OBJECTIVE CARE LIMITED v THE LONDON BOROUGH OF EALING

Summary judgment is appropriate only where the claim has no realistic prospect of success and is bound to fail. The court must avoid a mini-trial and generally accept the claimant’s factual case unless it is demonstrably unsupportable. A contractual payment-cancellation clause must be construed in the context of the agreement as a whole. It does not necessarily operate as a termination provision or exclude damages for wrongful termination. Where an employee allegedly manipulates a public authority into terminating contractual arrangements, and the authority allegedly fails to check the information supplied, the authority may be unable to rely on its own good faith as a complete answer. Permission to amend should be granted where the amendment arises from substantially the same facts and causes no material prejudice.

The claimant operated a care home at which three vulnerable adults had been placed by the defendant local authority. The claimant alleged that an employee of the authority, motivated by a personal grievance, orchestrated their removal and caused the authority to terminate or discontinue the placements without proper notice, consultation or justification.

The claimant brought a contractual claim for lost income and applied for permission to amend its Particulars of Claim. The defendant applied for summary judgment, relying principally on a contractual provision concerning cancellation of payments after a service user’s departure, and alternatively on the agreement’s termination provisions. The central issues were whether the claim was legally precluded and whether the proposed amendments introduced a new cause of action after limitation.

The defendant’s application for summary judgment was dismissed. The claimant’s application for permission to amend was allowed. The parties’ costs were to be set off, with quantification by detailed assessment.

1. Summary judgment. The court applied the principles stated in Three Rivers District Council v Bank of England No. 3 [2001] All ER 513 and summarised in Begum v Maran (UK) Ltd [2021] EWCA Civ 326. The court had to decide whether the claim was realistic rather than fanciful and bound to fail, without conducting a mini-trial. Although factual assertions need not be accepted where demonstrably unsupportable, disputed facts ordinarily required determination at trial.
2. Clause 6.2, read in the context of the agreement and its heading concerning payment, operated as a mechanism for cancellation of payments. It was not a free-standing termination provision. It did not oust a claim for damages where the agreement had allegedly been wrongfully terminated otherwise than in accordance with clause 4, nor limit recoverable damages.
3. For the purposes of the application, the claimant’s allegations concerning the employee’s bad faith and manipulation of the authority were assumed. On that case, the authority had placed the employee in a position to influence the termination and had failed to cross-check the information provided. It could therefore be treated as standing in her shoes and could not rely on an independent assertion of good faith. Whether the employee acted in bad faith and whether the terminations breached contract were triable issues.
4. The proposed amendment concerning the nature and duration of one placement arose from the same factual case and did not materially alter the claimant’s position. The proposed consultation and due-process pleading also arose from the same facts, had been identified in the early letter of claim, and caused no material prejudice. Permission to amend was therefore appropriate.

First-instance decision. No earlier appellate decision is stated in the judgment.