England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		30th October 2006

Mr Justice Lewison:

Introduction	1
The questions	8
The Courtaulds scheme	10
The Toray interim deed	16
The Toray explanatory booklet	20
The Toray definitive deed	21
The aftermath of Barber	33
Different categories of members	38
Transferees from the Courtaulds scheme	38
Joiners before 22 November 1993	40
Joiners after 22 November 1993 but before 17 May 1994	42
Joiners on or after 17 May 1994	43
Were transferees from the Courtaulds scheme entitled to a flexible retirement date?	47
The alternative submissions	47
The contractual analysis	49
What were the terms of the Toray scheme under the interim deed?	51
Is there an estoppel?	61
Benefits accrued by transferees from the Courtaulds scheme	69
Were joiners before 22 November 1993 entitled to a flexible retirement date?	71
The contractual analysis	71
Is there an estoppel?	74
Did the definitive deed purport to remove any rights from existing members; and should it be set aside?	76
Were joiners before 17 May 1994 entitled to a flexible retirement date?	79
The contractual analysis	79
Is there an estoppel?	81
A non-contractual agreement?	82
Normal Pension Date on redundancy	90
Equalisation in 1994	92
Equalisation in 2004	106
Retirement on redundancy	108
The 1994 announcements	108
The 2004 deed	109
The addendum to the booklet	110
The Barber window pension	113
Other circumstances in which a member is entitled to retire at 55 with unreduced pension	122
My answers to the questions	123

Introduction

1. This is another example of the difficulties that arise when the administrators of pension schemes apparently misunderstand the terms of the trust deeds under which the schemes are constituted; and ignore the provisions of the deed for making changes to the scheme. The whole story is one of muddle. No wonder that the trustees of the scheme have been compelled to ask for help from the court.
2. In 1988 Courtaulds plc established a pension scheme for its staff. In 1989 Courtaulds agreed to sell part of the business of one of its group companies, Samuel Courtauld & Co, to Toray Industries Inc, which in turn transferred it to Toray Textiles Europe Ltd, one of its subsidiaries. The agreement between Courtaulds and Toray Industries contained provisions relating to pension benefits enjoyed by staff who would be transferring to the new owner of the business.
3. In due course Toray Textiles Europe Ltd set up a pension scheme which was intended to be governed first by an interim deed; and subsequently by a definitive deed.
4. No doubt in an attempt to be helpful, explanatory booklets were produced which said that they were summaries of the benefits available under the Courtaulds scheme and the Toray scheme respectively. In fact, in crucial respects, they bore little relationship to the contents of the formal deeds. Whereas the formal definitive deeds in each case provided for men to retire at 65 and women at 60, the explanatory booklets said that there was a flexible retirement date between 60 and 65, apparently applicable both to men and to women.
5. 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.
6. 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 before 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 an 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".

7. Following the decision of the European Court of Justice in Barber, the trustees of the Toray pension scheme resolved to equalise the normal retirement dates for both male and female members by raising the normal retirement age for female members to 65. They purported to do so first in 1994 by an announcement, to take effect from 17 May 1994, sent to active members, and an addendum to the explanatory booklet, to take effect from the same date; and second by a deed executed in 2004.

The questions

8. The questions I am asked to decide have shifted somewhat since the claim form was issued, and shifted during (and after) the hearing. I asked the parties to agree the questions they wanted me to answer, based on a draft of mine which set out the questions as I understood them in language as simple as possible. Their agreed list reformulated some of the questions and added yet more. I have altered the draft yet again in order that at least I understand the questions I am trying to answer. The final list is as follows (although, as will be seen, not all the questions in fact arise):

i) Did the members of the Toray pension scheme who joined the scheme before the execution of the definitive deed have a right under the scheme to retire between the age of 60 and 65 without the consent of the employer and without reduction of pension? This question must be considered separately in relation to:

a) Transferees from the Courtaulds scheme; and

b) New employees who joined after the execution of the interim deed but before the execution of the definitive deed.

In the case of transferees from the Courtaulds scheme, I am also asked to answer the same question in relation to benefits accrued before the inception of the Toray scheme.

ii) If they had such a right, did the definitive deed purport to remove it from them, and was it effective to do so?

iii) If it was, should the definitive deed be set aside in part?

iv) Did new employees who joined the scheme after the execution of the definitive deed but before 17 May 1994 have a right under the scheme to retire between the age of 60 and 65 without the consent of the employer and without reduction of pension?

v) Were employees who joined the Toray scheme before execution of the definitive deed entitled to the benefit of the special provisions relating to redundancy contained in the definitive deed?

vi) Were employees who joined the Toray scheme after execution of the definitive deed entitled to the benefit of the special provisions relating to redundancy contained in the definitive deed?

vii) Were the 1994 announcements and/or the addendum to the explanatory booklet effective to equalise the normal retirement date of male and female members at age 65 for future service from 17 May 1994?

viii) If so, did the equalisation apply to members made redundant or affect early retirement rights for any class of member?

ix) If not, was the 2004 deed effective to do so for future service from 12 November 2004?

x) Is a member who has accrued a pension entitlement with reference to a Normal Pension Date of 60 or 55 for any period of service entitled to retire at the age of 60 or 55 on a full pension, or must that member wait until age 60 or 65 to receive pension accrued during a period of service with reference to a Normal Pension Date of 65 or 60 (early payment of which would have required consent of the trustees and the employer)?

xi) Are there any circumstances in which a member is entitled to an unreduced early retirement pension as of right from age 55, other than on redundancy. NB: No party has put forward a positive case to this effect.

9. Ms Sarah Asplin QC and Mr Fenner Moeran appeared on behalf of the trustees. Mr Andrew Simmonds QC appeared on behalf of the employer, Toray Textiles Europe Ltd. Mr Michael Skinner was appointed as a representative defendant for the class of members who joined the scheme before the announcements made in 1994. Ms Emily Campbell appeared on his behalf. Ms Deborah Ford was appointed as a representative defendant for the class of members who joined the scheme after the explanatory booklet was amended by an addendum, also in 1994. Mr Nigel Burroughs appeared on her behalf.

The Courtaulds scheme

10. The definitive deed, incorporating the rules of the Courtaulds scheme, was executed on 11 April 1988. Under rule 16 a member was entitled to a pension on his retirement at Normal Pension Age. Paragraph 1 (38) of Schedule 2 defined "Normal Pension Age" as follows:

"Normal Pension Age" means the sixty fifth birthday of Male Members and the sixtieth birthday of Female Members, except that for the purposes of Rule 16 (1) only the Normal Pension Age of a Female Member who is continuing in Service between age 60 and age 65 shall be deemed to be the date she leaves Scheme Service or, if earlier, attains age 65".

11. Thus a man had no right to retire before the age of 65. But rule 17 of the Courtaulds scheme did permit a member with more than two years' service and within ten years of Normal Pension Age to take an immediate pension if he or she retired (but only with the consent of the employer), or was made redundant. In that event, he or she was entitled to a pension. The pension would be reduced by ¼ per cent per month if the member retired more than five years before Normal Pension Age; but otherwise would be unreduced. The Courtaulds Conditions for Service of Staff said that it was compulsory to join the pension scheme; and that terms and conditions relating to the scheme "are governed by the Trust Deed and Rules".
12. However, an explanatory booklet, produced in attempt to provide a more user-friendly explanation of the Courtaulds scheme, contained the following question and answer:

"When may I normally retire? At any time between your 60^th and 65^th birthday".

May I retire before age 60 in other circumstances? Yes, with Company agreement and provided you are at least age 55 (men) or 50 (women) with 2 years' Company service."

13. Why anyone should have thought that the first of these questions and answers was the effect of the Courtaulds scheme is a mystery. Indeed the explanatory booklet is itself contradicted by a contemporaneous newsletter issued by Courtaulds which said:

"Date pension payable: at age 65 (men) or 60 (women)"

14. That is what Mr Skinner understood when he joined the Courtaulds scheme. As he says in his witness statement:

"When I originally joined the Courtaulds Scheme, it was my understanding that my age of retirement would be 65."

