Mishcon De Reya LLP v RJI (Middle East) Ltd

On a summary judgment application, the court is not subject to an absolute rule that it may consider only matters expressly raised in the pleaded defence. The statements of case remain important because they define the issues likely to arise at trial. Where an unpleaded issue emerges, the court should consider amendment, case-management consequences and whether there is a compelling reason for trial.

A guarantee containing counterpart and execution provisions is not subject to a condition precedent requiring execution by both parties unless that is the natural meaning of the words. A party seeking the benefit of a deed may also be bound in equity by its provisions. Summary judgment was therefore appropriate where the unpleaded enforceability defence had no real prospect of success.

The claimant, Mishcon de Reya LLP, appealed from a decision of HHJ Monty QC in the Central London County Court. The judge had refused summary judgment for the balance allegedly due under a guarantee because the claimant had not produced a counterpart executed by it.

The guarantee had been executed by the defendant guarantor and contained provisions concerning counterparts and the execution and delivery of documents. The defendant’s pleaded defence challenged enforceability only under Dubai law, but at the summary judgment hearing it argued that the guarantee was unenforceable under English law absent mutual execution and delivery.

The appeal concerned whether the enforceability issue was properly available and, if so, whether clauses 8.7 and 8.8 made mutual execution and delivery a condition of enforceability.

1. The appeal was allowed. Summary judgment was entered for the claimant in the principal sum of £168,279.52.
2. The claimant was entitled to raise the pleading point on appeal. The issue had been touched on before the first-instance judge, was directly addressed when permission to appeal was sought, required no new evidence, caused no irremediable prejudice and could be protected by costs. The principles in Singh v Dass [2019] EWCA Civ 360 supported allowing the point to be raised.
3. The defence did not put enforceability under English law in issue. Paragraph 14 admitted the guarantee subject only to a narrow caveat concerning Dubai law. Even if it was not a clear admission of enforceability, it did not plead an English-law challenge.
4. There was no absolute rule under CPR 24 that summary judgment could consider only matters raised in the defence. Earlier authorities concerning the former RSC Order 14A were not generally applicable after the CPR, although the statements of case remained important because they define the matters ordinarily to be tried. The court should consider the possibility of amendment or a compelling reason for trial where an unpleaded issue emerges.
5. Clauses 8.7 and 8.8 did not impose a condition precedent requiring mutual execution and delivery. Clause 8.8 required each party to execute documents but did not state that the guarantee would be ineffective until both parties had done so. Clause 8.7 dealt with counterparts being originals and avoiding an argument that the parties had not signed the same document.
6. The guarantee made commercial sense without such a condition. Further, once the claimant sought to rely on and obtain the benefit of the deed, equity bound it by the deed’s obligations. The authorities of Lady Nass v Westminster Bank Ltd [1940] AC 366 and Webb v Spicer 13 QB 886 supported that conclusion.
7. The defendant’s unpleaded enforceability defence had no real prospect of success and there was no compelling reason for trial.

• High Court (Queen’s Bench Division): appeal from the Central London County Court. The High Court allowed the appeal and entered summary judgment for the claimant in the principal sum of £168,279.52.
• Central London County Court: HHJ Monty QC refused the claimant’s summary judgment application for the balance of the claim.