Malcolm Lionel Robert Royle v Together Commercial Finance Limited

On applications for strike-out or reverse summary judgment, the court must determine whether the claim has a realistic prospect of success without conducting a mini-trial. A claim may proceed where oral evidence or fuller factual investigation could affect the outcome. Defects in pleading may justify a final opportunity to amend where the proposed case is legally recognisable and has a real prospect of success.

A mortgagor is prima facie entitled to an account of sums secured by the mortgage as an incident of the equity of redemption. Limitation issues may remain arguable where claims are advanced by way of equitable set-off or arise from alleged fiduciary obligations. A settlement deed does not necessarily compromise prior claims unless its wording clearly produces that effect.

The claimant, a property developer, brought claims against the defendant finance company concerning the application of loan proceeds, insurance monies, insurance cover, planning consents and the calculation of secured indebtedness. The defendant sought strike-out or reverse summary judgment under the Civil Procedure Rules 1998. The claimant separately sought permission to amend his Particulars of Claim and join two individuals.

The court considered whether the existing and proposed pleadings disclosed legally recognisable claims, whether the claims were statute barred, whether the claimant’s equity of redemption supported an account, and whether a settlement deed precluded the claims.

1. First Application. The application for strike-out or reverse summary judgment was adjourned. Although the existing Particulars of Claim contained serious defects, parts of the proposed case had a real prospect of success and disclosed recognisable legal grounds if properly pleaded.
2. The claim concerning interest on the amount paid to UK Mortgage Corporation Limited could potentially be reformulated as a claim based on promissory estoppel or, alternatively, collateral contract. The claimant had to plead the promises, reliance and the nature of any equity with specificity. A claim for declaratory relief and an account could then be available.
3. The claimant’s status as mortgagor gave him a prima facie right to an account of the sums owed to the mortgagee, as an incident of the equity of redemption. The account could determine whether the amount transferred to UK Mortgage Corporation Limited, with interest, formed part of his indebtedness and the sum required to redeem the security.
4. Limitation issues could not be conclusively determined summarily. A promissory-estoppel claim was not subject to the Limitation Act 1980, although laches might apply. A collateral-contract claim was potentially subject to the six-year period, but might be advanced as an equitable set-off. The insurance and fiduciary-duty claims likewise had a real prospect of success on the pleaded case, subject to limitation and the settlement defence.
5. The settlement deed did not clearly provide for full and final settlement of all claims or cross-claims. Its provisions concerning payment and discharge of security did not, on their face, quantify the claimant’s full indebtedness or release all liabilities. Extrinsic evidence could therefore be relevant to construction and any equitable set-off.
6. The claims concerning the insurance proceeds, insurance cover and planning consents involved disputed oral evidence and could not properly be resolved without a trial. The claimant was given a final opportunity to submit revised draft amendments against the defendant only.
7. Second Application. The application to join the two individuals was adjourned. The court expressed no view on its merits and directed that any renewed application be supported by proper notice and evidence.