Payments Pro Ltd & Ors v Freelancer and Contractor Services Association Ltd

An application for strike out or summary judgment should be refused where the defence or claim raises a properly arguable question of contractual construction, statutory application or fact. A short legal point may be decided without a trial where the evidence and arguments are sufficient, but an unclear and interconnected contractual framework should ordinarily be left for trial.

A failure to produce internal decision documents does not automatically justify adverse inferences where a participating party gives an explanation. The existence and scope of a Braganza duty may depend on the express terms, the discretion and the parties’ relationship. Rectification and estoppel claims require trial where communications admit competing interpretations. Refusing summary judgment does not determine the ultimate merits.

The four claimants, umbrella employers and members of the defendant trade association, challenged the purported termination of their memberships. They sought summary judgment or strike out of the defence on the membership issue. The application relied on four grounds: lack of power under the articles, construction of the contractual framework, breach of a possible Braganza duty, and rectification or estoppel by convention arising from pre-contract emails.

The defendant opposed the application and invited the court to strike out the claim on its own initiative, although it had made no formal cross-application. The court had to decide whether the claimants had met the interlocutory thresholds or whether any issue was suitable for final determination without a trial.

The claimants’ application was dismissed. The defendant’s invitation to strike out the membership issue on the court’s own initiative was refused. No concluded view was expressed on the ultimate merits.

1. Articles. It was not self-evident that a company limited by guarantee could exercise a membership-termination power only if the power was fully contained in its registered articles. The Companies Act 2006 did not expressly establish that proposition. Section 629 concerned classes of shares, while the applicability and effect of section 631 remained arguable. Article 2.5 expressly referred to termination under the membership terms. The reasoning in Bratton Seymour Service Co Ltd v Oxborough [1992] BCLC 693 (CA) and Cherry Tree Investments Ltd v Landmain Ltd [2012] EWCA Civ 736 concerned documents which omitted any reference to the disputed term and did not establish that an express cross-reference was invalid.
2. Construction. The interaction between the SPV Terms, the Disciplinary Procedure, the Terms and Conditions and the Complaints Procedure was insufficiently clear. The issue was connected with other questions reserved for trial, and material aspects of the competing constructions and the consequences of non-compliance had not been fully argued. It was therefore not a short point suitable for final determination on the application.
3. Braganza. The claimants would have to establish the existence of an implied term, its content or extent, and breach. The absence of internal decision documents did not justify an adverse inference because the defendant was participating fully and had explained the omission by its position that no duty was owed. Al-Masarir v Saudi Arabia [2026] EWHC 119 (KB) involved materially different circumstances. The developing relationship between Mid Essex Hospital Services NHS Trust v Compass Group UK and Ireland Ltd (t/a Medirest) [2013] EWCA Civ 200, Tesco Stores Ltd v Union of Shop, Distributive and Allied Workers [2024] UKSC 28 and TAQA Bratani Ltd v Rockrose UKCS8 LLC [2020] EWHC 58 (Comm) meant that the issue required fuller argument and evidence.
4. Rectification and estoppel. The relevant tests required examination of the parties’ intention, its outward expression, reliance and the subsequent dealings. The January 2025 emails were capable of more than one interpretation, and the parties advanced materially different accounts of the common intention or assumption. Those issues were unsuitable for summary determination.