Clancy Consulting Ltd v Derwent Holdings Ltd & Ors

On an application for strike out or summary judgment, a defence must identify the allegations denied, explain the reasons, and state any alternative case. A bare denial, or a denial of a money claim without identifying the sum said to be due, may be struck out. Summary judgment is appropriate where the defendant has no real prospect of successfully defending the claim; a real prospect means more than a merely arguable case and involves an absence of reality. Claims for lost management time require a causal link between the defendant’s default and the cost incurred, together with evidence that the claimant’s ordinary trading routine was disturbed. Where such a claim is unpromising but not suitable for summary judgment, conditional leave to defend may be granted.

The claimant sought payment of professional engineering and mechanical services fees arising from numerous contracts with the defendants. The claim included certified sums, uncertified sums calculated by reference to hours worked and hourly rates, and damages for management time spent pursuing payment.

The defendants applied to defend the claims through a defence containing bare denials and no positive calculation of the sums they said were reasonable. They had failed to comply with an unless order requiring an amended defence. The issue was whether the defence should be struck out, whether summary judgment should be entered, and whether the management-time claim should proceed subject to conditions.

1. Certified sums. The claimant was entitled to summary judgment for £329,525 plus VAT. The defendants had no realistic prospect of defending sums certified as due and payable under the parties’ agreed interim valuation process.
2. Pleading requirements. Under Civil Procedure Rules 1998, a defendant who denies an allegation must give reasons and, where appropriate, state its own version of events. A defendant disputing a money claim must advance a positive case identifying the amount admitted and the basis of calculation. Bare denials and unsupported denials of liability were therefore liable to be struck out.
3. Uncertified sums. The claimant’s case was sufficiently clear: payment was sought for the hours worked at the applicable hourly rates. The defendants had not challenged the hours or pleaded why the rates were excessive, nor proposed alternative hours or rates. They could not raise such a case at the hearing. The relevant parts of the defence were struck out and summary judgment was entered for £68,565 plus VAT.
4. Summary judgment. Applying the principles in International Finance Corporation v Utexafrica Sprl [2001] CLC 1361 and Three Rivers District Council v The Bank of England (No. 3) [2001] 2 All ER 513, the question was not which case was more probable at trial, but whether the defence had any real prospect of success.
5. Management time. Following Tate & Lyle v GLC [1982] 1 WLR 149 and RV Versicherung AG v Risk Insurance [2006] EWHC 42 (Comm), the claim required proof of both causation and disruption of the claimant’s ordinary trading routine. The evidence was incomplete, so summary judgment was refused. Applying the guidance in Olatawura v Abiloye [2002] EWCA Civ 998, leave to defend was granted conditionally on payment into court of £37,242.

This was a first-instance application in the High Court. No appellate history was stated in the judgment.