England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
BUSINESS LIST (CHANCERY DIVISION)

		Rolls Building Fetter Lane, London, EC4A 1NL
		17 April 2018

MR JUSTICE ARNOLD :

Contents

Topic	Paragraphs
Introduction	1-6
The witnesses	7-13
The Claimants' witnesses	7-11
BIC UK's witnesses	12-13
Legislative background	14-16
Factual background	17-75
BIC SA and BIC UK	17-25
The Scheme	26-29
The Works Scheme	30-32
Appointment of Noble Lowndes	33-35
BIC UK reduces its contributions	36-40
Amalgamation of the Scheme and the Works Scheme	41-47
Equalisation	48
Trustees' meeting on 18 February 1991	49-51
April 1991 booklet	52
March 1992 Announcement	53-54
Pre-97 Increases applied	55-56
December 1992 Announcement	57
The 1993 Deed and Rules	58-59
1994 Actuarial Valuation Report	60-65
Subsequent events	66-75
Relevant provisions of the Fourth Edition of the Rules	76
Relevant provisions of the 1991 Deed and Rules	77-78
General principles of construction of pension schemes	79
What decisions were made with respect to the Pre-97 Increases and by whom?	80-92
Issue 1: Were the pre-97 Increases properly paid?	93-147
Rule 32 of the Fourth Edition	94-98
Rule 36 of the Fourth Edition	99-117
Do the 1993 Deed and Rules have retrospective effect for these purposes?	118-125
A general point on the 1993 Deed and Rules	126
Clause 4 of the 1993 Deed	127-132
Clause 9 of the 1993 Deed	133-136
Rule 3(c)(iii) of the 1993 Rules	137-142
Rule 4(a) of the 1993 Rules	143
Rule 9(a) of the 1993 Rules	144-146
Former members of the Works Scheme	147
Issue 2: If the Pre-97 Increases were properly paid, can they now be stopped?	148
Issue 3: If the Pre-97 Increase were not properly paid, can the Trustees now recover from the pensioners the payments were made since 1992?	149-177
Estoppel as to validity	150-161
Was there a common assumption?	156
Was the common assumption shared between the Trustees and BIC UK?	157
Did BIC UK assume responsibility for the common assumption?	158
Did the Trustees rely upon the common assumption?	159
Would it be unconscionable for BIC UK to assert the true legal position?	160
Equitable recoupment	162
Section 91 of the Pensions Act 1995	163-168
Limitation	169-172
Laches	173-176
Estoppel as to remedy	177
Summary of principal conclusions	178

Introduction

1. This case concerns the BIC UK Pension Scheme (formerly called the Biro Bic Superannuation Fund, "the Scheme"). The Scheme is a balance of cost defined benefit occupational pension scheme under which the members paid contributions and the balance of the cost of the Scheme must be met by the principal employer, the Defendant ("BIC UK"). In the early 1990s, the Scheme had a large surplus which its trustees ("the Trustees") were obliged to reduce under the applicable tax regime. The Claimants, who are the current Trustees, contend that the then Trustees and BIC UK decided to apply limited price indexation increases to pensions in payment insofar as they exceeded Guaranteed Minimum Pension ("GMP"). (GMP is a minimum level of pension that had to be provided by schemes contracted out of the State Earnings-Related Pension Scheme ("SERPS") or the Additional State Pension.) These increases were applied annually from April 1992 onwards. The validity of the increases relating to service prior to April 1997 ("Pre-97 Increases") has been challenged by BIC UK since 2011. Payment of Pre-97 Increases has been suspended since 6 March 2013.
2. These proceedings have been brought to determine the following main issues of principle:

i) Were the Pre-97 Increases properly paid?

ii) If the Pre-97 Increases were properly paid, can they now be stopped?

iii) If the Pre-97 Increases were not properly paid, can the Trustees now recover from the pensioners the payments made since 1992?

3. By consent, I made orders under CPR rule 19.7 appointing the Claimants to represent those in whose interests it is to argue for an affirmative answer to question (i) and a negative answer to questions (ii) and (iii) and appointing BIC UK to represent those in whose interests it is to argue to the contrary. As counsel for BIC UK pointed out, it is important to appreciate that it is not just in BIC UK's interests to argue to the contrary (because it will have to fund the cost of further payments and will not directly benefit from any recovery), but also members who were not in pensionable service prior to 6 April 1997 and any members who were in pensionable service prior to that date, but who would not be entitled to Pre-97 Increases, depending on the basis on which it is contended that Pre-97 Increases were validly granted.
4. The present proceedings are not concerned with issues affecting individual pensioners and members of the Scheme. Nor are they concerned with certain other issues affecting the Scheme.
5. The Scheme closed to further accrual from 1 December 2010. As at 5 April 2015 the Scheme had assets of £34,230,000 against liabilities of £40,060,000 (excluding liability for the Pre-97 Increases) and a deficit of £5,830,000 on a Scheme Specific Funding basis. Had the Pre-97 Increases been included in the valuation, the liabilities figure would have increased to £45,120,000 and the deficit to £10,890,000. BIC UK is paying repair contributions to remedy the deficit under a recovery plan agreed with the Trustees.
6. As at 6 April 2017, the Scheme had 377 members, of whom 219 were pensioners and 158 were deferred members. Of these:

i) 159 pensioners have received Pre-97 Increases in the past, comprising 21 pensioners aged between 77 and 92 whose pensions commenced prior to 6 April 1992 and 138 pensioners whose pensions commenced after 6 April 1992 aged between 63 and 98 (save for one dependent pensioner with a lifelong condition aged 27);

ii) a further 33 pensioners would have received Pre-97 Increases had they not been suspended in March 2013;

iii) 25 pensioners have not and would not receive Pre-97 Increases even if they were reinstated (either because they have only post-97 service or because they are only in receipt of GMP);

iv) 104 of the deferred members would receive Pre-97 Increases when they take their pension if those increases are reinstated; and

v) 54 of the deferred members would not receive Pre-97 Increases even if they were reinstated.

The witnesses

The Claimants' witnesses

7. Michael Burgess, the First Claimant, is an independent Trustee who was appointed on 2 April 2015 and therefore had no involvement in the matters giving rise to the proceedings. He made two witness statements of a formal character and was not cross-examined.
8. Donald Hartridge qualified as a chartered accountant. He joined BIC UK in 1970. He was Finance Director and Company Secretary from October 1974 to February 1980 and Managing Director from February 1980 to September 1997. He was a Trustee of the Scheme from November 1979 to September 2013 (as a member-nominated Trustee from 2006 onwards) and a trustee of the Works Scheme (as to which, see below) until it merged with the Scheme in 1992. Mr Hartridge has been a Scheme pensioner since his retirement on 30 September 2000.
9. David Everitt, the Third Claimant, qualified as a certified accountant. He joined BIC UK in September 1978 and was Finance Director from April 1979 to September 2002. He was a Trustee of the Scheme from July 1987 to December 2002 and then again (and in succession to Mr Hartridge), as a member-nominated Trustee, from September 2013 to date. Mr Everitt has been a Scheme pensioner since 12 September 2002.
10. Mr Hartridge's and Mr Everitt's position is that neither of them is affected by the outcome of these proceedings, because, as former directors, they have been paid 5% fixed increases in accordance with an addendum to the 1985 edition of the Scheme's explanatory booklet for directors. BIC UK has recently issued proceedings challenging the validity of those increases, but that issue is outside the scope of these proceedings.
11. Counsel for BIC UK accepted that Mr Hartridge and Mr Everitt were both honest witnesses, but submitted that they were prone to wishful thinking in their evidence. I do not accept this. I found both to be good witnesses, whose recall of the events of the relevant period was better than might have been expected given that it was over 25 years ago. Nevertheless, both were candid as to the difficulty of accurately recalling the details of the key events. Accordingly, it is necessary for me to place most weight upon the contemporaneous documentation, such as it is, and the inherent probabilities.

BIC UK's witnesses

12. Bruno Bich has been the Chairman and Chief Executive Officer of Société BIC SA ("BIC SA"), BIC UK's ultimate parent company, since June 2016. He previously held those positions from June 1993 to April 2006. From April 2006 to June 2016 he was the non-executive Chairman. From 1984 to June 1993, he was Chairman and Chief Executive Officer of BIC Corporation, BIC SA's US subsidiary. Prior to that, he had held a number of positions of increasing seniority in BIC Corporation. He had no direct involvement in the matters giving rise to these proceedings. His evidence in cross-examination was closer to the evidence of Mr Hartridge and Mr Everitt than his written evidence.
13. Rose-Marie Bond has been a self-employed human resources consultant engaged by BIC UK since 2003. She has attended meetings of the Trustees as BIC UK's representative since 2010. She therefore had no involvement in the matters giving rise to these proceedings. Her evidence was mainly concerned with searches she had made for relevant documentation.

Legislative background

14. The application of inflation-based increases to pensions in payment is often referred to as indexation. This case concerns increases on pensions in excess of GMP earned prior to 6 April 1997. Indexation of such pensions is not governed by statute.
15. Provisions requiring increases of at least the lower of 5% and the Retail Prices Index ("RPI") (limited price indexation referred to as "5% LPI") to pension in excess of GMP earned after a date to be specified or earned before that date where the scheme was in surplus were included in the Social Security Act 1990 (section 11 and Schedule 2) and the Pension Schemes Act 1993 (Chapter 1 of Part V). These provisions were not brought into force, however.
16. Those provisions were superseded by section 51 of the Pensions Act 1995, which requires that pension in excess of GMP earned from 6 April 1997 until 5 April 2005 must be increased by at least 5% LPI. Pension in excess of GMP earned from 6 April 2005 must be increased by at least 2.5% LPI. Since 2011, the statutory increases have been determined by reference to the Consumer Prices Index ("CPI") rather than RPI.

Factual background

BIC SA and BIC UK

17. Bruno Bich's father Marcel Bich ("Baron Bich") and his partner Edouard Buffard set up a company then known as PPA SA in 1945. PPA SA made fountain pen and mechanical pencil parts in Clichy, France. In 1950 Baron Bich launched the famous Cristal ballpoint pen. In 1953 the company adopted the name BIC SA. In 1957 BIC SA entered the United Kingdom market ithrough the acquisition of Biro Swan Ltd (now BIC UK). Since then, the BIC Group has continued to grow and its business has diversified. The BIC brand is now present in over 160 countries. It remains under the control of the Bich family.
18. Baron Bich was Managing Director of BIC UK for a short period in 1957, and then Vice-Chairman. Frederick Bolt was General Manager of BIC UK from February 1958 to January 1959 and Managing Director from January 1959 to January 1980. From January 1961 to January 1978 Baron Bich was the Chairman of BIC UK. From January 1978 to January 1980 Mr Bolt was Chairman of BIC UK. Mr Hartridge then took over as Managing Director and Mr Bolt became a non-executive Chairman. Baron Bich remained a director of BIC UK until October 1993, when he was replaced by Mr Bich. Baron Bich died in 1994. Mr Bolt remained Chairman until December 1995.
19. During the period which is relevant to these proceedings, the board of BIC UK ("the Board") consisted of three executive directors and two non-executive directors. The executive directors were Mr Hartridge, Mr Everitt and first Terence Thorn and then (from June 1988) Gerald Burgess (Sales Director). The non-executive directors were Baron Bich and Mr Bolt.
20. Baron Bich was based in France. By the time that is relevant to these proceedings, he visited BIC UK annually to attend the Annual General Meeting. During this visit, he would review minutes of the Board meetings over the preceding year. If he had any questions, the executive directors would answer them. He would then sign or initial the minutes. Between visits, however, he remained in regular contact with BIC UK. Mr Hartridge sent him a "weekly state" document summarising key information regarding the company's position every week. Furthermore, Baron Bich and Mr Hartridge were in regular contact by telephone, with conversations on average once a week typically lasting five minutes or so.
21. The evidence of Mr Hartridge and Mr Everitt was that the executive directors of BIC UK had considerable autonomy in the way they ran the company, although Mr Hartridge acknowledged that Baron Bich was a remarkable man who always knew what Mr Hartridge was talking about. Mr Bich's written evidence was that his father was a micromanager who was obsessed with detail, but his oral evidence was closer to that of Mr Hartridge and Mr Everitt, particularly so far as matters relevant to the Scheme are concerned.
22. On the evidence, I find that decisions as to the level of remuneration, and in particular as to the level of pension benefits, provided to employees of BIC UK lay with the executive directors, and in particular Mr Hartridge. Such decisions were neither made by, nor subject to the prior approval of, Baron Bich.
23. It was also the evidence of Mr Hartridge and Mr Everitt that the executive directors ran BIC UK with considerable informality. Although there is in evidence a complete set of minutes of meetings of the Board covering the relevant period, their evidence was that it was not their practice to hold formal Board meetings. Rather, they would discuss matters informally amongst themselves, and with Mr Bolt, who visited BIC UK's office about twice a week. Mr Everitt would periodically produce minutes of decisions which the executive directors considered needed to be minuted and those would be approved by the other executive directors. The only formal Board meetings were the Annual General Meetings.
24. It is clear from the documentary evidence that the Board had no consistent practice with respect to the approval or recording of changes to pension benefits in Board minutes. There are a number of examples, to which I shall refer below, of such changes being made either with no mention in the minutes or only a general reference and no examination or approval of the detail.
25. Mr Hartridge and Mr Everitt gave unchallenged evidence that, during the period that is relevant to this case, BIC UK was a profitable company with substantial cash reserves.

