Summary Judgment and Strike-Out: A Racy Reminder

Published: 4/10/2016

Judgment recently handed down by the Commercial Court in the motorsport dispute between Francois Kryvenko v Renault Sport Racing Limited ([2016] EWHC 2284 (Comm)) provides a concise reminder of the principles to be applied to applications for summary judgment and strike-out.

The background

Francois Kryvenko, a sponsorship agent in the field of professional sports, including F1, issued a claim against Renault Sport, an F1 constructor company, under the terms of an investment agreement. Kryvenko alleged entitlement to commissions for introducing Renault Sport to Yota Devices, a Russian mobile telephony company. Renault Sport defended the claim, citing the source of the sponsorship as arising from long running (and separate) negotiations between Renault Sport and Yota.

In mid-June 2016, Renault Sport applied for summary judgment (under CPR 24.2) and strike out (under CPR 3.4) of Kryvenko’s claims on the basis that they were fanciful, stood no real prospect of success and that there was no other compelling reason why Kryvenko’s claims or the case should be disposed of at trial.

In giving judgment, Sonia Tolaney QC (sitting as Deputy High Court judge), summarised the approach that the courts will take to applications under CPR 24.2 and 3.4.

Summary judgment

The applicable principles are summarised by Mr Justice Lewison in EasyAir Ltd v Opal Telecom Ltd [2009] EWHC Ch at paragraph 15, as approved by the Court of Appeal in A.C. Ward Ltd v Catlin Fire Ltd [2009] EWCA Civ 1098, at paragraph 24:

  1. 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.
  2. 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 Civ472 at paragraph 8.
  3. In reaching its conclusion the court must not conduct a “mini-trial”.
  4. 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.
  5. 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.
  6. Although a case may turn out at trial not to be 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.
  7. On the other hand it is not uncommon for an application under CPR Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant's case is bad in law, the sooner that is determined, the better. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction: ICI Chemicals & Polymers Ltd v TTE Training Ltd [2007] EWCA Civ 725.

The court dismissed Renault Sport’s application for, inter alia, gaps in the documentary record and unexplained gaps in the chronology, precluding the court from conclusively establishing that Kryvenko’s claim was fanciful. Consistent with point 6 above, the court was hesitant about making a final decision without a trial.

Strike-out

The court held that there was no material difference in the test to be applied in respect of CPR rule 3.4(2)(a) (strike out) and CPR Part 24 (summary judgment) (per High Commissioner for Pakistan in the UIK v National Westminster Bank [2016] EWHC 1465 (Ch) at paragraph 17).

Accordingly, Renault Sport’s application for strike-out failed for the same reasons given by the court in determining its application for summary judgment.

Comment

The case provides a succinct reminder of the principles that the court will apply to applications for summary judgment and strike-out. Further, the outcome highlights that to determine a claim early in proceedings places a heavy burden on the applicant to establish that the underlying claim is fanciful and stands no real prospect of success.

The full judgment can be found here: https://www.lawtel.com/UK/FullText/AC0151931QBD(Comm).pdf

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