MELTON MEDES LTD AND ANOTHER V SECURITIES AND INVESTMENTS BOARD
| Published date | 01 March 1995 |
| DOI | https://doi.org/10.1108/eb024852 |
| Pages | 294-299 |
| Date | 01 March 1995 |
| Author | J LIGHTMAN,Joanna Gray |
| Subject Matter | Accounting & finance |
MELTON
MEDES LTD AND ANOTHER V SECURITIES AND
INVESTMENTS
BOARD
HIGH
COURT
(CHANCERY
DIVISION)
LIGHTMAN
J
Date of
Hearing:
June 1994
Date of Judgment:
12th
July,
1994
Reported at: [1995] 2
Weekly
Law
Reports
247
THE FACTS
The second
Plaintiff,
Melton Medes
Pension Trustees Ltd had in 1986
loaned some £5m from pension
funds under its administration to the
first
Plaintiff,
Melton Medes Ltd. It
was in respect of this loan and its
repayment that, in 1992, certain of
the pension fund beneficiaries
brought civil proceedings against the
Plaintiffs in this action seeking com-
pensation for losses to the fund, and
proceedings against two of the direc-
tors of the Plaintiff companies
seeking disclosure order, injunctive
relief and appointment of a judicial
trustee. These proceedings were con-
solidated into one action which is
referred to throughout the judgment
as 'the beneficiaries' action'. Also in
1992 the Investment Management
Regulatory Organisation (IMRO)
investigated the affairs of the second
Plaintiff which led in turn to a formal
Securities and Investments Board
(SIB) investigation pursuant to ss.
105 and 106 Financial Services Act
(FSA) 1986. The loan which was the
subject of the beneficiaries' action
also formed a large part of the SIB
investigation.
In the course of this investigation
the SIB obtained certain information
from the auditors of the pension
funds,
and in turn disclosed to them
certain information. Such disclosure
of otherwise restricted information
was permitted by s. 180(q) FSA 1986.
However, the SIB, who were, of
course, aware, of the beneficiaries'
action proceeding in parallel with
their own investigation, were in com-
munication with the beneficiaries and
allegedly wrongfully disclosed to
them information which was
restricted according to the terms of s.
179 FSA 1986. This information
related to the reliability of the pen-
sion funds' auditors' reports. As a
result of this disclosure settlement
negotiations in the beneficiaries'
action failed and the Plaintiffs
alleged that the beneficiaries' deci-
sion not to settle their action on
terms favourable to the Plaintiffs but
294
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