Early point scoring counts

Summary judgment is an invaluable, and much used, process for litigants faced with claims or defences that have “no real prospect of success”. It enables parties to dispose of part or all of a claim/defence and, in the process, saves costs and time (including that of the court). While a successful summary judgment application can bring an end to proceedings, even an unsuccessful one can assist a party to “score the first point” in litigation and weaken his opponent’s armoury early in proceedings. Is it therefore possible that parties might apply for summary judgment in unsuitable cases as losing the application could still result in a tactical success?

Antonio Gramsci Shipping Corporation & others v Recoletos Limited & others

In the recent case of Antonio Gramsci Shipping Corporation & others v Recoletos Limited & others [2010] All ER (D) 241 (May), the claimants applied for summary judgment against the defendants in a case alleging fraud and “corporate theft”. The summary judgment hearing took over three days of court time. The claimants’ skeleton argument ran to 54 pages, the defendants’ 66. There were at least 56 authorities referred to in the hearing bundle.

In his judgment, Gross J made it clear that instinctively it did not seem to him that the dispute lent itself to an issue or issues upon which summary judgment could be given without regard to the factual picture as a whole. He summarised that summary judgment is designed for plain cases:
l Cases that are not fit for trial at all (Three Rivers DC v Bank of England (No 3)[2001] UKHL 16, [2001] 2 All ER 513).
l When the case involves an allegation of serious fraud or dishonesty, generally conclusions on such issues ought to be reached at trial, caution ought to be exercised before giving summary judgment in a case of that nature (Wrexham Associated Football Club v Crucialmove Ltd [2006] EWCA Civ 237, [2006] All ER (D) 199 (Mar)).

On the other hand, where it can be ascertained without the conduct of a mini-trial that there is no realistic prospect of a successful defence, then summary judgment will or may be appropriate and the court should not be deterred from granting such relief simply because of the volume—or in some cases smokescreen—of documents (Wrexham Associated Football Club v Crucialmove Ltd).

On re-examination of his initial instinct, Gross J’s view remained the same. While he showed his distaste for some of the defendants’ activities, he felt that a finding of actual dishonesty was a strong conclusion to reach as a matter of summary judgment and the case called for a trial.
Gross J considered that it was improbable that the defendant would successfully resist the claim. He therefore made a conditional order that the defendants pay a sum of money into court as a condition of defending the claim.

Comment

Arguably, it should have been, and perhaps was, clear to the claimants that the case was not suitable for summary judgment. That said, the claimants left court with a conditional order and a strong indication from the judge that their claim would be successful at trial. Therefore, even though their application did not succeed, tactically they left court with the upper hand.
Gross J did not deal with costs in his judgment and it would be interesting to know whether the claimants were penalised on costs for pursing the application.

Of course, not all failed summary judgment applications result in backhanded success for the applicant. For example, if a defendant applies for summary judgment and fails, a judge may, on summing up, indicate that the claimant is, in fact, likely to succeed at trial. In those circumstances the defendant is “one-nil” down in the proceedings, likely to have a costs order made against it and is facing an uphill struggle to trial.

For this reason, using summary judgment as a “tactic” in the way discussed above is risky and should not be adopted lightly.

Catherine Reeves, non-practising solicitor, LexisPSL

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