Hope Capital 2 Limited v Stephen Michael Jones

On an appeal from summary judgment, the court must consider not only the evidence already available but also evidence reasonably expected to be available at trial. It should hesitate to decide finally where there are reasonable grounds to think that fuller investigation may alter the evidence or affect the outcome. Where further disclosure removes the uncertainty relied upon by the appellant, the appellant must identify a material evidential or legal basis for a defence. A subsequent transaction involving additional third-party security and deferred enforcement does not, without more, establish that the guaranteed obligations were varied or discharged.

The claimant obtained summary judgment against the defendant under a deed of guarantee and indemnity securing a loan made to a company of which the defendant was a director. The defendant appealed the order of Master Clark dated 21 December 2022.

Permission to appeal was granted only on whether a subsequent arrangement, involving additional security and deferred enforcement, might have varied or discharged the obligations relied upon by the claimant, and whether further evidence or disclosure should have been considered.

1. Appeal dismissed. The defendant had not shown a real prospect of establishing that the subsequent arrangements varied or discharged the obligations under the loan agreement or deed of guarantee and indemnity.
2. The court applied the summary judgment principles identified in Easyair Ltd v Opal Telecom Limited. The court must consider evidence reasonably expected to be available at trial and should hesitate before finally deciding an issue where fuller investigation may materially affect the evidence or outcome. The court was therefore entitled to order disclosure before determining the appeal.
3. The claimant disclosed the documents relating to the subsequent arrangements. They showed that Sphere Property 3 Limited gave a guarantee and legal mortgage, an intercreditor deed was entered into, and enforcement was deferred to allow an option to complete. Neither the defendant nor Sphere Property 2 Limited was party to those documents, and they contained no provision varying or discharging the defendant’s existing obligations.
4. The defendant identified no material gap in the disclosure and no feature of the documents supporting his case. The suggestion that an undisclosed reply email, an option to complete, or the formal nature of the arrangements could affect his liability was irrelevant to the amended grounds of appeal and could not credibly establish a defence.
5. The defendant was ordered to pay the costs of and occasioned by the appeal, including the costs of complying with the disclosure order, subject to agreement or detailed assessment on the standard basis.

• High Court (Chancery Division): The appeal against Master Clark’s order dated 21 December 2022 was dismissed. Permission to appeal had been granted by Bacon J on 28 July 2023 on limited grounds.