Oakhurst & ors v Blackstar (Isle of Man) Ltd & anr [2012] EWHC 1131 (Ch)

WTLR Issue: September 2012 #122

1. OAKHURST PROPERTY DEVELOPMENTS (LOWNDES SQUARE NO. 2) LTD

2. RONALD EDWIN PRATT

3. PAUL TREVOR HEITMAN

4. RICHARD ANTHONY BLYTHE

V

1. BLACKSTAR (ISLE OF MAN) LTD

2. CHURCH STREET TRUSTEES LTD

Analysis

The first claimant (the principal employer) set up employee retirement benefit schemes (ERBS) for three of its directors, the second to fourth claimants on 23 November 2007, under which the directors were each members of their own schemes. The first defendant, Blackstar (Isle of Man) Ltd (Blackstar) was the trustee for all three schemes. Under the ERBSs, the trustees were given an express power that they could exercise by lending all of the trust fund to the member or other beneficiary on uncommercial terms, and in each case Blackstar received some £2m from the principal employer and it lent the greater part of that sum to the employee by way of an unsecured loan. The chose in action represented by the right to be repaid that loan is the principal asset of the trust fund and there is a small sum in a bank account in relation to each of the trusts. In January 2011, a scheme called Independence 1 was considered, which illustrated the ability of the trustee to reduce the value of the trust assets from, in the example used, £1m to £50,000.

Counsel details

Mr Richard Wilson instructed by Forsters LLP (31 Hill Street, London W1J 5LS, tel 020 7863 8333, e-mail enquiries@forsters.co.uk) for the claimants.

Mr Michael Booth QC (13 Old Square Chambers, Ground Floor, 14 Old Square, Lincoln’s Inn, London WC2A 3UE, tel 020 7831 4445, e-mail clerks@13oldsquare.com) and Mr Robert Bourne instructed by Messrs Nelson for the first defendant.

The second defendant did not appear and was not represented.

Cases referenced

Cases in bold have further reading - click to view.

Legislation referenced

Legislation in bold has further reading - click to view.

  • Income Tax Earnings and Pensions Act 2003 part 7A (as introduced by FA 2011) Trustee Act 1925 Trustee Act 2000, ss31, 39