Mark John Wilson v Moira McNamara
| Jurisdiction | England & Wales |
| Judge | Lord Justice Nugee |
| Judgment Date | 15 February 2022 |
| Neutral Citation | [2022] EWHC 243 (Ch) |
| Docket Number | Case No: BR-2012-004866 |
| Court | Chancery Division |
[2022] EWHC 243 (Ch)
Lord 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
Royal Courts of Justice
Strand, London WC2A 2LL
George Peretz QC and John Briggs (instructed by Edwin Coe LLP) for Mr McNamara
Deok Jooh Rhee QC (instructed by Eversheds Sutherland (International) LLP) for the Joint Trustees in Bankruptcy
Hearing date: 16 December 2021
Approved Judgment
Remote hand-down: This judgment was handed down remotely at 10.30am on 15 February 2022 by circulation to the parties or their representatives by email and by release to BAILII and the National Archives.
Introduction
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 Judgment, and I will adopt the same abbreviations as I did there.
As there appears, Mr McNamara, an Irish citizen, was made bankrupt in England (on his own petition). Prior to his bankruptcy he had been a property developer in Ireland. The proceedings concern the impact of his bankruptcy on any rights that he might still have under an Irish pension scheme, the Simcoe Scheme. The Simcoe Scheme held a unit-linked retirement policy issued by Irish Life and this was claimed by his Joint Trustees in Bankruptcy for the bankruptcy estate. Mr McNamara however contended that any rights he had under the Simcoe Scheme should be excluded from his bankruptcy on the basis that this was required by EU law, and specifically by Art 49 TFEU. This issue was argued before me as a preliminary issue on agreed facts. I decided that the question whether the impact of insolvency on pension rights was within the scope of Art 49 TFEU was not acte clair, and that it was appropriate to make a reference to the CJEU to seek a preliminary ruling on this question: see the Main Judgment at [119]–[121].
Two questions were thereafter formulated by the parties, and scheduled to an order for reference made by me which was sealed on 30 March 2020. I give the text of them below but in effect they asked whether the relevant English provisions for exclusion from bankruptcy of the bankrupt's pension rights (namely s. 11 WRPA 1999, supplemented by various regulations) were compatible with EU law.
The request for a preliminary ruling was accepted by the CJEU on 17 June 2020. (The UK had ceased to be a Member State of the EU on 1 February 2020, but, as explained in more detail below, the CJEU continued to have jurisdiction to give preliminary rulings on requests from UK courts made during the transition period, which ended on 31 December 2020). The CJEU handed down judgment on 11 November 2021 under the name BJ and OV v Mrs M & others (Case C-168/20) 1 EU:C:2021:907. Again I refer in more detail to the judgment ( “the CJEU Judgment”) below, but in summary the Court decided that Art 49 TFEU precluded a provision of the law of a Member State which made the automatic exclusion of pension rights from bankruptcy dependent on a requirement that the pension scheme be tax approved in that Member State, unless such a provision were justified in the public interest. In other words, the CJEU accepted that the relevant English provisions did constitute a restriction on freedom of establishment, and would therefore be contrary to EU law unless justifiable.
I had in the Main Judgment expressed my own (provisional) view that the impact of insolvency on the accrued pension rights of a person exercising the right of self-establishment as a self-employed person was within the scope of Art 49 TFEU; that there had not been equal treatment between UK nationals and nationals of another Member State; and that the relevant English provisions therefore constituted
discrimination in the enjoyment of a social advantage prohibited by Art 49 TFEU and Art 24 CRD: see the Main Judgment at [122] to [125]. I had also heard argument on the appropriate remedy if there were unlawful discrimination and went on to consider that question to avoid it having to be revisited. I concluded that it would be appropriate to read down s. 11(2)(a) WRPA 1999 so that it included an exclusion of pension rights under a scheme established in another Member State which was “recognised for tax purposes” within the meaning of reg 2(3) of The Pension Schemes (Categories of Country and Requirements for Overseas Pension Schemes and Recognised Overseas Pension Schemes) Regulations 2006, SI 2006/206: see the Main Judgment at [126] to [133]. Since the Simcoe Scheme was (or very probably was) recognised for tax purposes within that meaning, the preliminary issue would therefore be answered “Yes”, that is that Mr McNamara's rights under the Simcoe Scheme would be excluded from his bankruptcyIn the light of the CJEU' s answer to the questions referred, Mr McNamara' s solicitors invited the Joint Trustees to agree to an order disposing of the preliminary issue in his favour, Mr McNamara's position being that there is nothing of any substance left to argue about: the CJEU had made it clear that the relevant UK provisions were prima facie discriminatory and hence unlawful unless justified, and since justification had never been raised as an issue in these proceedings, it followed that the preliminary issue should be answered in his favour without more. This was the contention advanced before me by Mr George Peretz QC, who appeared with Mr John Briggs for Mr McNamara.
