England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Claim No. HC-2016-001149 The Rolls Building, 7 Rolls Buildings, London EC4A 1NL
		19th December 2016

Master Matthews:

1. An application has been made to me, in the course of hearing an application for summary judgment, that I should give a ruling upon the scope of that application itself. It arises in these circumstances.
2. The application for summary judgment is by notice dated 16^th August 2016, issued by the Claimant. In box 3 of that Application Notice, it says in part:

"The Claimant seeks an order that:

(i) The Claimant be granted summary judgment under CPR Part 24 against the Defendant, because the Claimant believes that the Defendant has no real prospect of succeeding on the non-competition issues pleaded at paragraphs 35-39, 54(a) and (b), 55-57 of the Defence and Counterclaim and paragraphs 2 and 5-9 of the Rejoinder for the reasons set out in the second witness statement of Ian Springett dated 16 August 2016 and the Claimant knows of no other compelling reason why those issues should be disposed of at a trial ..."

There is then an application for costs.

3. In box 10, there is a statement that the information that the Claimant will be relying on in support of the application is the attached witness statement, which is the second witness statement of Mr. Ian Springett, dated 16^th August 2016, and the evidence "set out in the box below", although that does not take the matter any further. The evidence of Mr. Springett in the witness statement to which I have referred sets out particular evidence in relation to the summary judgment application, which is concerned with a number of points which have been raised.
4. In order to make this ruling intelligible, I must begin with a short summary of the case itself. The Claimant is a company which had the idea of seeking to break into the presumably lucrative market for web portals which hold details of available properties from different estate agents, thus making it possible for seekers of property to go to one place to find details of properties which might suit them and then to follow that up by going to the estate agents concerned. There are two big players in the market for this kind of web portal at present: Rightmove, which is apparently the number 1, and Zoopla, which is apparently the number 2.
5. The Claimant company was intended, it appears, to be a mutual company, in the sense that it would be owned by its estate agent members. However, there is an important point in the business model. This is that it was thought that it would only work if there was to be a rule that an estate agent who used this portal of the Claimant's would be bound not to advertise on more than one other portal. In practice, this would be either Rightmove or Zoopla. This is the "One Other Portal" rule.
6. In the litigation itself, which was begun by Claim Form dated 12^th April 2016, the Claimant sought an injunction restraining the Defendant, an estate agent, from acting in breach of contract. The contract concerned was the Agreement, dated 20^th January 2014, under which the Defendant agreed to sign up to use of the Claimant's portal and, in particular, to the "One Other Portal" rule. The claim for an injunction in breach of that contract was based on allegations, which I think are not denied, that for some time the Defendant estate agent was in fact advertising properties on all three portals: those of the Claimant, Rightmove and Zoopla.
7. A Defence and Counterclaim were filed in which the Defendant sought to turn the tables by saying that the Agreement and, in particular, the "One Other Portal" rule was no longer binding on the Defendant, if it indeed ever had been, by reason of a number of particular defences and, indeed, counterclaims. One related to misrepresentations alleged to have been made on behalf of the Claimant to the Defendant by various means, including presentations which were made during the initial start-up process when estate agents were being asked to sign up as members of the Claimant and agree to the "One Other Portal" rule. Another cause of action being put forward by the Defendant is breach of contract, by reference to an allegation that some of these representations were incorporated as terms into the contract which was entered into on 20^th January 2014.
8. For present purposes, the exact details of these do not matter. What I have is an application for summary judgment on the part of the Claimant, seeking an order giving judgment to the Claimant, not in relation to its claim, but in relation to the Defendant's counterclaim. In the Claimant's skeleton argument prepared and submitted for the purposes of this application, paragraph 2 states:

"It is submitted that [the Defendant's] Claims have no real prospect of succeeding and that there is no other compelling reason for them to be disposed of at a trial. In summary:

(1) The alleged representations are all non-fraudulent representations as to [the Claimant's] intentions for the future and are not therefore actionable;

(2) In any case, liability for misrepresentation is excluded by the disclaimer, discussed below ("the Disclaimer");

(3) Rescission is barred by affirmation;

(4) The alleged representations were not incorporated as terms of the agreement between the Claimant] and [the Defendant] ("the Agreement"); and

(5) In any case, contractual liability in respect of the alleged representations is also excluded by the Disclaimer."

