QUEENS BENCH DIVISION
London, WC2A 2LL
B e f o r e :
| The Queen on the application of Kenneth Green (trading as Green Denman & Co.)
|- and -
|Financial Ombudsman Service Ltd
|- and -
Smith Bernal Wordwave Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Jonathan Moffett (instructed by Ms Georgina Surry) for the Defendant
The Interested Party did not appear and was not represented.
Crown Copyright ©
Mr Justice Stanley Burnton:
(a) alleged procedural unfairness on the part of the Ombudsman in reaching his decision;
(b) mistake of fact on the part of the Ombudsman in reaching his decision.
The regulatory background
"A relevant existing complaint is to be determined (so far as practicable) by reference to such criteria as would have applied to the determination of the complaint by the former ombudsman under the former scheme in question immediately before commencement…"
"3.3 The [PIAOB] shall, subject to the other provisions of these Terms of Reference, in his own discretion, decide the procedure to be adopted by him in investigating and considering complaints. He shall act impartially in all respects.
3.6 The [PIAOB] shall not be bound by any legal rule of evidence.
5.1 If a complaint is not settled or withdrawn by agreement between the parties then the [PIAOB] may, after investigating and considering the complaint, make an award against, or a recommendation to, the firm identified in the complaint. In making any award or recommendation the [PIAOB] shall:
(a) except to the extent that they are inconsistent with the express provisions hereof, observe any applicable enactment, rule of law or relevant judicial authority;
(b) have regard to such statements of general principles of good insurance, investment or marketing practice, rules, codes and guidance as were relevant to the firm's business at the time of the events which gave rise to the subject matter of the complaint;
(c) have regard to any relevant standards of redress as issued by the PIA or by any other SRO as may be relevant to the firm in question.
5.2 Where such general principles, rules, codes, guidance and standards are inconsistent with any enactment, rule of law or judicial authority which would require the complainant to be treated less favourably, the said principles, rules, codes, guidance and standards shall prevail.
5.2A If, in respect of a complaint relating to a pension transaction, the [PIAOB] is satisfied that the firm in question has reviewed the transaction in accordance with the PIA's standards for the review of such transactions (including, if appropriate, making an offer of redress to the complainant) then he shall make no award or recommendation unless he is of the opinion that the particular circumstances of the case are not addressed by the standards."
"While the comparison of the (occupational) scheme's costs and benefits with those of the proposed personal pension arrangements … which was presented to the investor might not have been expected to itemise each area in precise detail, some consideration of all of the areas listed would have been vital for a full evaluation of the scheme and a broad comparison with the personal pension plan/Section 226 contract. These should have been carried out at the time of the sale and the information should be on file. Similarly, some quantification of the various benefits – and their cost, if having to be replaced – would have been essential."
"if no evidence is found of a particular part of the comparison, it needs to be assumed that it was not included. If there is no evidence of key areas being included in the comparison, it is unlikely that it will be possible to demonstrate that the sale was compliant." (Guidance, paragraph 03.3(e))
"The advice given should have been based on a sound knowledge of the investor and have been suitable for the investor … did the firm take reasonable steps to gather all the information necessary to give advice to the investor which was suitable … did the firm take reasonable steps to evaluate the information gathered in order that it could give the investor suitable advice … the central issue is whether the advice to acquire a personal pension was suitable advice in the circumstances including the individual's position in relation to the occupational scheme.
The firm needs to consider which contributions or benefits associated with membership of the occupational scheme or the personal pension were relevant to the investor and whether sufficient information was gathered to enable a broad comparison of the contributions and benefits as between the occupational and personal pension."
"As requested I have considered the following alternatives:-
1. That Julie should join the Courtaulds scheme for 2 or 3 years.
2. Alternatively that Julie contribute to a Personal Pension Plan for 2 or 3 years and then make it paid up. (She could, of course, start contributing at a later stage if appropriate.)
