A group of investors have failed to bring a case against a Gibraltar-based pension trustee for recommending unregulated collective investments as part of their qualifying recognised overseas pension schemes (Qrops).
Castle Trust & Management is a company registered in Gibraltar and operates as a professional trustee company. It is the trustee of two Qrops, which are also established in the Crown Dependency, namely the Equus Scheme and the Metro Scheme.
Each of the 62 claimants joined either one or both Qrops as a member and transferred existing “UK pension fund interests” into the relevant scheme, the high court was told.
The investors are divided between two groups: those who were advised on some unregulated investment schemes, and those who received advice on a single investment called ‘Elysian’.
Both Qrops were promoted by a Cypriot firm called Montegue Smythe which operated from an English address in Waterlooville, but was not authorised by the Financial Conduct Authority to conduct investment business in the UK.
Once the pension was transferred into the Qrops, Castle acted as the trustee and administrator of the scheme and “held the resulting sub-fund upon trust for the member”.
The 62 investors tried to bring the firm to court in England, as most of them reside in the UK, because they believed the unregulated investments were “entirely inappropriate for pension provision” and that many “investors’ accounts are in debit, eroded by the very high charges of [Castle]”, said McMeel, the barrister acting on behalf of the investors.
As a result, the claimants believed themselves to be victims of a pension scam.
But Judge Russen threw the case out as he said that it could not be heard in the English courts.
This is because Castle is domiciled and incorporated in Gibraltar and, as such, the UK does not have any jurisdiction over it.
Although the 62 claimants tried to argue that there was an exception to the rule, the judge disagreed.
He said: “It is therefore clear in my judgment that any claim against Castle based upon non-performance of services would have to be based upon the deeds and the rules incorporated by them.”
He added that any claim against the firm would need to be filed with the Gibraltar court, as a result.
Russen found that the 62 investors had “not established a good arguable case that this court has jurisdiction over their claims against Castle”, and dismissed their case.