[2025] EWCA Civ 1137

The Sub-Fund was launched in 2010. The relevant Appendix to the Offering Document relating to the Sub-Fund (originally called the “Lucent Strategic Land Fund”) described its investment objective as achieving medium to long-term capital growth through investment in strategic land assets located within the United Kingdom. The Offering Document indicated that the Sub-Fund would have a primary focus in high growth areas where demand for new housing stock was most acute. It explained that loans of the monies in the Sub-Fund would be made to subsidiary companies incorporated in Luxembourg which would acquire land which would be progressed through the planning process before being sold to a national house builder following the award of planning consent. The Offering Document stated that the Sub-Fund would target an average return in excess of 12% per annum.

The Shares in the Company relating to the Sub-Fund comprised Class A, A2, B and C Shares (with sub-classes denominated in Sterling, US Dollars and Euros).

On 1 August 2014, the Council invested £20 million belonging to the East Riding Pension Fund by subscribing for 17,110,835 Class C Sterling Shares in the Company. The circumstances and reasons for the decision to make that investment are not relevant to the issues which we have to decide.

In all, about £82 million was subscribed for Shares referrable to the Sub-Fund, and about £27 million worth of Shares were later redeemed. These monies were used to make loans to Luxembourg subsidiary companies that invested in four main projects in the UK. The main ones were in relation to land for new housing developments at Lincolnshire Lakes and at the Royal Pier Waterfront Southampton. Other investments were made in partnership with Allerdale Borough Council and Peterborough City Council.