15. Mr Davis and Mr Mitchell, who also worked for Courtaulds before the sale to Toray, had the same understanding; and the Courtaulds scheme was in fact administered on that basis.

The Toray interim deed

16. The interim deed was executed on 5 February 1990. It contains a number of administrative provisions, but gives no hint of the benefits to which members of the scheme are entitled. Instead, it recites in recital (B):

"(B) The establishment of the Plan and details of its main provisions have been made known to all persons eligible for membership in an announcement a copy of which is annexed to this Deed"

17. It goes almost without saying that there is no announcement annexed to the interim deed; and no one can identify with any certainty what the announcement was. In fairness, though, it should be said that documents relating to the scheme were kept at one of Toray's factories which was damaged by fire after it closed down, and before all the stored documents could be moved.
18. Toray and the trustees undertook to execute a definitive deed within twenty four months. In the meantime the trustees were to administer the scheme "as one capable of acceptance by the Board of Inland Revenue as an Exempt Approved Scheme" and in conformity with the provisions of the interim deed.
19. Clauses 17 of the interim deed contained power to alter the trusts and powers by deed. Under the terms of the interim deed, an amendment could have retrospective effect.

The Toray explanatory booklet

20. In 1990 (after the execution of the interim deed but before the execution of the definitive deed) an explanatory booklet was produced. The first draft of the booklet appears to have been written in February 1990, and the final draft some time in early March. It was entitled "Your Pension Explained". The relevant parts of it read as follows:

"SCHEME MANAGEMENT

The Scheme is governed by a Trust Deed and Rules ... While this booklet aims to give an accurate description of the benefits of the Scheme, if there is any variation between it and the Trust Deed and Rules, the legal document prevails ..."

"NORMAL RETIREMENT

The Toray Scheme allows you to retire at any time between age 60 and 65. When you retire your annual pension is worked out as follows:

1/60 x your pensionable service x your final Scheme pay ..."

"EARLY RETIREMENT

You may retire from age 50 (men and women) with the agreement of the Company and after 2 years' Company service.

Your early retirement pension is worked out in the same way as your normal retirement pension.

If you retire early on or after age 60 (men) or age 55 (women), your pension is not reduced for early payment.

If you retire before age 60 (men) or age 55 (women), your pension is reduced by 1/4% for each month of retirement before that age (3% a year) ..."

The Toray definitive deed

21. The definitive deed was executed on 22 November 1993. This was, of course, after the decision of the ECJ in Barber; and recital (E) to the deed contemplated that retrospective amendments to it might have to be made to take account of the decision in that case. The deed, and its accompanying rules and schedules, is a labyrinthine document, running to more than 160 pages.
22. Clause 3 of the deed required the scheme to be operated in a manner which did not "run contrary to any … overriding legislation affecting pension schemes". Clause 4 contained the power to amend the deed or the rules. The power was exercisable by deed. The power permitted retrospective amendments. A proviso stated that notification of amendments should be given, in certain circumstances, to the Inland Revenue and the Occupational Pensions Board; but there was no requirement to notify members.
23. Clause 8 contained the trustees' power to admit persons to membership of the scheme. An admission could be made (with the employer's consent) on special terms; and those special terms could include:

"the provision in any circumstances of a greater or a smaller benefit for the Member in relation to himself, his Beneficiaries, Personal Representatives or Dependants than would otherwise have been provided under the Rules".

24. Clause 9 entitled the trustees, at the employer's request, to augment benefits and to grant new benefits to members. However, this was subject to the trustees' being satisfied that the benefits were adequately funded.
25. The definitive deed incorporated the rules. Rule 2 deals with the admission of members. Rule 2 (d) says that an employee who is eligible for membership "may be required to make formal application in order to be able to join" the scheme. Rule 2 (e) says that:

"An Employee shall, on being admitted to membership of the Plan, become entitled to its benefits in accordance with (and subject to) the Trust Deed and the Rules."

26. Rule 5 (a) says that a member "may" be provided with a pension "on retirement at Normal Pension Date". Although rule 5 (a) uses the word "may", it is common ground that a member's primary entitlement to pension arises under this rule. The pension continues for the rest of the member's life, and is payable monthly.
27. The expression "Normal Pension Date", which lies at the heart of the dispute, is contained in Part I of the Schedule to the rules, and reads as follows:

" Normal Pension Date" means such date as shall be agreed between the Trustees, the Employer and a Member on the date on which he is admitted to membership of the Plan PROVIDED THAT:-

A. such date shall not without the prior consent of the Board of Inland Revenue be prior to the Member's 60th birthday (if male) or 55th birthday (if female) or to the Member's normal retirement date under any other of the Employer's Schemes nor subsequent to the Member's 70th birthday, and in the case of a Contracted-out Member shall not, without the Occupational Pensions Board's prior consent, be subsequent to the Member's State Pensionable Date;

B. it shall, in the case of a Specified Member, be his 65th birthday in the case of a male and her 60th birthday in the case of a female or, in the case of a Specified Member who is made redundant, be his 60th birthday and her 55th birthday respectively unless in both cases the Employer shall advise it to be such other date (within the limits specified in Proviso A immediately above) as shall have been agreed between the Trustees, the Employer and the Member, and

C. Normal Pension Date, once fixed in accordance with this definition, may subsequently be altered, subject to:

I. the consent of the Board of Inland Revenue having been obtained where it is altered to (a) a date earlier than that originally fixed, and the Member is within five years of the new date, or (b) a date later than the Member's 70th birthday, and

II. in the case of a Contracted-out Member, the Occupational Pensions Board's consent having been obtained where it is altered to a date later than the Member's State Pensionable Date.

28. The rules themselves do not prescribe the amount of the pension. This is done by a formula in Part III of the Schedule. The pension payable on retirement on or after the state retirement date is given by the formula
    1/60 x N x FPS; where N is the number of years' pensionable service (subject to a maximum of 40); and FPS is final pensionable salary. Service ceases to be pensionable service at Normal Pension Date. Where retirement occurs before state retirement date, there is an additional bridging pension.
29. Rule 7 deals with benefits payable on death in service. There are a number of options available. These include the payment of a lump sum. Schedule III provides that the lump sum is to be three times basic salary at the date of death. This death in service benefit seems in practice to have been called "personal life cover".
30. Rule 10 deals with retirement before Normal Pension Date. It says:

"With the Trustees' and the Employer's consent, an immediate pension may be granted to a Member in lieu of the benefit which he would otherwise be entitled to under Rule 12 (but subject nevertheless to Rule 12(m)), if he retires from Service at any time prior to Normal Pension Date on grounds of Incapacity or to a Member who retires from Service prior to Normal Pension Date but at or after his 50^th birthday (or, in the case of a female Member whose Normal Pension Date is earlier than her 60^th birthday, during the ten years immediately preceding Normal Pension Date but not earlier than her 45^th birthday) on grounds other than Incapacity. In either event, he shall be entitled to receive, as from the relevant Pension Payment Date, a pension at a reduced rate determined by the Actuary as being equivalent, on a reasonable basis, to that part of the Short Service Benefit consisting of pension payable to him which has accrued up to that Pension Payment Date or a pension of such higher rate as the Employer, with the Trustees' consent, shall decide ..."

31. Rule 11 deals with retirement after Normal Pension Date. In that event, a member's pension is deferred until the date of actual retirement; and his pension is increased by an amount determined by the actuary.
32. Rule 12 is the default position for members whose pensionable service ends before Normal Pension Date. It does not apply to early retirement under rule 10 (i.e. early retirement with the consent of the trustees and the employer) or to death in service. Where rule 12 applies, a member is entitled to short service benefit. However, short service benefit is not actually payable until a member reaches Normal Pension Date.

