Mark John Wilson v Moira McNamara
| Jurisdiction | England & Wales |
| Judge | Mr Justice Nugee |
| Judgment Date | 23 January 2020 |
| Neutral Citation | [2020] EWHC 98 (Ch) |
| Date | 23 January 2020 |
| Docket Number | Case No: BR-2012-004866 |
| Court | Chancery Division |
[2020] EWHC 98 (Ch)
Mr Justice Nugee
Case No: BR-2012-004866
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INSOLVENCY AND COMPANIES LIST
In the Matter of Michael Bernard McNamara
And in the Matter of the Insolvency Act 1986
Rolls Building, Royal Courts of Justice
Fetter Lane, EC4A 1NL
Mr George Peretz QC and Mr John Briggs (instructed by Edwin Coe LLP) for Mr McNamara
Ms Deok Joo Rhee QC and Mr James Barker (instructed by Eversheds Sutherland (International) LLP) for the Joint Trustees in Bankruptcy
Hearing dates: 5 and 6 November 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 is given on the hearing of a preliminary issue in an application in the bankruptcy of Mr Michael Bernard McNamara. Mr McNamara was made bankrupt by Mr Registrar Jones on 2 November 2012 on his own petition, presented that day. Prior to his bankruptcy Mr McNamara had been a high profile property developer operating primarily, if not exclusively, in the Republic of Ireland. But he and his wife had moved to London in July 2011, and the Court accepted that he had moved his centre of main interests (or COMI) from Ireland to England by the date of presentation of the petition.
The Applicants in the substantive application, dated 1 November 2018, Mr Mark Wilson and Mr George Maloney, are the current Joint Trustees in Bankruptcy of Mr McNamara ( “the Joint Trustees”), Mr Maloney being one of the original trustees and Mr Wilson being a successor trustee. They brought the application in order to claim for the benefit of the bankruptcy estate an investment held in an Irish pension scheme, the Simcoe Industries Limited Retirement Plan, in the form of a unit-linked retirement policy issued by the 3 rd Respondent, Irish Life Assurance plc ( “Irish Life”). The policy is held by the trustees of the pension scheme, who are now the 1 st Respondent, Mrs Moira McNamara (Mr McNamara's wife) and the 2 nd Respondent, Marine House Trustees Ltd ( “Marine House”). The Joint Trustees' primary claim is that the beneficial interest in the policy remained with Mr McNamara at the time of his bankruptcy and so vested in his trustees as part of his estate and is now vested in them as the current trustees; they have an alternative claim that if he divested himself of his interest in the policy before his bankruptcy then the transaction by which he did so constituted a transaction at an undervalue and should be set aside.
The application was issued against the first three Respondents only. On 29 March 2019 Mr McNamara applied to be added as a party. He sought relief under a number of heads, but in essence his case was that any rights he had under the pension scheme should be excluded from the bankruptcy estate. The basis for this contention was that if instead of being a member of an Irish pension scheme he had been a member of a UK registered pension scheme his rights under it would have been excluded from the estate, and EU law required the same treatment to be accorded to his rights under his Irish pension scheme. By Order dated 18 June 2019 ICCJ Mullen ordered that Mr McNamara be joined, that his EU point be tried as a preliminary issue on the basis of agreed or assumed facts, and that he be the applicant in relation to the issue and the Joint Trustees the respondents.
The preliminary issue is in the following terms:
“Whether by virtue of Articles 21, 45 and/or 49, 50 or 56 of the Treaty on the Functioning of the EU and/or Article 24 of Parliament and Council Directive 2004/38/EC and/or Article 7(2) of Parliament and Council Regulation 492/2011/EU, the pension rights of the bankrupt Michael Bernard McNamara under the Simcoe Industries Limited Retirement Pension Plan held with Irish Life Assurance plc (having policy no. 80001007) and approved by the Revenue Commissioners in Ireland for the purposes of Part 30, Chapter 1 of the Irish Consolidation Act 1997 (as evidenced by a letter dated 28 October 2009 from the Revenue Commissioners in Ireland) at the commencement of the bankruptcy are to be treated for the purposes of section 11(1) and (2)(a) of the Welfare Reform and Pensions Act as [rights under] an “approved pension arrangement” and hence excluded by that statutory provision from his bankruptcy estate.”
The text of this issue as I have set it out is not identical to that ordered by ICCJ Mullen. First, the underlined parts in the first line are in a draft amendment put forward on behalf of Mr McNamara, but I do not think anything turns on this as the argument for him in the event proceeded by reference to Art 49 of the Treaty on the Functioning of the European Union ( “TFEU”). Second, I have added the italicised words in the penultimate line to make the wording of the issue more grammatical and to bring it in line with the wording of s. 11 of the Welfare Reform and Pensions Act 1999 ( “ WRPA 1999”). The reference in the eighth line to the “Irish Consolidation Act 1997” should in fact be to an Irish Act called the Taxes Consolidation Act 1997 ( “ TCA 1997”)
That is the issue which has been argued before me, by Mr George Peretz QC for Mr McNamara, and Ms Deok Joo Rhee QC for the Joint Trustees. None of Mrs McNamara, Marine House or Irish Life has taken any part in the hearing.