The Scheme

26. The Scheme was established with effect from 1 October 1951 by way of an Interim Deed of Trust dated 27 September 1951. This was followed by a Definitive Deed and Rules dated 28 February 1952 and Deeds varying the Scheme dated 16 February 1954 and 19 January 1973. A Deed of Variation dated 10 October 1977 replaced the then rules with the Fourth Edition of the Rules. The Fourth Edition of the Rules ran to just over 32 pages of single-space typescript.
27. Changes including death benefits of up to £16,800 and higher accrual rates for salaries in excess of £3,000 per annum were introduced by the Fourth Edition of the Rules. There is no reference to the benefit changes in the Board minutes, and the Board was simply informed on 22 March 1978 that BIC UK's company seal had been applied to the Deed.
28. Improvements in the Scheme (including a move to 1/60th accrual from the building block arrangement in the Fourth Edition) to enable contracting-out from SERPS were made by a Written Instrument dated 1 February 1978. Although the existence of negotiations with staff representatives over contracting-out had been reported to the Board on 27 October 1977 and the fact that an agreement had been reached was reported on 16 November 1977, there was no indication of the detail or the anticipated cost of the improvements.
29. It is convenient to note at this point that a Fifth Edition of the Rules has been found, but it is unclear whether (or when) this was brought into effect. For present purposes, this can be disregarded, because, even if the Fifth Edition was in effect during the relevant period, the key rules do not differ from those in the Fourth Edition.

The Works Scheme

30. In 1967 the Biro BIC Limited Works Hourly Paid Personnel Pension and Life Assurance Scheme ("the Works Scheme") was established by way of an Interim Deed of Trust.
31. The minutes of the Board meeting dated 14 September 1977 record:

"The Managing Director reported that after extensive discussions with union representatives it had been agreed that the company would contract out of the government pension scheme to commence in April 1978, in respect of its hourly paid employees [i.e. those covered by the Works Scheme]. Consequently, a scheme had been formulated to meet the contracting out criteria of the Pensions Board and which would provide employees with a pension based on final salary and provide also a lump sum payment in retirement. The anticipated cost of the scheme is 9% of the payroll for the company and 3 ¼% for the employees.

It was RESOLVED that the action taken be and is hereby approved."

32. It can be seen that the minutes do not record any details of the scheme which had been agreed. In the event, benefit improvements in the Works Scheme (including a new rate of accrual of 1/80th of final salary in place of 1% of pay in the year of accrual provided) were made by a Deed dated 25 January 1978.

Appointment of Noble Lowndes

33. In February 1984 Noble Lowndes Associated Pensions Ltd ("Noble Lowndes") were appointed as the Scheme advisers, administrators and actuaries in place of Bowring & Laybourn Ltd and the assets of the Scheme and the Works Scheme were invested in a managed fund with Scottish Widows Life Assurance Society (previously they had been insured with Prudential Assurance Company Ltd). These decisions were taken by the Trustees and by the trustees of the Works Scheme on 17 February 1984 and approved by the Board on 27 March 1984.
34. Mr Hartridge's and Mr Everitt's evidence, which is supported by the contemporaneous documentation, was that the directors of BIC UK regarded Noble Lowndes as advising BIC UK as well as the Trustees. During the period that is relevant to this case, Mr Hartridge and Mr Everitt would meet with Noble Lowndes to discuss matters. Having received advice from Noble Lowndes, the Trustees would convene a meeting to take a decision. Nobles Lowndes did not attend Trustee meetings at that time.
35. Noble Lowndes (later Sedgwick Noble Lowndes and then Mercer) remained the Scheme advisers, administrators and actuaries from 1984 until 2003. It is important to note that, for whatever reason, no letters or memoranda setting out Noble Lowndes' advice from the key period have been located.

BIC UK reduces its contributions

36. By 1987 the Scheme was in surplus. The minutes of the Board meeting on 24 March 1987 include the following item:

"The Managing Director reported that recent legislation had restricted the amount by which pension fund assets could exceed potential liabilities to 5%. Since switching to a managed fund the returns on the pension fund had been very good and a recent actuarial valuation had shown that the 5% limit had been exceeded.

The company had been advised to reduce its contribution to the fund in order to comply with the new regulations.

It was possible that in future years the investment returns would not be at present levels and therefore possible that shortfall could occur which would have to be made up by the company.

It was proposed that the amount saved by the present reduction in contributions be invested in a separate fund to be utilised in the event of such a shortfall occurring.

It was also proposed that the fund be used for paying discretionary bonuses to employees or for such other purposes as the Management thought fit.

It was RESOLVED that the proposed action be and is hereby approved."

37. The decision was reported to the Trustees at a meeting held on 13 May 1987. The minutes record that the meeting was attended by Mr Hartridge as Chairman, Mr Thorn as Trustee and by Mr Everitt, who was not yet a Trustee. It was also reported to the trustees of the Works Scheme on the same day. Again, the meeting was attended by Mr Hartridge as Chairman and by Mr Everitt among others.
38. The legislation referred to in these minutes was originally the Finance Act 1986 and regulations thereunder, and subsequently the Income and Corporation Taxes Act 1988 ("ICTA 88") and regulations under that Act.
39. Although this is not recorded in the minutes, what happened was that BIC UK reduced its contributions from over 18% to the same level as the employees, namely 3.75%. Mr Hartridge's evidence, which was supported by the evidence of Mr Everitt, was that he did not wish to reduce the employees' contribution to zero, because the employees might get used to a non-contributory scheme, but neither did he consider it right that the company should not make any contribution while the employees' contribution stayed at 3.75%. Accordingly, they decided to reduce the company's contribution to the same level, which seemed equitable.
40. Mr Hartridge gave evidence that the separate fund referred to in the minute dated 24 March 1987 was subsequently paid to BIC SA.

Amalgamation of the Scheme and the Works Scheme

41. In 1990 the question of amalgamating the Scheme and the Works Scheme arose. Mr Hartridge raised it at a meeting of the Works Scheme trustees held on 13 March 1990 and attended by three other trustees and Mr Everitt. The reason for amalgamation was said to be the administrative burden of complying with increasingly complex legislation. One of the trustees, a Mr Hill, raised the question of index-linking pensions. Mr Hartridge replied that this was not possible, but it was agreed to ask Noble Lowndes what level of enhancement could be achieved for each 1% of extra contribution.
42. There was a further meeting of the Works Scheme trustees on 11 April 1990, attended by Mr Hartridge, two other trustees and Mr Everitt, at which it was resolved that the amalgamation should be carried out as soon as possible. It was also noted that the cost of enhancement by index-linking was "prohibitive".
43. That meeting was followed on the same day by a meeting of the Trustees, who were then Mr Hartridge, Mr Everitt and Gerald Burgess, all of whom were also executive directors of BIC UK. The Trustees also agreed that the amalgamation should be carried out as soon as possible.
44. The Works Scheme trustees took preparatory steps towards amalgamation at a meeting on 29 May 1990 by signing a resolution amending the Works Scheme Rules to enable its trustees to transfer the Works Scheme assets to another scheme. The resolution was signed also by Mr Everitt on behalf of BIC UK and was expressed to be pursuant to Works Scheme Rule 38. On the same day the trustees and Mr Everitt on behalf of BIC UK signed a resolution stating that BIC UK had terminated its liability to contribute to the Works Scheme and the Works Scheme was wound up with effect from 6 August 1990, "being the date on which the wind-up of the scheme and distribution of assets was completed". No reference is made to either resolution in the minutes of the meeting.
45. The proposed amalgamation was approved by the Board at a meeting on 3 July 1990, which was attended by Mr Bolt, Mr Hartridge and Mr Everitt. The rationale was administrative simplification, but it was noted that Works Scheme members would benefit by having their terms brought into line with the Scheme, mainly by increased life assurance and widow's benefits. There was no mention of the anticipated cost of this. It was also noted that the Works Scheme trustees had approved the amalgamation to have effect from 5 August 1990.
46. The amalgamation was not effected until 12 October 1992 when a Deed was executed by the Trustees, the trustees of the Works Scheme and BIC UK ("the Amalgamation Deed"). The Amalgamation Deed was expressed to take effect from 6 August 1990. The Amalgamation Deed was prepared by a firm of solicitors called Brookes & Bridge, but there is no evidence that they had any other involvement with regard to the Scheme in 1991-1992.
47. The Amalgamation Deed provided, so far as relevant:

"1. In this Deed where the context to admits:-

(a) The following expressions bear the following meanings:-

(i) 'the Rules' means the Fourth Edition of the Rules of the Staff Scheme adopted by Deed of Variation of the Staff Scheme dated 10^th October 1977 and as amended from time to time

(ii) 'the Effective Date' means 6^th August 1990

(iii) 'Transferred Member' means a person who was at the Effective Date a member of the Works Scheme in Service and who has been admitted to membership of the Staff Scheme

(iv) 'Transferred Pensioner' means a person who at the Effective Date was entitled to a pension in payment or a deferred pension pursuant to the provisions of the Works Scheme (including any person who on the Effective Date and in consequence of the death of a Transferred Pensioner becomes entitled to any pension or annuity pursuant to the provisions of the Works Scheme as the spouse or dependant of a former member thereof)

…

2. The Staff Scheme Trustees for themselves and other the trustees or trustee for the time being of the Staff Scheme HEREBY for the benefit of the Transferred Pensioners COVENANT with the Works Scheme Trustees out of the funds for the time being subject to the Staff Scheme:-

…

(b) To increase such pensions annuities deferred pensions and other benefits by such amount (if any) as may from time to time be required by law or which may from time to time have been awarded in exercise of any discretion conferred by the Rules of the Staff Scheme in all respects as if such pensions annuities deferred pensions and other benefits had been payable pursuant to the provisions of the Staff Scheme.

3. The Staff Scheme Trustees for themselves and other the Trustees or Trustee for the time being of the Staff Scheme FURTHER COVENANT with the Works Scheme Trustees for the benefit of the Transferred Members to provide to each Transferred Member in respect of his Past Service the benefits to which he would from time to time be entitled under the provisions of the Staff Scheme as if his Service as a member of the Works Scheme had been service as a Member of the Staff Scheme."

Equalisation

48. Some time after 28 August 1990 and on 11 November 1991 announcements were sent to female members of the Scheme about equalisation. The latter announcement was on BIC UK notepaper and signed by Mr Everitt. There was no discussion of the changes at Board meetings. Much later, it transpired that the changes were ineffective.

Trustees' meeting on 18 February 1991

49. The minutes of the Trustees' meeting on 18 February 1991 ("the 1991 Minutes") state:

"The Chairman reported that the pension fund was in surplus and that steps had to be taken to reduce this surplus. Several options had been considered and it was proposed that part of the surplus be used to enhance the pension of existing pensioners and improve future benefits for both them and the members of the pension scheme.

The proposals would involve increasing pensions in payment in line with inflation since the commencement of their payment and increasing future payments by RPI or 5% whichever was the lower.

The increasing of pensions in payment would be made at the discretion of the Trustees.

It was RESOLVED that the proposed action be carried out as soon as possible."

The 1991 Minutes were signed by Mr Hartridge and dated at the next meeting of the Trustees (as to which, see paragraph 54 below).

50. Mr Hartridge and Mr Everitt gave evidence that, as one would expect, this resolution was passed on the advice of Noble Lowndes. As explained above, however, no record of the advice (other than the 1991 Minutes) has been found. Nor is there any evidence as to what other options were considered. Mr Hartridge and Mr Everitt also gave evidence that Noble Lowndes had advised the Trustees that legislation was due to come into force that would require the Trustees to index pensions in payment, and thus all the Trustees were doing was anticipating what statute would soon require them to do in any event. This consideration is not mentioned in the 1991 Minutes (as opposed to the March 1992 Announcement, as to which see below), but I consider it probable that Mr Hartridge's and Mr Everitt's recollections are accurate.
51. There is no reference to this resolution, or any proposal to increase pensions in payment, in any Board minute during this period.

