High Court permits rescission of deeds of appointment and criticises HMRC practice

In JCT Employer Solutions Trustee Ltd v Garnett [2024], the High Court rescinded various deeds of appointment made under two trusts created for the benefit of employees of Janus Henderson.

The deeds were rescinded on the grounds of mistake as to their fiscal effect under the principle set out in Pitt v Holt. Master Brightwell criticised HMRC refusing an invitation to be joined to the claim and instead sending a letter to the Court setting out potential objections to the relief sought. 

The Master said that the letter went well beyond the sort of points that could properly be made in correspondence and without seeking to be joined to the proceedings, particularly the claim that HMRC had been prejudiced by a delay in bringing the claim. The Master added: “HMRC cannot expect these points to be determined if their only involvement is by a form of shadow boxing through correspondence.”