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All England Law Reports/1994/Volume 1 /National Westminster Bank pl ! "aniel and ot#ers $
%1994& 1 All ER 1'(
%1994& 1 All ER 1'(
National Westminster Bank plc v Daniel and others
COURT OF APPEAL C!"!L D!"!#!ON
$L!DEWELL AND BUTLER%#LO## L&&
'( FEBRUAR) '((*
Practice - Summary judgment - Leave to defend - Unconditional leave to defend - Test of whether
leave should be granted - Defendant seeking unconditional leave to defend - Defendant's
affidavits giving conflicting evidence - hether fair or reasonable !robability of defendant having
a real or bona fide defence - hether defendant having credible defence - "S# $rd %&'
)n an appliation *+ t#e plainti,, ,or summar+ -udgment under R./ )rd 14 a de,endant seeking
unonditional lea!e to de,end must satis,+ t#e ourt t#at t#ere is a ,air or reasona*le pro*a*ilit+ o,
#is #a!ing a redi*le de,ene and not merel+ t#at t#ere is a ,aint possi*ilit+ t#at #e #as a de,ene0
1, it is not redi*le2 t#en t#ere is no ,air or reasona*le pro*a*ilit+ o, #im setting up a de,ene0 1, t#e
a,,ida!its in support o, t#e appliation ,or lea!e to de,end gi!e on,liting e!idene t#e ourt ma+
onlude t#at2 *eause t#e+ annot *ot# *e orret and t#e inonsisten+ is su# as to ast
dou*t on w#et#er eit#er is orret2 t#ere an *e no ,air or reasona*le pro*a*ilit+ o, t#e de,endant
#a!ing a real or *ona ,ide de,ene 3see p 1'9 c d f g and p 1(4 a b d e h2 post50
"itum o, Akner L6 in (an)ue de Paris et des Pays-(as *Suisse+ S, v de -aray %1974& 1 Llo+d8s
Rep 21 at 29 applied0
"itum o, We*ster 6 in Paclantic .inancing #o /nc v 0oscow -arodny (ank Ltd %1979& 1 WLR
14(9 at 14(: disappro!ed0
1%22&3 % ,ll 4" %56 at %57
Notes
;or summar+ -udgment under R./ )rd 14 generall+2 see 9: 8alsbury's Laws 34t# edn5 paras
414$4192 and ,or ases on t#e su*-et2 see 9:395 Digest 3Reissue5 29$4:2 9%:%-9;;60
Cases re+erred to in ,-d.ments
(an)ue de Paris et des Pays-(as *Suisse+ S, v de -aray %1974& 1 Llo+d8s Rep 212 /A0
(hogal v Punjab -ational (ank< (asna v Punjab -ational (ank %1977& 2 All ER 29(2 /A0
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Paclantic .inancing #o /nc v 0oscow -arodny (ank Ltd %1974& 1 WLR 9942 /A< affg %1979& 1
WLR 14(90
Standard #hartered (ank v =aacoub %1994& /A =ransript (990
!nterloc-tor/ appeal and cross%appeal
=#e seond de,endant2 Paul Leonard .tep#en >ar!e+2 appealed ,rom t#e order o, 6o#n
"+son ?/2 sitting as deput+ -udge o, t#e >ig# /ourt in t#e ?ueen8s Ben# "i!ision on
14 No!em*er 1992 w#ere*+ #e ga!e @r >ar!e+ lea!e to de,end t#e appliation made
*+ t#e plainti,,2 National Westminster Bank pl2 ,or summar+ -udgment on a writ o,
summons dated 9 6une 1992 laiming t#e sum o, A1912:'7 ,rom @r >ar!e+ and ot#ers
under a guarantee o, t#e lia*ilities o, a ompan+2 6omini >ig#lig#t pl2 *ut made t#e
lea!e onditional on @r >ar!e+ pa+ing into ourt t#e sum o, A2'2444 wit#in 42 da+s0
=#e *ank ross$appealed2 seeking an order t#at -udgment *e gi!en ,or A1912:'72 t#e
,ull sum in dispute2 plus interest2 or alternati!el+ t#at @r >ar!e+ #a!e lea!e to de,end
onditionall+ on #im pa+ing into ourt t#e ,ull sum in dispute plus interest0 =#e ,ats are
set out in t#e -udgment o, Blidewell L60
Ste!hen >ones *instructed by #oo!er #arter #laremont< 8ailsham+ for 0r 8arvey'
,li 0alek *instructed by /sadore ?oldman+ for the bank'
$L!DEWELL L&0 B+ a speiall+ indorsed writ issued on 9 6une 1992 t#e plainti,,2 National
Westminster Bank pl2 laimed against t#ree de,endants2 o, w#om t#e present appellant2 @r Paul
