Ventura Capital GP Limited v DNANudge Limited & Ors

Summary judgment is inappropriate where the construction of a contractual notice depends materially on disputed background facts and evidence likely to be available at trial. A notice exercising an option is construed objectively, by reference to the contractual documents, the relevant contextual scene and how a reasonable recipient would have understood it. The court should avoid a mini-trial and should hesitate to determine a construction issue summarily where fuller investigation may affect the outcome, particularly where related claims will in any event proceed to trial. Subsequent conduct is generally inadmissible as an aid to construction, although it may be relevant to variation, discharge or estoppel. Whether later communications varied or discharged an alleged subscription obligation may itself require trial evidence.

Ventura sought summary judgment and strike-out relief concerning an alleged obligation to subscribe for a further £40 million of shares in DNANudge Limited. The defendants brought a cross-application seeking judgment that the obligation arose from an email dated 18 January 2021 and had not subsequently been varied or discharged.

The underlying proceedings included claims for fraudulent misrepresentation and related wrongs, which would continue irrespective of the applications. The central questions were whether the email objectively exercised a contractual subscription option and, if so, whether subsequent communications and agreements varied or abrogated the obligation.

1. Applications dismissed. Both parties’ applications for summary judgment and strike-out were dismissed. The fraud and related claims remained for trial.
2. Under Civil Procedure Rules 1998, rule 24.2, summary judgment is available only where the relevant party has no real prospect of success and there is no other compelling reason for trial. The court must distinguish a realistic case from a fanciful one, avoid a mini-trial, and consider evidence reasonably expected to be available at trial. Summary disposal may be appropriate for a short point of law or construction where the necessary evidence is before the court.
3. The 18 January email had to be construed objectively against the contractual documents and the surrounding circumstances. The relevant inquiry included the contextual scene, the meaning the language bore in that context, and how a reasonable recipient would have understood the notice. The email’s references to an intention to take up the allotment, the funding still being assembled, and the Term Sheet rather than the Subscription Letter created material uncertainty.
4. The parties disputed whether Ventura had an established practice of committing only after investor funding had been secured and whether DNANudge knew of that practice. The available pleadings and evidence were sparse. A fuller investigation of contemporaneous documents and oral evidence could affect the construction. The issue therefore had to proceed to trial.
5. Subsequent conduct is generally inadmissible as an aid to construing a written contract, and contractual notices are strongly arguable to be subject to analogous principles. Later conduct may nevertheless be relevant to variation, discharge or estoppel. The court did not finally determine the admissibility issue because the parties’ later communications had competing interpretations and required factual evidence.
6. If the option had been exercised, whether it was subsequently varied or discharged could not be determined summarily. The February to May 2021 communications, board minutes and Deed of Amendment required assessment against the factual matrix and evidence from the protagonists.