Under the Lautro provisions laid down for providing quotations it is not easy to provide a fully comparable basis which readily facilitates a cost benefit analysis. However I have highlighted below the main points to consider. For the sake of simplicity I have assumed that £83 gross per month would be paid into each scheme for the same period. For the same reason I have also assumed that Julie's salary remains unchanged over the next 3 years.
1. Membership for 2 years
(A) The Courtaulds Scheme: this offers 1/60th for each year of service. Therefore if Julie left after 2 full years of service she would be entitled to a paid up pension of £900 p.a. This pension would be increased by at least 70% of the rate of inflation. Therefore I have assumed that between now and age 60 the pension would be increased at the rate of 5% per annum. On this basis the estimated pension would be £3,360 p.a. increasing each year depending on the rate of inflation and at the discretion of the trustees. However part of this benefit would relate to SERPS. Julie has already contracted out of SERPS on an individual basis. For someone of Julie's age this is by far the best way to contract out.
(B) A Personal Pension Plan: after paying for 2 years in full the estimated pension fund (assuming 12% p.a. tax free growth) would be £26,400. Under the Lautro basis this would produce a level single life pension of £2,840 p.a. plus SERPS. On the face of it this may not be as good as the Courtaulds Scheme. However one must also consider that the growth rate could be higher than 12% and that the exercise of the open market could boost the pension appreciably, e.g. a with profits annuity would currently boost the pension by 33%. If this annuity fund grew at 12% p.a. this would allow the pension to increase at approximately 5% per annum, i.e. £3,777 increasing plus SERPS.
2. Membership for 3 years
(A) The Courtaulds Scheme: on the same estimated basis the paid up pension after 3 years would be £1,350 p.a. rising to £4,800 p.a. (increasing) less SERPS at age 60.
(B) A Personal Pension Plan: after paying for 3 years in full the estimated pension fund (assuming 12% p.a. tax free growth) would be £45,200. Under the Lautro basis this would produce a level single life pension of £4,870 p.a. plus SERPS. By applying a with profits annuity on the same basis as outlined above the pension would increase to £6,477 p.a. increasing at approximately 5% p.a. plus SERPS.
If Julie were to be a member of the Courtaulds scheme for less than 2 years then on leaving service she would only be entitled to a refund of contributions less a deduction of 20% for tax.
As there seem to be some doubt about the length of time Julie is likely to remain in service the best course of action would appear to be the Personal Pension Plan. She would simply increase her contributions to the existing Standard Life Plan and remain contracted out on an individual basis.
The only other consideration is the fact that membership of the Courtaulds Scheme provides life cover of three times salary. This could be covered elsewhere quite cheaply on a short term basis.
I trust you will find this letter helpful and look forward to hearing from you."
"Decided not to join Courtaulds scheme – cannot guarantee 2 years. Also wishes to increase contribution. …
Ian (Waring) also asked about State Maternity Benefit in the event that Julie leaves below 2 years service.
Ian asked that he receive regular information about performance of Julie's plan – part of review procedure."
"In reading your letter of complaint it is obvious that you have grossly misrepresented the facts and called into question my professional reputation with both the PIA and another independent financial adviser. Bearing in mind the defamatory remarks you also made to Skandia some months ago, I shall be taking advice on these matters."
Leaving aside the reference to Skandia, with which I am not concerned, this was a wholly inappropriate response to the Warings' understandable concerns. The Claimant expressed the view that the investigation would establish that the complaint was "totally without merit".
"On 28th October 1993 you advised that Julie would be going back to work for Courtaulds. However, you stressed that she would only be going back for two to three years. My understanding was that you planned to start a family and therefore your time scale could not be accurate. You sought guidance on what she should do about her pension benefits. It was also a requirement that joining the Courtaulds scheme required a 4% contribution from Julie i.e. £83. I also understand that there was some doubt as to whether or not she wished to increase her gross monthly contribution to £83 and thereafter be committed to a 4% contribution each year.
