British Gurkha Welfare Society v Ministry of Defence
| Jurisdiction | England & Wales |
| Judge | Lord Justice Maurice Kay,Lord Justice Longmore,Lady Justice Black |
| Judgment Date | 13 October 2010 |
| Neutral Citation | [2010] EWCA Civ 1098 |
| Court | Court of Appeal (Civil Division) |
| Date | 13 October 2010 |
| Docket Number | Case No: C1/2010/0211 |
[2010] EWCA Civ 1098
IN THE HIGH COURT OF JUSTICE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE ADMINISTRATIVE COURT
QUEEN'S BENCH DIVISION (MR JUSTICE BURNETT)
Before: Lord Justice Maurice Kay, Vice President, Court of Appeal Civil Division
Lord Justice Longmore
and
Lady Justice Black
Case No: C1/2010/0211
Ref no: CO/2343/2008
Mr Declan O'Dempsey and Miss Olivia-Faith Dobbie (instructed by Russell Jones & Walker) for the Appellants
Mr Rabinder Singh QC and Mr Sam Grodzinski (instructed by Treasury Solicitors) for the Respondent
Hearing date: 27 July 2010
Lord Justice Maurice Kay:
In recent years courts have had to consider the unusual position of the Gurkhas on a number of occasions. Invariably, judgments have included words of tribute to the valour of their military service and the esteem in which they are held in the United Kingdom. Those sentiments remain undiminished. This appeal raises issues in relation to the pension entitlements of retired Gurkhas. Their arrangements were substantially revised pursuant to the Gurkha Offer to Transfer (GOTT) of 8 March 2007 and the Armed Forces (Gurkha Pensions) Order 2007 (the 2007 Order). In these proceedings, the British Gurkha Welfare Society and the second and third appellants challenge the lawfulness of the GOTT and the 2007 Order. Their challenge failed before Burnett J, [2010] EWHC 3 (Admin). They now appeal to this Court on more limited grounds than those advanced at first instance.
The historical background, going back almost two centuries, has been set out in great detail in earlier cases: R(Purja) and others) v Ministry of Defence [2003] EWHC 445 (Admin) and [2003] EWCA Civ 1345, [2004] 1 WLR 289; R(Gurung) v Ministry of Defence [2008] EWHC 1496 (Admin). For present purposes, the material recent history was described by Burnett J as follows (at paragraphs 9–13):
“Since 1947 [the Gurkhas] have formed an integral part of the British Army … Four [regiments] transferred to the British Army, forming the Brigade of Gurkhas. Gurkhas are recruited from Nepal. All are Nepalese nationals on recruitment and remain so until retirement. Their terms and conditions of service have been different from those of others in the British Army, although there has been a gradual alignment in recent years. Before 1997 the Brigade of Gurkhas was based in the Far East, particularly in Hong Kong. There has also been a long standing arrangement whereby one regiment is based in Brunei. That arrangement continues. Before 1997 Gurkhas did serve from time to time in the United Kingdom at Aldershot but their base remained in Hong Kong. Pay and other conditions reflected the terms available to the Gurkhas serving in the Indian Army. Leave was taken in Nepal, much longer leave than allowed to others in the British Army, and the universal assumption was that Gurkhas would retire to Nepal …
Prior to 1997, pay was much lower than for the rest of the British Army and pension arrangements entirely different. Gurkhas are recruited at the age of 18. Those who do not progress beyond the rank of corporal serve for 15 years. Put simply, the position was that after 15 years such Gurkhas retired and received an immediate pension, payable for life, based on their accrued service. No pension was payable if a Gurkha served fewer than 15 years, although almost all completed that length of service. Those promoted beyond the rank of corporal could serve for longer and received an immediate pension on retirement.
The position for those serving elsewhere in the British Army was that no pension could be paid immediately to soldiers or non-commissioned officers unless they completed 22 years' service. That pension could be deferred to 60. Those who served for less than 22 years accrued pension rights, but no pension could be taken until 60 …
The long established [Gurkha Pension Scheme or GPS] paid out pensions which were generally lower than those available to others who retired from the British Army, albeit that they were available sooner …
The return of Hong Kong to the Republic of China in 1997 gave rise to fundamental changes to the way in which Gurkhas served. The three regiments based in Hong Kong were unable to remain there. In consequence, since 1 July 1997 three Gurkha regiments have been based in the United Kingdom, with one at any time being stationed in Brunei. The immediate impact was that as time passed all Gurkhas spent increasingly large amounts of their time in the United Kingdom and developed contacts and roots here; so too their families.