April 1991 booklet

52. In April 1991 a new explanatory booklet for Scheme members was issued. This explained how the members' GMP would increase when in payment, and said that Scheme pensions generally should reflect changes in the cost of living up to retirement, i.e., dealing with the fact that pensions were linked to a member's salary whilst he or she remained in pensionable service. It made no reference to any increases in the excess over the GMP.

March 1992 Announcement

53. On 19 March 1992 Mr Hartridge signed, "for and on behalf of the Trustees", a Notice to Members of the Scheme ("the March 1992 Announcement"). This explained that the Scheme was "in good financial health" as a result of the change to a managed fund. It went on:

"There is proposed legislation to increase pensions in payment, to reduce the effect of inflation on their buying power. The Trustees have decided to implement this proposal now rather than wait for the requirement to come into effect. Moreover, due to the strength of the Fund it will not be necessary at present to seek additional contributions from the members towards the extra cost of this improvement.

Therefore, all pensions commencing after 6th April 1992 will be increased each year by 5% or the Retail Price Index, whichever is the lower. The increase will be applied to that part of the benefit in excess of the Guaranteed Minimum Pension."

54. The next Trustees' meeting after the meeting on 18 February 1991 took place on 24 March 1992, and was again attended by Mr Hartridge, Mr Everitt and Mr Burgess. The minutes do not record any reference to increases to pensions in payment.

Pre-97 Increases applied

55. With effect from 6 April 1992, all pensions in payment, whenever they commenced and including the pensions of former Works Scheme members, were increased by 5% LPI.
56. No contemporaneous material has been found showing any consideration of the cost of either the proposal referred to in the 1991 Resolution or the change announced by the March 1992 Announcement or the practice actually adopted, if different (as to which, see below). Nor has any contemporaneous material been found showing any consideration of the impact of the amalgamation of the Works Scheme with the Scheme.

December 1992 Announcement

57. At some point in December 1992 an announcement ("the December 1992 Announcement") was issued to members of the Scheme, who by then included the former Works Scheme members. It is not signed by or expressed to be on behalf of any person or body of persons, although Mr Everitt's initials appear as part of the reference at the foot on the second page. The December 1992 Announcement stated, among other things:

"Pension increases

The way pensions are increased in payment is described in the Explanatory Booklet and an announcement dated 19^th March 1992.

The Trustees have power if the company agrees and if sufficient funds are available to provide further increases.

Under these powers all pensions in payment were increased on 6th April 1992 in line with increases in the Retail Prices Index for each year since the pension started to be paid."

The 1993 Deed and Rules

58. On 29 May 1993 a new Definitive Deed and Rules was executed ("the 1993 Deed and Rules"). The sealing of the 1993 Deed and Rules on behalf of BIC UK was reported by Mr Everitt at the Board meeting held on 1 June 1993. As explained in more detail below, the 1993 Deed and Rules were expressed to take effect from 6 August 1990 i.e. the effective date of the amalgamation of the Scheme and the Works Scheme.
59. The 1993 Deed ran to 33 pages of single-spaced typescript (not counting the signature page) and the 1993 Rules ran to no less than 81½ pages of single-spaced typescript. Eligibility for members and the contributions, benefits, etc of active members were set out in Part III of the Schedule. Paragraph 8 of Part III (which is headed "Pension increases – applicable to rule 9") provided that pension increases applied "only to that part of a pension under the Scheme which represents" GMP. Deferred members were dealt with in Part IV of the Schedule, and paragraph 1(c) of Part IV (which is headed "Pension increases") was to the same effect as paragraph 8 of Part III.

1994 Actuarial Valuation Report

60. Although it is clear that there were Actual Valuation Reports ("AVRs") in 1988 and 1991, no copy of the 1988 and 1991 AVRs has been located. The earliest AVR in evidence is the 1994 AVR. The 1994 AVR was issued by B.N. McConnell of Noble Lowndes (by then Sedgwick Noble Lowndes Ltd), the Scheme Actuary, in April 1995 valuing the Scheme as at 6 April 1994. Section 1, headed "Background", state at paragraph (b):

"The last actuarial valuation was made as at 6 April 1991, and took account of increases to pensions which were granted with effect from April 1992.

In view of the high level surplus which remained in 1991 – after account was taken of pension increases granted in 1992 – it was agreed that it was appropriate for the contribution rate to remain at the level of 7.5% of pensionable sales (including member contributions) to reduce the surplus significantly by 1994.

The present benefit structure is set out in detail in Appendix A."

61. Section 3, headed "Comments on the results", stated:

"a. The Solvency Position

The fund is currently well in excess of that required to cover the accrued liabilities, were all contributing members to leave the scheme on the valuation date (the discontinuance position). However a fall in the market value of the investments or a fall in interest rates could reduce this excess.

The solvency level, the level of cover by the scheme's assets for the discontinuance liabilities was 130% on the valuation date. At the time of the last valuation the solvency level was 141%, albeit on a slightly different basis of assessment.

b. The Ongoing Funding Position

Salaries can be expected to increase and so increase accrued liabilities. Making allowance for this (the ongoing position), the assets are still in excess of the accrued liabilities by some £1,060,000, compared to the surplus of £2,330,000 (after allowing for the 1992 pensions improvements) in 1991.

Because of the large surplus that existed in April 1991 – even after allowing for the substantial pensions increases introduced in April 1992 – it was agreed to limit the contributions rate to run down the surplus. This decision was taken in the light of legislation (the Pension Scheme Surplus Regulations) which limits the level of surplus which schemes are permitted to hold. Accordingly the contribution rate was continued at the level of 7.5% of pensionable salaries, some 10% of pensionable salaries below the level required to provide for benefits which accrued during the inter-valuation period.

It was anticipated that this level of contribution would extinguish the surplus over 9 years. However, the surplus has, in practice, run down at a faster rate than anticipated from 1991 to 1994.

[Five reasons for the more rapid run down of the surplus were set out.]

…

c. Effect of Recent Legislation

(i) Social Security Act 1990 (SSA90)

This Act which received Royal Assent in July 1990 required, inter alia, increases to pensions in payment, in excess of the Guaranteed Minimum Pension (GMP), at the rate of 5% p.a, or the increase in the Retail Prices Index if less – called Limited Prices Indexation (LPI) – in respect of the benefits accruing after a date ('A' day). The date is to be specified in regulations which have yet to be published.

When this provision is introduced it will no effect on the funding position or on the contribution rate, since the scheme already provides, and funding already allows, for pension increases at this level.

…

d. Statutory Surplus Limit

The Finance Act 1986 (FA86) placed a limit (5% of the liabilities) on the surplus which a pension scheme may hold as a proportion of liabilities on a very conservative (statutory) valuation basis, without taking steps to reduce it. The surplus at the valuation date was above this limit. The surplus at the present valuation date is below the limit."

62. Section 4, headed "Conclusions and recommendations", stated:

"a. The results show clearly that the scheme is still very well funded. At the valuation date the scheme solvency rate was 130%. This was, at that time adequate to provide members accrued pension rights in full should the scheme have been discontinued.

b. On the ongoing basis i.e. with allowances for future salary increases, the scheme has a significant surplus of assets over liabilities, albeit much reduced from the position in 1991. The surplus which remains, in the absence of benefit changes, should be used to continue to support the contribution rate, although the support available is lower than in 1991

…

d. After considering the funding position, the Company have agreed to an increase in the total contribution rate to 11.5% of pensionable salaries (including members' contributions of 3.75% of pensionable salaries) with effect from 6 April 1995. This lies within the range indicated by the valuation results, and I am therefore pleased to recommend to the Trustees that contributions at this rate be paid until the results of the next valuation are available.

…"

63. Appendix A stated at paragraph 9:

"The GMP component of pension accrued after 6 April 1988 is increased at 3% p.a. compound or by the increase in the Retail Prices Index (RPI) if lower. Pensions in excess of the GMP are increased in line with the increase in the RPI (subject to a maximum of 5% p.a.)."

64. Appendix B set out valuation data which showed that, as at 6 April 1994, the Scheme had current liabilities of £12.545 million.
65. The language I have quoted from Appendix A paragraph 9 also appeared in the 1997 AVR prepared by David Martin of Sedgwick Noble Lowndes Ltd at Appendix A paragraph A.9. Similar language appeared in the 2000 AVR prepared by Mr Martin, by then of William M. Mercer Ltd, at Appendix B paragraph B.10, in the 2002 AVR prepared by Mr Martin, by then of Mercer Human Resources Consulting Ltd ("Mercer"), at Appendix B paragraph B.10, in the 2003 AVR prepared by Graham Brown of Alexander Forbes Finance Services Ltd ("Alexander Forbes") at Appendix A, in the 2006 AVR prepared by Stephen Jacobson of Alexander Forbes at Appendix 1 and in the 2009 AVR prepared by Alan Carey of Alexander Forbes at Appendix 1 and in a Statement of Funding Principles signed on behalf of BIC UK by Gonzalve Bich, a director and Mr Bich's son, on 5 July 2010.

Subsequent events

66. An announcement to members of the Scheme made in May 1997 drew the attention of members to changes resulting from the Pensions Act 1995, including the impending introduction of increases at the rate of RPI or 5% if less in respect of service from and after 6 April 1997, but made no reference to any existing right of members to such increases on any tranche of their pension.
67. On 5 December 2003 Zafir Basit of Mercer (which had acquired Sedgwick Noble Lowndes Ltd) wrote a letter to Geoff Thompson, the then Chief Financial Operations Director of BIC UK, in which he said among other things:

"The current Trust Deed and Rules was executed in 1993. Since 1993 there have been a number of significant changes to the pension scheme provisions, which have been adopted using member announcements and trustee resolutions. For example:

1) Pension in payment increases were agreed by the trustees and are now payable.

2) The retirement age for males and females has been equalised at 65 with guarantees put in place for certain females.

3) The numerous provisions of the Pensions Act 1996.

It is normally good practice to review Trust Deed and Rules from time to time and bring them up to date. This is an opportunity to consolidate the changes and avoid ambiguities that may have arisen or future legal challenges."

68. On 31 December 2003 the Trustees agreed to appoint Alexander Forbes as advisors, administrators and actuaries in place of Mercer. Alexander Forbes instructed a firm of solicitors called Hewitsons to review the Scheme documentation, on the footing that their advice would be disclosed to and constitute advice to BIC UK. In a report dated 6 May 2004 Hewitsons recommended at paragraph 17 that Rule 9 of the 1993 Deed and Rules should be amended so that it incorporated the statutory requirement for RPI or 5% increases in respect of pension earned by service from and after 6 April 1997, but made no reference to increases in pension earned by earlier service. It does not appear that Hewitsons had a copy of the 1991 Minutes.
69. On 20 October 2004 Gene Davies of Alexander Forbes sent Mary Legg of Hewitsons an email querying the basis on which the Pre-97 Increases were paid. On 21 October 2004 Ms Legg replied referring to Rule 9(a) of the 1993 Deed and Rules and to the March 1992 Announcement, but observed that those documents were "not conclusive". There is no evidence that this uncertainty was disclosed to BIC UK at the time.
70. On 20 April 2005 Hewitsons sent Alexander Forbes a draft of the 2006 Deed & Rules (as to which, see below) and a comparative audit of trustee powers which stated that increases on pension above the GMP earned by service before 6 April 1997 were discretionary.
71. On 10 May 2005 there was a meeting of the Trustees, one of whom was by that stage Mr Thompson. The Minutes include the following item:

"LF [L. French of Alexander Forbes] raised the issue of pension increases following the change in legislation in relation to pensionable service after 6^th April 2005. Currently the pension scheme provides increases to pensions when in payment of limited price indexation up to a maximum of 5% per annum or the level of the limited price index inflation if less. For service after 6^th April 2005, it is now possible to reduce the level of pension increases in line with the indexation of the limited price index but with a maximum of 2.5% as opposed to 5%.

The amendment powers permit the Trustees, with the consent of the principal employer, to amend the provisions of the Scheme. The Trustees, therefore, proposed that the level of pension increases remains unchanged, however, they asked that LF write to Bic UK, as principal employer, outlining the implications of the change."

