City East Recruitment Ltd v British Gas Social Housing Ltd

Summary judgment and strike out are exceptional remedies where the pleaded case depends on disputed facts. A claim has a real prospect of success if it carries some degree of conviction, and the court should avoid conducting a mini-trial. Pleadings must be read fairly and in context, allowing reasonable latitude where facts may emerge through disclosure, evidence or trial. An estimated claim is not necessarily incurably defective as a debt at the pleading stage, particularly where an accounting or investigation may identify the sum due and damages are pleaded in the alternative. A claim should not be struck out for inadequate particulars before an order for further information has been sought and disobeyed.

The claimant recruitment agency brought claims arising from the defendant’s alleged use of workers introduced by the claimant without paying transfer fees or commission. The defendant applied under CPR 24 for summary judgment and, alternatively, under CPR 3.4 for strike out.

The application challenged claims concerning 181 estimated flipped workers, commission claimed in addition to transfer fees, and losses for management time and business development. The parties agreed that the same substantive test applied to both forms of relief. The court assumed, without deciding, that the claimant’s standard terms governed the parties’ relationship.

1. Application dismissed. The defendant’s application for summary judgment and strike out was refused.
2. Under CPR 24.2, a case has a real prospect of success where it is more than merely arguable and carries some degree of conviction. The court must not conduct a mini-trial. The same practical approach applied to the strike-out application under CPR 3.4(2), which concerns incoherent pleadings, facts which disclose no legally recognisable claim, or claims which are obviously ill-founded. The court relied on Global Asset Capital v Aabar [2017] Civ 37, Wragg v Partco Group Ltd [2002] EWCA Civ 594 and Ardila Investments VENRC [2015] EWHC 1667 (Comm).
3. The pleaded conversation and surrounding circumstantial matters, if proved, could found a claim for damages concerning the estimated flipped workers. The criticisms of the evidence were matters for cross-examination, witness assessment and submissions at trial. The relevant sections of the pleading had to be read together rather than in isolation.
4. The claim for estimated transfer fees and commission was not necessarily incapable of being pursued as a debt. Although a debt ordinarily concerns a specific sum, an investigation or accounting process might establish what was due. In any event, the claim was pleaded alternatively in damages, so striking out the debt claim would have no practical advantage.
5. The possibility of claiming both commission and transfer fees could not be removed at the interlocutory stage. There were evidential issues concerning the timing of each worker’s engagement and when commission ceased to be payable. Those matters required investigation on a worker-by-worker basis.
6. The claim for lost management time and business-development losses was inadequately particularised, but strike out was premature. The proper course was first to seek an order for further information and, only if that order were disobeyed, to consider strike out.

The judgment was not based on the “no other compelling reason” provision in CPR 24.2.