Jani-King (Gb) Ltd. v Alan James Manchett

Permission to appeal from summary judgment should be refused where the respondent’s overall case answers the proposed grounds and the applicant’s case has no real prospect of success. A judgment’s reasons are assessed in the context of the hearing, including what the parties understood at the time, and by reference to all the circumstances. An allegation of fraud must be distinctly and sufficiently particularised, with primary facts capable of supporting dishonesty rather than mere negligence. A party who signs a detailed commercial agreement is ordinarily bound by its clear terms, including provisions excluding reliance on unauthorised oral representations, subject to any express contractual preservation of fraudulent misrepresentation claims.

Jani-King obtained summary judgment before Master Eyre for £129,250, together with interest and costs, arising from a franchise agreement. The Master refused the defendant permission to amend his defence and dismissed his counterclaim. The defendant sought permission to appeal, alleging inadequate reasons and advancing issues concerning an escrow agreement, fraudulent misrepresentation, and a proposed amendment concerning the existence and business of Shayona R&D Ltd.

The application was heard by Mr Justice Sweeney, who considered whether any ground was arguable and whether the defendant’s case had a real prospect of success.

1. Disposition. Permission to appeal was refused on every ground. The stay consequently fell away. Costs submissions were invited in writing.
2. Adequacy of reasons. The Master had inaccurately referred to the claimant’s written argument as answering the defendant’s objections, although the oral argument had addressed the issues. Applying Harris v CDMR Purfleet Ltd [2009] EWCA Civ 1645 and Cook v Consolidated Finance Ltd [2010] EWCA Civ 369, the adequacy of reasons had to be assessed in the context of the hearing and the circumstances as a whole. The error did not make the reasons inadequate.
3. Escrow. The defendant’s case that his signature was conditional upon later professional advice was answered by the agreement’s objective terms, entire-agreement provisions, and provisions regulating variation and oral representations. The case therefore had no real prospect of success.
4. Fraudulent misrepresentation. The alleged representation concerning the level and price of business was contradicted by the detailed franchise agreement and schedules, which the experienced defendant repeatedly signed or initialled. The factual premise of the allegation strained credulity beyond any sensible breaking point. The legal arguments relied upon did not give the case a real prospect of success. The court applied the approach in Springwell Navigation Corporation v JP Morgan Chase Bank [2010] EWCA Civ 1221 and Peekay Intermark Limited v Australia and New Zealand Banking Group [2006] EWCA Civ 386 concerning the effect of signing contractual terms.
5. Amendment. The proposed pleading concerning Shayona offended the strict requirements for pleading fraud identified in Three Rivers DC v Governor and Company of the Bank of England No.3 [2003] 2 AC 1. On the evidence, the allegation of fraudulent misrepresentation was devoid of substance and had no real prospect of success. The contractual restriction on unauthorised oral representations also provided a valid answer.

1. High Court (Queen’s Bench Division): Master Eyre granted summary judgment to the claimant, refused the defendant’s application to amend, dismissed the counterclaim and refused permission to appeal.
2. High Court (Queen’s Bench Division): Mr Justice Sweeney refused permission to appeal on all grounds. The stay therefore fell away.