72. On 16 January 2006 the Trustees and BIC UK executed a new Definitive Trust Deed and Rules ("the 2006 Deed and Rules"). The 2006 Deed and Rules do not contain any provision stating that members are entitled to the Pre-97 Increases.
73. On 30 May 2006 Dalriada Trustees Ltd ("Dalriada") was appointed as an independent Trustee of the Scheme.
74. On 13 March 2007 Kevin Arope of Alexander Forbes sent Anita Burns of Hewitsons an email querying whether the Pre-97 Increases should be paid as they had been by the previous administrators. Ms Burns replied on 21 March 2007 that the previous administrators had correctly paid the Pre-97 Increases, relying on Rule 9(a) and the March 1992 Announcement. Again, there is no evidence that this exchange was disclosed to BIC UK at the time.
75. In 2011 the Trustees appointed Atkin & Co as advisors, administrators and actuaries in place of Alexander Forbes. It appears that Atkin & Co investigated the basis on which the Pre-97 Increases were being paid. As a result, at a meeting of the Trustees on 20 December 2011, BIC UK challenged the validity of the Pre-97 increases. Brian Spence of Dalriada asked Mr Hartridge for his recollections about the decisions that had been made. On 11 January 2012 Mr Hartridge wrote to Mr Spence setting out his recollections. His letter included the following passages:

"As mentioned to you previously, I have requested that the Company grant me access to the minutes of board meetings held during the relevant period to enable me to refresh my recollections on the chronology of events. To date, Bic has not made the minutes available or provided me with copies so that I have not been able to refresh my memory as I would wish. In the circumstances, therefore, (and until the relevant documents are made available) I have limited to my recollections to the general observations below in relation to the decisions taken with respect to the Scheme.

…

In the budget of 1987, the then Chancellor of the Exchequer, Nigel Lawson, introduced regulations intended to prevent major corporations manipulating their corporation tax liability by varying contributions to their pension schemes accordingly to their profitability. The regulations required companies to limit the funding of their pension schemes the extent of 105% of the schemes liabilities. Funds that were overfunded were required to take steps to reduce such overfunding.

In response to these changes in the applicable regulations the Company and the trustees were advised on possible course of action by the pension advisors. The discussions were documented where necessary and minutes of trustees' meetings were produced by Sedgewick Noble Lowndes. As the trustees and the executive directors of the company were one and the same, copies were effectively provided to the Company. Matters of substance decided by the Company were minuted.

During my tenure as Managing Director, documentation relating to the management of the Schemes was carefully retained. I held files relating to the Schemes in my office in Park Royal. These were additional to the full set of pension records maintained by the Financial Director and Company Secretary. He also held and maintained the statutory books of the Company including the Minute Book. I can confirm that the Minute Book of the company was up to date and available for inspection until at least the point at which I retired from the post of Managing Director. When I stepped from that post, the files (which I considered properly belonged with the office of the Managing Director) remained in place in the office. As mentioned, I contacted the Company to request access to the Minute Book so that I could refresh my memory prior to the meeting on 20 December 2011, but it was apparently unavailable. Among other things, it appeared that individuals within the Company were uncertain where the Minute Book and the relevant files actually were.

…

The GMP became subject to further revisions with the coming into force of the Pension Act 1995 ('the 1995 Act'). The 1995 Act was under consideration for some considerable time before finally passing into legislation. The 1995 Act required pension schemes to increase pensions in payment annually by the Retail Price Index (RPI) or 5% whichever was the lower. It is my recollection that one of the suggested courses of action to reduce the excess surplus was to move to the rates of increase required by the 1995 Act earlier that the required date. All the relevant discussions and decisions on this matter, both relating to the trustees and the employer should have been properly documented. If the employer as the custodian of the records will make the necessary information available, the situation can be clarified beyond doubt.

I am aware that the Pension Scheme has an amendment power which is contained in Clause 4 of the 1993 Trust Deed. It provides that the Trustees may at any time with the consent of the Principal Employer modify or alter the Scheme. As the trustees of the Scheme were also the Executive Directors of the Principal Employer, it would appear that the above mentioned decision met the necessary criteria."

Relevant provisions of the Fourth Edition of the Rules

76. The Fourth Edition of the Rules provided:

"32. The Employers may subject to Revenue Limitations at any time or times increase the contributions to be provided by them under Rule 11(B) and any increases so made shall be applied by the Trustees in one or both of the following ways as the Employers may direct namely

(i) to provide such additional benefits under the Scheme consistent with Inland Revenue approval as the Employers shall determine and

(ii) towards better securing the solvency of the Fund and the provision of the existing benefits under the Scheme.

…

36. Subject as hereinafter provided the Trustees may from time to time and at any time with the consent of the Principal Company by way of formal variation of these Rules adopted by any deed or deeds executed by the Trustees and the Principal Company or by any writing effected under hand by the Trustees and the Principal Company alter or modify all or any of the provisions of the Scheme Provided that no such alteration or modification as aforesaid shall be made which would have the effect of varying or affecting any benefits (whether immediate or prospective but not including Death Benefits) applicable to Pensionable Service completed before the alteration or modification (upon the basis that the Member's current Pensionable Salary will remain unchanged until the Normal Pension Date) without the consent in writing of any Member affected thereby."

Relevant provisions of the 1993 Deed and Rules

77. Clauses 1, 4 and 9 of the 1993 Deed provide, so far as relevant:

"1. The provisions of the Second Definitive Deed and the Existing Rules are hereby deleted with effect from 6^th August 1990 … and the following provisions substituted for them …

4. THE Trustees may at any time …, with the consent of the Principal Employer,

(i) by deed executed by the Principal Employer and the Trustees in the case of this deed or the Rules, or

(ii) by resolution (in writing) of the Trustees in the case of the Rules only

modify alter or extend all or any of the trusts, powers or provisions of this deed or the Rules, and any such modification, alteration or extension shall have effect from such time as may be specified in that deed or resolution or any reasonable time previous or subsequent to, so as to give the modification, alteration or extension retrospective or future effect (as the case may be) …

9. If and for so long as the Scheme is to be treated as an Exempt Approved Scheme, then subject to the provisions of Part II of the Schedule, the Trustees may, on the Principal Employer's direction, grant any new and additional Relevant Benefits to any person, or augment any of the Relevant Benefits (including pensions in payment) which any person may be entitled to under this deed or the Rules."

78. Rules 3(c), 4(a) and 9(a) of the 1993 Rules provided, so far as relevant:

"3.(c) ….

(iii) Despite any actuarial valuation of the Scheme made in accordance with paragraph (ii) of this Rule 3(c), if the Actuary is of the opinion that the value of the Fund exceeds the value of the liabilities of the Scheme and for that (or any other) reason, certain alterations are recommended to be made to the benefits or to the contributions payable under the Scheme, the Trustees with the consent of the Principal Employer may make such of those alterations or take such other action as they deem expedient to reduce that excess, except the payment of money out of the Fund to the Employers.

4.(a) Subject to the provisions of the Rules and in particular, subject always to Rule 16 and Rule 4(b), there shall be provided in respect of a Member for himself, his Beneficiaries, Personal Representatives or Dependants, such of the Relevant Benefits permitted by the Rules, and in relation to each such Relevant Benefit, in such amount or at such rate as the Employer, with the Trustees' consent, shall in its absolute discretion decide and as shall be notified to the Member in accordance with Rule 1(c)

PROVIDED THAT:-

A. (unless the Employer, with the Trustees' consent, decides otherwise and the Member is notified accordingly) in the case of a Specified Member, except where otherwise stated, the amount or rate of any such benefit shall, subject to the provisions above, be as set out in Parts III and IV of the Schedule …

9.(a) Any pension in the course of payment, whether to a Member or a Dependant, may be increased annually (or at such other intervals as the Trustees shall determine) after the start of that pension, by such amount as the Employer (with the Trustees' consent) shall decide."

General principles of construction of pension schemes

79. The correct approach to the interpretation of pension schemes was described by Arden LJ in British Airways Pension Trustees v British Airways plc ...a.k.a Stevens v Bell) [2002] EWCA Civ 672, [2002] PLR 247 as follows:

"26. There have been several reported cases about the interpretation of provisions of pension schemes in recent years. There are no special rules of construction but pension schemes have certain characteristics which tend to differentiate them from other analogous instruments. I mention some of those characteristics in the following paragraphs.

27. First, members of a scheme are not volunteers: the benefits which they receive under the scheme are part of the remuneration for their services and this is so whether the scheme is contributory or non-contributory. This means that they are in a different position in some respects from beneficiaries of a private trust. Moreover, the relationship of members to the employer must be seen as running in parallel with their employment relationship. This factor, too, can in appropriate circumstances have an effect on the interpretation of the scheme.

28. Second, a pension scheme should be construed so to give a reasonable and practical effect to the scheme. The administration of a pension fund is a complex matter and it seems to me that it would be crying for the moon to expect the draftsman to have legislated exhaustively for every eventuality. As Millett J said in Re Courage Group's Pension Schemes [1987] 1 WLR 495 at 505:

'[its] provisions should wherever possible be construed so as to give reasonable and practical effect to the scheme, bearing in mind that it has to be operated against a constantly changing commercial background. It is important to avoid unduly fettering the power to amend the provisions of the scheme, thereby preventing the parties from making those changes which may be required by the exigencies of commercial life.'

In other words, it is necessary to test competing permissible constructions of a pension scheme against the consequences they produce in practice. Technicality is to be avoided. If the consequences are impractical or over-restrictive or technical in practice, that is an indication that some other interpretation is the appropriate one. Thus in the National Grid case, to which I refer below, where there was a choice of possible constructions, Lord Hoffmann held that the correct choice depended 'upon the language of the scheme and the practical consequences of choosing one construction rather than the other.' (see [2001] 1 WLR 864 at 887, paragraph 53).

29. Third, in pension schemes, difficulties can arise where different provisions have been amended at different points in time. The effect is that the version of the scheme in issue may represent a 'patchwork' of provisions: see per Robert Walker J in the National Grid case. Pension schemes are often subject to considerable amendment over time. The general principle is that each new provision should be considered against the circumstances prevailing at the date when it was adopted rather than as at the date of the original trust deed: see per Millett J in Re Courage Group's Pension Schemes, above, at 505 – 506. Likewise, the meaning of a clause in the scheme must be ascertained by examining the deed as it stood at the time the clause was first introduced. ...

30. Fourth, as with any other instrument, a provision of a trust deed must be interpreted in the light of the factual situation at the time it was created. This includes the practice and requirements of the Inland Revenue at that time, and may include common practice among practitioners in the field as evidenced by the works of practitioners at that time. It has been submitted to us that the factual background is only relevant if the document is ambiguous. I do not accept this submission, which is inconsistent with the approach laid down by Lord Hoffmann in Investors Compensation Scheme v West Bromwich Building Society [1998] 1 WLR 896. In Lord Hoffmann's words '[i]nterpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background that would reasonably have been available to the parties in the situation in which they were at the time of the contract' (912H). Lord Hoffmann also distinguished the meaning of the words to be found in dictionaries from the meaning of documents:

'(4) The meaning which a document (or any other utterance) would convey to a reasonable man is not the same thing as the meaning of its words. The meaning of words is a matter of dictionaries and grammars; the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean. The background may not merely enable the reasonable man to choose between the possible meanings of words which are ambiguous but even (as occasionally happens in ordinary life) to conclude that the parties must, for whatever reason, have used the wrong words or syntax: see Mannai Investments Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749.'

31. Fifth, at the end of the day, however, the function of the court is to construe the document without any predisposition as to the correct philosophical approach. Both sides urged on us their respective philosophical approaches. Mr Inglis-Jones submitted that the overall approach of the APS Trust Deed was favourable to the members. BA submitted that it should be remembered that this was a balance of cost scheme and so the fact that there was a surplus meant that the employer had paid too much. As Brooke LJ, giving the judgment of this Court (Nourse, Schiemann, Brooke LJJ), said in the National Grid case [2000] ICR 174, 193

'The solution to the [problem of construction in that case] lies within the terms of the scheme itself, and not within a world populated by competing philosophies as to the true nature and ownership of an actuarial surplus.'

In the same case, in the House of Lords, the beneficiaries of the scheme argued that the surplus represented their contributions or their deferred remuneration. Lord Hoffmann rejected this approach. He expressed the view that, once it was established that the employer could exercise powers conferred by a scheme in its own interests, 'I do not see the relevance of the way in which the surplus was funded' (page 869G). I discuss the National Grid case in detail below.

32. Sixth, a pension scheme should be interpreted as a whole. The meaning of a particular clause should be considered in conjunction with other relevant clauses. To borrow John Donne's famous phrase, no clause 'is an Island entire of itself.'"

What decisions were made with respect to the Pre-97 increases and by whom?

