SEX & SUMMARY JUDGMENT: WHERE DOES THE BURDEN OF PROOF LIE IN ESTABLISHING A “COMPELLING REASON” WHEN DEFENDING A SUMMARY JUDGMENT APPLICATION?
The case of Sargespace –v- Eustace had a highly unusual set of facts. However it raises an interesting question of where the burden of proof lies in an application for summary judgment where a respondent to the application wishes to rely upon a “compelling reason” for refusing summary judgment
Any judgment that starts:
“Paul Baxendale-Walker (who also goes by the name Paul Chaplin) was formerly a barrister and then a solicitor specialising in tax law. Some people might have found that exciting enough, but since 2005, when he acquired and ran a company making pornographic films in which he also starred, he has been active in the sex industry. He describes himself now as a wealthy man living a playboy lifestyle. Those who are interested can apparently find details in the pages of Loaded magazine, which he purchased in May 2012. His lifestyle involves essentially casual relationships with multiple sexual partners, a group or club of women known as his “hunny bunnies” to whom, in return for their sexual favours, he makes lavish gifts, including money, clothes and holidays, as well as providing flats and cars for their use”
Is bound to attract attention. However beyond the salacious headlines of the case there is an interesting question of civil procedure.
The claimant was a company seeking the recovery of property paid to the Defendant, alleging that it was held on trust by her or loaned to her. An application for summary judgment was made.
THE TEST FOR SUMMARY JUDGMENT SET OUT BY THE JUDGE
The test set out by the judge was:
Summary judgment – the test
- In order to obtain summary judgment on one or both of its claims the claimant must show that the defendant has no real prospect of successfully defending the claim, and that there is no other compelling reason why the case should go to trial. Although there have been cases in which this test has been analysed in greater detail, it is sufficient for present purposes to say, as was common ground, that a real prospect of a successful defence is one that is better than merely arguable, and is not fanciful or imaginary, but that the prospect of success need not be as high as 50%. While summary judgment offers a valuable opportunity to prevent inappropriate cases from causing trouble, expense and delay to a claimant and unnecessarily taking up the court’s resources for a trial, it must not be used to prevent genuine disputes from being properly investigated and determined.
IS THERE A BURDEN ON A CLAIMANT TO SHOW “THERE IS NO OTHER REASON COMPELLING REASON WHY THE CASE SHOULD GO TO TRIAL”?
Although it is was not material to the case in question there is an issue as to where the burden of proof lies on a summary judgment application.
1. There is a burden on an applicant to show that the defendant has no real prospect of successfully defending the claim.
2. It is an interesting question whether there is a burden on a claimant to show that “there is no other compelling reason” why the case should go to trial.
CPR Part 24 states:
24.2 The court may give summary judgment against a claimant or defendant on the whole of a claim or on a particular issue if –
(a) it considers that –
(i) that claimant has no real prospect of succeeding on the claim or issue; or
(ii) that defendant has no real prospect of successfully defending the claim or issue; and
(b) there is no other compelling reason why the case or issue should be disposed of at a trial.
WHERE DOES THE BURDEN OF PROOF LIE IN A “COMPELLING REASON” ARGUMENT?
Can it be taken from that there is a burden on an applicant for summary judgment to establish “there is no other compelling reason”?
WHAT THE WHITE BOOK SAYS
The white book (24.2.5) cites ED&F Man Liquid Products Ltd –v- Patel  EWCA Civ 472 as authority for the proposition that “… the overall burden of proof rests on the applicant to establish that there are grounds to believe that the respondent has no real prospect of success and that there is no other reason for trial.”
However, on reading that case, there does not appear to be any express reference to the burden of proof in relation to the issue of “no other compelling reason”.
THE PRACTICE DIRECTION (PD 24)
The Practice Direction puts an obligation on an applicant for summary to state in the application notice “that the applicant knows of no other reason why the disposal of the claim or issue should await trial.”
However the requirement in the practice direction does not necessarily impose a burden on an applicant. Indeed it is difficult to prove a negative.
