Roadchef (Employee Benefits Trustees) Ltd v Hill & Ors
2014
CHANCERY DIVISION
United Kingdom
CORAM
- David Donaldson Q.C.
- sitting as a Deputy High Court Judge
Areas of Law
- Equity and Trusts
2014
CHANCERY DIVISION
United Kingdom
CORAM
AI Generated Summary
The case revolves around the distribution of funds following the Main Proceedings that found for the claimants. EBT1's trustees sought clarification on whether 'Beneficiaries' included all former employees or only current ones. The court concluded that 'Beneficiaries' refers only to current employees at the time of distribution, rejecting the broader classification suggested by the trustees.
Judgment
The origins of this matter go back some thirty years. For full details reference should be made to the judgment of Proudman J dated 29 January 2014 in Roadchef (Employee Benefits Trustees) Limited v Ingram Hill and ors Case No HC11C0051 (“the Main Proceedings”), in which she held that the claimants were entitled to recover very substantial sums (still to be quantified). Those claimants now seek the agreement of the court to their understanding of the class of persons to whom they may distribute the proceeds of that judgment or any compromise which may be reached with the defendants in advance of an appeal due to be heard next month. For reasons which it is unnecessary to explain, my decision is sought as a matter of some urgency. Though in my desire to assist I have sought in this judgment to concentrate on what appear to me the essentials, I have considered and had regard to all the arguments and factors advanced by counsel.
In 1983 Roadchef plc ( A the company @ or A Roadchef @ ) was the subject of a management buy-out. The then Managing Director, Mr Patrick Gee, acquired 70% of the shares, and Mr Timothy Ingram Hill 3%. Mr Gee was keen to encourage employee share ownership at a level of some 20%, and in December 1986, shortly after his death when he had been succeeded as Managing Director by Mr Ingram Hill, steps were taken to create an employee share option scheme ( A ESOP @ ). The purpose of such schemes was and is to facilitate the transfer of shares to employees taking advantage of a tax-break under which inter alia the employer can deduct its costs of financing that transfer and the shares are not treated as remuneration of the employees. The tax-break is dependant on approval as satisfying the requirements of the relevant Inland Revenue regulations.
To this end:
(a) a Share Participation Scheme ( A the SPS @ ) was set up by a trust deed dated 18 December 1983;
(b) about the same time the company set up RoadChef Employee Benefits Trust ( A EBT1") by a trust deed dated 9 December 1983.
Since August 1993 both trusts have had a sole corporate trustee, RoadChef (Employee Benefits Trustees) Limited ( A the trustees @ ).
The preamble to the SPS deed recites the intention that “the participating companies”, effectively Roadchef, would from time to time pay sums to the trustees to be applied in the acquisition of shares in Roadchef for appropriation to individuals in the scheme. That appropriation was to be made by the trustees to such indi