The aftermath of Barber

33. Following the decision in Barber the trustees considered what to do. The discussions were protracted; not least because there were still a number of legal uncertainties that needed clarification by the ECJ. At a meeting of the trustees on 15 October 1993 the trustees decided to give consideration to equalising the retirement age at 65 for both men and women; and instructed Mr Vince Murphy of Sedgwick Noble Lowndes to draw up "a suitable announcement to all members explaining the necessary changes in order that this may be approved by both the Trustees and the Company". A draft announcement was tabled for discussion at the trustees' meeting on 10 March 1994. Ultimately, at their meeting on 22 April 1994, the trustees decided to equalise retirement ages for both men and women at age 65. It was also agreed that an addendum to the scheme rules would be included with the explanatory booklet to be issued to employees becoming eligible to join the scheme in the future. Consequent upon that decision two announcements were sent to all active members: one to female members and one to male members. The announcements were written on the headed paper of the employer and were sent out with the May 1994 payslips. The announcement to female members, so far as material, read:

"RE EQUALISATION OF PENSION SCHEME BENEFITS

You may be aware that over a number of years following a case in the European Courts of the need for employers to amend their occupational pension scheme rules in order to treat men and women equally. One of the most difficult issues being the inequality of state pension age in the UK.

All employers operating occupational pension schemes are being required to amend their scheme to take account of the new legal position.

Having considered various options in conjunction with our scheme advisors and taking into account all facets of our current scheme status, the following changes have been agreed.

The normal retirement age will be equalised from 17 May 94 for both men and women at age 65, and service of all members of the scheme will accrue on the basis of a normal retirement age of 65 from this date. Although normal retirement age for yourself has been increased to age 65, in reality you may still retire from service at age 60 with the Company's/Trustees consent with no reduction in your accrued pension to the date of retirement.

…

Furthermore, if you retire from service before age 60 with the Company's/Trustees consent your benefits for early payment will be worked out in two parts:

1. benefits earned before 17 May 1990 will only be reduced for early payment if you retire before age 55, and

2. benefits earned from 17 May 1990 will be reduced for the years between your early retirement and age 60."

34. The announcement to male members contained the same explanation and continued:

"The normal retirement age will be equalised from 17 May 94 for both men and women at age 65, and the service of all members of the scheme will accrue on the basis of a normal retirement age of 65 from this date. The existing early retirement provisions with the company and trustees consent at age 60 onwards remain in place."

35. Each of the two announcements also announced an increase in the death in service benefit (called "personal life cover") from three times annual salary to four times annual salary.
36. The announcements were drafted by Mercers, who were advisers both to the company and to the trustees. It is not entirely clear who signed the announcements; but the tenor of the text suggests that although they were written on the employer's headed paper, the signatory of the announcement was one of (or represented) the trustees. At about the same time an addendum to the explanatory booklet was made in the following terms:

"This explanatory booklet was printed to coincide with the launch of the scheme in April 1990, since which time significant changes to the scheme rules have been made in order to comply with changes in the law, particularly in respect of equal benefits for males and females which has resulted in the normal retirement date for all members being changed to age 65. This is unchanged for males but was previously age 60 for females.

The purpose of this note is to draw attention to these changes and how they will affect the benefits outlined in the explanatory booklet to which you will become entitled upon joining the scheme.

Page 7 Retirement Benefits

Normal retirement date is at age 65 years for both males and females. Retirement before this age may still be possible but this will continue to need the consent of the company and the trustees at the time.

Page 8 Early Retirement

You may still retire from age 50 provided that you have the agreement of the company.

If you retire early on or after age 60 (men & women), your pension will not be reduced for early retirement.

If you retire before age 60 (men & women), your pension will be reduced by ¼% for each month under the age of 60 (3% a year)."

37. It seems probable that the addendum was not sent to existing members, but that new joiners were given the addendum together with a copy of the 1990 explanatory booklet. No deed was executed at this stage. However, the scheme was administered on the basis that there had been an effective equalisation. At some later date (I am not sure when, but it does not matter) doubts arose about the effectiveness of equalising Normal Pension Date by informal announcement. Accordingly on 10 November 2004 the relevant parties executed a deed which added the following proviso to the definition of "Normal Pension Date" in the definitive deed:

"PROVIDED FURTHER THAT in respect of a Member's period of Pensionable Service after 12 November 2004 the Member's Normal Pension Date is the Member's 65^th Birthday".

Different categories of members

Transferees from the Courtaulds scheme

38. Mr Skinner himself was a transferee from the Courtaulds scheme. It appears that some form of announcement was made to Courtauld employees when the sale of the business to Toray was agreed and that the announcement said something about pensions. However, on the basis of the material that has survived, it is impossible to be sure what the contents of the announcement were. However, based on a letter of 11 April 1990 from the Finance Director of Toray to the company's solicitors, it seems likely that employees were told that the new scheme was to be a "mirror image" of the Courtaulds Scheme. Mr Skinner received a copy of a circular letter dated 16 March 1990, signed by Mr Woods, the managing director of Toray. It invited him to transfer to the new Toray pension scheme. The material parts of it read as follows:

"By choosing to transfer to the new Toray Scheme, you will ensure continuity of your benefits and will receive full credit for your pensionable service in the Courtaulds Scheme. A booklet which sets out the benefits provided by the new Scheme is enclosed. You will see that the benefits are the same as those you enjoyed under the Courtaulds Scheme and reflect recent benefit improvements made by Courtaulds. Key improvements are:

A reduction in the discard from £2,236 to £1,950

Improved early retirement benefits

Enhanced past service credits.

You will also enjoy a 1 per cent reduction – to 5 per cent of pay less discard – in your contributions to the Toray Scheme for at least the next three years.

…

Whether you wish to transfer to the Toray Scheme or not, you must complete the enclosed form and return it …"

39. It is common ground that the enclosed booklet was the 1990 explanatory booklet of the Toray scheme. The enclosed form for Mr Skinner to complete was addressed to Toray and to the trustees. Mr Skinner ticked the box opposite the following text:

"I wish to join the Scheme and apply for membership commencing 1 April 1990. I authorise the Company to deduct the relevant contributions from my pay and request the Company and the Trustees of the Scheme to arrange the transfer of my benefits from the Courtaulds Pension Scheme."

Joiners before 22 November 1993

40. This category of member consists of new employees who joined the scheme before 22 November 1993 (the date of the definitive deed), but who were not previously members of the Courtaulds scheme. The example of this category was Mr Gary Shaw. He was made a job offer on 25 November 1992. Paragraph 7 of his job offer said:

"The company operates a Contributory Pension Scheme which you will be eligible to join following the six month probationary period. We propose that all new entrants will automatically enter the scheme at the time of eligibility unless you advise us to the contrary. Full details of the scheme will be discussed during your induction."

41. Mr Shaw accepted the job offer. Following the expiry of his probationary period he received two letters. The first, dated 7 June 1993, said that details of the scheme had been outlined at an introductory discussion and that he had been given a copy of the Toray explanatory booklet. He was asked to complete an application form if he wished to join the scheme. The second, dated 18 June 1993 again asked him whether he wished to join the scheme. If he did, he was asked to complete an application form. I have not seen the application form that he completed, but I infer that he did complete one and was admitted to membership.

Joiners after 22 November 1993 but before 17 May 1994

42. The example of members who joined the scheme after the execution of the definitive deed but before the 1994 announcements was Ms Tracy Rutherford. She was made a job offer on 26 January 1994. Paragraph 6 of her offer said that the company operated a contributory pension scheme which she would be eligible to join after six months' service. The offer letter apparently enclosed a booklet covering sickness, pension scheme and notice periods. It is not possible to say what this booklet was. It does not appear to have been the 1990 Toray explanatory booklet, which did not deal with sickness or notice periods, but dealt only with the pension scheme. She accepted the offer on the following day. History does not relate whether she was subsequently asked to fill in an application to join the scheme, or whether she did so. I am prepared to assume that she did. Since she only became eligible to join the scheme after six months' service, she would in fact have joined (if at all) after 17 May 1994. But since she was only proffered as an example, I ignore this point. She was taken as a paradigm of those who joined the scheme after the execution of the definitive deed but before the May 1994 announcements.

Joiners on or after 17 May 1994

43. Ms Ford took up employment after 17 May 1994. By this time the explanatory booklet contained the addendum. Her offer letter, dated 16 November 1998, said:

"The offer of employment is made subject to a six month probationary period, following successful completion of which you will be eligible to join the Company Pension Scheme in October 1999. Further details will be provided during your induction."

