LEX FOUNDATION v CITIBANK N.A. & Anor

Summary judgment may be given where a claimant has no realistic, rather than fanciful, prospect of success and no other compelling reason for trial. The court must avoid a mini-trial, but may critically assess the evidence and consider evidence reasonably expected to be available at trial. Allegations of fraud or forgery require very considerable caution; they do not create an automatic right to a trial. Where credible contemporaneous and documentary evidence is unanswered, and the claimant cannot substantiate evidence said to be available later, the court may conclude that the claim is fanciful and dismiss it summarily.

Lex Foundation claimed an account and payment of €10 billion allegedly transferred by Deutsche Bank in April 2021 to its Citibank account. Citibank denied that the transfer or the relied-on SWIFT messages existed and applied under the Civil Procedure Rules 1998 for summary judgment. Lex Foundation served no evidence in response and no Reply. The central questions were whether the claim had a realistic prospect of success and whether the allegations of fraud or forgery supplied a compelling reason for trial.

Application granted. Citibank was entitled to summary judgment dismissing the whole claim.

1. Applicable approach. Under rule 24.2 of the Civil Procedure Rules 1998, the court had to consider whether Lex Foundation had a real or realistic prospect of success and whether there was any other compelling reason for a trial. The principles collected in The LCD Appeals [2018] EWCA Civ 220, drawing on Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) and Swain v Hillman [2001] 1 All ER 91, required a prospect more than merely arguable, prohibited a mini-trial, and permitted consideration of evidence reasonably expected at trial. The court could nevertheless grasp the nettle where the evidence was sufficient.
2. Evidential burden. Once an applicant adduces credible evidence, the respondent must show a real prospect of success or another reason for trial, as explained in Sainsbury’s v Condek [2014] EWHC 2016 (TCC). A party relying on further evidence must substantiate its nature, source and relevance; it is insufficient to say that something may turn up, following Korea National Insurance Corp v Allianz [2007] 2 CLC 748 (CA) and the related guidance cited from ICI Chemicals & Polymers Ltd v TTE Training Ltd [2007] EWCA Civ 725.
3. Fraud and forgery. The court had to exercise very considerable caution because an adverse finding on integrity may justify a full oral hearing. That caution was not an absolute bar to summary judgment. The approach in Wrexham Association Football Club v Crucialmove Ltd [2006] EWCA Civ 237, and the decisions discussed in Foglia v Family Officer Ltd [2021] EWHC 650 (Comm), King v Stiefel [2021] EWHC 1045 (Comm) and Rahbarpoor v Suliman [2021] EWHC 2686 (Ch), supported summary disposal where cogent evidence made the prospects of success truly fanciful.
4. Application. There was no credible evidence that Lex Foundation, Intrepid or Regulus could remit €10 billion, that any of them was a Deutsche Bank customer, that Deutsche Bank transmitted the money, or that Citibank received it. Deutsche Bank had unequivocally denied sending the purported SWIFT messages and having relevant banking relationships. Citibank’s searches found no corresponding transfer or messages, while the further defects in the documents were supplementary but cogent. Lex Foundation produced no evidence capable of answering this case or showing what further evidence could emerge at trial.
5. The court was not required to accept the Particulars of Claim at face value merely because they were verified by a statement of truth. Citibank did not need to prove fraud or dishonesty to obtain summary judgment. Lex Foundation had no realistic prospect of success and there was no other compelling reason for a trial. The claim was dismissed.