80. Before I turn to consider the issues identified above, it is first necessary for me to resolve certain underlying disputes between the parties as to what decisions were made with respect to the Pre-97 Increases and by whom. These disputes are in part factual and in part turn on the interpretation of the relevant documents.
81. The Claimants contend that (i) on 18 February 1991 the Trustees decided to increase future payments to existing pensioners and members of the Scheme by 5% LPI and (ii) BIC UK agreed to this. BIC UK disputes both (i) and (ii).
82. So far as issue (i) is concerned, there is no suggestion by either side that the 1991 Minutes are not an accurate and complete record of the meeting. Accordingly, the question is one of the interpretation of the document.
83. BIC UK contends that all the Trustees decided to do was to adopt a policy which would be taken forwards with Noble Lowndes and which required further decisions and implementation subsequently (in particular, by the making of amendments to the Scheme's governing documentation). Counsel for BIC UK submitted that the present case was analogous to Sovereign Trustees Ltd v Glover [2007] EWHC 1750 (Ch), [2007] PLR 2777 in this respect. As counsel for the Claimants pointed out, however, that decision was based on the particular wording of the minute in question and the particular surrounding circumstances.
84. Counsel for the Claimants submitted that the Trustees had decided to do two things: first, to "enhance the pension of existing pensioners … in line with inflation since the commencement of their payment …. at the discretion of the Trustees"; and secondly, to "improve future benefits for both [existing pensioners] and members of the pension scheme … by RPI or 5% whichever was the lower". He also submitted that the reference to "members" was a reference to those who were then or subsequently became members, that being how the term was generally used in the Scheme's governing documentation. I accept these submissions, but in themselves I do not consider that they provide an answer to BIC UK's contention.
85. Counsel for the Claimants also submitted that the decision to "improve future benefits for both [existing pensioners] and members of the pension scheme … by RPI or 5% whichever was the lower" was to be implemented by the administrators of the Scheme without the need for any further decision or action by the Trustees. In support of this submission, he relied upon the wording of the resolution: "that the proposed action be carried out as soon as possible". I accept this submission, subject to the two points considered below.
86. First, there is the question of the date from which pensioners and members were to be paid the Pre-97 Increases. No date is specified in the 1991 Minutes. This might be said to show that the Trustees needed at least to make a decision as to the date. I consider, however, that the better view is that the Trustees decided that the Pre-97 Increases should start to be paid "as soon as possible", meaning as soon as practicable. In the event, that evidently turned out to be 6 April 1992.
87. Secondly, although I consider that the 1991 Minutes should be interpreted as a decision to alter or modify the benefits payable under the Scheme, I accept that the 1991 Minutes cannot be interpreted as a resolution formally to amend the Scheme's governing documentation. That is simply not what they say.
88. Before leaving this issue, I should make it clear that I do not accept the suggestion advanced by BIC UK that either the March 1992 Announcement or the December 1992 Announcement or what was done from 6 April 1992 were inconsistent with the 1991 Minutes. It is true that the March 1992 Announcement only refers to the 5% LPI increases being paid to new pensioners after 6 April 1992 (and not existing pensioners), but as counsel for the Claimants submitted this is explicable on the basis that the March 1992 Announcement was sent to members rather than pensioners. As for the December 1992 Announcement, the first sentence quoted in paragraph 57 above effectively repeats the March 1992 Announcement, and the same explanation is available. (I agree with counsel for the Claimants that the second and third sentences refer to the Trustees' first decision in the 1991 Minutes.)
89. I should also deal with the point made by BIC UK that the Pre-97 Increases are not mentioned in either the April 1991 booklet, the 1993 Deed and Rules or the 2006 Deed and Rules. I accept the submission of counsel for the Claimants that the most likely explanation for this is simply oversight.
90. Turning to issue (ii), this is essentially a question of fact. The starting point is that, as is common ground, the 1991 Minutes only purport to record a decision by the Trustees. The 1991 Minutes do not purport to record a decision by the directors of BIC UK. Furthermore, as is also common ground, there is no Board minute purporting to record a decision by the directors of BIC UK to approve the grant of the Pre-97 Increases.
91. Counsel for BIC UK placed strong reliance upon Mr Hartridge's letter dated 11 January 2012 (paragraph 75 above) as showing that, at that time, he anticipated that a search of the Board minutes would yield a minute showing that the directors had approved the Trustees' decision. I agree that that is what the letter shows. I do not regard that as conclusive, however.
92. Mr Hartridge and Mr Everitt both gave evidence that BIC UK had agreed to the payment of the Pre-97 Increases. I accept that evidence, and I reject the suggestion that it was wishful thinking on the part of the witnesses. In my judgment their evidence is supported by consideration of the surrounding circumstances. As discussed above, Noble Lowndes was treated as advising BIC UK as well as the Trustees. The three executive directors of BIC UK were clearly content for Noble Lowndes' proposal to pay the Pre-97 Increases to be adopted by themselves in their capacity as Trustees. If they were not, the proposal would not have proceeded. No doubt BIC UK's agreement should have been minuted, but there was no requirement for it to be and, as discussed above, BIC UK did not have a consistent practice in that regard. It is not particularly surprising that it was not minuted given that (i) the proposal was designed to reduce a surplus which the directors understood needed to be reduced for tax reasons, (ii) the proposal did not then appear to be particularly costly and (iii) BIC UK was benefitting from the substantial decrease in its contributions which had been implemented in 1987. Moreover, there was no objection by BIC UK to the payment of the Pre-97 Increases until some 20 years had passed, notwithstanding the fact that they were repeatedly referred to in the AVRs, in the letter dated 5 December 2003 (paragraph 67 above), in the minutes dated 10 May 2005 (paragraph 71 above) and the Statement of Funding Principles signed on 5 July 2010 (paragraph 65 above).

Issue 1: Were the Pre-97 Increases properly paid?

93. The Claimants rely upon no less than seven different bases for contending that the Pre-97 Increases were validly granted. It is only necessary for me to consider six of these, however, since counsel for the Claimants accepted that, if he did not succeed on rule 3(c)(iii) of the 1993 Deed and Rules, then rule 3(c)(ii) was unlikely to assist him.

Rule 32 of the Fourth Edition

94. Rule 32 gives the Employers (defined as the Principal Company, namely BIC UK, and any associated company participating in the Scheme) power to "increase the contributions to be provided by them" and to direct that "any increases so made shall be applied by the Trustees … to provide such additional benefits under the Scheme … as the Employers shall determine".
95. The Claimants contend that BIC UK exercised this power by making the decision recorded in the 1991 Minutes. The Claimants put their case in two ways.
96. First, the Claimants rely upon the express terms of Rule 32, which they contend should be construed broadly. In my judgment, however, the 1991 Minutes do not show that BIC UK decided to increase the contributions it was to provide or to direct that the increases should be applied by the Trustees to provide additional benefits. On the contrary, the decision taken was to use the surplus to provide additional benefits, and hence for BIC UK to maintain its contributions at the then existing level. I do not accept that the words of Rule 32 can be construed as extending to such a decision.
97. Secondly, the Claimants contend that it was an implied term of Rule 32 that the power could be exercised by utilising surplus contributions which had already been made as well as by increasing future contributions. I do not accept this contention either. As is common ground, the principles to be applied with respect to the implication of terms were re-stated by the Supreme Court in Marks and Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2015] UKSC 72, [2016] AC 742. In my judgment the proposed implied term is neither so obvious as to go without saying nor necessary to give the Fourth Edition of the Rules business efficacy. As counsel for BIC UK submitted, the Fourth Edition had a perfectly serviceable power of amendment which could be used to deal with any surplus which may have arisen. Furthermore, the effect of the implied term would be to deprive the Trustees of their power to deal with surplus, with the agreement of BIC UK, and instead confer a unilateral power on BIC UK alone. It would also trespass upon the Trustees' unilateral power to set the contribution rate for the employer.
98. I therefore conclude that the Claimants cannot rely upon rule 32 as validating the payment of the Pre-97 Increases.

Rule 36 of the Fourth Edition

99. Rule 36 gives the Trustees power, with the consent of the Principal Company, "by any writing effected under hand by the Trustees and the Principal Company" to "alter or modify all or any of the provisions of the Scheme" subject to a proviso which is not material for present purposes. It is common ground that "effected under hand" means that the document must be signed: see Trustee Solutions Ltd v Dubery [2006] EWHC 1426 (Ch), [2006] 1 All ER 308 at [21]-[36].
100. The Claimants' reliance upon rule 36 involves two steps. First, the Claimants contend that, if the 1991 Minutes had been signed by the Trustees and on behalf of BIC UK, then the decision to pay the Pre-97 Increases would have constituted a valid exercise of the Rule 36 power. I accept this.
101. Secondly, the Claimants contend that the failure to comply with that formality can be cured by the equitable maxim that equity looks on that as done which ought to be done. Counsel for the Claimants relied in support of this contention upon the decision of Vos J (as he then was) in HR Trustees Ltd v Wembley plc [2011] EWHC 2974 (Ch). Counsel for BIC UK submitted that the maxim had no application in circumstances such as these, relying in particular on the analysis of Newey J (as he then was) in Briggs v Gleeds (Head Office) [2014] EWHC 1178 (Ch), [2015] 1 Ch 212.
102. In HR v Wembley, the relevant power of amendment provided:

"The Principal Employer may from time to time without the concurrence of the Members authorise the Trustees in writing to alter or add to the terms and provisions of the Rules… The Trustees shall forthwith declare any such alteration or addition to the Rules in writing under their hands … This Deed and/or the Rules shall stand amended accordingly with effect from the date of such declaration or from such other date (whether future or past) as is stated in such declaration. …"

103. The problem was that, although the principal employer had authorised the trustees to amend the scheme to reduce indexation after 6 April 2000 from 5% to 5% LPI and the trustees had made the requisite declaration, the declaration had only been signed by four of the scheme's five trustees.
104. Vos J construed the power as requiring (i) an authorisation from the principal employer to the trustees, then (ii) a discretionary decision by the trustees whether or not to make an amendment within the ambit of the authorisation and then (iii) a declaration by the trustees of the amendment: see [43]-[46]. The effect of this was that there were no formal requirements for the making of the discretionary decision by the trustees. Formality only came into play after the decision to amend had been made, at which time the trustees then came under an obligation to declare under their hands any amendment they had decided to make.
105. Vos J then held that the trustees had validly exercised their discretion to make the amendment, as shown by the minutes of two meetings of the trustees: see [51].
106. Vos J went on to hold that the equitable maxim applied in those circumstances for reasons he expressed at [66] as follows:

"Here it seems clear to me that the trustees exercised their discretion to amend the rule in the way contained in the amendment. They were obliged, having done so under clause 16, to make an appropriate declaration in a particular form. They could have been compelled on behalf of the members, who are not volunteers, to specifically perform their exercise of the power. Not to make a valid declaration was a breach of the terms of the definitive deed. Thus, in my judgment, this is a classic case in which the maxim of equity can and should properly be applied. Mr Moeran is wrong, in my judgment, to submit that this is an extension of the doctrine. It may be that there has never been before a case on all fours with the present, but law and equity would be made to look ridiculous if it were powerless to correct what has been an obvious administrative error like the one made in this case. Moreover, none of the members of the scheme in any category have any reason to feel aggrieved. The members, apart from those in former scheme B, were told about the change at the time in July 2000. They never expected to continue to accrue rights on the previous basis. If they did so, they would be receiving a windfall which they had no right to expect. They cannot have known until much later that the amendment had been defectively executed."

107. As counsel for BIC UK pointed out, there was no suggestion in HR v Wembley that the trustees were under an enforceable obligation to exercise their discretionary power to amend in favour of the members. Rather, the case of one of non-performance of the obligation, once the trustees had exercised their discretion, to make a declaration under their hands. Vos J treated that obligation as specifically enforceable because the members were not volunteers.
108. One of the issues in Briggs v Gleeds concerned a power of amendment in the following form:

"The principal employer and the trustees may from time to time without the concurrence of the members by deed alter or add to the terms and provisions of the rules and the trusts, powers and provisions of this deed whether retrospectively or otherwise. The principal employer and the trustees shall forthwith declare such alteration or addition in writing and the deed and/or rules shall stand amended accordingly. …."

109. Newey J construed this as requiring a declaration in addition to a deed: see [64]-[69]. He then addressed the question of what the position was if the principal employer and the trustees failed to declare an amendment for which a deed provided. He concluded that a failure to make a declaration did not of itself invalidate the amendment: see [83]-[86].
110. In this context Newey J commented on HR v Wembley as follows:

"75. The approach Vos J adopted … has the obvious merit of having brought the legal position in that case into line with the parties' expectations. As Vos J pointed out, members of the pension scheme had been told at the time about the change that the defective documentation had been intended to effect and they did not expect to continue to accrue rights on the previous basis. It is also noteworthy that Vos J's reasoning depended on the fact that the trustees had become obliged to make a declaration. Had they merely had a discretion to do so, Vos J would, as I understand it, have considered that there was no question of the equitable maxim applying.

