UKPC 25
Privy Council Appeal No 0032 of 2011
Jacinth Kelly, Millicent Campbell, Claudia Davis, Courtney Miller, Ernel Lewis (Appellants) v Michael Fraser (Respondent)
From the Court of Appeal of Jamaica
JUDGMENT DELIVERED BY
12 July 2012
Heard on 8-9 May 2012
R. N. A. Henriques QC
(Instructed by MA Law (Solicitors) LLP)
(Instructed by Myers, Fletcher & Gordon)
"The benefits and amounts accrued to a Contributor who has been contributing to any Company pension plan or pension fund other than this Plan and who has been transferred and required to contribute to this Plan, shall be transferred to this Plan in a manner and on the terms and conditions determined by the trustees in their sole discretion and thereafter shall be subject to the terms of this Plan, but if in the judgment of the trustees this is impractical, inadvisable or inexpedient the benefits and amounts accrued to the contributor shall remain in the said other Company pension plan or pension fund."
"Re: Transfer of Pension Contributions
Further to your letter dated October 31 and subsequent discussions, we wish to confirm that the Trustees of the Life of Jamaica Pension Plan have transferred an amount of Fourteen Million Seven Hundred and Twenty-two Thousand Dollars ($14,722,000) to Island Life Salaried Staff Pension Plan... Your total contribution has been invested in our Diversified Investment Fund (DIF) as part of a United States Dollars (US$) denominated asset of the fund. The security purchased by the fund is the GOJ Global Bond 2007 with a maturity date of September 1 2007 and a coupon rate of 12.75%. Interest will be paid semi-annually. The value of your contribution expressed in United States Dollars was $327,074.53 at November 2, 2000 the date that the security was purchased.
Please bear in mind that the DIF is a Jamaican Dollar denominated fund. Therefore, all your contributions, past and current, will be shown on your certificates expressed in Jamaican Dollars.
Our commitment to you and other pension plan clients is tO maximize the returns on the contributions received while preserving the invested capital.
We look forward to serving you. Please call Clive Masters or Mrs L Johnson if you have any question on this matter."
Thereafter, Mr Fraser received periodical statements from the Employee Benefits Division of Island Life recording the accumulated current value of his units in the fund, in which the fund transferred from the Life of Jamaica scheme was included as an additional contribution.
"There is no evidence that had he not been induced to think that his funds were properly in the Pension Plan that he would have earned greater returns on his money if invested elsewhere. Indeed, the evidence is that Mr Fraser was paid an increase in full value of the unit entitlement to the extent that the sum transferred had grown from $14,722,000.00 to $29,816,400.17. The uncontested evidence is that Mr Fraser's transferred funds were invested in the Company's Diversified Investment Fund as part of a United States denominated asset pool of pension fund. The effect of Mr Fraser's evidence is that at the time of transfer he had no expectation of surplus. According to Mr Fraser, at the time when his pension was transferred from LOJ to the Company, (despite the fact that he had previously occupied a Senior Position in LOJ and now in the Company), he did not know that the Pension Plan would be wound up, much less that there would be a surplus in the fund which would increase his entitlement to a larger extent than if he had invested his pension from LOJ elsewhere."
The Court of Appeal (Panton P, Harris J and McIntosh JA) affirmed the judge on the question of authority to make the representation, but overruled her on detriment and gave judgment in favour of Mr Fraser. Panton P dealt with the question of detriment very briefly at the end of the only reasoned judgment. He held that "detriment has been shown by the mere fact that the respondents have used the appellants' money for the purposes of the pension plan and then denied him the appropriate benefits due to him as a result of such use".
Authority to make the representations
"It is obviously correct that an agent who has no actual or apparent authority either (a) to enter into a transaction or (b) to make representations as to the transaction cannot hold himself out as having authority to enter into the transaction so as to effect the principal's position. But, suppose a company confers actual or apparent authority on X to make representations and X erroneously represents to a third party that Y has authority to enter into a transaction; why should not such a representation be relied upon as part of the holding out of Y by the company? By parity of reasoning, if a company confers actual or apparent authority on A to make representations on the company's behalf but no actual authority on A to enter into the specific transaction, why should a representation made by A as to his authority not be capable of being relied on as one of the acts of holding out?"