Caribonum Pension Trustee Ltd v Pelikan Hardcopy Production AG

Summary judgment is appropriate where the defence has no real prospect of success. Contractual construction requires an objective assessment of the language, the document’s purpose, its other provisions, relevant background and commercial common sense, while excluding subjective intentions. Express representations in a guarantee do not ordinarily become liability-limiting contractual terms merely because the guarantor relied on related legal advice. A reservation in a foreign-law opinion must be construed according to its terms and does not alter liability under an English-law guarantee unless it does so clearly. A claimant’s inability to enforce a judgment, or the commercial pressure that may result, does not by itself make proceedings an abuse of process where the claim seeks legitimate redress.

The claimant trustee sought summary judgment for £4,306,605.33 under a guarantee given by the defendant in respect of unpaid contributions owed by a participating employer to an occupational pension scheme. The defendant argued that its liability was limited to its freely disposable reserves, alternatively by collateral contract, and that the claim was an abuse of process because enforcement was unlikely and the proceedings might pressure the employer’s parent company.

The court considered the construction of the guarantee, the effect of reservations in a Swiss legal opinion, and whether the asserted collateral purpose defeated the claim.

1. Summary judgment. The claimant was entitled to summary judgment because the pleaded construction and collateral-contract defences had no real prospect of success. The defence did not plead either alleged term or the necessary elements of a collateral contract, and no amendment application was made ([2018] EWHC 2321 (Ch), paras 22 and 29).
2. Construction of the guarantee. Clause 2.1 created an unambiguous and unqualified primary obligation. Applying the objective approach stated in Marley v Rawlings and [2014] UKSC 2, and the unitary approach described in Rainy Sky v Kookmin Bank and [2011] UKSC 50, clause 5.4 concerned the defendant’s representation and warranty of legal validity. It did not limit the separate payment obligation in clause 2.1 (paras 20–24).
3. The representations were made within the guarantee and expressly described as representations. The reasoning in Inntrepreneur Pub Co Ltd v East Crown Ltd and [2000] 2 Lloyd’s Rep 611 concerned pre-contractual assurances and did not justify treating these provisions as contractual limits on liability. The defendant’s motive and the consequences for third parties were irrelevant to construction (paras 25–29).
4. The Swiss Opinion was concerned with Swiss law and enforceability in Switzerland. Its reservation did not establish a limitation on liability under the English-law guarantee. The defendant therefore had no real prospect of showing that its liability was affected by its lack of freely disposable reserves (paras 30–33).
5. Abuse of process. Statutory claims, the Pension Protection Fund’s proof of debt and the effect of recovery on compensation were irrelevant to the defendant’s liability under the guarantee. Under Broxton v McClelland (No. 1) and [1995] EMLR 485, and Goldsmith v Sperrings Ltd and [1977] 1 WLR 478 (CA), an ulterior motive is insufficient unless the court’s process is misused to obtain something unavailable through properly conducted proceedings. A judgment remains legitimate even if it may be satisfied by the parent rather than the defendant, or may prove difficult to enforce (paras 34–41).

Summary judgment was granted for the claimant (para 42).