Facts
The agreed and assumed facts were scheduled to ICCJ Mullen's Order. There was initially one fact in dispute (whether Mr McNamara had been an employee as well as a director of Simcoe Industries Ltd), and ICCJ Mullen had provided for evidence to be filed on that issue, but that too is now agreed. I therefore do not have to resolve any issues of fact, and can take the facts from the schedule, supplemented by the documents in evidence.
Prior to his bankruptcy Mr McNamara was engaged in the building and property development business through Michael McNamara & Co ( “MMC”), a company operating largely if not exclusively in Ireland.
On 20 December 2002 MMC as employer and trustee established an occupational pension scheme for Mr McNamara ( “the MMC Scheme”) with a payment of €6,161,256, paid as a single premium on a pension policy, no. 80001007, issued by Irish Life ( “the Policy”), under which benefits would be paid on Mr McNamara's retirement or earlier death. The Policy was unit-linked, and the premium secured 6,161,256 units in a fund called the Future Fund. The asset underlying the Future Fund was a shopping centre in Dublin called St Stephens Green Shopping Centre. The policy was governed by Irish law.
In November 2010 MMC was put into receivership in Ireland at the suit of NAMA (the National Asset Management Agency) which had acquired MMC's debts to the Bank of Ireland. Its failure resulted from the crash in the Irish property market.
On 16 July 2009 Mr and Mrs McNamara established a new Irish company, Simcoe Industries Ltd ( “Simcoe”), with Mr McNamara as director, and Mrs McNamara as director and secretary. Mr McNamara was a director of Simcoe from 16 July 2009 to 14 April 2012. He was also (as is not now disputed) an employee of Simcoe from 1 December 2009 to 31 January 2011.
By Deed dated 31 August 2009 ( “the Deed”) Simcoe as Principal Employer established a pension scheme, the Simcoe Industries Limited Retirement Plan ( “the Simcoe Scheme”), with effect from that date, with Marine House as Pensioneer Trustee and Mr and Mrs McNamara as Additional Trustees. The Simcoe Scheme is governed by Irish law.
The Simcoe Scheme was established as a retirement benefits scheme as defined in s. 771 TCA 1997, to provide relevant benefits as defined in s. 770(1) TCA 1997 for such of the employees of Simcoe and Associated Employers as should be included therein as Members; under the Rules annexed to the Deed, a person was eligible for inclusion in the Simcoe Scheme if he were an employee (which for this purpose included directors and officers) of the Employers, and the Employers so decided. The Members of the Simcoe Scheme have in fact been Mr McNamara, Mrs McNamara and their son Ronan McNamara.
By clause 3 of the Deed the Simcoe Scheme was to be established so as to be capable of being approved by the (Irish) Revenue Commissioners pursuant to s. 772 TCA 1997 and of being treated by the Revenue Commissioners as an exempt approved scheme pursuant to s. 774 TCA 1997. By letter dated 28 October 2009 an Inspector of Taxes wrote to Marine House on behalf of the Revenue Commissioners to the effect that the Simcoe Scheme had been approved as a Retirement Benefits Scheme for the purposes of Part 30, Chapter 1 of TCA 1997, and would be treated as an Exempt Approved Scheme for the purpose of s. 774 TCA 1997, in each case with effect from 30 August 2009.
By clause 18 of the Deed if a Member was entitled to a benefit under any other retirement benefits scheme the Trustees had power to accept a transfer payment in accordance with rule 9 of the Rules; rule 9 empowered the Trustees to accept all or any of the assets of the other scheme relating to the Member. By Deed of Assignment dated 7 December 2009 MMC as trustee of the Policy assigned the Policy to Marine House and Mr and Mrs McNamara as Trustees of the Simcoe Scheme, to hold the Policy subject to the provisions of the Policy documents and endorsements thereto, and in consideration of the Simcoe Scheme assuming the obligation to provide a pension appropriate to the Policy.
In the period ending 31 August 2011, the Trustees of...
To continue reading
Request your trial
-
Mark John Wilson v Moira McNamara
...Nugee Introduction 1 This judgment is supplemental to a judgment ( “the Main Judgment”) handed down by me on 23 January 2020 at [2020] EWHC 98 (Ch) on the hearing of a preliminary issue in these proceedings. I will assume that any reader of this judgment will have access to the Main Judgme......