S&B Consultancy Services Limited v Robert Bourn & Anor.

On an application for summary judgment or strike out, the court may decide a short point of law or construction where the necessary evidence is available and the parties have had a proper opportunity to argue it. It should hesitate where the issue is novel, concerns developing jurisprudence, or may be materially informed by findings at trial.

Under section 26(3)(b) of the Financial Services and Markets Act 2000, an agreement is within section 26 only if its making or performance constitutes, or is part of, the regulated activity in question. The reference to performance may extend beyond acts strictly required by the agreement, but the acts must in some way be regulated by the contract. The question was unsuitable for summary determination on the assumed facts.

The claimant sought summary judgment and/or strike out of the defendants’ defence that an Introductory Agency Agreement was unenforceable under section 26 of the Financial Services and Markets Act 2000. The claimant accepted, for the application only, that it had carried out the alleged regulated activities in breach of section 19.

The dispute concerned whether those activities were performed under, or formed part of the performance of, the agreement within section 26(3)(b). The agreement expressly required introductions but provided a fee only if an introduced funder entered into a relevant contract. The claimant’s wider activities included discussions, negotiations, drafting and advice. The central issue was whether the statutory and contractual connection could properly be determined without findings at trial.

1. Application dismissed. The claimant’s application for summary judgment and/or strike out of paragraphs 43 to 54 of the defence was dismissed.
2. The ordinary summary judgment approach was applicable. The court may decide a short point of law or construction where it has the evidence necessary for proper determination and the parties have had an adequate opportunity to address it. It should not conduct a mini-trial. It should hesitate where a fuller investigation of the facts might affect the result: EasyAir Limited v Opal Telecom Limited [2009] EWHC 339 (Ch).
3. There was no material difference between the summary judgment and strike-out tests in this application. However, strike out was not normally appropriate on assumed facts in an area of developing jurisprudence: Begum v Maran (UK) Limited [2021] EWCA Civ 326; Farah v British Airways (The Times, 26 January 2000, Court of Appeal).
4. Section 26(1) requires the agreement to have been made in the course of carrying on the regulated activity. Section 26(3) separately defines and limits the agreements to which section 26 applies. Both provisions must be satisfied on their own terms. The words “making or performance” in section 26(3)(b) should not simply be read back into section 26(1).
5. The court inclined to the view that “performance” in section 26(3)(b) extends beyond acts strictly required by the agreement. It may include conduct envisaged by the agreement or regulated by its terms. The court did not decide the precise boundaries of the expression.
6. At trial, evidence about the claimant’s actual activities might assist in deciding whether the introduction was sufficiently connected with the alleged regulated activities, or whether those activities constituted performance of the agreement because they were undertaken in pursuit of the contractual fee. It was therefore realistic that the defendants could establish the necessary connection. No determination was made on the merits of those arguments.
7. The authorities relied on did not decide the scope of “performance” in section 26(3): Watersheds Ltd v DaCosta [2009] EWHC 1299 (QB), Various Angelgate & Baltic House Claimants v Key Manchester Limited and others [2020] EWHC 3643 (Ch), and Kinled Investments Limited v Zopa Group Limited [2022] EWHC 1194 (Comm). They provided limited assistance.