Opus Property Finance Ltd v Arca Homes Ltd & Anor

On an application for summary judgment, the court may use common sense and judgment when assessing whether a proposed defence has a real prospect of success. A positive case advanced for the first time at the hearing may be rejected where the contemporaneous documents and surrounding circumstances make it fanciful. Documentary inconsistencies do not necessarily justify a trial if they are immaterial or incapable of supporting a credible defence. Where the contractual obligation and guarantee are established, and no real prospect of successfully disputing their validity or the sums due is shown, summary judgment may be entered for the claimant.

Opus Property Finance Limited sought summary judgment against Arca Homes Limited for repayment of a £300,000 loan, together with interest, fees and costs. It also claimed against Stephen Charles Aggatt under a guarantee limited to £300,000 plus default interest.

The defendants’ pleaded case referred to possible forbearance, inspection of the loan agreement and checking of the sums claimed. At the hearing, Mr Aggatt’s sole substantive defence was that the loan agreement and faxed copy had been tampered with and that the signature page had been substituted for an unsigned page. The central issue was whether that defence gave the defendants a real prospect of successfully defending the claim at trial.

1. Summary judgment. The court granted summary judgment for the claimant. The alleged fabrication or substitution of the signature page was so fanciful that it had no real prospect of success at trial.
2. Assessment of the defence. Although the application was not a trial, the court was entitled to exercise common sense and judgment. The defence was advanced positively for the first time at the hearing. It was inconsistent with the earlier pleadings and witness evidence, which had questioned the credibility of the documents but had not asserted that the loan agreement was unsigned.
3. Documentary and surrounding evidence. The advance of the loan, the solicitor-countersigned guarantee, the common reference number appearing throughout the agreement, the contemporaneous emails and the board minutes of Arca Homes all supported the conclusion that the loan agreement had been signed. The alleged covering letter explaining non-signature could not be produced, and the alleged irregularities in the fax did not provide a credible basis for disputing execution.
4. Contractual sums. The claimant was entitled to the sums claimed under the agreement. Although the interest rate was high, the agreed loan period was intended to be short, and the contemporaneous correspondence showed that Mr Aggatt had expressly accepted the proposed monthly interest and additional fee.
5. Order. Summary judgment was entered for the claimant against both defendants, with the formal order recording the sums due.