Quidpay Finance Limited v Settlego Solutions Limited

Where a party asserts that regulatory or legal obligations prevent payment after contractual rights have been determined, the court should not exclude that issue merely because the asserted impediment has not yet been fully explained. The issue should instead be addressed in a procedurally fair manner, allowing the opposing party a proper opportunity to respond.

Where disclosure or enforcement may be affected by a third-party investigating or regulatory authority, the court should identify the authority’s position, determine what evidence is required, and decide whether open or restricted procedures are necessary. The authority may be required to justify withholding otherwise available civil relief.

The claimant sought payment of funds retained by the defendant under contractual reserve provisions. Following an earlier hearing concerning a mandatory interim injunction, the court ordered a trial of preliminary issues concerning whether the defendant could retain reserved funds after termination and what relief would be available.

The claimant sought removal of the words “or cannot” from the second preliminary issue and applied for specific disclosure of a suspicious activity report and related material. The defendant opposed both applications, relying on an unexplained regulatory or legal impediment to payment. The applications concerned the proper scope and management of the forthcoming preliminary-issues trial.

1. Wording of Issue 2. The defendant’s application succeeded and the claimant’s application to remove the words “or cannot” failed. The possibility that a legal or regulatory impediment might prevent payment had been in contemplation when the preliminary-issues trial was ordered. It would be inappropriate either to exclude the issue or to grant relief regardless of its possible effect.
2. The court did not need to determine the true nature or legal effect of the impediment. It was sufficient that the defendant had raised the issue in the Points of Dispute and that the court could not fairly assess its relevance without knowing more about it. The claimant was not required to accept the asserted impediment at face value, but the appropriate question was how its ambit and effect could properly be tried.
3. Specific disclosure. The application could not fairly be determined immediately. The defendant was entitled to respond, the NCA’s position might be centrally relevant, and no adequate procedure or hearing could be arranged before the expedited trial. The application was therefore adjourned for further consideration by the trial judge on 25 or 26 June 2026.
4. Procedure where a third-party authority intervenes. Adapting the guidance in C v S [1999] 1 WLR 1551, the defendant should, where necessary, explain its predicament to the court, potentially by sealed material or a skeleton argument provided to the court alone. The court should then determine what the claimant can be told, what evidence is required, whether a third-party authority should be involved, and how the issue should be resolved.
5. The court accepted that restricted procedures are unusual but not unprecedented, referring to Balabel v Air India [1988] Ch 317. The costs of both applications were provisionally reserved to the judge hearing the preliminary issues.