Neutral Citation No:  NICh 1
Judgment: approved by the Court for handing down
(subject to editorial corrections)*
Introduction  – ;
Financial Services Act 2000  – 
Civil Jurisdiction & Judgments Act 1982  – 
Rules of the Court of Judicature (Northern Ireland) 1980  – 
Discussion  – 
Conclusion  – 
FINANCIAL SERVICES AND MARKETS ACT 2000
(a) Section 107 is headed "Application for order sanctioning transfer scheme" and provides:
"107.-(1) An application may be made to the court for an order sanctioning (my emphasis) … a banking business transfer scheme …:
(2) An application may be made by—
(a) the transferor concerned;
(b) the transferee; or
(3) The application must be made—
(a) if the transferor concerned and the transferee are registered or have their head offices in the same jurisdiction, to the court in that jurisdiction;
(b) if the transferor concerned and the transferee are registered or have their head offices in different jurisdiction, to the court in either jurisdiction;
(c) if the transferee is not registered in the United Kingdom and does not have his head office there, to the court which has jurisdiction in relation to the transferor concerned.
(4) 'Court' means—
(a) the High Court; or
(b) in Scotland, the Court of Session."
"111(1) This section sets out the conditions which must be satisfied before the court may make an order under this section sanctioning … a banking business transfer scheme.
(2) The court must be satisfied that—
(a) in the case of a banking business transfer scheme the appropriate certificates have been obtained (as to which see Parts I and II of Schedule 12);
(b) the transferee has the authorisation required (if any) to enable the business, or part, which is to be transferred to be carried on in the place to which it is to be transferred (or will have it before the scheme takes effect).
(3) The court must consider that, in all the circumstances of the case, it is appropriate to sanction the scheme."
"112(1) If the court makes an order under section 111(1), it may by that or any subsequent order make such provision (if any) as it thinks fit—
(a) for the transfer to the transferee of the whole or any part of the undertaking concerned and of any property or liabilities of the authorised person concerned;
(b) for the allotment or appropriation by the transferee of any shares, debentures, policies or other similar interests in the transferee which under the scheme are to be allotted or appropriated to or for any other person;
(c) for the continuation by (or against) the transferee of any pending legal proceedings by (or against) the transferor concerned;
(d) with respect to such incidental, consequential and supplementary matters as are, in its opinion, necessary to secure that the scheme is fully and effectively carried out.
(2) An order under subsection (1)(a) may—
(a) transfer property or liabilities whether or not the transferor concerned otherwise has the capacity to effect the transfer in question;
(b) make provision in relation to property which was held by the transferor concerned as trustee;
(c) make provision as to future or contingent rights or liabilities of the transferor concerned, including provision as to the construction of instruments (including wills) under which such rights or liabilities may arise;
(d) make provision as to the consequences of the transfer in relation to any occupational pension scheme (within the meaning of section 150(5) of the Finance Act 2004) operated by or on behalf of the transferor concerned.
(2A) Subsection (2)(a) is to be taken to include power to make provision in an order—
(a) For the transfer of property or liabilities which would not otherwise be capable of being transferred or assigned;
(b) For a transfer of property or liabilities to take effect as if there were—
(i) No such requirement to obtain a person's consent or concurrence, and
(ii) No such contravention, liability or interference with any interest or right,
as there would otherwise be (in the case of a transfer apart from this section) by reason of any provision falling within sub-section (2B).
(2B) A provision falls within this subsection to the extent that it has effect (whether under an enactment or agreement or otherwise) in relation to the terms on which the transferor concerned is entitled to the property or subject to the liabilities in question.
(2C) Nothing in sub-section (2A) or (2B) is to be read as limiting the scope of sub-section (1).
(3) If an order under subsection (1) makes provision for the transfer of property or liabilities—
(a) the property is transferred to and vests in; and
(b) the liabilities are transferred to and become liabilities of,
the transferee as a result of the order.
(4) But if any property or liability included in the order is governed by the law of any country or territory outside the United Kingdom, the order may require the transferor concerned, if the transferee so requires, to take all necessary steps for securing that the transfer to the transferee of the property or liability is fully effective under the law of that country or territory.
