Case update: Court of Appeal considers the suitability of summary judgment and principle of “compelling reason” for second appeals

5 August 2013

In the case of M&C Energy Group Ltd v St Cuthberts Mill Ltd [2013] EWCA Civ 935, the Court of Appeal allowed an application for permission to bring a second appeal and gave guidance on what amounts to a “compelling reason” to do so. In doing so, the Court also looked at the appropriateness of summary judgment in cases where there are disputed issues of fact.

The facts

The original dispute arose in relation to an agreement between the parties surrounding the sourcing of energy suppliers. The Appellant (St Cuthberts Mill Ltd) had approached the Respondent (M&C Energy Group Ltd) in the hope that it would find them gas and electricity suppliers who would charge less than they were currently being charged. In return for their services, the Respondent would be entitled to 50% of the savings achieved from the charges imposed or otherwise available to the Appellant. The Appellant consequently entered into contracts with new gas and energy suppliers and the Respondent raised its invoice.

The Appellant disputed the amount being claimed by the Respondent, stating that there had been no clear agreement between the parties as to the basis for any charge. The Respondent relied upon an email exchange which had taken place between them and the Appellant Company, which they say amounted to evidence of an agreement being reached.

The District Judge in the first-instance found in favour of the Respondent. This decision was upheld on appeal by Sir Raymond Jack, who stated that although the arguments made by the Appellant were available to them in theory, they had nevertheless agreed upon the base rate through their conduct and so could not avoid summary judgment.

On hearing for application to bring second appeal

On hearing the evidence from the Appellant, Longmore LJ held that it was arguable that summary judgment should not have been given, and that Sir Raymond Jack may have failed to take into account certain evidence regarding the charging basis.

Longmore LJ was persuaded, albeit with a “somewhat heavy heart”, that there was a compelling reason to justify a second appeal. He observed that, where real factual issues have been raised, and the court has either ignored them or treated them as having no weight, so that the defendant is found liable on a summary basis, it must be wrong in principle to reach a final conclusion, at least in cases where the evidence is unchallenged.

In conclusion, Longmore LJ emphasised that "summary judgment is supposed to be for very clear cases, and it is arguable that this case is just not clear enough, and if that is right it is just wrong that summary judgment should be given".

Comment

This decision may give some encouragement to parties hoping for another ‘bite of the cherry’ in respect of applying for permission to make a second appeal.

It also serves as a reminder that summary judgment is not appropriate where factual evidence is likely to be in dispute. Judges who are ready to grant summary judgment in these circumstances risk criticism from higher courts upon hearing appeal applications.

Katie Allard

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