Bull & Ors v Gain Capital Holdings Inc & Ors

Applications for summary judgment or strike-out should not determine novel and developing questions of statutory interpretation where the pleaded facts disclose a realistic prospect of success and a fuller trial may affect the outcome. The court should avoid a mini-trial, while analysing whether factual assertions have real substance. Statutory remedies under the Financial Services and Markets Act 2000 do not expressly identify all persons against whom they may be sought; whether they extend to participants in a joint enterprise is therefore a substantial question best decided at trial. Alleged contractual limits on authority, foreign-law evidence and the distinction between actual and ostensible authority may likewise require factual examination. Acquiescence in an intermediary’s activities may arguably support ostensible authority.

Investors who lost money through Cameron Farley Limited brought claims against Gain Capital Holdings Inc and related companies. They alleged that Gain was involved in unlawful regulated activities and financial promotion under the Financial Services and Markets Act 2000. They sought statutory remedies and advanced joint-enterprise and agency theories.

The Gain defendants applied for summary judgment under CPR 24 or strike-out under CPR 3.4. They argued that the statutory remedies were available only against contractual counterparties and that there was no arguable basis for actual or ostensible authority. The central issues were whether those questions could properly be resolved summarily and whether the pleaded case had a real prospect of success.

1. Applications refused. The court could not rule out the possibility that the claimants would succeed at trial.
2. Under CPR 3.4(2)(a), a claim may be struck out where the pleaded facts, even if true, disclose no legally recognisable claim. Under CPR 24.2, summary judgment requires both no real prospect of success and no other compelling reason for trial. The principles summarised in EasyAir Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) applied. The court must distinguish a realistic claim from a fanciful one, avoid a mini-trial, consider evidence reasonably expected at trial, and determine a short point of law where the evidence is complete.
3. Claims in novel or developing areas of law should generally be decided on findings made at trial. The joint-enterprise question was novel and difficult. Sections 26, 29 and 30 of the Financial Services and Markets Act 2000 identify the persons entitled to remedies but do not expressly identify against whom those remedies lie. The earlier observations in SIB v Pantell (No 2) [1993] Ch 256 did not resolve the issue.
4. Brown v Innovatorone [2012] EWHC 1321 and Green and Rowley v The Royal Bank of Scotland plc [2013] EWCA Civ 1197 concerned materially different questions. They did not establish that the claimants’ joint-enterprise case was legally impossible. The reasoning in Majrowski v Guy’s and St Thomas’s NHS Trust [2006] UKHL 34, [2007] 1 AC 224 provided arguable assistance for the possibility that a statutory remedy may operate with a common-law principle determining its scope.
5. The agreements between Gain and Cameron Farley appeared to restrict authority, but individuals may have acted inconsistently with them. The claimants’ evidence was arguably consistent with Cameron Farley receiving money as Gain’s agent. The effect of contractual restrictions, the governing law, and the factual application of foreign-law principles could not safely be determined on the present evidence.
6. Acquiescence by Gain in Cameron Farley’s general activities might arguably found ostensible authority, even if it did not amount to authority for a specific transaction. The claims should therefore proceed to trial. The parties were directed to seek agreement on consequential orders.