TB Property Investments (Plymouth) Limited v TB Property SARL & Anor

The appeal concerned whether summary judgment should have been given for the claimant to enforce a £750,000 debt said to arise under a Novation Agreement and assigned to the claimant, where the debt was alleged to be subject to subordination arrangements and a joint venture provision (clause 15.3) which, the claimant said, obliged the buyer shareholder to procure repayment or assignment and the release of any subordination on the transfer of shares. The judge below refused summary judgment, concluding that factual investigation was required to understand the factual matrix and the operation of the subordination and related documents. On appeal the court accepted that parts of the judge’s reasoning relied on misplaced suppositions about an undisclosed separate agreement, but held that there remained real and properly arguable factual issues about whether a forced security transfer falls within clause 15.3 and about the interaction of multiple transactional documents. The appeal was dismissed because the judge was entitled to decline to decide complex construction and fact-sensitive issues at summary judgment.

Background and parties: Thames Bank Property Company Ltd originally contracted to buy the Plymouth property and paid a £750,000 deposit. That interest and related rights were novated and ultimately assigned to TB Property Investments (the claimant). Episo provided financing, acquired security (including a share pledge) and, on enforcement, transferred the claimant’s shares in the joint venture company (JVCO) to itself. The claimant sought payment of the £750,000 and relief under clause 15.3 of the Joint Venture Agreement; the defendants relied on a Deed of Subordination and other documents as a defence and raised a potential counterclaim under clause 15.2.

Nature of the application: An appeal from a first-instance judge’s refusal to grant summary judgment for the claimant. The claimant sought summary judgment for the deposit (or damages) and declarations/relief under clause 15.3. The defendants resisted and sought permission to adduce expert evidence; they cross-appealed only in the sense of seeking an order in their favour if the court considered summary judgment appropriate.

Issues before the court:

• Whether the judge below relied on any material misconception that vitiated his refusal of summary judgment.
• Whether the construction point under clause 15.3 (whether a forced security transfer triggers obligations to procure repayment/assignment and to procure release of guarantees/subordination) was a short point of construction suitable for summary determination.
• Whether an arguable counterclaim under clause 15.2, if established, would over-top the claimant’s claim.

Court’s reasoning: The court accepted that the judge below had wrongly entertained an apparent but unsupported hypothesis of an additional undisclosed agreement about the deposit; that misconception materially affected his reasoning. Nevertheless, the appeal court found remaining and substantial factual and document-based issues which were properly relevant to the construction and operation of clause 15.3: in particular the character of the transfer (forced enforcement of security versus voluntary transfer), the commercial context and the interaction of multiple transactional documents (including Luxembourg law and structuring of security). While clause 15.3(b) (obligation to use reasonable endeavours to procure release of "other comfort") was likely a shorter construction point, it was bound up with the subordination issue which itself required trial. The existence of a potentially over-topping counterclaim under clause 15.2 was an additional reason for refusing summary disposal. Having weighed the need for further factual investigation against the scope for a short construction point, the court concluded it was appropriate to uphold the judge’s refusal of summary judgment and dismissed the appeal.

Appeal dismissed. The appellate court found that, although the judge below had relied on an unsupported hypothesis about an additional agreement which was a material error, there remained real, document‑dependent and fact‑sensitive disputes (including whether a forced security transfer falls within clause 15.3 and the interaction of the subordination and other transactional documents) that made summary determination inappropriate. The judge’s overall decision to refuse summary judgment was therefore upheld.

Appeal from the decision of HHJ Raeside KC dated 12 January 2024 refusing summary judgment; permission to appeal was granted by Mellor J. This judgment is the appellate decision: [2025] EWHC 1618 (Ch) (Sir Anthony Mann).