Catchpole v Trustees of the Alitalia Airlines Pension Scheme and another

Hearing date: 13th July 2010

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

Mr Justice Warren:

Introduction

This is the appeal of the Appellant (“ Mr Catchpole”) against a Determination of the Pensions Ombudsman dated 20 January 2010 (“ the Determination”) dismissing Mr Catchpole's Complaint dated 7 May 2009 (“ the Complaint”). Mr Catchpole complained of maladministration on the part of the trustees of the Alitalia Italian Airlines Pension and Assurance Scheme (“ the Trustees” and “ the Scheme”), a balance of cost final salary pension scheme. The sponsoring employer under the Scheme, Alitalia-Linee Aeree SpA (“ A-LA”), is named as a respondent in the Complaint, although it is not clear that Mr Catchpole actually made any complaint against it.

Mr Catchpole had for many years, until her death on 24 September 2007, a long-term partner, Teresa Brahja (“ Ms Brahja”) with whom he lived. She was a member of the Scheme. Mr Catchpole now claims to be entitled to a spouse's pension under the Scheme in the circumstance which I will explain. The Trustees rejected the claim. The Pensions Ombudsman upheld their decision in the Determination. It is against that decision that Mr Catchpole now appeals

On this appeal, Mr Grant appears for Mr Catchpole. Neither the Trustees nor A-LA appear on the appeal.

The Facts

The following facts are not in dispute and appear mainly from the Determination.

Ms Brahja wrote a letter to a Mr GS, the Scheme Secretary, on 9 March 2004. It was addressed to him as such. She asked what Mr Catchpole's status would be with regard to death benefits:

“I would be most grateful if you clarify the definition of Spouse as quoted in the Members’ Booklet referring to Death Benefits, In the event of my death, would my partner of 20 years, Christopher Catchpole, be eligible to receive the benefits as detailed in the booklet, or do we need to be legally married? The Company already recognises our relationship as ‘common law’, as he is able to use concessionary tickets.”

The response came from a Ms A-H on the same day. Although the Pensions Ombudsman does not mention this, she wrote on headed Alitalia notepaper (the company name “Linee Aeree Italiane SpA” appearing at the bottom of the letter); but as he did mention, she was the Personnel Services Specialist at the employer. She wrote as follows:

“Following your letter dated 9 March 2004 I have checked the Trust Deed of the Alitalia Italian Airlines Pension and Life Assurance Scheme for the definition of the word ‘spouse’ and the following is what I found quoted; namely:

[[#page,3]]'For the purposes of the foregoing definition

‘spouse’ includes wife, husband, widow, widower and any former wife or husband and a person with whom a Member has gone through any ceremony of marriage or who is living with the member as his spouse. [her underlining]

I trust that the above has answered your questions…”

This letter was, the Trustees accept, incorrect. In fact the rules of the Scheme only provide for a pension to be paid to a person who was legally married to the member, or if there is no such person, the Trustees may pay an equivalent pension to a person who was “…wholly or mainly dependent on the Member for maintenance and support…”. The quoted definition of spouse applies only for a limited purpose and not for the purposes of the rule which provides for a spouse's pension.

In relation to this exchange, the Pensions Ombudsman said this:

“Ms Brahja's original query in March 2004 was directed to the secretary of the trustees, an appropriate person with whom to raise a matter regarding the pension scheme. I find that the letter dated 9 March 2004 signed by Ms A-H was sent on behalf of the Trustees. The minutes of the 18 June 2008 trustees’ meeting record that it was agreed by the Trustees’ Secretary and a Trustee.”

This is not challenged and seems obviously correct. As to the minutes, see paragraph 12 below.

Ms Brahja's contract of employment was transferred to Alitalia Servizi SpA with effect from 1 May 2005 and then to Alitalia Airport Ltd with effect from 10 December 2006.