The Joint Trustees' position is very different. Their position is that the CJEU in its judgment made it clear that the relevant provisions were only unlawful if they could not be justified and that it was for the referring court to ascertain whether there was any justification. Directions should therefore now be given to enable the question of justification to be determined. This was the contention advanced before me by Ms Deok Joo Rhee QC for the Joint Trustees.
The essential question for me to determine therefore is whether I should proceed to answer the preliminary issue in Mr McNamara's favour without more, on the basis that justification is not an issue raised in these proceedings; or whether I should give directions to enable the issue of justification to be tried.
In my judgment the submissions of Mr Peretz are to be preferred, for the reasons I give below. I will therefore make an order answering the preliminary issue in Mr McNamara's favour.
Procedural history — (i) up to the Order for reference
It is helpful to set out some of the procedural history, which starts with Mr McNamara being made bankrupt on his own petition on 2 November 2012.
By application notice under the Insolvency Act 1986 dated 1 November 2018 the Joint Trustees sought a declaration that all beneficial rights and interest in the pension policy issued by Irish Life vested in them as Mr McNamara's trustees in bankruptcy. The policy was held by the trustees of the Simcoe Scheme and the Joint Trustees' claim was based on the contention that the beneficial interest in the policy remained with Mr McNamara as a member of the Simcoe Scheme at the time of his bankruptcy. There was in fact a dispute about this and the Joint Trustees had an alternative claim to the effect that if he had divested himself of his interest in the policy before his bankruptcy then this constituted a transaction at an undervalue and should be set aside, but it is not necessary to refer to this further as the preliminary issue proceeded on the assumption most favourable to the Joint Trustees, that is that Mr McNamara still retained pension rights under the Simcoe Scheme at the time of his bankruptcy. The respondents to the Joint Trustees' application were Mrs McNamara and Marine House as trustees of the Simcoe Scheme, and Irish Life itself.
By application notice dated 29 March 2019 Mr McNamara applied to be joined to the proceedings and sought relief under a number of heads, including, by paragraph (b), a declaration that all his rights and interest, if any, in the policy were excluded from the bankruptcy estate by virtue of, among other provisions, Art 49 TFEU. The application notice set out, in brief, the grounds on which he claimed to be entitled to this relief. It is worth setting out the relevant ground in full as it identifies the EU law arguments that would be deployed by Mr McNamara:
“The definition of “approved pension arrangement” in section 11(1)(a) of the 1999 Act [ ie WRPA 1999] as meaning a pension scheme registered under section 153 of the 2004 Act [ ie FA 2004] infringes EU law in that the different treatment of pension schemes registered under section 153 of the 2004 Act and equivalent pension schemes based in other Member States amounts to unequal treatment and/or a hindrance to free movement rights within the scope of Articles 21, 45 and/or 49 of the Treaty [on] the Functioning of the EU (“TFEU”) and other provisions of EU secondary legislation such as Article 24 of Directive 2004/38 and Article 7(2) of Regulation 492/2011 which prohibit national measures which hinder or deter a national of a Member State from leaving his country of origin in order to exercise his right of free movement within the EU or which subject such nationals to unequal treatment compared to home state nationals. In the present case, failure to treat Irish pension schemes such as the Simcoe Pension Scheme, registered in...
To continue reading
Request your trial
-
Mark John Wilson v Michael Bernard McNamara
...DIVISION) ON APPEAL FROM THE BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES INSOLVENCY AND COMPANIES LIST LORD JUSTICE NUGEE — [2022] EWHC 243 (CH) MR JUSTICE NUGEE — [2020] EWHC 98 (CH); [2020] 2 CMLR 27 Royal Courts of Justice Strand, London, WC2A 2LL Deok Joo Rhee KC (instructed by Ev......
-
The Commissioners for HM Revenue and Customs v Martyn Glen Perfect
...solicitors informed the Court that, in the light of the decision of Nugee LJ, sitting as a first instance Judge, in Wilson v McNamara [2022] EWHC 243 (Ch), Mr Perfect no longer sought to resist HMRC's appeal on the excise duty 5 The judgment which this Court gave on 19 March 2019 ( [2019]......
-
Dawson's (Wales) Ltd v The Commissioners for HM Revenue & Customs
...solicitors informed the court that, in the light of the decision of Nugee LJ, sitting as a first instance judge, in Wilson v McNamara [2022] EWHC 243 (Ch), Mr Perfect no longer sought to resist HMCR's appeal on the excise duty issue. At [41] of his judgment in that case, Nugee LJ explained......
-
Peter Orji v Sukhdip Nagra
...amount to an abuse of process” (emphasis supplied). More recently, Nugee LJ reiterated in Wilson and Another v McNamara and Others [2022] EWHC 243 (Ch) at [57], by reference to Henderson v Henderson itself, that “the principle does not arise if there has not been a previous adjudication” b......