England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		9 June 1994

MR JUSTICE RATTEE:

The plaintiffs are both persons who were formerly employees of a division of a company known as Chloride Group plc (to which I will refer as "Chloride"). Both had for many years been members of and contributed to the Chloride (UK) Pension Scheme (to which I will refer as the "Chloride scheme"), of which the defendant is presently and has at all material times been trustee. In 1989 Chloride sold that particular division of its business to a company called CMP Batteries Ltd (to which I will refer as "CMP"), which was itself a subsidiary of a French company, and all the employees of that former division of Chloride's business were transferred to the employment of CMP. As part of the terms of the sale by Chloride, CMP was admitted temporarily as a participating employer (or associated company as it is referred to in the relevant trust deed) of the Chloride scheme until CMP set up its own scheme providing for benefit for employees similar to those provided by the Chloride scheme, which took place about a year later.

The facts relevant to the issues I have to decide can be briefly summarised for the purposes of this judgment, and I can do it by reference to a summary of the facts which was very helpfully included in a skeleton argument produced before the beginning of the hearing by Mr Steinfeld, leading counsel for the plaintiff.

The plaintiffs are both persons who were formerly employees of a division of a company known as Chloride Group plc (to which I will refer as "Chloride"). Both had for many years been members of and contributed to the Chloride (UK) Pension Scheme (to which I will refer as the "Chloride scheme"), of which the defendant is presently and has at all material times been trustee. In 1989 Chloride sold that particular division of its business to a company called CMP Batteries Ltd (to which I will refer as "CMP"), which was itself a subsidiary of a French company, and all the employees of that former division of Chloride's business were transferred to the employment of CMP. As part of the terms of the sale by Chloride, CMP was admitted temporarily as a participating employer (or associated company as it is referred to in the relevant trust deed) of the Chloride scheme until CMP set up its own scheme providing for benefit for employees similar to those provided by the Chloride scheme, which took place about a year later.

Following the setting up of that scheme, CMP ceased to participate in the Chloride scheme and all or most of its employees, including the two plaintiffs in these proceedings, became members of the CMP scheme. At that time the Chloride scheme's fund was in substantial actuarial surplus. The Chloride scheme trust deed as amended provided in clause 22 for what was to happen on a transfer of employees from the Chloride scheme to another scheme, in terms which I shall quote:

"22

(a) If any associated company shall cease to be an associated company it shall notwithstanding such cesser be deemed to remain an associated company for such period (if any) not extending beyond the scheme anniversary date next but one following the date of such cesser as such associated company and the company shall agree or beyond such later date as such associated company the company and HM Commissioners of Inland Revenue shall have agreed in any case in which there are special circumstances.

(b) The trustee shall on whichever of the following dates (hereinafter referred to as 'the appropriation date') shall apply that is to say:

(i) the date of the termination of the liability of such associated company to contribute to the scheme under clause 18(b); or

(ii) the date on which such associated company ceased to be an associated company or such later date as may have been agreed under sub-clause (a) of this clause;

appropriate in respect of those members who are then in the employ of such associated company and who are not immediately transferred to the employ of another of the employers such part of the assets of the scheme as the trustee determines to be appropriate having taken actuarial advice in all the circumstances and as from the appropriation date such members shall cease to be members."

In the years preceding the transfer by the trustees of the Chloride scheme of part of their fund to the new CMP scheme the employer under the Chloride scheme had as a result of the fund being in surplus enjoyed what is referred to as a contributions holiday in the sense that it had not been required to make any contributions. Under the terms of the Chloride scheme any such surplus was in fact available to provide additional benefits for members of the Chloride scheme and, as I understand it, a similar provision was included in the CMP scheme relating to any surplus which there might be in that scheme.

The trustee, in making its determination under clause 22(b) of the Chloride scheme, determined to transfer to the CMP scheme an amount equal to what is referred to as the past-service reserve of the former employees of Chloride who had transferred to the employment of CMP and in respect of whom the transfer by the trustee was made. The result of that was to leave, at any rate substantially, the whole of the surplus that existed in the Chloride scheme in that scheme, though as I understand the position the amount that was transferred provided what Mr Warren, leading counsel for the trustee, referred to as a cushion for the transferred employees in the sense that some part of the surplus was transferred and not merely the amount of the fund necessary to provide the actual fixed benefits provided for those employees by the Chloride scheme.

