The Law Debenture Trust Corporation Plc v Terence Malley and Another
| Jurisdiction | England & Wales |
| Judge | MR. JUSTICE RIMER |
| Judgment Date | 07 May 1999 |
| Judgment citation (vLex) | [1999] EWHC J0507-12 |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 07 May 1999 |
| Docket Number | CH.1998-L-No.6438 |
[1999] EWHC J0507-12
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Mr. Justice Rimer
CH.1998-L-No.6438
MR. P. NEWMAN (instructed by Messrs. Addleshaw Booth & Co., Manchester) appeared on behalf of the Appellant.
THE FIRST RESPONDENT did not appear and was not represented.
MISS S. ASPLIN (instructed by John Yolland) appeared on behalf of the Second Respondent.
(As approved by the Judge)
Friday, 7th May 1999
This is an application in an appeal pending in the Chancery Division. The appellant is The Law Debenture Trust Corporation Plc ('LDTC') . The first respondent is Terence Malley. The second respondent is the Pensions Ombudsman ('the ombudsman') . The appeal is by way of a notice dated 7th December 1998. It runs to some ten pages and is directed to achieving a setting aside of a determination and some directions made and given by the ombudsman on 10th November 1998.
The application before me is one by the ombudsman, who appears by Miss Asplin, to have the notice of appeal struck out. LDTC appears by Mr. Newman. Mr. Malley has not appeared or been represented.
The general basis of the ombudsman's challenge to the notice of appeal is that he claims that, in part, it raises matters which, in the events as they have happened, are of no practical importance as between LDTC and Mr. Malley and which, as a matter of principle, the court will therefore now not entertain on an appeal; that, in part, the appeal relates to a direction he made with regard to the payment of £79.50, which he says is too trifling a sum to be the subject of an appeal to the High Court; and that, in part, LDTC seeks to challenge matters referred to in his determination which he says cannot be the subject of an appeal to the High Court. Miss Asplin submits, therefore, that the appeal is one which is bound to fail and should be struck out at this stage since its further prosecution would be an abuse of the process of the court.
The background facts can be summarised quite shortly. The pension scheme is the Swan Hunter Pension Scheme. Mr. Malley is a former employee of Swan Hunter Shipbuilding & Engineering Group Limited ('SHEG') and was a member of the scheme. The trustees are or were Swan Hunter Pension Trustee Limited ('SHPT') and LDTC, the latter having been appointed as the independent trustee by the administrative receivers of SHEG. LDTC has been acting as a professional scheme trustee for over 30 years and acts as such for over 100 pension schemes. SHPT was dissolved in October 1998 and LDTC is now the sole continuing trustee. Mr. Malley is the complainant whose complaint led to the determination which is under challenge in LDTC's appeal.
Mr. Malley was, from 1980, employed by SHEG as a plater in a shipyard. He suffered an injury at work on 19th May 1993 and, on 25th May 1993, he applied to SHEG for early retirement on grounds of incapacity. He was by then earning £11,440 per annum.
Rule 5.1 of the scheme provides that:
"In the event of retirement with the consent of the Principal Company before the Normal Retirement Date due to incapacity a Member shall have the option to elect for an immediate pension calculated in the manner described in Rule 4 but based on the Member's Final Pensionable Salary at the date of retirement and the number of years of Pensionable Service which the Member could have completed up to Normal Retirement Date."
"Incapacity" is defined as:
"Physical or mental incapacity which prevents a Member from following his normal occupation and seriously impairs his earning capacity. The Trustees' decision (reached after receiving medical evidence and after consultation with the Employer) as to whether or not a Member is incapacitated will be final."
It appears that there was no express response by SHEG to Mr. Malley's request for early retirement. What did happen was that on 28th May 1993 SHEG declared him redundant. In December 1993, however, Mr. Malley once more raised the question of an early retirement pension with SHEG; and he followed that up in January 1994 with a letter from his general practitioner which enclosed a medical report from a neurosurgeon and asked SHEG to review his early retirement application. On 3rd February 1994, SHEG responded that he was not eligible for ill-health early retirement.
