Harland and Wolff Pension Trustees Ltd v Aon Consulting Financial Services Ltd: [2006] EWHC 1778 (Ch)

ChD: Warren J: 14 July 2006

The claimant was the trustee of an occupational pension scheme. The scheme's trust deed and rules provided that the normal retirement date (NRD) for a male member was his 63rd birthday and, for a female, her 60th birthday. The rules also contained a retrospective power of amendment. The defendant gave professional advice to the claimant regarding the scheme, in particular, the need to equalise the NRD for male and female members under article 141 of the EC Treaty (formerly article 119). On 7 September 1993, pursuant to the defendant's advice, the claimant executed a new trust deed and rules which provided that the NRD for both male and female members with pensionable service on and after 17 May 1990 was their 63rd birthday. The claimant subsequently contended that, while valid and effective as a matter of domestic law, the amendment was ineffective to prevent liability arising between 17 May 1990 and 7 September 1993 as a matter of Community law, as male members, during that period, had a right to require that their pension benefits be calculated as if they had a NRD at age 60. The claimant brought a claim against the defendant for breach of duty, alleging failure to advise that the period of service for which benefits of male members should be equalised with the level of female members did not end until the date of execution of the new trust deed and rules on 7 September 1993, rather than the date on which the deed claimed that the change would take effect, namely, 17 May 1990, and that, as a result, it had suffered certain losses.

The court ordered the trial of a preliminary issue to determine whether, as a matter of Community law, the requirement to provide male and female members of an occupational pension scheme with equal benefits for the same period of service served on or after 17 May 1990 was satisfied by the amendment of 7 September 1993.

Warren J held:
The position immediately before the execution of the 1993 deed and rules and before any attempt was made to make a retrospective amendment was that, under article 141 EC, men had a substantive right to claim, in respect of service on or after 17 May 1990, benefits on the same basis as those accruing to women, and that right could not be adversely affected, as a matter of Community law, by the retrospective exercise of the amending power. Regardless of whether the amendment was effective under national law, levelling down was not permitted under Community law, and, in respect of the period 17 May 1990 to 7 September 1993, therefore, male members of the scheme were entitled to have their benefits levelled up to those of women, so to accrue their benefits on the basis of a NRD of their 60th birthday. Accordingly, as the 1993 deed and rules did not provide for that accrual, it could not stand consistently with article 141 EC, and the requirement for male and female members of the scheme to be provided with equal pension benefits for the same period of pensionable service served on or after 17 May 1990 was not satisfied by the amendment.

Appearances: Paul Newman (PricewaterhouseCoopers LLP) for the claimant; Nicholas Paines QC and Nicolas Stallworthy (CMS Cameron McKenna LLP) for the defendant.}