(5) Property transferred as the result of an order under sub-section (1) may, if the court so directs, vest in the transferee free from any charge which is (as a result of the scheme) to cease to have effect.
(6) An order under sub-section (1) which makes provision for the transfer of property is to be treated as an instrument of transfer for the purposes of section 770(1) of the Companies Act 2006 and any other enactment requiring the delivery of an instrument of transfer for the registration of property.
(8) If the court makes an order under section 111(1) in relation to an insurance business transfer scheme, it may by that or any subsequent order make such provision (if any) as it thinks fit—
(a) for dealing with the interests of any person who, within such time and in such manner as the court may direct, objects to the scheme;
(b) for the dissolution, without winding up, of the authorised person concerned;
(c) for the reduction, on such terms and subject to such conditions (if any) as it thinks fit, of the benefits payable under—
(i) any description of policy, or
(ii) policies generally,
entered into by the transferor concerned and transferred as a result of the scheme.
(12) 'Property' includes property, rights and powers of any description.
(13) 'Liabilities' includes duties.
(14) 'Shares' and 'debentures' have the same meaning as in the Companies Acts (see sections 540 and 738 of the Companies Act 2006).
(15) 'Charge' includes a mortgage (or, in Scotland, a security over property)."
"This court hereby sanctions, pursuant to section 111 of the Act, the scheme as set out in the schedule hereto."
It then proceeds to set out under some 47 sub-paragraphs the effect of that sanction. At paragraph (a) it states that the Business (as defined in the Scheme) "shall, by virtue of this Order, be transferred to and be vested in the Transferee, in accordance with and subject to the terms of the Scheme."
At paragraph (b) it orders that each Transferred Asset (as defined in the Scheme) and all of the rights, benefits, powers, obligations and interests of the Transferor in the Transferred Asset "shall, by virtue of this Order and without any further act or instrument, be transferred to and be vested in the Transferee and the Transferee shall succeed to each Transfer Asset as if in all respects it were the same person in law as the Transferor, subject to all Encumbrances (if any) affecting such Transferred Asset and in accordance with and subject to the terms of the Scheme."
Sub-paragraph (c) then provides that "each Residual Asset (as defined in the Scheme) … and all of the rights benefits powers occupations and interests of the Transferor in each such Residual Asset" shall, by virtue of this Order without further act or instrument, be transferred to and be vested in the Transferee and the Transferee shall succeed to each such Residual Asset as if in all respects it were the same person in law as the Transferor, subject to all Encumbrances (if any) affecting each Residual Asset and in accordance with and subject to the terms of the Scheme.
CIVIL JURISDICTION & JUDGMENTS ACT 1982
"18- Enforcement of U.K. judgments in other parts of UK
(1) In relation to any judgment to which this section applies—
(a) Schedule 6 shall have effect for the purpose of enabling any money provisions contained in the judgment to be enforced in a part of the United Kingdom other than the part in which the judgment was given; and
(b) Schedule 7 shall have effect for the purpose of enabling any non-money provisions so contained to be so enforced.
(2) In this section 'judgment' means any of the following (references to the giving of a judgment being construed accordingly)—
(a) any judgment or order (by whatever name called) given or made by a court of law in the United Kingdom."
"stating a sum or aggregate of the sums (including the costs or expenses) payable under the money provisions contained in the judgment, the rate of interest, if any, payable thereon and the date or time from which any such interest began to accrue."
In those circumstances the applicant or any interested person may apply within six months from the date of the issue of the certificate in the prescribed matter to the proper officer of the superior court in any other part of the United Kingdom for the certificate to be registered in that court – the superior court in Northern Ireland being the High Court.
"(1) A certificate registered under this Schedule shall, for the purposes, of its enforcement, be of the same force and effect, the registering court shall have in relation to its enforcement the same powers, and proceedings for or with respect to its enforcement may be taken, as if the certificate had been a judgment originally given in the registering court and had (where relevant) been entered."
"(1) Subject to any provision made under sub-paragraph (2) the debt resulting, apart from paragraph 7, from the registration of the certificate shall carry interest at the rate, if any, stated in the certificate from the date or time so stated."