44. Ms Ford says in her witness statement:

"So far as I can recall, the only thing I was told about the scheme was that it was a final salary scheme and that I would be eligible to join it after I had served a period of employment. I do not remember any discussion about retirement age or anything else."

45. After she had completed her probationary period of employment she was told that she was eligible to join the scheme and that details of it would be provided to her. She was given a copy of a newer version of the Toray explanatory booklet. This contained a definition of "Normal Pension Date" at a member's 65^th birthday. It also referred to the possibility of early retirement with the consent of the employer and the trustees. From that she understood that her normal pension date was age 65; but that she could take early retirement with the consent of the trustees and the employer after two years' service at any time after her 50^th birthday. If she retired after age 60 her pension would not be reduced, but if she retired earlier than that it would be. Ms Ford completed an application form.
46. Mr Burroughs, who appears on her behalf, accepts that the terms on which she joined the scheme included a Normal Pension Date of 65 for both men and women.

Were transferees from the Courtaulds scheme entitled to a flexible retirement date?

The alternative submissions

47. Ms Emily Campbell, who appeared for this class of member, argued that the transferees from the Courtaulds scheme were entitled to a flexible retirement date. There were three alternative bases for this submission:

i) The terms on which Mr Skinner was offered the opportunity to transfer from the Courtaulds scheme to the Toray scheme, which he accepted, amounted to a legally binding contract which incorporated the benefits described in the Toray explanatory booklet. These benefits included the right to retire at any age between 60 and 65.

ii) When Mr Skinner transferred to the Toray scheme, the definitive deed had not been executed. The only extrinsic evidence of the terms of the trusts declared by the interim deed are those evidenced by the explanatory booklet, which referred to a right to retire at any age between 60 and 65. Those are the terms on which Mr Skinner must have been admitted to membership of the scheme.

iii) When Mr Skinner was offered the opportunity to join the scheme, the explanatory booklet was provided for him to enable him to reach his decision. At the very least the benefits described by the explanatory booklet amounted to a representation of the available benefits. He acted on that representation by joining the scheme with the consequence that the employer and the trustees are estopped from asserting any other terms.

48. Ms Campbell made the same submissions in relation to the other examples of members within her class, and I will deal with them in turn.

The contractual analysis

49. In order to make a contract by correspondence, it is necessary to identify an offer and an acceptance. An offer is an expression of willingness to contract made with the intention (actual or apparent) that it is to become binding on the person making it as soon as it is accepted by the person to whom it is addressed: Chitty on Contracts, 29^th ed., para 2-002. In the present case the letter from Toray to Mr Skinner invited him, if he wished to join the scheme, to complete and return an application form. In Gibson v Manchester City Council [1979] 1 WLR 294 the City Council expressed a willingness to sell Mr Gibson his council house at a stated price. The letter in which this was said invited him to complete a formal application form if he wished to buy. That was one of the two reasons which led the House of Lords to conclude that the letter was incapable of amounting to an offer capable of acceptance. It was no more than an invitation to treat. In my judgment the same reasoning applies here. The letter to Mr Skinner was not an offer capable of acceptance so as to bring a binding contract into existence.
50. Mr Simmonds QC, who appeared for the employer, had a number of other points in answer to Ms Campbell's submission. I need only mention two, which I consider are good points. First, the only communication sent to the trustees (who are said to be parties to the contract) is the application form itself. Plainly the trustees are not parties to the contract of employment. But the application form does not refer to the booklet. It is simply an application to join "the Scheme". Second, the explanatory booklet, which is said to form the basis of the contract, itself says that if there is conflict between the terms of the booklet and the terms of the scheme, the scheme prevails.

What were the terms of the Toray scheme under the interim deed?

51. According to the interim deed itself, the details of the scheme were said to be contained in an announcement annexed to the deed. As I have said there is no such annexure. Ms Campbell invites me to infer that the terms of the scheme as constituted under the interim deed are those contained in the explanatory booklet. Hence when Mr Skinner joined the scheme the applicable terms were those in the Toray explanatory booklet. These terms included a flexible retirement date. Mr Simmonds invites me to infer that the terms of the scheme were the same as those contained in the formal documents governing the Courtaulds scheme. Hence when Mr Skinner joined the scheme the applicable terms were those of the Courtaulds scheme. These terms contained a fixed normal retirement date; and made provision for early retirement, but only with consent.
52. The question is: on what terms did the trustee agree to hold the funds on trust? This question, I think, directs attention to the intention of the parties to the interim deed, that is to say the trustee and the employer. It does not direct attention to the intention of the members of the scheme. But on the other hand the recital to the interim deed does say that the terms of the scheme had been announced. If there was in fact an announcement which was the announcement to which the recital was intended to refer, then it seems to me that I should treat that as setting out the terms of the trust, even though it was not in fact annexed to the deed. The non-annexure would, to that extent, be treated as a falsa demonstratio. (It is possible, although I am not in a position to make a finding, that there was a copy of the interim deed to which the announcement was annexed, but which was destroyed in the fire to which I have referred. If that were the case then the contents of a lost document could be proved by secondary evidence anyway).
53. Mr Simmonds relies in particular on the contents of two circular letters sent by Toray to its employees. The first, dated 30 October 1989 informed them that Toray was in the process of setting up a new pension scheme. It concluded:

"The payments into and benefits of the scheme are identical to those enjoyed as members of the Courtaulds Scheme and full details will be sent to you on the launch of the TTEL scheme."

54. The second, dated 29 November 1989 drew attention to procedural defects in setting up the new scheme and explained that they had been corrected. It concluded:

"As the benefits and contributions under the Toray Scheme and the Courtaulds Scheme are identical, there will be no change in the level of benefits and contributions, but merely in the date on which employees will transfer from the Courtaulds Scheme to the Toray Scheme."

55. The second letter was preceded by a telephone call on 9 November 1989 between the actuary and the solicitor each acting for Toray. The solicitor explained that he had advised Toray that it would not be necessary for "the announcement" to "give a complete run down" of the benefits to be provided under the Toray scheme but "merely to refer to the fact that benefits would be the same as under the Courtaulds scheme." By this time the draft of the interim deed, with its recited reference to an announcement, was already in existence. On the other hand, the Toray explanatory booklet was not yet in existence, even in draft. The announcement referred to in that record of the advice given to Toray must have been the announcement contemplated by the recital, rather than the 1990 Toray explanatory booklet. In the light of that conversation, it is, I think, a fair inference, and I find as a fact, that the announcement referred to in the recital to the interim deed was the circular letter of 29 November 1989.
56. On that basis, I find that the terms of the trusts declared by the interim deed were that the benefits provided by the Toray scheme were "identical" to those in the Courtaulds scheme. That, however, is not the end of the argument. Ms Campbell says that what that means is that the benefits available under the Toray scheme would be identical to those described in the explanatory booklet describing the Courtaulds scheme (which is what the employees would have understood the Courtaulds scheme to contain) rather than the definitive deed of the Courtaulds scheme. It seems on the evidence that the Toray explanatory booklet was largely taken from the Courtaulds explanatory booklet; and that no one bothered to check it against the definitive deed governing the Courtaulds scheme. So by this route, Ms Campbell again submits that the benefits available under the interim deed were those described in the explanatory booklet.
57. The argument under this head turns, in my judgment, on the meaning to be given to the phrase "the benefits and contributions under the Toray Scheme and the Courtaulds Scheme are identical". The phrase must be given the meaning that it would convey to a reasonable reader of the interim deed and the announcement, with all the background knowledge of the parties to it. That background knowledge would include the explanatory booklet relating to the Courtaulds scheme.
58. Even so, in my judgment the meaning to be given to the phrase "the Courtaulds Scheme" is the Courtaulds Scheme as constituted by its formal governing documents, and not the description of the Courtaulds scheme contained in the explanatory booklet. The Courtaulds scheme is that which is contained in the scheme documents; not in a summary of the scheme. It is the definitive deed that has independent validity: the existence of the Courtaulds explanatory booklet is parasitic on the existence of the definitive deed. In addition, the Toray interim deed was intended to give effect to legal rights and obligations, although it described those legal rights and obligations by reference to another document which was itself referential. But it seems to me that, given that the ultimate objective of the quest was to find the legal rights and obligations intended to be incorporated by reference into the Toray interim deed, the reasonable reader would expect his quest to end in a formal document recording those legal rights and obligations; and not in a layman's summary.
59. To the extent that Ms Campbell contended for an estoppel relating to the terms of the Courtaulds scheme, Mr Skinner's evidence of his understanding of that scheme is fatal to the argument. He understood that his retirement date was 65, which is what the definitive deed says.
60. Accordingly I accept Mr Simmonds' submission that the trusts applicable to the Toray scheme, while it was governed by the interim deed, are those to be found in the Courtaulds definitive deed (together with any valid amendments that had been made to it before the execution of the Toray interim deed) rather than in the Courtaulds explanatory booklet. The Courtaulds scheme did not contain a flexible retirement date. I conclude therefore that Ms Campbell does not succeed under this head.

