UT/2023/000067 - [2024] UKUT 00106 (TCC)

QASL operates an account with BullionVault through which it was able to buy and sell from the BullionVault market gold bullion. In order for QASL to transfer title in the gold to Designated Employees of its client, a Bullion Vault account was opened by the relevant Designated Employee.

We were supplied with a Supply of Services Agreement dated 23 February 2016 between QASL and its client (‘the Client’), ie the employer of the Designated Employee, under which the Client appointed QASL to buy or supply gold for the Designated Employees. The agreement states at clause 2.2 that:

“For the avoidance of doubt, the title to the Assets purchased by [QASL] pursuant to this Agreement shall vest in [QASL], [QASL] shall transfer the title in the Asset to the appropriate Designated Employee.”

BullionVaults’ Terms and Conditions (effective until 18 January 2018) confirmed that all gold bullion purchased from it remained in the vault location specified by the buyer, such vaults being controlled by a vault operator, subject to agreement between the vault operator and BullionVault. Those Terms and Conditions included the following:

“You acknowledge that your ownership does not necessarily relate to a specific bar but to a specific quantity of bullion in a specific vault. BullionVault acknowledges that the bullion you own exists, is in the vault, is yours, and that being physical it is ultimately capable of being sub-divided into measurable amounts of material which you could take into your possession, subject to paying the physical withdrawal fee according to the Tariff.”

The contract between QASL and its Client states:

“2.2

For the avoidance of doubt, the title to the Assets purchased by [QASL] pursuant to this Agreement shall vest in [QASL], [QASL] shall transfer the title in the Asset to the appropriate Designated Employee.”

…

5.6

Provided [QASL] has received from the Client (or its nominee) the Deposit or Further Deposit (as applicable), [QASL]shall purchase the Asset specified in the Order in the name of [QASL] whereupon [QASL] shall:

5.6.1

notify the Client that the Asset has been purchased and is available; and

5.6.2

transfer title to the Asset to the Designated Employee identified by the Order provided that the Client has supplied the information required by [the Appellant] under Clause 4.1.3 (time shall not be of the essence).”

There were also two different BullionVault Terms and Conditions Waiver Acknowledgements (‘First Waiver’ and ‘Second Waiver’) relating to a Client of QASL and the Designated Employee of the Client. The First Waiver, dated 24 February 2016, was between BullionVault and QASL. It states that:

“We hereby confirm that the Company account registered at BullionVault under the USERNAME: 1ASSETHOUND1 [QASL] has been opened to facilitate the purchase of gold to the value of £2,000,000 which after settlement will be transferred to the [Designated Employee of the Client] who also have accounts registered at BullionVault.

…

When the transfer takes place, gold will be freely delivered to the Beneficiaries' BullionVault accounts, in the stated proportions within the BullionVault system. Any non-BullionVault transaction consideration owing shall pass from the Beneficiaries to the Company outside of BullionVault under terms agreed directly between the Company and the Beneficiaries.

The Company, Company Directors and all Beneficiaries understand and accept that the provisions of the underlined statements below from the stated section headings of BullionVault's published Terms and Conditions … listed below are duly waived:

…

Your right of withdrawal

You have a right of withdrawal of your gold and silver from BullionVault but you acknowledge BullionVault is not designed primarily as a service for those who wish to take physical possession of bullion.” (Emphasis added)

The First Waiver was signed by Mr David Graham as director of QASL and also on behalf of the Scheme Administrator, Qubic Tax Limited.

The Second Waiver, also dated 24 February 2016, stated:

“I hereby confirm as Managing Agent for the account registered at BullionVault under the USERNAME: [Designated Employee of the Client] has been opened to facilitate the receipt of gold to be transferred from the BullionVault account USERNAME: 1ASSETHOUND (Footnote: ¹)1

Any non-BullionVault transaction consideration owing shall be settled outside of BullionVault under terms agreed directly between the Company and the Beneficiaries.

I understand and accept that the provisions of the underlined statements below from the stated section headings of BullionVault’s published Terms and Conditions listed below are duly waived:

…

Your right of withdrawal

You have a right of withdrawal of your gold and silver from BullionVault, but you acknowledge BullionVault is not designed primarily as a service for those who wish to take physical possession of bullion.” (Emphasis added)

The Second Waiver was signed by Mr David Graham for QASL. In signing the Second Waiver, QASL was acting as agent on behalf of the Designated Employee under another Supply of Services Agreement, dated 24 February 2016, between QASL and the Designated Employee for the purpose of buying and selling gold. This Supply of Services Agreement made it clear that QASL was acting as agent for the customer in buying the gold. Clause 2.1 of this Agreement stated:

“Subject to the terms of this Agreement, You appoint and hereby authorise [QASL] to be Your agent for the management of the Portfolio throughout the Term unless this Agreement is validly terminated prior to expiry in accordance with Clause 8. [QASL] accepts the appointment on the terms set out in this Agreement.”