76. Even so, the implications of Vos J's approach are potentially far reaching. In the case before him, four of the five trustees who had made the relevant decision had signed documentation reflecting it. Vos J's reasoning does not, however, depend on that fact. As I see it, it would have made no difference to Vos J if no trustee had signed or, indeed, if the documentation had never been prepared. What mattered was that the trustees had decided to make an amendment. The fact that the power provided for an amendment to be declared either in writing or, where it was to the governing deed, by deed was unimportant. The formalities were, for practical purposes, of no significance.

77. One snag with that sort of approach is that it means that a scheme's formally-executed documents may not provide a reliable guide to the terms of the scheme. Someone wishing to establish the terms should also check the minutes of trustees' meetings to see whether the trustees have made decisions that have not been, or were not fully, implemented. Timing issues could potentially arise. Suppose, for example, that trustees decided to make a change, but took some time to execute the relevant paperwork. Could it be suggested that the change had in fact happened at an earlier date (on the basis that the trustees had by then had a reasonable period to sort out the documentation) and that the executed documents were thus irrelevant? What would the position be if the trustees resolved to make a change with effect from one date but, because of some delay, ultimately executed documentation providing for the change to happen from a later date?

78. A more important point for present purposes is that I have trouble with the idea that trustees are to be taken to have amended a pension scheme to the prejudice of its members because those members could themselves have compelled them to make the change. Plainly, the members would never have wanted to force the trustees to proceed with the amendment at issue in the HR Trustees case (it would not have been in their interests), and unsurprisingly counsel representing the members before Vos J argued for the invalidity of the amendment, not that the failure to comply with the formalities could be overlooked. If an amendment to the disadvantage of members is to be treated as effective because the members earned their rights, and so 'are not volunteers', the position is still odder. Why should they be worse off than volunteers?

…

80. A contractual obligation is … to be treated as having been performed only 'in favour of some person entitled to enforce the contract'. My own view is that a trustee should similarly be treated as having done what he ought to have done only in favour of someone who would have been in a position to enforce the obligation. It follows, as it seems to me, that pension trustees should not be taken to have made amendments against the interests of the scheme's members merely on the (unrealistic) basis that the members could have compelled them to do so."

111. Taking the concerns raised by Newey J in reverse order, the one he expressed at [78]-[80] would not apply where, as here, the amendment was for the benefit of the members. Turning to the point he made at [76]-[77], I acknowledge the force of this, but it depends on the circumstances of the case. In the present case, rule 36 plainly permitted amendments to be made "by any writing effected under hand". Provided the document was signed, no other formality was required. A manuscript note signed by the Trustees and on behalf of BIC UK would suffice. Thus the key point for present purposes is the one made by Newey J at [75], namely that Vos J's reasoning depended on the trustees having become obliged to make a declaration.
112. This chimes with the analysis of the law by the editors of Lewin on Trusts (19^th ed) at §§29-204 and 29-104. In §29-204 the editors say (footnotes omitted):

"… the ability of beneficiaries to enforce a trust depends on its being completely constituted, not on their having provided consideration; and where a power vested in trustees is imperative, they are entitled to require its exercise. It seems preferable to regard the beneficiaries' entitlement as turning on the maxim that equity looks on that as done which ought to be done. In the absence of a decision on the part of the trustee, no doubt the court would likely, if necessary, to appoint new trustees to secure the exercise of the power; but where the decision has been taken and only the want of some formality prevents it from taking effect, there seems no reason why the court should not similarly compel the performance of the requisite formality."

113. In §29-205 the editors go on (footnote omitted):

"On the other hand, there seems to be no warrant for saying that a purely discretionary power, even a fiduciary power, is subject to a similar jurisdiction. If so, the court will not direct trustees or other fiduciaries to exercise a power with the requisite formality merely on the ground that they have in fact decided how it should be exercised. …"

114. In the present case, rule 36 did not vest an imperative power in the Trustees, but a purely discretionary power (acting with the Principal Company). Accordingly, I conclude that the court would not have compelled the Trustees (or BIC UK) to exercise that power with the requisite formality merely on the ground that they had in fact decided how it should be exercised. That being so, the equitable maxim has no application in the present case.
115. Finally, counsel for the Claimants also relied in the alternative on the equitable jurisdiction to aid defective jurisdiction. This is explained by the editors of Lewin at §29-206 as follows:

"Equity will in some other cases aid a defective execution. It does so not (for example) by deeming an instrument to be a deed which is not in fact a deed but, acting in personam, by compelling those entitled in the absence of proper execution to perfect the intended exercise. The cases in which it does so are those in which the donee of the power, not the donor, owes some particular obligation, legal or moral, to those seeking to invoke the jurisdiction."

116. In my judgment this jurisdiction cannot be invoked by the Claimants here. That would require an application by the recipients of the Pre-97 Increases against the Trustees. Moreover, the Trustees did not owe the recipients any legal or moral obligation to grant the Pre-97 Increases. I would add that it does not appear that the jurisdiction has ever been exercised in circumstances such as these (the nearest case perhaps being the recent decision of His Honour Judge Hacon sitting as a High Court Judge in English v Keats [2018] EWHC 673 (Ch)).
117. I therefore conclude that the Claimants cannot rely upon rule 36 as validating the payment of the Pre-97 Increases.

Do the 1993 Deed and Rules have retrospective effect for these purposes?

118. The Claimants rely upon five provisions of the 1993 Deed and Rules as validating the payment of the Pre-97 Increases. The Claimant can only do so, however, if the 1993 Deed and Rules take effect for this purpose from 6 August 1990 as provided by clause 1(a).
119. It is well established that, in general, a contract may provide for its provisions to have effect from a date prior to the execution of the contract: see Trollope & Colls Ltd v Atomic Power Constructions Ltd [1963] 1 WLR 333 and Northern and Shell plc v John Laing Construction Ltd [2003] EWCA Civ 1035.
120. In the present context, however, the applicable principles are those laid down by Lord Walker of Gestingthorpe giving the judgment of the Privy Council in Bank of New Zealand v Board of Management of the Bank of New Zealand Officers' Provident Association [2003] UKPC 59, [2003] OPLR 281 at [26]:

"In the courts below the Board of Management's power to make a retrospective amendment was dealt with as a separate topic. But before their Lordships it was rightly conceded that this topic is merely a reflection of, or another (and possibly less helpful) way of putting, what is essentially the same point as to the scope of the power of amendment. Modern authority (as reviewed and summarised by Lord Mustill in L'Office Cherifien des Phosphates v Yamashita-Shinnihon Steamship Co Ltd [1994] 1 AC 486, 524-525) has recognised that when the law raises a presumption against the retrospective operation of an enactment or a disposition (including a rule change), it is concerned with fairness in the circumstances of the particular case, rather than with the application of some general formula. In the amendment of pension scheme rules, back-dating (that is, deeming a change of the rules to have been made at a date earlier than the date of the actual change) cannot be used as a device so as to rewrite history or validate an amendment which would otherwise be beyond the scope of the power of amendment. But if the substance of what is proposed is within the power, back-dating will not by itself lead to invalidity (whether it will be more or less helpful, simply as a matter of drafting technique, will depend on the circumstances)."

121. In Shannan v Viavi Solutions UK Ltd [2016] EWHC 1530 (Ch), [2016] PLR 193 Timothy Fancourt QC sitting as a deputy High Court judge (as he then was) said:

"[67] In this context, there is no presumption against a retrospective change in the operation of a pension scheme, unlike the strong presumption against Parliament legislating with retrospective effect. The presumption arises as a question of fairness in the circumstances of the particular case see Bank of New Zealand v Board of Management of the Bank of New Zealand Officers' Provident Association [2003] UKPC 58, per Lord Walker of Gestingthorpe, at para 26. But in the context of a trust deed of this kind, the question is to be resolved as one of the scope of the power conferred, having regard to the likelihood or otherwise of its exercise giving rise to impermissible re-writing of history: ibid., paras 25-27, and PNPF v Taylor, above, at paras 138-145. It is clear in this and other authorities that 're-writing history' is used in the sense of doing so impermissibly see Dalriada Trustees Ltd v Faulds [2012] 2 All ER 734, para 78. What is impermissible is exercising a power so as adversely to affect accrued rights, or to falsify something that was true and/or effective when done, or validate something that when done was a breach of trust.

[68] On the other hand, retrospectively validating a power that, as exercised, was invalid for want of formality (ratification), to give effect to expectations created, may be unexceptionable, as long as rights for other scheme members did not accrue as a result of the invalidity of the exercise of the power; and the conferring of additional rights, or voluntary assumption of obligations, with effect or calculated from an earlier time, may be perfectly acceptable (and indeed routine so far as the conferring of additional rights is concerned). What this shows is that the retrospective exercise of a power to change the identity of a principal employer may have a variety of different consequences, some of which are objectionable and others of which are not. …"

122. In the present case, it is common ground that the key question is whether exercising the powers conferred by the 1993 Deed and Rules with effect from 6 August 1990 would involve impermissibly rewriting history. That in turn depends on whether it would have been within the scope of the power of amendment contained in rule 36 of the Fourth Edition (pursuant to which the 1993 Deed and Rules were made).
123. Counsel for the Claimants submitted that this was a case of retrospectively validating a power that, as exercised, was invalid for want of formality to give effect to expectations raised, and that it would have been within the scope of the power conferred by rule 36 of the Fourth Edition to grant the Pre-97 Increases either in 1991 or 1993.
124. Counsel for BIC UK submitted that the retrospective introduction of a power which operated to validate a previous invalid exercise of another power in different terms was outside the scope of the power conferred by rule 36 of the Fourth Edition. He also submitted that there was nothing in the 1993 Deed and Rules which manifested an intention to validate what had been done previously, and that, on the contrary, the 1993 Deed and Rules manifested an intention inconsistent with the payment of the Pre-97 Increases.
125. I have found this a difficult question to resolve, but I prefer the submissions of counsel for the Claimants. The 1993 Deed and Rules were deliberately expressed to have retrospective effect, and for good reason (albeit a reason unconnected with the Pre-97 Increases). I see the force of the point that the 1993 Deed and Rules did not themselves provide for the payment of the Pre-97 Increases, but in my view that does not prevent effect from being given to the decision recorded in 1991 Minutes if that does not involve impermissibly re-writing history (assuming, for this purpose, that the 1993 Deed and Rules enable this to be done). I also see the force of the point that the Claimants' case involves relying upon different powers contained in the 1993 Deed and Rules to validate an amendment that was not validly made under rule 36 of the Fourth Edition. But, as I see it, the key point is that the amendment could have been made under rule 36, and the only reason why it was not validly made is due to the failure to observe the correct formalities. It is true that reliance upon the powers in the 1993 Deed and Rules involves an element of re-writing history, but that will often be the case where an instrument is expressed to have retrospective effect. In my judgment, however, it does not involve doing so impermissibly. Rather, it enables effect to be given to what, as a matter of historical record, was in fact decided and done.

A general point on the 1993 Deed and Rules

126. Counsel for BIC UK submitted that, in construing the provisions relied upon by the Claimants, the court should presume that each Clause or Rule was intended to have its own distinct subject-matter, rather than creating a multiplicity of overlapping powers. I accept that the 1993 Deed and Rules must be construed as a whole. I also accept that it is to be presumed that each Clause or Rule was included for a distinct purpose, and not to duplicate another provision. I do not accept that it follows that they should be construed to avoid any overlap. That would be to pre-suppose a degree of precision and perfection in drafting which is unrealistic.

