JMW Solicitors LLP & Ors v Injury Lawyers 4U Limited & Ors

On reverse summary judgment, the court asks whether the pleaded claim has a realistic prospect of success. It must avoid a mini-trial, but may decide a short question of law or construction where the necessary material is available.

Clear entire-agreement and non-oral-modification provisions generally give effect to the parties’ written bargain and may prevent reliance on earlier collateral warranties or informal variations. Continued conduct alone will rarely establish a later estoppel where it is equally consistent with an exercise of contractual discretion.

A new unpleaded case cannot ordinarily resist summary judgment without an application to amend. The court may nevertheless allow an opportunity to amend where the proposed case has sufficient potential merit and refusing that opportunity would be disproportionate.

The claimants, three solicitors’ firms, sued the defendants concerning a company operating a personal-injury lead-generation scheme. They claimed that a contractual slot-price differential favouring founding shareholders survived a later shareholders’ agreement, alternatively that it was protected by collateral warranty or estoppel by convention.

The claimants also challenged the transfer of shares, the appointment of two directors and the board’s decision to remove the differential. The defendants applied for reverse summary judgment under CPR Part 24, arguing that the pleaded claims had no real prospect of success and that the proposed challenges to the appointments were unpleaded.

The central issues were the effect of the 2013 shareholders’ agreement, the viability of rectification and estoppel arguments, and whether the unpleaded challenges should be allowed to proceed by amendment.

1. Summary judgment. The court applied the real-prospect test. A realistic case is more than fanciful or merely arguable. The court should not conduct a mini-trial, particularly where further disclosure or oral evidence may alter the evidential position, but should determine a pure construction issue summarily where the relevant materials are before it.
2. Contractual claim. The 2013 shareholders’ agreement clearly stated that it constituted the whole agreement, superseded the previous documents and terminated them. The earlier supplemental deed was within the defined current documents. Accordingly, the claim that the earlier slot-price provision survived was hopeless. Commercial common sense could not override clear language.
3. Rectification and estoppel. A rectification case had to be pleaded and supported by evidence of the relevant prior agreement, common mistake or known unilateral mistake. Continued application of the differential was equally consistent with the board exercising its contractual discretion, and did not establish a common assumption. The entire-agreement and non-oral-modification provisions also defeated the pleaded pre-contractual warranty and estoppel cases. Post-contract conduct did not include the unequivocal representation required to overcome the non-oral-modification clause.
4. Unpleaded challenges. The claimants’ original case on the directors’ appointments had fallen away, but their proposed arguments concerning the meaning of Amelans, an implied term, change-of-control provisions, and possible fiduciary conflict were not fanciful. The court therefore directed that summary judgment on those issues would be entered only if the claimants failed within 14 days to apply successfully to amend.
5. The defendants obtained summary judgment on the contractual, collateral-warranty and pleaded estoppel claims. Consequential matters were adjourned pending any amendment application.

First-instance decision. The judgment records no prior appellate decision.