Shahraab Ahmad v Karim Ouajjou & Anor

Permission to amend should be granted where the proposed case has a real, rather than fanciful, prospect of success and refusal would cause greater injustice. The court may assess whether the pleaded case is coherent and supported by some material, but should not conduct a mini-trial or resolve substantial credibility disputes on limited evidence.

On an application for summary judgment, the court must consider whether the claim or defence carries a realistic prospect of success. It should be cautious where the issue depends on disclosure, cross-examination and disputed evidence. Admissions may be withdrawn where the overall circumstances, including the prospects of the revised case, prejudice, procedural stage and administration of justice, favour withdrawal.

The claimant sought payment of more than €25 million and US$1.2 million under alleged loans made to the defendants during the Covid-19 pandemic. The defendants applied to amend their defence, add a counterclaim and withdraw admissions in their original defence. The claimant applied for summary judgment in respect of six loans.

The proposed defence alleged changes in the parties’ arrangements, including cancellation or alteration of loan obligations, and disputed the personal liability of the second defendant. The applications required the court to decide whether those allegations had a realistic prospect of success and whether the claims could fairly be determined summarily.

1. Applications. Permission was granted to amend the defence and counterclaim and to withdraw admissions. The claimant’s application for summary judgment was refused.
2. Amendment and summary judgment. The proposed factual case had a sufficient degree of conviction to proceed. The unusual relationship between the parties, the absence of signed loan documents for several substantial claims, the lack of demands for contractual interest, the parties’ continuing dealings and the disputed interpretation of financial spreadsheets all created substantial factual issues.
3. The court could not safely determine credibility on the limited materials. The fact that Mr Ouajjou’s credibility raised obvious questions did not mean that Mr Ahmad’s account should be accepted. Disclosure and cross-examination were necessary. The court therefore declined to reject the defendants’ case as fanciful or implausible and declined to enter judgment without a trial. The principles in Elite Properties Ltd v Barclays Bank PLC [2019] EWCA Civ 204 and the summary judgment authorities cited in ArcelorMittal North America Holdings LLC v Ravi Ruia et al [2022] EWHC 1378 were applied.
4. Withdrawal of admissions. Applying CPR 14PD.7, the court treated paragraph 33(a) of the original defence as an admission that the pleaded back-to-back loan agreements had been concluded. The defendants’ revised case had a realistic prospect of success, the proceedings remained at an early stage, and refusal would cause substantial prejudice by preventing investigation of the true factual position. The interests of justice favoured withdrawal.
5. The issue whether Ms Perez was personally liable, or whether the relevant borrower was Axess, was left for trial. The counterclaim concerning investment monies should be heard in the existing proceedings because it arose from the same dealings and separate proceedings would conflict with the overriding objective.