Is there an estoppel?

61. The estoppel under this head is an estoppel as to the terms of the Toray scheme. It is said that the trustees and the employer are estopped from denying that the terms of the scheme differ from those in the 1990 Toray explanatory booklet. Ms Campbell does not contend for what, in other cases, has been called a "group estoppel". Rather, she says that there is a series of individual estoppels relating to each individual member. The difficulty with this submission is that unless each case is examined individually, it is impossible to reach a conclusion. The argument was only directed to Mr Skinner's particular case, and so I will concentrate on that.
62. The essential ingredients of estoppel by representation are that:

i) A has made a clear and unequivocal representation to B about his legal rights, intending it to be acted upon;

ii) B has acted in reliance on that representation and

iii) It would be inequitable for A to resile from the representation he has made.

63. This, I think, was the primary way in which Ms Campbell put the case on estoppel. As an alternative, she relied on an estoppel by convention; that is to say a shared assumption made by all parties, from which it would be inequitable to permit them to resile.
64. The first difficulty that Ms Campbell faces is that the representation relied on, namely that made in the letter of 16 March 1989, is not clear and unequivocal. The statement in the letter is that:

"A booklet which sets out the benefits provided by the new Scheme is enclosed. You will see that the benefits are the same as those you enjoyed under the Courtaulds Scheme and reflect recent benefit improvements made by Courtaulds."

65. The booklet in question was the Toray explanatory booklet. However, a reader of that booklet would not see from it that the benefits described in the booklet were the same as those enjoyed under the Courtaulds scheme. Moreover, the booklet did not reflect the recent benefit improvements introduced by Courtaulds. To the extent that those recent improvements were referred to in the letter but not in the booklet, at least two of them (improved early retirement benefits and enhanced past service credits) were described in such general and vague terms as to be incapable of amounting to a clear and unequivocal representation.
66. The second difficulty that Ms Campbell faces is that of establishing reliance on the booklet's statement that a member had the right to retire at any age between 60 and 65. Mr Skinner described his understanding as follows:

"When I joined the Toray Scheme, I understood because I had heard nothing to the contrary that the provisions were the same as those for the Courtaulds Scheme and that my retirement age was 65."

67. The only possible conclusion from this evidence is that the contrary statement in the booklet had no impact on him at all. This evidence is also fatal to any contention that Mr Skinner shared an assumption that he had a right to retire at any age between 60 and 65.
68. I conclude that no estoppel has been established.

Benefits accrued by transferees from the Courtaulds scheme

69. I have concluded that transferees from the Courtaulds scheme had no right, under the Toray scheme, to a flexible retirement date. This was based on my understanding of the terms of the Courtaulds scheme and my conclusion that the benefits of the Courtaulds scheme, as set out in its definitive deed and rules, did not permit a flexible retirement date. By an addition to the list of questions after the conclusion of the hearing, I was asked to answer the same question separately in relation to benefits accrued in relation to periods of service before the inception of the Toray scheme.
70. It is, I think, implicit in my conclusion that the Courtaulds scheme did not have a flexible retirement date that benefits accrued by transferees to the Toray scheme before the inception of that scheme are also based on a fixed retirement date.

Were joiners before 22 November 1993 entitled to a flexible retirement date?

The contractual analysis

71. Based on the job offer made to Mr Shaw, the contractual analysis is, in my judgment, unsustainable. No doubt Mr Shaw was made an offer of employment which, upon acceptance, brought into existence an enforceable contract of employment. But it does not follow that an enforceable contract about the terms on which he would be admitted to membership of the pension scheme came into existence simultaneously. All that he was told at that time was that the company operated a pension scheme; and that he would be given details of it later. That cannot amount to a contractual offer to admit him to membership on any particular terms. In addition, he, like Mr Skinner, was ultimately asked to complete an application form. That would have been an application to join "the Scheme". The application form, which would have been the only communication to the trustees, did not refer to the Toray explanatory booklet at all.
72. Ms Campbell argued that the provision to Mr Shaw of the Toray explanatory booklet together with an invitation to apply to join the scheme amounted to a contract to admit him to membership on the terms of the explanatory booklet. I do not agree. The booklet makes clear that if there is any variation between the booklet itself and the trust deed and rules, the latter prevail.
73. In the light of my conclusion that the terms of the Toray scheme, administered under the interim deed, were the same as those of the Courtaulds scheme, there was no contract between Mr Shaw and the trustees which entitled him to a flexible retirement date.

Is there an estoppel?

74. The case for an estoppel is equally unsustainable. The only material relied on as amounting to an estoppel is the Toray explanatory booklet. As I pointed out in Trustee Solutions Ltd v Dubery [2006] Pens LR 177 the overwhelming majority of judges have said that explanatory booklets containing statements to the effect that in case of doubt or conflict the rules or trust deed will prevail do not on their own give rise to estoppels. To hold otherwise would mean that a booklet of that kind would override the rules, when the booklet itself says the contrary. I see no reason to depart from that view.
75. There is, in addition, no evidence about what Mr Shaw (or any other member in his position) believed the terms of the scheme to be.

Did the definitive deed purport to remove any rights from existing members; and should it be set aside?

76. Ms Campbell submitted that if the definitive deed purported to remove any rights from members who had joined the scheme before its execution it ought to be set aside under the principle in Re Hastings Bass [1975] Ch 25. This was not a question that had been foreshadowed in any of the evidence or any of the formal court papers. As far as I am aware it was raised for the first time in Ms Campbell's skeleton argument served about a week before the hearing. In those circumstances Mr Simmonds objected to the point being taken.
77. As it turned out, however, the point fizzled out anyway, because Mr Simmonds accepted that if Ms Campbell's clients had a contractual right to a flexible retirement date, the definitive deed did not take away that right. In any event, since I have held that they had no such right, the point is doubly academic.
78. I should, however, say that if the question had been a live one, I would not have allowed it to be argued without giving the parties the opportunity to adduce further evidence directed to that question.

Were joiners before 17 May 1994 entitled to a flexible retirement date?

The contractual analysis

79. Based on the documentation relating to Ms Rutherford I find it impossible to construct a contract entitling her to a flexible retirement date. Even assuming that she was provided with a copy of the Toray explanatory booklet the reasons that led me to conclude that there was no contract between the trustees and Mr Shaw apply with equal force to Ms Rutherford.
80. By the time that Ms Rutherford took up employment, the definitive deed had been executed. The consequences of being admitted to membership following an application to join the scheme are explicitly stated in rule 2 (e) of the definitive deed. The effect of admission to membership is that the member is entitled to benefits in accordance with the trust deed and the rules.

Is there an estoppel?

81. Again, the only material relied on as amounting to an estoppel is the explanatory booklet. The reasons that led me to conclude that Mr Shaw cannot establish an estoppel apply equally to Ms Rutherford.

A non-contractual agreement?

