Dalriada Trustees Ltd v Faulds & Ors

Dalriada Trustees Ltd v Faulds & Ors

MPVA loans constituted unauthorised member payments under s.160 and s.173 Finance Act 2004, were outside trustee powers, void in equity, and could not be validated by amendments to trust deeds. Indirect provision of benefit is sufficient to trigger unauthorised payment provisions.

Parties
Claimant: Dalriada Trustees Limited; First Defendant: David Alexander Faulds; Second Defendant: Athena Pension Services Limited; Third Defendant: Minerva Pension Services Limited
Jurisdiction
England and Wales
Judgment Date
15 December 2011
Procedural Posture
Civil / Judgment
Outcome
MPVA loans declared void in equity as unauthorised member payments; amendments to trust deeds ineffective to validate them; trustees not estopped from denying validity; further MPVA loans cannot lawfully be made.
Legal Topics
Unauthorised Member Payments, Trustee Powers, Fraud on the Power, Amendment of Trust Deeds, Investment Definition
Pensions Trusts Tax Unauthorised Member Payments Trustee Powers Fraud on the Power Amendment of Trust Deeds Investment Definition

Case Brief

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Parties

Dalriada Trustees Limited

Claimant

David Alexander Faulds

First Defendant

Athena Pension Services Limited

Second Defendant

Minerva Pension Services Limited

Third Defendant

Procedural Posture

Civil / Judgment

Legal Issues

  1. 1 Whether MPVA loans constituted unauthorised member payments under Finance Act 2004
  2. 2 Whether MPVA loans were valid exercises of trustee investment powers
  3. 3 Whether amendments to trust deeds could retrospectively or prospectively validate MPVA loans

Ratio Decidendi

MPVA loans constituted unauthorised member payments under s.160 and s.173 Finance Act 2004, were outside trustee powers, void in equity, and could not be validated by amendments to trust deeds. Indirect provision of benefit is sufficient to trigger unauthorised payment provisions.

Court Disposition

MPVA loans declared void in equity as unauthorised member payments; amendments to trust deeds ineffective to validate them; trustees not estopped from denying validity; further MPVA loans cannot lawfully be made.

Orders

  • Declaration that MPVA loans are void in equity
  • Declaration that amendments to trust deeds cannot validate MPVA loans