering the 2003 and 2004 seasons. The defendant relied principally on alleged misrepresentations and on the contractual effect of clause 17.

Master Eyre refused summary judgment but ordered the defendant to pay US $2.5 million into court, failing which judgment would be entered. Permission to appeal was limited to the amount, although the defendant sought to challenge the conditional order itself. The central issues were whether the conditional order was permissible and whether its amount was properly assessed.

1. Conditional order. The appeal against the making of a conditional order was not permitted. A court may dismiss an application for summary judgment while finding that a defence is possible but improbable to succeed. The relevant weakness must be more than a merely somewhat weak defence. The court must assess the written material and conclude that success is improbable, while recognising that the defence cannot properly be excluded without a trial.
2. Review of discretion. The Master had not conducted a mini-trial. His assessment of the alleged misrepresentations was open to him on the documents. The inconsistencies between the alleged representations, the contractual terms, and the defendant’s contemporaneous correspondence supported his conclusion that the defence was insubstantial. The existence of two differently expressed versions of the judgment caused confusion but did not invalidate the decision, since the reasons were sufficient to explain the result.
3. Matters omitted by the Master. The Master had failed to address the defendant’s argument on clause 17 and had not properly considered the need to protect the launch of the defendant’s product as part of its financial circumstances. Those omissions affected the amount of the payment into court, although they did not affect the propriety of making a conditional order.
4. Disposition. The order requiring payment of US $2.5 million was set aside and replaced by an order requiring shares worth US $1.5 million to be placed in escrow by 15 February 2005, followed by payment of US $1.5 million into court one week before trial. The shares could then be returned. Failure to comply would result in summary judgment for the claimant for the sums claimed, with interest and costs. There was liberty to apply.

• High Court (Queen’s Bench Division): Master Eyre refused the claimant’s application for summary judgment but ordered the defendant to pay US $2.5 million into court, failing which judgment would be entered.
• High Court (Queen’s Bench Division), on appeal: The challenge to the making of the conditional order was refused. The amount was set aside and reduced to US $1.5 million, subject to escrow and payment directions.