Zhiming Huang & Ors v Credit Suisse (UK) Limited

Summary judgment is inappropriate where a claim turns on disputed allegations of forgery, fraud, knowledge or authority and the evidence requires disclosure, witness examination or expert assessment. A defendant need not advance a positive alternative narrative. It may succeed at trial by showing that the claimant has not proved the claim on the balance of probabilities.

The court must avoid turning the summary process into a mini-trial on documents. Clear and reliable admissions may remove factual issues, but untested hearsay, unexplained omissions and circumstantial inferences ordinarily do not. Allegations of fraud remain subject to the ordinary civil standard; the assessment of likelihood is context-dependent. A statutory power to rectify a mistaken register is mandatory unless exceptional circumstances justify refusing rectification.

The claimants sought summary judgment on a claim to rectify the land register by removing charges over six properties, alleging that the charges and related documents were forged by or through Mr Zhang and that the claimants had no knowledge of, or authority for, the transactions. Credit Suisse (UK) Limited denied the central allegations and put the claimants to proof. It also relied on alleged exceptional circumstances under Schedule 4 to the Land Registration Act 2002, and counterclaimed for subrogation to earlier charges if the claim succeeded.

The application raised whether the evidence, including alleged admissions, missing documentation, suspicious conduct and travel records, established that the defendant had no real prospect of defending the claim and whether there was any other compelling reason for trial.

1. Application dismissed. The claimants had not shown that Credit Suisse had no real prospect of successfully defending the claim, and the factual issues required a full trial.
2. Under CPR Rule 24.3, the question was whether the defendant had a realistic, rather than fanciful, prospect of success and whether there was any other compelling reason for trial. The defendant did not need to prove a positive counter-narrative. It could succeed by undermining the claimants’ evidence so that they failed to prove, on the balance of probabilities, that the signatures were forgeries, that they lacked knowledge of the charges and loans, and that Mr Zhang acted without authority.
3. The alleged admissions by Mr Zhang were not primary evidence in these proceedings. The relevant documents did not address all the charges or whether any signing was authorised, and Mr Zhang’s evidence had not been tested. The court could not treat the admissions, transcript, default judgment or affidavit as sufficiently reliable to remove the factual issues.
4. The absence of a paper trail, the alleged misappropriation, suspicious identity documents, Mr Ho’s conduct, incorporation anomalies and travel records raised questions but did not establish the claim. Further disclosure remained outstanding, including approximately 11,000 pages, and the parties’ evidence and any handwriting evidence required testing. Determining the issues summarily would involve the mini-trial warned against in Three Rivers and Okpabi.
5. The ordinary civil standard applied to fraud. The likelihood of alleged conduct was context-dependent; no heightened standard of proof was imposed.
6. If the charges were void and their registration a mistake, Schedule 4 to the Land Registration Act 2002 generally required rectification unless exceptional circumstances justified refusing it. Whether exceptional circumstances existed depended on the factual findings and could not fairly be decided summarily. The unpursued subrogation counterclaim stood or fell with the forgery issue.