Credit Suisse AG v Burgundy Sea Ltd & Ors

Summary judgment may be given where the respondent has no realistic prospect of successfully defending the claim and there is no other compelling reason for a trial. The court must avoid a mini-trial, but may decide a short point of law or construction where the evidence is sufficient and the parties have had a proper opportunity to address it. Under contractual acceleration provisions requiring only one continuing event of default, a lender may accelerate the debt when that condition is met. Bare denials, unsupported by any positive case or evidence, may leave a defendant with no real prospect of success.

Credit Suisse AG sought summary judgment against Burgundy Sea Ltd and Prince Fahad bin Sultan bin Abdulaziz al Saud, and strike-out of their Defences. The claims concerned unpaid amounts under a yacht loan and obligations under a personal guarantee. The defendants admitted most of the underlying contractual facts but advanced bare denials of breach, default and liability. They did not attend the hearing or serve effective responsive evidence. The central issues were whether a continuing event of default entitled the lender to accelerate the loan and whether the guaranteed liabilities consequently became payable.

1. Application granted. Judgment was entered for Credit Suisse AG against Burgundy Sea Ltd and Prince Fahad bin Sultan bin Abdulaziz al Saud in the terms of the order.
2. The applicable approach under CPR 24.2 was that the court should consider whether the defence had a realistic rather than fanciful prospect of success. It should not conduct a mini-trial, but could determine a short point of law or construction where the evidence was sufficient and the parties had an adequate opportunity to address it, following the approach explained in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch).
3. Clause 10.2.1 of the Yacht Loan required only the occurrence of one continuing Event of Default. Each relied-on default operated separately. The admitted non-payment of interest and failure to provide evidence of the required portfolio, together with the established non-payment of legal fees, entitled Credit Suisse AG to serve the Notice of Acceleration.
4. Acceleration made Burgundy’s overall indebtedness immediately due and payable. It also entitled Credit Suisse AG to call on the Guarantee. Under the Guarantee, Prince Fahad became obliged to pay the accelerated indebtedness forthwith and to indemnify the lender as required.
5. The defendants’ bare denials disclosed no arguable basis for resisting those conclusions. They therefore had no real prospect of successfully defending the claims, and there was no other compelling reason for a trial. Credit Suisse AG was also entitled to compound interest on the outstanding sums. The claim for further sums accruing after the hearing could not then be finally determined, and jurisdiction was retained in that respect.