THE APPROPRIATE TEST
The appropriate test is surely that it is for the applicant to persuade a court that the respondent has no real prospect of success. If the court is satisfied with this it is for the respondent to show that there is a compelling reason why the case or issue should be disposed of at trial. The applicant may well have to state this in the application; however it is for the respondent to show the court that there remains a “compelling reason” why the matter should proceed in any event.
CASE LAW ON “NO OTHER COMPELLING REASON”
It is significant that even the white book notes cite cases that pre-date the CPR. The old Order 14 did indeed put the burden on the defendant to an application to satisfy the court that there was “an issue or question in dispute which ought to be tried or that there ought for some other reason to be a trial of that claim or part.”
That rule in relation to “some other reason” was introduced in 1965 but the rationale pre-dated this by some time. In Daimler Co Ltd –v- Continental Tyre  2 AC 307 the court refused to give summary judgment on a trade debt that was undoubtedly due. This was on the grounds that the claimant (although ostensibly English) was a German owned company. The UK was at war with Germany at the time.
In Miles –v- Bull  3 ALL ER 632 Megarry J found that there was no there was no arguable defence in a ground for possession where an estranged husband had sold a house (at full price) to his brother who sought to evict an ex-wife. However he refused summary judgment on the grounds that it was “too near the knuckle”, all the relevant facts were in control of the claimant and there were circumstances which required to be investigated by process of trial and cross-examination.
There were observations made by Cairns L.J. in Bank fur Gemeinwirtschaft AG v City of London Garages Ltd  1 W.L.R. 149
“It is not difficult to think of other circumstances where it might be reasonable to give leave to defend although no defence was shown: for example, if the defendant was unable to get in touch with some material witness who might be able to provide him with material for a defence; or if the claim were of a highly complicated or technical nature which could only properly be understood if oral evidence were given; or if the plaintiff’s case tended to show that he had acted harshly and unconscionably and it was thought desirable that if he was to get judgment at all it should be in the full light of publicity.”
However the Court went on to find that there was nothing to prevent summary judgment in that case.
The issue was also considered by Bingham LJ in Robert Simcock & Son –v Mark Peterson (CA July 14,1989)
[counsel for the defendant] advanced a further argument that the court should refuse to give judgment for the plaintiffs in its discretion. But it must be borne in mind that what the plaintiffs here seek is not an equitable remedy, but a common law judgment for the sum due under a bill of exchange. If the conclusion of the court is that there is no defence to that claim and if there is not within the wording of Order 14 some other reason why the matter should be tried, in my judgment the court has no discretion so far as giving judgment is concerned, but must give judgment for the plaintiffs. That is, as I see it, the position here.
THE OPEN ISSUE
It is an open issue of whether once an applicant has satisfied the court that the respondent to the application has not real prospect of succeeding that applicant has to go on to prove that there is no other compelling reason why the case should not go to trial.
The rule itself does not put the burden on the applicant, it states that the court may give summary judgment “if it considers that….”.
The appropriate construction is that it is for the respondent to raise the issue/argument and satisfy the court that there is a compelling reason. To put a second burden on an application, in circumstances where the court is satisfied that there is no real prospect of the respondent succeeding, is too high.
WHAT ABOUT THE SARGESPACE CASE?
The issue of “other compelling reason” did not fall to be decided in the case. The judge found that this was a highly unusual set of circumstances; that the documents were far from conclusive and that these were matters that needed to be investigated at trial. This decision was made on more conventional summary judgment grounds – that the claimant had failed to establish that the defendant had no real prospect of succeeding at trial.
“I am not prepared to conclude on the present state of the evidence that Miss Eustace’s evidence should be rejected and that Mr Baxendale-Walker’s should be accepted on all points on which they are in dispute. On the contrary, it seems to me on the basis of the material provided so far that there is likely to be fertile ground for cross-examination on both sides, and that the case may well look rather different at the end of a trial from the way in which it appears today.”
The case is reported at http://www.bailii.org/ew/cases/EWHC/QB/2013/2944.html
PART 24 PRACTICE DIRECTION http://www.justice.gov.uk/courts/procedure-rules/civil/rules/part24/pd_part24