Capita Trust Company Ltd v Optical Service (UK) Ltd

Summary judgment is appropriate where a defence has no realistic prospect of success and there is no other compelling reason for trial. The court must avoid conducting a mini-trial, but it need not accept factual assertions contradicted by contemporaneous documents or inherently implausible evidence. It must consider evidence already available and evidence reasonably expected at trial. A defendant cannot resist summary judgment by referring generally to undisclosed documents that could support its case. Where the existence of a loan account is not realistically arguable, a limitation defence depending on that issue also fails.

The claimant, as administrator of Graham Smith’s estate, claimed £477,630.87 plus interest from his former employer. The claim alleged that bonuses and interest had been retained in a company loan account for Mr Smith and remained unpaid at his death.

The defendant denied the agreement and contended that the sums represented deferred pension payments owed to its directors. It also raised limitation and argued that further disclosure might reveal evidence supporting its case. The issue was whether the defence had a real prospect of success under CPR 24.2.

1. The court granted summary judgment for the claimant. Under Civil Procedure Rules 1998, r 24.2, the defendant had to show a real prospect of successfully defending the claim and there had to be no other compelling reason for trial. The relevant prospect was realistic rather than fanciful, and the court applied the guidance summarised in Nigeria v Santolina [2007] EWHC 437 (Ch) and the criterion described by Lord Hobhouse in Three Rivers District Council v Bank of England (No. 3) [2001] UKHL 1.
2. The court was not conducting a mini-trial, but it was entitled to analyse the evidence and reject assertions lacking substance, particularly where they were contradicted by contemporaneous documents. The company’s explanation was inherently implausible, inconsistent with its audited accounts, prior correspondence, the August 2006 fax, the forensic accountant’s report and pension documentation. The documentary evidence overwhelmingly supported the existence of the loan account and the debt to Mr Smith.
3. The possibility of further disclosure did not justify a trial. The company had access to the relevant information and had not produced material that could reasonably be expected to alter the outcome. A party cannot stave off summary judgment by referring to documents that may exist but which it has not exhibited in support of its evidence.
4. The limitation defence stood or fell with the alleged agreement. Since the company had no arguable defence to the existence of the loan account, the limitation defence also failed. The cause of action accrued when repayment was demanded in May 2012.
5. Judgment was therefore entered for the claimant for the sums claimed.

First instance decision. No earlier appellate decision is stated in the judgment.