My letter of November 1993 dealt with your query in detail. The options were set out for consideration, with due regard to the most important fact that Julie was only planning to stay with Courtaulds for 2-3 years i.e. prior to starting a family. Based on the information contained in that letter you and Julie made the decision for her to remain in the Personal Pension Plan. Indeed you telephoned me on 13 January 1994 to say that Julie wished to increase her gross monthly contribution to £83. I asked that this be confirmed in writing. A letter dated 14 January 1994 was duly received. It should be noted that the plan is reviewed each year in January."
The letter also referred to the fact that Mrs Waring's decision to purchase a personal pension plan was based on the information contained in his letter dated 19 November 1993. The Claimant expressed the (erroneous) view that Mrs Waring's case did not fall into the category of pensions mis-selling because Mrs Waring's case was not an opt-out. His conclusions were as follows:
"1. The facts confirm quite clearly that Julie did not opt out of the Courtaulds Pension Scheme in order to take out a Personal Pension Scheme as an alternative to her employer's scheme. She had already left Courtaulds. Furthermore, she has not been in continuous employment with Courtaulds for the last 9 years. Therefore I am perfectly satisfied that the advice given was perfectly valid and correct when the Personal Pension was established.
2. In terms of ongoing advice, an IFA can only act on information received. Communication is a two way process. When you requested advice in November 1993, I went to considerable trouble to outline all the options in light of the very uncertain period of time during which Julie expected to be re-employed at Courtaulds. In the end, you and Julie decided to continue with the Personal Pension Scheme and the contributions were increased."
"1. Was it in Julie's best interest not join her company scheme, (Courtauld's), but instead to continue to contribute to a personal pension, even though the actual decided cost to her, (£83 per month) was the same?
4. Should we have received a letter from Mr Green asking if we want him to undertake a thorough review as per the P.I.A. guideline Phase 1 & 2?"
"When Mrs Waring went back to work for Courtaulds, he understood the needs to question whether or not she should continue contributing to her Personal Pension Plan or join the company scheme. As I understood the position, the decision to continue with the Personal Pension Plan was very much based on the fact that Mrs Waring could not guarantee to stay two years, never mind two or three. This point came out in the discussion about my letter of 19 November 1993. This was because they planned to start a family and whatever time she decided to join the company scheme she would have to guarantee to be able to stay for at least two years. This is just not possible when you are planning a family. Furthermore, Mr and Mrs Waring were not sure whether they could afford the 4% personal contribution."
"Bearing in mind the regular communication and rationale behind Mrs Waring continuing to contribute to her Personal Pension Plan, I did not consider that this situation required the thorough review which Mr Waring now claims should have taken place."
"I would agree that, if Mrs Waring were definitely not going to be with her employer for a period of more than two years, then the advice to contribute towards a personal pension would not seem inappropriate. However, I note from your letter of 23 March 2000 that 'Julie made her decision to continue with a personal pension because she only planned to stay with Courtaulds for 2-3 years'. This, as I read it, suggests that there was a distinct possibility that, at the time, Mrs Waring would have been with her employer for more than two years. On this basis, please explain why you considered that a personal pension would be more appropriate than joining her employer's scheme.
Expanding on the first sentence of the above paragraph, it could be similarly argued that, should it be inappropriate to join an employer's scheme, it is also not appropriate to effect a personal pension if there appears little prospect of the premium being maintained for more than a very short period, in view of the associated charges. If we assume that Mrs Waring was only to be in employment for a period of less than two years prior to starting a family, please advise why you believe that a personal pension was more appropriate than an alternative savings vehicle (for instance, a deposit account) with lower charges.
I am unable to locate a fact find or other such documentation to support your claim that it was Mrs Waring's wish to start a family in the near future, when the advice was given. The nearest evidence to this that I can find is your letter of 19 November 1993 when you state one of the alternatives is 'that Julie should join the Courtaulds scheme for 2 or 3 years'. As you are aware, Mr Waring states in his letter of 18 January 2001 (originally incorrectly dated) that 'I suggested that 2-3 years was a suitable period for comparison purposes, as she was likely to be there for at least (my emphasis) this long'. There are clearly differing accounts on this issue, and I would ask for your comments on this."
