Various Claimants v Giambrone & Law (a firm) & Ors

Summary judgment may be granted where earlier generic findings establish that deposits were paid away in breach of trust and the defendants have no real prospect of defending the resulting liability. Where the trust required retention of money unless a compliant guarantee existed, the trustee must restore the fund to the position that proper performance would have produced. Individual evidence of what claimants would have done is unnecessary for that breach-of-trust remedy, although it may be relevant to contractual or tortious causation. Relief under section 61 of the Trustee Act 1925 requires honesty, reasonableness and a fair basis for excusing liability; highly unreasonable conduct with causative potency will not ordinarily qualify. A failure to disclose that guarantees were legally ineffective may itself prevent informed consent to payment out.

The judgment concerned consequential matters following a substantive generic-issues judgment handed down on 7 July 2015. Claimants sought summary judgment under CPR 24.2 for deposits paid away when no compliant Italian guarantee was in place. Standard claimants sought their deposits, limitation claimants sought commission sums, and other claimants sought deposits paid out in the absence of compliant guarantees.

The defendants opposed summary judgment, relied on section 61 of the Trustee Act 1925, and sought permission to appeal on issues including planning enquiries, SAAMCO, breach of trust, loss and informed consent. The court also considered an unless order, costs of a strike-out application and the form of the order.

1. Summary judgment. The court held that the earlier conclusion was unambiguous: paying deposits away when no compliant guarantee existed was a breach of trust. Proper performance would have required the deposits to remain held. The claimants were therefore entitled to restoration of the trust fund, subject to section 61.
2. The absence of a triggering event under a valid guarantee did not defeat the claims. That argument addressed a different, alternative causation analysis. The breach-of-trust claim depended on the fact and timing of the unauthorised payment, whereas contractual and tortious claims could require proof that the claimant would not have proceeded or would have negotiated different terms.
3. The court rejected the suggestion that individual evidence and disclosure were required for the breach-of-trust applications. The proposed comparison between Article 106 and Article 107 institutions was misleading unless the legal significance of the distinction was explained. It was fanciful to suggest that a purchaser would knowingly proceed on the basis of a guarantee that did not comply with Italian law.
4. Under section 61, the defendants bore the burden of showing reasonable conduct. Applying Santander UK Plc v R.A. Solicitors [2014] EWCA Civ 183, causative connection was present because the deposits were paid away through the breach. The conduct was highly unreasonable professional conduct, and there was no realistic prospect of relief.
5. The limitation claimants were entitled to summary judgment for the commission sums. Deliberate concealment meant that their breach-of-trust claims could not reasonably have been brought before disclosure of the mandates and commission levels.
6. Permission to appeal was refused because none of the proposed grounds had a real prospect of success. The unless-order application was adjourned generally. An order for costs of the strike-out application was made in favour of Avvocato Giambrone, subject to adjustment and set-off.

The judgment followed a substantive generic-issues judgment handed down on 7 July 2015 in the same proceedings. It determined consequential applications and refused the defendants permission to appeal.