Global Steel Holdings Limited v Prasan (PTC) Limited

Summary judgment may be granted where the evidence establishes that a defence has no real prospect of success, but the court must avoid conducting a mini-trial. Written evidence should ordinarily not be rejected without cross-examination unless it is manifestly incredible or contradicted by all the material on which it is based. Caution is especially important where dishonesty is alleged.

Under CPR 24.3, both limbs must be satisfied. Related issues proceeding to trial may contribute to a compelling reason for trial when considered with other circumstances, including overlapping evidence, the significance of the unresolved claim and the timing and length of the trial. It is unusual to withhold judgment on wider discretionary grounds where both limbs are satisfied.

Global Steel Holdings Limited, acting through its liquidators, claimed repayment from its ultimate shareholder, Prasan (PTC) Limited, of the principal and interest due under a 2008 loan agreement. Prasan alleged that interest had been deferred and that a 2010 assignment agreement had extinguished the loan by assignment and set-off.

GSHL applied for summary judgment on the principal sum. It relied on expert evidence that PDFs of the alleged 2010 agreements had been scanned in 2023 and that their metadata had been deliberately manipulated. Prasan relied principally on witness evidence from an alleged signatory. The issues were whether the assignment agreement had a real prospect of being proved genuine, whether it extinguished the debt, and whether the related interest dispute supplied a compelling reason for trial.

1. Application refused. Prasan had a real prospect of proving that the alleged assignment agreement existed, and the related interest claim, due to be tried shortly in a five-day trial with overlapping evidence, supplied a compelling reason for the principal claim to be determined at trial.
2. The court accepted that the issue whether the alleged agreement was made was not factually complex and that summary judgment did not necessarily require a finding that the witness was lying. Clear, credible and unanswered expert evidence could be accepted on a summary judgment application.
3. Nevertheless, where the result depends on rejecting written witness evidence, the applicable safeguards are whether that evidence is manifestly incredible or contradicted by all the documents or other material on which it is based. Powerful cross-examination material is not necessarily the knock-out blow required for summary disposal. The metadata evidence and the defendant’s silence strongly suggested fabrication, but did not make the witness’s account impossible. Alternative explanations remained consistent with the evidence.
4. The alleged assignment agreement was also unsuitable for final construction at this stage. Although its fourth clause was incoherent and it contained no express discharge provision, clauses 1 to 3 made little commercial sense unless set-off was intended. The court lacked sufficient knowledge of the commercial background to resolve the issue safely.
5. Both limbs of CPR 24.3 must be satisfied. Related claims or issues going to trial may contribute to a compelling reason, depending on their relationship and the other circumstances. Here, the significant interest dispute, the imminent short trial and likely overlapping witnesses together amounted to such a reason. The application for an interim payment on account of interest therefore did not arise. Nothing in the judgment was a final finding binding the trial court.