Pension collapse case will go to Court of Appeal

Thursday 19 December 2019

A woman who lost the majority of her pension after it was moved to a high-risk fund has said she is going to take her trustees to the Court of Appeal, after the Royal Court ruled against her in trial.

Manita Khuller had taken her pension trustee, FNB International Trustees, to court to argue they had acted with gross negligence and wilful misconduct when handling and advising her on her pension.

She had moved from a standard workplace pension to a QROPS (qualified recognised overseas pension scheme) at the advice of an investment adviser in Thailand, where she was living. That advisor was hired by FNB, and the move they advised Ms Khuller to make ultimately cost her the majority of the money she had been saving all of her life. This was despite the fact she told the trustee she had a medium risk profile - meaning she should not be invested in high risk funds.

Despite an independant expert witness telling the Court the funds she was eventually invested in were high risk, the three Jurats presiding over the case concluded they could not find the defendant guilty of wilful misconduct. In their judgement, they said: "The Court has every sympathy for the Plaintiff for the financial loss that she has suffered.

Pictured: Invested across only three different areas, Ms Khuller's money was not very well diversified, but the Jurats were told this was because she had asked for an unusual restriction on her money - to keep it off the stock market.

"It is easy with hindsight to say that the Plaintiff was ill-advised to transfer the pension fund sitting in her two defined pension schemes to the investment in the QROPS established by her in Guernsey but that is not sufficient. [But] in seeking to hold the Defendant liable for her losses, it is necessary to view the Defendant’s actions and inactions in the light of the circumstances prevailing and the facts known to the Defendant at the material time.

"While the Plaintiff has failed to establish any grossly negligent breach of duty or wilful misconduct on the part of the Defendant that has caused loss to her, she has shown a number of failings that merit censure. [...] Jurat Crisp is critical of the Defendant for failing to enquire with the Thai SEC whether PPi required a licence. All the Jurats criticise poor administration and poor communication."

The judgement also found FNB were in breach of its duties as trustees when it came to communicating with Ms Khuller, as she did not fund out about the fund's collapse until months after it happened. Despite this though, it found: "The Plaintiff has failed to show that there was any breach of duty on the part of the Defendant that was either grossly negligent or wilful misconduct and causative of the losses that she has suffered."

Therefore, it could not rule in Ms Khuller's favour. 

She has said she will be pursuing her case into the Court of Appeal, however, because she felt there had been a miscarriage of justice in the trial. She told Express her grounds were the incorrect analysis of the evidence she had given, and a perceived bias in favour of FNB because it was a Guernsey based trust company. 

The next stage of proceedings will not start until the new year. 

To read the full judgement, click here.  To read more about Ms Khuller's case, click here. 

Pictured top: Manita Khuller and her Mackenzie Friend, Niall Coburn, a Barrister of Law in Australia.