"Is it worth her while joining if she is only going to work there for 2-3 years at most – family?"
Mr Waring challenges the reference to family as a later insertion, but nothing turns on this.
"I should start by explaining that it is my view (and the view that is expressed in the pensions review guidance) that it is hard to justify advising an individual to acquire a personal pension in favour of their occupational pension scheme. The guidance also lays down the information that should be communicated to the investor when they are being advised not to join an occupational pension scheme, although the imparting of such information in itself would not necessarily make the advice appropriate. Examples of what should be considered include dependant's pensions, early retirement and ill-health pensions, rates of increases in deferment and payment, ancillary benefits and, importantly, employer's contributions. It is further detailed in the guidance that the investor should be given crucial information concerning the recommendation including telling the investor the effect of not receiving the benefit of employer contributions. In this regard, I do not believe that you have demonstrated that the advice has met the compliance requirements of the regulator.
It is, of course, your argument that the advice was given not to join the occupational pension scheme because of Mrs Waring's imminent plans to start a family, and that she would therefore have had no accumulated benefit from the scheme when she ceased employment. I assume, therefore, that it is also your argument that any compliance failings are this immaterial. You will note that Mrs Waring, in her letter of 22 August 2001, refutes that she had any immediate plans to start a family.
I would observe that your position, with regard to Mrs Waring's employment intentions, is somewhat confusing. As I noted in my letter of 20 June 2001, your letter of 23 March 2000 states that 'Julie made her decision to continue with a personal pension because she only planned to stay with Courtaulds for 2-3 years'. However, your letter of 31 July 2001 states that 'there was every probability that, at the time, Mrs Waring would have been with her employer for less than two years'.
In view of the submissions made by both you and Mrs Waring and your respective statements, it is my view that the Ombudsman would not be persuaded that it was apparent that Mrs Waring would be working for Courtaulds for a period of under two years. My view is that, at the time of advice, that there was every possibility Mrs Waring would continue to be working for Courtaulds two years later or that – putting this another way – the evidence available does not indicate that it was probable that Mrs Waring would leave Courtaulds within two years. In this regard, I do not believe that the advice given to Mrs Waring was appropriate nor has it met the required regulatory standard.
My view, therefore, is that Mrs Waring should be compensated for any loss that she has suffered as a result of not joining the Courtaulds pension scheme in 1993. The loss should be calculated with regard to the Pension Review Guidance from the time that you gave the advice to Mrs Waring in 1993 up until the point that Mrs Waring joined the occupational pension scheme."
"In our view, this matter can be resolved in our clients' favour on the basis of a single issue. That issue is, when Mrs Waring asked for advice from our client, she said (through her husband or directly) that she only planned to stay with Courtaulds for two or three years. As that was her stated intention, then on any view, the advice must have been correct."
"We trust this deals with the matter sufficiently. If it does not, we will make further representations."
"Members leaving service within 2 years of joining are entitled to either a refund of contributions or a transfer to another pension provider. The transfer value would be made up of the member's contributions plus interest, plus the company's share of the Contributions Equivalent Premium."
Mr Mansell also enclosed a copy of the Warings' letter of 29 November 2001. He said:
"My view remains that your client should compensate Mrs Waring, in accordance with the regulator's guidance, for the period that she was not part of the Courtaulds scheme."
He then referred to the transfer to Standard Life, a matter that is not the subject of these proceedings, and continued:
"I would therefore ask for your further representations before I pass the papers back to the Ombudsman."
"We trust that the above is enough to cause you to reach a conclusion that the Warings' complaint is unsubstantiated and that our client's version of events is to be preferred. In the event that you require further information from us, please contact us …."
"This case raises various issues which I must consider. Firstly, I must determine whether or not adequate information was given to Mrs Waring as part of the advice so that she was able to make a fully informed decision. Secondly, I must consider the argument raised by Green Denman & Co. that it was Mrs Waring's imminent intention to start a family, thus any membership of an occupational scheme would have not accrued any worthwhile benefit. Essentially, I must decide whether Mrs Waring has satisfied me that the advice was inappropriate and if inappropriate I must decide whether Mrs Waring would have acted any differently if the advice had been appropriate."
