Gary Corsham v Police and Crime Commissioner for Essex
| Jurisdiction | England & Wales |
| Judge | Mr Justice Morgan |
| Judgment Date | 11 July 2019 |
| Neutral Citation | [2019] EWHC 1776 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: CH-2018-000247 |
| Date | 11 July 2019 |
[2019] EWHC 1776 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Rolls Building, Fetter Lane, London, EC4A 1NL
Mr Justice Morgan
Case No: CH-2018-000247
Case No: CH-2018-000248
Simon Cheetham QC (instructed by Ellis Hass & Co, Solicitors) for the Essex Appellants (Messrs Corsham, Washbrook and Gillies)
Naomi Ling (instructed on a Direct Professional Access basis) for the Avon and Somerset Appellants (Messrs Hazell and Kendall)
Jonathan Holl-Allen QC and Aaron Rathmell (instructed by Legal Services, Essex Constabulary and Legal Services, Avon and Somerset Constabulary) for the Respondents in both appeals
Hearing dates: 12 and 15 April 2019
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.
Introduction
This judgment concerns appeals against the decision of the Pensions Ombudsman (Mr Anthony Arter) dated 21 August 2018. That decision dealt with eight separate complaints which had been made to him. The eight complaints raised essentially the same issues. The Ombudsman dismissed all eight complaints.
Five of the complainants now appeal to the High Court. Three of those five were formerly police officers serving with the Essex constabulary. I will refer to them as “the Essex appellants”. They are Mr Corsham, Mr Washbrook and Mr Gillies. Two of the five appellants were formerly police officers with the Avon and Somerset constabulary. I will refer to them as “the Avon and Somerset appellants”. They are Mr Hazell and Mr Kendall. The appeals raise the same issues and have been heard together.
The problem which has been encountered by the appellants and which led to their complaints to the Pensions Ombudsman can be shortly stated as follows:
i) The appellants were serving police officers who were entitled to retire after 30 years' service in the police force.
ii) They were entitled on retirement to pensions which allowed them to take a substantial lump sum and then to receive annual pension payments.
iii) The appellants retired in 2010 or 2011 when each of them was under the age of 55.
iv) The Finance Act 2004 (“the 2004 Act”) contained detailed provisions as to the taxation of pensions which came into force on 6 April 2006 (“A-Day”).
v) When the appellants retired in 2010 or 2011, the 2004 Act provided that the normal minimum pension age was 55.
vi) It followed that the appellants were retiring under the normal minimum pension age.
vii) Taking pension benefits under the normal minimum pension age normally produced adverse tax consequences for the pensioner.
viii) However, the 2004 Act contained provisions which allowed the pensioner to avoid those tax consequences in certain circumstances. Those provisions potentially applied to the appellants but it was critical to their being able to take advantage of those provisions that the appellants did not take up employment of a certain kind within one month of retirement.
ix) Each appellant did take up such employment within one month of retirement and accordingly were subject to the adverse tax consequences of taking pension benefits under the age of 55.
x) The result was that each appellant was liable to pay a substantial tax charge on their lump sums and on their annual payments until they reached the age of 55.
xi) The appellants say that the chief constable and the police authority in relation to each appellant encouraged that appellant to take up the further employment without delay.
xii) When the police officers made their decisions to take up further employment within one month of retirement they were not aware that the result of so doing would be to make themselves liable to tax in the way described.
xiii) They had not been informed of that result by their chief constables or their police authorities in advance of taking up the further employment.
xiv) If they had been informed of that result, before taking up the further employment, they would have postponed the start date of their further employment until more than one month after retirement and, in that way, they would have avoided being liable for the tax consequences referred to above.
In their complaints to the Pensions Ombudsman, the appellants contended that the relevant police authority and the relevant chief constable were in breach of duty to the appellants by failing to advise them about, or at least to inform them of, the tax consequences of taking up further employment in the way described above. The Pensions Ombudsman dismissed the complainants and the appellants now appeal pursuant to permissions to appeal which I granted to one group of appellants on 26 October 2018 and to the other group of appellants on 29 November 2018.
