6 January 2009 00:20

Summary Judgment Seven Point Test

As readers will know, one of the objectives of Adjudication is to provide a relatively quick and cost effective procedure for resolving disputes (albeit the Adjudicator’s decision is temporarily binding).

Should the Adjudicator’s Decision not be complied with the successful party can seek to enforce it by obtaining a quick judgment using the summary judgment procedure enshrined in part 24 of the Civil Procedure Rules. Summary judgment can be used in any type of litigation proceedings, not just the enforcement of adjudication’s decisions.

Summary judgment is aimed at providing, in appropriate circumstances, judgment at an early stage of the litigation process, thereby avoiding the time and expense involved in a full-blown trial.  The grounds for an application for summary judgment are contained at part 24.2 of the CPR as follows:

24.2 The court may give summary judgment against a claimant or defendant on the whole of a claim or on a particular issue if-

a) that claimant has no real prospect of succeeding on the claim or issue; or

(i) that defendant has no real prospect of successfully defending the claim or issue; and

(ii) that defendant has no real prospect of successfully defending the claim or issue; and

b) there is no other compelling reason why the case or issue should be disposed of at a trial.

Whilst not related to an Adjudicator’s Decision, in the recent case of Nigeria v Santolina Investment Corporation and others [2007] EWHC 437 (Ch) Mr Justice Lewison provided a useful summation of the guiding principles to be applied by the court when deciding whether or not to award summary judgement.

Nigeria case - Recent Guidance

The case concerned an application by the Federal Republic of Nigeria for summary judgment to recover assets wrongly obtained by a former State Governor, Mr Alamieyeseigha.

By way of background to the application, in September 2005 Mr Alamieyeseigha was arrested in the UK on charges of money laundering. In November 2005 impeachment proceedings were commenced by the Bayelsa state against him. On 9 December 2005 he was dismissed as State Governor. It was also alleged that during his period in office Mr Alamieyeseigha had accumulated assets in excess of £10 million via corrupt practices, such as receiving bribes and other payments in return for awarding state government contracts. Some of these alleged assets consisted of properties in London, owned by Mr Alamieyeseigha’s company; other were in bank accounts in the name of Mr Alamieyeseigha, his wife and other corporate entities, some of which are wholly controlled by Mr Alamieyeseigha.

Considering the test to be applied by the court when considering an application for summary judgment, Mr Justice Lewison at paragraph 4 stated the following:

4.    The courts have now given guidance on the principles to be applied in deciding whether or not to give summary judgment. For present purposes I summarise the relevant ones as follows:

i) The court must consider whether the defendant has a "realistic" as opposed to a "fanciful" prospect of success: Swain v Hillman [2001] 2 All ER 91;

ii) A "realistic" defence is one that carries some degree of conviction. This means a defence that is more than merely arguable: ED & F Man Liquid Products v Patel [2003] EWCA Civ 472 at [8]

iii) In reaching its conclusion the court must not conduct a "mini-trial": Swain v Hillman

iv) This does not mean that the court must take at face value and without analysis everything that a defendant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED & F Man Liquid Products v Patel at [10]

v) However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5) [2001] EWCA Civ 550;

vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd [2007] FSR 63;

vii) Although there is no longer an absolute bar on obtaining summary judgment when fraud is alleged, the fact that a claim is based on fraud is a relevant factor. The risk of a finding of dishonesty may itself provide a compelling reason for allowing a case to proceed to trial, even where the case looks strong on the papers: Wrexham Association Football Club Ltd v Crucialmove Ltd [2006] EWCA Civ 237 at [57].

After careful consideration Mr Justice Lewison refused Nigeria’s application for summary judgement providing his detailed reasons for doing so in his judgment. One reason was that this was such a serious allegation it needed to go to trial to permit Mr Alamieyeseigha to confront his accusers and state his side of the facts.

Notwithstanding this, Mr Justice Lewison’s said guidance on the principles to be followed when considering an application for summary judgment provides a useful insight into the court’s approach.

Matthew Davies
March 2007

 

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