"(1) The non-money provisions contained in a judgment registered under this Schedule shall, for the purposes of their enforcement, be of the same force and effect, the registering court shall have in relation to their enforcement the same powers, and proceedings for or with respect to their enforcement may be taken, as if the judgment containing them had been originally given in the registering court and had (where relevant) been entered."
RULES OF THE COURT OF JUDICATURE (NORTHERN IRELAND) 1980
"(a) giving particulars of the judgment, stating the sum or aggregate of the sums (including any costs or expenses) payable and unsatisfied under the money provisions contained in the judgment, the rate of interest, if any, payable thereon and the date or time from which any such interest began to accrue;
(b) verifying that the time for appealing against the judgment has expired, or that any appeal brought has been finally disposed of and that enforcement of the judgment is not stayed or suspended; and
(c) stating to the best of the information or belief of the deponent the usual or last known address of the party entitled to enforce the judgment and of the party against whom the judgment is enforceable."
(a) Rule 27(1) which provides that an order giving leave to register a judgment shall state the period within which an appeal may be made against the order for registration and shall contain a notification that no application to enforce the judgment shall be made until after the expiration of the period:
(b) Rule 29 which states that notice of the registration of a judgment "must be served on the person against whom judgment was given by delivering it to him personally or by sending it to him at his usual or last known address or place of business or in such other manner as the Court may direct"; and that the requirements in paragraph (3) of Rule 33, set out above, shall apply with the necessary modifications to an affidavit made in application for the registration of a judgment containing any non-money provisions, namely giving particulars of the judgment, and setting out in detail all of the relevant information which, in the absence of it being expressed in money terms, would require to set out the respective impact of the provisions of any non-money issue, coupled with the requirement under Rule 29, as to the persons duly affected by the Order. (the emphasis is mine)
"Although the statutory discretion is unfettered, it must be exercised according to principles which give due recognition to the commercial judgment entrusted by the company's constitution to its Board. The court in my judgment is concerned in the first place with whether a policyholder, employee or other person would be 'adversely affected' by the scheme in the sense that it appears likely to leave him worse off than if there had been no scheme. It does not however follow that any scheme which leaves someone adversely affected must be rejected. For example, as we shall see, one scheme which might have been adopted in this case would have adversely affected many of the London Life's employees because they would become redundant. But such a scheme might nevertheless have been confirmed by the court. In the end the question is whether the scheme as a whole is fair as between the interests of the different classes of persons affected. But the court does not have to be satisfied that no better scheme could have been devised. A Board might have a choice of several possible schemes, none of which, taken as a whole, could be regarded as unfair. Some policyholders might prefer one scheme and some might think they would be better off with another. But the choice is in my judgment a matter for the Board. (my emphasis) Of course one could imagine an extreme case in which the choice made by the Board was so irrational that a court could only conclude that it had been actuated by some improper motive and therefore abused its fiduciary powers. In such a case a member would be entitled to restrain the Board from proceeding. But that would be an exercise of the court's ordinary jurisdiction to restrain breaches of fiduciary duties: not an exercise of the statutory jurisdiction under section 49 of the Insurance Companies Act 1982.
What is true of choices as between different schemes is also true of the details within a scheme. There are no doubt few schemes which could not in some respect be improved. But the terms of the scheme are a matter of negotiation between transferor and transferee companies and will to a greater or less extent, depending on their respective bargaining strengths involve concessions on both sides. Under the 1982 Act, the court cannot, any more than under the Act of 1870 sanction the scheme subject to the making of amendments. It must be either confirmed or rejected, although no doubt the court in rejecting a scheme could indicate that it thought the vice lay in some particular term and that a fresh scheme without that term was likely to be acceptable. I am therefore not concerned with whether, by future negotiation the scheme might be improved, but whether, taken as a whole, the scheme before the court is unfair to any person or class of persons affected."
"Applying those principles, in order for the Applicants to succeed in this case, they must demonstrate that they have an arguable case or a potentially viable defence requiring investigation. Conversely, the Respondent must demonstrate that the Applicants have no arguable case or potentially viable defence requiring investigation: or, alternatively, that the Applicants ground for dispute amount to nothing more than an ingenious pretext or mere quibble."