Simon Gibbons v Gravity Franchise Limited & Ors

On applications to strike out and for reverse summary judgment, a claimant must plead each misrepresentation with enough precision to identify its terms, maker, circumstances, falsity, legal character and reliance. Fraud requires primary facts capable of supporting dishonesty rather than facts consistent with negligence or innocence. A court may critically examine the pleading and contemporaneous documents without conducting a mini-trial. Clear entire-agreement, non-reliance and exclusion clauses may bar non-fraudulent misrepresentation claims. A claim against a director also requires a pleaded basis for personal assumption of responsibility. Where these defects leave no real prospect of success, the claim may be struck out and summarily dismissed.

The claimant brought a claim of approximately £3.4 million against Gravity Franchise Limited, Gravity Fitness (Warrington) Limited and Mr Paul Harvey Jenkinson. He alleged five pre-contractual representations concerning project cost, profitability, the appointed contractor, a strip-out contribution and funding. The representations were said to be fraudulent, negligent or innocent.

The defendants applied under the Civil Procedure Rules 1998 for strike-out and reverse summary judgment. The claimant’s amended particulars remained unclear despite requests for further information. The court also considered whether his brief defence to the defendants’ counterclaim for £849,288.07 disclosed any valid defence. The central issues were whether the pleaded claims disclosed reasonable grounds, had a real prospect of success, or could be saved by amendment.

Disposition. The applications were granted. The claim was struck out under the Civil Procedure Rules 1998 and dismissed on reverse summary judgment. Summary judgment was also granted on the counterclaim because the defence disclosed no valid defence.

1. Applicable principles. The court applied the principles summarised in The LCD Appeals [2018] EWCA Civ 220 and Matthew Williams v Richard Merrick, Merricks Solicitors Limited (sued as Merricks Solicitors). A claimant needed a realistic prospect of success, not merely an arguable case. The court was not to conduct a mini-trial, but could critically examine the pleadings, evidence and contemporaneous documents.
2. Pleading and fraud. The amended particulars did not identify the representations, their maker, timing, precise terms, falsity or legal basis with sufficient clarity. The claimant could not replace a coherent pleading with a large documentary bundle or evidence that might become clear only at trial. No primary facts showed that the defendants knew the cost or funding representations were false or were reckless as to their truth. The fraud allegations therefore had no real prospect of success.
3. Individual representations.
   • The cost allegation was arguable only in a limited form, but could not induce entry into the Lease after the costs had already exceeded the stated figure.
   • The profitability allegation was wholly opaque and did not establish that projections were guarantees or that they were fraudulently false.
   • The contractor allegation concerned opinion and lacked primary facts showing that the opinion was dishonestly or negligently given.
   • The strip-out allegation appeared to concern a collateral contractual promise or an omitted term, not an actionable misrepresentation.
   • The funding allegation was internally inconsistent, and the proposed guarantee had failed before the Lease was executed.
4. Negligence and exclusion clauses. The introduction of One Shot Construction Limited did not, without more, create a separate duty of care. The contractual allocation of project-management responsibility and the reasoning in Henderson v Merrett Syndicates Ltd [1995] 2 AC 145 supported that conclusion. Applying Inntrepreneur Pub Co v East Crown Ltd [2000] 2 Lloyd's L Rep 611, the clear non-reliance, entire-agreement and exclusion clauses barred any negligent or innocent misrepresentation claim. Fraud was not excluded, but had not been properly pleaded.
5. Procedure and counterclaim. A litigant in person remained subject to the procedural rules. The claimant had declined opportunities to clarify his case and supplied no draft amendment, so the court could not defer disposal on the speculation that a future amendment might cure the defects. It was unnecessary to decide the separate issue of Mr Jenkinson’s personal liability. The defence to the counterclaim merely asserted that the agreements were invalid because of misrepresentations and disclosed no valid defence.