Sze Ming Yeung v Jeckz Investment Ltd & Ors

Under CPR Part 24, summary judgment may be granted where a defence has no realistic prospect of success and no other compelling reason requires a trial. The court must avoid a mini-trial, but may analyse the available evidence, reject implausible or unsupported accounts, and require the defendant to present its best case. A collateral challenge raised in separate proceedings cannot be ignored merely because it is unpleaded; the court should consider whether amendment is realistically possible. An amendment may nevertheless fail where it requires withdrawal from admissions, follows unexplained delay, and lacks coherent particulars or supporting evidence. In an ordinary commercial guarantee case, generalised pressure and absence of independent legal advice do not, without more, establish a realistic undue-influence defence.

The respondents lent money to a property-development company and obtained personal guarantees from its principal director. The respondents later sued the appellant on those guarantees. In his defence, the appellant admitted the guarantees and argued that liability had not yet crystallised because the property had not been sold.

After the property was sold, the appellant commenced separate Part 8 proceedings alleging undue influence, lack of an opportunity to obtain independent legal advice, and backdating. The High Court granted the respondents summary judgment in the sum of £778,607. The appeal concerned whether the allegations in the separate proceedings should prevent summary judgment and whether they disclosed a realistic defence.

Appeal dismissed. The Court of Appeal unanimously upheld the summary judgment, although it rejected the judge’s first reason for granting it.

1. Under Civil Procedure Rules 1998 CPR 24.3, summary judgment requires both that the defence has no real prospect of success and that there is no other compelling reason for a trial. The prospect must be realistic rather than fanciful and must carry more than merely arguable conviction: Swain v Hillman [2001] 1 All ER 91 and ED&F Man Liquid Products v Patel [2003] EWCA Civ 472 at [8]. The court must not conduct a mini-trial, but it may analyse the evidence and reject implausible, self-contradictory or unsupported allegations: Elite Property Holdings Ltd v Barclays Bank PLC [2019] EWCA Civ 204 at [41]-[42].

2. The judge attached too much significance to the fact that the undue-influence allegations had been raised in separate proceedings. That was primarily procedural. A court considering summary judgment may look beyond the existing pleadings and consider the possibility of amendment, consistently with Mishcon De Reya LLP v RJI (Middle East) Ltd [2020] EWHC 1670 (QB) at [55] and [57]. The relevant question was whether the proposed defence gave the appellant a realistic prospect of defending the claim.

3. The alleged undue influence case was nevertheless wholly implausible. The allegations of bullying and pressure lacked particulars and supporting evidence. The parties had an ordinary commercial relationship, not one of trust and confidence. The absence of independent legal advice, without evidence that advice was requested or customarily obtained, added nothing. The backdating allegation was equivocal, unsupported, and inconsistent with the signed documents. The six-year delay and absence of contemporaneous evidence were also significant. Royal Bank of Scotland PLC v Etridge (No.2) [2001] UK HL 44 supported the need for early and clear evidence of undue influence.

4. Any amendment would have required the appellant to resile from admissions that the guarantees had been signed and were valid. The difficulty of withdrawing an admission, together with the unexplained delay, meant that an amendment would have failed under CPR 14.1A(3)(b) and 14PD 7. The appellant had identified no realistic prospect of obtaining further material. He was required to put forward his best case and could not wait in the hope that something might later emerge.

5. The separate argument concerning the additional £34,000 was not open on appeal because it had not been advanced below and was outside the permission granted. The judge’s second reason was therefore correct, and summary judgment was properly entered.

1. Court of Appeal (Civil Division): In [2024] EWCA Civ 1413, the court dismissed the appeal and upheld summary judgment on the personal guarantees.
2. High Court of Justice (King’s Bench Division), Liverpool District Registry: His Honour Judge Cadwallader granted the respondents summary judgment for £778,607 in case KB-2023-LIV-000011.