International Private Equity Ltd v ABN Amro Bank NV

On a summary judgment application, the court may decide a difficult point of law, including contractual construction, where the relevant factual background is clear. It should not decide the issue on disputed or inadequately defined facts, particularly where the assumed facts may materially affect the construction. A weak defence does not automatically justify summary judgment if resolving the issue would require a trial of disputed market practice and could waste judicial resources or cause delay. The appropriate course may be to refuse summary judgment and determine the dispute at trial on the actual evidence.

International Private Equity Ltd, a private equity placement agent, applied for summary judgment under CPR 24.2 against ABN Amro Bank NV concerning entitlement to success fees under a placement agent agreement. The central construction issue was whether “IPEL Investors” included investors not introduced by IPEL, or investors in respect of whose commitments IPEL was not the effective cause. The parties disputed the relevant market practice. The court had to decide whether the construction issue should be determined summarily on an assumed factual basis.

1. Application refused. The court declined to grant summary judgment and directed that the dispute proceed to trial, where the relevant market practice could be established on the evidence.
2. Under CPR 24.2, the court may determine a point of law, including a difficult question of contractual construction, on a summary judgment application. It must not determine disputed questions of fact, although it may reject fanciful factual allegations.
3. The construction issue depended materially on the market practice forming part of the factual matrix. The parties’ accounts differed, and the evidence did not provide sufficient detail to show how the alleged practice interacted with the agreement. The assumptions sought by IPEL were therefore neither wholly clear nor safely treated as the factual basis for final determination.
4. Although ABN’s construction case appeared weak, the court considered that deciding the issue summarily might lead to an appeal and a later trial on different facts. That would risk wasting judicial resources and delaying resolution. The proper course was to determine the contractual meaning after the factual evidence had been tested.
5. The court refused to make a conditional order under paragraph 5 of the Practice Direction to CPR 24. It considered it appropriate instead to require a significant payment into court, with the amount and any discount from the sum claimed to be addressed separately.