Capita Atl Pension Trustees Ltd and Others v Sedgwick Financial Services Ltd and Others
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Proudman |
| Judgment Date | 10 February 2016 |
| Neutral Citation | [2016] EWHC 214 (Ch) |
| Docket Number | Case No: HC-2011000062 |
| Court | Chancery Division |
| Date | 10 February 2016 |
[2016] EWHC 214 (Ch)
Mrs Justice Proudman
Case No: HC-2011000062
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Rolls Building
Fetter Lane, London, EC4A 1NL
Keith Rowley QC and Wendy Mathers (instructed by Wragge Lawrence Graham & Co LLP) for the claimants
Peter de Verneuil Smith and Andrew Mold (instructed by Maurice Turnor Gardner LLP) for the defendants
Hearing dates: 17, 18, and 19 November 2015
The first, second, fourth and fifth claimants are the current trustees ("the Trustees") of the Sea Containers 1983 Pension Scheme ("the Scheme"). The third claimant has retired as a trustee and can be disregarded for present purposes. The Scheme is a defined benefit occupational pension scheme established in 1983 to provide pensions and other benefits to employees of the Sea Containers Group of companies and their dependants.
The defendants are all part of the Mercer Group of companies and provide professional advice and services to the trustees for the time being including the drafting of documentation.
The claimants' claim in the action is for damages for professional negligence for services between December 1993 and December 2005, and it arises out of two sets of proposed amendments intended to be made to the Scheme's governing documentation with effect from 1 August 1994 ("the 1994 Changes") and 1 May 2002 ("the 2002 Changes") respectively. I am concerned only, in this application for summary judgment, with the 1994 Changes. Quantum is to be assessed at trial but is in the order of at least £8m.
The defendants seek summary judgment (alternatively striking out) as to,
• Parts of the claim against the first defendant ("The Novation Issue") on the basis that the second defendant replaced the first defendant in providing services to the Trustees.
• The entirety of the claim against the second defendant ("the section 14A and 14B of the Limitation Act 1980 Issues").
In the action the claimants claim that the defendants,
• Failed to advise the claimants that an amending deed or Board Resolution was required in order to implement the 1994 Changes (equalising the retirement ages for existing male and female members of the Scheme in 1994 after the case of Barber v Guardian Royal Exchange Assurance Group [1991] 1QB 344) and amending the Scheme's benefit accrual rate for all members to 1/50 th of "Final Pensionable Salary" for each year of "Pensionable Service";
• Failed to advise them that an amending deed or Board Resolution was required to amend certain member contribution rates and accrual rates in order to implement the 2002 Changes;
• Failed to ensure that a consolidating deed was prepared shortly after the 1994 Changes and should have advised, as respects both the 1994 and the 2002 Changes and following their intended effective dates, that deeds of amendment or Board Resolutions were passed;
• Failed to bring the alleged equalisation and other inadequacies to the Trustees' attention at any time after the 1994 Changes and the 2002 Changes were purportedly effected.
The claimants say that there are two broad limbs to the claim, namely,
"Negligence on the part of the relevant adviser at the time of the ineffective 1994 and 2002 Changes in failing to (i) advise as to the procedure that needed to be adopted so as validly to amend the Scheme's governing documentation and (ii) take reasonable care to ensure that this procedure was followed.
…Negligence on the part of the relevant adviser (which may or may not have been the adviser at the time the Changes should have taken effect) in later failing to observe and advise that the 1994 and 2002 Changes had not been validly effected."
So the claim is (under Limb (i)) for the additional liabilities to which the Scheme has become subject and (under Limb (ii)) for a combination of (a) the loss of a chance of receiving damages in respect of any claims that may now be statute-barred and (b) the additional liabilities to which the Scheme has become subject had action been taken so as to effect the intended changes, belatedly but prior to December 2005.
Background
On 30 September 2006 the Scheme closed to further accrual of benefits. On 15 October 2006 the Principal Employer, Sea Containers Services Limited, and its parent, Sea Containers Limited, filed for Chapter 11 bankruptcy protection in the United States.
On 5 February 2008 the Pensions Regulator issued a Financial Support Direction against Sea Containers Limited.
On 28 February 2008 a standstill agreement was entered into between the claimants and the first and third defendants (but not the second defendant), which terminated on 31 August 2011. On 20 June 2008 the Principal Employer entered into a standstill agreement with all the defendants.
On 19 September 2008 a Pension Schemes Settlement Agreement was entered into by various Sea Containers Group companies, the Trustees and the official committee of unsecured creditors of the Principal Employer which required the Principal Employer to make financial provision for liabilities arising under the Scheme in respect of equalisation.
On 30 July 2009 the Trustees issued Part 8 proceedings against the Principal Employer and Sea Containers Limited in order to determine the equalisation and other liabilities. Arnold J decided on 24 November 2010 that there was no equalisation for new joiners until 1 March 1993 (the operative date of a Deed of Amendment). Then the remaining issues in the proceedings were compromised on terms approved by the Court (Sir Andrew Morritt C) on 21 December 2010, reflecting the agreement between the parties that it was more likely than not that none of the 1994 Changes or the 2002 Changes was effective as intended.
The effect of the compromise was that the Scheme became subject to substantial additional liabilities to members.
The Principal Employer brought a claim against the defendants in 2011 which was compromised in April 2013. I have no details about this claim.
On 31 December 2011 the Scheme entered into winding up.
The law as to summary judgment/striking out
The application is brought under CPR 3.4 alternatively CPR 24. It is common ground that in most cases the former adds little to the latter ( AL Challis Limited v. British Gas Trading Limited [2015] EWHC 141 (Comm) at [6]) and I proceed to deal only with summary judgment. The applicable principles for the purposes of Part 24 were summarised by Lewison LJ in Mellor v. Partridge [2013] EWCA Civ 477 at [3] (citing his own judgment in Easyair Limited v. Opal Telecom Limited [2009] EWHC 339 (Ch) at [15]), approved by Etherton LJ in AC Ward & Sons Limited v. Catlin (Five) Limited [2009] EWCA Civ 1098 at [24],
"The correct approach on applications by defendants is, in my judgment, as follows:
i) The court must consider whether the claimant has a "realistic" as opposed to a "fanciful" prospect of success: Swain v Hillman [2001] 2 All ER 91 [ sic] (but corrected in the Court of Appeal));
ii) A "realistic" claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel [2003] EWCA Civ 472 at [8]
iii) In reaching its conclusion the court must not conduct a "mini-trial": Swain v Hillman [a point recently emphasised by the Court of Appeal in Blakemores LDP (in administration) v. Scott [2015] EWCA Civ 999 per Vos LJ at [42]];
iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED & F Man Liquid Products v Patel at [10]
v) However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5) [2001] EWCA Civ 550;
vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd [2007] FSR 63;
vii) On the other hand it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant's case is bad in law,...
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