GIAN ANGELO PERRUCCI v ORLEAN INVEST HOLDING LIMITED

Summary judgment requires a defence to have no real prospect of success and no other compelling reason for trial. The court must avoid a mini-trial, but may reject factual assertions that are inherently incredible, self-contradictory or contradicted by contemporaneous documents. A contractual obligation to provide services on request is ordinarily an innominate term, not a condition, so only a sufficiently serious breach may justify termination. Good-faith obligations are not implied into a detailed commercial services contract merely because they would be fair or advantageous. A term preventing harm to the other party’s interests is too vague unless it satisfies the stringent tests of necessity or obviousness. Contractual documents must be construed together where they form part of one commercial arrangement.

The claimant sought damages for the alleged repudiatory breach of a consultancy services agreement. The defendant resisted summary judgment and sought permission to amend its defence.

The proposed and existing defences relied on alleged oral restrictions against funding or competing with the defendant, implied obligations of good faith and non-interference, failure to provide requested consultancy services, an alleged contractual right to terminate without cause, and the effect of a related side letter on the duration and value of the consultancy.

1. Summary judgment. The court applied the real-prospect test under CPR r. 24.2. It would not conduct a mini-trial or resolve disputed probabilities without disclosure, but could reject a case that was inherently incredible, self-contradictory or contradicted by contemporaneous documents. The defence based on alleged oral conditions had a realistic prospect of success because the disputed conversations and their contractual effect required factual determination. The allegation of breach could not be rejected summarily when considered alongside the unresolved question whether the claimant’s denial was deliberately false.
2. Implied terms. The consultancy agreement was not a relational contract. It concerned specific services to be supplied upon request, and imposed no general duties restricting dealings with third parties. A good-faith term was therefore not necessary or obvious. A term requiring the claimant not to harm the defendant’s interests was also too vague and sought impermissibly to import an unagreed prohibition on funding a particular person.
3. Requested services. Permission to plead failure to provide services was refused. The obligation was not a condition. It was an innominate term, and the proposed pleading did not identify with sufficient precision the request, the time allowed for performance or facts capable of establishing repudiatory breach.
4. Termination and quantum. The words in article 3 referring to termination in accordance with the agreement did not confer an unexpressed right to terminate at will. Reading the consultancy agreement and side letter with the related convertible note arrangements, the consultancy would terminate upon redemption of the bonds and in any event on 2 December 2023. The quantum defence therefore had a realistic prospect of success, subject to assessment of the probability of repayment on 31 December 2022.
5. Conditional order and disposition. Although the court had power to require payment into court, such a condition was not automatic and would need to be proportionate and effective. No conditional order was justified. Summary judgment was refused on the claim but granted against specified defences. Permission to amend the defence was refused.