East-West United Bank SA v Vladimir Gusinski & Ors

Summary judgment or strike-out of part of a claim is discretionary. The court may determine a short legal or construction point summarily where the evidence is sufficient, but should consider whether a fuller trial may materially illuminate the issue, whether other issues will proceed to trial, and whether an appeal may impede efficient case management.

A proprietary claim should not be summarily dismissed where its construction is reasonably arguable and the wider factual issues will proceed to trial. Allegations of conspiracy based on misleading representations may remain viable independently of any proprietary interest. Questions of unconscionability in a constructive-trust claim are ordinarily better assessed against the facts as a whole.

The claimant bank brought proceedings arising from an arbitral award against companies controlled by the first defendant. It alleged that representations made during the arbitration gave it an equitable assignment or constructive-trust interest in money held in the solicitors’ client account, and claimed consequential relief against the solicitors and their individual representative.

The first defendant and the solicitors applied under Civil Procedure Rules 1998, rules 3.4 and 24.2, to strike out or obtain summary judgment on the proprietary-interest claim and dependent allegations. The solicitors also challenged parts of an unlawful-means conspiracy claim. The court had to determine whether the proprietary claims were unarguable and whether the challenged conspiracy particulars depended upon them.

1. Applications refused. The first defendant’s application and the application by the solicitors were refused.
2. Summary disposal. Under Civil Procedure Rules 1998, rules 3.4 and 24.2, the court has a discretionary power. It may decide a short point of law or construction where the evidence is sufficient, but must consider whether fuller investigation may affect the result, whether other issues will require a trial, and whether summary determination may cause delay through appeals. The overriding objective remains relevant: paras [8]-[15], [99].
3. Conspiracy allegations. Allegations that the defendants deliberately misled the bank and arbitral tribunal into believing that funds would be paid to the bank did not depend upon establishing an equitable assignment or constructive trust. Those allegations therefore survived. Allegations based directly on breach of trust or fiduciary duty were parasitic on the proprietary claim and would fall only if that claim were dismissed: paras [85]-[89].
4. Procurement of breach of contract. The challenged allegation concerning payment from the client account was formally adequate. Any ambiguity concerning purpose, knowledge and intention could be addressed by further information rather than strike-out. The pleading sufficiently alleged conduct falling within the relevant contractual restriction: para [88].
5. Equitable assignment. The representations were capable of raising a reasonably arguable issue as to whether there had been an immediate and irrevocable transfer or direction concerning the funds. The court declined to decide the issue summarily, notwithstanding that the material for objective construction was substantially before it. The issue would not materially impede the development of the wider case and was better left to trial: paras [90]-[99].
6. Constructive trust. The court expressed difficulty with the pleaded analysis, particularly whether a constructive trust could arise merely because the bank had been misled into failing to seek protective relief. Nevertheless, unconscionability had to be assessed in the context of the pleaded facts as a whole, including the conspiracy allegations. The issue was therefore left for trial: paras [100]-[103].
7. The first defendant’s non-joinder and foreign-proceedings objections disclosed no abuse of process. The proceedings were not dismissed for want of parties: para [83].

Not an appeal. The judgment determined applications for strike-out and summary judgment at first instance.