Pradeep Morjaria & Ors v Camran Mirza & Ors

A defence should not be struck out merely because the party cannot provide historical, invoice-by-invoice particulars, where the pleaded case remains legally recognisable and capable of proof at trial. In a fact-heavy fraud dispute, the court must avoid conducting a mini-trial on an application for strike out or summary judgment. Non-compliance with case-management orders may justify sanctions, but strike out must remain proportionate and must account for the fairness and integrity of the remaining trial. Expert evidence may assess the reasonableness of charges by reference to phases of work rather than individual invoices where that is a proper basis for evaluation.

The claim arose from a property-development joint venture. The claimants alleged that companies associated with the defendants had improperly charged fees and services to joint-venture entities and had thereby acted in breach of contract, fiduciary duty and through fraud.

Following two case-management conferences, the defendants were ordered under Civil Procedure Rules 1998 Part 18 to particularise how the charges were determined. The claimants applied under rule 3.4(2), and alternatively sought summary judgment, arguing that the defence was unsustainable, obstructed the just disposal of the proceedings, and failed to comply with court orders.

1. Application dismissed. The fees and services defence was not struck out, summary judgment was refused, permission was granted for the defendants to rely on the quantity surveyor’s report, and time for serving the second Part 18 response was extended to the date of service.
2. Under rule 3.4(2)(a), the question is whether the pleading discloses a coherent and legally recognisable case. A party’s inability, years after the events, to particularise every individual charge does not necessarily make a defence unsustainable. The issue may affect credibility and the weight of evidence at trial, but it does not establish that the defence is bound to fail.
3. The court must consider the pleaded case itself while assuming pleaded facts to be true unless an essential fact is obviously wrong. A disputed factual issue, particularly involving alleged fraud, should ordinarily be resolved through evidence and cross-examination.
4. Although a strike-out application may be treated as an application for summary judgment, the court must not conduct a mini-trial. The parties’ competing accounts, their understanding of the joint venture and the credibility of witnesses meant that the defendants could not be said to have only a fanciful prospect of success.
5. The phase-based response did not obstruct the just disposal of the proceedings. Expert evidence could assess whether charges were reasonable by reference to phases of work, and the trial judge could take account of the lack of invoice-level detail when evaluating what was actually charged.
6. In relation to breaches of court orders, the Denton approach was relevant by analogy, but the ultimate question was whether strike out was proportionate. Despite serious breaches, striking out a defence to a fraud claim worth millions would have been disproportionate, especially where the defendants had provided the particulars they could give.
7. A conditional payment-in order was refused. The proposal was raised too late to give the defendants a proper opportunity to respond, and the case was not shown to be improbable or particularly weak. The purpose of such an order is principally to regulate future proceedings, rather than punish past conduct.