MSN 1364 Leasing Limited & Anor v Big Charter Pvt Ltd

Summary judgment is appropriate where the defendant has no realistic prospect of defending the relevant issue and no compelling reason for trial. A defendant must identify a concrete factual or legal defence; the possibility that further investigation may reveal something is insufficient.

An arguable issue about whether a security assignment is equitable does not necessarily prevent judgment. Non-joinder of the assignor is ordinarily procedural and may be dispensed with where there is no real risk of double recovery or inconsistent decisions. Contractual provisions requiring payment without set-off may prevent a lessee from setting off a claim for return of a security deposit. Termination for uncured non-payment will ordinarily be commercially reasonable under Article IX(3) of the aircraft Protocol.

The claimants leased two aircraft to Vman Aviation Service IFSC Pvt Ltd, which sub-leased them to Big Charter Pvt Ltd. Following payment defaults, termination of the sub-leases and redelivery of the aircraft, the claimants sought summary judgment for unpaid rent, supplemental rent, late-payment charges, enforcement expenses and contractual indemnity costs.

Big Charter relied on alleged accounting issues, defects in the assignments, the Cape Town Convention, penalty, set-off of security deposits, and the possibility of further evidence. The court also considered an application for relief from sanctions concerning evidence served shortly before the hearing. The central questions were whether there was a realistic prospect of defending the claims and whether any other reason justified a trial.

1. Disposition. Summary judgment was granted for the claimants on the specified claims, with interest. The contractual indemnity provisions entitled the claimants to their costs on an indemnity basis.
2. Relief from sanctions. Applying the three-stage approach in Denton v TH White Ltd, the breach was serious and significant, there was no good explanation, and the circumstances as a whole justified refusing relief. The late evidence identified no particular factual error or alternative account and would not have generated a defence with a realistic prospect of success.
3. Summary judgment. Under CPR 24, the court should not conduct a mini-trial or order a trial merely because something might turn up. The calculations for rent, supplemental rent, late-payment charges and indemnity costs were sufficiently evidenced and had not been specifically challenged.
4. Assignments. The court was not prepared to conclude summarily that the assignments were unquestionably absolute assignments under section 136 of the Law of Property Act 1925. They might operate in equity. Nevertheless, following National Westminster Bank plc v Kapoor, non-joinder of the assignor was a procedural matter, not a substantive defence. In the circumstances, joinder could be dispensed with because Big Charter had consented to the arrangements and there was no evidence of double recovery, successive claims or inconsistent decisions.
5. Other defences. Termination for continuing non-payment was commercially reasonable for the purposes of Article IX(3) of the aircraft Protocol. The 10 per cent late-payment charge had no realistic prospect of being characterised as a penalty. The security-deposit provisions gave the lessor discretion whether and how to apply the deposit, while clause 12.4 required payment without set-off. Big Charter therefore could not set off its possible claim for repayment against the sums claimed.
6. No identified issue of Indian law, taxation, aviation regulation, enforcement abroad, quantum or termination provided another reason for trial.