Gamatronic (UK) Ltd & Anor v Hamilton & Ors

On applications for summary judgment and strike-out, the court must assess whether the claim has a real prospect of success and whether the pleading identifies the issues with sufficient clarity. A claimant in a covert wrongdoing case may face difficulty particularising the evidence, but that does not excuse an unclear pleading. A broad contractual release may cover unknown claims, but its scope depends on the language and context of the agreement and the parties’ actual or imputed knowledge. Where a party seeking the release knew of a possible claim and knew that the other party was ignorant of it, non-disclosure may amount to sharp practice and leave equitable remedies available. A defective pleading should ordinarily be amendable, but pervasive defects may justify striking it out while allowing a fresh statement of case.

Gamatronic UK Ltd and Gamatronic Israel brought claims against former directors and their new employer concerning alleged diversion of business, misuse of confidential information, breaches of contract and fiduciary duty, conspiracy, interference with business, procuring breach of contract, and money had and received.

The defendants applied under Civil Procedure Rules 1998, rules 3.4 and 24.2, seeking strike-out and summary judgment. The central issues were whether releases in a share sale agreement and employment compromise agreements barred the claims, whether the claims had been adequately pleaded, and whether the proceedings should be dismissed or re-pleaded.

1. Release. The defendants had not shown that the claimants had no real prospect of overcoming the release. The natural and ordinary meaning of the release, its contractual context and the parties’ apparent objective of finality required consideration. The court was not prepared, without disclosure and trial evidence, to decide that the release covered deliberately concealed wrongdoing of which the claimants were unaware. The claimants also had a sufficient case that the release might be set aside or rectified if it had been procured by misrepresentation or sharp practice. This approach was informed by BCCI v Ali [2001] UKHL 8 and Priory Caring Services Ltd v Capita Property Services Ltd [2010] EWCA 226.
2. Pleading. Pleadings must be concise but must identify the issues accurately and make their meaning plain to the court and the opposing parties. Parties should not have to infer allegations from argumentative headings, unidentified third parties or unexplained references to dishonesty. Difficulties in obtaining evidence of covert wrongdoing may justify incomplete particulars, but they do not justify lack of clarity.
3. Claims and loss. The claims for money had and received, damages, an account of profits, and claims against Vox were materially defective. Loss is a necessary ingredient of claims for procuring breach of contract, unlawful interference with business and conspiracy. The evidence nevertheless gave the claimants a real prospect of proving loss, so summary judgment and strike-out on that basis were refused.
4. Disposition. The statement of case was struck out because its defects were pervasive and could not be cured by amendment. The proceedings were not dismissed. The claimants were allowed to serve a new, substantially clearer statement of case, verified by Mr Goren or Ms Bar Zvi.

This was a first-instance decision of the High Court on applications under Civil Procedure Rules 1998, rules 3.4 and 24.2. The original statement of case was struck out, but the proceedings were permitted to continue through service of a new statement of case.