Oakhurst Property Developments v Blackstar (Isle of Man) Limited

28 June 2013

[2013] EWHC 1363 (Ch)

High Court, Chancery Division (Gabriel Moss QC sitting as a Deputy High Court Judge)

The 1st Claimant, Oakhurst, established an Employer Funded Retirement Benefit Scheme (an EFRBS) which was the main scheme. Three further EFRBSs were established as sub-schemes for the 2nd to 4th Claimants who were individuals and employees of the 1st Claimant. The Trustee of the main scheme was Hillberry Trustee Company Limited of the Isle of Man. The Trustee of each of the sub-schemes was Hillberry’s subsidiary, the 1st Defendant, Blackstar (IoM) Ltd.

The 2nd to 4th Claimants brought proceedings for accounts and inquiries challenging the amount of fees incurred in the trust administration. Blackstar counterclaimed for its outstanding fees.

The Claimants ran a whole series of arguments seeking to undermine the basis on which Blackstar had employed its parent company to undertake the trust administration.

The Court was not convinced by any of these and found that there was no basis for ordering accounts and inquiries and that the charges for which Blackstar sought an indemnity were neither irregular nor excessive and accordingly dismissed the Claim and gave judgment on the Counterclaim.

The Court was not persuaded by technical arguments but looked at the substance of the arrangement where it was understood from the outset that the parent company would be responsible for the trust administration. Alan Steinfeld QC and Jessica Hughes of XXIV Old Buildings appeared for the Defendant trustee.