Sandhar v Sandhar & Kang Ltd & Ors

Summary judgment under Civil Procedure Rules 1998, rule 24.2(a), turns on whether the claimant has a real prospect of success. The court assesses that question on the evidence filed, rather than on speculation that cross-examination or further documents might produce a different case. A mini-trial is unnecessary where the contemporaneous documentary evidence points inexorably to one conclusion. A serious allegation of forgery does not by itself prevent summary judgment where the surrounding evidence makes the alternative case wholly improbable. Documents executed by trustees charging property for a company, together with the parties’ accounts, tax treatment and subsequent dealings, may establish a beneficial ownership position inconsistent with a later asserted trust.

The appellant challenged summary judgment granted to the first defendant, Sandhar & Kang Ltd, on its counterclaim. The order declared that the company was the sole legal and beneficial owner of property in Birmingham. The appellant claimed that the property was held on trust for himself and three members of the Kang family.

The appeal followed an earlier decision removing a unilateral notice lodged by the appellant against the registered title. That decision was not appealed. The central issue was whether the evidence showed that the appellant’s claim had a real prospect of success under Civil Procedure Rules 1998, rule 24.2(a), particularly in light of an allegation that a later transfer document was forged.

1. Appeal dismissed unanimously. The court applied the simple test under Civil Procedure Rules 1998, rule 24.2(a): whether the claimant had a real prospect of success. Expressions such as an absence of reality, hopelessness or fancifulness were merely paraphrases of that test.
2. The assessment depended on the evidence filed. A party could not rely on speculation that cross-examination or further documents might improve its case. The court did not need to conduct a mini-trial where the documentary and other evidence made the asserted case unreal.
3. The evidence showed that the property had been treated as belonging beneficially to the company. The purchase finance was recorded as a company loan. The property appeared in the company’s accounts and tax treatment. The four individuals executed bank documents describing themselves as trustees and the company as beneficial owner or mortgagor. The company paid maintenance costs and retained rental income. The parties’ tax returns treated the property as company property, and the appellant’s settlement payment for his shares was calculated on that basis.
4. The allegation that the 1992 transfer was forged did not prevent summary judgment. The deputy judge was entitled to leave that issue aside and rely on the evidence predating the alleged forgery. The alternative case required the court to contemplate dishonesty by the other individuals, the accountant and apparently independent witnesses. That case was wholly improbable.
5. A further argument under section 53(1)(c) of Law of Property Act 1925 did not require determination. The two bank documents clearly complied with section 53(1)(b), and the appellant’s counsel could identify no answer to that point.

• Court of Appeal (Civil Division): [2008] EWCA Civ 238. Appeal from summary judgment given on 5 July 2007 by His Honour Judge Simon Brown QC, sitting as a deputy High Court judge in the Birmingham District Registry. Appeal dismissed.
• Earlier decision: on 1 May 2007 the deputy judge ordered removal of the unilateral notice against the title. Permission to appeal was refused and no application was made to the Court of Appeal.