Payments under employee benefit trust scheme had been justifiable

Asertis as assignee of Servico Build Tec Limited brought an action against the Mr Heathcote who was the company’s sole director until it went into creditors' voluntary liquidation in 2018. 

The company had previously entered an employee benefit trust scheme under which the company contracted to buy an asset such as gold to be provided to the employee as beneficiary. The employee could keep or sell the asset but the understanding was that the transaction would not attract a personal tax liability for which the company would have to account by way of PAYE under the disguised remuneration rules.

Asertis said the rewards were neither authorised nor justifiable as remuneration to Mr Heathcote for his services as director and had no other proper basis. They were therefore made in breach of his duties to the company as its director. 

The High Court was satisfied that both Mr...