Newmafruit Farms Ltd & Ors v Pither & Ors

Summary judgment is appropriate where the defence has no realistic prospect of success, but the court must avoid a mini-trial. Factual assertions may be assessed against pleadings, contemporaneous documents and admissions. A short construction issue may be decided summarily where the evidence is sufficient and the parties have had a fair opportunity to address it.

Where enforceability depends on whether lending activity was carried on by way of business under the Financial Services and Markets Act 2000, the question is broader than whether lending itself constituted a separate business. The assessment is fact-sensitive and may require a trial. Statutory non-compliance requiring a multi-factorial assessment of prejudice and culpability will ordinarily prevent summary judgment.

Newmafruit sought repayment of loans allegedly made to Alan Pither between 2009 and 2014. It applied to strike out his Re-Amended Defence and for summary judgment. The defence alleged, among other matters, that certain payments were not loans to Mr Pither, that later profit-sharing arrangements altered repayment obligations, and that the loans were unenforceable under the Consumer Credit Act 1974 and Financial Services and Markets Act 2000.

The court considered the claim in tranches. It addressed construction of the 2009 and June 2011 agreements, the evidential strength of the pleaded defences, statutory licensing and disclosure requirements, waiver, estoppel and set-off. The central issue was whether each defence had a real prospect of success or raised a triable issue.

1. Summary judgment principles. Under CPR r. 3.4(2)(a), a defence may be struck out where it discloses no reasonable grounds or is an abuse of process. Under CPR r. 24.2, summary judgment requires no real prospect of successfully defending the claim and no compelling reason for trial. The relevant prospect is realistic rather than fanciful. The court must not conduct a mini-trial, but may analyse factual assertions where contemporaneous documents or admissions show that they have no real substance.
2. Construction of the 2011 Agreement. The June 2011 Agreement did not make Mr Pither personally liable for the £125,000 previously lent to AMP. Its repayment provisions concerned sums advanced under that agreement, principally future drawdowns. The application was dismissed for those sums.
3. Loans and evidential assessment. The Quail West and Corringham payments were loans to Mr Pither. His assertion that later profit-sharing arrangements extinguished repayment obligations lacked a real prospect of success. The same applied to the sums advanced under the June 2011 Agreement. Summary judgment was granted for the row 4 sum and sums in rows 8–27, subject to the court’s conclusions on other tranches.
4. Consumer-credit and financial-services issues. Certain sums were or might have been advanced under regulated agreements. Article 48 of SI 2013/1881 required consideration of whether Newmafruit was exercising lender’s rights under regulated agreements as a regulated activity carried on by way of business. That issue was fact-sensitive and remained triable. The absence of prescribed disclosure and form also engaged the multi-factorial discretion under ss. 55, 61, 65 and 127 of the Consumer Credit Act 1974, which could not properly be resolved summarily.
5. Other defences. Waiver, estoppel and set-off had no real prospect of success. The contractual no-set-off clauses prevented disputed cross-claims from defeating summary judgment.

Orders were to be settled after further submissions. Summary judgment was therefore granted only for specified sums and dismissed for the remaining identified tranches.