Carl v Edwards

Summary judgment is inappropriate where the outcome depends on substantial disputes of fact requiring cross-examination. The court must assess whether the opposing case has a realistic, rather than fanciful, prospect of success, without conducting a mini-trial. It may analyse evidence and disregard assertions that are plainly unsustainable, especially where contemporaneous documents contradict them. A short issue of law or construction should ordinarily be decided summarily where the court has all necessary evidence and the parties have had a proper opportunity to argue it. However, a disputed question whether an apparent cheque or security document is a sham generally requires a fuller factual investigation. Applications made shortly before trial should be exceptional where the same factual issues are already to be determined at trial.

The claimant brought two applications for summary judgment under CPR rule 24.2. One sought reverse summary judgment on the defendant’s counterclaim for £198,000; the other sought judgment on the claimant’s claim concerning an alleged £221,000 loan, a dishonoured cheque and a 2013 Bill of Sale.

The defendant disputed whether she had borrowed the £221,000, contending that the cheque was a sham or, alternatively, unenforceable. She also disputed liability under the Bill of Sale and maintained that she had advanced £198,000 to the claimant. The applications raised whether these issues could be resolved on admitted or undisputed facts without a trial.

1. Applications dismissed. The claimant failed to show that the defendant had no realistic prospect of defending the claim or succeeding on her counterclaim, or that there were no compelling reasons for a trial.
2. The court applied the principles in Easyair Limited v Opal Telecom Limited, as approved by the Court of Appeal in AC Ward & Sons Limited v Catlin (Five) Limited. The court had to distinguish a realistic prospect of success from a fanciful one, avoid a mini-trial, analyse the evidence rather than accept assertions uncritically, consider evidence reasonably available at trial, and decide a short legal or construction point summarily where the necessary material was available.
3. The contemporaneous emails did not determine whether the defendant agreed to borrow £221,000. The claimant’s instruction to the defendant concerning the cheque required explanation by oral evidence. The later email apologising for writing an uncovered cheque was insufficient, by itself, to establish that the cheque was not a sham.
4. The question whether the cheque was something other than it purported to be was factual rather than an issue of contractual interpretation. That substantial dispute required investigation at trial. If the cheque was a sham, the cheque rule would not apply and there would be no immediate right of recourse under section 47(2) of the Bills of Exchange Act 1882.
5. The alternative issue whether the cheque was payable only after a two-week repayment period was left to the trial judge. No finding was made on the contention that the cheque was security for an unenforceable oral guarantee contrary to section 4 of the Statute of Frauds Act 1677.
6. Similar factual disputes concerning the Bill of Sale, the alleged £198,000 loan and the parties’ admissions could not be resolved summarily. The applications had been made eight weeks before trial and were based on the flawed premise that the material facts were undisputed.