Brandeaux Advisers (UK) Ltd v Chadwick

Where the law is developing or materially contested, strike out and summary judgment should be approached cautiously. The court should avoid deciding significant legal questions on hypothetical facts where the pleaded facts may affect the result. In an employment dispute, the assessment of repudiatory breach may require consideration of the overall employment relationship and all relevant circumstances, including the other party’s conduct. A pleaded argument that an employer’s own repudiatory breach affected its entitlement to rely on the employee’s breach was therefore not bound to fail at the interlocutory stage.

The claimant sought strike out or summary judgment under Part 24 of the Civil Procedure Rules 1998 against parts of the defendant’s defence and counterclaim. The defendant, a former senior employee, had transferred numerous work files to her personal email account before being dismissed for gross misconduct. She alleged that the claimant had itself committed repudiatory breaches and was therefore not entitled to rely on the employment contract or treat her conduct as repudiatory.

The central issue was whether those arguments were legally incapable of succeeding, or whether their determination depended on the facts and the state of the employment relationship.

1. Application dismissed. The court refused both strike out and summary judgment. The defendant’s factual allegations in paragraph 22 were relevant to several pleaded issues and had a proper evidential purpose.
2. The court should grant strike out only where it is certain that the claim or defence is bound to fail. Summary judgment requires the court to be satisfied that the relevant party has no real prospect of success. It is desirable that developing questions of law be decided on actual rather than hypothetical facts.
3. The authorities disclosed a genuine disagreement about the effect of an employer’s own repudiatory breach on its ability to rely on an employee’s repudiatory breach. In RDF Media Group plc v Clements [2007] EWHC 2892 (QB), the court had accepted that a party in repudiatory breach of a mutual obligation might be unable to accept the other party’s repudiation, and that the overall state of the employment relationship could be relevant. Those propositions were capable of applying where the parties’ roles were reversed.
4. That approach had been questioned in SG and R Valuation Service Co LLC v Boudrais [2008] EWHC 1340, while Tullett Prebon plc v BGC Brokers LP [2010] IRLR 648 expressed the orthodox view but also recognised that the employee’s conduct might be relevant to the objective assessment of trust and confidence. The disagreement meant that the defendant’s case could not be characterised as hopeless.
5. Whether the claimant was entitled to treat the transfer of emails as repudiatory, and whether its own conduct affected that entitlement, might depend substantially on the proved factual circumstances. The matter should proceed to trial under the existing speedy-trial timetable. Costs were left for submissions.