Shehzad Farrukh v Irwin Mitchell (A Firm) Kenneth Green (Trading as Green Denman and Skandia Life Assurance Company Ltd
|England & Wales
|Mr Christopher Nugee QC
|07 July 2006
| EWHC 1626 (Ch)
|07 July 2006
|Case No: HC 03 C 00580
 EWHC 1626 (Ch)
IN THE HIGH COURT OF JUSTICE
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Christopher Nugee QC sitting as a Deputy Judge of the High Court
Case No: HC 03 C 00580
Mr James Dingemans QC and Mr Thomas Roe (instructed by Manches) for the Claimant
Mr Charles Hollander QC (instructed by Ashurst) for the Defendant
Hearing dates: 26, 27 and 28 April; 2 May 2006
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
This is the hearing of an application under CPR Part 24 by the Defendant for summary judgment against the Claimant (or as it is sometimes called "reverse summary judgment"). CPR rule 24.2 provides that the Court may give summary judgment against a claimant on the whole of a claim or a particular issue if it considers that the claimant has "no real prospect of succeeding" on the claim or issue, and there is "no other compelling reason" why the case or issue should be disposed of at a trial. It is not suggested that there might in this case be any other compelling reason and it follows that what I have to decide is the familiar question whether the Claimant has any real prospect of success in his claims; or, to be more accurate whether the Defendant has established that he has no such prospect.
As appears below, it is well established that on an application such as this, it is inappropriate for the Court to conduct a mini-trial on the documents, but in order to make sense of what follows it is appropriate for me to summarise the facts as they appear from the evidence before me. I do so being very conscious that it is not the function of the Court at this stage to make findings of fact where there is any dispute, but to assess whether there is indeed any real prospect of the Claimant succeeding at trial.
Summary of facts
The Defendant, Skandia Life Assurance Company Limited, ("Skandia Life"), is as its name indicates an insurance company. It is part of the Skandia UK Group and carries on long-term insurance business, including pension business. Mr Nick Poyntz-Wright, who is now Skandia Life's Managing Director, says in his witness statement that Skandia Life (and other companies in the Skandia UK Group) only sell products through independent financial advisers ("IFAs"); in very general terms an insurance company can either sell its products though IFAs, who are independent of the insurance company, or through company representatives who are tied to the particular company. There is in fact an issue between the parties whether Skandia Life so conducted itself that some of its employees acted as company representatives, which I will have to consider later; but the general description of Skandia Life selling through IFAs is not disputed.
One such IFA is the Claimant, Mr Kenneth Green, who trades under the name of Green Denman. He established Green Denman in 1973, and he is evidently an IFA of very considerable experience. He has a long association with the Skandia group, having known Mr Alan Wilson (who by 1999 was the Managing Director of Skandia UK Holdings) for many years. He has been registered with Skandia Life to offer its products to his clients since 1979. One of his clients was Imagination Limited ("Imagination") and Mr Green was giving pensions advice to Imagination at least as early as 1981. As a result of his advice, in 1982 Imagination established a pension scheme with Skandia Life ("the 1982 Scheme"), the Scheme being established with effect from 1 February 1982 by an interim Trust Deed dated 29 January 1982 under which Imagination appointed itself first Trustee. The deed recites that Imagination had proposed or was about to propose to Skandia Life for a policy or policies for securing the benefits of the Scheme, and provides that as Trustee it should hold such policies under trust and apply the contributions received in the payment of premiums to Skandia Life. The 1982 Scheme is an occupational pension scheme of the money purchase type, with earmarked assets for each member, a separate policy (or policies) being issued by Skandia Life in respect of each member.