He referred to the Pension Review Guidance, and continued:
"The evidence in this case satisfies me that the conduct of Green Denman could not properly be regarded as satisfying the tests imposed by the Review.
I turn now to the matter of Mrs Waring's future plans at the time of the advice. Green Denman & Co. have argued that it was Mrs Waring's intentions to shortly start a family, and this is why she was recommended the personal pension. I am satisfied by the evidence in this case that compliant advice would have been to recommend that Mrs Waring join the Courtaulds Scheme. It would appear that Mrs Waring contemplated working at Courtaulds for two to three years and then commencing a family but that she could not in the terms of the contemporaneous note of 13 January 1994 guarantee that she would not leave Courtaulds before the expiry of 2 years. During membership of Courtaulds Scheme Mrs Waring would benefit from the protection afforded by the scheme if she were forced to retire from employment by reason of serious ill health. If, despite commencing a family, Mrs Waring had decided to return to the employment of Courtaulds following maternity leave then she would have secured the benefit of scheme membership (i.e. qualifying service) being maintained during the period of her maternity leave. Further a transfer value would be granted under the scheme rules if service did not exceed two years, a value which would not only be made up of the members contributions plus interest but also benefit from the company's share of the contributions equivalent to premiums. If Mrs Waring had left Courtaulds after 1 to 2 years service, as suggested as possible by Green Denman, then by reason of the inevitably substantial set up costs of the personal pension the paid up value of the pension contract would likely to have represented only a modest percentage of her contributions to the pension. If Mrs Waring wished to make contributions over and above those required of the company scheme then she would most advantageously have made those additional contributions to the company's in house AVC scheme rather than to a personal pension. Conversely I am not persuaded that the company pension was unsuitable because contributions to it would have had to have increased with salary increases since clearly an increase in salary would in absolute terms represent a very much larger sum than the required contributions increase and thus should be affordable from the first amount. Evidence has been given by the Warings that they had considerable savings at the time.
Finally I understand that membership of the scheme provided life cover three times salary.
It is, therefore, my finding that Green Denman & Co did not discharge its regulatory duty in providing Mrs Waring with financial advice, and that Mrs Waring would not have as acted as she did had they done so. My view is that it was inappropriate to recommend to Mrs Waring that she should not join her employer's scheme.
I therefore order Green Denman & Co to perform a loss assessment in respect of the time when Mrs Waring was not a member of the occupational pension scheme, in accordance with the Pensions Review Guidance, for the period from 1 January 1994 (which as best as I can judge might have been the earliest date from which Mrs Waring could have been expected to commence participation in the company scheme) to the date that Mrs Waring did eventually join the scheme. If a loss is revealed then I direct that redress should be made in accordance with the Guidance. If any unresolved issue arises in respect of loss or redress then, subject to our Rules, that issue may be referred to us."
The issues on fairness
"In the light of the recent correspondence that had taken place, my lawyers and I presumed that the purpose of this letter was to confirm the benefits available before and after two years service had been reached and therefore test the advice I had given."
That being the case, it was for the Claimant and his solicitors to justify his advice in the light of the information in the Courtaulds letter as to the benefits of their OPS. It is difficult to see what the point of sending the Courtaulds letter to the Claimant's solicitors was if not to obtain their client's case in the light of its contents. The Claimant's solicitors did not address the benefits mentioned in the Courtaulds letter in their further representations. The reason given by the Claimant is that neither he nor Mrs Waring was asked to comment upon it. That is not so as far as the Claimant is concerned. The letter of 19 December 2001 expressly asked for the Claimant's solicitors' further representations. I am unable to accept Miss Collier's submission that that request was limited to the question of the transfer to Standard Life: Mr Mansell's reiteration of his view that the Claimant should compensate Mrs Waring for the period that she was not part of the Courtaulds scheme made it clear that representations on his behalf had to address the appropriateness of the advice in December 1993. All of the matters referred to in the Courtaulds letter were relevant to the comparison required by the Guidance, and to the appropriateness of the advice. I do not accept that it was necessary for Mr Mansell or the Ombudsman to identify each benefit that was relevant and ask for comment on it: the relevance of each of them was apparent. I similarly do not accept the submission on behalf of the Claimant that it was unfair to require him to address all of the benefits of the Courtaulds scheme. That is precisely what was required of a financial advisor when advising his client and when carrying out a review of advice previously given. If, therefore, the Claimant's solicitors did not address the benefits of the Courtaulds scheme in their further representations, the Ombudsman was entitled to assume that they had chosen not to do so.
