Baird v Baird

The issue raised by this appeal from the Court of Appeal of Trinidad and Tobago is whether the nomination by a member of a company pension scheme of a beneficiary to receive the death benefit payable under the scheme on the member's death, before retirement constitutes a testamentary disposition by the member and is thus invalid unless executed in accordance with the provisions of the Wills and Probate Ordinance.

The appellant is the widow of Mr. Milton Baird who was, until his death in February 1972, employed by Texaco Trinidad Inc. That Company had, in January 1965, established an Employees' Benefit Plan (“the Plan”) for the provision of retirement and other benefits for employees. This replaced an earlier scheme funded entirely by the Company but the Plan was a contributory scheme funded by the employees out of their basic wages and supplemented by contributions from the Company as and when necessary to enable the benefits of the scheme to be paid. Article VIII (4) of the Rules of the Plan provided for the payment on the death of a member in service of certain sums of a capital nature to such person or persons as the member should have nominated and, in default, to his widow, or, failing her, to his estate. The right of a member to nominate a beneficiary was conferred by Article XIII which was in the following terms:–

“A Member may nominate a beneficiary to whom the benefits described in Sections 4 and 5 of Article VIII are to be payable and, if the beneficiary survives him, the benefits will be so paid. If the Member leaves no nominated beneficiary surviving, the benefits will be payable to the Member's widow or widower. If the Member leaves neither nominated beneficiary nor, widow nor widower surviving, the benefits will be paid to the Member's estate. Nominations and revocations or alterations thereto are subject to the consent of the Management Committee and must be made on the appropriate form provided by the Company. Nominations and revocations shall become effective upon registration and validation by the Secretary of the Plan”.

On 21st May 1965 Mr. Baird nominated his brother, the respondent, as his beneficiary. The nomination was on a form provided by the Company which identified the beneficiary, was signed by Mr. Baird and was in the following form:–

“For the purposes of Sections 4 and 5 of Article VIII of the above-mentioned Plan, I hereby nominate the under-mentioned person as my beneficiary in the event of my death in accordance with the Rules of the said Plan. I reserve the right to revoke or alter this nomination at any time subject to the consent of the Management Committee”.

The notes which form part of the form read:–

• “(1) For effect of nomination please see Article XIII of the Rules of the Plan.

• (2) This Nomination Form should be signed in the presence of and delivered to one of the Company's Labour Officers.

• (3) The rights of a nominee may be subject to legal claims of a widow and/or children of the Member”.

That nomination was on 31st May 1965 approved by the Company. The Wills and Probate Ordinance of Trinidad and Tobago (Cap.8 No.2) follows the provisions of the English Wills Act 1837 in requiring a will to be executed in the presence of two witnesses.

On 27th June 1970 Mr. Baird married the appellant. He died on 1st February 1972 whilst still in the Company's employment without having revoked or varied his nomination. The appellant obtained a grant of letters of administration to her husband's estate on 10th August 1973.

The sum due under the Plan amounted to $11,852.40 which was claimed both by the widow and by the nominated beneficiary. On 14th January 1974 the Company issued an interpleader summons and the sum was subsequently paid into court. A question was directed to be tried as to which of them, the appellant (the widow) or the respondent (the nominated beneficiary) was entitled to the sum in court.

On 7th July 1975 Roopnarine J. decided that question in favour of the respondent and on 27th May 1987 the appellant's appeal against that decision was dismissed by the Court of Appeal (McMillan, Warner and des Iles JJ.A.).

The respondent has not been represented before the Board but their Lordships have had the benefit of the careful and scrupulously fair argument of Mr. White who appeared for the appellant and who has drawn their Lordships' attention to all the relevant authorities in favour of and against his client's contentions. The cases are not altogether easy to reconcile but before considering them it is important to analyse and keep clearly in mind the precise nature of a scheme of this sort and of the member's rights under it. The Texaco Trinidad Scheme is a pension scheme of the conventional type now familiar in most industries and was constituted by a Trust Deed and Rules. In the instant case the Trust Deed has not been included in the Record and does not appear to have been before the Court of Appeal, but it is referred to in the Plan and Mr. White concedes that it must be assumed to be in the normal form vesting the funds from time to time contributed to the Plan in the trustees upon the trusts constituted by the Rules.

The Plan, in Article II, describes its main purpose as “the provision of retirement pensions and other benefits for Members”. Article III contains a number of definitions, the only relevant ones for present purposes being: “The Funds of the Plan” which are defined as meaning and including “all monies from time to time held by or on account of the Trustee under the Trust Deeds between the Trustees (sic) and the Company;” and “Members” who are defined as meaning and including “all persons who in accordance with the Rules shall become and shall for the time being be contributors to the Plan”. Membership is regulated by Article IV which, in Section 2, provides that the persons qualified to be members of the Plan are all employees of the a Company over the age of 18 years who have been in employment with the Company for 3 months and who apply in writing on a form to be provided by the Company to become members of the Plan. Section 3 of the same Article recites the existence of a previous non-contributory pension fund and provides that members of that fund who wish to join the Plan must withdraw from the fund and agree to their entitlement thereunder being transferred to the Plan. It is expressly provided that “no employee shall be compelled to participate in the Plan, but an employee who has applied to become a Member shall not be entitled to withdraw from the Plan while in service, except as provided in these Rules”. Under Article V, a member joining the Plan is to contribute 5% of his annual basic wage together with, in the case of a member who was a member of the previous non-contributory fund, the amount standing to his credit under the provisions of that fund. The other source of contributions is the Company which undertakes to contribute such monies by way of supplement of member's contributions as are necessary to provide the benefits conferred by the Plan.

The benefits payable under the Plan are set out in Article VIII. The primary benefit is by way of pension provision with an option to surrender a part of the pension payable in order to provide a pension for a surviving spouse after the death of the member. The material provisions for present purposes are those contained in Section 4 of this Article which, so far as material, is in the following terms:–

“In the event of death of a Member during his employment with the Company, payment shall be made to such person or persons, as the Member shall have previously nominated in writing according to these Rules, or, in default of nomination, to the Widow of such Member, and, if the Member leaves no widow surviving him, to his estate, the following….”

What then becomes payable consists of three elements, that is to say, two years' annual basic wage (which may be paid either as a lump sum or, at the discretion of the Management Committee, may be spread over five years), a sum equal to the member's contributions together with compound interest and any sum transferred to the member's account from the previous fund together, again, with compound interest. Section 5 of Article VIII contains somewhat similar provisions in the event of the death of a member who has retired but has been on pension for less than ten years. In that event there is to be paid to his nominee or, in default, to his widow or, if there is no surviving widow, to his estate a pension for the balance of the period of ten years which may, at the member' s request and with the approval of the Management Committee, be paid as a lump sum. In addition there is to be paid a sum equal to three months' basic wage at the time of retirement.

The case of a member who leaves the service of the Company before going on pension is covered by Article IX. Such a member receives a deferred pension of an amount appropriate to the pension earned at...