The Official Receiver & Anor v Azam Iqbal Haq & Anor

Summary judgment is available only where the respondent has no realistic prospect of success and there is no other compelling reason for a trial. The court must avoid a mini-trial, but may evaluate the available evidence and conclude that a defence is fanciful. A short point of law or construction may be decided summarily where the evidence is sufficient and the parties have had a proper opportunity to address it.

Where the evidence raises unresolved issues about the purpose or recipient of payments, possible repayment credits, or double counting between claims, those issues ordinarily require a trial. The absence of a written contract does not, without further analysis, establish that a director had no entitlement to remuneration.

The Official Receiver, as liquidator of Wifime Ltd, applied for summary judgment against its former sole director and shareholder, Azam Iqbal Haq. The application concerned alleged unauthorised salary payments, payments recorded with the name of Mr Haq’s spouse as the reference, and a balance on Mr Haq’s director’s loan account.

Default judgment was also sought against the spouse, but those proceedings were discontinued after the hearing. The remaining issues were whether any of the claims against Mr Haq could be determined summarily and, if not, what directions should be given for trial.

1. Summary judgment principles. The court applied the approach summarised in Global Asset Capital Inc v Aabar Block SARL, including the requirement for a realistic rather than fanciful prospect of success, the prohibition on conducting a mini-trial, and the need to decide a short legal or construction point where the evidence and argument are sufficient. The court may nevertheless evaluate the strength of evidence and draw a line where a case has no real prospect of success.
2. Salary Claim. The Official Receiver relied on the absence of a written service agreement and on Hamuel Reichernbacher Limited v McDermott. That decision did not establish that a remuneration entitlement must be contained in a written contract. The Company’s accounts recorded the payments as salary, and issues concerning the effect of those accounts, the sole-director and sole-shareholder context, and the Duomatic principle required fuller argument. Summary judgment was therefore refused.
3. Payments Claims. The alleged payments bearing the spouse’s name could, on Mr Haq’s account, have been payments into his own account, salary payments, expense reimbursements, or drawings on his director’s loan account. The fuller payment references raised a realistic prospect of a defence. Possible double counting with the Salary Claim also required investigation. The remaining payment claims should be tried together.
4. DLA Claim. Although the Company’s accounts and Mr Haq’s statement indicated an apparent outstanding balance, Mr Haq identified later payments into the Company which might reduce or discharge it. There was also a possible overlap with the Payments Claims. The court could not conclude that there was no real prospect of a successful defence.
5. All remaining claims against Mr Haq were directed to proceed to trial. The Official Receiver was to seek appropriate directions and permission to amend the Points of Claim.