ILFC Aircraft 32a-1808 Limited v Fly Bosnia D.O.O.

Judgment may be entered on an admission where the admitted liability establishes the sum due, subject to any legally effective defence. Summary judgment is appropriate where the defendant has no realistic, as opposed to fanciful, prospect of successfully defending the claim and there is no other compelling reason for a trial. The court may analyse pleaded factual assertions and need not accept them at face value where contemporaneous documents or the contractual terms show that they lack substance. A contractual security deposit could not be set off where the contractual conditions for repayment were unsatisfied because Events of Default had occurred.

The claimant sought judgment on admissions and, alternatively, summary judgment under CPR 14.3 and CPR Part 24 for unpaid rent and maintenance rent under an aircraft lease. The defendant admitted substantial arrears and contractual interest but alleged that it could set off a US$1 million security deposit. The court also considered the effect of insolvency proceedings filed by the defendant in Bosnia and granted the Bosnian liquidator liberty to apply.

1. The claimant was entitled to judgment for the admitted rent and maintenance rent debt of US$1,315,148.62, together with contractual interest, including US$162,056.76 calculated to the hearing date, subject to checking the calculation.

2. Under CPR 14.3, judgment on an admission is such judgment as the court considers the applicant entitled to on the admission. The defendant admitted liability for the deferred amounts, deferred interest and the admitted outstanding lease payments.

3. The security-deposit set-off defence failed. The lease made repayment conditional on there having been no continuing Event of Default and no default under any other relevant agreement. The defendant had admitted Events of Default arising from non-payment and from failure to return the aircraft in the required condition.

4. The alternative summary judgment application also succeeded. Applying the test restated in Mellor v Partridge [2017] EWCA Civ 477, a realistic prospect requires more than a merely arguable case and the court may analyse factual assertions rather than accept them without scrutiny. The admitted debt and the ineffective set-off defence left no real prospect of successfully defending the Rent Claim and no compelling reason for a trial.

5. The court gave the liquidator liberty to apply if it was considered that the hearing should not have proceeded, such application to be made within 28 days of any winding-up order in Bosnia.