82. In order to understand this argument it is necessary to return to the definition of "Normal Pension Date" in the definitive deed. It begins by saying that Normal Pension Date means such date as shall be agreed between the Trustees, the Employer and a Member on the date on which he is admitted to membership of the Plan. However, this definition is subject to a number of provisos or qualifications. The relevant one, for present purposes, is proviso B which applies only to Specified Members. All the relevant members in the present case are Specified Members. In the case of Specified Members, the qualification is that Normal Pension Date "shall be" 65 for men and 60 for women (or 60 and 55 in case of redundancy) unless "in both cases the Employer shall advise it to be such other date … as shall have been agreed between the Trustees, the Employer and the Member."
83. As I read this convoluted piece of drafting, the default position for Specified Members is that they have a fixed Normal Pension Date, in accordance with the first part of proviso B; in contrast to other members whose default position is agreement at the time of admission to membership of the scheme. However, in the case of Specified Members the default position may be overridden by an agreement made in accordance with the final part of proviso B.
84. The argument is that the Toray explanatory booklet is such an agreement. Ms Campbell says that since the definition of Normal Pension Date specifically contemplates an agreement which is not recorded in the terms of the definitive deed itself, the statement in the Toray explanatory booklet to the effect that in case of conflict the deed prevails does not apply. If there is an ad hoc agreement which falls within the terms of proviso B, there is no relevant conflict. In my judgment this is correct. She also says that an agreement for the purposes of proviso B need not be contractual. I am inclined to accept that an agreement for the purposes of proviso B need not be contractual in the sense of having to manifest all the attributes of a concluded contract (offer, acceptance, intention to create legal relations and consideration). However, it is still necessary to consider what kind of an agreement proviso B contemplates.
85. First, it seems to me that there must be a tri-partite agreement between the trustees, the employer and the member. Second, once that agreement has been made, the employer must "advise" the agreed date. Precisely what is meant is unclear, but it seems to me to be probable that the employer must notify someone (presumably the trustees and the member) so that there is a record of what has been agreed. Thus what is contemplated appears to be a two-stage process. Third, the subject matter of the agreement is a "date".
86. I find it difficult to see how the Toray explanatory booklet, without more, can amount to a tri-partite agreement. It is simply a booklet produced to explain (however imperfectly) the benefits offered by the scheme. If I add to the Toray explanatory booklet the application to join the scheme, I still cannot see how that amounts to a tri-partite agreement incorporating the terms of the booklet, since the application form does not refer to the booklet.
87. Even if the booklet alone, or the booklet plus the application form, does amount to an agreement, the second stage of the process (namely the "advice" by the employer) does not appear to have taken place.
88. Finally, I have considerable doubt whether the kind of agreement contemplated by proviso B (a "date") would extend to a range of potential dates to be selected in the future by the member, rather than a fixed date, or at least a formula for working out a fixed date.
89. I do not, therefore, consider that any of the members of the Toray scheme had the flexible range of retirement dates indicated by the Toray explanatory booklet.

Normal Pension Date on redundancy

90. I have concluded that those members who joined the Toray scheme, whether before or after the execution of the definitive deed, did so on the terms of the scheme itself, and not by virtue of any special contract or agreement. It follows, in my judgment, that the whole of the definition of Normal Pension Date in the definitive deed applies to them. This includes the special provisions relating to retirement on redundancy.
91. My conclusion was, however, reached only in relation to joiners before the purported equalisation in 1994. This is the class of member represented by Mr Skinner. I deal with joiners after the purported equalisation in 1994 later.

Equalisation in 1994

92. As far as existing members are concerned, Mr Simmonds relies on the announcements sent respectively to active male and female members as amounting to an effective equalisation of Normal Pension Date at age 65. He relies on the addendum to the explanatory booklet as being effective to equalise Normal Pension Date at the same age for new joiners. None of these documents is, of course, a deed, which is what the definitive deed requires in order the change the terms of the scheme. However, Mr Simmonds says that this does not matter. He puts the case in two ways. First he says that the change in retirement date was not an alteration of the rules which required a deed. Rather, it was an exercise of a power already contained in the rules, namely in proviso C to the definition of "Normal Pension Date". Alternatively he says that all relevant parties are bound by an estoppel by convention: the estoppel being that a valid alteration could be made to the rules informally, and without the necessity for a deed. I emphasise that the case on estoppel is put on the basis of estoppel by convention. It was not argued that there was an estoppel by acquiescence.
93. Proviso C, so far as is material to this point, says:

"Normal Pension Date, once fixed in accordance with this definition, may subsequently be altered…"

94. Accordingly, Mr Simmonds says that Normal Retirement date was initially fixed in accordance with proviso B. It was therefore capable of alteration under proviso C. Proviso C does not prescribe any formality for altering Normal Pension Date. Consequently no deed was required.
95. Not only did the draftsman of proviso C fail to say how Normal Pension Date could be altered, he did not even say who could alter it. Mr Simmonds realistically accepted that the employer could not unilaterally decide to alter Normal Pension Date. After all, if the employer could do that, what would stop the member doing likewise? So he contended that what was required was an alteration to Normal Pension Date in circumstances from which it could be inferred that the members, the employer and the trustees all consented. Given that the announcements were made on the employer's headed paper and were sent out with the May 1994 payslips, it is easy to conclude that the employer agreed to the change. Given also that the announcement was made by or on behalf of the trustees, it is clear that they too agreed the changes. But in the time-honoured phrase: what about the workers?
96. It is trite law that, save in exceptional circumstances, silence cannot amount to the acceptance of an offer. The function of acceptance is to signify assent to an offer. Why, then, should silence be any more powerful in signifying the kind of agreement that Mr Simmonds accepts is a necessary ingredient of a valid alteration of Normal Pension Date under proviso C? Mr Simmonds relied on an observation of Staughton LJ in Republic of India v India Steamship Co Ltd (No 2) [1998] AC 878. The question was whether shipowners were estopped from asserting a lack of jurisdiction in the English courts to entertain a claim for damaged cargo. The cargo owners relied both on estoppel by convention and estoppel by acquiescence. Dealing first with estoppel by convention Staughton LJ said at 891:

"In our judgment it is essential that the assumption be agreed for there to be an estoppel by convention; but agreement need not be express and may be inferred from conduct, or even from silence."

97. Staughton LJ does not say that silence will always, or even usually, be enough to allow an agreement to be inferred; only that it is possible to infer agreement from silence. The trial judge in fact held that on the facts of the case consent should be inferred from a failure to protest. But the Court of Appeal reversed his conclusion. When the case went to the House of Lords it is true that, as Mr Simmonds pointed out, the formulation of the test by Staughton LJ was not disapproved. Indeed, the same formulation was more recently referred to with approval by the Court of Appeal in Glencore Grain Ltd v Flacker Shipping Ltd [2002] 2 All ER (Comm) 896, 930. Mr Simmonds submitted that in looking at what other judges have said about estoppel by convention in the context of informal alterations to pension schemes (in which there has been discussion of the effect of silence), it is important to keep separate the two separate ingredients of such an estoppel; viz. the shared assumption on the one hand and the communication of it on the other. While silence can rarely, if ever, amount to the requisite communication, there is nothing to prevent it from amounting to sufficient evidence from which to conclude that there was a shared assumption. My attention was, of course, drawn to the observations of Morritt V-C in Redrow plc v Pedley [2002] Pens LR 339, para 60 and following. Morritt V-C said that, in the context of an allegation of estoppel by convention what must be proved is that each and every member has by his course of dealing put a particular interpretation on the terms of the Rules or acted upon the agreed assumption that a given state of facts is to be accepted between them as true. This involves more than merely passive acceptance. The administration of a pension scheme on a particular assumption as to the yardstick by which contributions or benefits are to be calculated may well give rise to a relevant assumption on the part of the trustees. It requires clear evidence of intention or positive conduct to bind the general body of members to such an assumption. Receipt of the benefit or payment of the contribution, without more, is unlikely to be enough. Mr Simmonds submitted that this observation was directed to the second limb of an estoppel and not to the first. Where, as here, what is in issue is simply whether the members have agreed to the change in Normal Pension Date, silence, in the sense of a failure to object to the announcement, may be (and is) enough. This analysis of Morritt V-C's judgment may well be right. But it does not answer the question: in what circumstances should one infer consent from silence?
98. As a general rule, silence is taken to amount to assent only when there is a duty to speak. I was referred to the observations of Browne-Wilkinson J, presiding in the Employment Appeal Tribunal, in Jones v Associated Tunnelling Co Ltd [1981] IRLR 477. The question under consideration was whether, by continuing to work, an employee should be taken to have agreed to a variation in his terms of service. Browne-Wilkinson J said:

"In our view, to imply an agreement to vary or to raise an estoppel against the employee on the grounds that he has not objected to a false record by the employers of the terms actually agreed is a course which should be adopted with great caution. If the variation relates to a matter which has immediate practical application (e.g. the rate of pay) and the employee continues to work without objection after effect has been given to the variation (e.g. his pay packet has been reduced) then obviously he may well be taken to have impliedly agreed. But where, as in the present case, the variation has no immediate practical effect the position is not the same. It is the view of both members of this Tribunal with experience in industrial relations (with which the Chairman, without such experience, agrees) that it is asking too much of the ordinary employee to require him either to object to an erroneous statement of his terms of employment having no immediate practical impact on him or be taken to have assented to the variation. So to hold would involve an unrealistic view of the inclination and ability of the ordinary employee to read and fully understand such statements.

