Trustee Solutions Ltd and Others v Dubery and Cripps

JurisdictionEngland & Wales
JudgeMr Justice Lewison
Judgment Date21 June 2006
Neutral Citation[2006] EWHC 1426 (Ch)
Docket NumberCase No: HC05C00638
CourtChancery Division
Date21 June 2006

[2006] EWHC 1426 (Ch)

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Before:

Mr Justice Lewison

Case No: HC05C00638

Between:
(1) Trustee Solutions Lmited
(2) Stephen Patrick Comar
(3) Keith James Edwards
Claimants
and
(1) LESLIE DUBERY
(2) Julia Cripps
Defendants

Mr Nicolas Stallworthy (instructed by Nabarro Nathanson) for the Claimants

Mr Paul Newman (instructed by Hill Dickinson LLP) for the First Defendant

Miss Barbara Rich ( instructed by Eversheds) for the Second Defendant

Hearing dates: 13 th 14 th June 2006

Approved Judgment

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.

Mr Justice Lewison Mr Justice Lewison

Introduction 2

Barber 2

The issues 3

The rules of the scheme 3

Were the rules validly altered? 4

The documents relied on 4

Estoppel 11

Introduction 11

Priorities 15

Introduction

1

The Colour Processing Pension Scheme ("the Scheme") was originally constituted by a deed of trust made on 3 October 1960. It was a pension scheme for the employees of Colour Processing Laboratories Ltd. On 10 November 1986 the then trustees of the Scheme, with the consent of the company, resolved to adopt a new set of rules. That set of rules was the third edition of the rules. The resolution was signed by each of the trustees, and by the company secretary, acting by order of the board.

2

The company (which had changed its name to Graphics Resolution (CPL) Ltd) went into creditors' voluntary liquidation on 1 November 2001. There is unlikely to be any dividend for unsecured creditors, of whom the Scheme is one. The Scheme commenced winding up on 15 February 200As at September 2003 the scheme had 230 deferred members and 63 pensioners. The Scheme is in deficit.

Barber

3

In Barber v Guardian Royal Exchange [1991] 1 QB 344 the European Court of Justice decided that it was unlawful, under European law, to discriminate between men and women, for example by providing for pension benefits to be payable on retirement at different ages. Until that judgment, it had been conventional in the United Kingdom for men to have a retirement age of 65; and for women to have a retirement age of 60.

4

Following subsequent cases, particularly Coloroll Pension Trustees Ltd v Russell [1994] OPLR 179 the effects of the Barber judgment on the requirements for equal treatment of men and women were confirmed as follows:

i) For pensionable service prior to 17 May 1990 (the date of the Barber judgment) it was not unlawful for male and female pension benefits to be provided at different retirement ages;

ii) A scheme could be amended so as to equalise benefits for men and women, if the rules of the scheme permitted such amendment. The nature of the amendment could either reduce the normal male retirement age, or increase the normal female retirement age, or both; provided that both sexes were treated equally;

iii) For pensionable service between 17 May 1990 and the operative date of any valid amendment male members of a pension scheme were entitled to be treated as if their normal retirement age was the same age as that applicable to female members (usually 60). This period is known, in the jargon, as "the Barber window".

5

As a result of the decision in Barber, Parliament passed provisions in the Pensions Act 199Section 62 of that Act provides that an occupational pension scheme which does not contain an equal treatment rule is treated as including one. This provision is treated as having had effect in relation to any pensionable service on or after 17 May 1990: section 63 (7).

The issues

6

The main issues that I have to decide are whether the rules of the Scheme have been validly amended so as to raise the normal retirement age for female members; and, if not, whether an estoppel has arisen which precludes those members who would benefit from a reduced retirement age from alleging the contrary. In other words: has the Barber window been closed? There is a further issue relating to the priority of payments under section 73 of the Pensions Act 1995 as it stood in 2002.

7

The current application has been brought by the trustees of the Scheme, represented by Mr Nicolas Stallworthy. The First Defendant, represented by Mr Paul Newman, is a scheme member whose interests are best served if the rules have not been validly amended. He had attained the age of 60 before the commencement of the winding up. The Second Defendant, represented by Miss Barbara Rich, is a scheme member whose interests are best served by the earliest possible amendment of the rules of the Scheme. She is a deferred member of the Scheme. Both Defendants are taken to be representative of a class of scheme members.

The rules of the scheme

8

I was told that the rules were in the form of a standard form drafted by the Prudential Assurance Co; and were widely used. The following provisions of the rules are relevant to the issues I have to decide:

i) The definition of "Normal Retirement Date" which is 65 in the case of a male member and 60 in the case of a female member;

ii) The definition of "Pensionable Service" which is limited to service between the date on which a person became a member and Normal Retirement Date;

iii) Rule 11 (A) which deals with members' contributions. These cease to be payable after the last day of a scheme year which is or next precedes that member's Normal Retirement Date;

iv) Rule 12 (A) which provides that a member who is in service on the Normal Retirement Date is entitled to a pension commencing on the following day. However, a member who is entitled to a pension has the right to postpone commencement of the pension until the day after he retires from service. This option must be exercised by "notice in writing" given by the member to the trustees within a time scale contained in the rules;

v) Rule 38, which contains the power of amendment, and which I must quote:

"… the Trustees may from time to time and at any time with the consent of the Principal Company by way of formal variation of these Rules adopted by any deed or deeds executed by the Trustees and the Principal Company or by any writing effected under hand by the Trustees and the Principal Company alter or modify all or any provisions of the Scheme Provided that no such alteration or modification as aforesaid shall be made which would have the effect of varying or affecting any benefits … applicable to Pensionable Service completed before the alteration or modification …without the consent of any Member affected thereby and Provided further that no such alteration or modification as aforesaid shall be permissible if it would result in any payment refund or transfer to the Employers or any of them.

Notice in writing of any such alteration or modification as aforesaid shall before the same takes effect be given to every Member who will be affected thereby."

Were the rules validly altered?

The documents relied on

9

Although a number of documents have been canvassed as potentially altering the rules, Miss Rich relied on only two. These were:

i) a memorandum dated 15 May 1992 taken in conjunction with

ii) an announcement to female members dated July 1992.

10

Both documents are unsigned. It is therefore common ground that if a valid variation requires a document signed by or on behalf of the trustees, there has been no valid amendment.

11

The memorandum was written on the company's headed paper; but it was expressed to come from the Trustees. It was addressed to all members of the Scheme. It said that as a result of the decision of the European Court retirement ages for men and women had to be the same. It said that following further clarification:

"We now believe that no changes will apply before May 1990 but since that date pension benefits will be based upon retirement at the same age for both men and women."

12

It then set out three options:

i) Both men and women to retire at age 60;

ii) Women to retire at age 65;

iii) Retirement at some mid-point between 60 and 65.

13

It concluded by saying that the Trustees could not delay choosing between these options; and invited Scheme members to a presentation to be made by the Prudential (who were the Scheme administrators) on 11 June 1992.

14

The announcement was not written on the company's headed paper. It was headed: "The Colour Processing Pension Scheme" and was an "Announcement to Female Members". The text of the announcement read:

"The Board of Colour Processing Laboratories Limited wish to inform you that as a result of a decision of the European Court of Justice, it has become necessary to equalise the retirement ages under the Scheme for both male and female Members. The Board after careful consideration have therefore decided to revise the normal retiring age under the Scheme for female Members.

With effect from 1 st October 1991 your Normal Retiring Date will be the day before your 65 th birthday. This effectively means that you will continue to contribute to the Scheme, and accrue additional pension benefits until age 65 or the earlier date of leaving Pensionable Service. Furthermore you will continue to be covered for death in service benefits until this date (see section 13 of your booklet).

The pension payable to you, at age 65 (your new Normal Retiring Date), will be calculated as follows:

(i) that part of your pension representing Pensionable Service completed on or after 1 st May 1990 will be calculated as described in section 7 of your booklet, but will be based on your Final Pensionable Salary at age 65 (your new Normal Retiring Date) and

(ii) that part of your pension representing Pensionable Service completed before 1 st May 1990 will also be calculated as described in section 7 of your booklet, but will be based on your Final...

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