9. The "Disclaimer" referred to is a document to which I have been taken on several occasions during the course of this argument. I need not deal with its terms at this stage, but suffice for the moment to say that it is a lengthy and complex disclaimer clause. At some point some decisions will have to be made about what it means and what it extends to.
10. In relation to the five heads upon which the Claimant in this application submits that it is entitled to summary judgment by way of defence to the Defendant's counterclaim, it is agreed to be common ground that the first of these points is not pursued in today's application and I need not consider it further. There remain, therefore, four different possible heads or bases upon which the Claimant seeks summary judgment.
11. Of these (the second to fifth issues), the position between the parties is that it is common ground that the second and fifth are and remain in issue. Accordingly, I need not deal with those further for the purposes of this ruling.
12. The question arises, however, as to whether the third and the fourth of these five issues are within the scope of this application at all. The third, it will be recalled, is the question of rescission being barred by affirmation and the fourth is that the alleged representations were not incorporated into the contract between the parties.
13. By way of background, it is necessary to understand that there are parallel proceedings dealing with competition law issues in this case, which were effectively hived off into the Competition Appeal Tribunal. Mr. Justice Roth, sitting both as a Judge of this division and also as President of the Competition Appeal Tribunal, made certain directions in this case, effectively staying the Chancery proceedings, save for certain exceptions. He did this in an order dated 26^th July 2016, in which it was ordered, and it is recorded as "By consent", that:

"The part of the proceedings which has not been transferred to the Competition Appeal Tribunal [from the Chancery Division] be stayed save for (i) the Defendant's pending applications for security for costs and for fortification of the Claimant's cross-undertaking given on 19^th April 2016; and (ii) the hearing of any application for summary judgment to be made by the Claimant, on a date to be fixed, such application to be issued by not later than 4pm on 16^th August 2016."

14. As I have already said, the Application Notice that was issued in this case is dated 16^th August 2016. On the copy in the bundle, it gives the time at which it was issued as 3.45p.m. Thus the application was within the deadline set by Mr. Justice Roth. That application was effectively not stayed with the rest of the claim, even though at the date on which Mr. Justice Roth was sitting it had not been issued. I have already read the main terms of the application.
15. I must also now consider the terms of the Practice Direction to Part 24 of the Civil Procedure Rules, which deals with summary judgment. Paragraph 2(3) of that Practice Direction reads as follows:

"(3) The application notice or the evidence contained or referred to in it or served with it must –

(a) identify concisely any point of law or provision in a document on which the applicant relies, and/or

(b) state that it is made because the applicant believes that on the evidence the respondent has no real prospect of succeeding on the claim or issue or (as the case may be) of successfully defending the claim or issue to which the application relates,

and in either case state that the applicant knows of no other reason why the disposal of the claim or issue should await trial."

16. There is no question but that in this case the application certainly makes the last of those statements, i.e. that the Applicant knows of no other reason why the disposal of the claim or issue should await trial. The argument has been over whether the third and fourth of the five points in the Claimant's skeleton have been concisely stated, either in the Application Notice or in the evidence contained or referred to in it.
17. In particular, Mr. Grant QC for the Defendant says that the Application Notice does not identify the point that rescission is barred by affirmation, which he says is a matter of law for this purpose. Neither (he says) does it identify the point about the incorporation of the alleged representations as terms of the agreement. Therefore, he says, he was misled in preparing for this application by thinking that the only questions which were going to be debated were the questions raised in points (2) and (5); that is to say the scope of the Disclaimer, to which I have already referred.
18. Mr. Maclean QC says that the Application Notice refers to the paragraphs in the Defence and Counterclaim and in the Rejoinder where these issues are raised, including questions relating to rescission and breach of contract. I accept that they refer to rescission and breach of contract, but the question is whether they refer to the points of law involved, ie the rescission being barred by affirmation and the incorporation of representations as terms.
19. The Application Notice refers to paragraphs 35 to 39. I am not going to read those out now, but it is clear that those paragraphs give particulars of the alleged misrepresentations. So far as I can see, there is nothing in paragraphs 39 or 54(a) and (b) which deals with affirmation as thereby putting an end to any claim for rescission. As to paragraphs 55 to 57, again I cannot see anything there which deals with the affirmation defence. Paragraphs 2 and 5 to 9 of the Rejoinder seem to me to be of the same stamp. There is nothing there, so far as I can see, which deals with affirmation.
20. In my judgment, the point being made by Mr. Grant does have some force. If, as I consider it is, the purpose of paragraph 2(3) of the Practice Direction is to enable a party to be clear about the case which it has to meet, it seems to me that that has not happened here. Accordingly, on the face of it, there is a failure to comply with the Practice Direction. The scope of the Application Notice, albeit dealing in general terms with some issues which have arisen in the case, is not actually dealing with the points raised at (3) and (4) of paragraph 2 of the skeleton argument on behalf of the Claimant. I have not dealt specifically with the question of non-incorporation, but the same remarks, in my judgment, apply in the same way to the affirmation argument.
21. The result is that the scope of this application ought to be restricted to the Disclaimer and this to issues (2) and (5) of the second paragraph of the Claimant's skeleton argument. In those circumstances, especially given that it is now 4.25p.m. and we will have to adjourn the hearing in any event, what I propose to do is to adjourn the hearing over until a date to be discussed with counsel, when the remainder of the application can be heard.
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