“The Members of the Club shall contribute in accordance with the terms of the Management Agreement to all reasonable costs incurred by the Club including and without prejudice to the generality of the foregoing…(v) All outgoings incurred in respect of the Apartments including electricity, gas, water, rates, contributions to the community of property owners to which the Apartments belong and any taxes or other charges or impositions whether of an annual or recurring nature or otherwise”
“To the extent that it is in the Members’ best interests for BBCB not to be wound up, FNTC UK is duty bound to ensure that the Spanish Taxes are satisfied to prevent BBCB’s winding up and to take all necessary action to ensure the same”
“……the injustice or unconscionability requirement of estoppel by convention focuses on the reliance placed on the convention by the party asserting the estoppel. As stated in Chitty…this will typically be because that party has been “materially influenced” by it.”
“62. First, the pension scheme embodies not only the terms of a contract between individual members and the trustees but also a trust applicable to the fund comprising the contributions of members and surpluses derived from the past in which present and future members may be interested. Such trusts cannot be altered by estoppel because there can be not such estoppel binding future members. 63. Second, it is necessary to show that the principle is applicable to all existing members. I agree with Laddie J in ITN v Ward[1997] PLR 131 that it is not necessary for that purpose to call evidence relating to each and every member’s intention. But that will not absolve a claimant from adducing evidence to show that the principle must be applicable to the general body of members as such. 64. Third, as the formulation of the principle shows, what must be proved is that each and every member has by his ‘course of dealing put a particular interpretation on the terms of the Rules’ or ‘acted upon the agreed assumption that a given state of facts is to be accepted between them as true”
“Of course, the liability to pay any additional tax is that of the club and that is the view held”. (viii). Kevin Page’s evidence was that he could not remember what he thought in 2004, although he said in cross examination that he had a “general feeling” and was “hopeful” that the Club would not be liable to pay the Spanish Taxes, albeit that this was not a deeply considered position. However, in light of the contemporaneous evidence, I believe Kevin Page to be mistaken about this. It is clear that by 2004 the Club Committee (including Kevin Page) had been operating for some time (on the advice of Mr Diaz-Saavedra, Ray Bostock and then Mr Pennington) on the assumption that they would have to pay the Spanish Taxes if the appeals were lost. It had set up a reserve fund specifically to cater for this eventuality and, instead of obtaining advice as to whether the Club could ever be liable, it had simply continued to fund the appeals in the hope that if these were successful, the Club would escape liability. Kevin Page’s report as Chairman of the Club in 2004 refers to “the Tax Case brought against us” and notes that the current reserves represent “approximately 80% of the potential tax bill should we eventually lose the case”
“…you will appreciate that very substantial sums of money are involved here for the Club and they want to ensure that matters are properly dealt with”. (xi). At a Committee Meeting on8 August 2009 , Richard Pennington reported on Señor Lopez’s view and went on to say that “Overall he was convinced that if we did lose and offered a substantial down payment with a plan for payment of the balance, there would be no difficulty with the tax authorities”
“The accountants were fully briefed and were advising us to appeal. When we had asked frankly whether we should just give up and pay, they were aghast and were clear that we should appeal; we fight on, we fight to win!...We had some money as figures showed in the reserve fund but we certainly could not spend it and would in those circumstances have to keep additional monies available in order that we could sort matters if we had to pay a lump and then by way of additional payments to pay the rest. This came from a decision and the way the Club was set up which was nothing to do with Kevin Page or Bahia Blanca Leisure Limited and was part of the club as it had been bought by them and was a function of how the Trust Deeds and the Club had been set up originally.” (xiii)Kevin Page’s cross-examination on this was clear: “Q: So again that’s still thinking in 2010, isn’t it, that if the appeals are lost what you needed to do was liaise with the taxman and work out a payment plan? A: Yes”. (xiv). At the AGM held on18 November 2010 , the Minutes record that similar issues were discussed: “An attempt was made to explain how the Club was owned and why it was that Club Members might be called upon to pay this liability. The reason being that the Trustees are entitled to insist on an indemnity from Members in relation to sums which they paid out”
“…it is quite clear in the documentation that all costs and taxes in relation to that property are the responsibility of the club.” (ii) Ms Scott’s evidence was to similar effect. In her witness statement she said that “ultimately the Club was responsible for the tax debt” and “The club had taken responsibility for the tax assessments and had arranged and paid for the legal representatives they appointed to deal with the tax appeals, they had acknowledged in correspondence that the liability was theirs and that the Club had provided indemnities to the Trustee under the club documentation and we were comforted by all of these points…”
“A. …We as trustee, only hold the custodian of the underlying property for and on behalf of the club. Q. Was that a view that you formed with the benefit of legal advice?... A. It was informed in lots of other tax cases, where the club documentation, where the developer understood his responsibility, the club understood their responsibility and the matters were dealt with. We assumed this was running on correctly. What we didn’t understand, that there was a slightly different agenda. Q. But your understanding as to the club’s liability was the result of your internal assessments of the liability for the tax based on your knowledge of the way that these schemes worked, is that correct? A. We have lots of clients. Q. Have I got that correct, yes or no? A. It is based on what other clubs have done, our understanding which was always confirmed by how our other clubs dealt with this.”
