Pandora Jewellery UK Limited & Anor v EML Payments Europe Limited

Summary judgment is appropriate where the issue is a short point of law or construction and the court has the evidence necessary to determine it. Contractual wording must be interpreted objectively in the context of the agreement as a whole. Clear language should be applied, while commercial common sense cannot be used to undervalue that language. Specific provisions take priority over inconsistent general provisions.

Where an agreement provides that payments terminate upon termination, provisions requiring relevant clauses to survive for an orderly run-off do not enlarge the substantive payment obligation. A Quistclose trust is discharged when trust money is applied in accordance with the agreed purpose. A subsequent obligation to make a contractual payment does not necessarily preserve a proprietary or resulting-trust interest.

Pandora Jewellery UK Limited and Pan Jewelry Limited claimed payment from EML Payments Europe Limited of gift-card balances which expired after the parties’ agreement ended on 31 March 2024. They argued that the agreement continued to require payment of those Expired Funds during the Transition Period and Run-off Period. They also claimed that EML held the funds on resulting trust.

The parties made cross-applications for summary judgment. The central questions were whether the contractual Breakage Payment obligation survived termination and, if not, whether EML nevertheless held the Expired Funds on resulting trust for the claimants.

1. Summary judgment. The issue was suitable for summary determination under Civil Procedure Rules 1998, r 24.2. There was no real prospect of the claimants succeeding and no compelling reason for a trial.
2. Construction. Section 2.2.g did not create a free-standing entitlement to Expired Funds. It required payment to the claimants only in accordance with the Breakage Payment regime in Fee Schedule D. Paragraph 2 of that Schedule defined the Breakage Payment Period as ending on termination and stated that Breakage Payments terminated upon termination.
3. The specific provision in Fee Schedule D therefore governed the general wording of section 2.2.g. Sections 7.3 and 7.4 preserved the operation of section 2.2.g during the run-off only to the extent required by its terms. They did not enlarge or alter the substantive obligation, which ended on 31 March 2024. The run-off mechanism could operate without a continuing obligation to pay Expired Funds.
4. The fact that the result gave EML a contractual bounty, or appeared commercially unattractive to the claimants, could not justify departing from the natural meaning of the negotiated wording. The alternative construction would render the defined Breakage Payment Period and express termination provision otiose.
5. Trust. Even if the Programme Account arrangements created a Quistclose trust, section 2.2.g expressly authorised the Expired Funds to be remitted from the ring-fenced account to EML. That application discharged the trust. EML’s remaining obligation was contractual, not proprietary. The agreement’s architecture was inconsistent with an ongoing resulting trust or proprietary entitlement in favour of the claimants.
6. EML’s application was granted. Reverse summary judgment was entered for EML, and the claimants’ application was dismissed.