In Caribonum Pension Trustee Ltd & Anor v Pelikan Hardcopy Production AG [2018] EWHC 2321 (Ch) Master Clark rejected an argument that the fact that a defendant was never going to be able to pay a judgment meant that the action was an abuse of process.

The general position is that an absence of assets to satisfy a judgment is not a ground for not granting judgment; and in my judgment, an inability to enforce a judgment for other reasons is directly analogous”


The claimant pension fund brought an action seeking the contributions that the defendant should have paid into the fund.   The defendant was in liquidation.  The defendant filed a defence, the claimant applied for summary judgment.


One of the arguments put forward by the defendant was rejected by the Master on, inter alia, it was not a matter pleaded in the defence.

  1. The first point to note is that the Defence does not in fact plead that it was a term of the Guarantee that the defendant’s liability under it was limited to the extent of its freely disposable reserves; nor does it plead that there was a collateral contract to the like effect, or, indeed, the necessary elements of such a contract: offer, acceptance, consideration. There is no application to amend to plead these matters. This would be sufficient for the claimant to succeed in its application. Nonetheless, I consider the defendant’s arguments on their merits.


Abuse of process
    1. The defendant relies upon a number of features of the statutory framework and factual circumstances surrounding the claim:
(1) The claimant’s entitlement to claim for unpaid employer contributions against the National Insurance Fund, via the Redundancy Payments Service – under s.228 (3) Pensions Act 2004, which creates a statutory debt in the sum of the unpaid contributions;
(2) The claim by the PPF in the liquidation of the Employer for the entirety of the Scheme debt;
(3) The fact that any sums recovered by the claimant will only reduce the amount of compensation paid by the PPF when it assumes responsibility for the Scheme.
These are said to have the consequence that there is no proper basis on which to bring this claim. In my judgment, they are irrelevant to the question of whether the claimant is entitled to judgment against the defendant in respect of its liabilities under the Guarantee.
    1. A more formal defence of abuse of process arises from the assertion that even if the defendant is liable under the Guarantee, any judgment against it will be unenforceable. This fact, the defendant’s counsel submitted, tainted the claimant’s purpose in bringing the claim, its true purpose being to put pressure on the Parent, with whom the claimant has no legal relationship.
Abuse of process – legal principles
    1. The parties were agreed on the principles applicable to abuse of process by way of an improper collateral purpose, which so far as relevant are:
(1) The institution of proceedings with an ulterior motive is not of itself enough to constitute an abuse: an action is only that if the Court’s processes are being misused to achieve something not properly available to the claimant in the course of properly conducted proceedings: Broxton v McClelland (No. 1) [1995] EMLR 485 at 497;

(2) When a litigant sues to redress a grievance no object which s/he may seek to obtain can be condemned as a collateral advantage if it is reasonably related to the provision of some form of redress for that grievanceGoldsmith v Sperrings Ltd [1977] 1 WLR 478 (CA) at 503.

Abuse of process – submissions, discussion and conclusions
    1. The claimant’s counsel submitted that it was pursuing the claim for the simple and appropriate purpose of securing payment of the sums due under the Guarantee; and that that was not an abuse of process.
    2. As to enforceability, the claimant’s position is that it believes that the Guarantee is or may be enforceable at least as to part; if not in Switzerland, then against non-Swiss assets or under an inter-company indemnity. However, the claimant does not identify any non-Swiss assets of the defendant, and it is not a party to the relevant indemnity, so these seem to be unlikely to be fruitful sources of recovery. In my judgment, the defendant has a real prospect of showing that its liability under the Guarantee is not enforceable.
    3. As to whether the commercial pressure placed on the defendant and the Parent renders the claim an abuse, the claimant submitted that this type of pressure was of a type “ordinarily encountered in the course of properly conducted litigation” (Broxton at [3]) and reasonably related to the provision of some form of redress for [the breach of the Guarantee]” (Goldsmith at p503); and is not therefore an abuse of process.
    4. I do not accept that an inability to enforce the judgment against the defendant, and only to obtain satisfaction of the judgment through the Parent’s wish to support its subsidiary renders this claim an abuse. If the claimant has, as I have held, a valid claim under the Guarantee, then it is entitled to judgment; and the possibility that its judgment may be satisfied by someone other than the defendant is not an improper collateral advantage.
    5. The general position is that an absence of assets to satisfy a judgment is not a ground for not granting judgment; and in my judgment, an inability to enforce a judgment for other reasons is directly analogous. The commercial pressure on the Parent derives not from the claim itself; but from the defendant being unable to satisfy the judgment from its own resources. That pressure is not, in my judgment, a “collateral advantage” sought by the claimant in bringing the claim. Indeed, in this case, it would be open to the Parent not to “bail out” the defendant, and to leave the judgment debt unsatisfied – the existence of the judgment does not ensure that the claimant will receive satisfaction of it.
  1. For the reasons set out above, therefore, I will grant summary judgment for the claimant.