Athena Capital Fund Sicav - Fis SCA v Crownmark Ltd

Summary judgment requires a realistic, rather than fanciful, prospect of success. The court must avoid a mini-trial and should ordinarily refuse summary determination where disputed oral evidence, disclosure or cross-examination may affect the outcome. It may decide a short point of law or construction where the evidence is sufficient, but should hesitate where further investigation could alter the result.

Where summary judgment is refused, the court may impose a proportionate conditional order under Civil Procedure Rules 1998 Part 24. A weak or improbable defence may justify payment into court, but an asset-disclosure condition must be related and proportionate to the relief sought. A pleaded claim for rescission for innocent misrepresentation concerning the legal effect of a written agreement should not be struck out where its legal characterisation and consequences remain arguable.

Athena claimed US$50 million and interest from Crownmark under a written Facility Agreement. Crownmark alleged that the parties had made an inconsistent oral agreement, that the interest obligation ended with a recovery period, and that the Facility Agreement had later been terminated orally. It also pleaded estoppel, collateral contract and rescission for innocent misrepresentation.

Athena applied for partial summary judgment on an interest instalment and to strike out Crownmark’s counterclaim. The central questions were whether Crownmark had a real prospect of defending the interest claim, whether the counterclaim was bound to fail, and whether conditional relief should be imposed.

1. Summary judgment. The court accepted the principles summarised in EasyAir Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch). The relevant question was whether Crownmark’s defences had a real and realistic prospect of success. The court had to consider evidence reasonably expected to be available at trial and avoid conducting a mini-trial.
2. The alleged oral agreement concerning the recovery period had no real prospect of success if considered alone. The documents appeared inconsistent with recovery efforts having ended before the June 2017 interest payment. That conclusion did not require the court to disbelieve Crownmark’s witnesses, whose evidence was largely based on information received from others.
3. The alleged oral termination of the Facility Agreement raised genuine issues about what was said, Mr Klemos’s authority and whether any agreement was subject to contract. The existing correspondence was insufficient to resolve those issues. Further disclosure could materially affect the analysis. The application for summary judgment was therefore refused.
4. Conditional payment. Under Part 24 of the Civil Procedure Rules 1998, the court could require payment into court as a condition of defending. The defence was weak and improbable when tested against the documents, although it required trial. Payment of the full interest instalment was a proportionate means of providing security and preventing prejudice to Athena.
5. An order for asset disclosure was refused. It was not sufficiently related to the summary judgment relief, would operate analogously to freezing-order relief without satisfying the specific requirements for that relief, and was not a proportionate or effective condition.
6. Counterclaim. The pleaded representations could arguably be representations of fact, intention or legal effect. The authorities did not establish that Crownmark’s case was hopeless. Its contingent claim for rescission for innocent misrepresentation, and the interaction with estoppel and collateral contract, required fuller argument and factual investigation. The strike-out application was dismissed.
7. The summary judgment application was dismissed, subject to Crownmark paying the full interest instalment into court. The application to strike out the counterclaim was dismissed.