Global Marine Drillships Ltd v Landmark Solicitors LLP & Ors

Summary judgment should be granted only where the claim or defence has no realistic prospect of success and there is no other compelling reason for a trial. The court must avoid a mini-trial, especially where factual disputes, complex transactions or inferences requiring disclosure and oral evidence are involved.

A solicitor’s undertaking will ordinarily be enforced summarily. However, where the beneficiary may have authorised conduct inconsistent with the undertaking, or the surrounding transaction raises substantial questions about the parties’ knowledge, good faith or propriety, the claim may require trial. A claim for dishonest assistance must distinctly plead and particularise the alleged dishonesty.

The claimant held approximately £7 million with Landmark Solicitors LLP under a solicitor’s undertaking given by Salina Jones. The money was to be used only for obtaining insurance connected with standby letters of credit. The letters of credit were never procured, the arrangement terminated, and most of the money was paid to a car dealership rather than returned.

The claimant sought summary judgment against Landmark and Ms Jones for breach of the undertaking, and against Frank Mullins for alleged participation in the diversion of the money. The defendants relied on disputed evidence concerning the claimant’s knowledge and authorisation of the payments. The central issues were whether the claims had no real prospect of success and whether there was another compelling reason for trial.

1. Summary judgment principles. CPR rule 24.2 requires the court to consider whether the opposing party has a realistic, rather than fanciful, prospect of success and whether there is any other compelling reason for trial. The court must not conduct a mini-trial or resolve substantial factual disputes on affidavit evidence. It may decide a short point of law or construction where the evidence is sufficient, but must account for evidence reasonably expected to be available at trial.
2. Claim against Landmark and Ms Jones. The claimant’s case was founded on the undertaking and on a trust-law analysis. The judge accepted that the Quistclose principle applied: the money remained the claimant’s money, subject to a power to apply it only for the specified purpose. The undertaking was therefore apparently breached when the money was not used to obtain insurance and was not returned after the standby letters of credit failed to materialise.
3. Nevertheless, disputed evidence raised a real prospect that persons acting for the claimant knew of, or authorised, the payments to Charles Barber and that the undertaking had thereby been modified. The unusual transaction, the uncertain insurance arrangements and the involvement of intermediaries also created an exceptional need for disclosure and oral evidence. There was therefore an “other compelling reason” for trial, including in the equitable context of the trust claim.
4. Claim against Mr Mullins. The same factual issues required trial. In addition, the pleaded case appeared to allege dishonest assistance, but did not distinctly plead or particularise the dishonesty alleged against Mr Mullins. Summary judgment could not properly be granted on an unpleaded and unparticularised allegation.
5. The applications for summary judgment were dismissed. The amended defence was permitted to be relied upon.