Steria Ltd v Ronald Hutchison

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLord Justice Mummery,Lord Justice Jacob,Lord Justice Neuberger
Judgment Date24 November 2006
Neutral Citation[2006] EWCA Civ 1551
Docket NumberCase No: A3/2006/0135

[2006] EWCA Civ 1551

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

MR JUSTICE PETER SMITH

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Lord Justice Mummery

Lord Justice Jacob and

Lord Justice Neuberger

Case No: A3/2006/0135

CH/2005/APP/0578

Between:
Steria Limited & Ors
Appellant
and
Ronald Hutchison & Ors
Respondent

MR BRIAN GREEN QC & MR PAUL NEWMAN (instructed by Wragge and Co LLP) for the Appellant

MR NIGEL INGLIS -JONES QC & MR NICOLAS STALLWORTHY (instructed by Levi Solicitors LLP) for the First Respondent

Lord Justice Mummery

The appeal

1

This is a second appeal, for which permission was granted by Lloyd LJ on 14 March 2006. The central point is whether, in the circumstances of this case, the doctrine of estoppel applies to the operation of an occupational pension scheme.

2

Estoppel was the basis of a finding by the Pensions Ombudsman of maladministration of an occupational pension scheme called the "Steria Management Plan" (the Scheme) , which was formerly called the "Information Systems Management Plan".

3

In his Determination (the Determination) dated 21 July 2005 the Pensions Ombudsman dismissed many allegations of maladministration made in a complaint dated 14 July 2003. The allegations were made by Mr Ronald Hutchison, the respondent to this appeal, against the appellants, who include the past and present trustees of the Scheme and the current principal employer.

4

The Pensions Ombudsman upheld one of Mr Hutchison's claims. It related to his pension rights on retiring before he reached the normal retirement date (NRD) of 65, which was specified in the Trust Deed and Rules of the Scheme dated 24 July 1998: see Rule 1.1. The Rules also provided that a member who, with the agreement of the employer retired before NRD but after attaining age 50 was entitled to receive an immediate annual pension, but reduced in such manner as the Actuary should advise to be appropriate to take account of the earlier date on which it becomes payable: see Rule 5.4. These provisions have not been amended under the express power of amendment in the Rules. Yet Mr Hutchison claimed that, if he served 20 years' pensionable service, as he had, his NRD would be at age 62 without any actuarial reduction for the acceleration of his pension. This claim is based on allegations of estoppel by representation, promissory estoppel and estoppel by convention.

5

The Pensions Ombudsman directed that the trustees and other respondents involved in the administration of the Scheme were

"49. …to treat Mr Hutchison as having a normal retirement date at age 62 with entitlement to receive a pension from that age without an actuarial reduction."

6

The Pensions Ombudsman concluded that statements made in booklets about the Scheme and in letters sent to Mr Hutchison were such that Mr Hutchison could reasonably assume that, were he to complete 20 years pensionable service, his NRD would be at age 62; that he relied on the statements; and that it would be unjust to permit the appellants to go back on the statements relied on by Mr Hutchison and deny that his NRD should be at age 62.

7

On 21 December 2005 Peter Smith J dismissed an appeal by the appellants under section 151(4) of the Pension Schemes Act 1993 on points of law. He held that there was no error of law in the Determination.

Background

8

8. I should first identify Mr Hutchison's employers and his employment.

9

The first appellant Steria Limited (Steria) is the "Principal Employer" of the Scheme and has been since 28 June 2003 when it replaced Mr Hutchison's employer, Bull Information Systems Limited (Bull) . Bull is a respondent to the appeal, but it has taken no active part in the appeals before Peter Smith J or this court.

10

Mr Hutchison became an employee of Bull on 7 October 1974. Following his promotion to a management position in 1994, Mr Hutchison took the opportunity to become a member of the Scheme. It was a final salary scheme providing pension benefits for senior employees. He transferred to it his accrued benefits under the pension scheme that he had joined on becoming an employee of Bull (the Information Systems Retirement Plan-ISRP).

11

Mr Hutchison remained an employee of Bull after Bull sold the services part of its business to Steria. He continued to be an employee of Bull until February 2006. He is one of about 70 employees of Bull to whom statements were made of the kind relied on by him to support his claim of entitlement, on the ground of estoppel, to full pension benefits under the Scheme at age 62. Upholding Mr Hutchison's claim has potentially substantial financial effects on the Scheme and those who benefit under it.