“Once a common assumption is revealed to be erroneous, the estoppel will not apply to future dealings”. (vii) The fact that the Claimants gave evidence to the effect that they would have taken different steps had they known of the Defendants’ intentions to purchase the Apartments (in particular that they would have applied for an injunction) is not, in my judgment, positive evidence that they were materially influenced by the convention. Further and in any event the Claimants’ evidence in this regard is in my judgment seriously undermined by the fact that when the Claimants first discovered in May 2012 that the Defendants were intending to make a bid for the Apartments at auction, they took no active steps to prevent such a course of action and did not even insist on having a meeting to discuss it: Ms Scott’s response to the18 May 2012 email from Ms Gonzalez referred to above, sent to (amongst others) Mr Kenny on the same day, was “The Club has been considering a number of options in the event an auction takes place. Their suggested proposal (for Kevin Page to purchase the property in his own name at a price lower than the tax debt) is not something we could approve given the risk to the directors of Bahia Blanca B Limited nor the lack of security for the members of the Club. I think we need to decide what action we would be comfortable with and then let make (sic) Kevin Page aware…”
“I understand that in the event that the tax authorities set a date for the auction of the property, you are considering, dependent upon the interest shown to acquire the bare ownership of the property. I’ve spoken to Declan and he’s suggested it may be worthwhile organising a meeting between ourselves to discuss this and explore what other options may be available”
“…there is not an answer from the Tax Office regarding the offer made for the Titles”
“The Committee of the Club and the Trustee may by deed supplemental hereto modify or add to the provisions of this Deed in such manner and to such extent as they may consider necessary or expedient provided that unless the Trustee shall certify in writing that in its opinion such modifications, alteration or addition does not materially prejudice the interests of the Club or the then existing Members and does not operate to release any of the parties hereto from any responsibility to the Club or to its then existing Members no such modification or addition shall be made without the sanction of a resolution of Members pursuant to the Constitution.”
“(a) Any person (not being a minor) may apply for and be admitted to membership of the Club. (d) In the first instance the Company as initial holder of all Membership Certificates shall issue to Members Membership Certificates and such other evidence of membership as shall from time to time be determined by the Committee. Thereafter Membership Certificates may be transferred from current Members or the representatives of deceased Members in accordance with the relevant provisions of this Constitution. (e) Membership of the Ordinary Members of the Club shall cease on the occurrence of any of the following events: (i) the transfer of all Membership Certificates owned by a Member, subject to a transferee being admitted to membership of the club;…”
“(a) Any Member, his personal representative, trustee in bankruptcy or liquidator, (as the case may be) may sell, bequeath or otherwise transfer the rights conferred by a Membership Certificate, provided that the transferee applies for and becomes a Member of the Club and all liabilities of the transferor in respect of such Membership Certificate are paid or provided for. (b) In the event of a sale or transfer the Membership Certificate shall be delivered to the Committee or the Management Company with the Form of Surrender and Request properly endorsed by the transferor and transferee. A reasonable fee may be charged for the registration of the transfer and issue of a new Membership Certificate, which fee may be revised by the Management Company from time to time. Upon payment of the required fee and the discharge of any liabilities in respect of such Membership Certificate, the Committee of the Management Company shall promptly issue a new Membership Certificate and register the same in the name of the new Member.”
