Butcher & Anor v Pike & Ors (Rev 1)

Summary judgment may be given on a short point of construction where the court has the evidence necessary to decide it fairly. The court must avoid a mini-trial, but should determine the issue without trial where there is no real prospect of success and no compelling reason for further factual investigation.

Contractual language must be construed objectively and in context. Commercial common sense cannot justify rewriting clear words or supplying an important restriction which the parties could have expressed plainly. A disclosure provision is not necessarily confined to information contained in a specified disclosure letter where the contract does not say so.

The claim arose from an agreement for the sale of the entire issued share capital of BPG (UK) Limited. The purchasers resisted payment of deferred consideration and counterclaimed for breach of warranty and misrepresentation.

The purchasers alleged that the company’s contracts with Rightmove and Zoopla prohibited it from placing property advertisements for other commercial lettings agents, and that the sellers had failed to disclose the extent of the alleged breach. The sellers applied for summary judgment on two issues: whether the alleged restriction existed and whether disclosure for the purposes of the contractual fraud or negligent non-disclosure proviso was confined to the Disclosure Letter.

1. Summary judgment. The court applied the principles in Easyair Ltd (Trading As Openair) v Opal Telecom Ltd [2009] EWHC 339 (Ch), as approved in AC Ward & Sons Ltd v Catlin (Five) Ltd [2009] EWCA Civ 1098. It must not conduct a mini-trial, but should decide a short legal or construction issue where it has the necessary evidence and a fair decision can be reached. There was no compelling reason to leave either issue for trial.
2. Issue 1. The Rightmove and Zoopla terms did not contain a clearly expressed prohibition against placing advertisements for other commercial lettings agents. The definitions expressly contemplated clients who were agents carrying on business in selling or letting property for third parties. The court would not combine less direct provisions to create a restriction which the platforms could readily have stated in plain language.
3. The contractual interpretation principles in Investors Compensation Scheme Ltd v West Bromwich Building Society (No 1) [1998] 1 W.L.R. 896, Arnold v Britton [2015] Ac 1619, Chartbrook Ltd v Persimmon Homes Ltd [2009] AC 1101 and Prohphet v Hugget [2014] EWCA Civ 1013 did not permit commercial common sense to override clear wording or enable the court to rewrite the bargain. Sinochem International Oil (London) Co Limited v Mobil Sales and Supply Corp (No 1) [2000] 1 Lloyd’s Rep. 339 reinforced that conclusion.
4. Issue 2. Clause 6.2 was not confined to facts or matters disclosed in the Disclosure Letter. Its reference to non-disclosure concerned concealment of facts essential to the purchaser’s decision or knowledge necessary to bring a claim. If the purchasers actually knew of the relevant matter, the time bar could still apply even if the information was not in the Disclosure Letter. The purchasers therefore had no reasonable prospect of establishing the contrary construction.
5. Declarations were granted by way of summary judgment. The court reserved costs for further submissions or an agreed draft order.