Lawrence Ewan McGaughey & Anor v Universities Superannuation Scheme Limited & Ors

Lawrence Ewan McGaughey & Anor v Universities Superannuation Scheme Limited & Ors

The Court of Appeal held that the claimants could not bring a common law derivative claim on behalf of USSL because USSL had not suffered loss or harm, and any alleged loss was not reflective of the claimants' own loss. The claims were not derivative actions but were, in substance, claims against USSL as trustee. There was no prima facie case of equitable fraud or improper benefit by the directors. The proper course was a direct claim for breach of trust or a beneficiary derivative action, not a company derivative claim. The appeal was dismissed on all grounds.

Parties
Claimant/appellant: Lawrence Ewan McGaughey; Claimant/appellant: Neil Martin Davies; Defendant/respondent: Universities Superannuation Scheme Limited; Defendant/respondent: The Individuals Listed in Appendix 1 to the Claim Form; Defendant/respondent: The Individuals Listed in Appendix 2 to the Claim Form
Jurisdiction
England and Wales
Judgment Date
11 September 2024
Procedural Posture
Civil Appeal / Appeal From High Court Judgment Refusing Permission to Continue a Common Law Derivative Claim
Outcome
Appeal dismissed
Legal Topics
Derivative Actions, Directors' Duties, Reflective Loss, Breach of Trust, Discrimination, Fiduciary Duties, Proper Purpose Rule
Company Law Trust Law Pensions Law Derivative Actions Directors' Duties Reflective Loss Breach of Trust Discrimination +2 more

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Parties

Lawrence Ewan McGaughey

Claimant/appellant

Neil Martin Davies

Claimant/appellant

Universities Superannuation Scheme Limited

Defendant/respondent

The Individuals Listed in Appendix 1 to the Claim Form

Defendant/respondent

The Individuals Listed in Appendix 2 to the Claim Form

Defendant/respondent

Procedural Posture

Civil Appeal / Appeal From High Court Judgment Refusing Permission to Continue a Common Law Derivative Claim

Legal Issues

  1. 1 Whether members of a pension scheme can bring a common law derivative claim on behalf of a corporate trustee against its directors for breach of duty
  2. 2 Whether the requirements for a multiple derivative claim are met in the context of a company limited by guarantee acting as a pension trustee
  3. 3 Whether the claimants have standing and have shown reflective loss

Ratio Decidendi

The Court of Appeal held that the claimants could not bring a common law derivative claim on behalf of USSL because USSL had not suffered loss or harm, and any alleged loss was not reflective of the claimants' own loss. The claims were not derivative actions but were, in substance, claims against USSL as trustee. There was no prima facie case of equitable fraud or improper benefit by the directors. The proper course was a direct claim for breach of trust or a beneficiary derivative action, not a company derivative claim. The appeal was dismissed on all grounds.

Court Disposition

Appeal dismissed

Orders

  • Appeal dismissed on all grounds
  • No permission to continue the derivative claim