Executive Authority for Air Cargo And Special Flights v Prime Education Ltd & Ors

At a summary judgment hearing, a party cannot rely on a contractual amendment to justify conduct outside the amendment’s terms. Where funds are required to be held in accounts in specified names, that obligation is inconsistent with an implied power to remove and speculate with them. Such use may amount to repudiatory breach even if the amendment is otherwise valid.

A judge deciding a summary judgment application is not obliged to make binding declarations on interim findings. Whether to do so is a fact-specific case management decision, particularly where the issue was not pleaded, is closely related to matters requiring trial, or may be unsafe after fuller evidence.

The appellant, an executive agency of the Libyan government, appealed against the dismissal by the Senior Master of its application for summary judgment against Prime Education Limited. The underlying claim concerned substantial sums transferred under a 2015 agreement for aviation training, which Prime Education later transferred to related entities and used in Turkish property developments.

Prime Education relied on an alleged oral and written amendment to the agreement, together with promissory estoppel. The Senior Master considered that there was no real prospect of establishing consideration for the amendment, but left that issue for trial and dismissed the summary judgment application because other issues remained.

The central questions were whether Prime Education had any answer to a contractual claim based on repudiatory breach, and whether the Senior Master was required to make a binding declaration on the consideration issue.

1. Appeal allowed in part. Judgment was entered for the appellant against Prime Education for damages for breach of contract in €13,349,788.74 and, subject to quantification, £1,871,560, with interest. The remaining claims and issues were left for trial.
2. Even assuming that the alleged amended agreement was legally effective, its terms permitted the funds to be transferred from the UK client account to accounts in the name of Prime Education or its subsidiaries for project purposes. They did not permit the funds to be removed from those accounts and invested in speculative property developments.
3. The wording requiring the funds to be held in specified accounts was clear. It could not be construed as conferring an implied discretionary power to remove and use the funds, however prudent the proposed investment might appear. The property purchases therefore constituted repudiatory breaches of both the 2015 Agreement and the alleged Amended Agreement.
4. Any alleged promissory estoppel concerning the transfer of funds to Turkey could not protect Prime Education from the distinct breach constituted by using the money for property speculation. The question whether withdrawal of the alleged promise would be unconscionable remained for trial.
5. The Senior Master was entitled to leave the consideration issue open. A judge determining a Civil Procedure Rules 1998 Part 24 application is not obliged to make a binding declaration on an interim finding. The decision is a fact-sensitive case management exercise governed by the overriding objective.
6. Relevant factors included that no declaration had been sought in the application, the issue had not been pleaded as a standalone issue, and it was closely connected with promissory estoppel and other matters requiring trial. There was no misdirection, procedural unfairness, failure to consider relevant matters, or plainly wrong decision warranting appellate interference.

• High Court (Queen’s Bench Division) — On appeal from the Senior Master, the court allowed the appeal on the repudiatory breach issue, entered judgment against Prime Education for contractual damages, and left the remaining claims and issues for trial.
• Senior Master Fontaine — The summary judgment application was dismissed: [2020] EWHC 1985 (QB). The Senior Master considered that Prime Education had no real prospect of establishing consideration for the alleged amendment but declined to determine that issue finally.