Sub 20 Ltd v Royalton Investment Limited & Ors
[2024] EWHC 907 (Comm)
Global Steel Holdings Limited v Prasan (PTC) Limited
31 July 2024
[2024] EWHC 1968 (Comm)
High Court
A company tried to get quick payment on a loan from another company. Even though evidence suggested the second company faked a document to avoid paying, a judge said there was still a chance the document was real based on someone's statement, and that it would be better to have a full trial to sort it all out, rather than make a rushed decision.
Key Facts
- •Global Steel Holdings Ltd (GSHL) in liquidation sued its shareholder, Prasan (PTC) Ltd, for repayment of a USD 22,795,021 loan.
- •The loan agreement, dated October 12, 2008, stipulated repayment on October 12, 2023, with interest accruing at Libor + 2%.
- •Prasan defended, alleging an oral agreement deferring interest until the repayment date and a subsequent written assignment agreement extinguishing the debt.
- •GSHL's forensic expert found that the PDF of the alleged assignment agreement was created in June 2023, not April 2010, indicating manipulation of metadata.
- •Prasan's witness, Mr. Singh, claimed to have signed the agreement in 2010, while residing in China.
- •GSHL presented evidence from audited accounts, witness statements, and examination under oath contradicting Prasan's claim.
Legal Principles
Summary judgment approach: The court must not conduct a 'mini-trial' and should critically examine the evidence to determine if a claim has a real prospect of success.
EasyAir Ltd v Opal Telecom [2009] EWHC 339 (Ch); Calland v Financial Conduct Authority [2015] EWCA Civ 192; Three Rivers District Council v Governor and Company of the Bank of England (No 3) [2003] 2 AC 1; Okpabi v Royal Dutch Shell Plc [2021] UKSC 3.
Caution is needed before granting summary judgment in cases involving allegations of dishonesty or manufactured documents.
Foglia v The Family Officer Limited [2021] EWHC 650 (Comm); King v Stiefel [2021] EWHC 1045 (Comm); Verdi Law Group PC v BNP Paribas SA [2023] EWHC 1860 (KB).
A court cannot usually disbelieve untested witness evidence without cross-examination, unless it's manifestly incredible or contradicted by all other evidence.
Long v Farrer & Co [2004] EWHC 1774 (Ch); Coyne v DRC Distribution Ltd [2008] EWCA Civ 488; Kireeva v Bedzhamov [2022] EWCA Civ 35.
Summary judgment may be refused if there's a compelling reason to have the issue resolved at trial, including the existence of closely related issues to be tried.
CPR 24.3(b); Executive Authority for Air Cargo and Special Flights v Prime Education Limited [2021] EWHCA 206 (QB); Re Candey Ltd [2024] EWHC 1398 (Ch); Iliffe v Feltham Construction Ltd [2015] EWCA Civ 715.
Outcomes
Summary judgment application refused.
While strong evidence suggested the assignment agreement was fabricated, the court found Prasan had a real prospect of proving its existence based on Mr. Singh's testimony, which couldn't be summarily dismissed. The court also considered the existence of a related interest claim scheduled for trial in a few months as a compelling reason to proceed to trial.
Application for interim interest payment refused.
This followed the refusal of the main summary judgment application.
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