Clause 4 of the 1993 Deed

127. Clause 4 of the 1993 Deed empowers the Trustees with the consent of the Principal Employer (BIC UK) and subject to certain formalities to "modify alter or extend all or any of the trusts, powers or provisions of this deed or the Rules". The Claimants contend that the decision recorded in the 1991 Minutes can be given effect to as a decision to modify the Rules within clause 4. This contention gives rise to two issues of construction of clause 4.
128. The first is whether the only formality required by clause 4 in the case of an amendment to the Rules alone is a "resolution (in writing)" of the Trustees, as the Claimants contend, or whether the consent of the Principal Employer must always be given by deed, as BIC UK contends. As counsel for BIC UK accepted, BIC UK's construction involves reading words into paragraph (ii). He submitted that it was nevertheless justified because of the desirability of there being some formal record of the Principal Employer's consent. I accept that that is desirable, but nevertheless that is not what clause 4(ii) says. For whatever reason, the draftsman of clause 4 drew a distinction between the formalities required in paragraph (i) and (ii). It is fair to say that, on any view, paragraph (i) is oddly drafted in that the word "or" appears to suggest that a deed is required to amend the Rules, which would make a nonsense of paragraph (ii). It seems to me, however, that the sense that it is intended is that a deed is required to amend either the Deed or the Deed and the Rules.
129. It is sufficient for the Claimants' purpose for there to be an amendment of the Rules. Accordingly, as I construe clause 4, all the Claimants need to establish by way of compliance with formalities is "a resolution (in writing) of the Trustees". The Claimants also need to establish the consent of the Principal Employer, but I have already found that BIC UK did consent to the grant of the Pre-97 Increases.
130. The second issue is what is meant by "a resolution (in writing)". The Claimants contend that these words mean what they say, and hence that the 1991 Minutes qualify. BIC UK contends that what is required is a resolution setting out the text of the amendments to the 1993 Rules. I do not accept this. Clause 4 empowers the Trustees by a "resolution (in writing)" (with the consent of the Principal Employer) to "modify, alter or extend all or any of the … provisions of … the Rules". Provided that the resolution is sufficiently clear in its effect, I do not consider that it was required to set out the text of an amendment to the 1993 Rules.
131. In my judgment the 1991 Minutes contain such a resolution. BIC UK contends that, even if the 1991 Minutes contain a "resolution (in writing)", it was not a resolution to modify, alter or extend any of the provisions of the 1993 Rules because it simply amounted to the adoption of a policy. For the reasons given above, I do not accept this.
132. Accordingly, I conclude that the decision to pay the Pre-97 Increases was validly made by virtue of clause 4 of the 1993 Deed. In case I am wrong about this, however, I shall go on to consider the other routes relied upon by the Claimants.

Clause 9 of the 1993 Deed

133. Clause 9 of the 1993 Deed empowers the Trustees, on the Principal Employer's direction, to "grant any new and additional Relevant Benefits to any person, or augment any of the Relevant Benefits (including pensions in payment) which any person may be entitled to". Unlike the provisions considered above, clause 9 does not require the observance of any formalities. Again, however, the Claimants' reliance upon clause 9 gives rise to two issues of construction.
134. First, BIC UK contends that clause 9 is directed at the provision of augmented benefits to individual members of the Scheme and was not intended to enable the Trustees to grant across-the-board increases. I agree that the wording of clause 9 enables the provision of augmented benefits to individual members, but in my judgment it is wide enough to encompass the provision of augmented benefits to all members, since "any person" can include any group of persons.
135. Secondly, BIC UK contends that clause 4 cannot extend to new joiners. In support of this contention counsel for BIC UK relied upon Walker Morris Trustees Ltd v Masterson [2009] EWHC 1955 (Ch), [2009] PLR 307. As counsel for the Claimants pointed out, however, clause 4 is broader and in more general terms than the rather more specifically-worded power that was in issue in that case. Moreover, the facts of the present case are different to that case. In my judgment the wording of Clause 9 is wide enough to extend to new joiners, since "any person" can include persons who are not current members.
136. Accordingly, I conclude that the decision to pay the Pre-97 Increases was validly made by virtue of clause 9 of the 1993 Deed.

Rule 3(c)(iii) of the 1993 Rules

137. Rule 3(c)(iii) provides that, if the Actuary is of the opinion that the Fund is in surplus, the Trustees with the consent of the Principal Employer may make "alterations … recommended to be made to the benefits … under the Scheme" or "take such other action as they deem expedient to reduce" the surplus. On its face, this appears to be one of the two most apposite provisions in the 1993 Deed and Rules for dealing with the situation arising out of the 1991 Minutes (the other being rule 9(a)).
138. BIC UK contends that rule 3(c)(iii) does not confer a free-standing power on the Trustees, but only enables the Trustees to exercise other powers available to them under the 1993 Deed and Rules, and in particular the power of amendment contained in clause 4. Counsel for BIC UK relied in support of this submission on the decision of the House of Lords in National Grid Co plc v Mayes [2001] UKHL 20, [2001] 1 WLR 864. As counsel for the Claimants submitted, however, that case was concerned with differently-worded provisions. On the other hand, as I have already said, I accept that the 1993 Deed and Rules must be construed as a whole.
139. On its face, rule 3(c)(iii) confers a free-standing power which is triggered in specific and narrow circumstances. It was evidently included because of the statutory provisions with regard to pension scheme surpluses referred to above. Although the power is not subject to the observance of any formalities, it is subject to the consent of the Principal Employer. Does the existence of a more general power to amend in clause 4 mean that rule 3(c)(iii) should be construed as merely specifying a particular circumstance in which the more general power may be exercised? In my judgment the answer to that question is no, because the effect of that construction would be to render rule 3(c)(iii) surplusage.
140. BIC UK also contends that there is no evidence of any recommendation by the Actuary. In my judgment, however, it may be inferred from the 1991 Minutes that the Actuary, namely Mr McConnell, did express the opinion that the Fund was in surplus prior to 18 February 1991 and that one of his recommended solutions was to improve the benefits under the Scheme in the manner set out in the 1991 Minutes. Moreover, the evidence of Mr Hartridge and Mr Everitt is to the same effect. It is immaterial that this solution does not appear to have been the only option proposed by Noble Lowndes, particularly given that the Trustees were not restricted to the Actuary's recommendations in any event.
141. Finally, BIC UK again contends that the power under rule 3(c)(iiii) does not extend to new joiners. I do not accept this. The power is expressed in very general terms, and I see nothing in the wording to prevent it from being exercised in relation to new joiners as well as existing members.
142. Accordingly, I conclude that the decision to pay the Pre-97 Increases was validly made by virtue of rule 3(c)(iii) of the 1993 Rules.

Rule 4(a) of the 1993 Rules

143. Given my conclusions in relation to the other provisions relied upon by the Claimants, I shall express my conclusion and reasoning with respect to rule 4(a) briefly. By contrast with clause 9, I consider that rule 4(a) confers on the Trustees a discretion with respect to the amounts payable to individual members and not to make Scheme-wide alterations. Unlike clause 9, with its broad language of "any person", rule 4(a) is much more specific in its drafting. Accordingly, I conclude that the Claimants cannot rely upon rule 4(a) to validate the payment of the Pre-97 Increases.

Rule 9(a) of the 1993 Rules

144. Rule 9(a) empowers the Employer (which includes the Principal Employer i.e. BIC UK), with the Trustees' consent, to increase "[a]ny pension in the course of payment, whether to a Member or a Dependant, …annually … after the start of that pension". There is no requirement of formality.
145. BIC UK again contends that rule 9(a) does not confer a free-standing power, and that any change to Schedule Part III paragraph 8 or Schedule Part IV paragraph 1(c) requires an amendment under clause 4. Again, I do not accept this. On its face, rule 9(a) appears to confer a free-standing power of specific and narrow scope. I see no reason not to give effect to the wording because of the existence of a more general power of amendment, and to construe rule 9(a) in the manner suggested by BIC UK would render it surplusage.
146. Accordingly, I conclude that the decision to pay the Pre-97 Increases was validly made by virtue of rule 9(a) of the 1993 Rules.

Former members of the Works Scheme

147. Finally, I must address the position of former members of the Works Scheme. The Claimants contend that Transferred Members of the Works Scheme (i.e. those who were active members as at 6 August 1990) are to be treated as if all their benefits had been accrued in the Scheme by virtue of clause 3 of the Amalgamation Deed. I do not think this is in dispute, but in any event I agree. In the case of Transferred Pensioners of the Works Scheme, the Claimants contend that they are entitled to the Pre-97 Increases by virtue of clause 2(b) of the Amalgamation Deed. Given my conclusion that the validity of the grant of the Pre-97 Increases depends on the 1993 Deed and Rules, clause 2(b) only has this effect if the 1993 Deed and Rules fall within the definition of "the Rules" in clause 1(a)(i) of the Amalgamation Deed. In my judgment the 1993 Rules do fall within that definition, since the 1993 Rules are in substance an amended version of the Fourth Edition of the Rules, but the 1993 Deed does not. Given my conclusions that provisions of both instruments can be relied upon, this does not matter.

Issue 2: If the Pre-97 Increases were properly paid, can they now be stopped?

148. BIC UK does not dispute that, if the 1991 Minutes record a valid decision by the Trustees and BIC UK to pay the Pre-97 Increases, then the decision was an irrevocable decision to do so without limit of time. It follows that, if I am right in concluding that the Pre-97 Increases were properly paid by virtue of one or more of clauses 4 and 9 of the 1993 Deed and rules 3(c)(iii) and 9(a) of the 1993 Rules, then payment cannot now be stopped.

Issue 3: If the Pre-97 Increases were not properly paid, can the Trustees now recover from the pensioners the payments made since 1992?

149. If I am right in concluding that the Pre-97 Increases were properly paid, this issue does not arise. I shall nevertheless consider it in case I am wrong. It involves a number of sub-issues.

Estoppel as to validity

150. The Claimants contend that, if the Pre-97 Increases were not validly granted, then the Trustees and BIC UK are estopped against each other from denying that the Pre-97 Increases were validly granted. The Claimants' primary case is based on estoppel by convention, but in the alternative the Claimants rely upon estoppel by representation.
151. Estoppel by convention arises out of a common assumption as to fact or law, the truth of which has been treated by convention of the parties as a basis of their relationship. When the parties have so acted in their relationship upon the agreed assumption that the given state of facts or law is to be accepted between them as true, that it would be unfair on one for the other to resile from the agreed assumption, then he will be entitled to appropriate relief. The principles applicable to estoppel by convention were summarised by Briggs J (as he then was) in Revenue and Customs Commissioners v Benchdollar Ltd [2009] EWHC 1310 (Ch), [2010] 1 All ER 174 at [52] as follows:

"(i) It is not enough that the common assumption on which the estoppel is based is merely understood by the parties in the same way. It must be expressly shared between them.

(ii) The expression of the common assumption by the party alleged to be estopped must be such that he may properly be said to have assumed some element of responsibility for it, in the sense of conveying to the other party an understanding that he expected the other party to rely on it.

(iii) The person alleging the estoppel must in fact have relied on the common assumption, to a sufficient extent, rather than merely upon his own independent view of the matter.

(iv) That reliance must have occurred in connection with some subsequent mutual dealing between the parties.

(v) Some detriment must thereby have been suffered by the person alleging the estoppel, or benefit thereby have been conferred upon the person alleged to be estopped, sufficient to make it unjust or unconscionable for the latter to assert the true legal (or factual) position."

