MCP Pensions Trustees Ltd v AON Pension Trustees Ltd
| Jurisdiction | England & Wales |
| Judgment Date | 18 June 2009 |
| Neutral Citation | [2009] EWHC 1351 (Ch) |
| Docket Number | Case No: HC08C01400 |
| Court | Chancery Division |
| Date | 18 June 2009 |
[2009] EWHC 1351 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Jeremy Cousins Qc, Sitting As A Deputy Judge Of The Chancery Division
Case No: HC08C01400
Mr Fenner Moeran (instructed by Messrs Browne JacobsenLLP of 77, Gracechurch Street, LONDON EC3V OAS) for the Claimant
Mr David E Grant (instructed by Messrs CMS Cameron McKenna LLP, of Mitre House, 160, Aldersgate Street, LONDON EC1A 4DD) for the Defendant
APPROVED JUDGMENT
Hearing date: 14 th May 2009
THE DEPUTY JUDGE:
BACKGROUND
In this case the Claimant, MCP Pension Trustees Limited (“MCP”), seeks damages (together with such further or other relief as may be appropriate) in respect of loss alleged to have been suffered as a result of the Defendant's, AON Pension Trustees Limited's (“AON”), breach of contract or negligence in the provision of pension fund administration services in relation to the Maxwell Communication Works Pension Scheme (“the Scheme”). In essence MCP's case is that it retained AON to administer the Scheme between 1992 and 1997. In about 1996, MCP maintains, some 32 persons were transferred into the Scheme from a plan operated by another employer. MCP alleges that because at some point after the transfer AON incorrectly amended the records of the Scheme so as to remove reference to the 32 transferred members, those persons were overlooked when the Scheme was wound-up in 2003. When this was subsequently discovered, provision had to be made for 15 of the transferred members at substantial cost.
MCP had previously arranged insurance cover to deal with this very kind of problem. Appropriate sums have been paid out to the transferred members. The claim now brought by MCP is therefore pursued by its insurers.
AON disputes liability in this case on many grounds. Its case is summarised in paragraph 2 of its Amended Defence. AON contends, amongst other things, that any claim is time barred pursuant to sections 2 and 5 of the Limitation Act 1980, and denies that it was in breach of contract or negligent in the way it administered the scheme. It alleges that MCP was contributorily negligent, and, of particular reference to the preliminary issue which I have to determine, it relies on the fact that MCP undertook an extensive advertising campaign, calling for former members of the scheme to notify it of any claims, in accordance with the requirements of section 27 of the Trustee Act 1925. AON contends that since none of the former members of the scheme who were overlooked responded to this notice, and that MCP did not have notice of “the claims” of the former members, MCP was protected by the operation of section 27 so that it had no liability to the former members of the Scheme who were overlooked when the Scheme was wound-up. AON maintains that in the circumstances section 27 provides a complete answer to MCP's claim.
Given the potential importance of the defence raised under section 27 of the 1925 Act, the parties ultimately agreed that a preliminary issue should be tried, as I shall explain below.
THE FACTS
In order to facilitate the trial of the preliminary issue the parties have helpfully agreed a Statement of Facts. I should explain that some of these facts agreed for the purposes of the preliminary issue will be disputed by AON at any subsequent trial in the event that the preliminary issue is resolved against AON.
The agreed facts relevant to the preliminary issue, which I take from the Statement of Facts, are as follows:
“(1) At all material times the Claimant was the trustee of the Maxwell Communications Works Pension Scheme (“the Works Scheme”).
(2) The Defendant provided administration services to the Works Scheme from around 1992 until late 1997.
(3) The winding up of the Works Scheme commenced in 2003. The Claimant took out two insurance policies as part of the process of winding up the Works Scheme including an overlooked beneficiary policy.
(4) The Claimant used all the assets of the Works Scheme in securing the benefits of all members of the Works Scheme that it knew of, and using an apparent surplus to augment those members benefits. Thereafter the Claimant became aware of 32 individuals whom the Claimant believes to have been members of the Works Scheme who did not have benefits secured for them when the Works Scheme winding up commenced. These individuals were formally members of the Diemer & Reynolds Limited Retirement and Death Benefit Plan (“the D&R Scheme” and the “D&R Works Transferees” respectively).
