Joy Irene Dooley and Others v Castle Trust & Management Services Ltd
| Jurisdiction | England & Wales |
| Judge | Lady Justice Carr,Lady Justice Nicola Davies,Lady Justice Macur |
| Judgment Date | 30 November 2022 |
| Neutral Citation | [2022] EWCA Civ 1569 |
| Docket Number | Case No: CA-2022-000219 |
| Court | Court of Appeal (Civil Division) |
[2022] EWCA Civ 1569
Lady Justice Macur
Lady Justice Nicola Davies
and
Lady Justice Carr
Case No: CA-2022-000219
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN BRISTOL
CIRCUIT COMMERCIAL COURT (KBD)
His Honour Judge Russen KC (sitting as a Judge of the High Court)
Royal Courts of Justice
Strand, London, WC2A 2LL
Gerard McMeel KC and Philip Stear (instructed by High Street Solicitors Limited) for the Claimants/Appellants
James Hart (instructed by TSN Law) for the Defendant/Respondent
Hearing date: 18 October 2022
Approved Judgment
This judgment was handed down remotely at 10am on Wednesday 30 November 2022 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
Introduction
The Appellants (“the pensioners”) are individual investors predominantly domiciled in England and Wales. They seek to pursue proceedings in this jurisdiction against the Respondent (“Castle”), a professional trustee company registered and domiciled in Gibraltar.
The pensioners claim to have been the victims of a classic “pension scam” orchestrated by unregulated intermediaries operating in England and Wales. The principal unregulated intermediary, a Cypriot firm known as Montegue Smyth (“MS”), is said to have been in a commercial relationship with Castle and to have been paid substantial fees or commissions by reference to each pension transfer referred by MS. The pensioners contend that, as a result of the intermediaries' activities, they went from having valuable UK-based pension rights to being party to inappropriate, expensive, offshore pension arrangements with Castle, invested in unregulated collective investment schemes of little or no value.
Proceedings were commenced on 30 September 2020 and served on 19 March 2021. By an application dated 18 May 2021 under CPR Part 11, Castle challenged the court's jurisdiction. The matter came before HHJ Russen KC (“the Judge”). For reasons set out in his judgment dated 13 October 2021 (“the Judgment”), he acceded to Castle's application. In summary, he held that the pensioners did not have a good arguable case that the proceedings fell within Article 13(3) of the 1968 Brussels Convention as modified (“the Brussels Convention”). The proceedings fell within Article 2 (or Article 5(6)).
The overarching ground of appeal is that the Judge was wrong to hold that the pensioners did not have the better of the argument in establishing jurisdiction under Article 13(3) of the Brussels Convention. There was a plausible evidential basis for holding that the proceedings concerned contracts concluded by consumers for the supply of services by Castle, which contracts were preceded in the State of the pensioners' domicile by specific invitations addressed to them.
The key facts and documents in summary
Castle is the trustee of two Qualifying Recognised Overseas Pension Schemes (“QROPS”) established in Gibraltar: the Equus Scheme, established by a Declaration of Trust dated 10 April 2013, and the Metro Scheme, established by a Declaration of Trust dated 1 August 2013. QROPS are “overseas pension schemes” within the meaning of the UK Finance Act 2004 (s. 150(7)), and the Pension Schemes (Categories of Country and Requirements for Overseas Pension Schemes and Recognised Overseas Pension Schemes) Regulations 2006, SI 2006/206, a status accorded by His Majesty's Revenue and Customs.
The respective trust deeds for the two Schemes (“the Deeds”) and the Scheme Rules annexed to and incorporated in the Deeds (“the Rules”) are in materially identical terms. The Rules identified Castle as the “Scheme Administrator”. Clause 4.1 of the Deeds provided that the “Trustees shall hold the Fund under irrevocable trusts and shall administer the Scheme…”. Thus, upon a pension transfer being made, the effect of the Deeds was that Castle as trustee of the QROPS held the resulting sub-fund upon trust for the member. Clause 8.2 provided for costs, charges and expenses incurred in establishing, administering or managing “the Plan” to be paid out of the trust fund. Clause 12 provided for Castle's professional fees for time spent “in relation to the trusts hereof or to the administration of the Plan”. Castle's entitlement to charge fees was “as shall from time to time be published as its normal scale of charges”.
