Ais Pipework Limited v (Formerly Aig Engineering Services Limited)

For summary judgment, a set-off or counterclaim does not automatically prevent relief. The court must assess whether the defence has a realistic prospect of success and whether there is any compelling reason for trial. Contractual construction, breach, causation and quantification issues requiring a mini-trial are ordinarily unsuitable for summary determination.

An interim payment requires satisfaction, on the balance of probabilities, that the claimant would in fact obtain judgment for a substantial sum. It is insufficient that judgment is merely likely. Relevant set-off and counterclaim must be taken into account.

The claimant sought summary judgment declaring that £379,429 was payable for pipework and related services, subject to set-off or counterclaim. It alternatively sought an interim payment of £300,000.

The defendant admitted a starting value of approximately £300,000 but advanced substantial claims for defective work and delay. The disputes concerned the contractual regime, the claimant’s design and installation obligations, alleged defects, causation, quantum and payment machinery. The court therefore had to determine whether either application could properly be granted before trial.

1. Summary judgment. The claimant was not entitled to summary judgment merely because the defendant relied on set-off and counterclaim. The court had to examine whether the defendant had a realistic, rather than fanciful, prospect of successfully defending the claim and whether there was any other compelling reason for trial.
2. The defendant’s figure of £300,000 was used as the starting point because the number of hours worked and the value of the additional work required determination at trial. The alleged defects and delay claims raised triable issues concerning contractual construction, breach, causation and quantification. Resolving the disputed design issue would require detailed consideration of drawings and expert evidence. Those matters were not plain and obvious and could not properly be resolved through a mini-trial. Summary judgment was refused.
3. Interim payment. Under CPR rule 25.7(1)(c), the court had to be satisfied, on the balance of probabilities, that the claimant would in fact obtain judgment for a substantial amount if the claim went to trial. The test was not met merely by showing that judgment was likely. Relevant set-off and counterclaim had to be considered. The claimant could not establish on the material before the court either that it would recover £379,000 for its work or that it would defeat the defendant’s substantial defects and delay claims. The interim-payment application therefore failed.
4. An order requiring payment into court was also inappropriate. Even if the delay claim were unlikely to succeed, the defects claim slightly exceeded the admitted starting value of the claimant’s claim.
5. The claimant’s applications failed. The parties were directed to prepare a draft order, with costs issues to be considered at a later costs and case management conference if unresolved.