Abaidildinov & Anor v Amin

On an application for summary judgment seeking declaratory relief, the CPR Part 24 test concerns the defendant’s prospect of disputing the facts or matters underlying the proposed declaration. Once the defendant has no realistic prospect of defending those matters, the court should determine whether to grant the declaration by exercising its ordinary discretion. It need not ask whether the defendant might persuade a trial judge to exercise that discretion differently.

The discretionary assessment considers justice to each party, whether the declaration serves a useful purpose and any special reasons for or against relief. Admissions do not necessarily make a declaration pointless. A declaration may provide useful certainty for the parties and third parties or assist in correcting public records.

The claimants sought declarations concerning the defendant’s removal as the second claimant company’s chief executive, the continuing directorships of two individuals and the first claimant’s shareholding. They also sought injunctions. After proceedings began, a properly convened board meeting removed the defendant as chief executive, and he accepted the principal facts underlying the requested declarations.

The court permitted the claim form to be amended to rely on the later board meeting. The principal issue was whether summary judgment could be given for declaratory relief and, in particular, whether the CPR Part 24 test applied only to the underlying facts or also to the court’s discretionary decision whether to make a declaration.

1. Application granted. The claim form could be amended to rely on the defendant’s removal as chief executive at the later board meeting. A claim form may be amended, with permission, to include a claim based on facts arising after issue. The alternative case had already been pleaded, the defendant had answered it and no prejudice arose. Permission accorded with the overriding objective, and the procedural irregularity arising from the absence of a formal application was waived.

2. The principles summarised in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) governed the application. A defence must have a realistic rather than fanciful prospect of success and must carry some degree of conviction. The court must avoid a mini-trial but may analyse the evidence. It should consider evidence reasonably available at trial, generally assume disputed facts in the respondent’s favour and decide a short point of law or construction where all necessary material is available.

3. Where summary judgment is sought for a declaration, the CPR Part 24 inquiry concerns the defendant’s prospect of successfully disputing the facts or matters underlying the declaration. It does not extend to whether the defendant might persuade a court after trial to refuse relief as a matter of discretion. Once there is no realistic defence to the underlying matters, requiring a trial solely to exercise the declaratory discretion would ordinarily be disproportionate. Financial Services Authority v Rourke [2001] EWHC 704 (Ch) was explained and applied as adopting this two-stage approach.

4. The declaratory discretion required consideration of justice to the claimant, justice to the defendant, whether relief would serve a useful purpose and any special reasons for or against it. Although declarations without a full trial require caution, that practice must yield where necessary to provide full justice. Potential adverse repercussions for third parties must also be considered.

5. The declarations served a useful purpose despite the defendant’s admissions. They provided certainty to the parties and third parties about the chief executive’s removal, the continuing directorships and the first claimant’s shareholding. They would also assist in correcting Companies House records. The possibility that the declarations might be misused abroad did not outweigh those benefits, particularly because the judgment explained their basis. No third-party prejudice or other special reason was identified.

6. The interim injunctions were discharged because the defendant offered undertakings acceptable to the claimants. The court made no decision about the validity of the purported resolutions at the earlier board meeting. Costs were awarded to the claimants on the standard basis, subject to detailed assessment if not agreed.

This was a first-instance claim. Before the summary judgment application, Nugee J had granted interim injunctions without notice on 19 March 2020. The present court granted declaratory relief, discharged those injunctions upon acceptable undertakings and extended the time for filing any appellant’s notice to 21 days after hand-down.