Olympic Council of Asia v Novans Jets LLP

Summary judgment should be granted on a short, decisive point of law or construction only where the court has the evidence necessary for a proper determination and the issue is suitable for final disposal. The court should usually permit a claim or defence to proceed where its resolution depends on an uncertain factual matrix, commercial context or developing law.

Contractual provisions providing that payments are non-refundable may be decisive in an unjust enrichment claim, but their meaning and any application of the penalty doctrine may require evidence about the transaction’s commercial background. A partial failure of basis may potentially support restitution where contractual consideration is severable, but the issue is fact-sensitive. The defendant bears the burden of pleading and proving change of position.

Under an Aircraft Lease to Purchase Agreement, the claimant paid an initial sum and an annual instalment for priority use of an aircraft. After a dispute over ancillary expenses, the defendant suspended use of the aircraft and purported to terminate the agreement.

The claimant sought summary judgment for the alleged value of unused block hours, pleading unjust enrichment based on partial failure of basis. For the application, it accepted that the defendant had been entitled to suspend use and terminate the agreement. The defendant relied on the agreement’s provision that payments were non-refundable, the penalty doctrine and change of position.

The central question was whether those issues could properly be determined summarily under CPR Part 24 before the listed trial.

1. Application dismissed. The claimant had not shown that the defendant had no real prospect of successfully defending the unjust enrichment claim. The action was therefore to proceed to trial.
2. The governing summary judgment principles were those stated in JD Wetherspoon Plc v Van de Berg & Co Ltd [2007] EWHC 1044 (Ch) and EasyAir Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch), as approved in later appellate authority. The court may decide a short, determinative issue of law or construction where it has the necessary evidence and the parties have had a fair opportunity to address it. It should be cautious where resolution depends on assumed facts, developing law or matters likely to be materially different at trial.
3. The construction of the words “Payment paid to Lessor is non-refundable” could not confidently be determined on the limited evidence. Their natural meaning favoured the defendant, and commercial common sense was not sufficient reason to reject that meaning. The transaction’s front-loaded payments and possible up-front costs or commitments made the commercial context material.
4. The alternative penalty argument also required evidence concerning the defendant’s legitimate interest and the commercial purpose and effect of the provision. The court could not determine that issue confidently at the interlocutory stage.
5. The court made no final determination on whether the claimant could establish partial failure of basis. Modern authorities recognised that consideration might be severable where that reflected commercial reality. Nor did it finally determine the change of position defence, although the defendant bore the burden of pleading and proving the particular changes of position, reliance and resulting inequity.
6. The parties were invited to agree consequential orders. Any application for permission to appeal and other consequential applications was adjourned, with time extended under the Civil Procedure Rules.