For some time prior to 1997 Gurkhas stationed temporarily in the United Kingdom had received a supplement to their pay. That arrangement became a permanent fixture for those based in the United Kingdom after 1 July 1997. The supplement brought the Gurkhas' take-home pay up to the level of a soldier of equivalent rank in the British Army. However, it was not treated as pensionable pay. Pension arrangements remained as before. The continuing assumption was that on retirement Gurkhas would return to Nepal … Most of those retiring were in their early 30s and would develop a second career in Nepal. Nevertheless, the pension payable could maintain a reasonable lifestyle, irrespective of whether the person concerned could (as was usual) earn additional money. The evidence suggest that the pension of an ordinary Gurkha in Nepal equated with the pay of a captain in the Nepalese Army.”
Unsurprisingly, once the Gurkhas became based in the United Kingdom, there was pressure to assimilate their terms and conditions of service with those of British soldiers. There was also pressure to enhance their immigration status so as to enable them to remain in or re-enter this country in retirement. This resulted in a change in the Immigration Rules so that, with effect from 24 October 2004, any Gurkha with at least four years' service in the British Army and who had been discharged after 1 July 1997 was able to apply for indefinite leave to enter or remain in the United Kingdom. Although such leave is discretionary, the reality is that all who have applied have been successful. About 90% of those eligible Gurkhas discharged after 1 July 1997 have taken advantage of the change in the Immigration Rules. They number about 2000. There remain about 25,000 Gurkhas who are in receipt of pensions under the Gurkha Pension Scheme but who retired before 1 July 1997.
The GOTT and the 2007 Order
In January 2005, the Secretary of State for Defence announced a review of the Gurkhas' terms and conditions of service. This development, leading to the GOTT and the 2007 Order, was explained and described in detail by Ouseley J in Gurung (at paragraphs 6–24). The review resulted in a recommendation that serving and retired Gurkhas should be permitted to transfer from the GPS to the Armed Forces Pension Scheme (AFPS). Those who wished to remain in the GPS could do so but it would be closed with effect from April 2006. All this became reflected in the GOTT which applied in terms to all Gurkhas who retired or were serving on or after 1 July 1997. The basis upon which they could transfer to AFPS was that their accrued pension based on service after 1 July 1997 would transfer into the AFPS on a year-for-year credit – effectively bringing them in line with what the rest of the British Army had accrued for that period. For the years of service before 1 July 1997, the rights accrued in the GPS would be valued actuarially and the total of that value would be transferred to the AFPS as a pension credit. Because the pensionable pay of a Gurkha before 1 July 1997 was considerably less than that of a soldier in the rest of the British Army at that time, the pension credit was correspondingly less.
The previous litigation: Purja and Gurung
In Purja, the claimants sought to challenge the legality of various aspects of the Gurkhas' terms and conditions of service, including the differential pension provisions. These were challenged on grounds of irrationality and discrimination pursuant to Article 14 of the ECHR by reason of nationality which could not be justified. Although irrationality was advanced unsuccessfully before Burnett J in the present case, it is not pursued on this appeal. In Purja, the claimants failed on both grounds before Sullivan J and in the Court of Appeal. There was no challenge on the basis of age discrimination. Moreover, the case was decided before the amendment to the Immigration Rules which has enabled many Gurkhas to remain in or re-enter this country following their retirement.
The claimants in Gurung had all retired after 1 July 1997 but had qualifying service before and after that date. Their grounds of challenge to the GOTT and the 2007 Order comprised irrationality and age discrimination. Ouseley J dismissed both challenges, holding that any indirect age discrimination was justified for the purposes of Article 14 of the ECHR. An application for permission to appeal to this Court was refused on paper by Toulson LJ and was not renewed.
The present case: the decision of Burnett J
In the present case, the second appellant retired before 1 July 1997. The third appellant retired after that date but his qualifying service had commenced before it. In view of the previous litigation, both faced obvious difficulties but Mr O'Dempsey sought to circumvent Purja and Gurung on the basis that Purja preceded the amendment to the Immigration Rules and, in any event,...
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