Mistake of fact
"… a transfer value would be granted under the scheme rules if service did not exceed two years, a value which would not only be made up of the members contributions plus interest but also benefit from the company's share of the contributions equivalent to premiums."
"However, even if I had been aware of my error it would have made no difference to my decision which was based on my assessment that it was probable that Mrs Waring would be employed for more than 2 years."
MR JUSTICE STANLEY BURNTON: My judgment in this case has been distributed in draft. I would like to express my gratitude to counsel for their suggested corrections. For the reasons set out in the judgment, copies of which are now available to the parties, their legal representatives, the press and the public, the claim will be dismissed.
MISS WINDLE: My Lord, the respondent does not appear to have a representative here. The claimant wishes to apply for permission to appeal. I am not quite sure what you might wish to do about costs.
MR JUSTICE STANLEY BURNTON: No-one here for the defendant at all?
MISS WINDLE: The defendant's solicitor is here I understand, my Lord, but no counsel.
MR JUSTICE STANLEY BURNTON: Who is the solicitor?
DEFENDANT'S SOLICITOR: That is me.
MR JUSTICE STANLEY BURNTON: Were you expecting counsel to be here?
DEFENDANT'S SOLICITOR: I was, yes. I am from the Financial Ombudsman service. I am one of the solicitors there.
MR JUSTICE STANLEY BURNTON: What do you want to do?
DEFENDANT'S SOLICITOR: We would like to ask for our costs?
MR JUSTICE STANLEY BURNTON: Why are you not represented?
DEFENDANT'S SOLICITOR: I do not know. I came straight from the office and I did not know counsel was not attending. I do not know why he is not here.
MR JUSTICE STANLEY BURNTON: Do you have any objection to my dealing with costs on this basis?
MISS WINDLE: My Lord, we do not agree to the defendant's costs schedule because we feel that the claimant should have costs arising from the adjournment and the extra evidence. We should not have to pay the defendant's costs of those and should, indeed, get their own costs arising from that adjournment occasioned by the defendant.
MR JUSTICE STANLEY BURNTON: What I am going to do is put this back until 20 past 10 so that the lady who is here from the Financial Ombudsman Service can find out what has happened to her counsel, and if he or she gets over fast enough perhaps you can discuss the disputed items and I shall hear you then. If he is not here and the case is not in a position to proceed, we will discuss what to do and there may be costs consequences in relation to that.
MR MOFFETT: My Lord, can I please offer my apologies for not being here at 10 o'clock. I understand your Lordship came to court. Unfortunately I understood the matter was to come on at 25 past 10. I do not know where the confusion arose, but I do apologise for keeping your Lordship waiting.
MR JUSTICE STANLEY BURNTON: It is a very curious time for anything -- 25 past 10 -- the listing shows 10 o'clock.
MR MOFFETT: I understand that is when we were informed by the court offices, my Lord. I am very sorry, my diary said it was 25 past.
MR JUSTICE STANLEY BURNTON: Your clerk knew it was at 10 o'clock.
MR MOFFETT: He may well have done, my Lord. All I can say in my defence is that in my diary, on the computer, it says 25 past. I do offer my sincerest apologies.
MR JUSTICE STANLEY BURNTON: There we are. Right, judgment has been handed down.
