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Causation, Loss and Double Recovery

Published online by Cambridge University Press:  27 June 2003

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Extract

In 1987, Mr. Primavera, a restaurant owner, was approached by the defendant, who offered him a loan for the development of a second restaurant, linked to an Executive Retirement Plan (ERP) for Mr. Primavera himself. The ERP promised a tax-free lump sum payment of £500,000 after seven years. However, the defendant neglected to tell Mr. Primavera that in order to qualify for the lump sum, he would have to draw a salary of not less than £334,000 per annum for at least three of the seven years. Unaware of this, Mr. Primavera paid himself a smaller salary. When he came to claim his lump sum in 1995, he found that the maximum that he could draw tax-free was £125,875. A claim form was issued against the defendant in respect of, amongst other things, £101,000 representing the tax payable on the rest of the lump sum. In the meantime, Mr. Primavera chose to continue with the ERP, paid himself a larger salary and, in 2000, qualified for the full £500,000 tax-free.

Type
Case and Comment
Copyright
Copyright © Cambridge Law Journal and Contributors 2003

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