Following the determination by the trustee of the Chloride scheme to make that transfer to the CMP scheme the plaintiffs asked the trustee to disclose to them all the trust documents in the possession of the trustee, including in particular minutes of trustee meetings, which indicate or might indicate the reason for the trustee's determination. The trustee, relying on in particular the decision of the Court of Appeal in Re Londonderry's Settlement [1965] Ch 918, refused to disclose those documents, on the basis that by virtue of the decision of the Court of Appeal in Re Londonderry's Settlement they were not required to disclose documents which would disclose the trustees' reason for exercising their discretion under clause 22(b) of the Chloride trust deed in the way in which they did.

The plaintiffs were dissatisfied with that response and started these proceedings by an originating summons issued on 22 March 1993 by which they seek "an order that the defendant as trustee of the scheme do within 21 days by a proper officer produce for the inspection of the plaintiffs and permit them or solicitors acting for them to take copies of all documents in the possession of the defendant, its officer, servants or agents, recording or disclosing or tending to show: (1) the basis and information on which the defendant determined what part of the assets of the scheme was appropriated to the CMP pension scheme ('CMP scheme'); (2) the actuarial and other professional advice received by the defendant in connection with the proposed transfer payment to the CMP scheme; (3) the representations received by the defendant from or on behalf of Chloride (UK) Ltd ('the company') in connection with the proposed transfer payment to the CMP scheme including any representations made in relation to the allocation of any surplus over liabilities in the scheme assets."

In fact some of the documents originally sought by the plaintiffs have been disclosed by the trustee. In particular, full disclosure has been made of the advice which the trustee obtained from its actuary in accordance with the requirement of clause 22(b). Disclosure has also been made of letters of advice from the trustee's solicitors to the trustee but with parts of that advice blanked out, as I understand it, to the extent that the contents of the relevant letters would themselves disclose the trustees' reasons for exercising their discretion under clause 22(b) in the way in which they in fact did. Certain other documents including minutes have been disclosed but again with parts of them blanked out, those being parts which the trustee contends that it is not bound to disclose to the plaintiffs by reason of those parts again containing discussion of the reasons for the trustees exercising the discretion in the manner in which they did. Thus now the plaintiffs seek disclosure of the documents referred to in the originating summons to the extent that such documents have not already been disclosed.

In Re Londonderry's Settlement [1965] Ch 918 the relevant trust instrument with which the Court of Appeal was there concerned contained common form discretionary powers for the trustees to appoint capital and income in favour of a defined class of beneficiaries. On an application by the trustees of that settlement for directions, it was held by the Court of Appeal that the trustees were not bound to disclose to their beneficiaries documents containing the reasons for the trustees exercising their discretionary powers in the way in which they had done, notwithstanding that the documents concerned might be documents to which the beneficiaries were prima facie entitled as being trust documents in which the cestuis que trustent had a proprietary interest. The leading judgment in the case was given by Harman LJ, who at p.928F said this:

"The Court is really required here to resolve two principles that come into conflict, or at least apparent conflict. The first is that, as the defendant beneficiary admits, trustees exercising a discretionary power are not bound to disclose to their beneficiaries the reasons actuating them in coming to a decision. This is a long-standing principle and rests largely I think on the view that nobody could be called upon to accept a trusteeship involving the exercise of a discretion unless, in the absence of bad faith, he were not able to have his motives or his reasons called in question either by the beneficiaries or by the court. To this there is added a rider, namely, that if trustees do give reasons, their soundness can be considered by the court. Compare the observations of James LJ in Re Gresham Life Assurance Society, ex parte Penney (1872) 8 Ch App 446 at pp.449-50 on the analogous position of directors."

Later in his judgment at p.933D-E Harman LJ said this:

"I would hold that even if documents of this type ought properly to be described as trust documents, they are protected for the special reason which protects the trustees' deliberations on a discretionary matter from disclosure. If necessary, I hold that this principle overrides the ordinary rule. This is, in my judgment, no less in the true interest of the beneficiary than of the trustees. Again, if one of the trustees commits to paper his suggestions and circulates them among his co-trustees; or if inquiries are made in writing as to the circumstances of a member of the class; I decline to hold that such documents are trust documents the property of the beneficiaries. In my opinion such documents are not trust documents in the proper sense at all."

