Miranda Investments Limited & Ors v Abraham (Avi) A Dodi & Ors

Summary judgment is appropriate only where the relevant claim has no realistic prospect of success. A claim may remain arguable despite defective pleading, factual difficulty or the possibility that the court would ultimately reject it. Claims may be determined summarily where the pleaded facts cannot establish the necessary legal elements, such as inducement, reliance, detriment or recoverable loss.

Contractual exclusion clauses concerning misrepresentation are subject to the reasonableness requirement in the Unfair Contracts Terms Act 1977. Whether contractual documents amount to binding terms, representations, or an invitation to treat may require a fact-sensitive assessment. Deeds attract a 12-year limitation period for contractual claims. Equitable rescission claims are not automatically barred by a fixed limitation period, although laches may apply.

The claimants invested in a property development scheme through a special purpose company. They brought claims against the promoters and associated companies for misrepresentation, breach of contract, rescission, damages in lieu of rescission, repayment under alleged buy-back agreements, an account of rent and related relief.

The defendants applied to strike out the claim under CPR 3.4(2) or alternatively for summary judgment under CPR 24.2(a). The court considered which claims were adequately arguable, which belonged to the company or its liquidator, the effect of the contractual documents, limitation, and contractual exclusion provisions.

1. Disposition. Summary judgment was granted on parts of the claims. The court reserved the question of strike out and directed a consequential hearing concerning the form of order, costs and related matters.
2. The alleged representation that the third and fourth defendants had each invested £1 million had realistic prospects against those defendants. The claim was inadequately pleaded, but it was not appropriate to strike it out or determine it summarily. The corresponding claim against the first and second defendants had no realistic prospect because they were not parties to the Shareholders’ Agreement. A possible negligent-misstatement claim was suggested but no amendment was sought.
3. The contractual claim based on the stated £2 million investment was difficult but not hopeless. It therefore survived summary judgment and strike out.
4. The £500,000 withdrawal claim was summarily determined because no contractual provision prevented the withdrawal. Any preference or misfeasance claim belonged to the company or its liquidators. The claim for a 24% return also failed summarily: the prospectus gave an illustrative example, was not incorporated as a contractual term, and contained no promise of that return.
5. Rescission and damages in lieu of rescission were unsuitable because the company was in liquidation, the first and second defendants were not parties to the agreement, and restoration of the parties to their pre-contractual positions was impossible, including because the shares could not be undone.
6. The alleged promise arising from proposed bank-loan documents could not found a claim. The documents did not amount to a representation by the defendants, post-dated the contract, could not have induced it, and the pleading lacked reliance, detriment and damage.
7. The alleged buy-back agreements had a realistic prospect of being binding agreements rather than mere invitations to treat and survived. The rent claim belonged to the company or liquidator and was summarily dismissed.
8. Claims in contract concerned deeds and therefore attracted a 12-year limitation period. The equitable rescission claims were not barred by laches at this stage. The court’s provisional view was that misrepresentation claims arising before 12 June 2018 were statute-barred.
9. Exclusions of misrepresentation liability were subject to the reasonableness requirement under the Unfair Contracts Terms Act 1977. On the facts, excluding liability was unlikely to be reasonable, and wording purporting to exclude reliance or the existence of representations could not override the apparent reality of how the documents were presented and relied upon.