Peter Earnshaw and Others v The Prudential Assurance Company Ltd (Defendant/Applicant)
| Jurisdiction | England & Wales |
| Judge | Chief Master Marsh |
| Judgment Date | 25 April 2017 |
| Neutral Citation | [2017] EWHC 916 (Ch) |
| Docket Number | Case No: HC-2016-002516 |
| Court | Chancery Division |
| Date | 25 April 2017 |
[2017] EWHC 916 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Rolls Building, 7 Rolls Buildings,
Fetter Lane, London EC4A 1NL
Chief Master Marsh
Case No: HC-2016-002516
Hugh Jackson (instructed by Gordons LLP) for the Claimants
Edward Sawyer (instructed by Prudential Legal Department) for the Defendant
Hearing dates: 22 and 23 February 2017
The first to fifth Claimants are the trustees ("the Trustees") of an occupational pension scheme established by the sixth Claimant ("the Employer") named the Job Earnshaw & Bros Limited Staff Pension Scheme ("the Scheme"). The Defendant was the Scheme's administrator from 1956 until 2012. It also provided actuarial services for the Scheme up to 2002. The Claimants seek damages against the Defendant in contract and in negligence in respect of breaches of duty which fall into three categories:
i. Between 14 October 1999 and about 6 October 2012 the Defendant issued quotations to members of the Scheme and caused payments to be made pursuant to the Scheme to pensioners who had retired prior to their Normal Retirement Date ("NRD") without making a deduction for early retirement. The overpayment was estimated by the Claimants up to September 2016 to be £334,335.
ii. The Defendant made errors in respect of the dates on which the benefits of male and female members in the Scheme were equalised as a result of the decision in Barber v Guardian Royal Exchange [1991] 1 QB 344. The Claimants say that the Defendant wrongly thought equalisation had occurred on 7 November 1990 rather than the true date of 31 December 1994. As a consequence, the Defendant wrongly calculated benefits in respect of pensions paid from 1993 onwards resulting in underpayments.
iii. The Defendant made various other computational errors when calculating pensions including mistakes as to the applicable pensionable salary and periods of pensionable service.
For convenience these three types of claim are referred to respectively as "the Early Retirement Claim", "the Equalisation Claim" and "the Other Errors Claim". The quantum of the Early Retirement Claim is now said to be in the region of £420,000 plus interest. The Equalisation Claim, however, is much smaller and is likely to be in the region of £30,000.
The Defendant made an application under CPR 24.2 for summary judgment in respect of the Early Retirement Claim and the Equalisation Claim on the basis that the Claimants have no real prospect of success on those two parts of the claim and there is no other compelling reason why they should be disposed of at a trial.
The claim was issued in the Leeds District Registry. On 23 March 2016 an order was made by consent transferring it to the Chancery Division in London. A costs and case management conference was listed for hearing on 17 November 2016. However, prior to that hearing the Defendant's application for summary judgment had been issued and, therefore, the Deputy Master gave only very limited directions. There was some discussion at the hearing before the Deputy Master about whether there should be a stay for mediation prior to the hearing of the application. The Claimants are critical of the Defendant for refusing to agree to undertake mediation before the application is disposed of. To my mind such a criticism is without substance. The Defendant was entitled to seek to narrow the issues in dispute by obtaining summary judgment in respect of a significant part of the claim prior to undertaking mediation. The Defendant has made it clear that whatever the outcome of the application may be, it will be willing to undertake a mediation in due course.
The jurisdiction under CPR 24.2 is well understood. The principles that are applicable have been summarised in a number of cases. I will have regard to the principles as they are summarised in the judgment of Mr Justice Lewison, as he then was, in Easy Air Limited v Opal Telecom Limited [2009] EWHC 339 (Ch) as approved by the Court of Appeal in AC Ward & Son v Caitlin (Five) Limited [2009] EWCA Civ 1098. The parties have, in addition, referred me to the summary of the relevant legal principles contained in the judgment of Green J in Paul Denning v Greenhalgh Financial Services Limited [2017] EWHC 143 (QB) at [42].