Danckwerts LJ, starting at p.935G, said this:

"It seems to me that where trustees are given discretionary trusts which involve a decision upon matters between beneficiaries, viewing the merits and other rights to benefit under such a trust, the trustees are given a confidential role and they cannot properly exercise that confidential role if at any moment there is likely to be an investigation for the purpose of seeing whether they have exercised their discretion in the best possible manner. Of course, if a case is made of lack of bona fides, that is an entirely different matter. In that case, I agree, it becomes necessary to examine exactly what has happened because that is in an action and not in a theoretical application for directions, as the present case appears to me to be. It appears to me that the documents are confidential and the trustees' duty would become impossible and the execution of the trust would become impossible if the trustees were bound to disclose to any beneficiary any information or other matters in regard to beneficiaries that they had received."

Salmon LJ at p.936G said this:

"The settlement gave the absolute discretion to appoint to the trustees and not to the courts. So long as the trustees exercise this power with the consent of persons called appointors under the settlement and exercise it bona fide with no improper motive, their exercise of the power cannot be challenged in the courts - and their reason for acting as they did are, accordingly, immaterial. This is one of the grounds for the rule that trustees are not obliged to disclose to beneficiaries their reasons for exercising a discretionary power. Another ground for this rule is that it would not be for the good of the beneficiaries as a whole, and yet another that it might make the lives of trustees intolerable should such an obligation rest upon them: Re Beloved Wilkes's Charity; Re Gresham Life Assurance Society, ex parte Penney. Nothing would be more likely to embitter family feelings and the relationship between the trustees and members of the family, were trustees obliged to state their reasons for the exercise of the powers entrusted to them. It might indeed well be difficult to persuade any persons to act as trustees were a duty to disclose their reasons, with all the embarrassment, arguments and quarrels that might ensue, added to their present not inconsiderable burdens."

The defendant trustee by counsel says that those dicta of their Lordships and the decision in the case itself, Re Londonderry's Settlement, recognised the well-established rule that where a discretion is entrusted to a trustee by the relevant trust instrument the trustee is not required to give reasons for the exercise of that discretion and that, in the absence of evidence apart from such disclosure that the trustee has acted improperly, whether from an improper motive or by taking account of factors which the trustee should not have taken into account or not taking into account factors which the trustee should have taken into account, the court will not interfere with the exercise of the trustee's discretion.

That principle, submits Mr Warren, was stated quite clearly in Re Beloved Wilkes's Charity (1851) 3 Mac & G 440. In that case the trustees of a charity were under the terms of a trust to select a young man to be brought up as a minister of the Church of England, and a question arose as to the exercise by the trustees of that power of selection. In the course of his judgment Lord Truro LC, at p.447, said this:

"The question, therefore, is whether it was the duty of the trustees to enter into particulars, or whether the law is not that trustees who are appointed to execute a trust according to discretion, that discretion to be influenced by a variety of circumstances (as, in this instance, by those particular circumstances which should be connected with the fitness of a lad to be brought up as a minister of the Church of England), are not bound to go into a detail of the grounds upon which they have come to their conclusion, their duty being satisfied by showing that they have considered the circumstances of the case, and have come to their conclusion accordingly. Without occupying time by going into a lengthened examination of the decisions, the result of them appears to me so clear and reasonable that it will be sufficient to state my conclusion in point of law to be, that in such cases as I have mentioned it is to the discretion of the trustees that the execution of the trust is confided, that discretion being exercised with an entire absence of indirect motive, with honesty of intention and with a fair consideration of the subject. The duty of supervision on the part of this Court will thus be confined to the question of the honesty, integrity and fairness with which the deliberation has been conducted, and will not be extended to the accuracy of the conclusion arrived at, except in particular cases. If, however, as stated by Lord Ellenborough in R v The Archbishop of Canterbury and another 15 East 117, trustees think fit to state a reason and the reason is one which does not justify their conclusion, then the court may say that they have acted by mistake and in error, and that it will correct their decision; but if, without entering into details, they simply state, as in many cases it would be most prudent and judicious for them to do, that they have met and considered and come to a conclusion, the court has then no means of saying that they have failed in their duty, or to consider the accuracy of their conclusion."

