The Imaging Centre Assets Limited v Canon Medical Systems Limited

Summary judgment should be refused where the issues require a fuller investigation of facts that may affect liability or damages. The court must assess whether the respondent has a realistic, rather than fanciful, prospect of success without conducting a mini-trial. It must also consider evidence reasonably expected to be available at trial.

Where contractual obligations depend on disputed matters such as the meaning of a best-price term, incorporation of terms by a course of dealing, payment arrangements, the order process or reasonable delivery time, those issues may provide a compelling reason for trial. Summary judgment on liability is inappropriate where the subsequent assessment of damages would require determination of the same unresolved issues and would not materially shorten the trial.

The claimant and defendant were parties to a Master Agreement for the supply of medical imaging units. The claimant applied for summary judgment on liability, with damages to be assessed, alleging that it had ordered 36 units at the contractual best price and that the defendant had failed to deliver them.

The defendant disputed the validity and effect of the orders, the applicable price, payment terms, delivery period and any requirement to accept a quotation. The claimant relied substantially on an earlier judgment concerning the parties’ agreement, reported at [2023] EWHC 3007 (Comm). The central issue was whether liability could properly be determined without a trial.

1. The application was dismissed. The claimant had not established that the defendant had no real prospect of defending the claim, and there was in any event a compelling reason for the issues to proceed to trial.
2. Under CPR r 24.3, the court must consider whether the respondent’s case has a realistic prospect of success, rather than a merely fanciful or arguable prospect, and whether any other compelling reason requires a trial. The court must not conduct a mini-trial, but it is not required to accept factual assertions at face value. It must consider evidence reasonably expected to be available at trial.
3. The earlier judgment determined the issues then before the court. It did not decide the consequences of the defendant providing quotations which the claimant alleged were not at the contractual best price or contained unacceptable payment and delivery terms. The earlier judgment therefore did not dispose of the present issues.
4. The present dispute raised substantial questions of fact and contractual construction. These included the meaning and application of the best-price provision, whether payment and delivery terms were implied or incorporated through a course of dealing, whether acceptance of a quotation was a precondition to delivery, and what constituted a reasonable delivery period. Those matters could affect both liability and the date of breach.
5. The defendant’s argument that an unaccepted repudiatory breach could never support a damages claim was plainly wrong. An innocent party may elect to keep the contract alive and claim damages for losses caused by the breach.
6. Even if the defendant had no real prospect of defending liability, the court retained a discretion under CPR r 24.3. It would be wrong to enter judgment before determining facts which might decisively affect liability. A liability judgment would not avoid the need for a trial addressing the best price, delivery period, incorporated terms and resulting loss.

Unless the parties agreed a way forward, the claim was to proceed to trial.