Olsen & Anor v Griffin & Ors

Amendment should be refused where the proposed pleading would itself be liable to strike out or summary judgment. The court must assess whether the pleaded case has a realistic prospect of success, without conducting a mini-trial, while testing the substance of the factual case against the evidence reasonably available. An implied contract requires conduct consistent only with a contractual explanation, together with sufficiently clear evidence of offer, acceptance, intention and certain essential terms. Company-law duties may prevent an alleged agreement from imposing obligations on directors to procure company action. A claim for wrongful dismissal requires an employment contract; appointment as a director and entitlement to remuneration do not establish one.

The claim concerned alleged contractual, company-law and tortious grievances arising from the first claimant’s removal as a director of Volter (UK) Ltd, the transfer of his shares and associated financial losses. The defendants applied for strike-out and/or summary judgment. Following an adjournment, the claimants sought permission to replace their original particulars with claims based on implied and express oral contracts, wrongful dismissal and breach of a shareholders’ agreement. The central issue was whether the proposed amended pleadings were coherent, legally viable and capable of establishing a realistic prospect of success.

1. The court refused permission to amend and struck out the claim. The proposed new particulars did not set out a coherent case sound in law or supported by primary facts with a realistic prospect of success.
2. On an application for amendment where strike-out or summary judgment is in issue, the court must consider whether the proposed case would be liable to strike out or summary judgment. It must not conduct a mini-trial, but need not accept assertions without analysis. It may consider the evidence before it and evidence reasonably expected to be available at trial. Where the issue is one of law or construction and the evidence is sufficient, the court should decide it without delay. The approach in Easyair (t/a Openair) v Opal Telecom Ltd [2009] EWHC 399 (Ch) was adopted and applied.
3. The implied-contract claim failed the necessity test. The pleaded emails, invoices and conduct were consistent with alternative arrangements and therefore did not necessitate the alleged continuing contract. The pleadings also failed to address conflicts of interest and the directors’ duties arising from the proposed contract between the companies. The approach in Blackpool and Fylde Aero Club Ltd v Blackpool Borough Council [1990] 1 WLR 1195 was applied.
4. The express oral contract was inadequately pleaded and evidenced. The alleged date and circumstances of formation were vague, and the proposed obligations to procure company action were not reconciled with the directors’ duties or the company’s constitutional documents. The relationship between that claim and the implied-contract claim was also unclear.
5. The wrongful-dismissal claim was misconceived because no employment contract was pleaded. Directorship and receipt of remuneration did not establish employment, and such an employment claim would in any event belong in the Employment Tribunal.
6. The shareholders’ agreement claim did not explain how a completed share transfer and valuation could be retrospectively reopened, or how the alleged good-leaver status followed from the pleaded facts.
7. The court’s conclusion concerned only the viability of the proposed pleadings and made no finding on any possible alternative company-law claim. The original claim had effectively been abandoned, permission to amend was refused, and the claim was struck out. Costs consequences were likely to follow.