COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
THE HON MR JUSTICE ARNOLD
Claim No HC08C02564
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE WILSON
and
LORD JUSTICE PATTEN
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International Management Group (Uk) Limited |
Appellant |
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- And - |
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Peter German Hr Trustees Limited |
First Respondent Second Respondent |
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Mr Richard Hitchcock And Mr Farhaz Khan (Instructed By Baker & Mckenzie Llp) For The First Respondent
Mr Nicolas Stallworthy (Instructed By Hogan Lovells International Llp) For The Second Respondent
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Lord Justice Mummery :
The background
"Assignment, forfeiture, bankruptcy etc
91. Inalienability of occupational pension
(1) Subject to subsection (5), where a person is entitled to a pension under an occupational pension scheme or has a right to a future pension under such a scheme-
(a) the entitlement or right cannot be assigned, commuted or surrendered,
(b) the entitlement or right cannot be charged or a lien exercised in respect of it, and
(c) no set-off can be exercised in respect of it,
and an agreement to effect any of those things is unenforceable.
[subsections (2),(3) and (4) are omitted as immaterial]
(5) In the case of a person ('the person in question') who is entitled to a pension under an occupational pension scheme, or has a right to a future pension under such a scheme, subsection (1) does not apply to any of the following, or any agreement to effect any of the following-
(a) [omitted as immaterial]
(b) a surrender, at the option of the person in question, for the purpose of-
(i) providing benefits for that person's widow, widower, surviving civil partner or dependant, or
(ii) acquiring for the person in question entitlement to further benefits under the scheme…"
"Would s91 of the Pensions Act 1995 render unenforceable a court-approved compromise of all the issues in the appeal and the cross-appeal?"
Judgment of Arnold J
"Does any purported compromise and/or waiver of pension entitlements or rights entered into by a Member on or after 6 April 1997 constitute an unenforceable surrender of such entitlements or rights by virtue of section 91 of the Pensions Act 1995?"
"231. Turning to section 91(1)(a), I consider that the word "surrender" encompasses entering into a compromise agreement the effect of which is that a member of a pension scheme waives rights which, but for the compromise agreement, he or she would be entitled to. In such a situation the member has surrendered his or her rights by entering into the agreement even if there was a bona fide dispute as to the existence of those rights at the time of the agreement.
232. In my view this interpretation is supported by three points. First, the policy enshrined in section 91(1) discussed above [i.e. The Goode Report]. It seems to me that enforcing compromises which have the effect of depriving members of pension rights to which they would otherwise be entitled would run counter to the policy of protecting members against their own improvidence and of protecting the public purse.
233. Secondly, section 91(5)(b) demonstrates that the legislature addressed its mind to the question of providing exceptions to section 91(1), but did not see fit to provide an exception for compromise agreements.
234. Thirdly, a contrast may be drawn with section 77 of the Sex Discrimination Act 1975 and section 76 [a mistaken reference to s72] of the Race Relations Act 1976, to which my attention was helpfully drawn by counsel for the Present Trustee. In each section, subsection (3) provides that a term in a contract which purports to exclude or limit any provision of the Act is unenforceable, while subsection (4) contains detailed provisions exempting compromises from subsection (3) if prescribed conditions are satisfied. Provisions corresponding to subsection (4) of those Acts are conspicuously absent from section 91 of the 1995 Act."
IMG'S submissions on jurisdiction : CPR 19.7
The narrow ground: CPR 19 r7(6)
Section 91: submissions, discussion and conclusion
(1) The statute speaks
(2) Policy and purpose factors
(3) Other legislation
(4) The Goode Report
(5) The authorities
Conclusion
Lord Justice Wilson:
Lord Justice Patten: