Serene Construction Ltd v Barclays Bank Plc

A case-management judge may refuse an adjournment, or grant it on reasonable conditions, even where a party has received less than the prescribed notice of a summary-judgment hearing. An appeal based on procedural irregularity requires both an unreasonable exercise of discretion and an unjust result.

Summary judgment is appropriate where the pleaded claim or defence is bound to fail. A lender is not obliged to advance a conditional facility where the borrower has neither made the required drawdown request nor fulfilled conditions precedent. A conditional contractual offer of finance is not, without more, a representation that funds will be advanced regardless of those conditions.

The company appealed from an order of His Honour Judge Simon Brown QC in the Birmingham District Registry granting the bank summary judgment on the company’s claim and on the bank’s counterclaim under an earlier loan facility.

The company alleged that the bank had failed to advance a later facility, had made a negligent misrepresentation, and had sold secured land at an undervalue. It also contended that the summary-judgment hearing was unfair because it had received short notice and its application for an adjournment had not been granted unconditionally.

The central issues were whether the refusal of an unconditional adjournment was a serious procedural irregularity causing injustice, and whether any pleaded claim or defence to counterclaim had a real prospect of success.

1. Appeal dismissed. The judge’s decision to proceed with the hearing, while offering an adjournment on conditions, was within the reasonable range of case-management decisions. The company had known of the summary-judgment application from November 2014, had not identified material evidence requiring an adjournment, had failed to serve a defence to the counterclaim, and had given the bank notice of its adjournment application only at the last moment.
2. The shortfall in the prescribed notice of the hearing gave the company reasonable grounds to seek an adjournment, particularly as it was unrepresented. It did not, however, compel an unconditional adjournment. The judge could abridge procedural time limits and could require a defence to the counterclaim and security for the bank’s wasted costs as conditions of an adjournment.
3. In any event, no injustice resulted. A rehearing would cause delay, costs and use court resources while producing the same outcome, because the pleaded claim and any defence to the counterclaim were bound to fail.
4. The bank had no contractual or other legal duty to advance the second facility. No written drawdown notice was identified, and the undisputed conditions precedent, including further security and a satisfactory monitoring surveyor’s report, had not been fulfilled by the deadline.
5. The alleged misrepresentation was untenable. The facility letter was a contractual offer, not an identified representation of fact, and was expressly conditional upon fulfilment of the conditions precedent. The negligent-sale allegation was also unparticularised and unsupported by evidence challenging the marketing, valuation or sale price.
6. The court applied the summary-judgment approach stated in Swain v Hillman [2001] All ER 91. Use of the Part 24 jurisdiction advances the overriding objective by avoiding expense, delay and futile proceedings where a claim is bound to fail.

• Court of Appeal (Civil Division) — unanimously dismissed the company’s appeal: [2016] EWCA Civ 1379.
• Birmingham District Registry — His Honour Judge Simon Brown QC granted the bank summary judgment on the claim and counterclaim on 19 January 2015.