Kession Capital Ltd (Appellant) v KVB Consultants Ltd and others (Respondents)

Hearing listed

Case summary
Appeal
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Case summary

Case ID

UKSC/2024/0114

Parties

Appellant(s)

Kession Capital Ltd

Respondent(s)

1) KVB Consultants Ltd

2) Pamela Cizek

3) Barry Coleman

4) Nigel Denning

5) Richard Denning

6) Driveland Estates Ltd

7) Arjun Kainth

8) Daphne Morgan

9) Kuldip Kainth,

10) Aquarius Living Ltd,

11) Miraj Patel,

12) Melanie Rayner,

13) Dilip Shah,

14) Nalina Shah,

Issue

Did the terms of an agreement between the Appellant and a third-party (the “Appointed Representative Agreement” or “ARA”), which prohibited the third-party from dealing with Retail Clients, also limit the Appellant’s liability for acts and omissions from the third-party conducting business with Retail Clients?

Facts

Kession Capital Ltd (“KCL”), the Appellant, a firm authorised to carry on designated investment business, along with 11 other firms (together, the “Defendants”) entered as principal into an ARA with Jacob Hopkins McKenzie Ltd (“JHM”) to carry on ‘relevant business’ (as defined in the ARA). The agreement was entered into under section 39 of the Financial Services and Markets Act 2000 (“FSMA”). JHM subsequently promoted and operated various property investment schemes (“Schemes”) in which multiple entities, including KVB Consultants Ltd (“KVB Consultants”), the first Respondent, invested a combined total of approximately £1.7 million. The Schemes subsequently failed, and several entities sought to recover their lost investments from the Defendants. An application for summary judgment was made against KCL, with judgment having already been obtained against 10 of the Defendants and the other Defendant having been made bankrupt. The Judge awarded summary judgment on the basis that KCL, by virtue of section 39 of FSMA, assumed responsibility for JHM’s activities in marketing the schemes. On appeal, the Court of Appeal agreed with this decision, finding unanimously that the ARA prohibited JHM from advising and arranging the Schemes; and by a majority that the terms of the ARA did not limit the Appellant’s liability for acts and omissions from JHM conducting business with Retail Clients. It is the second finding alone which is being appealed to the Supreme Court.