“…the Spanish Taxes are an expense of the trusts on which BBCB and FNTC hold the Apartments for the benefit of the Club, and the Claimants are therefore entitled, as trustees, pursuant tosection 31(1) of the Trustee Act 2000 and/or at common law to be reimbursed in relation thereto out of the Trust Property, namely the bare title to the Apartments, in support of which entitlement the Claimants have a non-possessory lien, or first equitable charge, over the bare title to the Apartments.”
“31(1) A trustee (a) Is entitled to be reimbursed from the trust funds, or (b) May pay out of the trust funds, expenses properly incurred by him when acting on behalf of the trust.”
“Q. Now it was not your understanding was it, Mr Kenny, in 1997 that BBCB was a trustee, was it? A. No Q. Your understanding was that it was FNTC that was a trustee. A. FNTC was the trustee, and the trust property were the apartments. Q. Yes. So when did you come to the view that, in fact, it was BBCB that was the trustee? A. I was never of the view that BBCB was the trustee. My view has always been, in all structures, that the trustee is FNTC, and BBCB is the vehicle that owns the property on behalf of the trustee. Q. Yes. To be accurate, BBCB is the company that holds the property. Yes? A. It is the vehicle that holds the trust assets, yes. Q. And the trustee controls those trust assets through its ownership of BBCB. A. Through its ownership, correct.”
“(a) The Founder Member shall cause the Apartments enumerated in the Appendix to be transferred either directly to the Owning Company or to a Company which is a wholly owned subsidiary of the Owning Company, together with such further Apartments as the Founder Member shall determine…. (b) The Founder Member shall arrange for the membership of the Owning Company to be limited to an independent custodian trustee or joint trustees…who will hold and control the Owning Company in trust for the benefit of the Members of the Club from time to time upon the terms of the Deed of Trust…”
“(by becoming the sole and exclusive members thereof)”
“Q. So the trustee, through its ownership its holding in the owning company, holds the property. A. That is how it holds the property for the members, yes. Q. Yes, and that was your understanding throughout? A. Correct”
“Legal numbers 23 and 24 have already been conveyed to Bahia Blanca Club “B”
“It was certainly never a matter that was raised by FNTC UK with me, nor was it one that I was aware of”
“We would be very grateful for any information you can provide”
“Midmark 10 Limited, a company limited by guarantee and incorporated in Scotland with the number 114934 being the company hereinafter defined, in trust for the Members of the Club as provided in the Deed of Trust and the Constitution, the sole members of such company being the joint custodian trustees provided for by the Deed of Trust…”
“It has been said that a person claiming an interest under a common intention constructive trust cannot plead mutually inconsistent facts, each set of which would lead to a different beneficial ownership: Bhusate v Patel[2018] EWHC 2362 (Ch) at [65]”
“you cannot contest that”
“In my judgment, the position, in a commercial context, can be summarised as follows: (1) Baden types (1) to (3) knowledge on the part of a Defendant render receipt of trust property unconscionable. It is not necessary to show that the Defendant realised that the transaction was obviously or probably in breach of trust or fraudulent; the possibility of impropriety or the Claimant’s interest is sufficient. (2) Further Baden types (4) and (5) knowledge also render receipt ‘unconscionable’ but only if, on the facts actually known to this Defendant, a reasonable person would either have appreciated that the transfer was probably in breach of trust or would have made enquiries or sought advice which would have revealed the probability of the breach of trust”
“Annual Trustee Fee – 65 units at£124.60 each Annual Trustee Fee – 20 units at£187.43 each Annual Trustee Fee – 20 units at£155.67 each”