Alphier Capital LLP v Blyvoor Gold Capital (Pty) Ltd

On an application for strike out or summary judgment, the court must assess whether the claim has a realistic prospect of success without conducting a mini-trial. A contractual prohibition on assignment is construed objectively, in the contract’s factual and commercial context. A prohibition extending to a party’s rights may prevent assignment of an accrued debt where the contract contains no relevant exception. A prohibited assignment may nevertheless create rights between assignor and assignee, including a trust where the transaction objectively has that effect. Parties may be added where this permits all connected issues to be resolved efficiently. Where limitation is disputed and an undertaking removes the risk of pursuing time-barred parts of a claim, the court may accept that undertaking when deciding joinder.

The claimant sought payment of an alleged debt arising from fees payable under agreements between Exotix and Blyvoor concerning funding arranged from Orion. The debt had purportedly been assigned from Exotix to Tellimer and then to the claimant. Blyvoor applied to strike out the claim or obtain summary judgment, contending that the assignments breached a contractual prohibition. The claimant applied to add Exotix and Tellimer as parties. The court considered the effect of the assignment clause, whether the transactions created a trust, limitation issues, and whether joinder was desirable and permissible.

1. Strike out and summary judgment. The court applied the principles summarised in Easyair. The claimant needed a realistic, rather than fanciful, prospect of success. The court was not to conduct a mini-trial, but could decide a short point of law or construction where the evidence was sufficient.
2. Construction of the prohibition. Clause 17.6 prohibited the transfer of rights or obligations, subject to an exception for transfers within the Exotix Group. Construed objectively, the clause prohibited transfer of all rights and obligations under the engagement. The transfer to Tellimer purported to transfer the whole mandate, not merely an accrued debt. The claimant’s distinction between contractual rights and the fruits of performance therefore failed.
3. The clause also applied to the right to sue for the debt. The drafting contained no exception for accrued debts, and the parties had expressly addressed an intra-group exception. Tellimer and the claimant were not within the contractually defined Group. Both transfers were consequently ineffective against Blyvoor.
4. Trust. The prohibition did not prevent the transaction from creating rights between assignor and assignee. Applying Don King and Barbados Trust, the court distinguished an equitable assignment from a declaration of trust. The Deed of Transfer was effective to make Exotix trustee of the Putative Debt for Tellimer. The court considered that the May 2020 Assignment had a realistic prospect of transferring the benefit of that trust to Alphier, although the issue was not finally determined.
5. Joinder and limitation. Exotix had a clear interest as original creditor and trustee. It was desirable to add Exotix so that the connected dispute could be resolved efficiently. The claimant should have the opportunity to add or substitute Exotix before strike out was considered. The court accepted an undertaking that no time-barred part of the debt would be pursued. On that basis, CPR 19.6 was not engaged in relation to any claim being pursued. Further representations were invited on the remaining applications, including Tellimer’s joinder, amendments, security for costs and costs.

First-instance judgment. The judgment does not state any prior appellate decision in this litigation.