The Pensions Ombudsman recorded Mr Catchpole's evidence as being that Ms Brahja was in generally good health until 2004 when she suffered from weight loss following the death of her uncle and was consequently signed off work for an extended period. In 2007 she was diagnosed with depression and prescribed appropriate medication. Later that year she developed jaundice and was admitted to hospital on 13 August. She was treated on a general ward but on 21 September suffered serious internal bleeding. At that point her condition was diagnosed as terminal and she died on 24 September.

On 29 October 2007, Mr Catchpole applied to the Trustees for a spouse's pension. On 11 February 2008 he received a letter from the scheme administrators saying that he had no right to a spouse's pension under the Scheme although the Trustees did have a discretion to award a dependant's pension. It was suggested that he provide documentary evidence to demonstrate his dependency in order to claim such a pension. His claim to a dependant's pension based on dependency was in due course rejected by the Trustees. That rejection formed part of the Complaint, but the Pensions Ombudsman found against him. There is no appeal from that part of the Determination and I need say no more about it.

An extract from the minutes of the Trustees’ meeting of 17 April 2008 reads as follows:

“CL reminded the Trustees of the situation relating to the late Ms Brahja. Essentially, Ms Brahja had erroneously been informed that in the event of her death her partner, to whom she was not married, would be entitled to a pension. In fact, benefits were not payable unless Ms Brahja's partner, Mr Catchpole, was a financial dependant at the date of her death under the Scheme's Trust Deed and Rules…

MB noted that the Trustees might be found at fault in relation to the letter that had previously been sent to Ms Brahja. It was agreed to alert the Company to the situation once the Trustees had information about Mr Catchpole's dependency or otherwise.”

At their meeting of 18 June 2008, the Trustees considered the case of Ms Brahja. Included in the minutes of the meeting is the following:

“[Ms A-H] explained that both her and [Mr S's] recollection was that the letter sent to Ms Brahja stating that Mr Catchpole would be eligible for a spouse's pension had been agreed by [Mr S] (the Trustees’ secretary at the time). [Ms A-H] stated that if the letter had made it clear that Ms Brahja and Mr Catchpole needed to be married to guarantee that Mr Catchpole would be eligible for benefits then she believed that they would have got married. The Trustees agreed that this appeared likely from the correspondence.”

The Pension Ombudsman recorded what Mr Catchpole had to say in this way:

“He says that as a result of this advice, he and Ms Brahja decided that it was not necessary for them to marry in order for him to benefit under the Scheme. He says that had they known that they need to marry for him to have an entitlement they would have done so, not regarding it as particularly significant step. It would, he says, have been a minor inconvenience compared to a lifetime future pension. He says that in fact it would have been irrational not to marry.”

That, I think, reflects what Mr Catchpole submitted to the Pensions Ombudsman in response to the draft Determination which the Pensions Ombudsman sent to the parties. I shall return to that in a moment

What the Pensions Ombudsman does not record, however, is the fact that Ms Brahja had made Will dated 27 March 2005 under which Mr Catchpole was her universal legatee.

Nor does he record the contents of the Complaint in the section headed “Details”. It is very brief and I set it out in full:

“Following the death of my partner of 24 years I submitted a claim to receive a “Spouse's” pension. My partner had previously sought clarification of the definition of Spouse from her employer in 2004, as at that time we were considering getting married later that year on her 50 ^th birthday. The enclosed letter [the letter from Ms A-H] clearly states that I, as her long term co-habiting partner, would be eligible for a spouse pension.”

The Pensions Ombudsman's conclusions

The Pension's Ombudsman held that the Trustees had been guilty of maladministration in giving the incorrect information which they did to Ms Brahja. However, he nonetheless rejected Mr Catchpole's complaints. As I have said, there is no appeal against his rejection of the complaint about the refusal of a discretionary dependency pension; I am concerned only with the rejection the complaint about the refusal by the Trustees to pay a spouse's pension to him. The Pensions Ombudsman's reasons on this aspect of the case were short and I set them out in full:

“18. The question I have to decide is what would have happened if Ms Brahja had been given the correct answer. Mr Catchpole should be put in the position he would have been in if Ms Brahja had been told that he did not automatically qualify for a pension even though he was living with Ms Brahja as her spouse.

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