MR MOFFETT: In the light of that we would simply ask for an order that the claimant pays the defendant's costs.
MR JUSTICE STANLEY BURNTON: There is an issue as to costs, have you been told about that?
MR MOFFETT: Yes, I have, my Lord.
MISS WINDLE: My Lord, the claimant seeks the costs arising from the adjournment which the defendant needed in order to put in extra witness statements as to the mistake of fact. The claimant contents that those --
MR JUSTICE STANLEY BURNTON: When you say the adjournment, which adjournment are you referring to?
MISS WINDLE: My Lord, I am having some difficulties here because I was not instructed in the original case.
MR JUSTICE STANLEY BURNTON: As far as I was concerned, there was just one hearing and there was another witness statement -- in fact two witness statements and written representations were put in.
MISS WINDLE: My Lord, yes. I understand there was some extra evidence that was put in after the beginning of the hearing.
MR JUSTICE STANLEY BURNTON: But there was not a second hearing.
MISS WINDLE: My Lord, I am sorry, that must obviously be my mistake, I was not there.
MR JUSTICE STANLEY BURNTON: Unless there was some hearing that was adjourned before the matter came to me, was there?
MR MOFFETT: No, my Lord. Your Lordship may recall the latter was originally listed for one day and then ran over into the second day. Your Lordship overnight asked Ms Collier, who was then representing the claimant, to go away and see if she can unearth any authorities relating to mistaken facts. So I do not know if that is where the confusion arises.
MISS WINDLE: I am instructed that the mistake of fact did not come to light until after the hearing begun which then occasioned us having to go away and get extra evidence relating to the mistake of fact which was as a result of them not having produced evidence in that (inaudible) to begin with before the hearing. So its those costs, my Lord, that I am instructed to request.
MR JUSTICE STANLEY BURNTON: The order that I made on the 16th was that Mr Prior serve a supplemental witness statement by 4 o'clock on the 17th, and the claimants were given leave to serve a witness statement in response and so on.
MISS WINDLE: Yes, it is the costs incurred as a result of that supplemental witness statement which the claimant says Mr Prior should have brought to the attention of the court before the hearing began, and then all the evidence in response to the submissions and so on would have been done by the claimant before the beginning of the hearing, as opposed to in the middle of it and necessitated going back to the documents and reconsidering matters, inevitably incurring extra expenditure as a result of revisiting.
MR JUSTICE STANLEY BURNTON: Is there a schedule of costs, or are costs to go to a detailed assessment?
MISS WINDLE: My Lord, I understand the costs are to go to a detailed assessment. My learned friend has a schedule, I am afraid I do not.
MR MOFFETT: My Lord, I was going to ask for detailed assessment. Can I perhaps clarify what occurred. The mistake of fact was raised in the witness statement of Mr Prior which was served before the hearing.
MR JUSTICE STANLEY BURNTON: That is how the claimant knew there had been a mistake of fact.
MR MOFFETT: Indeed, my Lord. So it is not true that this matter was not put before the court. Your Lordship may recall that what happened was that your Lordship wanted further clarification on the exact nature of the mistake of facts. Your Lordship was of the view that Mr Prior's original witness statement had not provided --
MR JUSTICE STANLEY BURNTON: Yes, it did not give any figures or say just what the mistake was.
MR MOFFETT: So that is why the matter proceeded as it did. This was a point taken by the claimants and it proceeded not because we say we were in any default, we quite clearly and properly raised the matter for the court and admitted to it. There was no allegation --
MR JUSTICE STANLEY BURNTON: There was insufficient information before me, I felt, for me to decide.
MR MOFFETT: I accept that and I accept that is why your Lordship made the point, but in relation to the principle of the matter, this was an issue which was taken by the claimant. The result of the further evidence was that your Lordship did not accept the claimant's argument of the point and that being the case, I would submit respectfully that the normal rule should apply -- by taking a point which they did not succeed on, then we should be entitled to the cost of that point, my Lord.
MR JUSTICE STANLEY BURNTON: What is said is that additional costs were incurred because the matter had not been adequately addressed earlier.
