Matrix Receivables Limited v Musst Holdings Limited
[2024] EWHC 1495 (Ch)
Elevar Finance SPV Photon LLC v Sabesan Somasundaram
27 January 2023
[2023] EWHC 151 (Ch)
High Court
A company sued a guy for cheating them out of money. The judge said there's too much to figure out without a full trial because it involves claims of lying and secretly agreeing to not pay back debts. The guy has to explain himself better in his defence or his case will be dismissed.
Key Facts
- •Elevar Finance SPV Photon LLC (Elevar) provided a factoring facility to Teleunique Solutions Limited (Teleunique), owned by the defendant, Mr. Sabesan Somasundaram.
- •The Factoring Deed contained warranties by Teleunique that receivables were free from set-off rights.
- •Dialog, Teleunique's primary customer, delayed payments, and eventually claimed a set-off against invoices.
- •Elevar alleged that the defendant fraudulently misrepresented the absence of set-off rights, procured a breach of contract, and conspired to injure Elevar.
- •The defendant denied the allegations and claimed Dialog's set-off was invalid.
- •Elevar applied to strike out the defendant's defence or for summary judgment.
Legal Principles
A statement of case can be struck out if it discloses no reasonable grounds for defending the claim.
CPR 3.4(2)(a)
Summary judgment can be granted if the defendant has no real prospect of successfully defending the claim.
CPR 24.2
When denying allegations, a defendant must state reasons and provide their version of events.
CPR 16.5(2)
The court should be cautious about granting summary judgment in fraud cases but will do so in suitable circumstances.
Wrexham Association Football Club v Crucialmove Ltd [2006] EWCA Civ 237 and King v Stiefel [2021] EWHC 1045 (Comm)
For a director to be personally liable for procuring a breach of contract, they must have assumed personal responsibility.
Not explicitly cited but discussed in legal argument.
Outcomes
The application to strike out the defence was refused.
The court found that a fuller investigation of the facts was needed, and the defendant had a real prospect of successfully defending the claims.
The application for summary judgment was refused.
The court considered the case involved mixed fact and law issues unsuitable for summary determination and the need for caution in fraud cases.
The defendant was ordered to file a re-amended defence complying with CPR 16.5(2) within 28 days, or their defence would be struck out.
The Amended Defence did not adequately set out the defendant's reasons for denying the allegations.
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