>ar!e+2 was t#e seond2 upon a guarantee signed *+ ea# o, t#em2 guaranteeing t#e lia*ilit+ to
t#e plainti,, *ank o, 6omini >ig#lig#t pl0 =#e prinipal sum laimed was A1912:'7C49'(2 w#i#2
toget#er wit# interest2 ame to A1442744C49:90
Neit#er t#e ,irst nor t#e t#ird de,endant ga!e notie o, intention to de,end2 and -udgment in de,ault
was entered against t#em0
=#e plainti,, made appliation under R./ )rd 14 ,or summar+ -udgment against @r >ar!e+0 )n 9
)to*er 1992 t#e master #ad *e,ore #im two a,,ida!its sworn *+ @r .#a,,er 3t#e soliitor ating
,or t#e plainti,,5 and an a,,ida!it sworn *+ @r >ar!e+ on 24 6ul+ 19920 =#e master ordered t#at @r
>ar!e+ mig#t #a!e lea!e to de,end upon t#e pa+ment into ourt o, t#e w#ole o, t#e sum laimed
3not inluding interest50
>e was reDuired to make t#at pa+ment into ourt wit#in 27 da+s< i, #e did not do so2 t#e plainti,,
mig#t enter ,inal -udgment against #im ,or t#e apital sum2 wit# interest0
@r >ar!e+ appealed t#at deision0 )n 14 No!em*er 1992 @r 6o#n "+son ?/2 sitting as a deput+
-udge o, t#e >ig# /ourt2 allowed t#e appeal to t#e eEtent o, reduing t#e sum reDuired to *e
*roug#t into ourt as a ondition ,or lea!e to de,end to t#e sum o, A2'24440
1%22&3 % ,ll 4" %56 at %5@
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@r >ar!e+ appeals ,urt#er to t#is ourt against t#at deision on t#e *asis t#at #e is una*le to pa+
an+ sum at all0 >e seeks lea!e to addue additional e!idene *e,ore t#is ourt w#i# was not
*e,ore t#e -udge2 and #e urges us to sa+ t#at t#e proper ourse was to grant #im unonditional
lea!e to de,end0
=#e plainti,, *ank ounter$appeals2 arguing t#at2 on t#e material *e,ore t#e -udge2 lea!e to de,end
s#ould not *e gi!en0 =#eir e!idene inluded a seond a,,ida!it sworn *+ @r >ar!e+ on ' )to*er
19922 toget#er wit# a t#ird a,,ida!it sworn on 21 )to*er 19922 and a s#ort a,,ida!it sworn *+ @r
>olste2 t#e manager 3at t#e rele!ant time5 o, t#e *ran# o, t#e plainti,, *ank wit# w#i# @r >ar!e+
dealt2 on,irming @r .#a,,er8s a,,ida!it0
@r @alek ,or t#e plainti,, *ank su*mits t#at t#e proper ourse is to enter -udgment ,or t#e plainti,,
*ank in t#e sum laimed0
1 start *+ onsidering w#at is t#e proper test ,or t#e ourt to adopt in irumstanes w#ere 3as
#ere5 it #as *e,ore it2 on an appliation ,or summar+ -udgment under )rd 142 a,,ida!its w#i# gi!e
ompletel+ on,liting aounts o, a transation0
/#ronologiall+ t#e matter *egins wit# a -udgment o, We*ster 6 in Paclantic .inancing #o /nc v
0oscow -arodny (ank Ltd %1979& 1 WLR 14(92 in w#i# t#is !er+ situation arose0 =#e -udge said
3at 14(:5F
8W#ere in matters o, t#is kind lea!e to de,end is gi!en t#e su*seDuent trial2 i, it takes plae2 ma+ take
man+ mont#s and t#e *ank ma+ *e kept out o, mone+ to w#i# it is entitled ,or man+ +ears0 )n t#e ot#er
#and2 i, summar+ -udgment is gi!en2 a de,endant ma+ *e depri!ed o, a legitimate de,ene wit#out trial2
wit#out e!en #a!ing *een #eard and wit#out #is e!idene #a!ing *een #eard and tested0 1t does not
seem to me t#at ross$eEamination o, t#e de,endant on #is a,,ida!it is likel+ to assist0 1, t#e ase is
ompliated t#e preparation ,or and #earing o, t#e ross$eEamination ma+ in!ol!e almost as mu# time
and eEpense as t#e trial0 1, t#e ase is straig#t,orward a speed+ trial ould *e ordered0 But in t#e
a*sene o, an opportunit+ to test t#e de,endant8s !erait+2 it seems to me t#at t#e ourt s#ould ne!er
gi!e summar+ -udgment ,or t#e plainti,, w#ere2 upon t#e e!idene *e,ore it2 e!en a ,aint possi*ilit+ o, a
de,ene eEists08
=#en in relation to t#at partiular ase2 #e said 3at 14(:5F
