McGaughey & Anor v Universities Superannuation Scheme Ltd & Ors [2023] EWCA Civ 873 (21 July 2023)

McGaughey & Anor v Universities Superannuation Scheme Ltd & Ors [2023] EWCA Civ 873 (21 July 2023)

Scheme members do not have standing to bring a common law derivative claim on behalf of a company limited by guarantee acting as pension trustee where the losses alleged are not reflective of their own losses, the claims are in substance against the trustee company itself, and direct claims are available. A prima facie case of deliberate or dishonest breach of duty or improper benefit by directors was not established. The claims were not properly brought as derivative claims under company law principles.

Citation
[2023] EWCA Civ 873
Parties
Claimant/appellant: Lawrence Ewan McGaughey; Claimant/appellant: Neil Martin Davies; Defendant/respondent: Universities Superannuation Scheme Limited; Defendant/respondent: Individuals listed in Appendix 1 to the Claim Form; Defendant/respondent: Individuals listed in Appendix 2 to the Claim Form
Jurisdiction
England and Wales
Judgment Date
21 July 2023
Procedural Posture
Civil Appeal / Appeal From High Court Judgment Refusing Permission to Continue a Common Law Derivative Claim
Outcome
Appeal dismissed
Legal Topics
Derivative Claims, Directors' Duties, Reflective Loss, Breach of Trust, Indirect Discrimination, Fiduciary Duties, Actuarial Valuations, Scheme Administration, Investment Duties
Company Law Trusts Law Pensions Law Equality Law Derivative Claims Directors' Duties Reflective Loss Breach of Trust +5 more

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Parties

Lawrence Ewan McGaughey

Claimant/appellant

Neil Martin Davies

Claimant/appellant

Universities Superannuation Scheme Limited

Defendant/respondent

Individuals listed in Appendix 1 to the Claim Form

Defendant/respondent

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 scheme members have standing to bring a common law derivative claim on behalf of a company limited by guarantee acting as pension trustee
  2. 2 Whether the claims fall within the exceptions to the rule in Foss v Harbottle
  3. 3 Whether there is a prima facie case of deliberate or dishonest breach of duty or improper benefit by directors

Ratio Decidendi

Scheme members do not have standing to bring a common law derivative claim on behalf of a company limited by guarantee acting as pension trustee where the losses alleged are not reflective of their own losses, the claims are in substance against the trustee company itself, and direct claims are available. A prima facie case of deliberate or dishonest breach of duty or improper benefit by directors was not established. The claims were not properly brought as derivative claims under company law principles.

Court Disposition

Appeal dismissed

Orders

  • Permission to continue the proceedings as a common law derivative claim refused
  • No order for injunction or declarations as sought by appellants