A company and director, who were ordered to pay more than £11m after the high court ruled that they operated so-called land banking schemes, have won the go-ahead to take their case to the Supreme Court.
In April last year, Gloster LJ at the Court of Appeal backed Andrew Smith J’s ruling in February 2013 that Asset Land Investment and its director David Banner-Eve had operated “collective investment schemes” (CIS) in breach of financial services legislation.
However, now Lords Mance, Wilson and Toulson have given them permission to appeal further. No date has yet been set.
The Financial Conduct Authority, formerly the Financial Services Authority, had taken action over six schemes involving land in Surrey, Hampshire, Berkshire, Essex, North Yorkshire and Leicestershire, and the High Court judge granted a declaration that they contravened sections 19 and 21 of the Financial Services and Markets Act 2000. He ordered an inquiry as to how much they should pay, with interim payments of £11.27m.
Gloster LJ, dismissing the subsequent appeal, said that she agreed with the high court judge’s analysis and found that he was perfectly entitled on the evidence to reach the conclusion that the schemes proposed by Asset Land to investors involved three key features: that Asset Land would seek to progress planning procedures with a view to the sites being used for housing; that Asset Land would then procure the sale of the sites, likely to developers; and investors would be paid a share of the total consideration paid by the purchaser.
As a result, she found that these were “arrangements” with respect to property within the meaning of s235, and added: “The schemes, as presented by Asset Land, involved the purchase of plots by way of investment, and all of the investors participated in these schemes.”
In a statement following the initial high court decision, the FCA said that it would seek orders for the payment of at least £15m to return to investors.
It claimed to be aware of about 1,200 investors, with some paying between £5,000 and £25,000 for each individual plot of land. However, it said that, to date, no planning permission has been obtained for any of the sites marketed by Asset Land.
The Financial Conduct Authority v Asset Land Investment plc and ors Supreme Court (Lords Mance, Wilson and Toulson) 15 February 2015
