Sheikh Abdulrahman Khalid Bin Mahfouz v Sheikh Sultan Bin Mahfouz & Anor

Summary judgment is appropriate where the defendant’s proposed defence has no real prospect of success and is plainly fanciful. A defendant is entitled to a trial where the defence has a real prospect of success, but the court need not allow further time where the evidence makes clear that no genuine defence can emerge. Money transferred for a specific purpose may be held on trust for that purpose. Where the purpose fails and the recipient misappropriates the money, the claimant may obtain judgment for its repayment.

The claimants sought summary judgment for repayment of €35 million transferred into the first defendant’s Swiss bank account. The payment was said to fund a deposit for oil contracts, supported by agreements and a personal guarantee. The money was not used for that purpose and was spent by the defendant.

The defendant had served no defence. In evidence, he advanced a new case that the payment was an unconditional gift made in return for access to information about assets allegedly hidden by the first claimant’s father. The issue was whether that defence had a real prospect of success and whether the hearing should be adjourned to allow further evidence.

1. Summary judgment. A defendant to a money claim is entitled to a trial where the defence has a real prospect of success. Where the evidence shows that the defence is entirely without substance and fanciful, a trial is unnecessary and summary judgment may be entered (para [1]).
2. Nature of the payment. On the claimants’ evidence, the €35 million was received on trust for the limited purpose of paying the intended deposit to the oil-producing entity. That purpose failed because the money was never paid over and was instead misappropriated by the defendant (paras [7], [26]).
3. Assessment of the defence. The gift defence was incapable of belief. It was raised late, was inherently fantastical, was unsupported by independent evidence, conflicted with the earlier account advanced through solicitors, contradicted the defendant’s signed repayment promise and subsequent assurances, and was inconsistent with the agreements and guarantees documenting the intended oil venture (paras [19]-[26]).
4. Adjournment. No useful purpose would be served by granting further time where the defendant had no prospect of producing evidence establishing a genuine defence. The adjournment application was therefore refused (para [27]).
5. Disposition. The claimants were entitled to summary judgment. Judgment was entered for €35 million together with interest (para [28]).