That principle in relation to the exercise by a fiduciary of a discretion was applied in a different context in Re Gresham Life Assurance Society, ex parte Penney (1872) 8 Ch App 446, where it was held by the Lords Justices that where the constitution of a company gave the directors of the company power to refuse the registration of a proposed transfer of shares the directors need give no reasons for their decision. At p.449 of the report in the course of his judgment James LJ said this:

"In this case I feel compelled to come to a different conclusion from that of the Master of the Rolls. The clause in the deed of settlement appears to me very clear, which provides that no transfer shall be made to any person outside the company unless that person shall be approved of by the board of directors. No doubt the directors are in a fiduciary position both towards the company and towards every shareholder in it. It is very easy to conceive cases such as those cases to which we have been referred, in which this Court would interfere with any violation of the fiduciary duty so reposed in the directors. But in order to interfere upon that ground it must be made out that the directors have been acting from some improper motive or arbitrarily and capriciously. That must be alleged and proved, and the person who has a right to allege and prove it is the shareholder who seeks to be removed from the list of shareholders and to substitute another person for himself."

Later on in his judgment, James LJ at p.450 said this:

"But if it is said that wherever any shareholder has proposed to transfer his shares to some new member, the court has a right to say to the directors, 'We will presume that your motives are arbitrary and capricious, or that your conduct is corrupt, unless you choose to tell us what your reasons were, and submit those reasons for our decision', it would appear to me entirely altering the whole constitution of the company as provided by the articles."

At p.452 Mellish LJ said:

"I am, therefore, of opinion that in order to preserve to the company the right which is given by the articles the shareholder is not to be put upon the register if the board of directors do not assent to him, and it is absolutely necessary that they should not be bound to give their reasons, although I perfectly agree that if it can be shown affirmatively that they are exercising their power capriciously and wantonly, that may be ground for the court interfering."

The same principle, submits the defendant trustee, applies to clause 22(b) of the trust deed of the Chloride scheme which confers a discretion on the trustee to decide what is the appropriate quantum of the part of the scheme fund to be transferred to a new pension scheme to which former members of the Chloride scheme have transferred. The plaintiffs, on the other hand, argue that in applying the principle established by the cases to which I have referred to clause 22 of the Chloride scheme trust deed it is necessary to bear in mind the radically different nature of a pension scheme from that of a private discretionary trust such as that with which the court was concerned in Re Londonderry's Settlement.

Mr Steinfeld on behalf of the plaintiffs forcefully points out that the members of a pension scheme such as the Chloride scheme, which is a contributory scheme under which the members had to contribute part of their earnings, are not volunteers. Far from it, they have purchased their interests under the scheme by their service to the employer and by their contribution to the scheme fund. They are entitled, submits Mr Steinfeld, to see that the fund is properly administered, and they can only see that it is properly administered, in particular with reference to the exercise by the trustee of its discretions, if the trustee is bound to disclose the reasons for exercising its discretion in the way it has done.

For that proposition Mr Steinfeld relied in particular on two recent decisions of the Court of Appeal in the context of pension schemes. One is an unreported decision given on 26 March 1986 in the case of Kerr v British Leyland (Staff) Trustees Ltd. The other is a decision in Stannard v Fisons Pension Trust Ltd [1992] IRLR 27.

In Kerr v British Leyland (Staff) Trustees Ltd the relevant scheme contained a provision that members would receive an incapacity benefit if the trustee of the scheme accepted that the member concerned was under a permanent incapacity. In the passage in Fox LJ's judgment, on which Mr Steinfeld particularly relies at p.12 of the transcript beginning at A, his Lordship said this:

"I come now to the duty of the trustee. In my view, under the provisions of the booklet, a member is not entitled to the incapacity payment unless it has been accepted that the incapacity is permanent. The acceptance, in my opinion, must be by the trustee and that, as I understand it, is not in dispute.

Now this is not a case of a trust where the beneficiaries are simply volunteers. The beneficiaries here are not volunteers. They have rights derived from contractual and commercial origins. They have purchased their rights as part of their terms of employment. Consistently with that, the power of the trustee to decline acceptance of the claim cannot be simply an uncontrolled discretion. It seems to me that the duty of the trustee was to give properly informed consideration to the application. But I think that when, on 28 June 1978, the board of the trustee company considered the case they were not properly informed as to the matter before them."

Fox LJ went on in his judgment to explain what he meant by that and to point in particular to the information which he found was not before the trustee which should have been when considering the question of the permanent incapacity of the member concerned and, with the agreement of Mustill LJ and Caulfield J, decided that as a result of that fact the trustees were not properly informed as they should have been, and held that the trustees' decision on the question of the applicant's permanent incapacity was bad.