Even if he does read the statement and can understand it, it would be unrealistic of the law to require him to risk a confrontation with his employer on a matter which has no immediate practical impact on the employee. For those reasons, as at present advised, we would not be inclined to imply any assent to a variation from mere failure by the employee to object to the unilateral alteration by the employer of the terms of employment contained in a statutory statement."

99. In my judgment the same approach is appropriate in a case like this one. What is in question is a change in the normal retirement date for all members of the scheme. I say for all members of the scheme because the effect of Barber, unless and until a valid change took place, was that the age at which men were entitled to retire had been effectively reduced from 65 to 60. Thus, as far as male members were concerned, the equalisation was just as much an increase in the age at which they were entitled to retire as it was for women. Against that background, and in agreement with Ms Campbell, I consider that the announcement to male members was misleading. It did not mention the rights that male members had accrued as a result of Barber. It gave the impression that, so far as male members were concerned, nothing much would change. The male members were not alerted to the fact that they were being asked to agree to an increase in the age at which they could retire. In those circumstances, to imply consent from silence would not, in my judgment, be appropriate. In addition, so far as all existing active members were concerned, an increase in the normal retirement age cannot be equated to an immediate pay cut. Although, as Mr Simmonds submitted, the theoretical underpinning of Barber is that a pension is deferred pay, therein lies the rub. It may be pay; but it is deferred.
100. Mr Simmonds also relied on the fact that the announcement also said that there had been an agreed increase in "personal life cover" (i.e. the death in service benefit) from three times annual salary to four times annual salary. He submitted that the members "enjoyed" that benefit and that they could not be heard to say that they enjoyed the benefit while repudiating the increase in retirement age. He may well be right about that. Indeed I did not understand Ms Campbell to argue seriously to the contrary. But that may raise questions of election: either the members can accept the whole package; or they can reject the whole package. But it is in my judgment artificial to say that members "enjoyed" the increased death in service benefit when there is no evidence that any of them claimed it.
101. I do not consider that, on the materials available, it would be right to infer that the members consented to the change in Normal Pension Date.
102. Mr Simmonds' alternative argument is that there was a convention, by which the members are bound, that alterations to the rules can be made by informal unilateral announcement and that they do not require a deed. The first difficulty with this argument is that this appears to be the first purported alteration of the rules. So there is no preceding course of conduct to which Mr Simmonds can appeal. This might not matter if there was subsequent conduct on the part of the members which supported the alleged estoppel. But at this point in the argument Mr Simmonds runs into all the difficulties to which Morritt V-C alluded in Redrow. There is, in truth, little more than the passive receipt of benefits on which he can rely. As Morritt V-C said in Redrow, that is not enough.
103. I conclude therefore that the 1994 announcements were not enough to alter Normal Pension Date; and that consequently as regards existing members of the scheme Normal Pension Date was not effectively equalised.
104. It follows that the 1994 announcements did not remove any entitlement to retirement on redundancy enjoyed by existing members of the scheme (whether under the rules themselves or as modified by Barber). Nor did they affect early retirement rights.
105. Joiners after 17 May 1994 accept that, so far as they are concerned, Normal Pension Date is 65 for both men and women (subject to the question of retirement on redundancy). The precise legal route to this conclusion does not concern me. To the extent that the reformulated questions raise other issues, they were not issues that were argued; and I decline to answer them.

Equalisation in 2004

106. The 2004 deed was properly executed by the trustees and the employer. It added a new overriding proviso to the definition of Normal Pension Date, making it clear that it was 65 for both men and women in respect of pensionable service after 12 November 2004. On the face of it that deed complied with all the requirements for a valid alteration of the rules. On what basis can it be challenged? Essentially, as I understand it, Ms Campbell's only challenge is based on the proposition that members had a contractual right to a flexible retirement age; and that the contract did not allow for any variation. I have already rejected the arguments based on a contractual right to a flexible retirement age. Consequently it follows that this challenge fails.
107. I conclude that the 2004 deed was effective to equalise retirement ages for both men and women at age 65 in relation to service after 12 November 2004.

Retirement on redundancy

The 1994 announcements

108. Since I have held that the 1994 announcements did not effectively equalise Normal Pension Date, the question whether the announcements also abolished the special provisions applicable on redundancy does not arise. No further findings of fact are required to answer this question, should the case go further.

The 2004 deed

109. Although it is out of chronological sequence, I take the 2004 deed first, since an understanding of the structure of the definition of "Normal Pension Date" is important. The 2004 deed added a new proviso to the definition of "Normal Pension Date". It applies to all members; not just Specified Members. But it does not apply to all pensionable service: it applies only to pensionable service after 12 November 2004. In the first respect it is wider than proviso B. In the second respect it is narrower. But in the same way as proviso B is a qualification of the general definition of "Normal Pension Date" so is the new proviso. In my judgment it is clear that the new proviso was intended to (and does) override proviso B in the cases to which it applies. Since the special provisions about redundancy are themselves contained within proviso B (and for a sub-category of cases to which that proviso applies) it follows that they are overridden by the new proviso. I conclude that the 2004 deed applies both to retirement on redundancy and also to retirement for other reasons.

The addendum to the booklet

110. Mr Burroughs, for the members who joined after 17 May 1994, accepted that the addendum to the booklet (or the new version of the booklet) was binding on his class of member. He said that it was a short question of construction whether the addendum (or the new booklet) covered only retirement otherwise than by reason of redundancy or retirement on redundancy as well.
111. The original booklet does not say anything explicit about redundancy at all. But the addendum says that "normal retirement date is at age 65 for both males and females". It is true that the defined expression in the definitive deed is Normal Pension Date rather than Normal Retirement Date; but no one suggested that anything turned on that. The special provisions on redundancy are part of the definition of Normal Pension Date. If therefore, the definition is changed, then without a specific carve-out for redundancy, which is part of the definition, the special provisions for retirement on redundancy go too. Since a reader of the booklet would not be aware of any special provisions relating to retirement on redundancy, I cannot see that that is an unjust conclusion. I conclude that the amendment to the booklet related to retirement on redundancy as well as to retirement for other reasons.
112. The case is stronger in relation to the new version of the booklet, which does contain a definition of "Normal Pension Date". It is age 65. I conclude that the new booklet covers retirement on redundancy as well as retirement for other reasons.

The Barber window pension

113. The next question relates primarily to a male member who has accrued pension during the Barber window, although the answer to the question may apply to other cases as well. But the Barber window example was the only one addressed in argument, and the only one I propose to consider. In a nutshell the question is this. Is a male member who has accrued a pension entitlement during the Barber window entitled to retire at the age of 60 on a full pension, or must he wait until age 65 to receive pension accrued during a period of service outside the Barber window?
114. In Trustee Solutions I had to consider a similar question in the context of a scheme in the course of winding up. Because rights and liabilities crystallised at the date of the winding up I was asked to consider revenue law and practice as at the date of the winding up. In dealing with the question I said:

"62. A male member of the Scheme who has entitlement to pension accrued during a Barber window has the right to take pension accrued during that period at age 60. That is a right conferred upon him by European law. Moreover a female member had a right under the Scheme to retire at 60 and would have retained that right unless and until the Scheme was validly amended. An amendment of the Scheme cannot retrospectively remove accrued rights. The entitlement of which section 73 (3)(b) speaks is not restricted to any particular kind of entitlement. It applies to an entitlement under European law just as much as it applies to an entitlement under the rules of the Scheme.

