DR ROHIT KULKARNI v GWENT HOLDINGS LIMITED & Anor.

Summary judgment is inappropriate where the construction of a remediability clause depends on disputed facts and the contractual context. “Capable of remedy” ordinarily requires consideration of whether the breach can be put right for the future, whether the resulting mischief can be removed, and whether a residual stigma remains. A repudiatory breach is not necessarily incapable of remedy. Nor does loss of trust and confidence, or the innocent shareholder’s decision to enforce a contractual remedy, conclusively determine remediability. The court must construe the particular agreement and assess the breach and its consequences on the evidence. Where contractual estoppel or estoppel by deed depends on the meaning and purpose of recitals, admissible facts and circumstances may make a trial necessary.

The claimant sought summary judgment in a claim concerning a shareholders’ agreement governing shares and the operation of a hospital. He sought retrospective rectification of the company’s register under section 125 of the Companies Act 2006, relying principally on recitals stating that he owned 1,652 fully paid A shares. He also sought relief under clauses 6.4 and 7.1(d) of the agreement, alleging that two admitted breaches by the controlling shareholder triggered a deemed transfer notice.

The central issues were whether the register should be rectified retrospectively and whether the breaches were capable of remedy within clause 7.1(d). The application was made under CPR rule 24.2 before defences had been served.

1. Application dismissed. Neither issue was suitable for summary determination. The defendants had real prospects of success and the disputed contractual, factual and estoppel questions required a trial.
2. Under CPR rule 24.2, the court may determine a short point of construction or law where the evidence permits, but must also consider whether there is another compelling reason for trial. Summary determination of an issue may be inappropriate where it risks piecemeal litigation or a bifurcated appeal, although determining issues separately can sometimes simplify a trial.
3. The power under section 125 of the Companies Act 2006 is wide enough in principle to rectify a register retrospectively. However, the court could not grant summary rectification where the meaning of the SHA recitals, the amount treated as paid, and the operation of estoppel remained genuinely disputed. The register had already been updated prospectively, and the retrospective issue warranted full examination at trial.
4. Remediability under clause 7.1(d) depends on the proper construction of that agreement in its factual context. The court should ask whether the breach can be put right for the future, whether the mischief caused by it can be removed, and whether a residual stigma remains. The analysis is not governed by a universal rule.
5. A repudiatory breach is not automatically incapable of remedy. Clause 7.1(d) did not necessarily exclude common-law termination rights, and the court rejected the submission that every repudiatory breach, or every breach causing loss of trust and confidence, was irremediable. The claimant’s enforcement of the clause did not itself prove loss of trust and confidence, and evidence from the claimant on that issue was not conclusive.
6. The issues concerning contractual estoppel and estoppel by deed also depended on the construction of the SHA, the parties’ intentions, public policy limits, the scope of the estoppel, and the admissibility of evidence. Those matters were best determined against findings of fact at trial.