In Malik v Henley Homes plc [2023] EWCA Civ 726, the Court of Appeal (Lewison, King and Nugee LJJ) upheld a decision to grant summary judgment against a defence alleging an oral contract.
The Respondent, Mr Malik, was a shareholder and former director of the Appellant company. He claimed the outstanding balance of director’s loans (of at least £2.3 million) which he had lent the company. The company alleged that Mr Malik and his fellow shareholders had reached an oral agreement over 20 years ago that the loans could not be repaid (save in the event of a sale or liquidation of the company), unless all three shareholders consented.
The Court of Appeal upheld the decision of the Judge (Stuart Isaacs KC, sitting as a Deputy High Court Judge) to grant summary judgment against this defence. There were no traces of the alleged oral agreement in any documents and it was contradicted by the company’s own documents. The company’s pleading and witness evidence provided scant support for its case. The position would not be any different at trial either.
This was a case when summary judgment could be granted against an allegation of an oral contract, applying the well-known test in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch).
The Court also decided that, even though the Judge’s decision had been made on paper, without hearing oral evidence, it still required an appellate court to show respect and reticence before overturning it. The decision on summary judgment (in a case like this) was an evaluative exercise on the facts, and an appellate court should only disturb a decision if it was not open to the Judge to reach it: [78]-[79].
Please click here for the judgment.
Adam Solomon KC and Alexander Halban appeared for the successful Respondent in the Court of Appeal, and Alexander Halban appeared alone before the Judge, instructed by John Sykes and Rory Partridge of Charles Russell Speechlys LLP.
