Grenda Investments Ltd v Barton

Proceedings should be struck out for abuse based on inactivity only where the evidence supports the clear inference that the claimant had no intention of bringing them to a conclusion. Delay which is equally consistent with a temporary suspension or competing priorities is insufficient. The court must also consider its discretion and any prejudice.

On summary judgment, the court asks whether the defence has a real, rather than fanciful, prospect of success. It must not conduct a mini-trial, although it must scrutinise the evidence and may consider evidence reasonably expected to emerge at trial. Credible evidence of an oral agreement, particularly where material evidence from the alleged counterparty is absent, may require the claim to proceed to trial. An alleged oral variation or agreement said to be subject to contract may likewise raise issues unsuitable for summary determination.

Grenda Investments Limited brought debt claims against Philip Barton under three loan facilities. Barton applied to strike out the proceedings, alleging that Grenda’s inactivity amounted to an abuse of process because proceedings had allegedly been held back while his assistance was required in related litigation. Grenda applied for summary judgment.

Barton relied principally on an alleged February 2014 agreement with Andrew Ruhan concerning set-off and repayment timing, and on an alleged November 2015 agreement that the proceedings would not be pursued. The central questions were whether the delay justified strike-out and whether Barton had a real prospect of establishing the alleged agreements at trial.

1. Strike-out. The application was refused. Under CPR 3.4(2)(b), inactivity may amount to abuse where the evidence establishes that proceedings were commenced or continued without an intention to bring them to conclusion. The inference must be clear and supported by evidence. Here, the inactivity was equally consistent with a temporary suspension caused by Mr Ruhan’s involvement in other litigation. It was not the warehousing described in Arbuthnot Latham Bank v Trafalgar Holdings and the circumstances did not fall within the type of case addressed in Grovit v Doctor. There was also no demonstrated litigation prejudice, and the defendant delayed in raising the point.
2. Summary judgment principles. Under CPR 24.2, the applicant bears the overall burden of showing that the defence has no real prospect of success and that there is no other reason for trial. A real prospect means a case with some genuine degree of conviction, not a fanciful or imaginary case. The court must avoid a mini-trial, while retaining its critical faculties and considering evidence reasonably expected to be available at trial.
3. Defences based on oral agreements. The alleged November 2015 non-pursuit agreement was insufficiently particularised and had weak evidential support. Standing alone, it would not have prevented summary judgment. The alleged February 2014 agreement was different. Barton’s evidence described an agreement concerning both set-off and the postponement of repayment while the Bluestone loan remained outstanding. That evidence was not contradicted by evidence from Mr Ruhan and raised matters properly explored at trial rather than by cross-examination on a summary application.
4. The court could not determine summarily whether the agreement was subject to contract, whether the facilities’ clauses concerning set-off and written variation prevented reliance on it, or whether the agreement was a multi-party arrangement whose effect survived assignment of the Bluestone loan. The authorities on contractual formation and non-variation clauses, including RTS Flexible Systems Ltd v Molkerei Alois Müller GmbH & Co KG, MWB Business Exchange Centres Ltd v Rock Advertising Ltd and Globe Motors Inc v TRW Lucas Verity Electric Steering Ltd, did not make those issues suitable for summary determination on the evidence available.
5. Both applications were refused. The claim was to proceed to trial, with no payment-into-court condition imposed.

not stated in the judgment.