In the other Court of Appeal decision on which Mr Steinfeld particularly relies, Stannard v Fisons Pension Trust Ltd, the Court was concerned with a situation similar to the situation in the present case in the sense that the company concerned, having a pension scheme, had sold off part of its undertaking and some of its employees had transferred to the purchaser's employment and had transferred to a pension scheme set up by the purchaser. The trustees of the original scheme in the events which had happened were bound by one of the provisions in the pension scheme to transfer to the new pension scheme in respect of the transferred employees such part of the assets of the original fund as the trustees after consulting their actuary decided to be just and equitable. The transfer was made, but purportedly by the trustees under a different provision in the trust deed which was later held to have been inapplicable to the situation which existed. Certain members of the scheme who had transferred to the employ of the purchaser challenged the propriety of the transfer. In the course of the proceedings in which that challenge was mounted it emerged that at the time of the transfer by the trustees, as a result of rises in market prices of the relevant investment, the fund had gone into surplus without the trustees having been aware of the fact.

At paragraphs 34 and 35 of the report of the case, again a passage on which Mr Steinfeld places considerable importance, Dillon LJ said this:

"The relevant law is set out by Fox LJ, giving the leading judgment of this Court in the unreported case of Kerr v British Leyland (Staff) Trustees Ltd, decided on 26 March 1986. That case involved an assertion by a member of a pension scheme that his claim for incapacity benefit had been wrongly rejected by the trustees. Fox LJ pointed out at p.12C-E of his judgment that:

'The beneficiaries here are not volunteers. Their rights derive from contractual and commercial origins. They have purchased their rights as part of their terms of employment. Consistently with that, the powers of the trustee to decline acceptance of the claim cannot be simply an uncontrolled discretion. It seems to me that the duty of the trustee was to give properly informed consideration to the application.'

In the present case both the transferring members and the contributing members had contributed to the Fisons pension fund, and the duty thus explained by Fox LJ was owed by the trustees to both alike. To give properly informed consideration the trustees should, in my judgment, have given consideration to the current value of the trust fund and its implications. But they did not."

As a result the Court of Appeal in that case held that the trustees' decision as to the amount to be transferred in respect of the transferring employees was flawed.

The plaintiffs by Mr Steinfeld submit that those two decisions of the Court of Appeal make it clear that the Court of Appeal recognised that different considerations apply to the accountability of trustees for the exercise of discretions conferred upon them by pension schemes from those applicable to the exercise of discretions by the trustees of voluntary trusts.

The plaintiffs also rely on a decision of Warner J in Mettoy Pension Trustees Ltd v Evans and others [1990] 1 WLR 1587 as another example of the recognition by the courts of this essential difference between pension funds and private trusts. In that case the pension scheme concerned gave the employer company power in its absolute discretion to use the surplus in the fund to augment benefits for members of the scheme. One of the questions before the Court in the proceedings was the effect on that power of the liquidation of the employer company. At p.1618D of the report Warner J said this:

"If the discretion were in a will or in a private settlement in favour of beneficiaries who were volunteers, the conclusion that the person on whom it was conferred owed no duty to the objects of it would not be startling. However, in deciding between a construction of the deed of 1983 [that is, the relevant pension scheme] which would lead to a like conclusion and a construction of it leading to the conclusion that the employer did owe a duty to the objects of the discretion, one must in my view have regard to the fact that the beneficiaries under a pension scheme are not volunteers. As I pointed out earlier, their rights are derived from the contracts of employment of the members as well as from the trust instrument. Those rights have been earned by the service of the members under those contracts as well as by their contributions. I do not mean by that that, on some default by the trustees, a member would have an alternative right of action against the employer in contract for payment of the benefits due to him under the scheme. I mean only that, in construing the trust instrument, one must bear in mind as an important part of the background, the origin of the beneficiaries' rights under it."

Mr Steinfeld on behalf of the plaintiffs also relied on a dictum of Vinelott J in a judgment delivered on 26 July 1993 in McDonald and others v Horn and others [1993] OPLR 183. In that case Vinelott J was considering an application by members of the pension scheme for the appointment of judicial trustees of the scheme, and he said at p.196G-H that one of the factors he took into account in favour of the appointment of judicial trustees was:

"In the case of a pension fund, unlike a conventional trust fund, the beneficiaries have themselves contributed both in cash and in service to the employer.

They are entitled to be satisfied that the trust fund to which they have contributed is administered in a way which reflects their legitimate expectations by trustees in which they have full confidence."