The organisation of police forces
The organisation of police forces is governed by Part I of the Police Act 1996 (“the 1996 Act”). By section 1 of the 1996 Act, England and Wales are divided into the police areas listed in schedule 1 to the 1996 Act. The listed police areas include the areas of Essex and of Avon and Somerset. Section 2 of the 1996 Act requires there to be a police force for every police area.
Each police area must have a chief constable: section 2(1) of the Police Reform and Social Responsibility Act 2011 (“the 2011 Act”). A police force, and the civilian staff of a police force, are under the direction and control of the chief constable of the force. A chief constable has the functions conferred by the 2011 Act and by other enactments: section 2(4) of the 2011 Act. Section 2(7) of the 2011 gives effect to schedule 2 to the 2011 Act. Paragraph 2 of schedule 2 provides that a chief constable is a corporation sole. By paragraph 4(2) of schedule 2, the chief constable may appoint such staff as he thinks appropriate to enable him to exercise his functions and otherwise to assist the relevant police force.
A police officer is an officer of the Crown and is a public servant: Halsbury's Laws of England, 5 th ed. Vol. 84, Police and Investigatory Powers, para. 4. A police officer is not an employee of the police authority or the Police and Crime Commissioner: see Halsbury's Laws of England, 5 th ed. Vol.84, Police and Investigatory Powers, para. 5. However, it has been held that the relationship of the chief constable and the officer is closely analogous to that of employer and employee: see White v Chief Constable of South Yorkshire [1999] 2 AC 455 per Lord Steyn at 497E-F and per Lord Hoffmann at 505C and James-Bowen v Comr of Police of the Metropolis [2018] 1 WLR 4021 per Lord Lloyd-Jones at [15].
The terms on which a police officer holds his office are governed principally by the Police Regulations 2003. It was not suggested by any counsel in this case that these Regulations contained any provisions which are relevant to the issues on these appeals.
Originally, section 3 of the 1996 Act provided for the establishment of a police authority for every police area. A police authority was a body corporate: section 3(2) of the 1996 Act. Section 3 of the 1996 Act was repealed by the 2011 Act and the police authorities for Essex and for Avon and Somerset were abolished: section 1(9) of the 2011 Act. They were replaced by the Police and Crime Commissioners for those police areas. A Police and Crime Commissioner is a corporation sole: section 1(2) of the 2011 Act. A Police and Crime Commissioner has the functions conferred by section 1 of the 2011 Act, the functions relating to community safety and crime prevention conferred by Chapter 3 of Part 1 of the 2011 Act and the other functions conferred by the 2011 Act and other enactments: section 1(5) of the 2011 Act. The liabilities of a police authority for a police area before the coming into force of the 2011 Act were transferred to the new Police and Crime Commissioner for that police area: 2011 Act, schedule 15 paras. 5 and 25.
Police pensions
Section 1 of the Police Pensions Act 1976 (“the 1976 Act”) permits the Secretary of State to make regulations so as to provide for the pensions which are to be paid to and in respect of members of police forces. There are currently three police pension schemes created under this provision. The first scheme was created by the Police Pensions Regulations 1987 (“the 1987 Regulations”) and regulations supplementing and modifying those Regulations. The second scheme was created by the Police Pensions Regulations 2006. The third scheme was created under the Police Pensions Regulations 2015. The 1987 scheme was closed to new entrants on 5 April 2006 but all of the appellants in this case were and remain members of the 1987 scheme.
In the course of argument on these appeals, I was referred to one or two provisions in the 1987 Regulations but I was not shown the detailed provisions of the 1987 Regulations as regards the entitlement to pensions for which they provided. This tends to emphasise that this case is not about the entitlement of the appellants to pensions in accordance with the regulations which govern such entitlement.
Who administered the scheme?
In 2010 and 2011, which is the time relevant for the purposes of the present appeals, the body which was responsible for administering the pensions payable under the 1976 Act and the 1987 Regulations was referred to as “the police authority”. This phrase was defined by section 11(2) of the 1976 Act and was used in...
To continue reading
Request your trial