The matter was then taken up on Mr. Malley's behalf by the Pensions Advisory Service. LDTC came on to the scene in 1995 and appears thereafter to have investigated Mr. Malley's claim on its merits, or at least to have taken steps towards doing so. In May 1995, Mr. Malley had an operation on his spine. LDTC asked the hospital for an opinion on him and was told in September 1995 that he was suffering from low back pain and residual left sided sciatica and that it was too early to give an opinion regarding incapacity. LDTC asked for further evidence from the hospital and, on 28th February 1996 the Registrar in neurosurgery responded, stating that Mr. Malley was suffering from back and leg pain. He went on to say:
"In the end I am not entirely sure whether I can actually say that he is incapacitated either medically or physically. If his pain is real then he is certainly incapacitated but at the same time we have no objective evidence to account for his pain but he could also have pain without having objective evidence on the MRI scan."
LDTC asked for more medical evidence on 11th March 1996. The Registrar replied on 1st May 1996 saying:
"I don't think that at this time we can declare whether Mr. Malley is fully incapacitated from his work because of his low back pain and leg pain, he has not really been treated fully for his back problem. He has recently had surgery and this takes a long time before the wound is healed. It takes about 6–12 months before we can say whether surgery has been successful … We will have to wait a while longer before we can declare him incapacitated for his pain problem, at least one year or maybe two."
The information available to LDTC at that stage was, therefore, apparently inconclusive as to whether Mr. Malley was then suffering from relevant incapacity, although I comment that it seems to me — and I understood both counsel to agree — that the rather more relevant question was whether or not he was suffering from such incapacity as at 25th May 1993 when he made his application for early retirement.
Faced, however, with the incomplete picture about incapacity which the evidence had disclosed by May 1996 LDTC then decided to employ private detectives who placed Mr. and Mrs. Malley under covert surveillance for six days between 12th and 21st July 1996. The ombudsman said of this in paragraph 13 of his determination:
"13. … the detectives produced a video of approximately one hour's duration showing [Mr. Malley] and his wife in their garden, drinking in various pubs, going to buy petrol and walking in the park; although [Mr. Malley] appeared to move without any physical difficulty, the heaviest activity undertaken was watering his front garden flower beds."
LDTC's position was, at any rate as reported by the ombudsman in his determination, that that video demonstrated that Mr. Malley could obtain alternative employment at roughly the same wage as he had received as a plater. On 29th July 1996, LDTC wrote on behalf of the scheme trustees to Mr. Malley and informed him that his application for early retirement on the grounds of incapacity was rejected.
Paragraphs 15, 16, 17 and 20 of the ombudsman's determination read as follows:
"15. On 6th August 1996 the Senior Consultant Neurosurgeon wrote to [LDTC] suggesting that a Senior Physician carry out an assessment of [Mr. Malley's] disability. [LDTC] did not take up this suggestion. However, on 25 September 1996 the Senior Registrar in Neurosurgery sent a detailed report to [LDTC]. This recorded that [Mr. Malley] had injured his back at work in May 1993 and had not effectively worked since then. [Mr. Malley] had had surgery but remained in severe pain. Further major surgery was possible. The Senior Registrar concluded:
"'It is likely that he will be troubled with low back pain for the rest of his life, heavy physical work is totally out of the question and different employment without the heavy physical nature of ship yard work will have to be undertaken. I would strongly support his claim for retirement on medical grounds from the shipbuilding industry.'
"On 8 October 1996 [LDTC] replied, expressing surprise that the report had been submitted and declining to pay the fee for it of £79.50, as the report had not been requested. [LDTC] stated:
"'The decision in July regarding Mr. Malley's application stands.'
"16. Following a retraining course, [Mr. Malley] obtained a job in September 1996 as a clerk, at a salary of £8,400 per annum.
"17. The Scheme was subsequently wound up with effect from 11 November 1994.
"20. [Mr. Malley] submitted a table of comparative earnings to me, which demonstrated that his earnings as a clerk were much less than a shipyard plater in the area, particularly when bearing in mind that night work was available to shipyard platers. [Mr. Malley] pointed out that, as a result of his injury, he had become a clerical worker with 2 years experience, whereas before he was a shipyard plater with 17 years experience. As a result his earning capacity had been seriously impaired."
On 1st December 1997, Mr. Malley lodged a complaint with the ombudsman. That was almost eight months after he had been told, in a circular letter from the scheme...
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