Mihir Vijay Choksi v IPS Law LLP

Summary judgment should be granted only where the opposing case has no realistic prospect of success and there is no other compelling reason for trial. The court may evaluate evidence, but must avoid a mini-trial and must consider whether reasonably available further evidence could materially affect the outcome.

Where a commercial agreement is materially ambiguous, construction may require trial evidence concerning the admissible background and commercial context. A subsequent agreement with one contracting party does not necessarily vary a separate contractual obligation owed by another party. Variation requires consideration, and knowledge or acquiescence in breach requires actual knowledge of the breach. A bare assertion that a party agreed to await repayment, contradicted by contemporaneous documents, is insufficient.

The claimant deposited £1.5m under a Bridging Loan Agreement involving Biodex Trade Solutions Ltd and IPS Law LLP. The money was placed in an escrow account for use as proof of funds in connection with an investment. The claimant alleged that IPS had paid the money away in breach of contract and of a Quistclose trust.

IPS argued that it was not bound by the agreement, that Biodex had authority to direct payment, and that the claimant had varied or acquiesced in the arrangement or was estopped from relying on the original terms. The claimant applied for summary judgment for £1.5m, interest and costs. The central questions were whether the agreement imposed enforceable obligations on IPS and whether IPS had a realistic defence based on variation, knowledge, acquiescence or estoppel.

1. Summary judgment principles. The court applied the principles in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch), as approved in AC Ward & Sons Ltd v Catlin (Five) Ltd [2009] EWCA 1098. A realistic prospect is more than merely arguable, but the court must not conduct a mini-trial. It must also consider evidence reasonably expected to be available at trial and whether there are reasonable grounds for believing that further evidence could materially affect the outcome.
2. Construction. The Bridging Loan Agreement was poorly drafted and contained real uncertainty as to whether IPS was a party, whether it undertook express obligations, and whether the funds had to remain in the escrow account or could be deployed at Biodex’s direction. Those questions required the interpretive exercise to be undertaken at trial in the context of admissible background material and the commercial purpose of the arrangement. IPS therefore had a realistic prospect of success on construction.
3. Variation and estoppel. If IPS was contractually bound to retain the funds, its alternative defences did not provide a realistic answer. There was no cogent evidence of an agreement to delay repayment. A variation enforceable against IPS would require consideration from IPS, and an agreement with Biodex could not vary a separate obligation owed by IPS. The evidence did not plausibly show that the claimant knew of IPS’s payment away of the funds before February 2025 or acquiesced in the breach.
4. Further evidence. Disclosure and witness evidence would be relevant to the construction issue. Expert evidence, and evidence concerning release conditions, authorisation protocols or verification procedures, appeared unlikely to be relevant.
5. The summary judgment application was dismissed. The construction issue was to proceed to trial.

First-instance decision. No prior appellate decision is stated in the judgment.