Sinclair Investment Holdings SA v Cushnie & Ors

For summary judgment, the question is whether the defendant has a realistic, rather than fanciful, prospect of success at trial. The court must consider the evidence as it may develop before trial. A defendant cannot resist judgment on an issue by making unsupported assertions where the claimant’s evidence is clear and compelling.

Where fraud damages are claimed, the prima facie measure is tortious: the claimant is put in the position it would have occupied had it never entered the transaction. Benefits received under the transaction must therefore be credited. The court left open whether different principles apply to equitable compensation for dishonest assistance. Summary judgment may be entered on liability while quantum remains for trial, subject to the court’s power to award an interim payment.

The claimant sought summary judgment against Mr Cushnie for £2,350,000 and interest, alleging fraud, conspiracy to defraud and dishonest assistance. The claim arose from funds paid to an offshore trading company associated with the Versailles Group, which the claimant alleged had been misused.

Mr Cushnie disputed the claimant’s standing, challenged the authenticity of a consolidated trading agreement, and argued that profits or interest already received affected the recoverable loss. The application was heard shortly before a wider trial, which was to continue in any event. The central issues were whether there was a realistic prospect of defending liability and whether the evidence permitted summary determination of damages.

1. Liability. The applicable test under CPR 24.2(a)(i), as stated in Swain v Hillman [2001] 1 All ER 91, was whether Mr Cushnie had a realistic, rather than fanciful, prospect of successfully defending the claims. The court had to assess prospects at trial and take account of any realistic prospect that the defence evidence might improve before then.
2. The standing challenge had no realistic prospect of success. The evidence, including certified bank material and confirmation from Barclays, established that the claimant’s account made the four payments to TPL. The contrary suggestion was fanciful.
3. The forgery challenge also had no realistic prospect of success. An expert had examined an original agreement in 2000 and found original signatures without additions or alterations. In any event, if the consolidated agreement were not authentic, the pleaded earlier agreements would revive. Those earlier agreements were not supported by credible evidence of forgery.
4. Quantum. In a fraud claim, damages are assessed on the tortious basis. The claimant must be put in the position it would have occupied had it never entered the transaction, rather than the position it would have occupied if the transaction had been performed. Profits or interest received under the transaction must therefore be credited.
5. The court was not sufficiently satisfied that the same approach necessarily applied to equitable compensation for dishonest assistance. That issue required determination at trial. The court also declined to enter judgment for a proposed part of the damages because the amount was not clearly established in the evidence and no interim-payment application had been made. Further argument was directed on newly produced calculations.