81 onlude2 t#ere,ore2 t#at 1 an re-et @r0 Wong8s a,,ida!it2 or an+ e!idene ontained in it onl+ i, t#e
a,,ida!it2 or t#at e!idene2 is in#erentl+ unrelia*le *eause it is sel,$ontraditor+2 or i, it is inadmissi*le2 or
i, it is irrele!ant0 1 onlude t#at 1 ould re-et a de,endant8s e!idene w#en t#ere is a,,irmati!e e!idene
w#i# is eit#er admitted *+ t#e de,endant or un#allengea*le *+ #im2 and w#i# is uneDui!oall+
inonsistent wit# #is own e!idene< and w#ere no2 or no plausi*le2 eEplanation is gi!en o, t#e
inonsisten+< *eause in su# a ase 1 ould2 *ut would not neessaril+2 onlude t#at on t#e e!idene
not e!en a ,aint possi*ilit+ o, a de,ene eEisted0 But 1 onlude t#at 1 s#ould not re-et t#e de,endant8s
e!idene i,2 merel+ *eause o, its in#erent implausi*ilit+ or its inonsisten+ wit# ot#er e!idene2 1 ,ind it
inredi*le or almost inredi*le80
=#at ase ame on appeal to t#is ourt2 w#i# up#eld t#e deision o, We*ster 62 *ut gi!ing t#e
-udgment o, t#e ourt Ro*ert Bo,, L6 said 3%1974& 1 WLR 994 at 9995F
1%22&3 % ,ll 4" %56 at %52
8=#ere #as not *een2 *e,ore t#is ourt2 eit#er ,ull itation o, aut#orit+ or ,ull argument upon t#is point
%re,erring to We*ster 68s o*ser!ations w#i# 1 #a!e -ust read&0 Aordingl+2 we desist ,rom eEpressing an+
onluded !iew upon it0 We wis#2 #owe!er2 to eEpress our reser!ations a*out a statement w#i# seeks to
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ategorise2 in eElusi!e terms2 t#e irumstanes in w#i# su# a,,ida!it e!idene an *e re-eted08
A,ter We*ster 68s deision2 *ut *e,ore t#e deision o, t#is ourt in Paclantic .inancing #o /nc v
0oscow -arodny (ank Ltd2 t#ere was anot#er deision o, t#is ourt2 (an)ue de Paris et des
Pays-(as *Suisse+ S, v de -aray %1974& 1 Llo+d8s Rep 210 Akner L6 said 3at 295F
81t is o, ourse trite law t#at )0 14 proeedings are not deided *+ weig#ing t#e two a,,ida!its0 1t is also
trite t#at t#e mere assertion in an a,,ida!it o, a gi!en situation w#i# is to *e t#e *asis o, a de,ene does
not2 ipso ,ato2 pro!ide lea!e to de,end< t#e /ourt must look at t#e w#ole situation and ask itsel, w#et#er
t#e de,endant #as satis,ied t#e /ourt t#at t#ere is a ,air or reasona*le pro*a*ilit+ o, t#e de,endants8
#a!ing a real or *ona ,ide de,ene08
)8/onnor L6 agreed0
1n (hogal v Punjab -ational (ank< (asna v Punjab -ational (ank %1977& 2 All ER 29( at 949
Bing#am L62 putting t#e matter di,,erentl+2 saidF
8But t#e orretness o, ,atual assertions su# as t#ese annot *e deided on an appliation ,or
summar+ -udgment unless t#e assertions are s#own to *e mani,estl+ ,alse eit#er *eause o, t#eir
in#erent implausi*ilit+ or *eause o, t#eir inonsisten+ wit# t#e ontemporar+ douments or ot#er
ompelling e!idene08
;inall+2 in Standard #hartered (ank v =aacoub %1994& /A =ransript (99 Llo+d L62 gi!ing t#e
deision o, t#e ourt wit# w#i# Ni#olls L6 agreed2 saidF
81t is sometimes said t#at in an appliation under )rd 14 t#e ourt is *ound to aept t#e assertion o, a
de,endant on a,,ida!it unless it is sel,$ontraditor+ or inonsistent wit# ot#er parts o, t#e de,endant8s
own e!idene2 and t#at t#e ourt annot re-et an assertion on t#e simple ground t#at it is in#erentl+
inredi*le08
Llo+d L6 t#en re,erred to We*ster 68s deision in Paclantic .inancing #o /nc v 0oscow -orodny
(ank Ltd2 sa+ing t#at it was not appro!ed *+ t#e /ourt o, Appeal0 >e t#en re,erred to t#e
-udgment o, Bing#am L6 in (hogal v Punjab -ational (ank and ontinuedF
81n t#e present ase 1 ask m+sel, w#et#er it is redi*le t#at an oral agreement was made in mid$6anuar+
o, 197' as alleged *+ @r Naidoo in #is t#ird a,,ida!it0 1 #a!e ome to t#e onlusion t#at it is not08