(5) Of these 32 D&R Works Transferees it was unnecessary to make provision for 17 of them, leaving 15 members to make provision for. Consequently the Claimant made a claim on the overlooked beneficiary policy, paying out £868,472 to these 15 members. It has recently become apparent that there may be a further liability in relation to 4 of those 15 members, which is currently being investigated.
(6) Although the question of liability is not an issue at the forthcoming Preliminary Hearing and a number of matters asserted by the Claimant in the Particulars of Claim and the Witness Statement of Mr Derek Bambury made on 23 December 2008 on behalf of the Claimant are not accepted, for the purposes of the hearing of the preliminary issue only, the Defendant is content to proceed on the basis that the D&R Works Transferees transferred to the Works Scheme in around 1996.
…
(8) The Claimant has not been wilful or negligent in the exercise of its duties as trustee of the Works Scheme and the Claimant has acted honestly and reasonably.
(9) The Claimant undertook an extensive advertising campaign calling for former members of the Works Scheme to notify it of claims, and in accordance with the requirements of section 27 Trustee Act 1925. The outcome of this advertising was that only 3 individuals, who were not already known to be Works Scheme members, were identified. The D&R Works Transferees did not respond to the advertising.
(10) At the time of the distribution of the assets of the Works Scheme, the Claimant was not aware of the D&R Works Transferees.
…”
THE PRELIMINARY ISSUE
On 19 th June 2008 by order of Chief Master Winegarten it was provided that there should be a Preliminary Issue to consider certain matters. Initially it was envisaged that three substantive points should be determined. However AON subsequently confirmed that it was not advancing a case in relation to two of those points so that only one remains for consideration of the Court namely:
“Whether on the true construction of section 27 Trustee Act 1925 the Claimant is not liable to the D&R Works Transferees”.
MCP accepts that if this Preliminary Issue is resolved in favour of AON then this would be determinative of the action, which should be dismissed.
At the trial of the Preliminary Issue, at which of course no oral evidence was adduced, it was agreed between the parties that submissions should first be made by Mr David E. Grant, learned counsel for AON, to be followed by submissions to be made by Mr Fenner Moeran, learned counsel for MCP, to be followed by submissions in reply from Mr Grant.
THE SUBMISSIONS FOR AON
The provisions of section 27
Mr Grant drew my attention to the provisions of 27 of the Trustee Act 1925 which provides as follows:
“27 Protection by means of advertisements
(1) With a view to the conveyance to or distribution among the persons entitled to any real or personal property, the trustees of a settlement [, trustees of land, trustees for sale of personal property] or personal representatives, may give notice by advertisement in the Gazette, and [in a newspaper circulating in the district in which the land is situated] and such other like notices, including notices elsewhere than in England and Wales, as would, in any special case, have been directed by a court of competent jurisdiction in an action for administration, of their intention to make such conveyance or distribution as aforesaid, and requiring any person interested to send to the trustees or personal representatives within the time, not being less than two months, fixed in the notice or, where more than one notice is given, in the last of the notices, particulars of his claim in respect of the property or any part thereof to which the notice relates.
(2) At the expiration of the time fixed by the notice the trustees or personal representatives may convey or distribute the property or any part thereof to which the notice relates, to or among the persons entitled thereto, having regard only to the claims, whether formal or not, of which the trustees or personal representatives then had notice and shall not, as respects the property so conveyed or distributed, be liable to any person of whose claim the trustees or personal representatives have not had notice at the time of conveyance or distribution; but nothing in this section—
(a) prejudices the right of any person to follow the property, or any property representing the same, into the hands of any person, other than a purchaser, who may have received it; or
(b) frees the trustees or personal representatives from any obligation to make searches or obtain official certificates of search similar to those which an intending purchaser would be advised to make or obtain.
(3) This section applies notwithstanding anything to the contrary in the will or other instrument, if any, creating the trust.”
The first words in square brackets were inserted by amendment by the Trusts of Land and Appointment of Trustees Act 1996, the second words in square brackets were inserted by amendment by the Law of Property (Amendment) Act 1926.
Application of section 27 of the Trustee Act 1925 to Pension Schemes
Mr Moeran did not submit, on behalf of MCP, that...
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MCP Pensions Trustees Ltd v AON Pension Trustees Ltd
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