12

Next I turn to the trustees of the Scheme. The second appellant, Steria Pension Trustees Limited, (formerly Bull Pension Trustees Limited) was the trustee of the Scheme. Since February 2005 the third appellant Steria (Management Plan) Trustees Limited has been the sole trustee of the Scheme. I shall refer to these two appellants together as "the trustees".

13

The logical starting point for ascertaining Mr Hutchison's NRD is the governing Trust Deed and Rules of the Scheme. As indicated earlier, according to the formal Scheme documents his NRD is at age 65 and, in the case of retirement before that age, a member's pension is required to be actuarially reduced to take account of its accelerated payment.

14

Mr Hutchison, who was born in September 1954, will not be 65 until September 2019. He is now 52 years old. The possibility of his retiring either at age 65 or earlier at age 62 has in fact gone, as he ceased to be a contributing member of the Scheme on 30 September 2002 and has since ceased to be an employee of Bull. His pension benefits under the Scheme are now "deferred benefits" of the kind described later. The fact that Mr Hutchison falls to be treated as a deferred pensioner under the Scheme does not, however, render the point of this appeal academic, as Mr Hutchison contends that his deferred benefits are affected by a determination that his NRD is to be treated as at age 62 rather than at age 65. (He in fact commenced receipt of a pension from the Scheme on 6 April 2006).

15

The present dispute arose when the Pensions Manager of Steria informed Mr Hutchison by letter of 29 November 2002 that his NRD was at age 65 and that earlier retirement, without actuarial reduction, would only have been at Bull's discretion.

16

Mr Hutchison's case that his NRD should be treated as at age 62 and that he is entitled to retire at age 62 with no reduction in his pension for drawing it before the age of 65 is based on his alleged detrimental reliance on representations (estoppel by representation) , or his reliance on promises made to him by the trustees and/or his employer (promissory estoppel) , or as a result of the way in which he, the employers and the trustees conducted themselves between 1994 and November 2002 (estoppel by convention) . Whichever species of estoppel applies, he contends that it would be unconscionable to allow the trustees and/or the employers to resile from a clear and unambiguous statement, promise or a common understanding to the effect that his NRD was to be treated as at age 62.

17

Mr Hutchinson relies principally on the contents of a letter of 13 September 1994 (the 1994 letter) sent to him by Bull's Manager of Pensions and Benefits when he was invited to join the Scheme and of an explanatory booklet issued in June 1991 (the 1991 booklet) and sent with the letter. (Rule 21 provided for each member to be given a booklet containing the basic information about the Scheme and his benefits and contributions under it.) Some changes were made to the booklet in January 1998 (the 1998 booklet) on which he says he also relied. He was by then already an existing member of the Scheme. Mr Hutchison has also referred to later letters written when he was already a member of the Scheme. They were sent to him in connection with the transfer of part of Bull's business to Steria and the termination of his active membership of the Scheme. He refers to the letters, notably a letter of 9 July 2002, as evidence in support of his contentions on estoppel, but the heart of his case on reliance on the statements and estoppel is in the 1994 letter and the 1991 booklet. The later documents have some evidential value, but if Mr Hutchison fails in his estoppel claim based on detrimental reliance on the 1994 letter and the 1991 booklet, the later letters and booklets cannot help him.

18

On the matter of NRD Mr Hutchison submits that the 1994 letter and the 1991 booklet are in clear conflict with the express provisions of the Scheme. The appellants deny that the letter and the booklets contain clear and unambiguous representations and promises, which can be relied on by Mr Hutchison as altering the plain provisions on NRD in the Trust Deed and Rules from age 65 to age 62.

19

The appellants also rely on the notices or caveats in the booklets, which draw attention to the Trust Deed and the Rules in terms which, they contend, negative the alleged representation and prevent Mr Hutchison from saying that he relied to his detriment on the statements regarding benefits on early retirement at 62. The caveats have been referred to as the "Information Notice."

20

Although the trustees accept, for the purposes of this appeal, that the 1991 booklet and the 1998 booklet are to be regarded as documents circulated with their authority and that they cannot deny responsibility for their contents in these proceedings, they contend that they did not make, and are not...

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