It is worth reminding oneself of the judiciary’s approach to determining a question of pure contractual construction in the context of a summary judgment application.
Typically, the situation is one where the court has been asked to exercise its discretion to grant a declaration that one party’s contended for contractual construction is correct, with the other party having no real prospect of succeeding on the issue/claim and there being no other compelling reason why the issue/claim should be disposed of at trial.
In BBC Worldwide v Bee Load, Toulson LJ outlined the approach to be adopted in such circumstances. At paragraph 24 of his judgment, he described the issue in the following terms:
“…how the court should proceed where the issue raised is a pure point of construction which can be as well determined on a summary application as on a full trial (or a trial of preliminary issues), because it will not be affected by evidence”.
Having presented the issue in this way, Toulson LJ concluded that “…if at the end of the argument the court comes to a clear view as to the correct construction, the court has jurisdiction to grant summary judgment under CPR 24.2 on the basis that a trial would have no realistic prospect of causing it to reach a different judgment” (emphasis added).
He went on to observe, at paragraph 25, that if summary judgment is given on points of construction “it is because they appear to the judge to be clear as a matter of English law” (emphasis added).
In the recent case of Black Diamond v Fomento de Construcciones y Contratas, Barling J held that he should approach the issue of contractual construction in that case on the basis set out by Toulson LJ in BBC Worldwide.
The take away point is that, if in the context of such an application the court comes to a “clear view” as to the correct contractual construction, it has jurisdiction to grant summary judgment on that issue/claim. Whereas in other contexts practitioners might consider that convincing the court that a defence has a certain percentage, eg 30-40%, prospect of success at trial should be sufficient to successfully withstand a summary judgment application, it is apparent that the position in respect of contractual construction questions is different. In short, assuming there is no realistic prospect of further relevant evidence, the court may proceed to determine the question there and then.