63. Consequently a male member with an accrual of Barber window pension has an absolute right to take that pension at the age of 60. However, both the rules of the Scheme (which refer to the payment of "a pension", not "part of a pension") and the requirements of the Inland Revenue, which are relevant to the interpretation of the Scheme, do not allow only part of a pension to be taken. The whole of a pension must be taken at the same time. Accordingly, if a male member wishes to take his Barber window pension at the age of 60 he must retire, and accept the application of an early retirement factor to the remaining accruals (if they have been based on a Normal Retirement Age greater than 60). Although under the rules such a person would need the consent of the company to retire early, that consent cannot be refused, since to refuse it would be a breach of European law. Consequently, such a person has an entitlement to the immediate payment of pension once he has attained the age of 60."

115. Mr Simmonds says, in the politest possible way, that although my answer was right on the facts of that case, my reasoning was wrong. He accepts that a male member with a Barber window pension entitlement is entitled to retire at 60 and that such a right cannot be taken away from him. He accepts that Revenue practice at the time I was considering in Trustee Solutions forbade the taking of part only of a pension or, as he would put it, it forbade the taking of a pension which increased in the rate of payment by more than Revenue permitted limits. He also accepts, I think, that in the light of Revenue practice at the time, the trustees would have had to consent to retirement at 60 even if that meant that a retiree became entitled to his full pension. But he says that in referring to the rules of the scheme prohibiting the payment of "part of a pension" I was confusing entitlement to a pension and the rate at which pension is payable. Now that many of the old restrictions on payment of pensions have been abolished by the Finance Act 2004, the only question is whether the rules of the scheme permit pension to be paid at differing rates. Accordingly he submits that since the coming into force of the relevant parts of the Finance Act 2004 (6 April 2006 or "A-day") the trustees are entitled to refuse consent to a pre-equalisation member to draw unreduced at 60 the component of his pension that relates to service since equalisation, because that will not prevent that member from drawing the component of pension relating to service during the Barber window unreduced at age 60. The consequence of this is that a member retiring at 60 in order to draw his Barber window pension will have to wait until 65 before drawing pension accrued outside the window.
116. I accept Mr Simmonds' submission that there is nothing in current revenue law or practice which prevents a pension from being taken in tranches. So the question is, in the end, one of construction of the rules of the scheme. It is well established that the rules of a pension scheme must be construed against the fiscal background. But it seems to me that the fiscal background in question, at least in relation to parts of the rules that have never been amended, is the background that existed when the scheme was set up. Subsequent events are not usually relevant to the interpretation of a written instrument. So the liberalisation effected by the Finance Act 2004 is not directly in point.
117. It is common ground that under the rules a member is only entitled to be paid a pension on his retirement; and that he can only retire once. In the words of rule 5:

"A Member may be provided with a pension on retirement at Normal Retirement Date".

118. The pension is to be paid on the Pension Payment Date, which is defined as the date of the Member's "actual retirement". In order to ascertain the amount of the pension, it is necessary to apply the formula in Part III of the Schedule to the rules. The pension payable on retirement on or after the state retirement date is given by the formula 1/60 x N x FPS; where N is the number of years' pensionable service (subject to a maximum of 40); and FPS is final pensionable salary. The same formula (with additions) forms the basis of calculation in the case of retirement before the state retirement date. Service ceases to be pensionable service at Normal Pension Date. On the face of it this formula envisages a flat rate pension and does not cater for increases at different Normal Pension Dates. Rule 9 provides for limited index linking of pensions. It also gives the trustees power to increase the rate of pension; but this is a discretionary matter for them. I do not consider that the way in which the rules work gives the member a right to require an increase in his pension some years after his actual retirement. The assumption underlying the formula for calculating the pension is that, subject to limited index linking and discretionary decisions by the trustees, it will be paid at a flat rate. On the other hand, rule 10 provides that if a member, with the consent of the trustees and the company, retires before Normal Pension Date, he is entitled to a reduced pension. In Trustee Solutions, I said that:

"one of the primary functions of the Normal Retirement Date, which is to act as a calculator for the accrual of pension. An accrual in this sense is an entitlement to pension earned in a particular period of pensionable service. It is therefore possible for different Normal Retirement Dates to apply to different periods of pensionable service, even though in the end there will only be one pension payable."

119. In my judgment that applies to the Toray scheme too. It follows therefore, that if a member retires in order to draw his Barber window pension, his accrual of pension outside the Barber window will be based on the Normal Pension Date as defined by the rules. Where, in the case of a male member, that date is the member's 65^th birthday, his entitlement to pension is an entitlement at a reduced rate under rule 10.
120. Accordingly, I conclude that if a male member retires in order to draw his Barber window pension at age 60, the whole of his pension will become payable immediately in accordance with the formula contained in Part III of the schedule. He need not wait until age 65 to draw pension accrued outside the Barber window. However, pension accrued outside the Barber window will be calculated by reference to a Normal Pension Date of 65, even though it will be payable on his actual retirement; but it will be reduced under rule 10 in relation to those periods. In the light of my conclusions about the effective date of equalisation, the Barber window will close earlier for joiners after 17 May 1994 than for those who were existing members on that date.
121. It may be that if this is disadvantageous to the scheme it can be put right by a suitable amendment to the rules. I express no view one way or the other. But if it can, that is for another day.

Other circumstances in which a member is entitled to retire at 55 with unreduced pension

122. This is not a question that was raised at the hearing. As the agreed list of questions itself says, no party put forward a positive case in answer to it. I decline to answer it.

My answers to the questions

123. I answer the questions as follows:

i) Did the members of the Toray pension scheme who joined the scheme before the execution of the definitive deed have a right under the scheme to retire between the age of 60 and 65 without the consent of the employer and without reduction of pension? Answer: No.

ii) If they had such a right, did the definitive deed purport to remove it from them, and was it effective to do so? Answer: Does not arise.

iii) If it was, should the definitive deed be set aside in part? Answer: Does not arise.

iv) Did new employees who joined the scheme after the execution of the definitive deed but before 17 May 1994 have a right under the scheme to retire between the age of 60 and 65 without the consent of the employer and without reduction of pension? Answer: No.

v) Were employees who joined the Toray scheme before execution of the definitive deed entitled to the benefit of the special provisions relating to redundancy contained in the definitive deed? Answer: Yes.

vi) Were employees who joined the Toray scheme after execution of the definitive deed entitled to the benefit of the special provisions relating to redundancy contained in the definitive deed? Answer: Yes, in relation to those who joined before 17 May 1994.

vii) Were the 1994 announcements and/or the addendum to the explanatory booklet effective to equalise the normal retirement date of male and female members at age 65 for future service from 17 May 1994? Answer: No, in relation to members who joined the scheme before 17 May 1994.

viii) If so, did the equalisation apply to members made redundant or affect early retirement rights for any class of member? Answer: Does not arise.

ix) If not, was the 2004 deed effective to do so for future service from 12 November 2004? Answer: Yes.

x) Is a member who has accrued a pension entitlement with reference to a Normal Pension Date of 60 or 55 for any period of service entitled to retire at the age of 60 or 55 on a full pension, or must that member wait until age 60 or 65 to receive pension accrued during a period of service with reference to a Normal Pension Date of 65 or 60 (early payment of which would have required consent of the trustees and the employer)? Answer: He is entitled to retire at the earlier age. His pension will become payable immediately; but in so far as pension has accrued by reference to a Normal Pension Date of 65, the amount of that part of his pension may be reduced under rule 10.

xi) Are there any circumstances in which a member is entitled to an unreduced early retirement pension as of right from age 55, other than on redundancy. NB: No party has put forward a positive case to this effect. I decline to answer this question.