PD Teesport Limited v P&O North Sea Ferries Limited

On a summary judgment application, a defence must have a realistic prospect of success and carry some degree of conviction. Bare assertions, unsupported suggestions that further evidence may emerge, and an invitation to wait for something to turn up are insufficient. The court may determine a short question of contractual construction where the available material is sufficient and no fuller factual investigation could affect the result.

A force majeure clause providing relief where an event affecting one party prevents the other party from performing requires a causal connection between the event affecting the first party and the other party’s inability to perform. A clause requiring disputed sums to be set aside does not, without clear words, postpone the contractual due date or prevent pre-judgment interest accruing.

The claimant, operator of Teesport, sought summary judgment for a contractual shortfall payment of £910,843 under a minimum volume guarantee. The defendant accepted the shortfall but advanced defences based on clause 11.3, which concerned consideration of an amendment to the guarantee, clause 12.3, concerning force majeure, and clause 9.9, concerning disputed invoices and interest.

The claimant accepted that the contractual interest rate was unsuitable for summary determination. The central issues were whether the remaining defences had a real prospect of success and, in particular, how clauses 11.3, 12.3 and 9.9 should be construed.

1. Summary judgment. The court applied the principles stated in Easyair Ltd. v. Opal Telecom Ltd. [2019] EWHC 339 (Ch). The court must assess whether the defence is realistic rather than fanciful, without conducting a mini-trial. It may analyse evidence, consider evidence reasonably expected at trial, and decide a short point of law or construction where the available material is sufficient. The respondent must substantiate any assertion that further evidence will become available.
2. Clause 11.3. It was unnecessary to decide whether the Agreement was a relational contract or whether a good faith obligation applied. Any such obligation would be conditioned by context and required proper pleading of its content and alleged breach. The evidence, including the claimant’s 4 February email, supported the conclusion that the claimant had considered an amendment with an open mind and reasonably. The defendant’s bald assertions did not establish a real prospect of proving otherwise.
3. Clause 12.3. The clause required two cumulative preconditions: a force majeure event must have affected the claimant, and that event must have caused the defendant’s inability to transport units. It was insufficient that the event was merely capable of affecting the claimant, or that an unrelated event prevented the defendant’s performance. The pleaded case and evidence disclosed no such causal link, and did not establish that the claimant had been affected.
4. Clause 9.9. The provision required disputed amounts to be set aside but did not alter the due date specified by clause 9.5. Its reference to interest accruing from the due date, before as well as after judgment, was inconsistent with postponing payment until judgment. No implied adjustment was necessary or justified.
5. Judgment was therefore entered for the claimant for £910,843, with interest at 2 per cent above the Barclays Bank base rate from 2 March 2022. The rate dispute was left for trial, and costs and consequential matters were reserved for further submissions.

This was a first-instance application for summary judgment. The claim was begun on 8 August 2022 and the application was made on 15 November 2022. No lower-court decision or appeal is stated.