Marsfield Automotive Inc v Siddiqi

Summary judgment is inappropriate where a substantial restitution claim depends on disputed evidence or a developing question of law, unless the issue can be resolved without prolonged argument or a mini-trial. A contractual allocation principle does not generally bar restitution where there was no relevant binding contract and the parties did not restrict their rights of recovery. Whether a contract arose by conduct, whether the payment’s basis failed, and whether counter-restitution is required may require trial. The law on an agent’s liability for money received for a principal remains arguable where payment was not made under a mistake of fact or wrongful act. A conditional order should not be made where a defence having a real prospect of success is not improbable.

Marsfield Automotive Inc v Siddiqi was a claimant’s application for summary judgment in a £50 million restitution claim against the defendant, who had received payments under deeds executed for Eco Motive AG. The proposed venture and its definitive agreements were never completed. The defendant relied on defences including contract by conduct, absence of total failure of basis, inability to give counter-restitution, and ministerial receipt as agent.

The court had to decide whether those defences had a real prospect of success and whether any remaining uncertainty justified a conditional order.

1. The application for summary judgment was dismissed. The defendant had a real prospect of success on four defences.
2. The principle in MacDonald Dickens & Macklin v Costello did not apply. The parties had made no relevant binding contract, and the Payment Letters did not restrict or circumscribe the claimant’s restitutionary rights.
3. Whether a binding contract arose by conduct was a factual issue requiring close examination of what the parties did. The defence could not be rejected without an impermissible mini-trial.
4. For failure of basis, it was strongly arguable that the relevant benefit was one which the claimant was reasonably entitled to expect, whether or not the anticipated contract was actually made. Whether the payment was made on that basis required factual determination.
5. The law of ministerial receipt had competing strong and weak versions. The strong version treats the principal, rather than the agent, as enriched. The weak version gives the agent a defence for money transferred in accordance with the principal’s instructions before notice of the claimant’s restitutionary right. Authorities supporting the weak version generally concerned mistake of fact or wrongful act. Since those features were absent, it was strongly arguable that the claim lay against the principal, not the agent. The issue was unsuitable for summary determination.
6. The first three defences were improbable, but the ministerial-receipt defence was not. A conditional order was therefore inappropriate.