1t is rig#t to sa+ t#at in The Su!reme #ourt Practice %229 !ol 12 para 14/9$4/7 re,erene is made
to We*ster 68s deision in relation to t#is matter wit# t#e Duali,iation t#at it was not
w#ole#eartedl+ appro!ed in t#e /ourt o, Appeal0 1n t#e latest supplement2 re,erene is also made
to t#e -udgment o, Akner L6 in t#e (an)ue de Paris ase2 wit# t#e Duali,iation t#at Paclantic
3We*ster 68s deision5 was not ited in t#at ase and t#e editors su*mit t#at t#e (an)ue de Paris
ase s#ould *e ,ollowed0
1%22&3 % ,ll 4" %56 at %6:
1n m+ -udgment t#at last o*ser!ation is orret0 1 regard t#e test ,ormulated *+ We*ster 62 wit#
respet to #im2 as *eing too narrow and too restriti!e0 1 t#ink it rig#t to ,ollow t#e words o, Akner
L6 in t#e (an)ue de Paris ase2 or indeed t#ose w#i# amount to mu# t#e same t#ing 3as 1 see
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it5 o, Llo+d L6 in Standard #hartered (ank v =aacoubF is t#ere a ,air or reasona*le pro*a*ilit+ o,
t#e de,endants #a!ing a real or *ona ,ide de,eneG Llo+d L6 posed t#e testF is w#at t#e de,endant
sa+s redi*leG 1, it is not2 t#en t#ere is no ,air or reasona*le pro*a*ilit+ o, #im setting up a
de,ene0
1n t#is ase t#e learned deput+ -udge adopted Akner L68s test2 and t#ere,ore we annot sa+ t#at
#e misdireted #imsel,0 1t ,ollows2 in m+ -udgment2 t#at essentiall+ we an onl+ di,,er ,rom #im i,
we an sa+ t#at #e was w#oll+ wrong in t#e deision to w#i# #e ame0
.o ,ar we #a!e onl+ #eard argument on t#e plainti,, *ank8s ross$appeal2 so t#ere,ore we are onl+
dealing wit# t#e Duestion w#et#er t#e -udge was w#oll+ wrong in t#e onlusion to w#i# #e ame
on t#e material *e,ore #im2 w#i# is now *e,ore t#is ourt0
%>is Lords#ip t#en onsidered t#e e!idene and stated t#at t#e aounts gi!en in @r >ar!e+8s two
a,,ida!its2 relating to t#e alleged dis#arge o, personal guarantees gi!en *+ t#e two de,endants2
were totall+ inonsistent and ould not *ot# *e orret2 w#i# ast dou*t upon w#et#er eit#er o,
t#em were orret0 >is Lords#ip ontinuedF& 1n m+ -udgment2 upon t#at material2 t#e onl+ proper
onlusion to w#i# t#e -udge ould #a!e ome was t#at t#e aount gi!en *+ @r >ar!e+ o, an
agreement rea#ed wit# t#e *ank manager o, 12 )to*er 1994 to release t#e personal
guarantees was inredi*le2 to use t#e words o, Llo+d L60 1n ot#er words2 it ,alls ,airl+ and sDuarel+
wit#in Akner L68s ditum0
Looking at t#e w#ole situation 1 onlude t#at t#ere is no ,air or reasona*le pro*a*ilit+ o, t#e
de,endant #a!ing a real or *ona ,ide de,ene0
@r 6ones #as not soug#t to argue as an alternati!e2 and logiall+2 o, ourse2 #e ould not possi*l+
#a!e done so2 t#at2 i, t#e ourt took t#e !iew t#at t#ere was no argua*le de,ene in relation to t#e
)to*er meeting2 t#ese ould onei!a*l+ *e a de,ene in relation to t#e alleged agreement in
6une0
Aordingl+2 wit# t#e greatest respet to #im2 1 take t#e !iew t#at t#e deput+ -udge was plainl+
wrong in t#e deision to w#i# #e ame on t#is material< t#at alt#oug# in terms #e applied t#e
rig#t test2 #e understood it 3per#aps t#is is t#e eEplanation5 too narrowl+ and aordingl+ #e ,ell
into error0
;or t#at reason 1 would allow t#e appeal< 1 would set aside t#e -udge8s order and 1 would enter
-udgment ,or t#e plainti,, *ank in t#e sum laimed0
BUTLER%#LO## L&0
;or t#e reasons gi!en in t#e -udgment o, Blidewell L62 wit# w#i# 1 respet,ull+ agree2 1 agree t#at
t#e ross$appeal s#ould *e allowed and t#at t#e appeal s#ould *e dismissed0
,!!eal dismissed' #ross-a!!eal allowed'
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Raina Le!+ Barrister0