Manita Khuller won her appeal against Guernsey-based trustee FNB International.
She sued the firm las year after she lost £330,000 ($424,506, €359,786) from her pension pots, which she claimed FNB was responsible for.
Khuller believes she was “mis-advised” by an unregulated adviser while she was living in Thailand, resulting in transferring her two UK defined benefit (DB) pensions into a Qrops.
The money was put into a Royal Skandia wrapper and invested in three funds, one of which was a property fund run by LM Investment Management, which turned out to be a Ponzi scheme.
The case was first dismissed by the court in Guernsey, prompting Khuller to seek an appeal.
The appeal
According to Roger Berry, managing director at pensions and fiduciary firm Concept Group, the single mother managed to prove that FNB’s reliance on the investment adviser it appointed, showed gross negligence.
“The trustee sought to show that they could rely on the delegation to the adviser/manager to remove or qualify its duties as trustee and in any event, to be liable, the trustees had to be shown to have acted with gross negligence,” he said.
“In the appeal, the appointment of the adviser was seen to be reasonable, as certain checks had been made by the trustees, and thus the original decision was undisturbed.
“But the decision concerning breach of duties, regarding the choice of investments, was overturned as it was concluded that a mistake had been made in the original decision, as to the position to which the adviser was appointed.
“The appointment was as an adviser not as an investment manager, and a clear delegation of the trustee’s responsibilities was not achieved.”
The adviser’s investment decisions were not notified to the trustees, who were unable to choose investments.
As a result, the appeal court decided that the trustee’s “indifference to its duty and the identified risk” was, indeed, gross negligence.
‘Justice is done’
Khuller told International Adviser: “I am finally seeing justice done after seven years since the LM Fund failed and I started my complaint with FNB International Trustees, Guernsey.
“I don’t understand why this should have happened to me, but I am delighted that I may finally see some restoration of my lost UK DB pension, which was transferred to a Guernsey Qrops in 2011.“
A spokesperson for FNB International told IA: “FNB notes the ruling by the court of appeal.
“Whilst the bank is disappointed with many aspects of the ruling, it respects and will abide by the outcome in the interest of resolving the matter.
“We believe that our decision will allow all parties concerned to move on.”