MR MOFFETT: My Lord, I would not accept that and I would not accept that in the way it is put because there are two separate issues. Firstly there is the issue of the witness statement and it might perhaps be on a less strong ground in relation to that because your Lordship found that your Lordship did require more information. But certainly in relation to submissions, what I would say is a good part of those submissions were addressed to questions of law, and your Lordship may recall getting served with voluminous bundles of authorities and it would not be at all fair to say that was our fault because in relation to the authorities and the principle that was at stake, those matters were very much in play long before the matter first came before your Lordship.
MR JUSTICE STANLEY BURNTON: And you want this to go to detailed assessment?
MR MOFFETT: Yes, my Lord. Given the way the matter proceeded I do not ask your Lordship to summarily assess the costs.
MISS WINDLE: My Lord, the claimant simply says, as your Lordship pointed out, that the defendants had put insufficient evidence before the court and that required the claimant to go back and get additional witness statements and produce additional submissions which might indeed have been done anyway, but would have been done previously and would not have necessitated revisiting matters and reconsidering matters out of consequence as it were and, therefore, incurring extra costs, but perhaps the appropriate place to discuss this is on a detailed assessment.
MR JUSTICE STANLEY BURNTON: Thank you very much. The defendant will have his costs to go for detailed assessment, however the costs of and occasioned by the last witness statement served on behalf of the claimant will be paid by the defendant. I make no separate order in respect of the supplemental skeleton arguments resulting from the service of that evidence on the basis that, more or less, the same time and costs would have been incurred had the matter been originally sufficiently evidenced.
MR MOFFETT: My Lord, I am grateful for that.
MISS WINDLE: My Lord, we would seek permission to appeal and the ground on which we appeal is that the claimant has a real prospect of success on two issues. The first of those issues is whether, in all the circumstances, procedural fairness required that the defendant should make clear precisely the case against the claimant in order that the claimant was able to respond to that. My Lord, our submissions were that procedural fairness required that the claimant should be told exactly the points against him and should not be required to infer them from a letter.
MR JUSTICE STANLEY BURNTON: Those are Ms Collier's submissions?
MISS WINDLE: My Lord, yes. The point of law for appeal is a question of whether the defendant must specify the points which he is going to consider against the claimant before actually considering those points, and not leave him to infer them from (inaudible) but in fact specify them, and we say this is an important point of interest to anybody in the same circumstances who needs to know exactly what they are required to do to respond to a complaint against them, and whether they need to consider any matters which might conceivably be raised or only those matters which are drawn to their attention as being considered.
The second point on which we seek permission to appeal is the question of the mistake of fact, and your Lordship found that if the mistake of fact was material, then it would be a ground for judicial review.
MR JUSTICE STANLEY BURNTON: I think I fudged that a little.
MISS WINDLE: And the issue is whether as a matter of law it is appropriate for somebody to rely on a mistake of fact which they say is immaterial without showing that it is immaterial by showing the size of it in respect of the entire pension fund without showing its immateriality. My Lord, unless you have any further question, those are our submissions.
MR JUSTICE STANLEY BURNTON: Although I did not find this case entirely straightforward, it turned on questions of fact and the real question is the degree of specificity required in what are intended to be informal proceedings. The facts are set out in detail in my judgment. In those circumstances, I do not think it appropriate to grant leave to appeal. Leave to appeal can be sought from the Court of Appeal who will be able to read the judgment and take a view speedily as to whether it is a proper case for the appeal to go forward.
MISS WINDLE: My Lord, I am grateful. There is one other matter. The claimant would seek permission to have an extension of time in which to make a further application for permission to appeal. Ms Collier is actually in court today and again all next week, and there may be some difficulty in obtaining further instructions. In the light of your Lordship's comments, we would seek 28 days in which to make a further application for permission to appeal.
MR MOFFETT: My Lord, I would not object to that.
MR JUSTICE STANLEY BURNTON: So be it.
MISS WINDLE: My Lord, I am grateful.