The pensioners joined one or both QROPS as members, transferring existing UK pension fund interests into the relevant scheme. The QROPS were promoted principally by MS, a firm which operated from an English address in Waterlooville, but which was not authorised by the Financial Conduct Authority (“FCA”) under the Financial Services and Markets Act 2000 (“ FSMA”).
With three exceptions, all of the pensioners are individuals domiciled in this jurisdiction (or, in the case of two Appellants, personal representatives of individual investors who died domiciled in England or Wales). Two pensioners are domiciled in Northern Ireland and a third is domiciled in Scotland. No point is taken in relation to these three, whom Castle accepts should be sued here alongside the other pensioners, if jurisdiction in respect of those other pensioners is established.
The First Appellant (“Mrs Dooley”), a former police officer, can be taken as an exemplar. She received a Transfer out Request Pack from the administrator of the Police Pension Scheme in March 2014. In August 2014, she signed a declaration confirming that her pension was to be transferred to another registered scheme to be confirmed by way of a declaration made by the receiving scheme. On or about 1 September 2014 Castle received a self-advice letter from Mrs Dooley, requesting Castle to arrange transfer into a QROPS for her benefit at retirement.
The Application Form
On 2 September 2014 Mrs Dooley signed an application form to join the Metro Scheme (“the Application Form”). At the end of the document, Mrs Dooley declared that the information provided was accurate to the best of her knowledge and that:
“I …agree to the Terms & Conditions set out below (Appendix II).”
She also agreed to an attached fees schedule, and authorised “the Trustees” to execute the relevant deed(s) to adhere her to the Scheme.
The Terms and Conditions were Castle's standard terms and conditions, set out in a document headed “Appendix II” (“the Terms and Conditions”). They provided as follows:
“These Terms and Conditions set out the terms upon which the Company and/or Firm provides Services to its Clients.
1. Definitions
…Engagement means the Services we provide by the Questionnaire.
Engagement Letter means the questionnaire and any attachments including these Terms and Conditions sent to the Client which sets out the basis of our contract with the Client and which constitutes the agreement between the Company and/or Firm and the Client…
Services means the services to be provided by the Company and/or Firm as specified in the Engagement Letter…
3. Provision of Services
In providing the Services the Company and/or Firm does not hold itself out as having knowledge of the laws or regulations other than those applicable in Gibraltar and does not provide [advice] on matters relating to taxation in any jurisdiction. Castle Trust Group has a zero tolerance to bribery and corruption. We are committed to conducting business in a manner which complies with the UK Bribery Act 2010…
8. Liability
The Company and/or firm will perform the services with reasonable skill and care and acknowledge that the Company and/or Firm will only be liable for any loss or damage caused by its negligence, breach of contract, fraud or wilful default, subject as follows:
The Company and/or Firm will not be liable if such loss is due to the provision of false, misleading or incomplete information or documentation or due to the acts or omissions of any person other than the Company and/or Firm…
15. Jurisdiction
These Terms and Conditions and the provision of Services shall be governed by and construed in accordance with Gibraltar Law and Financial Services of Gibraltar.”
At or around the same time, Mrs Dooley also signed a letter agreeing to pay MS fees in the sum of £2,000 inclusive of VAT.
Castle received and kept Mrs Dooley's signed application form in its records under cover of an internal document checklist which contained as its first (duly ticked) entry:
“Signed Application Form with T & Cs and Signed letter/s of Authority”
The Welcome Letter
On or about 23 September 2014 Mrs Dooley was admitted as a member of the Equus Scheme by way of Deed of Adherence. She received a welcome letter from Castle dated 9 February 2015 (“the Welcome Letter”) which stated:
“We would like to welcome you as a Member of the … Scheme administered by [Castle], who also provide the ongoing fiduciary duties as Trustees to the Scheme…
As part of the overall service, you will on each anniversary of your joining the Scheme receive an annual statement detailing a current valuation. This will be provided to you by [Castle] as your Trustee.
Should you have any questions with regard to the Scheme, either now or in the future, please do not hesitate to contact your Introducer, [MS], in the first instance, or [Castle] as your Trustee and scheme administrator.”
The Particulars of Claim
The following claims are pleaded in the Particulars of Claim:
i) The “Joint Tortfeasorship Claims”: various third parties are said to have acted negligently and/or in breach of regulatory or statutory rules giving rise to a statutory cause of action under ss. 150/138D of FSMA. It is said that Castle knew or ought to have known of such negligence and/or...
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