Venulum Property Investments Ltd v Space Architects Ltd & Ors

On an application to strike out or obtain summary judgment, the court must decide whether the claim has a realistic, rather than fanciful, prospect of success. It must avoid a mini-trial, while examining whether pleaded factual assertions have real substance and considering evidence reasonably expected at trial. Particular caution is required where fuller factual investigation may affect the outcome or where the law is developing.

A limitation issue may depend on whether a transaction caused measurable loss when entered into, including diminution in the value of a package of rights and obligations. That issue should not ordinarily be decided summarily without evidence of value where the consequence is dismissal of the claim. A claim may proceed against an individual where pleaded statements could constitute a personal assurance, but a bare allegation against a director, unsupported by any pleaded act, is fanciful.

The claimant, an investment fund, claimed in tort against developer defendants and in contract and tort against agent defendants arising from a proposed residential development. It alleged that plans used to obtain planning permission were defective and that the defendants had caused it loss.

The defendants applied to strike out the claim or obtain summary judgment, principally on the grounds that the claims disclosed no reasonable cause of action, had no realistic prospect of success, or were statute-barred. The claimant also sought to amend the name of the sixth defendant. The central issues were whether the pleaded claims were sufficiently arguable and when any cause of action accrued for limitation purposes.

1. Summary disposal. The principles stated by Lewison J in Wetherspoon v Van de Berg & Co [2007] EWHC 1044 (Ch) were correct. The court must distinguish a realistic claim from a fanciful one, avoid conducting a mini-trial, consider evidence reasonably expected at trial, and exercise particular caution before deciding a developing or fact-sensitive issue summarily.
2. The claims against Space Architects Ltd, MRP Development Services Ltd and Mr Willmott were weak but not fanciful. The pleaded statements by Mr Willmott might amount to a personal assurance, and the circumstances in which they were made required trial investigation. By contrast, Mr Anderson was mentioned only as a director of a company against which the claim was no longer pursued. No act by him was pleaded, and the claim against him was fanciful.
3. The allegation against the agent defendants concerning good faith was allowed to proceed only as an allegation of breach of fiduciary duty, and not dishonesty. The claim against Mr Ungemuth personally also required investigation because the capacity in which he acted was fact-sensitive.
4. It was arguable that the claimant suffered measurable loss when it entered into the conditional purchase contract if the value of the package of rights and obligations was diminished by defective plans. However, the court had no evidence establishing that diminution in value or the likelihood of planning permission. Given the draconian consequence of a limitation finding, the issue was unsuitable for summary determination.
5. The sixth defendant’s name was amended from Abbeyross Ltd to Abbeyross (GB) Ltd. The claim was allowed to continue against all defendants except Mr Anderson, subject to payment of approximately £450,000 into court under CPR 3.1(3) within 28 days. Failure to make payment would result in dismissal of the action.

First-instance decision. The judgment itself refers to an earlier judgment dated 22 May 2013 concerning the procedural history.