Imagination was not the only client that Mr Green introduced to Skandia Life, but it became an important one; when the 1982 Scheme was set up, Imagination was a relatively small company with some 24 employees, but by the end of 1996 it had (according to the Company Secretary, Ms Joyce Powell, who was the person at Imagination responsible for administration of the Scheme) 232 employees. It would seem that about half were active members of the 1982 Scheme. Mr Green was typically, and certainly in the case of Imagination, remunerated for his advice by commission; this was paid to him by Skandia Life, and covered by the charges which Skandia Life levied on the policies. The precise rates and amounts do not matter but as Imagination grew and the number of employees and members of the 1982 Scheme grew with it, this became a significant source of income for Mr Green. Mr Green's own figures (annexed to the Particulars of Claim) assume that if the 1982 Scheme had continued unchanged, he would have earned over £290,000 by way of commission in relation to the 1982 Scheme in 2000, and correspondingly larger figures thereafter, depending on the assumptions that are made about increases in the number of members and their salaries.
At the risk of oversimplification, Mr Green's essential complaint in these proceedings is that Skandia Life was instrumental in causing Imagination in 2000 to change from the 1982 Scheme to new pension arrangements with Professional Life Assurance Company Limited ("Professional Life"), another insurance company within the Skandia UK Group. These new arrangements were on a nil commission basis with the result that Mr Green lost the benefit of the commission payable under the 1982 Scheme, and indeed had to repay some commission which had been paid to him in advance. Mr Green claims that in doing so Skandia Life acted in breach of terms to be implied into his contract, and conspired (with Imagination, with Professional Life and with another Skandia company, Skandia Life (Pensions Trustee) Limited ("Skandia Trustee")) to use unlawful means to injure him. This is only a brief summary of his claims which I will have to consider in detail in due course.
To resume the history, Imagination as might be expected from time to time reviewed its pension arrangements; Mr Green refers in his evidence to two occasions in particular, one in 1992–3 when Imagination took advice from Pannell Kerr Foster and Skandia Life were asked to take part in a "beauty parade" competing with alternative providers; and one in 1997 when Imagination took advice from Mr Hyman Wolanski of Wolanski & Co, a firm of consulting actuaries. In each case Imagination in the event decided to stay with Skandia Life and retain the 1982 Scheme.
Mr Green points to what happened in 1997 as an illustration of how he and Skandia Life could successfully work together to persuade Imagination of the merits of its existing pension scheme. I do not think it is necessary for me to recount these events in any detail. Mr Wolanski had written a report in May 1997 addressed to Mr Richard Adams, the Finance Director of Imagination (which had by then apparently changed its name to The Imagination Group Limited) in which he made a number of criticisms of the existing pension arrangements, describing the charging structure as complicated, and the Skandia Life contract as relatively expensive; he set out a number of options, including moving to a nil commission basis with Skandia Life or Professional Life, or moving to other providers. This led to a meeting in July 1997, at which Mr Jim Roberts (Investment Director for the Skandia UK Group) made a presentation on behalf of Skandia Life which emphasised the financial performance of the Skandia funds, and Mr Green stressed the after sales service which he provided and the flexibility of the existing arrangements. Mr Green says that it was also demonstrated at that meeting that a transfer to a fee-based arrangement would not be in the interests of the members, and that this was accepted by both Mr Adams and Mr Wolanski.
In the event Imagination stayed with the existing scheme, albeit with some changes. One of these was a change of trusteeship: Mr Roberts had made the point in his presentation that the Pensions Act 1995 imposed a number of new responsibilities on trustees, which Imagination would not want. His suggested solution was to amend the rules to adopt the rules of the Skandia Master Trust and appoint Skandia Trustee as sole trustee and scheme administrator. The evidence before me does not deal with this in any detail. It does include a form of Deed of Appointment under which Skandia Trustee is appointed sole trustee of the 1982 Scheme in place of Imagination. This is undated and executed by Imagination alone; but Skandia Life accepts on the pleadings that Skandia Trustee became trustee on 1 September 1997. I do not think I have any clear evidence as to whether Mr Roberts' other suggestion of amending the rules to adopt the Master Trust was taken up.
There were also some changes to improve the financial terms, but these do not appear to have entirely satisfied Mr Adams. In January 1998 he wrote to Mr Green mainly asking for further information but also saying that although he was pleased to have confirmation of the improved benefits they had not "translated as much as I guessed they would into £ value", and that it seemed to him "there would still be at a...
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