Manolete Partners Plc v Sampson Coward LLP

Summary judgment is inappropriate where the issues require fuller factual investigation, including evidence reasonably expected to be available at trial. The court must assess whether the claim has a realistic, rather than fanciful, prospect of success, without conducting a mini-trial.

Where a claim concerns a developing area of law, or the undertaking and surrounding facts raise issues requiring findings at trial, the court should generally decline to determine the issue summarily. A conditional order should be made only where the claim or defence, and the required remedial step, can be identified with sufficient clarity.

The claimant, as assignee of claims belonging to two companies in liquidation, brought claims against the defendant solicitors concerning the operation of escrow accounts, alleged breaches of solicitor’s undertakings, and alleged failures relating to property transactions.

Before a Defence was filed, the defendant applied for summary judgment on three parts of the claim. The issues were whether the companies had any beneficial entitlement to monies in the escrow accounts, whether the undertakings could be summarily enforced against the defendant LLP, and whether the property-transaction allegations lacked a sufficiently pleaded causation case.

1. Escrow account claim. Summary judgment was refused. Applying the principles in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch), the court had to consider not only the pleaded evidence but also the evidence reasonably expected to be available at trial. The Reply case raised a realistic prospect that the borrowers had beneficial ownership of at least some monies, having regard to the Loan Agreements, the Automatic Drawdown provision, the requirement that advances be paid into Security Accounts in the borrowers’ names, and the source of the funds. The issue required fuller factual investigation and was unsuitable for summary determination.
2. The Reply case was relevant to the summary judgment application, although the Particulars of Claim did not clearly identify reliance on the Loan Agreements or the Automatic Drawdown provision. The court declined to require amendment as a condition of refusing summary judgment. The application concerned a particular issue, rather than a claim bound to fail unless amended.
3. Undertaking claim. Summary judgment was refused. Harcus Sinclair LLP v Your Lawyers Ltd [2021] UKSC 32 left open whether the court’s supervisory jurisdiction should extend to undertakings given by incorporated law firms. That issue was part of developing jurisprudence and was better considered against facts found at trial. The undertaking itself might also raise factual and legal issues requiring determination in the wider claim.
4. Property transactions. Summary judgment was refused. The alleged instructions, the defendant’s duties, and what could be attributed to the borrowers were likely to be central to causation. The issue was unsuitable for determination before a Defence had been filed.
5. The defendant was directed to file and serve its Defence within a period to be fixed after judgment. Costs and consequential matters were reserved for further submissions.

First-instance decision. No prior appellate decision was stated in the judgment.