Wednesday 27th September 2017
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Investment advisory firm Saturn Portfolio Management has lost a court battle with pension provider i-Select after a judge rejected its allegations of a conspiracy between i-Select and its competitors.
The two firms agreed to a distribution and service agreement in February 2013 so Saturn could arrange UK pension transfers to the i-Select scheme before the pension provider wrote to terminate the agreement in June this year. I-Select had similar arrangements with 51 other providers, including GBPensions Investments and Kingshield Investments, which was wholly owned by GBPensions and its director Tony Chamberlain.
Saturn, chaired by professional director Craig Stobo, alleged i-Select knew about an arrangement between those two investment advisory firms and two employees at those firms - Chamberlain and Lester Luey from Kingshield - to take all its clients and set up a competing company. Saturn said i-Select agreed to give Chamberlain information, breaching confidentiality obligations under its agreement, and breached good faith obligations by terminating the agreement and agreeing to give services to Kingshield.
The investment advisory firm asked for an interim injunction to stop i-Select terminating the deal and to make the pension provider retract an email sent in August to scheme members advised by Saturn, telling them the agreement had finished.
In the High Court in Auckland, Justice Mark Woolford said Saturn's belief that i-Select had acted in concert with Chamberlain and Luey to arrange for at least 128 of Saturn's clients to end their agreements was "without sufficient factual foundation" and he wasn't convinced there was a serious question to be tried about whether i-Select had been involved in a conspiracy with the other defendants. The Aug. 16 judgment was recently published on the Ministry of Justice's website.
The judge also found there was no evidence of a confidentiality breach imposed by the agreement between Saturn and i-Select, and that the good faith requirement didn't mean i-Select couldn't use its contractual right to terminate without cause.
The judge reserved costs.
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