Raja v McMIllan

On an application for strike out or summary judgment, the court must not conduct a mini-trial. Disputed allegations of fraud, dishonesty and factual inference ordinarily require disclosure, cross-examination and trial. Fraud is sufficiently pleaded where the material facts and the case to be answered are clear, even though proof remains for trial. Unlawful means conspiracy requires a combination, unlawful means, the requisite intention and causative loss. The intention to harm need not be the predominant purpose where unlawful means are directed at the claimant and directly cause the loss. Legal advice may rebut an inference of intention only if it is firm, pertinent and based on the material facts. A defendant may also incur joint liability for deceit without personally making the representation.

The claimant sought damages from the defendant for alleged unlawful means conspiracy and deceit as a joint tortfeasor. She alleged that she had been induced to purchase a flat represented to be free from an affordable housing obligation arising under a section 106 agreement made pursuant to the Town and Country Planning Act 1990. The defendant applied under CPR 3.4 and CPR 24.2 for strike out or summary judgment.

The application concerned the pleading of fraud, the elements of unlawful means conspiracy and deceit, the effect of corporate control and legal advice, and causation. The central issue was whether the pleaded claims were bound to fail or had no real prospect of success without a trial.

1. Application dismissed. The claim was not suitable for strike out or summary judgment and was to be listed for directions.
2. The court applied the principles in Three Rivers District Council v Bank of England (No.3) [2001] UKHL 16; [2003] 2 AC 1 and Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch). Strike out was inappropriate unless the claim was certain to fail. Summary judgment required the claim to have no real prospect of success and no other reason for trial. A short point of law or construction could be decided summarily where the evidence and argument were complete.
3. Allegations of fraud were not automatically immune from summary disposal, but the court could not conduct a mini-trial. The claimant had identified the representations, the facts said to support dishonesty and the case the defendant had to answer. Whether those facts could be proved was for trial.
4. The pleaded case disclosed an arguable conspiracy between the defendant and companies under his control. Separate corporate personality meant that common control did not make the alleged conspiracy legally impossible. The claimant also had arguable cases concerning the participation of other alleged conspirators, unlawful means, knowledge, intention and causative loss.
5. Unlawful means conspiracy did not require the predominant purpose to injure the claimant. It was sufficient in principle that unlawful means were directed at the claimant and directly caused the injury. The effect of the defendant’s legal advice depended on its scope, firmness and factual basis and could not be finally assessed summarily.
6. The deceit claim was arguable. The pleaded representations were representations of fact, and joint liability could arise through inducement, assistance pursuant to a common design or other joint tortfeasance. The defendant’s failure personally to make the representations was not decisive.
7. The court made no final determination of the contested questions concerning the timing of knowledge or intention, or the ultimate effect of the legal advice. Those issues required trial.