I accept that in construing the relevant trust instrument, and in particular clause 22 of the trust deed of the Chloride scheme as amended, I must have regard to the fact that the trusts it creates and the powers it confers are for the purposes of a pension scheme in which the members have bought their interests as opposed to being pure volunteers. But I also accept the defendant's submission that nevertheless I must give effect to settled principles of trust law in determining the effect of the trust instrument on its true construction. In my judgment, none of the authorities relied on by the plaintiff supports the contrary. In both Kerr v British Leyland (Staff) Trustees Ltd and Stannard v Fisons Pension Trust Ltd evidence was before the court that the trustees had failed to take account of information that would have been relevant to the exercise of their discretion. Therefore in each case the presumption referred to in Re Beloved Wilkes's Charity and Re Gresham Life Assurance Society, to which I have earlier referred, that in the absence of evidence to the contrary a trustee has exercised his discretion properly, did not apply. In my judgment, neither of the two Court of Appeal decisions lends any support to the proposition (which was not before the court in either case) that in the absence of any such evidence of impropriety the court will compel the trustee of the pension scheme to disclose the reasons for the exercise of a discretion by that trustee, contrary to the principles well-established and applied in Re Beloved Wilkes's Charity, Re Gresham Life Assurance Society, and Re Londonderry's Settlement. Of course I accept that a pension scheme is different from a private trust in that, in particular, the members of a pension scheme have purchased their interests, but the question is what is the nature of the interest which they have purchased. That, in my judgment, depends upon the application to the relevant trust instrument and, in particular, to the trust deed in the present case on its proper construction, of well-established principles of trust law. That, in general, the principles applicable to private trusts as a matter of trust law apply equally to pension schemes was held by Sir Robert Megarry V-C in Cowan and others v Scargill and others [1984] IRLR 260, in particular at paragraph 41.

Mr Steinfeld indeed rightly accepted that even a pension scheme may by sufficiently clear words confer on its trustee a discretion so absolute as to absolve the trustee from explaining its exercise to the beneficiaries. But, submitted Mr Steinfeld, in the case of a pension scheme, in the absence of some express provision in the scheme to the contrary, the trustee is in fact bound to give reasons for the exercise of discretions conferred upon the trustee by the relevant trust instrument because, he submitted, it would be unreasonable that members of the scheme who had bought their interests should not be able to see that the trustee has exercised its discretion properly - which they cannot see in the absence of reasons given for the trustee's actual exercise of its discretion. Although Mr Steinfeld accepted that there is no authority for this proposition in the form of any decision of the court to that effect, he submitted that the dicta to which I have referred as having been relied on by him, and in particular the two dicta in Kerr v British Leyland (Staff) Trustees Ltd and Stannard v Fisons Pension Trust Ltd, justify modification of the law of trusts established by such cases as Re Beloved Wilkes's Charity, and applied in Re Londonderry's Settlement in its application to pension schemes. Very attractively though Mr Steinfeld put his argument, I cannot accept it. It would in my judgment be wrong in principle to hold that the long-established principles of trust law as to the exercise by trustees of discretions conferred on them by their trust instruments, in the context of which parties to a pension scheme such as the present entered into those schemes, no longer apply to them and that the trustees are under more onerous obligations to account to their beneficiaries than they could have appreciated when appointed, on the basis of the relevant trust law as it has stood for so long.

I accept Mr Warren's submission that if any such amendment to the law of trusts as applied to pension schemes is to be made it should be made by the legislature, either by regulations made under or by the extension of s.113 of the Pension Schemes Act 1993 in which Parliament has already addressed the question of the extent to which members of a pension scheme should be entitled to information relating to the scheme's administration.

In my judgment, clause 22(b) of the trust deed in the present case does confer a clear discretion on the trustee of the pension scheme to which the well-established principles of trust law, to which I have referred, apply, to the effect that the trustee is not bound to give reasons for the manner in which it exercised that discretion. Moreover, there is in my judgment sound reason for the parties to the trust instrument in the present case having conferred such a discretion on the trustee in the hope of minimising the potential for dispute and possibly litigation by various groups of employees and ex-employees, dissatisfied by an exercise of the trustee's quantification of the amount to be transferred in a situation such as the present.

There is in this case (and Mr Steinfeld rightly did not contend to the contrary) no evidence to suggest that the trustee did not exercise that discretion conferred upon it perfectly properly. It follows in my judgment that the trustee is under no obligation to disclose documents containing evidence of the trustee's reasons for the exercise of its discretion. Accordingly, I shall dismiss the originating summons.

ORDER: Originating summons dismissed with costs.