152. In Stena Line Ltd v Merchant Navy Ratings Pension Fund Trustee Ltd [2010] EWHC 1805 (Ch), [2010] Pen LR 411 at [137] Briggs J adjusted paragraph (i) of this summary, saying that "the crossing of the line between the parties may consist either of words, or conduct from which the necessary sharing can properly be inferred". These principles have been applied in a number of pensions cases, including Stena Line itself. It remains the case, however, that an estoppel by convention is difficult to establish in the pensions context for the reasons explained by Sir Andrew Morritt V-C in Redrow plc v Pedley [2002] Pens LR 339 at [62]-[64] and Lewison J (as he then was) in Trustee Solution v Dubery (cited above) at [51]-[52].
153. Counsel for BIC UK submitted that there were two fundamental problems with the Claimants' case on estoppel by convention even before one considered its constituent elements. First, the estoppel is asserted by the Trustees against BIC UK. The only purpose of asserting such an estoppel, however, must be to enable the Trustees to administer the Scheme on the footing that the relevant members are entitled to the Pre-97 Increases. If the Trustees are not bound by the trusts on which they hold the Scheme assets to pay such increases, BIC UK is not obliged to fund the Scheme to provide them. In other words, it is an indirect assertion of an estoppel by the members themselves. It must follow that the Trustees are not able to assert such an estoppel if the members could not do so.
154. Secondly, to assert such an estoppel would involve a breach of the Trustees' fiduciary duty in that they are choosing to prefer the interests of members who will benefit if the Pre-97 Increases are payable over the interests of members who will not benefit at a time when the Scheme is substantially in deficit. Such a consequence is objectionable even in the context of an estoppel claim by members against trustees: see Steria Ltd v Hutchison [2006] EWCA 1551, [2007] PLR 291 at [109] (Neuberger LJ).
155. I accept these submissions. Nevertheless, I shall go on and consider the constituent elements of the Claimants' case.
156. Was there a common assumption? The Claimants contend that both the Trustees and BIC UK (by its directors) shared a common assumption that the Pre-97 Increases could be and had been validly granted by the 1991 Resolution and the March and December 1992 Announcements. In my judgment this contention is borne out by my findings of fact. Counsel for BIC UK accepted that it was clear that Mr Hartridge, Mr Everitt and Gerald Burgess believed that they had in their capacity as Trustees validly granted the Pre-97 Increases, but submitted that the evidence did not establish that either (i) they had the same belief in their capacity as directors of BIC UK or (ii) they had made any assumption as to the method by which the Pre-97 Increases had been granted. I do not accept either of these points. As to (i), for the reasons explained above, I consider that it is clear that the executive directors of BIC UK did believe that the Pre-97 Increases had been validly granted. As to (ii), it is fair to say that there is no evidence that the individuals in question turned their minds in either capacity to the method by which the Pre-97 Increases had been validly granted. Nevertheless, I consider it is clear that, in both capacities, they assumed that the steps which had been taken were sufficient. Those steps consisted of passing the resolution recorded in the 1991 Minutes and issuing the March and December 1992 Announcements.
157. Was the common assumption shared between the Trustees and BIC UK? The Claimants contend that the common assumption was shared between the Trustees and the executive directors of BIC UK because they were the same people. The Claimants do not rely upon any words, but upon the conduct of the parties as demonstrating such sharing. In my judgment, however, there is no evidence of any conduct from which it may be inferred that there was any crossing of the line between the Trustees and the directors. It simply an assumption which the individuals made in both their capacities.
158. Did BIC UK assume responsibility for the common assumption? The Claimants contend that the directors took some responsibility for it, in that they expected the Trustees to rely upon the shared understanding. Although both parties also relied upon Noble Lowndes, that mutual reliance upon the same adviser reinforced the shared responsibility for the correctness of the assumption. As counsel for BIC UK submitted, however, the individuals' view of the position in both capacities was formed on the basis of the same advice from Noble Lowndes and owed nothing to their conduct wearing their other hat.
159. Did the Trustees rely upon the common assumption? The Claimants contend that the Trustees (and BIC UK) relied upon the common assumption in (i) not recording the decisions to grant the increases with any greater formality, (ii) paying the increases and (iii) arranging the funding of the Scheme (and dealing with the Inland Revenue) on the basis that the increases had been validly granted. As counsel for BIC UK submitted, however, the evidence does not show that the Trustees or BIC UK relied on the common assumption. Rather, they relied on the advice they received from Noble Lowndes as to what they needed to do.
160. Would it be unconscionable for BIC UK to assert the true legal position? The Claimants contend that it would be unconscionable for BIC UK now to assert the true legal position because (i) BIC UK obtained the benefit of the Pre-97 Increases, with employee goodwill and tax advantages and (ii) the Trustees acted to their detriment, by paying out sums for many years in reliance upon the common assumption. As to (i), however, there is no evidence as to what tax charges were avoided and the surplus could have been reduced in other ways e.g. by reducing employee contributions. Nor is there any evidence that employee goodwill was generated, still less that more goodwill was generated than would have generated by reducing employee contributions. As for (ii), clause 17 of the 1993 Deed and Rules excludes liability for anything except "wilful default on the part of the trustee who is sought to be made liable" and clause 12.1 of the 2006 Deed and Rules is to the same effect subject to a further exception in relation to failure to exercise the care or skill required in the performance of an investment function. Accordingly, there is no detriment to the Trustees from having inadvertently made overpayments consisting of the Pre-97 Increases.
161. Accordingly, I conclude that the Claimants' primary case of estoppel by convention is not made out. I do not propose to deal with the Claimants' alternative case of estoppel by representation in detail. Suffice to say that, given the difficulties I have identified in the estoppel by convention case, I cannot see how the Claimants can overcome them by re-framing the case as one of estoppel by representation.

Equitable recoupment

162. Assuming that (i) the Pre-97 Increases were not validly granted and (ii) BIC UK is not estopped from asserting this, then BIC UK contends that the Trustees would be under a duty to exercise their equitable right of recoupment in order to recover the sums overpaid out of sums which would otherwise be paid to the pensioners in question in the future: see Re Musgrave [1916] 2 Ch 417. There is no dispute that, in principle, the Trustees would have that right and duty. Nor is there any dispute that there is precedent for overpayments being recovered in this way, commonly by deductions spread over a similar period of time to the period during which overpayments were made. This is subject to the points considered below, however.

Section 91 of the Pensions Act 1995

163. It is common ground that the equitable right of recoupment is subject to section 91 of the Pensions Act 1995. As amended by the Welfare Reform and Pensions Act 1999, and so far as relevant, this provides:

"(1) Subject to subsection 5, where a person is entitled to a pension under an occupational pension scheme or has a right to a future pension under such a scheme –

...

(c) no set-off can be exercised in respect of it

…

(5) In the case of a person ('the person in question') who is entitled to a pension under an occupational pension scheme or has a right to a future pension under such a scheme, subsection (1) does not apply to any of the following -

…

(f) subject to subsection (6), a charge, lien or set-off against the person in question's entitlement … for the purpose of discharging some monetary obligation due from the person in question to the scheme arising out of a payment made in error in respect of the pension.

(6) Where a … set-off is exercisable by virtue of subsection (5) … (f) -

(a) its amount must not exceed the amount of the monetary obligation in question, or (if less) the value (determined in the prescribed manner) of the person in question's entitlement or accrued right, and

(b) the person in question must be given a certificate showing the amount of the charge, lien or set-off and its effect on his benefits under the scheme,

and where there is a dispute as to its amount, the … set-off must not be exercised unless the obligation in question has become enforceable under an order of a competent court …."

164. It is common ground that the equitable right of recoupment is a form of set-off for the purposes of these provisions. The issue is to the effect of section 91(6), which prevents exercise of the right in the event of a dispute except under an order of "a competent court", an expression which is not defined. Does this include a determination by the Pensions Ombudsman?
165. It is also common ground that the Pensions Ombudsman cannot entertain a complaint by trustees against a member that the member has been overpaid or give directions to a member to make payments to trustees: see the Pension Schemes Act 1993, section 146(1)(c) and (1A)(a).
166. It is also common ground that, if trustees identify an overpayment and notify it to the member with proposals for the exercise of the right of recoupment out of future payments of pension, the member can refer to the Ombudsman a dispute about either the amount or the terms on which the trustees propose to exercise their right of recoupment. The outcome of such a referral could be a decision by the Ombudsman that the trustees are entitled to exercise their right of recoupment in the way they have proposed up to an amount which the Ombudsman is satisfied has been overpaid. If the Ombudsman made such a determination and the member was unwilling to accept the consequent exercise of the right of recoupment, the trustees could apply to the County Court to enforce the determination "as if it were a judgment or order of that court": see the Pensions Schemes Act 1993, section 151(5)(a). This could be done by the County Court making an order declaring the trustees' entitlement to recoup the overpayment in accordance with the determination.
167. BIC UK contends that the Pensions Ombudsman's determination would amount to an order of a competent court, whereas the Claimants dispute this.
168. In my judgment, a determination by the Pensions Ombudsman would not itself constitute "an order of a competent court", because the Ombudsman is not a court. An order by the County Court pursuant to section 150(5)(a) of the Pensions Schemes Act 1993 would constitute an order of a competent court, however.

Limitation

169. The Claimants contend that recovery by exercise of the equitable right of recoupment is subject to a six year limitation period under section 5 of the Limitation Act 1980, but BIC UK disputes this.
170. Counsel for the Claimants relied upon three decisions in support of the Claimants' contention. The first two were successive decisions on appeal from the Pensions Ombudsman in the same case, Webber v Department of Education (No 2) [2014] EWHC 4240 (Ch), [2015] PLR 69 and Webber v Department of Education (No 3) [2016] EWHC 2519 (Ch), [2016] PLR 1. In the first of these decisions, Nugee J held at [79] that a claim for overpayment was subject to a six-year limitation period prior to a cut-off date. As is more clearly explained in the second decision at [36]-[37], however, at that stage the issue between the parties was as to the applicability of section 32 of the Limitation Act. In the second decision, Edward Bartley Jones QC sitting as a deputy High Court Judge determined what the correct cut-off date was. As can be seen from his judgment at [49], however, it was common ground before him that section 5 of the Limitation Act applied to the claim for overpayment.
171. More relevantly, in D v BIC UK Pension Scheme (PO-1918, 1 September 2017), a determination of the Pension Ombudsman concerning the Scheme, the Ombudsman rejected the Trustees' argument that the Limitation Act did not apply to the right of equitable recoupment. His reasoning was that equitable recoupment was a form of restitutionary claim for unjust enrichment, and it was settled that section 5 of the Limitation Act applied to such claims (see Aspect Contracts (Asbestos) Ltd v Higgins Construction plc [1015] UKSC 38, [2015] 1 WLR 2961 at [25] (Lord Mance)).
172. Counsel for BIC UK submitted that this reasoning was erroneous, because equitable recoupment was not a restitutionary claim for unjust enrichment, it was an equitable self-help remedy which did not involve any claim for payment back of the monies paid in the past but an adjustment of accounts in the future. Furthermore, the application of section 5 of the Act to "any claim for specific enforcement of a contract or an injunction or for any other equitable relief" was excluded by section 36 of the Act. In support of these submissions, counsel relied upon the statement in Lewin at §42-010 that "the right of recoupment, being a matter of adjustment of accounts by the trustee, is not subject to the Limitation Act 1980", citing Re Robinson [1911] Ch 502. I accept these submissions.

Laches

173. It is common ground that, if there is no limitation period, then, in principle, the doctrine of laches will apply.
174. The classic statement of the doctrine is that of Lord Selbourne LC in Lindsay Petroleum Co v Hurd (1874) LR 5 PC 221 at 239:

"Now the doctrine of laches in Courts of Equity is not an arbitrary or a technical doctrine. Where it would be practically unjust to give a remedy, either because the party has, by his conduct, done that which might fairly be regarded as equivalent to a waiver of it, or where by his conduct and neglect he has, though perhaps not waiving that remedy, yet put the other party in a situation in which it would not be reasonable to place him if the remedy were afterwards to be asserted, in either of these cases, lapse of time and delay are most material."

175. The doctrine was considered by the House of Lords in Fisher v Brooker [2009] UKHL 41, [2009] 1 WLR 1764, where Lord Neuberger said at [64]:

"… laches is an equitable doctrine, under which delay can bar a claim to equitable relief. … Although I would not suggest that it is an immutable requirement, some sort of detrimental reliance is usually an essential ingredient of laches, in my opinion."

176. The Claimants contend that the Court can and should determine that recovery of overpayments by the Trustees would be barred by laches. BIC UK contends that the Court cannot, or should not, determine this question on a group basis, but should leave it to be determined as between the Trustees and individual members of the Scheme. I agree with BIC UK on this point. The starting point is that, prima facie, it would be the Trustees' duty, and not inequitable, to seek to recover overpayments and thereby increase the assets available for the benefit of all the members. On the other hand, it may be inequitable for the Trustees to do so in a particular case. This will depend in particular, as indicated by Lord Neuberger, on whether there has been detrimental reliance by the individual in question in their particular circumstances.

Estoppel as to remedy

177. In the alternative to laches, the Claimants contend that recovery of overpayments would be barred by estoppel. Again, the Claimants' primary case is based on estoppel by convention and their secondary case is based on estoppel by representation. BIC UK again contends that the Court cannot, or should not, determine this question on a group basis, but should leave it to be determined as between the Trustees and individual members of the Scheme. Again I agree with this, for essentially the same reasons as in relation to laches.

Summary of principal conclusions

178. For the reasons given above I conclude that:

i) the Pre-97 Increases were not validly granted by virtue of either rule 32 or rule 36 of the Fourth Edition of the Rules;

ii) the Pre-97 Increases were validly granted due to each of clause 4 and 9 of the 1993 Deed and rules 3(c)(iii) and 9(a) of the 1993 Rules since those provisions can take effect from 6 August 1990 without impermissibly re-writing history;

iii) the decision to pay the Pre-97 Increases was irrevocable;

iv) if the Pre-97 Increases were not validly granted, the Trustees cannot assert that BIC UK is estopped from so asserting;

v) if the Trustees were to exercise the equitable right of recoupment to recover overpayments, then a determination by the Pensions Ombudsman on a reference by a member would not amount to an order of a competent court within section 91(6) of the Pensions Act 1995, but an order of the County Court enforcing such a determination would;

vi) equitable recoupment is not subject to a six-year limitation period under section 5 of the Limitation Act 1980; and

vii) the Court is not in a position to determine on a group basis whether recovery of overpayments by the Trustees would be barred by laches or estoppel, since those are matters which require determination as between the Trustees and individual members of the Scheme in their own particular circumstances.