Although it is not a point included in either of those summaries, it is well established that if the applicant for summary judgment adduces credible evidence in support of the application, the respondent becomes subject to an evidential burden of proving some real prospects of success or some other reason for the claim being tried. Thus, the respondent to an application under CPR 24.2 cannot be complacent. A court is generally entitled to assume that if the applicant's evidence is such as to transfer the evidential burden to the respondent, it will have provided the court with all the evidence it has available to meet the case against it.
There are two important principles which bear emphasis:
i. The court must have regard to evidence that could reasonably be expected to be available at trial which is not available at the hearing of the Part 24 application;
ii. There is a need for caution where there are reasonable grounds for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case.
It is often the case on the hearing of an application for summary judgment that the respondent says the case is unsuitable for disposal on a summary basis because disclosure has not taken place and, therefore, the respondent is at a disadvantage because it does not know what evidence may emerge from disclosure. The court is required to determine in such cases whether the submission is mere Micawberism, or whether there are real grounds for believing that documents in support of the Claimants' case will emerge on disclosure. Something more than a rather fanciful hope that what is otherwise a claim without real prospects of success claim can be salvaged after disclosure must exist.
I would add that the exhortation to avoid conducting a mini-trial does not mean that the court may not grapple with what are sometimes difficult issues in dealing with a Part 24 application. What the court must not do, however, is to prefer the evidence of one side over that of the other unless the evidence being put forward is obviously unreliable.
The Defendant's application is supported by two witness statements from Yanting Mao who is senior legal counsel at Prudential UK & Europe and a solicitor. She has no first-hand knowledge about the relevant events. Her witness statement is based upon her review of the documents which have come to light as part of the litigation and her understanding of the practices and procedures of the Defendant as pension scheme administrator which she has acquired in the course of her role as senior legal counsel. Save for one discrete issue of fact, her evidence is not controversial and largely comprises an explanation of the basis upon which the Part 24 application is made, namely upon the assumption that the facts relied upon by the Claimants in their pleaded case are true. The Defendant's case is that aspects of the claim cannot succeed at a trial based upon a legal analysis of the claim.
The Claimants' evidence, by contrast, is somewhat diffuse. Mr John Earnshaw who is Chief Executive Officer of the Employer and a trustee of the Scheme has made a witness statement but the principal evidence by volume is from Charles Howarth a partner at Gordons LLP solicitors and David Jordan of H & C Consulting Actuaries LLP who are the current administrators of the Scheme. Mr Howarth exhibits a short expert report from Mr Chris Tagg who is an associate of Barnett Waddingham, a firm that provides pension administration services. Given the limited scope of the issues before the court, the evidence provided on behalf of the Claimants is extremely lengthy and a considerable proportion of it is of no relevance or assistance.
The Claim
The Claimants allege that the Defendant was retained to provide and did provide administration and documentation services to the Claimants in respect of the day to day running of the Scheme up to 6 October 2012. In addition, the Defendant provided actuarial services to the Claimants in respect of the Scheme until about 28 November 2002. In paragraph 18 of the Particulars of Claim the Claimants set out a number of duties which they allege were owed by the Defendant both in contract and tort to the Trustees and to the Employer in tort only. The duties are taken from a statement of services dated 12 December 2008. The Claimants' case is that the duties defined in that statement were applicable throughout the period during which the Defendant acted as pension administrator and the contractual obligations are matched by tortious duties. For the purposes of the application that is not disputed, save the Defendant points out that under paragraph 5.1 of the statement Prudential is only required to "…use its best endeavours to ensure that its employees and agents carry out the services described in this agreement competently and in accordance with its terms." If the terms of the contract are taken to be the benchmark in respect of the duties owed then, in accordance with submissions made on behalf of the Defendant, the duties are not absolute because the Defendant is only required to use its best endeavours.
The duties are set out in paragraph 18 and Mr Jackson, who appeared for the Claimants, said they are all...
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